How Do You Handle a Non-Qualified Status Change Election Where the Amo

[Guest Dick Sonntag]

Non-Qualified Status Change

The employer provides up to $500 to be “spent” for health plan coverage or cash. An employee elects single coverage at $200/month and elects to receive the remaining $300/month in cash (taxable income). Subsequently, the employee marries, but fails to add the spouse within the 30 election window for a Qualified Status Change. The employee wishes to change to family coverage (at $500/month) which the health plan will permit. Since the election does not satisfy the requirements for a Qualified Status Change, the additional premium must be paid post-tax as well as the initial $300 cash election. Is there any legal way that the additional $300 in premium could be paid pre-tax?

[Guest Benefits Maven]

Not that I can see - not until the next open enrollment

[Guest Dick Sonntag]

Would there be any difference if the employer had a POP (Premium Only Plan), the employee elected single coverage at $200/mo (the employer will provide up to $500/month), the employee married, but didn't enroll the new spouse until after the 30 day Qualified Status Change window. The family plan (only two-tiers offered) cost is $500/month. Can the employee receive family coverage fully paid by the employer or is the extra $300 of premium the employee's responsibility post-tax?

[Guest Benefits Maven]

I think you still have the same problem, even in a POP. You can't change the elections affecting pre-tax dollars except as prescribed and he missed his window of opportunity. I think he's got to pay the difference post-tax

[GBurns]

Where did you find this 30 day limit. I have looked but must have missed it?

Why is this not allowed under Final Reg. 1.125-4 ? It seems to be exactly as Example 2 illustrates as a permitted election change.

[Lisa Hand]

The time period to submit valid change of status requests is normally set in the plan documents.