Can an employee get out of a cafeteria plan if his non-employee spouse

[Guest Theresa]

Can an employee of a company that has signed up for the Cafeteria Plan get out of the plan if their spouse whom is not an employee and is recently self-employed has found cheaper insurance? In other words does this event qualify as a reason to elect out of the plan once an election has already been made?

[Guest Jae]

A change in spouse's employment can be a change in family status which will allow a change in a participant's election. Prop. Reg. 1.125-2 Q & A 6.