Guest Melissa Winslow Posted March 3, 2000 Posted March 3, 2000 A client of mine is the on the receiving end of a substanital increase in health insurance premiums (effective 4/1/00). They are considering the removal of their prescription card benefit under their coverage to help offset the increase. They would like to allow the folks in their 125 plan (YE =12/31) to change their medical reimbursement elections ASAP to help defray the financial impact of the above action. I do not believe the above qualifies as an allowable mid-year change to the medical reimbursement portion of the 125 plan. Does anyone have a thought on this matter? If it is allowable, could I have a citation?
Lisa Hand Posted March 28, 2000 Posted March 28, 2000 Change in cost or coverage - proposed and final regulations issued March 23, 2000 - would permit the change in premium but not a change in the FSA, in fact the proposed regulations specifically prohibit the Medical FSA being changed. What your client might consider instead is cost sharing the increased in premium with the employees instead of eliminating benefits. [This message has been edited by Lisa Hand (edited 03-28-2000).]
KIP KRAUS Posted March 29, 2000 Posted March 29, 2000 Milisa: What is your client doing with regard to an alternative Rx drug reimbursement program? Depending on how big a group they have and how their plan is financed, they may be able to off-set totally droping the Rx plan with verying Rx reimbursement plan designs. This could ease both their premium increase and the effect on plan participants.
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