Employer funded plan stipulates election to add dependent during special enrollment period (i.e. mid-year following qualified event) must be submitted no later than 31 days post event - birth of dependent in this case. Employee missed deadline and appealed for exception. Employee is currently enrolled in family plan with wife and one dependent, birth of second child is qualifying event.

Can an exception be granted without inviting undue scrutiny from IRS under IRC 125? If IRS took issue with the exception, would exclusion from income be denied to all plan participants or just affected employee? I couldn't find this specifically addressed elsewhere. Thanks.

Based on what you've written, I believe the answer to be yes if your plan will allow it. I base that on the fact that the premium isn't changing - and that, after all, is what the IRS really cares about. Now, if the premium (employee contribution) was changing, then I would change my answer.

It's now down to your plan and if they would allow the change. Talk with your carrier and see if they'd allow. Even though I think the IRS wouldn't care now, the carrier might.

JMO