A company has a Premium Only Plan (section 125) for their medical insurance plan. It is my understanding that if an employee elects during the year (any time) to drop coverage for himself and/or dependents then he is allowed to do that. However, should this employee elect to enroll in the medical plan (Pre-tax deductions) he could not unless there was a "qualifying event". Otherwise, he would need to wait until the Open Enrollment period.

My question is can an employee who had previously elected medical insurance (pre-tax...Premium only plan) elect to drop coverage any time during the year without a "qualifying event" from occuring? (I would not think a company could require him to pay for deductions until the next open enrollment at which time he could decline coverage. I could imagine that there would be very many upset employees. And if they cannot change this election does anyone have a sample of the Premium Only Plan information that is given to new employees or current employees at Open Enrollment?)
THANKS!

An employee can only make changes to pre-tax deductions during open enrollment or in the event of a change in status (i.e. - a qualifying event). Employees can not choose to no longer participate in a pre-tax benefit simply because they no longer want it.

Your plan administrator or human resources manager should have a copy of your plan document or a summary plan description for your review.

I 2nd that opinion

quote:

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Originally posted by inslady:
An employee can only make changes to pre-tax deductions during open enrollment or in the event of a change in status (i.e. - a qualifying event). Employees can not choose to no longer participate in a pre-tax benefit simply because they no longer want it.

Your plan administrator or human resources manager should have a copy of your plan document or a summary plan description for your review.

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jlcowden

I also agree. That is why we believe in permitting employees to choose whether or not they will pretax their premiums. The IRS does not give you a tax break without imposing restrictions. Here, the trade is a tax break on the premiums traded for losing the freedom to move in and out of the plan