One of the most common questions we receive pertains to Section 125.  And here it is: When can an employee change his or her elections under a Section 125 plan?

Under a Section 125 plan, participant elections generally must be irrevocable until the beginning of the next plan year. However, when a participant experiences one of several specific recognized events, he or she may be permitted to make a change in election that is consistent with the event. A change in election must be made prospectively, except in the few cases where HIPAA requires that a change be made effective retroactive to the date of the event.

A Section 125 plan may allow a participant to change his or her elections related to Section 125 plan benefits (other than flexible spending accounts) upon the occurrence of any of the following events:

  • Change in status (for example, employee’s legal marital status, number of dependents, employment status, dependent eligibility change or change in residence);
  • Significant cost increase;
  • Significant curtailment of coverage;
  • Addition or elimination of benefit package option;
  • Change in coverage under other employer’s plan;
  • Loss of group health coverage sponsored by a governmental or educational institution;
  • FMLA leaves of absence;
  • COBRA qualifying events;
  • HIPAA special enrollment events;
  • Judgment, decree or court order, such as a Qualified Medical Child Support Order (QMCSO); or
  • Medicare or Medicaid entitlement.

Now you have the list!