Couple of Questions on Group Health

[somarco]

Got this from a 125 administrator . . .

The legal: Hardship is not a qualifying event permitting a change in a premium election mid-year. He can drop the insurance but cannot stop the withholding until the end of the year.

The practical: I don't know of many groups that enforce this rule as it relates to premium. The IRS has never fully audited any 125 plan ... anywhere ... anytime ... since 1978 when passed and have no money in the budget to do so. The Emperor in Washington not only has no clothes ... he also has no teeth. The upside to permitting a change like this is a happy employee. The downside, if audited, would be some back taxes and penalties. The probability of the downside ... something less than .00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001. The most I have ever heard about an IRS audit is they have asked to see their written plan and SPD.
​

 

[LGilmore]

CHANGE STATUS ALLOWANCES​

CHANGE IN LEGAL MARITAL STATUS
CHANGE IN NUMBER OF DEPENDENTS
CHANGE IN EMPLOYMENT STATUS
CHANGE IN DEPENDENT STATUS
CHANGE IN RESIDENCE STATUS
QUALIFIED MEDICAL SUPPORT ORDER (QMCSO)
CHANGE IN MEDICARE OR MEDICADE STATUS
SIGNIFICANT COST OF COVERAGE CHANGE
CHANGES IN SPOUSE OR DEPENDENTS PLAN
CHANGES DUE TO HIPPA RIGHTS


pop plan change allowances.

He can drop the insurance but cannot stop the withholding until the end of the year.


Are you referring to the re-embursement account? That would be correct, but it also isn't tied to having a particular plan in place, it is tied to claims, covered by insurance or not.​