Election Tool Caveats

• In general, election changes are permissive.  That is to say, a cafeteria plan can be written to incorporate only some or even none of the permitted changes.  This tool assumes that the plan incorporates the full extent of the election changes permitted under IRS rules.
• The IRS rules themselves are largely substantive; plans can impose their own process requirements; for example, a plan may require change requests to be submitted on a particular form or within a certain number of days after the occurrence of a status change event.  This tool assumes that all processes required by the plan have been followed.
• Application of the IRS rules is not always a black or white decision.  In some cases, exercise of judgment or discretion is required to determine whether a request should be allowed.  Use of this tool is no substitute for that exercise.  Consistency is important.  Don’t allow the CEO to make an election change if you wouldn’t (or haven’t) allowed the mail room clerk to make the same change under similar circumstances.
• In some cases, the rules require that employees “certify” that a particular event has occurred.  There is no special form for this certification.  Best practices would require something in writing.
• Any discussion in the rules involving spouses includes same-sex spouses if the marriage was legally contracted in a State that recognizes same-sex marriages.  Domestic partners and persons joined in “civil unions” are not spouses and may not be treated as such under these rules.  IRS rules do not require employers to provide cafeteria plan coverage for same-sex spouses.
• When the rules talk about “dependents”, they generally mean individuals who qualify as tax dependents under Sec. 152 of the Internal Revenue Code.  However, in the case of the employee’s child, the Affordable Care Act expanded the definition of “dependent” for health plan purposes to the end of the year in which the child turns 26, regardless of whether he or she otherwise qualifies as a tax dependent.
• This tool assumes that the employer has already determined whether an individual is a dependent or a same-sex spouse.
• All election changes are prospective only, except where expressly noted.
• There is overlap among various status change rules.  For example, the change in employment, marriage and birth status change rules cover the same topics as those covered under HIPAA special enrollment events. Despite the overlap, there are differences: a change not permitted under one rule might be permitted under another.  Users should make sure they check all rules that may apply.
• No tool can anticipate every possible election change request.  This tool tries to address the most common types of requests.  If a request does not fit into one of the categories discussed, it probably is not permitted.  Employers are urged to confer with their counsel on unusual requests.