Source: https://www.div125.com/can-i-change-my-election-for-my-health-insurance-mid-year-when-the-exchanges-open/
Timestamp: 2019-04-21 10:52:23+00:00

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Can I change my election for my health insurance mid year when the exchanges open? | Diversified Administration, Inc.
Can I change my election for my health insurance mid year when the exchanges open?
Many employers offer health plans to employees through salary reduction under a section 125 cafeteria plan. Generally, cafeteria plan elections must be made before the start of the plan year, and are irrevocable during the plan year. See proposed § 1.125-2. However, the final regulations under § 1.125-4 permit a cafeteria plan to provide for changes in elections in certain circumstances, such as for change in status events. An employer that wishes to permit such changes in elections must incorporate the rules in § 1.125-4 in its written cafeteria plan.
In 2014, employees of an applicable large employer member covered under their employer’s health plan through salary reduction under their employer’s cafeteria plan may wish to enroll in coverage through an Exchange and discontinue their employer’s coverage. However, the availability of health plan coverage through an Exchange beginning in 2014 does not constitute a change in status under § 1.125-4. As a result, employees would not be permitted to change their salary reduction elections for accident and health coverage during the plan year to cease salary reduction under the cafeteria plan and purchase coverage through an Exchange. Conversely, to avoid the individual responsibility payment under section 5000A, employees not covered under their employer’s health plan may wish to enroll in the plan beginning after December 31, 2013.
The Treasury Department and the IRS have concluded that it is appropriate to provide transition relief from the election rules in proposed § 1.125-2 with respect to salary reduction elections under a cafeteria plan for an employer-provided accident and health plan with a fiscal year beginning in 2013. This transition relief applies only to the revocation, modification, or commencement of salary reductions for accident and health coverage offered through a cafeteria plan of an employer with a cafeteria fiscal year plan beginning in 2013 (and does not apply to any other qualified benefit offered through a cafeteria plan).
(2) An employee who failed to make a salary reduction election through his or her employer’s cafeteria plan for accident and health plan coverage with a fiscal plan year beginning in 2013 before the deadline in proposed § 1.125-2 for making elections for the cafeteria plan year beginning in 2013 is allowed to make a prospective salary reduction election for accident and health coverage on or after the first day of the 2013 plan year of the cafeteria plan, without regard to whether the employee experienced a change in status event described in § 1.125-4.

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