It s a Good Thing Cafeteria Plan Flexibility

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It s a Good Thing Cafeteria Plan Flexibility
Calendar19 September 2014

The IRS issued a notice yesterday that expands permissible changes in medical plan elections under a cafeteria plan. It addresses new scenarios employers may encounter as a result of the ACA – employees who come in and out of eligibility based on the 30-hour requirement, or who become eligible for a subsidy in the public exchange. In an earlier post, I suggested that an employer offering very basic Minimum Essential Coverage (MEC) coverage should consider setting up the plan with post-tax contributions to give employees the flexibility to drop coverage if they became eligible for subsidized coverage at some point during the year. This notice makes it possible to offer pre-tax deductions and still allow employees to cancel coverage to take advantage of subsidized coverage on the public exchange. This notice comes not a moment too soon, as many employers are finalizing open enrollment materials. But hey, we’re not complaining – the additional flexibility is a good thing!

Go to full article: www.irs.gov

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