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Section 125 Plan Year

lgrofflgroff 1 Post
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Must a Section 125 plan year coincide with the calendar year or can it be any 12 month period?
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  • 3 Comments sorted by Votes Date Added
  • MarciaMarcia 5 Posts
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    Our Section 125 Plan year is 7/1 through 6/30. It coincides with our benefits package renewals. It just evolved that way to follow our health insurance renewals. We do find it easier to do elections, etc. in June of each year rather than in December around the holidays.
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  • awilliamsawilliams 258 Posts
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    [font size="1" color="#FF0000"]LAST EDITED ON 06-25-02 AT 01:30PM (CST) by jrobb (admin)[/font][p]I posed this question to a member of the advisory board of the [link:www.hrhero.com/bcla.shtml|Benefits and Compensation Law Alert], who replied:

    It can be on any 12 month period. Be aware that there are some issues associated with having a plan year that does not coincide with the plan for an underlying benefit package.

    I hope that helps!

    Anne Williams
    Attorney Editor

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  • Lori BLori B 172 Posts
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    Yes, it can be any 12-month period and you need to remain consistent. It is possible though to have a short plan year if you want to adjust it to some other time period. This issue is much easier now that 5500s aren't required for standalone 125 plans.
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