30 Day Notice for a Qualifying Event

montanaguru

We have a Section 125 plan that is self-insured. Our SPD outlines a 30 day requirement for qualifying events.

We have an employee who approached me 90 days after the birth of a child to add the newborn to our plan.

Does an employer have any leeway in this regard, or are we bound by IRS regulations relating to qualifying events under a Section 125 plan??

Thanks in advance for any responses.

E Wart

I am not legally trained in this matter, but this is what I have learned over the years.
First, was your employee given previous notice that they are supposed to notify you when an event happens (do you or someone send out initial letter to all new hires?)
If yes, they were given fair warning and should have come to you. I have had a situation lately where an employee's spouse lost her coverage for herself and child and didn't notify us in time (within 30 days of event) and I was not able to add her back into our coverage. She can enroll again during our annual re-enrollment period.
Now that said, one thing that I try to do, any time I learn that an employee has married, divorced, had a baby or whatever... I have a form letter that I send out that covers things like 1)group medical insurance change 2) life insurance beneficiary change 3) 401k beneficiary change 4) tax exemption changes 5) name change (if female) 5) auto deposit change, if applicable. I also include the pages from the initial COBRA letter so that they can complete this. If they don't return it to me in time, it is now their problem.
My gut feeling is that if employee didn't notify you within 30 days and you have provided them with the initial COBRA letter, they aren't eligible until re-enrollment.
However, this is your call since self insured. (You could go back and have employee pre-date forms. I would just worry about setting yourself up for future problems and would not advise this.)
E Wart

jmcaa

If your SPD has the 30 day requirement and the employee received the SPD, it is the employee's responsibility to read the SPD and know the rules of the plan. Therefore, he should wait until the next Open Enrollment Period to add the child.

If he realized he hadn't added this child within 45 days I would be tempted to say the paperwork was lost, but "90 days" is a long time to not notice that your doctor bills weren't being paid.

montanaguru

Things get even better....

Apparently our employee was told by our third-party administrator that he had 90 days - and this was due to a typo in the SPD (but not the Plan Document).

I wonder however, most plans state 30 days, but someone told me last week that regulations relating to a Section 125 plan only require that the employee must be given at least 30 days to elect changes.

In short, is there an IRS-driven requirement for the 30 days?