IRS Expands Election Changes Allowed Under Section 125 Cafeteria Plans In official guidance issued yesterday, the IRS has expanded the permitted election changes for health coverage under a Section 125 Cafeteria Plan. Effective immediately, IRS Notice 2014-55 allows a participant to revoke his election during a period of coverage if:
Under no circumstances may a participant elect to revoke coverage on a retroactive basis.
The IRS guidance requires a cafeteria plan amendment to allow the additional election changes. The amendment must be adopted on or before the last day of the plan year in which the elections are allowed, can be made retroactive to the first day of the plan year, and must be publicized to participants. Also, a cafeteria plan may be amended to adopt the election changes for a plan year that begins in 2014 at any time on or before the last day of the plan year that begins in 2015.
To view IRS Notice 2014-55 in its entirety, please