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News from Flexible Benefit Administrators

Changes to Cafeteria Plan Election Rules

The IRS recently issued Notice 2014-55 which expands the permitted election rules for health coverage under a Section 125 cafeteria plan. In this notice there are two specific situations that are addressed allowing a cafeteria plan participant to revoke their election during a period of coverage. In order to allow the new permitted election changes under this notice, cafeteria plans must be amended to allow for such changed. For a review of the IRS Notice visit http://www.irs.gov/pub/irs-drop/n-14-55.pdf

  • A participating employee whose hours of service are reduced so that they are expected to average less than 30 hours of service per week, but the reduction of hours does not affect the employees eligibility for coverage under the group health plan.
  • An employee participating in the employer's group health plan who would like to cease coverage and purchase coverage through an Exchange or Marketplace program.


Please feel free to contact our office if you have any questions on this change or if you need any assistance with updating your plan documents.