Normally, employees are only allowed to make changes to their benefit elections during the annual enrollment period. But there are specific qualifying life events where an employee can adjust their benefit choices to reflect their new circumstances.
Some of the most common examples include:
- Marriage or divorce. Employees can make changes to their benefits following a marriage or divorce, such as adding a spouse or removing a former spouse from their health insurance coverage.
- Birth or adoption of a child. Having a new child, either through birth or adoption, typically allows employees to enroll the child in their health insurance plan or adjust their dependent care assistance accordingly.
- Change in employment status. Significant changes in employment, such as starting a new job or leaving an old one, may trigger the need to modify benefit selections.
- Change in dependent status. If an employee's dependent no longer meets the eligibility criteria for coverage, such as a child reaching a certain age, it may necessitate a change in benefit elections.
- Loss of other coverage. If an employee or their dependents lose coverage under another employer-sponsored plan, they may be eligible to enroll in their current employer's plan.
- Significant cost or coverage changes. If there are substantial modifications to the benefits offered under the cafeteria plan, such as a change in deductibles or co-pays, employees may have the opportunity to adjust their elections.
Section 125 of the Internal Revenue Code provides the framework for qualifying life events, but specific rules can vary depending on the employer's plan. Employees should contact their employer's benefits department for the exact qualifying events and procedures for making changes to their benefit elections.