Q.- We use the look-back method for determining full-time status. We have an employee who is full-time for the stability period but is switching to part-time later this summer. We know we have to continue to offer him health coverage. He doesn’t want to pay for the coverage when he has a smaller paycheck. Are we allowed to let him drop the coverage mid-year?
A.- Yes. If an employee who is full-time during a stability period switches to a part-time position and wants to drop health coverage, the employee is permitted to drop the coverage under the mid-year life event rules. The IRS recognizes this as a permissible mid-year life event.