Question of the Week

Posted by BAS - 16 July, 2020

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Q.- Can we skip open enrollment this year since we are not going to be back in the office and make our employees stay in the same plans for next year?

A.- If your employees pay for benefits on a pre-tax basis through a cafeteria plan, the answer is no. Under the Code section 125 rules, a plan year must be 12 consecutive months (except for a short plan year which is very limited). The plan year can begin on any day of any calendar month and must end on the preceding day in the immediately following calendar year. If you have flexible spending account plans, the election reverts to $0 for the next plan year if there is no affirmative new election made.


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