Can terminated participants revoke their elections?
A. Yes, if the plan so provides. A Cafeteria Plan may permit, but is not required to permit an employee who separates from service during a period of coverage to revoke existing benefit elections and terminate the receipt for the remaining portion of the coverage. A Cafeteria plan may also provide that a benefit will cease to be provided to an employee if the employee fails to make the required premium payments with respect to the benefit. (Reg. Sec. 1.125-2 Q&A-6) Q. If a participant elects to pay for medical insurance premiums through a Cafeteria Plan and then unilaterally drops the coverage without a valid change in family status, can the employer reinstate the original salary? A. Technically no. Unless there is a change in family status or a significant change in the cost of coverage, the plan cannot allow for an upward salary adjustment. Any bonus increase in pay would have to be independent of the Cafeteria Plan. Also, any arrangements formally outside of the Cafeteria Plan to ad
Related Questions
- When terminated from a program or grant training, why are approved participants required to repay all funding issued on their behalf within 30 days?
- In what circumstances may participants revoke existing elections and make new elections under a cafeteria plan?
- Can terminated participants revoke their elections?
