Modifying Your Election Mid-Year (Life Events & Status Changes)

Overview

Generally, choices made during open enrollment for a Section 125 Cafeteria Plan are locked in for the entire plan year. However, IRS rules allow participants to modify their pre-tax elections mid-year if they experience a qualifying life event (Change in Status) that meets a specific consistency test.

Use this guide to understand when, why, and how mid-year election changes can be made across your different Rocky Mountain Reserve (RMR) accounts.

Table of Contents

• Qualifying Change in Status Events
• The Consistency Test Explained
• How Changes in Costs Impact Your Election
• How Changes in Coverage Impact Your Election
• Other Special Enrollment Triggers
• Is There a Time Limit to Request a Change?

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1. Qualifying Change in Status Events

A participant may modify their plan elections mid-year if they experience any of the following life events:

• Legal Marital Status: Marriage, divorce, legal separation, annulment, or the death of a spouse.

• Number of Dependents: Birth, adoption, placement for adoption, or the death of a dependent.

• Employment Status: Any change that impacts benefits eligibility for the employee, their spouse, or a dependent. This includes starting or terminating employment, switching between full-time and part-time status, a strike or lockout, beginning or returning from an unpaid leave of absence, or a change in worksite location.

• Dependent Eligibility: A child reaching the maximum age limit for coverage, changing student status, or a dependent no longer meeting the qualifications to be eligible for dependent care.

• Residence: A change in home address for the employee, spouse, or dependent that alters their coverage options (e.g., moving out of an HMO network service area).

🌟 The HSA Exception: Unlike FSAs or insurance premiums, Health Savings Account (HSA) elections are not locked. You may modify, increase, decrease, or revoke your HSA contributions at any point during the plan year without needing a qualifying life event.

2. The Consistency Test Explained

Experiencing a life event isn't enough on its own; the requested change must also pass the Consistency Test. This means the election modification must directly correspond to, and be on account of, the event itself.

• Health & Life Insurance: The change must match the impact on coverage eligibility. Gaining a dependent allows you to add coverage; losing a dependent allows you to drop coverage for only that person. You cannot use one person's life event to change someone else's coverage (e.g., if one child ages out, you cannot cancel insurance for your other children).

• Gaining Other Coverage: If you or a dependent becomes eligible for coverage under a different employer’s plan (due to marriage or a spouse’s new job), you can only drop your current coverage if enrollment in the new plan actually begins.

• Dependent Care FSA: An election change is consistent if it aligns with a change in care expenses (e.g., a spouse starts working from home and no longer requires external daycare).

3. How Changes in Costs Impact Your Election

Whether you can adjust your elections due to mid-year price updates depends entirely on the benefit type:

• Medical Premium Plans: If premiums experience minor changes, the plan can automatically adjust your pre-tax payroll deductions. If costs increase significantly, you can switch to a cheaper, similar plan option or drop coverage entirely if no similar option exists. If costs drop sharply, you may elect to join the plan.

• Dependent Care FSA: You can adjust your election if a cost change is imposed by a professional childcare provider. You cannot change your election if the cost change comes from a provider who is your relative.

• Health FSA: No mid-year changes are allowed based on cost fluctuations. Your Health FSA contribution amount is strictly locked for the year, even if your underlying insurance premium rates change or if you decide to begin participating in an HSA.

4. How Changes in Coverage Impact Your Election

If the structure of your benefits changes mid-year, adjustments may be permitted:

• Medical Premium Plans: If a plan significantly cuts benefits (such as a massive hike to deductibles or copays), you can switch to a different, similar health plan option. If the employer adds or upgrades a plan option, you may switch to that option. You can also adjust coverages to coordinate cleanly if your spouse’s employer operates on a different plan year and holds Open Enrollment mid-way through yours.

• Dependent Care FSA: Hiring a new childcare provider (whether an independent business, a household employee, or a relative) counts as a valid change in coverage. You may adjust your election to reflect the rates of the new provider.

• Health FSA: No mid-year changes are allowed based on coverage changes.

5. Other Special Enrollment Triggers

• Medicare or Medicaid: If an employee, spouse, or dependent becomes newly entitled to Medicare or Medicaid, the employee can prospectively reduce or cancel their pre-tax premium elections for that individual.

• Marketplace (Exchange) Enrollment: An employee can revoke their group health plan election (excluding a Health FSA) to purchase a Qualified Health Plan through the Health Insurance Marketplace if they qualify for a Special Enrollment Period (SEP) or enroll during the Marketplace’s annual Open Enrollment period. The cancelled workplace coverage must end the day before the Marketplace coverage begins.

6. Is There a Time Limit to Request a Change?

While IRS rules do not dictate a strict federal deadline following a change-in-status event, employers set their own time limits within their official plan documents.

⏱️ Standard Practice: Most employers require participants to submit election changes and supporting documentation within 30 or 60 days of the qualifying life event. If you miss your company's designated window, you must wait until the next annual open enrollment period.

📞 Contact Participant Services

If you need to submit a mid-year change request or verify your employer's exact deadline window, please reach out to our team:

• 💬 Live Chat: Available directly inside the RMR User Portal

• ✉️ Email: [e-mail]

• 📞 Phone: [phone]

• 🕒 Support Hours: Monday – Friday, 8:00 AM – 5:00 PM MS