Understanding cafeteria plan election changes can be complex, especially when dealing with domestic partner relationships. Here’s what you need to know about whether such relationships qualify for election changes under cafeteria plan rules.
Domestic Partner Relationship and Election Changes
The commencement of a domestic partner relationship does not qualify as a “change in marital status” under cafeteria plan rules. Legal marital status changes include marriage, death of a spouse, divorce, legal separation, and annulment. While the list is not exhaustive, the IRS does not recognize the start or end of a domestic partner relationship as equivalent to these events.
Alternative Election Change Event: Change in Coverage Under Another Employer Plan
However, another permitted event, “change in coverage under another employer plan,” may allow for an election change. If your plan includes this provision, your employee can drop major medical coverage upon becoming covered under their partner’s employer plan. This event does not restrict changes to the plans maintained by the employer of a spouse or dependent but does not allow changes to health FSA elections.
Key Takeaways
- Domestic Partner Relationship: Does not qualify as a change in marital status for election changes.
- Change in Coverage: Employees can change their election if covered under a partner’s employer plan.
- Documentation: Required to prove new coverage under the partner’s employer plan.
- Plan Specifics: Check your specific cafeteria plan terms for detailed rules and procedures.
Conclusion
While domestic partner relationships don’t qualify for election changes under marital status rules, a change in coverage under another employer plan can allow adjustments. Always consult your cafeteria plan specifics and seek professional advice for compliance.
