What type of benefit plans can be included in a POP?

Under IRS Code Section 125, the types of benefit plans which may be offered under a POP Flexible Benefit Plan include the following:

What legal documents are required for plan sponsors?

Do employees have any additional tax reporting obligations as a result of participating in the POP?

No. Participants will notice that their W-2 reflects a lesser amount as ‘taxable wages’ than if they had not participated in the plan.

What are “Change in Status” events?

The IRS has defined the circumstances under which participants may change their elections mid-plan year. Requests for changes due to “Change in Status” events are subject to the terms and limitations of your underlying group benefit plans. An election change may be made only if it is consistent with, and on account of, any of the change in status events listed in the Election Change Matrix in the back of your SPD.

Is a plan sponsor required to allow an employee to change his/her election if a qualified change in status event occurs?

No. A plan sponsor may restrict participants’ opportunities to change elections as long as the events are handled consistently throughout your plan year. It is important that the plan documents reflect whatever restrictions may be in place.

Can an election change be applied retroactively?

A change may only apply retroactively if it applies to birth or adoption. All other changes must be made on a prospective basis only.