If a group’s open enrollment has closed, can an employee make an election change outside of Section 125 permitted qualifying events?

Generally, an employee’s election made through a cafeteria plan is irrevocable once the plan year begins, unless the individual experiences an Internal Revenue Code Section 125 qualifying event that allows them to change their elections (assuming the Section 125 plan document also recognizes the event). But Section 125 (i.e., the cafeteria plan regulations) does not prohibit election changes before the period of coverage begins. This means the employer may allow election changes before the plan year begins but is not required to do so.

It is ultimately the employer’s choice whether to allow any changes. If the employer allows changes, an employee does not need any particular reason to make a change. Note that cafeteria plan terms must be applied uniformly to all participants, so any exceptions to a plan requirement that elections be made during the open enrollment period must be applied equally. Despite the added administrative difficulty, there are certain employee circumstances that may persuade an employer to allow post-open enrollment/pre-plan year election changes, such as if an employee has a shift in health insurance needs or was unavailable during the open enrollment window. Many employers will end open enrollment with enough time before the plan year begins to fix any mistakes and conduct any preliminary discrimination testing.