What seems like a simple idea, changing the plan years of welfare benefits plans, actually involves several compliance issues. Each of those issues must be analyzed to determine if the plan year can be changed, and if so, how best to accomplish the change. Under the Section 125 and ERISA rules, the change is only permitted if there is a legitimate business purpose. If the Section 125 Plan has a Health FSA as a component benefit, the change should not be made until the start of the next plan year. And, in addition to the legal considerations, the employer should consider the human relations issues of a short plan year as well.
Read the full McGriff Compliance Q&A
Insurance products and services offered through McGriff Insurance Services, LLC, a subsidiary of Truist Insurance Holdings, LLC, are not a deposit, not FDIC insured, not guaranteed by a bank, not insured by any federal government agency and may go down in value.
McGriff Insurance Services, LLC. CA License #0C64544