Tough Times Lead to Rise in Cafeteria Plan Change Requests

When times are tough and it is increasingly difficult to pay the rent / mortgage and put food on the table, many benefits (health benefits, life insurance, etc.) elected under “cafeteria plans” (benefits purchased on a pre-tax basis) become luxuries, not necessities.  With rising costs of living and stagnant salaries, many employers are being faced with requests from employees to withdraw from cafeteria plan benefits during the plan year.  Seems simple enough, right?  A few standard forms and a call to your plan manager should do the trick?  Not so fast. Under Section 125 of the Internal Revenue Code (and the regulations promulgated thereunder) cafeteria plans may allow employees to revoke an election during a period of coverage and make a new election for the rest of the period if a “change in status event” has occurred, and the election change is consistent with the event.  “Change in status events” include changes in marital status, employment status, number of dependents; instances where a dependent satisfies or ceases to satisfy eligibility requirements; and changes in residence.  To satisfy the “consistency rule,” … Continue reading


According to the Chinese Zodiac, one of the traits of the Rat is wit; and it just may be that characteristic that recently saved the Rat from the National Labor Relations Board’s (“NLRB”) chopping block.  You’ve seen it, the giant inflatable Rat that looms outside a work place pulled into some type of labor dispute.  If you have not, just imagine a 60 foot Rat with a nasty smirk on its face bouncing up and down with the wind and the chants from angry union workers. In a recent case remanded from the DC Circuit Court of Appeals to the NLRB (Sheet Metal Workers Local 15 (Brandon Region Medical Center), the NLRB determined that the Rat’s presence at a secondary employer’s premises to protest the use of non-union workers does not violate the law.  Pursuant to the law (The National Labor Relations Act), conduct that “threatens, coerces or restrains” a secondary employer from doing business with a primary employer is illegal.  In a 3 to 1 decision by the Democrat controlled Board, the NLBR determined that the presence of a … Continue reading