From the Hotline: Cafeteria Plan Mid-Year Changes

Question: When an employee changes a benefits election mid-plan year, does the § 125 cafeteria plan require the employee to sign an authorization form that contains the pre-tax cafeteria plan language?

Answer: Section 125 plans are allowed to take passive enrollment, meaning no document is required, as long as the employee has been informed of the process if the employee chooses to opt out of the pre-tax contributions at any time. As long as the employee was informed of this previously, such as at open enrollment, there is no requirement to have the employee sign an authorization or acknowledgement when the mid-year change is made.