Are we required to have employees complete wellness reward screenings which impact health care premiums, prior to the new plan year beginning?
While some employers do take this approach, it may be possible for employers to apply premium reductions for those who complete the required screenings mid-year.
The challenge relates to compliance with the Internal Revenue Code (IRC) Section 125 cafeteria plan regulations that govern mid-year plan or premium changes. In order for the employer to accomplish this compliantly, their cafeteria plan must include language which clearly provides that in the event of a coverage cost change, the salary reduction election can be automatically increased or decreased. Additional language should outline that in the event of a “significant” premium change, an individual can revoke his or her current election and make a new election which is consistent.