September Compliance Q&A: Key Section 125, QLE & HSA/HDHP Guidance

9.3.26  |  HEALTH PLAN RATE INCREASE FOR COBRA PARTICIPANTS

Q. For 2027, is telemedicine still allowed to be a $0 copay on HSA/HDHP plans?
A. Yes, the One Big Beautiful Bill made the telehealth safe harbor permanent. Employers are free to offer no-cost telehealth services as part of an HDHP without jeopardizing the ability to make HSA contributions.

9.10.26  |  PAYROLL SCHEDULE CHANGE A QLE?

Q. If an employee moves from an hourly arrangement to a semi-monthly pay arrangement is it considered a QLE allowing a change in benefits?
A. No, a change in the frequency of payroll is not a qualifying life event under the Section 125 rules. An employee cannot change a benefits election mid-year solely because of a change in payroll frequency.

9.17.26  |  SPOUSE OPEN ENROLLMENT

Q. An employee is covered under her husband’s plan with a different employer. Her husband’s open enrollment is mid-year with a Sept. 1 effective date. She wants to be dropped from his plan and enroll in her employer’s plan effective Sept. 1. Is this considered a voluntary loss of coverage, which is not a qualifying event under her employer’s plan?
A. Actually, an employee being dropped from a spouse’s plan (voluntarily) during the spouse’s open enrollment is a qualifying life event and your client is permitted to allow the employee to enroll in coverage mid-year. This is a unique situation expressly covered by the Section 125 cafeteria plan regulations.

Answers to the Question of the Week are provided by Kutak Rock LLP. Kutak Rock provides general compliance guidance through the UBA Compliance Help Desk, which does not constitute legal advice or create an attorney-client relationship. Please consult your legal advisor for specific legal advice.