Judges: W.A. DREW EDMONDSON, Attorney General of Oklahoma
Filed Date: 9/29/1998
Status: Precedential
Modified Date: 4/17/2021
Dear Chairman Apple
¶ 0 This office has received your request for an Attorney General Opinion addressing the following question:
May the Oklahoma Employee Benefits Council reopen the StateFiscal Year 1999 employee benefits option period so Stateemployees can change their health insurance coverage since theLegislature increased financial support for health coverage afterthe election period closed?
¶ 1 The State offers health insurance for its employees and their families through a cafeteria plan. 74 O.S. Supp. 1997, §§1361-1372[74-1361-1372]. In a cafeteria plan, employees pick among various benefit options. See
¶ 2 Before July 1, 1998, the State offered each full-time employee $262.19 per month to help pay for employee health insurance coverage. 74 O.S. Supp. 1997, § 1370[
¶ 3 Cafeteria plans are creatures of the federal Internal Revenue Code.
¶ 4 In keeping with federal law, the Oklahoma Legislature requires the State's cafeteria plan to comply with federal statutory and regulatory requirements. 74 O.S. Supp. 1997, §1365[
¶ 5 In keeping with the statute and following guidelines from the Treasury Department, EBC has promulgated rules governing State employees' election of benefits. These rules, which were effective during the State Fiscal Year 1999 election period, follow the Internal Revenue Service rules set out below and state:
(a) Except as otherwise provided in this Section, a participant's election of benefits described in this Chapter . . . shall be irrevocable during the Plan year with regard to any benefit or portion of benefit elected for the period of coverage to which the election pertains. . . .
(b) A participant shall be entitled to modify a benefit election . . . if the modification or new election is on account of and consistent with a change in family status which shall include but not be limited to:
(1) Marriage;
(2) Divorce;
(3) Death of spouse or child;
(4) Birth or adoption of child;
(5) Commencement or termination of employment of spouse;
(6) The employee or dependent move [sic] out of the service area of an HMO or pre-paid plan, resulting in loss of eligibility; and
(7) Such other events, which may permit such modification or election in accordance with the Internal Revenue Code, and regulations promulgated thereunder. . . .
OAC
¶ 6 This rules follows U.S. Treasury policy dealing with when employees may elect their benefits. Under IRS policy, generally the benefits election can be made only during the option period.2
¶ 7 Under IRS policy, elections outside this option period are limited to "changes in status," which are defined at
1. Change in marital status through marriage, divorce, annulment, legal separation, or death of spouse;
2. Change in number of dependents through birth, adoption, placement for adoption, or death of a dependent;
3. Change in employment status through termination or commencement of employment by employee, spouse, or dependent;
4. Change in work schedule through reduction or increase in hours of employment by employee, spouse, or dependent by strike, lockout, commencement or return from an unpaid leave of absence, or switch between part-time and full time employment;
5. Change in unmarried dependent's status allowing health or accident insurance coverage such as attainment of age limit for insurance coverage or cessation of student status; and
6. Change in place of work or residence for employee, spouse, or employee's dependent.
¶ 8 Additional funding from an employer to help cover the cost of insurance is not a listed change in status.
¶ 9 After the election period closes, the change-in-status provisions limit any alteration in cafeteria plan benefits. Operating outside this framework would put the State's cafeteria plan benefits back into the definition of gross income and subject employees to additional taxation. See
¶ 10 It is, therefore, the official Opinion of the AttorneyGeneral that: The Oklahoma Employee Benefits Council may not reopen theState Fiscal Year 1999 employee benefits option period so Stateemployees may change their health insurance coverage despite thefact that the Legislature increased financial support for healthcoverage after the election period closed.
W.A. DREW EDMONDSON ATTORNEY GENERAL OF OKLAHOMA
ANDREW TEVINGTON ASSISTANT ATTORNEY GENERAL