First, your cafeteria plan document must allow it under IRS section 125. Verify that your cafeteria plan includes a midyear election change provision. If it does, have the employee provide documentation of the spouse’s open enrollment period and any election change made with respect to the spouse’s coverage.
Second, the employee’s requested change must correspond with the spouse’s election under their plan.
Examples:
Allowed: If the spouse declines or drops coverage under their plan they can be added to your plan. Or, the employee can drop or decline coverage under your plan and enroll in the spouse’s plan.
Not Allowed: The spouse is in an open enrollment period but the employee wants to change from one medical option to another under your plan even though nothing about their coverage or eligibility has changed. That typically is not allowed until your next open enrollment period. There must be a qualifying event.
This generally applies to medical, dental, or vision coverage changes. It doesn’t allow the employee to change unrelated benefits, such as life insurance, disability coverage, or a health flexible spending account (HFSA) election.