Q. Can I change or cancel my contribution election during the year?
A. Unless you have a change in status as defined in the Changes to medical, dental, and vision plans (health plans) pre-tax contributions, you may not opt out of your pre-tax election during a plan year. However, you have the opportunity to opt out once a year during the annual enrollment period.
Your new election takes effect the following January 1.
You are enrolled to pay contributions for medical, dental and vision plan coverage on a pre-tax basis, which gives you two primary advantages:
- Under current tax law, you do not pay federal income taxes or Social Security taxes on the amount of these contributions. In most states, you also save on your state income taxes.
- Each year you are enrolled to pay your contributions for medical, dental and vision plan coverage on a pre-tax basis and your election remains in effect unless you cancel it during a subsequent enrollment period or due to a change in status. The amount of your pre-tax payroll deduction will increase or decrease to reflect the amount of your contributions for medical, dental and vision plan coverage at the beginning of each plan year and when your class of coverage changes.
- Pre-tax contributions for your premiums are different than your pre-tax contributions to your flexible spending account.
If you opt out of paying your contributions on a pre-tax basis, you will have to renew this election to pay on an after-tax basis each time you make a change on account of a change in status and each annual enrollment.