In the past, the IRS had indicated that an employee
who returned to work after termination should
not be allowed to re-enter the Section 125 Plan
(this pertained to any pre-tax benefit). The
IRS has now indicated in their Final Regulations
issued March 23,2000 that a terminated employee
who returns during the Section 125 Plan year
can re-enter the Plan. If termination has been
longer than thirty (30) days, the employee can
make a new election regardless of any elections
made during prior participation. If re-hired
within thirty (30) days of termination, the
participant's old elections must be reinstated-e.g.
an implicit termination/rehire merely to change
the employee's election would not be permitted
