When Can Employees Change Their Benefits? IRS Section 125 Qualifying Events Explained

Understanding when employees can modify their workplace benefits is essential for both employers and staff, mainly when their plans include advanced options like Core360 from Health Sphere. This plan isn’t your typical Section 125 setup. Core360 brings together IRS Section 125, Preventative Care Management Plan (PCMP) and Self-Insured Medical Reimbursement Plan (SIMRP) into a single compliant solution which provides extensive benefits without increasing expenses for either organizations or staff.

This text explains IRS Section 125 qualifying events, so readers can understand when changes are possible while demonstrating how Core360 provides better flexibility than standard benefit programs.

What Is a Section 125 Qualifying Event?

A qualifying life event under Section 125 is a specific situation that allows employees to make mid-year changes to their pre-tax benefit elections. Usually, once selections are made during open enrollment, they remain locked in for the entire plan year. However, life doesn’t always follow a schedule, and the IRS acknowledges this.

Here are some of the most common triggers for benefit adjustments:

Marital changes – such as getting married or divorced
Birth or adoption – adding a new dependent to the family
Employment status updates – including job loss, new employment, or switching from full-time to part-time
Dependent eligibility shifts – like a child aging out of coverage
Coverage loss or gain – either through a spouse’s plan or government programs

When any of these situations occur, employees can adjust their benefits accordingly; however, they typically need to take action within 30 days of the event.

Why Traditional Section 125 Plans Fall Short

Most standard Section 125 programs only offer limited pre-tax savings on premiums or flexible spending accounts. While helpful, they don’t go far enough to solve deeper cost and coverage concerns for today’s workforce.

Core360 by Health Sphere is in a different category. It blends the compliance of Section 125 with the value of PCMP and SIMRP, delivering a multi-layered benefits solution that:

Automates compliance
Enhances care access
Boosts financial outcomes for employees and employers

Core360: A Smarter Way to Deliver Benefits

Core360 is explicitly designed for organizations with 40,000–70,000+ enrolled employees, and it is making a measurable difference across various industries. By bundling IRS Section 125 rules with proactive care strategies, Core360 enables employees to manage their health more effectively. This helps employers unlock significant savings.

For Employers, Core360 Offers:

An average of $600 in annual savings for every full-time employee
That’s $60,000 in annual savings for every 100 W2s—without adding to operational expenses.
Zero upfront cost
You get a benefit-rich system with no budget strain or hidden setup fees.
Decreased healthcare claims
Employers typically experience a $1,400 reduction in claims per employee over a three-year period.
Fast, efficient rollout
Most companies can implement Core360 in just 4-5 weeks from start to finish.
Workforce stability
A stronger benefits package helps improve retention and drive workforce performance.
Real-time financial impact
The program can start delivering measurable ROI almost immediately.

For Employees, Core360 Delivers:

A boost in take-home pay
Employees can see a 3–4% net increase in their paychecks—adding up to around $100/month.
Unlimited virtual care with no out-of-pocket expenses
From everyday concerns to urgent support, employees get 24/7 access to doctors, nurses, and mental health experts.
Wellness tools trusted by medical leaders
Core360 features Mayo Clinic-backed resources and a digital health dashboard to support smarter decision-making.
Comprehensive protection
Employees can access universal life, disability, and critical illness insurance—with options that also cover spouses and dependents.

What Makes Core360 Stand Out?

Unlike most plans that only address pre-tax benefits, Core360 provides a fully managed and structured approach. By combining three powerful components—Section 125, PCMP, and SIMRP—the program delivers stronger outcomes for both sides of the business with minimal friction.

It’s fully automated, highly scalable, and tailored to each organization’s needs. No more piecing together separate tools and providers. With Health Sphere, everything works together by design, not by default.

How Qualifying Events Work with Core360

Since Core360 leverages Section 125 rules, it also adheres to the IRS guidelines for when benefit changes are permitted mid-year. The good news? Employees can make updates during open enrollment or after a qualifying life event, with the same flexibility you’d expect from a top-tier plan.

Here’s what employers should do to stay aligned:

Educate employees about what counts as a qualifying event
This ensures they know when they’re eligible to make changes.
Keep documentation clear and simple
Help your team understand what paperwork is needed and what timelines to follow.
Work with a benefits partner like Health Sphere
Core360 simplifies compliance, tracks qualifying events, and makes it easy to update elections.

Summary: Core360 Turns Benefit Confusion Into Opportunity

When employees experience significant life changes, they need a system that makes benefit adjustments seamless, not stressful. Core360 helps employers deliver that flexibility while improving access to care and reducing costs.

By integrating IRS Section 125 qualifying events with advanced wellness and reimbursement features, Health Sphere’s Core360 program does more than just follow the rules—it transforms how employees experience and receive their benefits.

If you’re looking to offer a more innovative, cost-free solution with immediate payoff and long-term value, Core360 is the path forward.