Quick Response - Wants to drop husband from ins.

njjel

A female employee has advised me she wishes to drop her husband from her medical/dental insurance because they are separated. I'm thinking she can't do that unless they get divorced and the decree doesn't state she needs to keep him covered. Am I on the right track here?

LindaS

Whenever an employee has come to me with this request I have always advised them against this. Reason being that once the spouse is notified that their coverage has been cancelled, they will immediately obtain a court order stating that insurance cannot be cancelled until the divorce is final. If the employee still wants to go that route, if you have paperwork showing that they are legally separated this is a COBRA qualifying event so you would need to send out the paperwork. If they are merely separated, no COBRA notice but a HIPAA certificate would need to be generated.

In almost every case like this, the employee has had to come back and reinstate coverage for the spouse due to the new court order.

njjel

In NJ there is no "legal" separation per se. So you say he would not be eligible for COBRA and would need to obtain his own insurance? Hmmm...I do see problems arising as you said.

lnelson

If this is during your open enrollment period the ee would be able to term the husband from insurance without reason if specified in your insurance company contract but you may have to reinstate if court ordered.

I do not recommend adding more tension to the already volatile situation. I would advise against terming him until the divorce is finalized.


Just my input.
Lisa

System

njjel,

It may depend on your State. Here in Maryland, there is no definition for "legally" separated. Though being legally separated is a qualifying event, our insurance carrier will not allow the change in coverage without a document to establish the separation. This is reasonable since a spouse may move back to Mom's (therefore separated) and the couple reconciles five weeks later. In this state, one party will file for a "limited divorce" which establishes a separation agreement until one of them files for a divorce.

I would say you need more than a verbal statement from your employee that she is separated. Call your carrier and ask what document is needed to establish the qualifying event.

juju

There is no legal separation in PA that I know of either. We would not drop a spouse without a divorce decree (unless it was open enrollment or they had obtained other coverage). If our state did have legal separation, I believe our plan would allow us to drop the spouse upon receiving documenation.

Beave

I always understood that the employee was the person entitled to insurances under your employment agreements/ union contracts - in other words, it was their insurance, not their dependents. The employee could enroll / unenroll at their leisure (based on insurance company guidlines) and based on their employment entitlements. I was not entitled to ask personal questions.

Employees taking someone off their insurance just because they want to is not a COBRA qualifing event - but - I always sent a COBRA letter whenever anyone came off (overly cautious, I know). In nearly all cases like this, it prompt a rather quick court action where the EMPLOYEE would then be forced to re-enroll them back to the termination date. I would inform them of the process without asking personal questions and sometimes they would change their minds after hearing it. Leave it up to them. I figured I went through my own divorce 10 years ago - I was not going to go through theirs with them too.

AJ SPHR

Beave, if you are taking pre-tax deductions for benefits, the IRS has rules you must follow regarding changes mid-year. Change can only occur if a valid life status event has happened (e.g. legal separation, divorce, marriage, birth, etc). So if someone is trying to take someone off or add them to their health plans during the year, you must ask for the reason to see if it qualifies. Otherwise, no change should be approved.

Beave

No tax implications applied because it was 100% employer paid health insurances. Do you have the IRS rule number AJSPHR? I'd be interested to look that one up?

AJ SPHR

Hi Beave - wow a company that still pays 100% for health insurance! Pre-tax deduction plans are called section 125 plans, because that's the IRS code that deals with the rules associated with offering those type of plans (FSA's are also subject to these same rules because of the pre-tax nature of those deductions).

Beave

Yup. Still at 100%, but I don't know for how much longer. Thanks for the info. Gotta love the IRS! Oh yea, NOT ... lol

Whatever

[font size="1" color="#FF0000"]LAST EDITED ON 01-08-04 AT 09:59AM (CST)[/font][br][br]The rule of thumb in any case like this is to see the documentation. In NY, where I live, I was separated, but not legally separated, until the paperwork had been approved by the courts. Until then, I had (and believe me it was painful)to continue coverage for my then spouse. Second, if the divorce decree states the ee must pay for health insurance, the employer is not obligated to do so. The ex gets cobra and the spouse pays the premium.

bamahr

I always ask for a notarized statement from the spouse - stating they are aware they are being dropped. Most of the time it's not a problem. Our agent suggested this route.

Don D

MAN!, this is an interesting thread if I ever saw one. I'm not that 'up' on this subject and really am impressed with the depth of knowledge the rest of you exhibit in this area. This is really good reading. (Sorry to interrupt)

System

Don, you're toying with us. Sarcasm is a subtle form of hostility.

Remember: goozefraba, goozefraba.

Glad I could help.

ritamcguire

Good responses, although I question the idea that an employer would drop a spouse during an open enrollment period just because an ee ask that the spouse be dropped. I believe I would get confirmation in writing from the spouse first.

But the main reason for this response is to pose the following scenario/questions. An ee, who has been beaten by her spouse, gets a court order banning the spouse from any contact with the ee to include staying away from their house. Does this ee have to continue paying for the spouse's insurance until their divorce (a qualifying event) is final? I know the spouse would qualify for COBRA at his own expense after the divorce, but it's hard to imagine the ee being forced to continue paying the insurance premiums for someone that has beaten her. Of course the spouse could voluntarily agree to pay for his share of the premium, but what if he refuses to pay and still wants to be covered? This is a real life scenario that is unfolding as we speak.

AJ SPHR

Hi Ritamcguire,
Life Status events include legal separation and divorce, at which time your employee could drop the spouse (or ex-spouse) from coverage. Otherwise, it seems to me that the employee would have to continue with 2-party coverage, paying the employee contribution amount for that level of coverage until a valid life status event occurs. I would check with legal counsel to see if a court order would also qualify as valid life status event, but not sure how it would be written.

A very sad scenario you depict. I hope your employee is doing ok.

ritamcguire

AJ

Thanks for your input. The scenario actually involves a couple at a local company (not mine). Their HR Director (a friend) asked me for my advice. The HR Director is obviously not a "Forumite". In addition to giving him my opinion on the scenario in question, I also suggested he look into becoming a "Forumite". I believe he'll be contacting HRhero.com today in order to enroll. Thanks again!

Whatever

One of the hard parts of the job is doing it inspite of the fact that your heart tells you not to. In the above case, while instinctively you would want to discontinue coverage, you must do what the law says. The above scenario does not change anything.

njjel

Here's more information on this that I found since asking my question:

IRS Ruling 2002-88 issued 12/30/02 answers the following question:

"If an employee cancels his/her spouse's coverage under a group healthplan in anticipation of their divorce, when is the group health plan required to make COBRA coverage available to the spouse?"

the IRS states "there is no authority under COBRA statute or regulations to require a plan to make COBRA available before the date of a qualifying event."

Don D

Damn if I do and Damn if I don't. I interrupted this thread to say that I know very little about this subject and am impressed with the exchange. I was serious about that. I have very little knowledge in this particular area and enjoyed being able to 'listen' to the discussion. And dang if I don't get accused of hostility and sarcasm for being honest and complimentary. I would choose an emoticon to go here but I really don't know which one would be appropriate.

Beave

Don. Your appreciation for the other HR professionals sharing their knowledge on this subject, is the same feeling we have for you when you share with the rest of us your vast knowledge on many subjects we are limited on.

System

Well, Don; It seems to me that you commented on qualifying events some time ago and you were VERY knowledgeable of the topic. That's how I got the impression you were toying with us. Plus, I don't know anyone who believes the topic of benefits is 'interesting' or 'good reading.' Maybe I hang with the wrong crowd.

Didn't mean to offend you. Sorry if my inferrance of your post was off target, but you haven't changed my mind. You're toying.