Insurance Coverage

Cross

We have two married employees whose spouses have children from previous marriages. Both spouses have joint custody and have court orders mandating that they provide the primary insurance benefits for the children. For as long as anyone can remember, our insurance plan has always covered these children either as the primary carrier if the spouse did not have coverage and/or as the secondary carrier.

A situation arouse about two years ago which made the higher ups look at our policy and they are now saying that because of the verbiage, we are not obligated to cover these children; therefore, the decision was made to take them off the policy.

The verbiage they are leaning on states: "Family Coverage covers husband, wife, and all unmarried, dependent children from birth to age 19 or to 23rd birthday if enrolled as full-time students. The children must be your children by birth, legal adoption, legal guardianship, or stepchildren. They must reside with you in a normal parent-child relationship, and receive more than 50% of their support from you."

As I was reading the other notices regarding this topic, I ran across a comment regarding who got to claim the child for income tax purposes. One of the employee's spouse does claim the child every years. I don't know if this makes a difference.

I understand employers are not obligated to provide health care benefits, but this somehow seems biased and discriminatory. Any suggestions and/or help would be greatly appreciated.

LindaS

I am currently going through the same thing with our insurance company and have been informed by them that a dependent, in our plan, is "in the custody of and financially dependent upon the participant". If the children, both natural and step-children, do not reside with the participant more than six months out of the year, they are not an eligible dependent under our plan (this is waived if there is a QMSCO for the employee). The financially dependent portion comes down to who claims them on their taxes.

I was also informed that our plan does not recognize spousal court orders so we now have an employee who has four (4) step-children who reside with him and his wife approx. 40% of the time and whose natural father claims on his tax returns so we cannot add them to the plan even though his wife's divorce decree states that insurance must be maintained by both parents either through their employment or the places of employment of their spouses.

I think this is strange but it was explained to me that the intent of the plan was to limit exposure.