"Change in Status" under 125

Sue2

We have an employee who wants to drop his thirty-six year old wife from his medical insurance midyear. He states his wife is now covered under her MOTHER'S insurance. The wife wants to have Gastric Bypass and we've denied it. The employee states that the mother is adding her daughter (the wife) to her insurance and they have approved the surgery....GO FIGURE! I don't think the spouse obtaining other insurance through her mother's carrier qualifies as a "change in status". I don't want to jeopardize our 125 plan.

marc

It's been a while, but our carrier has interpreted the change in status laws in fairly liberal fashion. Being dropped from a spouses coverage always counted. If I remember correctly, they also allowed the reverse to act as a change, but I think it only happened once, so definitely not a trend.

Perhaps Irene will chime in. She knows this area pretty well.

FunHRBanker

I agree. Losing coverage is a "qualifiying event" under the 125 plan. On a side note, I'm not sure how the wife could possibly be eligible under her mother's insurance since she would no longer be a dependent. I hope he has very carefully looked into this before dropping her from his coverage.

Sue2

I don't understand how her mother's insurance would cover her either. My dilema is whether I allow him to drop his coverage on his wife. The way I understand the reasons for allowance of changes are- Marriage or divorce, birth or adoption, death, termination or commencement of employment of spouse, switching from part-time to full-time employment status (or vice versa), taking of unpaid leave. He does not fall into any of these categories. It appears that they have "shopped" for an insurance company that may cover gastric bypass. However, if the wife is not dropped from our medical insurance the "new" insurance will not cover the procedure.

Whatever

As they use to say "Something is rotten in the state of Denmark." I have never heard of an insurance carrier aloowing coverage for any married child. Second, why would any insurance company voluntarily want to be the prime carrier so they can pay for a very, very expensive medical procedure. Finally, the wife is not losing coverage, her husband is asking that her insurance coverage be terminated (this may be a fine point, but there is a difference.) Under the circumstances, check with your carrier.

Sue2

Whatever, I agree with you! Thanks for the input.

Rockie

Sue: This can't be true. There is no way the mother's insurance would cover a 36 year old child. The only time I have heard of this happening is when a totally disabled individual is being covered under their parent's policy.

I'd call the employee on this and ask them to provide proof that the carrier is going to insure this person before I would allow them to drop.

irenesmsaclaims

This is not a status change allowed under Section 125, unless your plan had a significant cost increase, and the change is consistent with dropping the coverage. You should not allow it for this reason. I agree with the others that it is extremely unlikely that this married, 36-year old could be added to her mother's coverage, unless it's a self-funded plan with very liberal eligibility.