Insurance Question

Cat · December 2005

One of my employees is under our Cafeteria Plan under Blue Saver. (1st 1700.00 is paid by employee and then insurance will pay 100 percent after that) Our open enrollment was Aug. 1st and he signed up for this plan.
Now it is his wife's open enrollment and she wants him to drop coverage with us and put him on her plan. Is this a qualifying event for him to drop our coverage and get onto hers. And if so, why?
I am really confused. I am getting answers both ways. My broker says if you follow the rules for qualifying event, this is not one for him to get off our insurance.
Her Plan Administrator is saying that this does qualify for him to drop us and get on theirs.
Thanks in advance for any and all input!!

HeRman39 · December 2005

If I understand correctly, it is open enrollment time for the spouse's insurance. If he qualifies for coverage as a spouse under his wife's plan, then he can simply sign up on her plan. There is no legal requirement for an employee to remain on an insurance plan (yours) if he does not want coverage and can be done at any time. I would caution you, however, to get proof of other insurance before he is allowed to drop his coverage under your plan.

jmcaa · December 2005

[font size="1" color="#FF0000"]LAST EDITED ON 12-20-05 AT 12:43PM (CST)[/font][br][br]If your plan is a Section 125 Plan then his spouse's open enrollment is NOT a qualifying event.

If, however, she is only NOW eligible for coverage by her employer (which would mean she either just started a job or went from part-time to full-time) then that would be a qualifying event.

Under a Section 125 Plan you can NOT drop coverage just for any reason, it has to be tied to a Qualifying Event as required by the IRS.

If there was NOT a qualifying event, his options are: 1) to continue with his health insurance and not enroll on hers, or 2) to continue with his health insurance AND enroll in hers.

Cat · December 2005

That is what I thought. He is under our Section 125 Plan and it is not our open enrollment. I think he has to continue coverage with us.
Thanks for your help.

Dgross · December 2005

We have also been advised in the past that if the spouses coverage with their employer has significantly changed (deductible, copay amounts, etc.), that it could be considered a qualifying event and allow your employee to make changes.

jimbomt · December 2005

and besides, it will save you $'s, assuming it is a qualifying event which I think it is, as others pointed out

Cat · December 2005

Yes it would save us money, but if you follow the regs., I do not think it is a qualifying event for us. Her plan did not change drastically. It is basically the same plan she had when he hired on with us. He got off her plan and onto ours. He elected the high deductible plan with us. So if you follow guidelines, it is not our open enrollment, and as I read the qualifying events I don't see where this would apply. I wanted it to apply though.

Thanks, and I wish everyone Happy Holdiays!

E Wart · December 2005

Read your 125 document. It will spell it out for you. I am sure your broker knows more than her employer. (If you don't have a copy of your 125 docuemnt, ask your broker if he does. If not, it is a good time to get it updated. We did our earlier this year. Hadn't been updated in about 15 years.)
It could be an event, but more info needs to be known and need to know how your document reads.
E Wart

DB · December 2005

So if a husband and wife have different open enrollment periods, how do they ever move from one plan to the other?

Insurance Question

Comments