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Plan coverage when leaving a company


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Luke, I do not believe there is any legal law/reg to point at for this.  I have been in the employee benefit industry since ‘82 and have seen it in both ways.  Looking at it now I should have added more to the answer.  I do not believe plan documents address this issue, at least not that I ever remember.  My response earlier was to state it is can occur.  As for this persons situation, I do not have sufficient information to comment.  

By use of example.  Employee is hired 4/1, with a waiting period of 0 days, 26 pay periods, $50 per pay period employee contribution.  The employer will not have a full employee contribution for the month of April, but makes it up in last month.  

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leevena, in my world employees are typically paying a very large share of their premiums, and very often coverage starts first day of month. Seems like in some situations the outcome could be questionable. ERISA says so much about retirement plans, so little about health, but preempts so much. Guess it wasn't such an issue back in 1974.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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  • 2 weeks later...

The problem is that:

1. Insurance premiums are quoted as a monthly rate.

2. The section 125 election is on a monthly basis.

3. The payroll is not set up to meet any whim and fancy situation that might occur.

I doubt that your insurance coverage is really up on the date that you leave the job. Is this information coming from the Insurer or it it from your Benefits Dept? I would ask the Insurance company for verification.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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On ‎10‎/‎26‎/‎2019 at 7:32 PM, GBurns said:

doubt that your insurance coverage is really up on the date that you leave the job. Is this information coming from the Insurer or it it from your Benefits Dept? I would ask the Insurance company for verification.

Shark, the above from GBurns is really good advice.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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