Enrollment due to loss of coverage

[Mary C]

We have an over age 65 employee who has Medicare A & B and is currently covered under a Medicare HMO plan. The HMO is dropping the Medicare plan in the county where she resides and she has requested to enroll in our group plan. Our open enrollment takes place in July and this would be a mid-year enrollment. Because the 125 regs specifically state it must be loss of coverage provided by another employer to allow a mid-year enrollment, we denied her request. She's gone to the DOL who claims a loss of other coverage (even personal) entitles the employee to a special enrollment period under HIPAA. (I've confirmed this with out local DOL office).

Because this disagrees with the 125 regs, I've been trying to get some guidance from the IRS and have been on hold for over 35 minutes with various departments. I'd appreciate any guidance or suggestions anyone may have. Or a phone number of someone at the IRS who may be able to help.

[KIP KRAUS]

I agree with the DOL. She should be able to enroll in your group plan. My question is, why would an over age 65 active employee be using Medicare and an HMO supplement plan as her primary medical coverage when she could have used your group plan as a primary medical plan in the first place?

[Mary C]

Kip -

she chose to go outside and participate in a Medicare HMO due to cost factor and provider network. We require employees to pay 50% of the group premium - the risk HMO was substantially cheaper. We did not offer the HMO network the risk plan did and she wanted to keep her own providers.

Although I agree the "right" thing to do is let her enroll, I'm having trouble explaining why loss of personal coverage qualifies as a family status change when the regulations specific other group coverage. The carrier is hesitating about enrolling her until I can come up with an explanation.

mary