HIPAA coverage after non-payment of premiums and termination?

[Guest]

Do we have to let an employee elect plan coverage in our open enrollment period when he was previously dropped from plan coverage for non-payment of premiums? Can we condition his reentry on collection of the past premiums?

[KIP KRAUS]

dsilver:

It sounds like you are administering a Bar Association Plan that allows members to purchase medical coverage through an association group plan? Otherwise, I can't see how he could not have paid premiums.

Need clarification.

[Guest]

We have some employees who are on a commission basis, and sometimes the commissions aren't enough to cover the premiums.

[KIP KRAUS]

Dsilver:

I don’t know how difficult it would be, but maybe you could set up the contribution to allow for the total employee cost of coverage to be deducted from more than one commission check over the course of the plan year. Perhaps limiting the deduction to a percentage of the commission check so that a disproportionate amount does not come out of one check. This could abate the problem of non-payment, if not eliminate it.

Getting back to your original question as to allowing the employee back in at open enrollment, unless your plan document has specific language regarding not allowing a person back in because of non-payment of previous premiums, I would be reluctant to not let him/her back in the plan. That being said, I would have the plan amended to cover this situation beginning with the new open enrollment period.

Hope this helps. Maybe someone else out there can find a siting for this particular case, but I would think it is very unique to a few employers.

[Linda]

I agree that you could draft a plan so open enrollment is not available to a person who has lost coverage due to a failure to pay premiums. But, I think you could not avoid allowing re-enrollment for HIPAA events (such as a marriage or new dependent).