Health plan denial of coverafe to spouse & child of employee where

[Guest pinsall]

An employee of our Company was sent a notice from her legal husband's employer that she waz no longer covered under her husband's medical plan effective end of the month due to the fact that she is not living with her husband. She moved out recentl with her minor child.

Is this allowable?

The employee is eligible for coverage under our medical plan but will have to pay a premium.

Thnaks

[Brigid Anderson]

I am not aware of anything that would prohibit this under federal law at any rate. I have heard of plans that require a dependent child to be resident with the covered employee to be eligible, but not spouses. Note that the child's loss of coverage (assuming there was a loss) might trigger a COBRA right under the other plan.

[Kirk Maldonado]

I'm not sure that I agree that COBRA would apply. I don't know what is the qualifying event. Divorce and legal separation are qualifying events, but (merely) changing residence isn't.

[Brigid Anderson]

A dependent child losing eligibility is a qualifying event. Assuming the child was covered while living with the covered employee and lost coverage by moving away, I think that would qualify. It is analogous to an over-age child having continued eligibility while at college full time and then dropping out of school.

[Kirk Maldonado]

I agree. The child ceasing to satisfy the conditions for status as a "dependent" is a qualifying event.

[Guest pinsall]

Who pays the COBRA premium? spouse or hubby?

Does COBRA apply since spouse & child could be covered under her employer's medical plan?

Thanks

Pat Insall

[KIP KRAUS]

pinsall:

First of all, I have never seen a definition in a medical plan that denies spousal coverage because the spouse does not live with the covered employee, unless they are legally separated. It is also common to allow dependent children of divorced parents to be covered when they do not live with the employee. Second, if the husband's plan is covered by state insurance regulations, it may be illegal to deny coverage in this situation.

If the husband's SPD does not specifically state that a legal spouse must reside with the employee in order to have coverage, then the employer cannot, in opinion deny coverage.

If what has happened is legal and above board, it clearly should prompt a COBRA qualifiying event. However, your employee would probably be better off paying your company's contribution in staed of electing COBRA.

I suggest that your employee demand a copy of the husband's SPD so she can read the eligibility provisions.

Finally, if the husband's medical plan is not part of a Section 125 plan he could probably drop his spouse and dependent child from coverage at any time.

I wouldn't believe that a legally married person could be dropped from coverage by the employer until I saw it in writing in an SPD.

[jeanine]

None of our self-funded plans or insured product plans drop a spouse or child from coverage simply because they are not domiciled together. In fact, we consider the COBRA qualifying event to be the entering of the divorce degree. We would question any spouse atttempting to remove a spouse from coverage under these circumstances. As Kip has also noted, you need to consider whether state law allows a plan to drop a child because they are not living in the home. I thought that OBRA '93 forbid plans from using residency (of child) as an eligibility exclusion, and forbid eligibility exclusions based on out-of -wedlock children and children who are not claimed as dependents on the employees federal tax form.

[Guest HIPAAdrome]

I think the OBRA 93 restrictions only apply in the face of a QMCSO. A plan cannot enforce those types of restrictions to defeat a QMCSO. But, generally, they are allowed. I have seen self-funded plan provisions which state that the dependent must live with the employee in order to be eligible.