HIPAA and change in family status.

[Guest Scott Fielding]

Does HIPAA allow, with a family status change, an employee to change from a High option plan to a Low option plan mid year?

[GBurns]

I don't see where HIPAA is even applicable. Why would HIPAA apply?

[KIP KRAUS]

I agree with GBurns. I don’t see the applicability of HIPAA. However, assuming that you are running premiums through a 125 plan what qualifying event would justify changing from a high option plan to a low option plan?

Did the premiums increase substantially in mid-year, if so a change may be in order?

[mroberts]

I'm not sure of a family status change that would allow an employee to move from a high plan to a low plan. Usually medical plans are set up for single and family, so if an employee was getting a divorce or losing custody of his or her kids, it still wouldn't be a justification to switch medical plans. Perhaps from family to single or single to family in the event of a marriage, but that's about it.

[KIP KRAUS]

mroberts:

I believe that a major increase in premiums to the high option plan would be a qualifying event to switch to the low option plan if the increase came at mid-year. I believe the regs specifically allow for this type of change.

[mroberts]

That they do. But this poster didn't mention anything about a significant premium hike, only a family status change. I was focusing on the latter. If the former happens to coincide with the latter, then he can go ahead and do it.

[GBurns]

mroberts,

Are you saying that he can go ahead because this complies with HIPAA?

[Guest Scott Fielding]

Thanks for the responses. I should have made myself more clear.

The employee simply had a baby, wanted to add it, AND change from the High Option to the Low Option mid year. There was no increase in premium. I know they can add the child, but can they change plans mid year or will they have to wait until open enrollment to do that?

[papogi]

My thinking is no. Adding a baby to the plan is consistent with having a baby. Changing plans is not consistent with having the baby. Even if the employee has single coverage right now, and the baby will push him/her in to a higher payroll deduction, that would not allow a change to a low option.

[KIP KRAUS]

I agree with papogi.

[mroberts]

gburns - that wasn't what I was saying. HIPAA has nothing to do with this whole thing. What I was saying was that if the qualifying event coincides with a significant rate change it could be done.

The additional info provided by the poster confirms my assumptions and my stance is the same - no, it can't be done and the employee will have to wait until open enrollment.

[GBurns]

The question was posted on this Board and not on the Cafeteria Plan Board and the posted specifically asked about HIPAA. Together these imply that this is not a cafeteria plan issue but some other issue.

There is no status change issue under HIPAA, and we all seem to agree on this.

However, there is nothing that says that this is a Cafeteria Plan issue either.

If there is no Cafeteria Plan in place, and there are many plans that do not need a Cafeteria Plan, then the questioned change would be allowable if the Plan Documents etc allow for such a change.

[papogi]

Very true. I went on the assumption that this was in light of a flex plan. If there is no flex plan in place, then the document of the underlying plan will dictate.