On Cobra, had baby.

[Guest nick02]

We recently had a baby I know we can add him to our insurance but can we also change insurance plans offered by my former employer? Does Section 125 allow employer to do it or does it not even apply.

[KIP KRAUS]

Having a new baby does not qulify for a change in medical plans. Do it at open enrollment.

[Guest nick02]

Any idea why it would'nt qualify (laws against it?)

[KIP KRAUS]

Acquiring a new dependent is a qualifying event for adding that dependent to your existing medical plan it doesn't necesitate changing which medical plan you are enrolled in.

I guess if the employer wanted to allow a change in plan they could, but if it results in a change in premiums and premiums are paid pre-tax I'd say it would violate Section 125.

What reason other than higher dependent child coverage or lowere premiums would necesitate a change in plans because of child birth?

[Mary C]

Section 125 requires that the change be consistent with the change event. You changed the number of your eligible depedents by having a baby. Adding this baby to the plan would be consistent with the event, but changing the carriers would not be.

Also, by reading your post, I am assuming you are on COBRA. The regs for COBRA allow you to continue only the coverage you were enrolled in immediately prior to your COBRA qualifying event. COBRA regs also only allow you to make changes a similarly situated actively employed person would be allowed to make - i.e., enroll a new dependent, change carriers at annual enrollment etc. If your active group health care plan does not allow a change in carrier with the birth of a baby, then a COBRA participant may not change carriers because of the birth of a baby.

[papogi]

Mary C is absolutely correct with regards to the consistency rules. An employer does not have the luxury of overriding this requirement. If the IRS ever audited your Section 125 practices and found anything out of compliance (such as a plan change when a new baby is added), they could decide to make it costly for all participating employees and the employer. They don't do it much, but it's best to be safe.