working spouse charge

[Guest Stacey]

If a spouse is offered coverage through their employer, but elects to waive, a working spouse fee is applied. If they notify late of a change in employment where the fee no longer applies, can this pre-tax deduction be removed mid-year? :confused:

[Sandra Pearce]

I'm not sure if I totally understand the question. My interpretation is that the employee's health plan charges a higher rate for family coverage when the dependent spouse has coverage available through the spouse's employer but chooses to waive that coverage. Then the dependent spouse changes jobs and the new job does not have health coverage available, and your employee wants to have the additional fee stopped (the charge for family coverage reduced to eliminate the additional fee). If I am understanding the question and there is nothing in the health plan document to probibit the change in the charge during a plan year, I believe in the Section 125 rules this would be allowable as a permitted election change related to automatic cost of coverage change. The section reads, "If the cost of a qualified benefits plan increases (or decreases) during a period of coverage and, under the terms of the plan, employees are required to make a corresponding change in their payments, the cafeteria plan may, on a reasonable and consistent basis, automatically make a prospective increase (or decrease) in affected employees' elective contributions for the plan. "

[Guest 2795more]

Can they charge the surcharge if you go on cobra?

[Sandra Pearce]

It would seem to me that if the surcharge related to a spouse having other coverage available and that changed then the surcharge could be stopped. However, the plan could certainly limit when that changes could be made. The answer should be found in the plan document and/or the SPD.