Question: Employee Contribution Vs. Coverage

[Guest Resource1]

I have a question regarding employee contribution to their health care plan.

We have an employee who recently notified us that his dependent son (age 19) did not return to school and should no longer be covered under our self-funded insurance. This "qualifying event" took place in August, but we were notified in late October, over a month past the 30-day period surrounding benefit changes due to a "qualifying event."

Our department has since taken the employee's dependent off of the insurance, but informed the employee that his contribution level will not change since it was past the 30-day mark; and that he would have to wait for open enrollment to drop the "employee + one" coverage down to "employee only."

My question: Did our department do the right thing? Is there any law that was severed by negating the employee's coverage but still making him pay for it? Does the employee have any right to action against this?

Common sense would beg the question, "If the employee is still paying for coverage, why isn't he getting it?" Or "If the employee was past the 30-day event time, why did you take the dependent off in the first place?"

Any help or input would be appreciated.

Thank you.

[Guest jreddi]

It seems a little draconian for your department to cut off his dependent coverage but still require him to pay for it.

We get this all the time, where employees forget to tell us about a dependent status. Heck, they even forget to tell us they got married until sometime later. Glad we have a good relationship with our insurance carriers!

Experience has taught me to give the employee a glowering look then treat the situation as if it happened in the thirty-day window.

What I have done, then, is just removed the dependent retroactively and stopped the employee deduction. We do not, however, refund the employee's contribution for the two months he dawdled.

I hope that your situation would never reach the "actionable" level. It's our job as HR professionals to keep our employee's as content as possible, especially in these trying times. Why not just take the kid off the policy and reset the rates to employee only.

Never know when this employee will become the needed ally for the HR department.

John

[Guest Resource1]

John -

Thanks for your response. I and others in the department agree with you completely. I was making an inquiry to see if other HR professionals did as well.

Unfortunately, the call was not mine to make and I'm seeking out opinions and regulations, if any, for future reference so this doesn't happen again.

Again, thank you.

[Sandra Pearce]

If the employee is paying for coverage under a Section 125 plan that plan governs when the elections for payments may be changed. Many 125 plans require that notice be given within 30 days of a qualifying event. The underlying health plan has its own rules regarding changes and definitions regarding eligibility. The health plan rules would govern when the dependent loses coverage, the 125 plan rules would govern when the premium payment for coverag could be changed (reduced).