new insurance plan

[Guest kimb]

We are TPA's for the section 125 plans. A client of ours just found out that their vision insurance company went out of business in the early part of this year. They're searching for a new vision plan now but her question is - do they only offer the new plan to the employees that were participating in the old one or does she have to offer it to all employees? Would this be considered open enrollment for a current benefit or open enrollment for a new plan? They have a calendar plan year for their section 125.

[Guest JerseyGirl]

The matrix I use most often for determining mid-year election changes states that *the addition or improvement of a benefit package option* would allow *all eligible employees to revoke their current election and prospectively elect coverage under the new or improved option*.

In my mind going from an out-of-business vision insurance plan to one that will actually provide coverage qualifies as an *improved option*!

[KIP KRAUS]

I disagree somewhat with JersyGirl. If the new vision plan is merely replacing the old plan it is not necessarily an improved plan. If, on the other hand the new plan is really an improved plan over the previous plan then I agree with her. My opinion also assumes that there was no laps in vision coverage, but Kimb’s post doesn’t make this clear.

[mroberts]

First, it would need to be determined if there is going to be any lapse in coverage. Additionally, chances are that the employer is going to be looking for comparable coverage mid year, not something totally different. Therefore, I would only allow employees currently enrolled in this old vision plan enrollment into the new plan.