Benefits Change question

[Guest Ravena]

I faxed (July 24, 2003) in my Benefit change form to my employer along with documemtation indicating that my husband had gained new employement and that we are currently on their insurance plan.

I received the following response back from my "If you gained coverage within the last 31 days, or will be gaining coverage, than, in order to be able to process the change, please obtain documentation stating the date that your coverage will begin. This information should be on their company letterhead and signed by the person releasing the information."

My husband's employer will only mail the required documentation, which he was informed that he will receive in 4 to 6 weeks. He gained his new employment on July 1, 2003 and had to wait for the benefits forms to arrived in the mail. He completed the forms July 23, 2003, and his employer back date the start of the insurance to July1, 2003.

I do not think that they need to know when the coverage starts. The "qualifying" event is his new job NOT his new insurance. If he took a new job and chose not to take out insurance with the new job I would still be able to make changes as the job is the qualifying event?

Any suggestion as to effectively handle the situation? My employer wants me to have the effective date from my husband's employer by July 31, 2003.

[Sandra Pearce]

The qualifying event is the new eligibility for coverage because of the new employment. The date the coverage is effective is relavent and our health plan would require similar information and documentation.

[oriecat]

Agreed. Here is how my matrix defines the allowed change for when a Spouse Gains Employment: "May drop or decrease coverage for employee, spouse, and/or dependents who become eligible for and elect coverage under spouse's plan". New employment itself is not a qualifying event.

As to how to handle your situation, I am not sure, because I do not understand why they would require a signed letter on letterhead, etc. I would think just getting a copy of the new enrollment form would suffice. I also don't understand why they would only mail it and it would take 4-6 weeks. It would take 2 minutes to print out a letter real quick showing that information. Have you tried contacting the insurance carrier directly to see if they have processed the enrollment yet and if they could fax a letter showing the coverage?

[Guest Ravena]

I agree as to my Employer's need of my new insurance's effective date, I differ in opinion on what constitutes "documentation".

The following is a PDF on www.irs.gov in which clarification was sought on this very topic (among others).

www.irs.gov/pub/irs-utl/tres_reg-1125-4.pdf (Top of page 6)

The following quote is from that document

"With respect to accident or health coverage, the consistency rule in the final

regulations requires that any employee who wishes to decrease or cancel coverage

because he or she becomes eligible for coverage under a spouse's or dependent's

plan due to a marital or employment change in status can do so only if he or she

actually obtains coverage under that other plan. Commentators requested clarification

as to the type of proof an employer must receive to satisfy this rule, expressing concern

that a plan could not implement a change on a timely basis because of a need to obtain

proper proof of the other coverage. An example in the final regulations has been

revised to make it clear that employers may generally rely on an employee's

certification that the employee has or will obtain coverage under the other plan

(assuming that the employer has no reason to believe that the employee certification is

incorrect )."

This would indicate to me that I can certify my change (most likely via a printable e-mail) and unless my employer has reason to believe that my certication is erroneous it should suffice.

Note: This clarification occurred in Jan-2001 and many employers still erroneously use the archaic "documentation" standards.

Let me know your thoughts!

PS: Ortiecat: No enrollment forms are necessary as my spouse's plan uses a IVR (touch-tone) enrollment process.

[Sandra Pearce]

I think your misunderstanding is due to the fact that employers are given the flexibility to rely on the employee's certification but they do not have to rely on that. An employers 125 plan does not even have to allow a change during the year. My take on this is that since the employee (your spouse) does not have an enrollment form to produce the employer (your employer) has suggested a brief letter from your spouse's employer as documentation. Employers choose their documentation standards.