Dropping health & dental coverage

[Guest kerryb]

We have a question concerning an employee who wants to drop health & dental coverage outside of open enrollment (the plans are offered through a 125 Plan), without an apparent "qualifying event". The stated reason is that the health & dental premiums being charged are more than the employee can afford given a defacto (but not "legal") separation of the couple. The employee would then apply for medical assistance. Can the employee drop coverage?

Thanks!

kerryb@waushosp.org

[Guest jreddi]

I am of two minds regarding your question.

First, I generally allow employees to drop coverage anytime during the year without a QE, but...

In this case, I would be very cautious as the EE is dropping coverage in anticipation of a QE. This might put the spouse (if s/he is coverage and would otherwise be a QB) in a disadvantageous spot of not having COBRA coverage when s/he needs it.

HIPAA be, er, darned, and all of its privacy hobgoblins, but I would pry a little bit into the employee's situation. I think you have a higher calling to obey COBRA regs than you do to obey HIPAA regs in this situation.

It a good ploy, though, on the part of the employee to take medical assistance which may or may not be subject to a QMED, whereas the group health plan most assuredly would be.

[papogi]

If this is going through a 125 plan, this person cannot drop coverage mid-year without a status change. I don't see the valid status change. The employee should just go on medical assistance, then wait for open enrollment to drop the employer coverage.

[Sandra Pearce]

The original post says that the benefit is offered through a qualified Section 125 plan. In order to continued to be a qualified plan you must follow the rules of the plan. A allowable event has to have happened in order to permit an election change. The future possible divorce or legal separation is not an acceptable reason to allow the drop.