Involuntary removal of dependents from health plan

[Guest Paul Fronstin]

Can an employee who is in the middle of getting a divorce remove the spouse from the health plan without the spouse's permission?

[papogi]

Yes, but only if the plan allows employees to drop dependents mid-year without a qualifying event. Rev Rul 2002-88 states that if a spouse is removed from coverage in anticipation of the divorce, COBRA coverage must be made available to the spouse when the divorce becomes final (almost surely causing a break in coverage for the spouse). The ruling does not alter the rules already in place for the plan regarding dropping spouses from coverage, particularly Section 125 rules. If the plan in question is operating under Section 125, with pre-tax payroll deductions paying for that spouse’s coverage, the employee cannot drop the spouse in anticipation of the divorce. The divorce is the qualifying event, and that must occur first. Few plans allow dependents to be dropped in the middle of the plan year without a family status change, since most plans are under Section 125.

[Guest b2kates]

I agree with papogi.

Always start by checking the plan document. Most plans will only permit changes at open enrollment and in the event of a family status change.

The COBRA rules require that the spouse being dropped be provided COBRA continuation notice. This is true if the dropping is at open enrollment and in anticipation of the divorce.

Further if there are children/minor dependents involved, the court can issue a qualified medical child support order mandating that coverage be maintained for the dependent children.