Change in status - open enrollment

[Guest OSU]

I know that in 2000, the IRS changed their ruling to allow employers to treat the election of a spouse during open enrollment as a qualified status change (for open enrollments conducted at a different time of year).

Can we allow spouses to drop our coverage if they joined their company's group health plan during their open enrollment, however not allow them to add their spouse for the same reason? We would, of course, be changing our plan document accordingly.

Thanks.

[jsb]

I think these are "voluntary" provisions, so you can pretty much do what you want, up to the maximum permitted by the IRS.

Other than the potential cost considerations (which I'll agree might be important) why would you want to do this? You run a pretty significant morale hazard here if you'll let them drop for a good reason, but not come back onto your plan for a similarly good (and IRS permitted) reason. Your employee might be left scrambling for spouse and/or dependent coverage or worrying about the cost and quality of private plan or COBRA (if eligible) coverage. Their attention is diverted from your business by this concern and the time they take to resolve any problems or issues. And then they are ticked off at you for your inhumane policies that devalue them as your employee, so productivity suffers further. A bit extreme, perhaps, but not out of the realm of belief.

With over 13,000 primary lives, we seek to enable our employees to have the maximum flexibility permitted under the law. This saves me and my staff the hours it would take to try and explain why our policy is more limiting than the law permits. Oh, we still get our share of appeals when situations fall outside of IRS guidelines, but I no longer deal with any strife caused by our self-inflicted policies. We have many hundreds of qualifying events each year, so the time saved is considerable.