Cacellation rules: spouses with different election periods

[Guest poorredman]

After talking with HR and doing my own research, I need more help in answering this question:

Can I cancel my health plan benefit mid-term because my wife's open enrollment and plan term is different than mine? My open enrollment date is October 1st. My wife's is November 1st.

I can find a few websites that say yes, but cannot find an IRS or Treasury publication that talks about this.

The sad part is that I missed my company's open enrollment by 3 weeks and am looking at paying double coverage for 11 months. I know it is my fault for not staying on top of it, but I did not receive any notification from HR that the window was approaching/closing. I am a remote employee and it looks like I was not included on the distribution email lists and did not receive anything in regular post mail.

I appreciate any help or hints you can provide,

Eric

[J Simmons]

Discussed at length at this thread to my chagrin (I was wrong, others right--thanks Mary C and Sieve).

Take a look and if you yet have questions, then post again in this thread.

[Guest poorredman]

Thank you for referencing that thread. I had found it before, but after reading just the first post I didn't think it was the same situation. After reading the whole thread, am I safe to assume the following:

- the IRS regulations do allow a mid-term change (cancellation in my case) if my spouse's employer uses a different plan year and enrollment period

and

- my employer's cafeteria plan document allows this action

Is it common practice that if I ask HR for a copy of the cafeteria plan document that they actually give it me?

Thanks!

[J Simmons]

After reading the whole thread, am I safe to assume the following:

- the IRS regulations do allow a mid-term change (cancellation in my case) if my spouse's employer uses a different plan year and enrollment period

and

- my employer's cafeteria plan document allows this action

That's what Treas Reg § 1.125-4(f)(4) provides.

Is it common practice that if I ask HR for a copy of the cafeteria plan document that they actually give it me?

It might be common, but the employer is required to provide you a copy within 30 days of your written, specific request for plan documents, if the plan is subject to ERISA. If not, a court could impose a fine for each day the plan administrator is late in providing them. Be specific in asking for each of the plan's current governing documents, written policies, and summary plan description. Make sure you address and send the written request to the plan administrator. Keep proof of when the written request was mailed or delivered to the plan administrator.

[masteff]

As changes are generally only permitted w/in the 30-day window after a qualifying event, you should simultaneously ask for the plan document AND inform them of the change in coverage in your spouse's plan and request to make the change in your plan. This puts your plan on notice of it so even if they take some time to review it, you've done your action w/in the proper time period.

Oh, and if your company is big enough to have a benefits department in addition to an HR department, then talk to the benefits department directly; get HR out of the middle so they can't muddy the water.

[Guest poorredman]

Thanks for the reply masteff. Unfortunately my company does not have a benefits dept.

I have reminded HR about Treas Reg § 1.125-4(f)(4) and requested the Plan Document and SPD. She replied and said she has to request the Plan Document from BCBS and the SPD is mailed to each subscriber by BCBS. Isn't the Plan Document something my company created and not something BCBS would have control of? I thought the response was weird.

I had called BCBS last week to ask about canceling coverage. The guy I spoke with did not seem to think it was a problem. There is even an example of the cancellation paperwork in the policy manual. He said the paperwork needed my signature and my employer's signature.

So if HR is just going to keep saying I'm not allowed to cancel, what are my options? Waiting until the next open enrollment is going to cost me $900 as I am already signed up for my wife's plan.

Thanks again!

[Guest poorredman]

I finally got my company to do the mid-year cancellation. Most of the time it felt like I knew more about the regs than my HR department and the benefits broker they use.

My research leads me to another question: Now that I have opt-out of my companies medical plan, should I be receiving additional compensation from them?

The requirements for a cafeteria plan calls for employees to choose between a non-taxable benefit (medical coverage) and taxable cash compensation. Is this still true? I have asked several time for the cafeteria plan document to no avail. I wonder if one even exists.

Should I leave it alone or pursue further?

Thanks again!

[J Simmons]

It depends on what the employer's plan provides. You might not be entitled to anything in lieu of the coverage you've now opted out of. On the other hand, you might be entitled to more compensation or employer-borne amounts applied to "pay" for other benefits.