Cancelling Coverage Upon Revocation of QMCSO

[Chaz]

Employee is not enrolled in employer's cafeteria plan. Under employer's plan, dependents can only participate if the employee is enrolled. Employee presents QMCSO requiring his child to be added to plan. Accordingly, to meet the plan requirements and the QMCSO, Employee and child are added to plan pursuant to Prop. Treas. Reg. 1.125-4(d)

Employee obtains QMCSO requiring former spouse to add the child and wants to disenroll the child and himself from the Plan. Under Prop. Treas. Reg. 1.125-4(d)(ii), as long as the child is actually enrolled in the spouse's plan, coverage for the child can be dropped mid-year. But under what 125 provision can the employee drop his coverage?

This has to come up occasionally.

Thanks.

[J Simmons]

I think if the EE's enrollment was forced to be able to act in accord with the first QMCSO, when that one was superseded and the child no longer covered the EE's forced enrollment too could be dropped. After all, we wouldn't be monkeying with an EE election made for the plan year.

[Chaz]

Thanks for the response. There is an added wrinkle, however: The first QMCSO is actually in effect right now and the EE is going through the process of obtaining the second one, which probably won't be finished until sometime next year (e.g., January). Meanwhile, the employer is having its annual open enrollment period, during which time the EE would have to elect coverage for himself and child in accordance with the QMCSO.

With my new facts, will the employer now be "monkeying" the EE's election come January when the new QMCSO is presented? Or, perhaps, is the EE not making an "election" (even though it is now OE) because he is still being forced to be on the plan by reason of the first QMCSO?

[J Simmons]

I do not think forced coverage for the EE is an "election", even into next year--unless the employee gratuitously completes and signs an election during your open enrollment to put himself and the child on coverage. If he does not, and the ER simply continues the EE's coverage in order to provide coverage to the child, then when a later QMCSO stops the child's coverage the forced coverage of the EE too may come to an end. If the EE wants coverage for himself for all of next year, then he should make an election now during your open enrollment.