Employee wants to drop medical coverage

[Guest taylorjeff]

Employee is covered for medical and pays a percentage of premium, taken out of pay on a pre-tax basis per their Sec 125 plan. Employee is also covered on spouse's medical plan at her employer. Open enrollment was Jan 1, and employee maintained past election. Effective April, employee is receiving pay cut, and wants to drop medical plan.

While not directly a "significant increase in cost" to medical, the employee's take home pay is changing 4/1, and he sees the double coverage at this time to be less attractive, thereby his request to drop coverage. If he had known the pay cut was coming prior to the 1/1 open enrollment, he probably would have made the change then.

I can see where a mid year pay adjustment, could greatly affect a person's ability to pay. But, I haven't found anything in the regulations that would address this. Have any of you run into a similar situation or can you site a section of the law that I missing that would allow this type of mid year change?

Thanks

[oriecat]

The change matrix from my TPA clearly shows "No Change Allowed" for a Change in Wages.

When is the spouse's open enrollment? Have they asked if they can drop him there instead?

[GBurns]

Open enrollment was 1/1, but when is Plan Year and when is the election effective ?

[Guest taylorjeff]

Thanks to both for your response.

Plan year / effective date was 1/1. Open enrollment was actually in November.

Oriecat, I think you've confirmed what I thought. Ie, no way out. I will check regarding the spouse's plan, though.