Changing coverage during a plan year

[Guest SRN]

Is a plan administrator free to change carriers or to change from an PPO to an HMO pursuant to his or her discretion?

[SLuskin]

Yes, the plan administrator can make these changes. The problem is that the employee-participants cannot make corresponding changes to their elections until the next open-enrollment period. For example, if an employee elects $500 in the Medical Reimbursement Account because that is the deductible in the employer-sponsored PPO, he cannot reduce that amount if the employer switches midyear to a $10 copay HMO. That employee would lose whatever money he couldn't use.