Mid year election change

[Guest Larry Arnold]

An employee elected to be covered under his spouses plan with another company. Now the spouses company is changing medical plans and coverage will be at a higher premium rate. Our employee want to change his election and be covered under the company plan. Does the IRS regs permit this?

[Guest mls]

Yes, this change would qualify as a family status change - since there is a significant change in the spouse's coverage. We require a letter from spouse's employer stating that the plan rates are changing and the effective date.

[Guest jnoel]

How about an employee who is eligible and waives coverage early in the year, then gets promoted? Can he go from "waive" to covered? And could he add any dependents at time of promotion / status change? Does the "now I can afford it" type of status change allow him to do all of the above?

[KIP KRAUS]

jnoel:

Does not sound like it meets "change in Family Status' to me. I'd say no. However, if the promotion put this person into a different class, with different benefits, it may be a qualifying event.

[EGB]

Don't forget to consult the plan document. Though certain events may allow a change of election under the regulations, the plan may or may not contain those options (ie, the regulations allow plans to contain change in status events, but do not require a plan to include them).

[Guest jnoel]

The plan allows a change consistent with a change in status and lists "change in employment status" as an eligible change. Is a promotion a change in employment status and Would a "new election" (enrolling when previously waiving) be consistent with the change in status?

[KIP KRAUS]

As I said before, unless the promotion provided the employee with different benefit options by putting him into a different benefits classification, i.e being promoted from hourly to salaried where benefits may be different, a promotion does not change his employment status.

The change in employment status typically applies when your eligibility for benefits changes(spouse also), or you actually change employers(spouse also). It doesn't sound as though this employee's benefits elibibility

has changed? In which case,I would tell the employee flat out they he must wait until open enrollent unless any of the above loosely apply.

[Guest jnoel]

To get more specific, it is an hourly to salaried promotion. Salaried do receive life and disability coverage (ER paid), but there is no difference in medical / dental benefits. So if I understand your comments, because their is no new benefits "to enroll for", there should not be given the opportunity to revoke a previous waive election...thanks for all your input.

[Guest jjordan]

I have health insurance under my Husband's employers group health plan. I have recently become a full time University Student and would like to opt for a mid year election change so I may be covered by my University Health Plan. My husband's employer says that is not a recognized change of status under the IRS Regs. I think they are incorrect. Can you give me an answer???

[papogi]

If you quit a job in order to become a full time student, then this would be a change in your employment status and would be a status change. However, since IRS consistency rules must apply to all status changes, this would mean that the only change that would be allowed is for you to come on his coverage, which you already are. You can opt for the university coverage, and have double coverage for a period of time, then drop his coverage at the next open enrollment.