EE wants to drop spouse from med. Ins.

jbanda

[font size="1" color="#FF0000"]LAST EDITED ON 03-12-03 AT 04:20PM (CST)[/font][p] One of our employees wants to drop his spouse from medical Insurance because they are going thru a divorce, but they just started the process, they aren't divorce yet, is going to be another 5 or 6 months before they complete the process, is there any liability on the company if I drop the spouse now or do i have to wait until the divorce is finalize. It seems like the divorce is going to be an ugly one.

Thanks,

Ee only wants to drop spouse, not children.

Parabeagle

Your insurance contract provisions are controlling, but if it's like most companies I've dealt with it depends on whether or not your ee has to pay for dependent coverage. If they pay even a portion of the cost of dependent coverage they can drop that coverage; if the employer pays for dependent coverage I don't think so.

Theresa Gegen TX

Most insurance policies under ERISA require a qualifying event to make changes (for example, divorce, birth, marrage, etc). I strongly doubt whether starting a divorce is qualifying, and I strongly doubt whether it is in the employee's best interest to drop the spouse (the court will probably order him to continue throughout the pendancy).

You need to check your policy about mid plan year changes by the employee. I suspect they would not be allowed until the divorce is final.

Good Luck!

Balloonman

I had a similar case not long ago. The employee had to wait until the divorce was final.
My $0.02 worth.
DJ The Balloonman

HRsage

I agree with the others, most of the time there has to be a qualifying life event change. Do you have an open enrollment time period coming up that allows ee's to modify their coverage at that time without the life changes?

VanEngen

Section 125 issues only come into play if the employee is paying their portion of the premium "pre-tax". Otherwise the employee should be able to take dependants off at any time with no qualifying event issues.

If there is no divorce or legal separation, COBRA isn't even involved.

I agree with the other HR gurus, council the employee to contact his attorney to see if it really is in his best interest to take his spouse off the policy.

Granhel

So Mr. Big Heart EE wants to drop his wife's insurance, without her knowledge, I'd bet. Imagine his surprise if she was to suddenly take seriously ill, guess who would be responsible for her medical costs as long as they are married? I'd counsel him and hope that he would change his mind. He is morally wrong if he is trying to do this without her knowledge! People do crazy things when they are hurting and angry but this could cause him more harm personally than he can imagine.

Like other responses, I'd check with your attorney to see what the ramifications would be for your company as far as her ability to sue them for not notifying her, with your insurance company for rules on dropping someone, and with the COBRA law to see if there is any guidance there (if your company falls under that Act.

HRPeg

ERISA laws prevail here which require a qualifying event. Insurance cannot changed just because someone wants to for financial or other reasons. There must be a qualifying event. We just paid a consultant who specializes in ERISA to review all of the procedures that we were using for our Section 125 Plan to ensure we were in compliance as there can be big fines involved. The qualifying event is the FINALIZED divorce. Be sure to send the spouse COBRA notification!

LindaS

My experience has been that an employee can drop a dependent whenever he or she chooses unless there is a court order telling him/her otherwise. In EVERY instance I have been involved in where an ee wants to drop their spouse due to a divorce, as soon as the spouse hears about it they get a court order that says the employee must maintain coverage until the divorce is final. This is what I tell employees when they ask me.

Balloonman

Hey Granhel, you sound a little.............bitter. As we do not know any of the situation behind the divorce let's not crucify the guy without any facts. I have seen some divorces where I found it very appropriate that the husband got taken to the cleaners..........and others where the less than wonderful wife did not get enough pain and suffering inflicted on her. So lets not just bash the guy.
My $0.02 worth.
DJ The Balloonman

Terry

Linda, great advice. Please don't drop the insurance until there is a legal separation or final divorce decree. I had an employee who did drop his spouses insurance before I worked for the company and he received a court order to provide ... 4 months later. Not only did we have to get the wife's insurance reinstated, all of her claims during the 4 months had to be reprocessed AND the employee had to pay back 4 months premium. Do yourself a BIG favor and don't do it!

Don D

I'm with Granhel and vote to bash the guy. Just on the face of it, his attempt to push her out onto a lilypad with no insurance tells me there is a jerk in the equation somewhere. But, I've never seen or heard of a policy that allows the dropping of insurance anytime one wishes to do so. I agree with the posters who implicated 'qualifying event' and ERISA and COBRA. Even the self insured plans (that I'm familiar with) where the ee and family have no premium share do not let ee's make changes until the window of 'open enrollment' rolls around, typically in December for January effective changes. Back to the jerk...I can understand cancelling credit cards and boxing up the weapons so they don't go to the new boyfriend, but it takes a special kind of DAWWG to cancel somebody's insurance. Just my humble opinion, and I know, as usual, I'm too vague and reserved in giving it. Don D.

LindaS

Don - most plans I have dealt with have been self-insured and have allowed changes to an ee's policy whenever they have desired (the first of the month following, that is). It creates an administrative nightmare but I have contacted the TPA for these plans and have been informed that this is the way the policies were written.

Terry

While a health insurance plan may allow changes to insurance at any time, including dropping a spouse even if you are in the process of divorcing, each STATE has their own DIVORCE laws that can prohibit this. So, sure, maybe he can within the scope of the insurance but guaranteed 99% of the time it will come back to bite him in the butt. I suggest that he check with HIS attorney and I would let him know that you are doing HIM a favor by preventing a huge headache and owing the company back premiums. I know this is not allowable in New Jersey (but then, that is NJ).

LindaS

I agree totally and I advise any employee wanting to drop coverage for that reason that it is not a good idea and all the spouse needs to do is have her attorney contact a judge and a court order will be completed in no time. I actually had a situation wherein the employee was hell bent on dropping his spouse's coverage regarless of my advice. Several days later I brought him the paperwork and he informed me, very sheepishly, to forget it as he had since spoken with his attorney.

ladyzuesse

>Don - most plans I have dealt with have been self-insured and have
>allowed changes to an ee's policy whenever they have desired (the
>first of the month following, that is). It creates an administrative
>nightmare but I have contacted the TPA for these plans and have been
>informed that this is the way the policies were written.

On the flip side - the self insured plans I have worked with have all required a qualifying event (some of the lists of documentation required were so in depth that I began to question the company's "Paternalistic instincts")to add or remove a person from the insurance - although those events were broad in nature, ie. spouse got a job with cheaper insurance.

I have repeatedly counselled my employees to think long and hard before dropping spouse coverage, particularly where children are involved (our particular plan now allows for dropping coverage at the time of legal seperation) because invariably the judge will come back to award coverage or the parties will reconcile - which is then a scramble to get coverage reinstated. Besides, with kids, the cost difference with spouse or without
has been negligable or non-existant(in my experience, I know other plans are different)

LadyZuesse

ritaanz

Don, did you have your coffee this morning?

Don D

Why do you ask. Do I seem sluggish or lethargic? Hell, a bum is a BUM. I just call 'em like I sees 'em. And I would tell him that to his face. I haven't mastered the art (or affliction) of dancing around issues.

Balloonman

Don, I have to disagree with you. The wanting to cancel the insurance is a typical response to the divorce request. At least with the 3 guys I have that have gone through it. Does not make them a Dawg, and with COBRA the wife would have to be notified. Our plan, will not allow it until the divorce is finalized, ie. the qualifying event so it is not an issue for me.
I find it interesting how many want to jump on the side of the wife in a divorce, as if it is automatically the husband's fault. Not every divorce is friendly, and depending on the circumstances, I don't think you can unilaterally fault the individuals, man or woman who may wish to drop them from their coverage.
My $0.02 worth.
DJ The Balloonman

Don D

I agree that such decisions often FOLLOW divorce; but, I do not think it's a reasoned, human thing to do prior to the decree being stamped final on the bench. I ain't faulting nobody based on sex. If the employee were a woman with her husband covered on her policy and she surreptitiously axed him from the policy, I'd say she's a dawg too. In that case, tho, she be, let's see.......

You'd really have to show me clearly how it was sensible to take such action. Ripping away somebody's lifeline to health insurance is worse than Lorena Bobbitt. Think about it. I wouldn't do it.....I'm a nice guy even when it comes to divorce.

ritaanz

[font size="1" color="#FF0000"]LAST EDITED ON 03-13-03 AT 03:18PM (CST)[/font][p]Mr. Don: I asked because you come across cranky and curmudgeonly. There ya go, making assumptions with no information. Is your middle name Solomon?

Diane Messick

Under the new COBRA regulations - the spouse can be dropped by the employee after the divorce (life change). BUT don't forget the company MUST offer Cobra to the spouse when they are dropped. The employee must give a good address - make sure to send the COBRA notification via certified mail. Good luck!!

LindaS

Let me preface this response by reaffirming my prior posts wherein I ALWAYS advise my employees that it is NOT a good idea to remove a spouse from the insurance prior to the divorce due to the ease with which they would be able to obtain a court order. I was just reading an article in the Benefits and Compensation Law Alert regarding this issue and wanted to share some information I gleaned -

According to an IRS ruling, a spouse that has been removed from insurance due to a pending divorce is NOT automatically eligible for COBRA (absent a legal spearation, of course). The qualifying event is the date of the divorce (or legal separation) so COBRA notices do not have to be sent out at the time of removal from insurance. They are to be sent out after the divorce decree, regardless of the fact they had already been terminated from the plan.

Just wanted to pass this along.

Rockie

The knee jerk reaction to a divorce is to cut everything off to the offending party as possible (maybe that's a BAD choice of words). Anyway, we had a female employee who wanted to drop her spouse from coverage as soon as they separated. He was on dialysis and would have had a heck of a time getting coverage. I advised her NOT to do this as, more than likely, she would be ordered by the court to reinstate him. She proceeded to barrel ahead and do it anyway. Of course,the court did order her to reinstate him and she called up crying and wanting to know how she was going to pay these horrendous back premiums. I reminded her of my sage advice and she just replied "I know, I know..I was just pissed at him!" So....again it's not always the man who is the DAWG!

2445428

The IRS recently issued Revenue Ruling 2002-88. This gives guidance regarding COBRA coverage and divorce. According to this ruling you are right on the mark Linda. At-A-Girl!