Q- An employee pays for health coverage on a pre-tax basis through a Code section 125 cafeteria plan. The employee is enrolled in coverage for herself and her spouse. She wants to drop her spouse from coverage because the spouse has found a less-expensive individual plan. Can the employee drop coverage for her spouse mid-year so the spouse can enroll in the less-expensive plan?
A- No. Obtaining individual coverage at a cost lower than the employer-provided coverage is not a qualifying life event that would permit an employee to change her election mid-year to drop her spouse.