Question of the Week

Posted by BAS - 07 June, 2018

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Q.- An employee has family coverage under our medical plan and pays for the coverage on a pre-tax basis through our cafeteria plan. She is getting a divorce, and she wants to change her medical plan election. However, the change she is requesting is to drop coverage altogether (not just remove her ex-husband from coverage). Do we have to allow the requested change?

A.- No. We assume the mid-year change event rules under your cafeteria plan have a consistency rule (require a mid-year change to be consistent with the event giving rise to the change). If this is a correct assumption, cancelling coverage is not consistent with a divorce and does not have to be permitted under your plan.


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