Section 125 POP Headache

[yorkriver1]

Anyone experienced in premium only plan issues? Looks like EE may be able to drop out mid year, not clear on my group's eligibility for the exception.

Just found IRS ruling about a one time exception for employees to drop out of POP plans in 2014 for plans that don't have a calendar year. The group in question runs 12/1/2013-2014. I took over the plan on AOR mid 2013.

An employee in this group wants to drop out of the group major medical insurance because the VA will treat the problems without a $1,000 deductible. EE can't see value in continuining to pay for the insurance since the more 1st dollar benefits are available.

This may fall under the IRS rules that I saw have been clarified in Feb 2014, and allow employers to modify their plans up to 12/31/2014 to allow EE's to drop out. I notice it refers to fiscal year, not plan year. My group probably has a plan that tracks the insurance plan year ending 11/30/2014.

 

[LGilmore]

If this is premium only plan, this is not a problem for him to drop off. Never has been. Just make sure it is in writing for the group. He is just waiving coverage. Document and move on.

 

[yorkriver1]

Thanks, by make sure it is in writing for the group, do you mean having it be written into the employer's POP plan document?

I documented the 3 way phone call we had today between the employer admin, the name of the POP admin and me in an email to the employer. A supervisor at the large payroll/HR/plan admin firm was consulted, and said it was fine.

So I am going to assume the plan document they are using has already written in the permission to leave the plan without the reason being one of the 14 permitted mid-year events. Or, that since the plan admin said it was OK, I am not giving the advice, their plan admin is on the hook.

sound of hands being dusted off... Not to be smug, just did what I could for today. The POP admin dept at my FMO (not the one my group uses for now) says they would need to amend their plan for the mid-year drop outs to be permitted for any reason other than the 14.