Employee Drop ER Coverage and Get Individual

floridashores

New Member
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So, I can't get a straight answer on this. Maybe my colleagues can help!

Scenario 1: ER renews 8/1/2017. EE doesn't want the ER coverage. Can the EE then get an individual plan (on or off marketplace, no subsidy) if it's not open enrollment in the individual market?

Scenario 2: ER renews 8/1/2017. EE enrolls in ER plan. Then, the individual open enrollment period begins and EE wants to instead get her own plan. Can she leave her ER's plan end of December for a 1/1/2018 Individual plan?

ER has a Section 125. ER offers affordable and qualified health insurance.

Truly cannot get a straight answer on this.

Thanks for any input.
 
If you asked 3 lawyers on this, you would get 3 answers.

The practical answer? Remain enrolled in ER coverage through 12/31 and start ACA coverage on January 1.

Whoever is administering the Section 125 plan is actually the determining body. But I bet if you asked 3 people there, you would get 3 answers again.
 
So, I can't get a straight answer on this. Maybe my colleagues can help!

Scenario 1: ER renews 8/1/2017. EE doesn't want the ER coverage. Can the EE then get an individual plan (on or off marketplace, no subsidy) if it's not open enrollment in the individual market?

Scenario 2: ER renews 8/1/2017. EE enrolls in ER plan. Then, the individual open enrollment period begins and EE wants to instead get her own plan. Can she leave her ER's plan end of December for a 1/1/2018 Individual plan?

ER has a Section 125. ER offers affordable and qualified health insurance.

Truly cannot get a straight answer on this.

Thanks for any input.

Situation #1: Yes, they qualify for a special enrollment period.

Your job-based health plan is ending for the year and you choose not to renew it. Note: If the plan is affordable and meets minimum value standards, you can buy Marketplace insurance but won’t qualify for a premium tax credit or other savings.

Source: https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/

(under losing job-based coverage)

Situation #2: It would seem so although I couldn't find the exception in the code.

See example 4 page 3, change in status.

https://www.washcoll.edu/live/files/5502-section125qualifyingeventsrevisedjune2013nfppdf

I would guess no subsidy and a 30 day window to do it.
 
So, I can't get a straight answer on this. Maybe my colleagues can help!

Scenario 1: ER renews 8/1/2017. EE doesn't want the ER coverage. Can the EE then get an individual plan (on or off marketplace, no subsidy) if it's not open enrollment in the individual market?

Loss of coverage creates a 60 day window to buy individual. Can be voluntary or involuntary.



Scenario 2: ER renews 8/1/2017. EE enrolls in ER plan. Then, the individual open enrollment period begins and EE wants to instead get her own plan. Can she leave her ER's plan end of December for a 1/1/2018 Individual plan?


Yes, but going to depend on group size too. Small group this is much harder to do because of participation requirements. Could possibly blow up the group.


ER has a Section 125. ER offers affordable and qualified health insurance.

This is actually the big thing, she loses her pre tax advantage if she goes individual coverage as section 125s are for group plans. I have a lot of employees come to me with this and you have to make them do the math. The 125 usually makes purchasing outside of the group plan more expensive. They just have to pencil it out.


Truly cannot get a straight answer on this.

Thanks for any input.



I would just talk to the employee about the choice.
 
Scenario 1: ER renews 8/1/2017. EE doesn't want the ER coverage. Can the EE then get an individual plan (on or off marketplace, no subsidy) if it's not open enrollment in the individual market? Yes, called voluntary termination and more than 99.9% of the time will not be allowed a subsidy. SEP applies from loss of grp coverage.

Scenario 2: ER renews 8/1/2017. EE enrolls in ER plan. Then, the individual open enrollment period begins and EE wants to instead get her own plan. Can she leave her ER's plan end of December for a 1/1/2018 Individual plan? Yes, again same voluntary termination from grp and similarly, no subsidies will apply.

This EE will NOT be allowed to use pre-tax dollars to purchase an IFP plan, period (no participation in a Section 125 plan).
 
Scenario 1: ER renews 8/1/2017. EE doesn't want the ER coverage. Can the EE then get an individual plan (on or off marketplace, no subsidy) if it's not open enrollment in the individual market? Yes, called voluntary termination and more than 99.9% of the time will not be allowed a subsidy. SEP applies from loss of grp coverage.

Scenario 2: ER renews 8/1/2017. EE enrolls in ER plan. Then, the individual open enrollment period begins and EE wants to instead get her own plan. Can she leave her ER's plan end of December for a 1/1/2018 Individual plan? Yes, again same voluntary termination from grp and similarly, no subsidies will apply.

This EE will NOT be allowed to use pre-tax dollars to purchase an IFP plan, period (no participation in a Section 125 plan).


Subsidies will NEVER come into play. Its called the family glitch ;)

Just because you want an Indy plan, doesn't mean you want a subsidy
 
Subsidies will NEVER come into play. Its called the family glitch ;)

Just because you want an Indy plan, doesn't mean you want a subsidy

The part about "NEVER" is inaccurate as our state group exchange ALLOWS subsidies for dependents when the right box is checked on the master app ;)

Also, if the current employer sponsored plan offerings are in excess of 9.whatever percent of household gross income. Never say never
 
All I know is that my GA's compliance dept warns against invalid POP/Section 125 drop outs, because if they violate the POP plan document/tax rules, the whole plan and all employees lose tax deductible status.
 
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The part about "NEVER" is inaccurate as our state group exchange ALLOWS subsidies for dependents when the right box is checked on the master app ;)

Also, if the current employer sponsored plan offerings are in excess of 9.whatever percent of household gross income. Never say never

Ok. Sorry.

If you lie on the form in CA, you can still get a subsidy.

But you are right. Never should never be used when dealing with health insurance
 
Ok. Sorry.

If you lie on the form in CA, you can still get a subsidy.

But you are right. Never should never be used when dealing with health insurance

No lie.

Covered CA SHOP allows employers under 50 employees the option to offer "employee only" group coverage. If they check the employee only box, Covered CA allows the spouse and dependent children to purchase IFP with subsidy (no family glitch applies).
 
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