We have an employee who recently separated from his wife. She is covered on his health, dental and vision insurance, but he is asking to remove her. Can he do so due to the separation, or should we make him wait until open enrollment? I called our carrier, but they were unwilling to answer the question.
When employees pay for their benefits through a cafeteria plan (i.e., on a pre-tax basis), the general rule is that they cannot change their benefits elections outside of open enrollment UNLESS they experience a change in status, often referred to as a qualifying event. The most common changes in status are marriage, divorce, birth or adoption of a child, and employment status changes for the employee or the spouse/dependent.
I will assume the employee is paying the premiums pre-tax, which is almost always the case. In this situation, he could only drop his wife’s coverage if it is a legal separation. This process is undertaken in court – similar to a divorce – and is pretty rare. If the employee and his wife are only taking up separate residences, that would not be sufficient to drop her from the coverages.
I recommend you follow up with the employee to determine whether he is pursuing a legal separation. If that is the case, he would be able to drop his wife from the coverages after the separation is final unless the court’s order requires otherwise.
It’s not a surprise to hear the carrier was unwilling to answer your question over dropping coverage. While carriers certainly have a say in whether employees can add coverage, it is not for them to say whether someone may be dropped. That is governed purely by the cafeteria plan rules regarding status changes.