Cafeteria Health Plan

[deblamb]

What is the name of your state (only U.S. law)? Texas
I took out medical insurance through my company. Shortly after that my husband lost his job, he was a 1099 contractor. I contacted my company to cancel the insurance within 30days, they are deducting over $200 per week and this has caused a great financial impact on us with my husband not working. Under Section 125, it does state you can cancel with a qualifying "change in status". I sent an appeal letter with this information and supporting IRS section 125 documentation and they denied me cancellation. How do I get this cancelled and the deductions stopped? This has been going on now for the last three months and it has just about Bankrupted us. I do have a qualifying "change of status" with my husband losing his job. Please help!

[ecmst12]

Your husband losing his job is NOT a qualifying event in this case, because your insurance was through YOUR job, he has not lost or become eligible for other coverage. When he gets a new job, if he becomes eligible for coverage there, THAT would be a qualifying event allowing one or both of you to switch to that plan. Otherwise you will have to wait for open enrollment. A change in financial status does not count as a qualifying event, it has to be a change in INSURANCE status.

[deblamb]

So what you are telling me is there is absolutely nothing I can do? Even if I hired a lawyer? There has got to be some loophole somewhere? If my husband finds a job and is able to get insurance through that company, then that is a "change in status" and I will be able to cancel my insurance? Thank you very much for your help!

[deblamb]

What if I just purchased medical insurance from an outside vendor? Like AARP or AAA? Would that be considered an insurance change in status?

[ecmst12]

No, there is nothing you can do and no loopholes. This is federal law governing section 125 plans because of the tax-free status of the premiums and it is absolutely iron clad. When you enroll, you are making a committment to stay on the plan for the full year, unless there is a valid change in status.

A change in insurance status means another section 125 plan, not private health insurance.

The only thing that would let you cancel coverage sooner would be to quit - but I don't think that would help you!

[cbg]

So what you are telling me is there is absolutely nothing I can do? That's right. There is absolutely nothing you can do.

Even if I hired a lawyer? A lawyer cannot force your employer to violate Federal law.

There has got to be some loophole somewhere? No. There doesn't. And there isn't.

If my husband finds a job and is able to get insurance through that company, then that is a "change in status" and I will be able to cancel my insurance? THAT would be a change in status, as long as you drop the coverage within 30 days of his becoming eligible and joining the plan (becoming eligible does not count if he does not actually take the insurance). But his losing his job when his job does not provide the insurance, is not. Until your husband becomes eligible for a new plan with a new employer, unless it is open enrollment there is NOTHING you can do to drop the insurance. Period.

[momm2500]

Find out when your open enrollment period is with your insurance plan and that date you can drop your insurance.