Dropping Group Coverage
In some cases, an employee may want to move from your group-based medical plan to an individual medical plan. This is common when looking at spouse and/or child coverage, since individual rates can be lower for children and younger adults in the individual market.
Two Rules Collide
Under current FSA/POP contract language, an employee is only allowed to drop your group coverage if there is a change in family status, or when your group medical plan has its open enrollment.
The open enrollment period for individual plans only runs from November 15th through February 15th annually, with a start date for coverage beginning as early as January 1st .
The problem arises when your group plan’s open enrollment period does not coincide with the individual marketplace’s open enrollment period. Under this circumstance, employees won’t be allowed to drop your group coverage mid-way through your group plan’s contract year unless they have a qualifying change in family status.
Change Your FSA/POP
Contract Now you can remove this obstacle by adding an additional reason for an employee to terminate group coverage: the option of dropping coverage during the individual medical open enrollment period.