Anyone know why I cant cancel my Health Insurance through my employer until "open enrollment"?

Question

We pay $800 a month and realized that we wouldnt spend that much if we paid cash. My husband tried to cancel it and we were told that we had to wait until open enrollment to cancel it, unless we had a major life change.

Answer 1

That's the law.  That's how it works.

And, if something really bad goes wrong, it's going to cost a lot more than $800 a month.

Something else to keep in mind - once something goes wrong, depending on what the something is, NO ONE will sell you health insurance.  

See, the time to buy it, is when you're healthy.  If you develop something while you're uninsured, you're possibly going to be uninsured for life - which means, broke, permanently.

Uninsured medical costs are the #1 reason for bankruptcy filings in the US.

Answer 2

Yes, it is correct that the IRS has regulations regarding open enrollment and mid-year changes to pre-tax benefit plans (such as health insurance).

Here's a link from the University of Georgia regarding the IRS regulations...I picked this specific link, because its relatively simple to read.  (As opposed to reading the cumbersome text of the actual IRS regulation.)

Even though this link was designed for University of Georgia employees, its still the same relevant info to all of us, since it describes the IRS rules.

http://www.hr.uga.edu/benefits/bensumm/c...

Answer 3

This is very common especially with large companies.  It is because they do not want people to be making changes everyday.  This would be so much paper work it's not even funny.  A major life change like marriage, divorce, or even if your spouse gets his own insurance are the only types of reasons you can make a change between enrollment periods.  Sorry :(

Answer 4

First off, it's the law. It was the HMO act, sponsored by Teddy Kennedy in the early 70's, that set forth the rules and regulations of today's group policies. This act mandated coverage that was not normally in group policies prior to the act, such as maternity and mental health coverage. Because of this added coverage the premium for the insurance would have increased substantially. The open enrollment period was implemented to help keep the premium down by making sure everyone eligible stayed on the plan paying their premium. The more people on the plan the lower the premium.

Second, you said you were overweight. Each insurance company has it's own height and weight guidelines so while one company may decline with a BMI of 30 another may accept up to a BMI of 40.

Third, insurance companies have a variety of plans but in my state there is no difference in the height and weight guidelines between policies of the same company. Major medical is the type of policy you want; anything less will drastically reduce benefits. Medical bills are the number one cause of bankruptcy but many of those had insurance; they just didn't have major medical.

Fourth, COBRA is a continuation of the plan you have now and would not be any cheaper. You would not be eligible for COBRA unless your husband quit working for that company. With COBRA you stay on the same plan, you pay your share plus the employers share of the premium, plus 2% admin fee.

Answer 5

Yes, you wouldn't "have" spent that much if you paid cash.  But I know a guy that decided it was cheaper to go without insurance for a couple months, had a heart attack and now he has to go without his home.  Yep, had to sell his house to pay his medical bills from the hospital.

I broke my wrist 3 months ago - $10,000.  I didn't expect it to happen and it'd been 20+ years since I broke anything, but it happened.  My cost = $0.

Consider this...

Look into individual coverage and see what the cost is.  Individual is almost always cheaper than group unless your employer is paying so you may be able to save money.  Or, just pulling you off the plan may work as well.  Make a decision and apply for it.  Once the coverage is in force (and make sure you can get a refund if unable to drop the group) submit the form to drop the group.  The reason is that he's(or you're) now covered under his spouse's plan.  Whether you fib a little a tell them it's group coverage is up to you.  

Under no circumstance should you go without coverage and please don't tell me how healthy you are (because I hear that argument all the time), because healthy people get struck by drunk drivers too.  And, I also know a kid without coverage that is now in a wheel chair with round the clock care and about ~$500,000 of medical bills.  

Jeff

PS  If COBRA is available from where you just left work and it's cheaper that should work too if you elect that coverage.

Answer 6

Most employers have rules like this for benefits changes.

Answer 7

Waiting until open enrollment actually depends on the type of plan it is. Certain plans will allow the employer to decide if an employee can drop outside of open enrollment, but even then, it's usually because you become eligible for another plan.

That being said, do what you need to do to keep that coverage! As other members stated, it only takes one small issue to cost you a whole lot more than $800 a month! Right now, you're best bet is to get out and there and find a job, ANY job, just to help with your expenses, and look for things to pare from your other expenses. Health insurance is a lot more important than premium cable!