Can an employer legally prevent you from dropping your health insurance plan before annual enrollment?

Question

We were told we can only drop or change a plan for marriage, childbirth, a promotion or quitting the job. The cost is unaffordable and we didn't check the cost before signing up. Can we plead financial hardship?

Answer 1

Your employer cannot let you drop your coverage outside of open enrollment, aside from standard qualifying events.

They are legally required to enforce this as part of the IRS regulations regarding pre-tax benefit plans.  Its not your employer's rule - its an IRS regulation.  Your employer has no choice but to enforce it.

Unfortunately, you have the responsibility to check this information before you sign up for your benefit plan.  The IRS doesn't allow exceptions for "I didn't realize what I was getting into."

Unless you have a qualifying event, you're stuck until open enrollment.  Sorry.  Next time, be sure to look at the paperwork before you sign up!

Answer 2

They are right.  I work in medical billing and coding so I work with insurance companies and am familiar with the laws that govern health plans.  Unfortunately for you, they are correct.  In group health plans you can only make alterations during the annual enrollment period or if you have a change in status which would be the marriage, child, promotion, or termination.  On individual policies you could simply stop paying the monthly premium but unfortunately if the plan is through your employer they most likely deduct the monthly premium from your check before you ever see it.  As for pleading financial hardship I am not aware of anything that specifically allows you to drop the health plan during a time of financial strife.  However, if you do attempt to plead financial strife keep in mind that you will have to PROVE financial strife to have any hope of them letting you drop the health plan.  I can assure you they will not allow you to drop the health plan because it is a financial inconvenience because of which you won't be able to buy that new mercedes or take that 3 week luxury cruise.  You will most likely have to prove that the cost of the health plan will force your family onto the street.  Even then it's highly unlikely.  You signed a contract enrolling in the health plan.  Your employer, the health insurance, and any court or judge is going to see it as your responsibility to verify cost before signing.  

The only way you'll be able to get out of it is if your employer did something wrong when enrolling you.  I'm not familiar with all the laws governing employers.  However, I do know that most employers take health plan costs out of the employee's paycheck before paying them.  Your employer has to have you sign a form or letter authorizing him to take the money out of your paycheck.  When I had health insurance with my employer I signed a form that specifically stated how much they would take out of every check and what it was for.  The only way for you to not have known the cost of the health plan before enrolling would be if either you did not sign the form or you signed a form allowing your employer to take an unspecified amount of money out of your check (which would make you just stupid).  You also should have signed at least one if not several forms for the health insurance company enrolling in the health plan.  If you didn't fill out any forms or sign anything and your employer enrolled you involuntarily you may be able to get out of it by arguing that you didn't enroll in the first place.    

Answer 3

Yes, in fact they are legally required to enforce open enrollment rules. There are actually more qualifying  events than you listed, and If you want to read them all use the link below for the full text of the law.

Don

http://mtnhealthinsurance.com

Answer 4

the only way you can drop it early is by quitting your job.  Once you're signed up, you can't drop out until the next enrollment period

Answer 5

Unless you signed a contract of some sort you are not obligated to keep your insurance because of an employer.

Answer 6

nope.  They're right.  Sorry

Answer 7

No-the only time you can change coverage before open enrollment is if you have a qualifying event-marriage,birth, divorce, loss of hours, etc.

I'm sure that if you check the paperwork you were given at enrollment, you will see that this info was given to you. The fact that you didn't check to see that you could afford the price of the insurance at the time of enrollment is irrelevant. Employers are very aware of the info they are required to give you about insurance and cost is high on the list. The fact that you didn't read it is not a factor in canceling the coverage before open enrollment. Sorry....  

Answer 8

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Answer 9

yes employer can do but after a fix period