My spouse recently took a new position with benefits. Where I have been providing benefits through my employer I contacted them and ask to remove my spouse. At first, they said not a qualifying event. However, after checking with my health insurance provider they said a spousal change in benefit status did qualify. Reaching back out I was told that the problem was not with Anthem, but something about the pre-tax premium associated with the plan.

If this is right, I am left with two choices:

a) to double-pay our insurance premiums through our separate company plans until my open enrollment in March, and drop my spouse then (resulting in a few thousand dollars in extra payments)

b) my spouse can refuse her own benefits (which are way more affordable than keeping her on as a spouse on my plan) and I can drop her during my open enrollment next year. With the latter choice, she will be without insurance for 3 months until her company's July enrollment period and we may be open to a tax penalty.

Thanks in advance for your answers/advice

1 Answer 1


Tax exempt contributions made to an employer Section 125 Cafeteria plan are governed by the IRS. The IRS states that the election change may not be made during a plan year except for certain qualifying events. Off plan-year changes due to eligibility under a different employer plan, loss of eligibility under a different employer plan and open enrollment at a different employer are acceptable under section 125 according to the IRS.


26 CFR 1.125-4 - Permitted election changes.

(a) A cafeteria plan may permit an employee to revoke an election during a period of coverage and to make a new election only as provided in paragraphs (b) through (g) of this section. Section 125 does not require a cafeteria plan to permit any of these changes.

(c) Changes in status

(2) Change in status events.

(iii) Employment status. Any of the following events that change the employment status of the employee, the employee's spouse, or the employee's dependent: a termination or commencement of employment; a strike or lockout; a commencement of or return from an unpaid leave of absence; and a change in worksite. In addition, if the eligibility conditions of the cafeteria plan or other employee benefit plan of the employer of the employee, spouse, or dependent depend on the employment status of that individual and there is a change in that individual's employment status with the consequence that the individual becomes (or ceases to be) eligible under the plan, then that change constitutes a change in employment under this paragraph (c) (e.g., if a plan only applies to salaried employees and an employee switches from salaried to hourly-paid with the consequence that the employee ceases to be eligible for the plan, then that change constitutes a change in employment status under this paragraph (c)(2)(iii)).

There is also: Section 125(4)(f)(4)(ii) regarding a spouse's employer's regular open enrollment.

The exception to the exception is paragraph a above. The eligibility language of the plan does not need to allow these provisions.

Bearing in mind that employers generally set and maintain eligibility criteria. Anthem (I'm assuming that's your provider) has nothing to do with adding and removing people from an employer plan, your employer does.

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