Question
What is the name of your state? Arizona
My son was born on the 10th of December of last year. I knew that I had to let my benefits center know that I had a child within 30 days of his birth. I thought that I satisfied this requirement when I changed my elections for 2006. Unfortunately, my company is telling me that this was not the correct protocol and now I'm stuck with over a thousand dollars of doctors and hospital bills. So, even though they started covering my son on the 1st of January, which is within the 30 days of his birth, they won't cover the days just following his birth and the one and two week doctor visits. Of course, I didn't know that I didn't follow the proper procedure because I followed their advice and did things online (if I would have called and talked to someone, the live person would have told me to fill out the other forms). I found out that there must be something wrong when I started to receive bills from the doctors office saying that my sons insurance was denied. I started to receive the bills at the beginning of the May and the benifits center has taken their sweet time in getting back in touch with me to finally tell me that it they weren't going to do anything due to this technicality.
The funny thing was is that I never in a million years believed that this problem was irrepairable. In a heavy litigated society with all kinds of paperwork, I just can't believe that their isn't a provision for making a honest mistake like this. It wasn't like I was trying to be dishonest or decietful. I was doing what I thought was procedure. Is their any recourse I can take?
If not, could someone explain to me why 30 days is a rule that seems to not have any exceptions or special circumstances? I guess I feel like I would fall into this category since I thought I was doing what I was told by my HR rep?
Answer
Very, very, very important question. Does your portion of the premium come out of your paycheck pre-tax or post tax? If post tax, do you have the option of taking it pre-tax?
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The health insurance premium comes out pre-tax dollars.
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Then you are out of luck.
Federal law requires that when an insurance policy is under Section 125 (and if your premiums are pre-tax, it is) then additions and subtractions to the policy can ONLY be made within 30 days of the qualifying event (in this case, the birth) or during open enrollment. This is the law. It is not your employer refusing to make exceptions or consider special circumstances; if your employer were to make an exception for you they would be in violation of the law. And insurance plans ARE audited; they can't just pretend to look the other way.
The law makes this ruling because of the pre-tax nature of the benefit. Any pre-tax benefit is heavily regulated; they don't want people coming in and out of the plan to take advantage of the pre-tax benefit when it's convenient and dropping out when it's not.
If this were not a Section 125 plan it would be up to your employer whether to make an exception or not. They would not have any obligation to, but they could if they chose. But with Section 125 in place, they have no more choice than you do. They MAY NOT allow you to add a new dependent once the 30 day window has passed unless it is open enrollment. The law makes no provisions for misunderstandings.
I understand that you misunderstood and I'm sorry. But you have no option now but to pay whatever bills have already accumlated and add your son during the next open enrollment period. Perhaps you can find a short term plan to cover the rest of the year before open enrollment comes around again (by law it must be once a year).
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It is just hard for me to believe that in the heavily litigated society with all its forms and exceptions to forms, etc. that there would not be a provision made for a mistake like this. I was following what I had interpreted from the HR rep. My intention had always been to have my company take care of the birth and that is clear on every visit I had since we gave them our insurance card.
We, of course, did not know that this was an issue until the 30 day window was up due to the time response of the billing cycle. Would a judge throw out a case like this given the circumstances? I understand the letter of the law, but every law isn't bullet proof from every circumstance.
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So you're suggesting that you sue your employer because they refuse to violate the law for you?
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I feel like I was mislead by my company. Where did this 30 days by the federal goverment come from? Why is it so absolute that no special circumstances can ever be considered? This law seems to suit the insurance companies very well. Since my only interaction with this law is through my companies HR and benefits center one would think that the company would have done more to see that their employees couldn't possibly fill out the wrong form. I feel like I have been swindled out of a benefit due to a technicality. As I said in the beginning, I thought I was following the law, by filling out my 2006 elections and having them come into effect prior to 30 days following the birth of my son. It was never ever my intention to pay for the birth of my son or the doctor visits following his birth. I hate to think that I'm a victim of circumstance, but it seems like that is what this is turning out to be. If my son was born during any other time, this wouldn't be an issue since I wouldn't have had the choice to fill out two different forms. If they didn't encourage to do all this stuff online, it would have most likely not been an issue. All I know is that this doesn't seem just to me at all and I find it incredibly hard to believe that there is nothing that can be done to make the situation right. I feel like it is not that people can do anything, it is that they won't.
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The thirty days is not a new law by any stretch of the imagination. The law ONLY permits pre-tax deductions, which benefit both the employer and the employee, within the 30 day window because they don't want people jumping on and off the policy only when it suits them to be covered. That does not benefit anyone. But it is not really an insurance carrier issue. Whether you want to believe it or not, this IS a law (you can look it up - Section 125 of the IRS code) and it IS that restrictive and the employer CAN lose their right to offer pre-tax deductions if they violate it.
However, you do bring up another point which I had intended to cover. EVEN IF you were able to convince your employer to violate Section 125 and add your son outside of a QE or open enrollment, there is absolutely no guarantee that the insurance carrier would agree to add your son retroactively far enough to cover him. Quite frankly, the chances that a judge or the DOL or any regulatory or law enforcement bureau would order your employer to violate both ERISA and Section 125, AND also order the insurance carrier to essentially "buy" a claim by adding your son in violation of ERISA and the eligibility requirements of the insurance policy, is slim at best.
Sometimes mistakes are really irreparable. It's a shame this happened but you are absolutely wrong in believing that your employer and the insurance carrier could fix this if they wanted to. They cannot - not without violating the law.
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I am not asking that I have a dependent added outside of an open enrollment. My son has been insured since January 1, 2006, which was 22 days after his birth, so he has already been added. Apparently, the route I followed to inform my benefit center and insurance company of his birth implied that coverage began on that date, but I thought I was giving the proper notification, based on the instructions given me by my HR representative, within the 30-day window. I understand that adding a dependent MUST be done within the 30-day window or during open enrollment. I find it difficult to believe that my benefit center and the insurance company can argue that I didn't let them know about the birth of my child within the 30-day window if they were insuring him 22 days after his birth. I am not asking that my company or the insurance company violate the law, I am asking that they honor the intent of my notification.
Thank you for your time, cbg. I do appreciate the information you have conveyed. However, it is clear you have the insurance company's best interest in mind.
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Whatever you say. Naturally if I can't find a way to force them to honor your intent when you did not complete the proper paperwork it can only mean that I'm looking toward the best interest of a company I don't work for and have no interest in. It can't possibly be because the law does not support your position. Of course there has to be a way for you to get what you want no matter what mistakes were made because it is your right to have everything your own way no matter what.
Have a nice day.
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Of course there has to be a way for you to get what you want no matter what mistakes were made because it is your right to have everything your own way no matter what.
It's a shame signatures are turned off. Maybe we can get this placed on the top of the page for every topic instead.
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Just an update on this situation. I went to my new HR rep and explained the situation. Everything has been worked out, through a little effort and explanation. Turns out that tax auditors do possess the ability to read addendums to alleged violations. Things have been worked out with the benefits center and insurance company and the insurance company will be paying for the hospital and doctor visits immediately following my sons birth. I didn't have to involve a judge or even a lawyer to get this matter resolved.
So, I guess my freeadvice to anyone who cares is to keep fighting for what you feel is right. If you feel like you are being screwed by a semantical technicality, chances are, you are and there are people willing to make sure you are justly dealt with. I believe in paying taxes and know that by in large, tax laws are set up to accomplish a just purpose, however, in this case they really need to make a new rule involving new borns. According to the medical office we are not the first couple to have issues with insurance companies trying to hide behind this 30 day add/drop a dependant law. They have issues all the time with things like this.