hello, everyone, I'm a newbie!
My family's health insurance coverage was done thru my husbands co. Recently, the insurance went up 200% and it became impossibe to pay. We did not cancel the insurance-Aetna until this month because they stopped covering therapy for my daughter who is has Special needs. We decided to use the state program Florida Kid care which would cover all of her needs. We went ahead and cancelled the DEPENDENT insurance coverage. Aetna has processed our request but my husbands company is saying that they can't stop deducting the premiums from his paycheck because IRS stipulations prohibit an employee dropping insurance based on financial reasons. I believe that this is a load of CRAP! I have contacted my state's insurance commissioner but have yet to receive a response.

Are their actions legal? what recourse do I have? Florida Kidcare does not proide coverage to children that already have insurance, thus the cancellation.We are a low income family and with only one income, things are exremely tight. We have already sourced alternate coveragefor myself(Mid WEst Insurance) but continue to be unable to pay becaus the money we intended to use is still being deducted from his paycheck.I have already started a paper trail just in case this matter is going to need legal attention. In the meantime though we are uninsured. DH is insured thru his co but we His wife and child remain uninsured. What can I do?

I am in a similar situation. I've worked with this company for almost 2yrs. Last year someone bought the company, we moved into a new nicer office, and opened up other types of business. Seemed really great right? Well now paychecks are bouncing, and our insurance has been cancelled for 3 months and they just told us about it last Friday. They are still deducting money from our paychecks for the insurance even though we don't have it. I'm 5 months pregnant with no insurance now. They keep saying it will be reinstated, but who knows when. They told us all the monies deducted will be paid to the insurance when it is reinstated. What a crock huh? I know that that money has already been spent. Today I'm applying for Medicare.

I work as a quality assurance analyst (previously customer service associate) for a benefits consulting firm, so I thought I'd add some input on this one.

Their actions are legal (and required by the IRS)...however you should have been informed of this prior to them making any change. You were likely paying pre-tax deductions. The IRS has rules for employers, called Section 125, that basically say if the employee is paying pre-tax(before taxes are deducted), then no change can be made. I don't know what the exact wording is, but some interpret it as no changes allowed at all, and some interpret it as you can drop coverage, but the deduction continues.

The particular client that I work on allows employees to drop coverages, but if they were paying pre-tax, the deduction continues due to IRS regulations. if the employee had chosen to pay after-tax, then the deduction would stop.

If it was us, in your particular case, we'd probably end up listening to any prior phone calls and giving you coverage back if you weren't informed of this rule, and still wanted it since you're paying for it. It's not likely you can get them to stop the deduction since your enrollment into the plan wasn't a mistake.

However, if you've experienced a qualified change in status (these vary by employer sometimes), then you can change your coverage. It doesn't sound like you had one though. Some examples would be: birth, divorce, you or your spouse losing their job, cost increase during the plan year, etc.

Also, you can ask your insurance company about appealing. I use to do appeals when I did customer service, and I handled a few similar to your situation, however I always denied them.

[This message has been edited by iChrisi (edited 05-17-2003).]