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).]
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