Does open enrollment at a spouse’s employer allow an employee to change medical plans under his/her employer? What changes are allowed when a spouse’s employer has open enrollment? Is the answer different if it’s the spouse gaining eligibility for a spouse’s employer’s plan?
When an employee’s spouse enrolls in the spouse’s employer’s plan during an enrollment, the employee can drop coverage mid-year for self, spouse, and/or any dependents enrolling in the spouse’s plan. Similarly, if the spouse drops coverage, the employee can add coverage. This type of mid-year change is allowed for medical, dental & vision, dependent care FSA, life, AD&D, and disability coverage elections. This mid-year change is not allowed for health FSAs, and the rules do not permit the employee to change medical plans (e.g., PPO to HDHP).
The rules are different when the employee’s spouse has a change in employment status that triggers eligibility under the spouse’s employer’s plan. Like above, the employee can drop coverage for individuals who enroll in the spouse’s plan. In addition, the employee can change medical plans (e.g., PPO to HDHP) when there is a permissible coverage category change (e.g., family to single coverage). The employee can also decrease or cease their health FSA election for the remainder of the year if the employee gains eligibility for health coverage under the spouse’s plan.