We just had the annual sign-up for the plan at work a few months ago. Now I’m hearing that we’re getting a new plan with a new company this summer. It’s supposed to be a better deal. Can the company do that – switch carriers mid-way through the year?
Dear Mid-Stream Switcheroo,
Yes, your employer can switch carriers mid-year. If the change will reduce benefits, then federal law requires at least 60 days advance notice. If the change will not “materially” affect the benefit, then advance notice is technically not required. As a practical matter, you will have to enroll with the new insurer; generally, this would happen in the month before the new plan started.
Your employer may be doing this to change the cycle of your plan year. By having a June or July renewal date, your plan has six months of 2014 before it has to follow health reform rules. (Health reform takes effect when group plans renew in 2014.)
You might want to ask whether the new insurer is going to credit you for whatever you have paid toward the deductible in 2013. This is a common practice when a group plan moves from one insurer to another. Another thing to check: whether your doctor accepts the new plan.