Rule Rule 101-020-0025
Removing an Ineligible Individual from Benefit Plans


All eligible employees have 30 days from the date a spouse, domestic partner, or dependent child loses eligibility to remove the individual from PEBB coverage. The individual will be removed from plans the last day of the month in which eligibility was lost.
(2) An employee’s failure to report a spouse, domestic partner, or dependent child’s loss of eligibility within 30 days of the event is an intentional misrepresentation of a material fact of enrollment by the employee. PEBB will rescind all coverage back to the last day of the month and plan year when eligibility was lost. Under COBRA regulations ineligible individuals removed more than 60 days from the eligibility loss date will receive a COBRA unavailability letter due to the employee’s late notification.
(a) At an agency’s discretion, an employee may become liable to repay the agency for premiums paid by the agency while the individual was ineligible.
(b) An employee may become liable for repayment of insurance claims incurred and paid by a plan for the ineligible individual according to contract agreements between PEBB and the plan.
(c) An employee may face disciplinary action by an agency.
Example: Ann’s divorce is final on June 6. Ann submits her update form to her agency October 10. The agency forwards the update forms to PEBB. PEBB terminates the ineligible individual’s coverage the last day of the month that the divorce was final. The ex-spouse will receive a COBRA unavailability letter.
(3) Premium refunds to agencies:
(a) Premium refunds for rescinded coverage may be available according to PEBB’s contract agreement with each plan.
(b) An agency will not receive a premium equivalent refund from a PEBB self-insured plan for an ineligible individual whose coverage is rescinded.
(3) A plan may remove from coverage or deny the claims of an eligible employee, a family member, domestic partner, or domestic partner’s dependent child because of fraud, intentional misrepresentation of a material fact, eligibility violations, or policy term violations. Violations include but are not limited to, fraud, material misrepresentation, or concealment. When a plan removes an employee from coverage for violations:
(a) The employee may choose, as a midyear plan change, an alternative plan to replace the terminated plan. If no alternative plan is available, there is no coverage.
(b) The plan may retain all premiums paid and has the right to recover from the employee, the benefits paid as a result of such wrongful activity that are in excess of the premiums.
(c) The plan may deny future enrollments of the individual.
(4) When discovered, PEBB may rescind coverage for individuals identified as ineligible to the end of the month that eligibility is lost, whether or not requested by the employee within the 30 day period.
Last accessed
Aug. 5, 2020