Client just found out that employee would like to drop dependent group-term life insurance for his child who has in fact not been a "Dependent" within the definition of the Plan for several years. In other words, this child is ineligible for coverage and has been for quite some time, and yet has been enrolled. How do we correct? I assume we immediately cease collecting premiums (given that the kid doesn't have life insurance coverage anyway and was never eligible). Do we have to go back and refund the past years' premiums paid in error? Thanks for your help.

I would just stop collecting premiums and call it a day. The premiums are going to be minimal at best for dependent child life insurance.