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Qualifying Events and Midyear Special Enrollment Periods

by | Sep 26, 2016 | EPIX News, HR Strategies, Insurance Consulting |

Qualifying Events and Midyear Special Enrollment Periods

Recently, one of our employer clients inquired about an employee who wanted to be added to our medical insurance midyear because his coverage through his wife’s plan is changing. His wife’s severance package provided several months of free COBRA coverage, but the subsidy is expiring and they would have to pay the COBRA premiums themselves to continue on her plan. So our employee wants to enroll himself and his wife in our plan. What events allow a midyear enrollment and what is the time-frame for adding the employee once the request is made.

Answer: Under HIPAA special enrollment rights, an employee must be given the opportunity to enroll in the group health plan midyear under certain circumstances. Losing COBRA coverage under another plan can trigger special enrollment rights, but only if the maximum COBRA period has been exhausted. In this employee’s case, there is no loss of coverage. Although the subsidy is expiring, the COBRA period has not been exhausted so your plan is not required to offer a midyear special enrollment.

Regarding the HIPAA rules in general, group health plans are required to provide special enrollment periods during which individuals who previously declined health coverage for themselves or their dependents may be allowed to enroll (without waiting for the next open enrollment period).

Special enrollment rights occur when:

  • An individual loses coverage under the other group health plan or other health insurance coverage due to loss of eligibility (such as an employee and/or his or her dependents losing coverage under the spouse’s plan due to employment status change, death, divorce or legal separation, or moving out of the plan’s service area).
  • An individual loses coverage under the other group health plan because the employer terminates the plan or stops all employer contributions to the plan. If the other coverage is COBRA, however, special enrollment does not have to be offered until the COBRA continuation period is exhausted.
  • An individual becomes a new dependent through marriage, birth, adoption, or being placed for adoption.
  • An individual loses coverage under a State Children’s Health Insurance Program (CHIP) or Medicaid, or becomes eligible to receive premium assistance under those programs for group health plan coverage.

When one of the above events occurs, a special enrollment opportunity may be triggered. If the event is “loss of coverage” under another plan, the affected person(s) generally must have had the other health coverage when he or she previously declined coverage under your plan. Special enrollees must be given at least 30 days from the date of the event to enroll. For events related to Medicaid or CHIP, the minimum special enrollment period is 60 days. Coverage must take effect no later than the first of the month following the date the special enrollment request is made. If the event is birth or adoption of a child, coverage must take effect retroactively on the date of the birth, adoption (or placement for adoption).

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