Group health plan contracts dictate when employees and their eligible dependents are eligible to enroll in the plan. For the majority of health plans, employees and their eligible dependents can only enroll when initially eligible, at the annual open enrollment, or during the plan year due to a special enrollment right under HIPAA.
Mid-year special enrollment rights are only available in one of the following situations:
- Acquiring a newly eligible dependent through marriage, birth, or adoption
- Loss of eligibility for other health coverage due to:
- The individual’s termination of employment or reduction in hours, divorce, or loss of dependent status
- The individual is covered by an HMO, no longer resides in the HMO service area,and has no other available plan option
- The plan no longer offers benefits to similarly situated individuals
- Loss of eligibility for coverage under Medicaid or a state Children’s Health Insurance Plan (CHIP)
- Newly eligible for state premium assistance from Medicaid or CHIP towards the cost of group health plan coverage
- Termination of employer contributions under the other group health plan
- Exhaustion of COBRA coverage
An employee may also be able to add a child during the plan year due to a Qualified Medical Child Support Order (QMCSO).
Note: Special enrollment rights are optional for group dental and vision plans. Check your plan documents before offering special enrollment rights under these plans.
Timing of Special Enrollment
Individuals must request enrollment in your plan within 30 days of the triggering event (or within 60 days if due to Medicaid/CHIP eligibility).
Coverage begins no later than the first day of the month following the request for enrollment. For birth, adoption, or placement for adoption, the coverage must begin on the date of birth, adoption, or placement for adoption.
Tag Along Rule
When the individual becomes eligible for special enrollment, all eligible family members can join your group health plan at that time, even if they were previously eligible and declined coverage, and they can choose any available benefit option. For example:
Your group health plan includes an HMO and a PPO. Your employee initially elects HMO self-only coverage and declines coverage for his spouse, who is covered by her employer’s plan. The employee’s spouse later loses coverage under her plan due to termination of employment and now has a special enrollment right under your plan. The employee and his spouse can enroll under either your HMO or PPO within 30 days from the spouse’s loss of coverage date.
When Special Enrollment Rights Do NOT Apply
Several common scenarios are a frequent cause of confusion for employers. The following situations do NOT provide a special enrollment right for an employee, spouse, or dependent to join your group health plan during the year:
- Another employer’s open enrollment period
- An increase in cost or decrease in coverage under another employer’s plan
- An individual stops paying for COBRA before the maximum period of coverage is exhausted
Notice of Special Enrollment Rights
Employers must provide eligible employees with a notice of special enrollment rights at the time they are initially offered the opportunity to enroll. This notice is typically included on your plan’s enrollment form (or waiver of enrollment form), which should be signed by the employee whether electing coverage or not. If it is not on your enrollment form, you should prepare a separate notice for employee review and signature.
Coordination with Cafeteria Plans
HIPAA special enrollment rights are also a permitted cafeteria plan mid-year change in election. Therefore, an employee is allowed to change his or her pre-tax election to correspond to his or her new health plan enrollment. Your cafeteria plan documents should allow for a change in election due to special enrollment rights.