Under HIPAA, special enrollment rights allow eligible employees and/or dependents to enroll in an employer-sponsored group medical plan during the plan year, due to certain events.
If an eligible employee and/or dependent initially declined your group medical plan due to other coverage, they may be able to enroll in your plan during the year if they lose the other coverage. The conditions for special enrollment into your plan due to loss of other coverage are:
- Loss of eligibility under other medical plan coverage due to:
- termination of employment or reduction in hours
- legal separation (but only if it causes a loss of eligibility, most medical plans extend eligibility to the spouse until the date of divorce)
- loss of dependent status due to age
- death of employee
- change in residence while covered by an HMO and no longer in the HMO service area, with no other plan option available
- the plan no longer offers benefits to similarly situated individuals
- Termination of employer contributions under the other group medical plan
- Exhaustion of COBRA coverage
Eligible employees and/or dependents may also enroll during the plan year due to loss of eligibility for coverage under Medicaid or a state Children’s Health Insurance Plan (CHIP), or if they become newly eligible for state premium assistance from Medicaid or CHIP towards the cost of group medical plan coverage.
Special enrollment rights are also available if an employee has a newly eligible dependent through marriage, birth, or adoption.
Timing of Special Enrollment
Individuals must request enrollment in your medical plan within 30 days of losing other coverage or obtaining a newly eligible dependent or within 60 days if due to Medicaid/CHIP eligibility. Your group medical contract may specify a different time frame, but it must allow these time frames at a minimum.
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 medical plan at that time, even if they were previously eligible and declined coverage. Additionally, the family can choose any benefit option available to similarly situated individuals, as if they were initially eligible.
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 or dependent to join your group medical plan during the year:
- Another employer’s open enrollment period
- Some cafeteria plan changes in status, such as an increase in cost or decrease in coverage under another employer plan
- An individual stops paying for COBRA under a prior employer’s plan before the maximum period of coverage is exhausted
- A loss of other coverage due to failure to pay premium
Only your group medical plan contract can dictate when an employee and dependent is eligible to enroll. For most group medical plans, enrollment is only available when initially eligible, at open enrollment, or during the plan year due to a special enrollment right. An employee may also be able to add a child during the plan year due to a Qualified Child Medical Support Order.
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. If it is not currently part of your enrollment process, 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 change in status. Therefore, an employee with a special enrollment right can change a pre-tax election to correspond to the new medical plan enrollment. Your cafeteria plan documents should allow for a change in election due to special enrollment rights.
Note: Special enrollment rights are optional for group dental and vision plans. Check your plan documents before offering special enrollment rights under these plans.