The open-enrollment period comes around just once a year. If your company offers an ACA-compliant health plan, employees who miss that open-enrollment deadline generally can’t get new coverage for the year. But what if an employee has a baby or gets married or divorced? Is it just tough luck until the proper enrollment time period rolls around again?
Happily, no. “Qualifying life events” allow new family members to be added to an employee health care plan at any time. Even better, the ACA allows your employee’s entire family to adjust the health care plan to fit their new needs.
The rules regarding adding a new spouse are a little tricky and require a bit of explanation. If an employee gets married during the open-enrollment period, they may ask when the spouse’s health care plan becomes active. The answer depends on whether they add their new wife or husband as a general open-enrollment addition or as a special qualifying life event addition. It turns out that it’s more advantageous to add a spouse as a special qualifying life event.
Here’s why: Say a couple marries during the company’s open-enrollment period. If the spouse gets added under the general open-enrollment guidelines, his or her health care plan may not become active for a few weeks! However, if the employee adds the spouse under the special qualifying event regulations, the spouse becomes covered much sooner. It’s an oddity, but one that’s important to keep in mind.
As soon as a new baby emerges into the world, he or she begins incurring charges with an insurance company. The good news is that parents have at minimum 30 days to add a baby to a health care plan, and new babies are also considered a special qualifying life event. Some plans and states will allow a 60-day grace period, but it’s best to get the baby added as soon as possible.
The rules that apply to new babies also apply to adopted children or foster children. Instead of a birth date, the date of adoption or date of entry into foster care triggers the qualifying life event.
Divorce and Changing Jobs
While these last two qualifying life events tend to reduce the number of covered lives in a business, they are still important for an employer to know about. In a divorce, depending on what the judge decides, the divorced spouse and dependents may still be covered by your health plan. Also, if one of your employees is covered by a spouse’s plan and the spouse loses that job and/or the coverage, you may end up with more covered lives this year.
Even happy life changes such as marriages and births can be stressful for employees, as well as human resource departments. You can help reduce these stresses by keeping your workforce aware of policies surrounding qualifying life events. Send out annual alerts reminding employees of impending open-enrollment periods, and be sure the entire company is generally aware of the ways qualifying life events fit into health benefits planning.
It’s a good idea to inform your employees about qualifying life events so they can prepare to adjust their health care plans to fit their changing family’s needs. Communicate to your employees that there is no rush to change their plan, but be clear about timing when it comes to enrollment dates, as well. You don’t want any members of your workforce to miss out on provisions or dates that will help their family get the best plan for them, so education is the best policy in this case, as it is with many health care matters.
This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
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