Every year, there is an open enrollment period where employees are able to sign up or renew their employer-sponsored health insurance coverage. During this period, employees have the right to switch plans — if the employer offers multiple choices — or sign up for a plan if they haven’t had one before.
Once this open enrollment period ends, under most circumstances, employees can no longer sign up for health insurance or make changes to their plan. In order to qualify for a plan outside of this period, employees must have what’s known as a qualifying event.
Below, we’ll dive deeper into what a qualifying even it, as well as what the employer is responsible for doing.
What’s an Open Enrollment Period?
The open enrollment period is a predetermined time where employees are able to make changes to any employer-sponsored health insurance plan that is offered. This period happens the same time every year, normally, and lasts for roughly 30 days.
During this period, employees are able to sign up for a new plan for themselves as well as their spouse and dependents. They’re also able to make changes to their current plan, such as selecting a new plan or removing people from the plan.
What’s a Qualifying Life Event?
Once the open enrollment period ends, no changes can be made to an employer-sponsored health insurance plan unless an employee has what’s known as a qualifying life event. These are termed to be life-changing events that would necessitate a change to their health insurance.
Typically speaking, an employee will have about 60 days after the event happens to make changes to their employer-sponsored health insurance. Here are some examples of qualifying life events.
Any major change in household status will usually be a qualifying life event. This includes if a couple has a baby or adopts a child. It also includes any change to the family status, such as a marriage, divorce or legal separation.
If someone in the family who was covered on the health insurance plan passes away, this would also be a qualifying life event.
Health Coverage Loss
Some employees decline employer-sponsored health insurance because they are covered under their spouse’s plan. If that spouse loses their health coverage, though, this would be a qualifying life event that would allow them to sign up for the plan.
The biggest reason this might occur is if the spouse is laid off or switches jobs. In this case, the family would lose their current health insurance, which would allow them to sign up for a new plan.
There are some other changes that could be a qualifying life event. This might be if the family moves to a new county or Zip code that’s outside the coverage area of the plan.
It could be if an employee becomes a citizen of the United States, or if there are major changes to their income levels. The federal government lists other qualifying events on their Healthcare.gov site.
What Must Employers Do?
Whenever an employee experiences a qualifying life event, employers must do a few things. First, they must make available and collect benefit enrollment documents, just as you did for all employees during the open enrollment period. You must also collect the documents that prove the qualifying life event occurred.
Next, you must submit these forms to your health insurance company or broker so that they can add the employee and any other family members to the company plan. You’ll need to advise the employee when their coverage will be active and when they’ll get their cards and other plan information.
Finally, employers must update payroll to reflect the changes. This includes properly withholding the correct amount from the employee’s paycheck, which could affect their tax withholding as well.
Work with Beckham Insurance Group for Your Employer-Sponsored Health Plan
Knowing all the rules and regulations of employer-sponsored health plans can be difficult, especially when dealing with qualifying life events that might happen outside of your open enrollment period. That’s why it’s always a good idea to work with an insurance company that you can trust and that will guide you in the right direction.
Beckham Insurance Group is that trusted company in the Georgia and South Carolina area. By working with us, you’ll learn all you need to know about offering a health insurance plan to employees, and when your employees can enroll or make changes.
Our experienced professionals have years of experience helping companies just like you navigate the sometimes-challenging insurance waters. To learn more, contact us today.