Qualifying Life Event
Table of Contents
Table of Contents
What Is a Qualifying Life Event?
A qualifying life event occurs when there is a change in an employee’s life that permits them to take part in a special enrollment period and change their healthcare election outside of the open enrollment period. You can view all the qualifying life events that pertain to your company within your insurance plan documents. If you’re not sure where to locate your plan documents, you can consult with either your vendor or broker.
Why Are Qualifying Life Events Important?
Qualifying life events are important because they allow an employee to engage in a special enrollment period to prevent coverage gaps. Understanding what a qualifying life event is allows you and the employee to be aware of their options.
- Manage life’s uncertainties. Some events are planned and some aren’t. Whether an employee adopts a child, moves, or there is a death in the family, a qualifying life event helps an employee and their family be prepared by making appropriate health insurance changes.
- Prevent coverage gaps. Suppose one of your employees is receiving health insurance coverage through their spouse’s company. If their spouse loses their job, both of them would lose coverage. Given that this situation is considered a qualifying life event, your employee would be eligible for a special enrollment period (SEP) and have a certain amount of time (typically 60 days, although you should verify this in your plan documents) to add health insurance in order to prevent a coverage gap.
Types of Qualifying Life Events
Common examples of qualifying life events include changes in family members, moving to a new location, change in residence, and loss of health coverage, leaving jail, gaining U.S. citizenship status, beginning or ending Americorps service, change in income relative to insurance you may qualify for, or gaining membership in a tribe that is federally recognized. Let’s look at a few of the more common.
Adopting a child, having a baby, getting divorced, getting married and an immediate family member passing away all count as qualifying events.
Change in Residence
If your employee moves to a new location, this may result in a qualifying life event depending on whether the change in residence involves a change in zip code or county. If moving to new locations periodically for work is included in the job description, it is possible that the insurance plan may not allow a change in residence to be a qualifying life event (you can review your plan documents to be positive about this). Another type of a change in residence could be a student moving to or away from where they go to school.
Loss of Health Insurance
At age 26, dependents lose coverage through their parent’s plan. This is considered a qualifying life event, and the dependent is eligible for a special enrollment period. If your employee loses coverage through a student plan or a spouse’s plan, or if they lose eligibility through CHIP, Medicare or Medicaid, these are also qualifying life events.
Less Common Examples of Qualifying Life Events
You may encounter other situations where a qualifying life event may or may not be applicable. These situations include receiving a court order from a state or federal agency, adding a stepchild, and cohabitation. Some of these situations can be tricky, so it’s important to review your plan document before you take action.
If your employee has dependents and you receive a court order to enroll them in benefits, this is considered a qualifying life event. The documents usually mention a timeline for how soon you need to enroll the dependents in your group coverage. This timeline is considered to be the special enrollment period.
Adding a Dependent
If an employee gets married, their special enrollment period begins the day of their marriage. If their spouse has children, they can also be enrolled under the employee’s coverage so long as the stepchild is under the age of 26.
Health insurance plans typically state that in order for a domestic partner to be covered under group health insurance, they must be legally married. In some states where common law is recognized, it is up to the employer whether or not they choose to allow domestic partners to participate in health insurance plans.
Documents Needed for a Qualifying Life Event
You will likely need documentation from your employees to access a special enrollment period through a qualifying life event. Documentation provides evidence that the changes to health insurance aren’t falsely acquired.
Document 1: Dependent Verification
If an employee has a baby, adopts a child, gets married or divorced, they can provide documentation in order to verify the event through a copy of a birth certificate, marriage certificate, adoption paperwork, etc.
Document 2: Loss of Coverage
If your employee’s spouse loses coverage through a separate employer or your employee loses coverage by any other means, you can require that they provide a letter showing proof of loss of coverage. This is a letter obtained from the previous health insurance provider to your company’s benefit administrator.
Document 3: Change in Residence
If your employee moves to a new county or zip code, the employee can provide a lease or rental agreement, U.S. postal service confirmation which includes a change of address, or a mortgage deed that shows that the employee is using the property as their primary residence.
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Questions You’ve Asked Us About Qualifying Life Events
James has worked in the HR field going on 5+ years and has held various positions of leadership. His areas of expertise are in benefits, recruiting, onboarding, HR analytics, engagement, employee relations, and workforce development. He has earned a masters degree in HR, along with a nationally recognized SHRM-SCP certification.