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When an employee requests a change to health insurance, how do you respond? This article discusses special enrollment periods when an employee is allowed to make changes to a health plan, how long they have to do so, and why special enrollment periods are important.

What Are Special Enrollment Periods?

The Affordable Healthcare Act (ACA) limits when employees can make changes to their health insurance plans. A special enrollment period is the time window allotted to an employee to make needed changes to their insurance outside of the annual Open Enrollment period (when all employees are normally able to make updates to their insurance plans).

Special enrollment periods are triggered only by qualifying life events. These are defined as a change in life circumstances that make a change to health insurance appropriate right then. Examples include having a baby or a child leaving home and getting their own insurance.

Under employer-sponsored health plans, employees generally have at least 30 days after a qualifying life event when the special enrollment period is triggered. Specific exceptions may apply based on the employer. In the Federal Marketplace on HealthCare.gov, qualified individuals are given 60 days of special enrollment period.

It is always important to study the Summary Plan Descriptions (SPDs) and other plan documents from your insurance carrier to understand both the allotted special enrollment periods specific to your company’s plans and also what are considered qualifying life events.

Why Are Special Enrollment Periods Important?

Generally, your employees are only able to make changes to their health insurance plans once a year during open enrollment. This can be burdensome when events happen in life that alter the need for specific insurance coverage for employees and/or their dependents.

Importance for Employees

Special enrollment periods make it possible for employees to make needed updates due to qualifying life events. They may stop coverage for themselves, stop coverage for dependents, or gain coverage for new dependents.

Importance for Employers

Special enrollment periods give you the freedom to support your employees when they need to make a change to insurance without compromising any IRS and/or ACA regulations that your health insurance is bound to.

How Special Enrollment Periods Work

An employee who has had changes in their life that create a need to change their insurance coverage for themselves or their dependents can inquire with HR or within an HRIS or Benefit Administration System to see if the life event is a qualified life event. If it qualifies, then a special enrollment period is triggered. It begins on the day the life event occurred, so educate your employees to report life changes promptly.

The employee can then make the necessary changes to their insurance to remedy the needs caused by the life event. Special enrollment periods last at least 30 days on employer sponsored plans and 60 days for ACA Federal Marketplace plans on healthcare.gov. Once the changes are made, they are in effect until either another special enrollment period is triggered by another qualifying life event or until the annual open enrollment.

How Is a Special Enrollment Period Different From Open Enrollment?

There are a few distinct differences between a special enrollment period and open enrollment. Changes can happen during both time frames, but special enrollment periods limit who can make changes and what changes can occur.

Limited Changes Allowed

The employee can only make changes based on what the qualifying life event allows and which dependents are affected in a special enrollment period. For example, if an employee has a baby, they are able to add the baby as a dependent, but are not able to add or remove any other dependents. Open enrollment, however, allows for any changes to either coverage or dependents.

Change of Plan

In special enrollments, the employee is only making changes to the current plan(s) they are enrolled in and the coverage level for dependents. Open enrollment allows for a full change of plan.

Required Documentation

Specific documentation is required to show that a qualifying life event has occurred and a special enrollment period is now triggered. Said documentation should be retained as proof of the special enrollment period allowed. Open enrollment occurs annually for the entire company; no documentation is required to be shown by the employee.

Examples of Special Enrollment Periods

Here are a couple of examples of special enrollment periods that may occur for employees or dependents.

Example 1: Adult Child Gets Insurance

“My adult child who is 23 years old just started a new job that will provide them insurance.” This is a qualifying life event because a dependent has gained insurance, so now the employee will have up to 30 days from the date the child received insurance to remove the dependent from their insurance.

Example 2: Babies

“I just had a baby, wahoo!” This is a qualifying life event, so the employee will now have 30 days from the birth of their child to add them as a dependent under the employee’s insurance plan.

Example 3: Spouse’s Insurance Ends

“My husband got laid off last week and his insurance will end at the end of the month.” This is a qualifying life event, so the employee will now have 30 days from the end of the insurance (at the end of the month) to enroll their spouse in the company’s insurance plan or select COBRA coverage instead.

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Questions You’ve Asked Us About Special Enrollment Periods

If your coverage is considered adequate coverage under the standards of the Affordable Healthcare Act, one of the qualifiers is that changes to plan can only occur during special enrollment periods or open enrollment. It doesn’t matter if it is for individual coverage with a broker or employer-sponsored plans. The only exception is for shorter-term plans that only last one to three months, but this is considered temporary coverage.

Qualifying life events are the trigger for a special enrollment period. If the enrollee does not experience a life event that qualifies under ACA, IRS, and insurance plan document-defined qualifications, a special enrollment period cannot open, and changes are unable to be made until either a qualifying life event or open enrollment occurs.

Rob a.k.a Rob From HR is a passionate HR professional striving to find the #HRNuggets that can only improve the sacred relationship between Company and their most valuable asset–the People! With well over a decade within the HR world, Rob continues to grow himself as a professional, network with other HR professionals, and also share the HR Wisdom he comes across.

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