Events Permitting Election Changes Mid-Plan Year

Events Permitting Election Changes Mid-Plan Year

The Plan may be drafted to permit an individual to change an election mid-year based on a permitted event. Alternatively, a plan sponsor may design the plan so that individuals are not allowed to modify their elections or allow individuals to make only certain modifications.

While determining what modifications to allow, the plan sponsor must follow these guidelines. The guidelines are allowed based on Section 125 rules, HIPPA rules, COBRA guidelines, etc. The allowed changes are listed below.

Change in Status

• Change in employee’s legal marital status (gain or lose a spouse)
• Change in number of dependents
• Change in employment status for employee, souse, or dependent that affects eligibility
• Dependent satisfies (or ceases to satisfy) eligibility requirements
• Change in resident, and
• Commencement or termination of adoption proceedings

Change in Cost of Benefits

• Insignificant changes may be made by the employer automatically on a prospective basis (future effective date)
• Significant changes allow the employee to adjust elections accordingly

Significant Curtailment or Improvement of Coverage

Change in Coverage Under Other Employer Plan (including when the two employer plans have different plan years)

Loss of Group Health Coverage Sponsored by Governmental or Educational Institution

HIPAA Special Enrolments - FAQs on HIPAA Portability

• Individuals who lose group health plan or health insurance coverage
• Acquisition of a new spouse or dependent by marriage, birth, adoption, or placement for adoption
• Individuals who lose or become eligible for Medicaid or CHIP coverage

COBRA Qualifying Events - COBRA Questions and Answers

• Death of a covered employee
• Covered employee’s termination or reduction of hours of employment
• Covered employee becoming entitled to Medicare
• Divorce or legal separation from the covered employee
• Dependent child ceasing to be a dependent under the requirements of the plan

 Judgements, Decrees, or Orders

• A judgement decree, or order resulting from a divorce, legal separation, annulment, or change in legal custody that requires accident or health coverage for an employee’s child or for a foster child who is a dependent

Medicare or Medicaid Entitlement

FMLA

Health Savings Account (HSA)

• Election changes allowed prospectively on a monthly basis (future changes)

Individual Plan Enrollment

• Participants are permitted to revoke elections from employer-sponsored group health plans due to a reduction in hours even if there is no loss in eligibility (during the look-back measurement ‘stability’ period) if employee indicates intention to enroll in another minimum essential coverage plan (group or individual coverage)
• Participants are permitted to revoke elections for employer-sponsored group health plan if the participant chooses to enroll in an individual health plan through the public Marketplace during the annual open enrollment period or a special enrollment period

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