Signing up for health insurance is typically a once-a-year event that occurs during a period called open enrollment. If you or your employees miss it, you can’t get health insurance or make changes to your coverage until the next open enrollment—unless you have a qualifying life event.
A Qualifying Life Event (QLE) is a change in your employees’ lives that allows them to enroll in your health plan or make changes to their coverage. Employees who experience a QLE are eligible for a special enrollment period. It is a window during which they can enroll or make changes to their health coverage, including adding a spouse or dependents to the plan.
What life changes are considered a Qualifying Life Event?
Marriage, divorce, or legal separation
Some of the most common examples of QLEs are:
An employee who gets married can add their new spouse to the plan. Or, they can drop your plan if they’re added to their new spouse’s plan. Also, an employee who loses coverage due to divorce or legal separation would be eligible for a special enrollment period. During that time they can sign up for a plan your company offers.
The birth or adoption of a child
Your employee will have a special enrollment period to add their new child to their coverage. Coverage for a newborn or newly adopted child will be backdated to the date of birth or adoption.
Involuntary loss of coverage under another plan
For example, let’s say your employee is covered under a spouse’s plan. But then the spouse quits their job, and with that, loses their health insurance. In this case, your employee could enroll in your health plan, assuming they meet the other eligibility guidelines. And if you offer coverage for spouses, their spouse could also enroll.
But the critical caveat here is that the loss of coverage has to be involuntary. If your employee had coverage under an individual market plan and simply canceled it or stopped paying the premiums, they would not qualify for a special enrollment period.
Change in employment that leads to a gain or loss of health insurance coverage, or a change in eligibility
Eligibility for health insurance coverage typically depends on the number of hours an employee works or their classification as a full-time employee rather than a part-time or seasonal worker. So if an employee goes from being part-time to full-time, they become eligible for your health benefits, and for a special enrollment period.
Another example might be an employee who is eligible for benefits under your plan but enrolls in a plan at their second job. Suppose one of your employees loses their health insurance at their other job. In that case, they’d have a special enrollment period where they could sign up for a plan you offer.
Aging out of coverage on a parent’s plan
The Affordable Care Act (ACA) allows young adults to remain on a parent’s health plan until age 26. If you have employees on their parents’ plans, they’ll lose that coverage when they turn 26. When that happens, they’ll have a special enrollment period assuming they’re otherwise eligible for your plan.
You can find a more comprehensive guide to QLEs from the Department of Labor.
How do I handle a Qualifying Life Event?
Employees who experience a QLE will need to show proof in order to have a special enrollment period. The necessary proof varies depending on the QLE, but things like marriage certificates, birth certificates, and letters from insurers indicating an impending (or recent) loss of other coverage can all count as proof.
When employees notify you that they’ve experienced–or will experience–a QLE, you may need to help them understand their special enrollment period. Here are some common questions they may have:
- What QLE documentation do they need to submit, and where should they send it? The details will depend on your plan, so chat with your broker for guidance.
- What’s the deadline for enrolling or making changes to their coverage during the special enrollment period? Special enrollment periods must last at least 30 days (or 60 days in certain circumstances). However, you can choose to make it longer if your insurance carrier approves.
- When will the enrollment or plan changes take effect? It depends on the qualifying life event. In most cases, the effective date will be the first of the month after the employee submits their enrollment or plan change request. Coverage will be backdated to the birth or adoption date, if the QLE is a birth or adoption.
- When will they see payroll deductions for health insurance premiums? Typically, premiums are deducted the same month as when coverage is provided. In some cases, employers deduct the premiums in advance so they can send that money along to the insurer. However your organization manages the payroll deduction of premiums, make sure to communicate it with your employees and apply consistently.
What about Qualifying Life Events in the individual insurance market?
The questions your employees have about QLEs are most likely related to the job-based coverage you offer them. However, you might also run into questions about QLEs in the individual market from those who need to buy their own health insurance.
For the most part, there’s a lot of overlap in the QLE rules for group and individual market plans. One of the key differences is that special enrollment periods typically last longer for people who buy their own coverage. Special enrollment periods in the individual market last for 60 days after the QLE. But if the QLE is due to a loss of coverage, the special enrollment period runs for 60 days before the actual loss of coverage. This allows your employee to have a seamless transition to their new plan.