What is a qualifying event?
When you enroll in the health insurance plan at your job, you are told that you can only make changes during the annual open enrollment period or if a qualifying event takes place in your life. What does that mean anyway? You should have a clear understanding of this concept or you could get burned.
A qualifying event is a ruling in the IRS code that allows you to make midyear changes to your health plan at work should a big change in your life happen. This may seem kind of boring but an occurrence that dramatically changes your health insurance needs requires that you be able to do so. It’s pretty straightforward but you need to be about to prove that you are within those guidelines.
When you get married, have a kid, quit, move to another house, etc. you could end up with a health insurance plan that doesn’t work for you anymore. A pretty list of qualifying events is below but let’s say you move to a different county and your premiums increase as a result. You could change your plan to make sure the rates you pay stay within your budget. You would also have the option to add a dependent you missed at your last open enrollment. Do some research before you move. Make sure your know the rate for the county your new beautiful home sits on.
Keep in mind that you will only have 30 days to tell your HR contact or the insurance carrier about the needed change/event. If you wait too long, you will have to wait until the plan’s next annual open enrollment period. That’s a real bummer. This is the most common mistake I get in my office. People get really put out because they didn’t realize they had a deadline and “burned” themselves for 6 months waiting for next year’s group renewal.
You’ll also need to know that the changes are typically backdated to the beginning of the month of the occurrence. Some carriers will start the month following. This can make your payroll deductions change slightly. Double check them! You may be responsible for any unpaid changes in premiums between the occurrence date and the date you reported the qualifying event.
Talk to your HR contact at work to see what the details are specifically for your employer’s plan. Now for the pretty list:
- Change in marital status—marriage, death of spouse, divorce, legal separation, or annulment. Note: Proof of event is needed when a change is to be made.
- Change in number of dependents—birth, death, or adoption of a child, or placement of a child for adoption. Note: Proof of event is needed when a change is to be made.
- Change in employment status—commencement or termination of employment, strike or lockout, commencement or return from an unpaid leave of absence, change in worksite, or any of these events that may apply to the employee, the employee’s spouse, or the employee’s dependant(s). Note: the IRS regulation specify that an employee must actually obtain coverage under the spouse’s or dependent’s plan for the election change to be consistent. The employee’s certification that he or she either has or will obtain the coverage is sufficient proof. Note: Proof of event is needed when a change is to be made.
- Change of residence—change in the place of residence of the employee or the employee’s spouse or dependent. If, for example, an employee and/or the employee’s family move to another town, changing their coverage to a plan that provides coverage in the new location would be necessary. Note: Proof of event is needed when a change is to be made.
- Significant change in coverage—a significant cost increase or reduction in coverage. Under this reason, however, only the election for plan coverage may be change at midyear; medical flexible spending accounts (FSAs) may not be changed midyear on account of changes in cost of coverage. Note: Proof of event is needed when a change is to be made.
- A substantial loss of providers available in a network option may be considered a coverage decrease: however, the loss of a single physician from a network where there are other physicians available in the network and in the geographic area covered by the plan would not be considered a coverage decrease.
- If there is a significant cost decrease for a specific plan, an employee may be allowed to make a change to participate in that plan if he or she is not a current participant. Similarly, if there are significant improvements in the plan, employees may be allowed to make an election to participate.