We have learned just this week that the state made changes to the health benefit enrollment and eligibility rules and notification requirements for qualified life events on Jan. 1 of this year. Some of these changes are good; some are less so. These events include: the birth, adoption, or placement for adoption of a dependent child; a marriage event; loss of other insurance coverage; or a court order/legal guardianship event.
These changes are being made to comply with HIPAA and IRS Section 125, which bans retroactive benefits except in limited circumstances related to birth, adoption or placement for adoption.
Historically, the State has allowed 30 calendar days from the birth, adoption or placement for adoption to request enrollment in health benefit coverage for the new dependent. The good news is that, as of Jan. 1, 2015, the employee now has 90 days to get their request for enrollment for health benefits for the dependent.
In the other instances (the bad news), the state had allowed enrollment in health benefit coverage as of the date of the event, such as marriage, provided the employee notified the state and provided the necessary paperwork within 30 days of the event. Under IRS Section 125, the enrollment can only take place prospectively. Now, the employee’s requests will not be effective until the first of the month following the date that the enrollment form and supporting documentation are received by their Human Resource/Benefits Representative, provided they are received within 30 days from the date of the event.
Here’s an example: You get married on Sept. 5, and notify the state by the end of the month. Coverage will now begin on Oct. 1, whereas previously it would have begun on Sept. 5 – the actual date of the marriage. This leaves your new spouse with a coverage gap between the event and Oct. 1. If you do not notify the state until Oct. 1, although still within the 30 days, the new spouse will not have coverage until Nov. 1, leaving them with a health insurance coverage gap of nearly 60 days.
Under either scenario, your spouse should hold on to existing insurance, if available, to see them through the coverage gap.
This example also extends to loss of other insurance coverage and court ordered/legal guardianship events.
The bottom line is to plan accordingly whenever possible.
If you have any questions about this, please contact Chris Porter, the SEA/SEIU Local 1984 Compensation & Benefits Research Specialist, at (603) 271-3411 x 105 or firstname.lastname@example.org.