Employees Now Have Longer to Enroll in Your Health Plan

Have you ever experienced an employee attempting to enroll their spouse a month and a half after getting married or an employee attempting to enroll a newborn child 40 days after the birth?  Normally, these enrollments would not be permitted given that the employee notified you outside of the 30-day HIPAA special enrollment window.  Well along with everything else that COVID is changing in our lives, it has changed our response to the question we frequently receive from our clients “Can/Should we allow this enrollment mid-year even though the employee notified us outside of the 30-day period?”

Last week the DOL and IRS issued a joint rule which provides relief from certain deadlines for group health plans, other welfare benefit plans, and retirement plans. Included in this final rule was a relief for employees on the HIPAA special enrollment timing rules.   The guidance applies to all plans covered by ERISA or the Code, and HHS has announced it will extend similar relief to non-federal governmental health plans.   It is not optional, so you must understand how the new rule impacts your group health plans.

As a refresher, the HIPAA special enrollment rule allows otherwise eligible individuals to enroll in your  group health plan mid-year if they have one of the following events occur:

  • They acquire a new dependent through marriage, birth, adoption or placement for adoption;
  • They lose other coverage;
  • They gain or lose eligibility for premium assistance under a state Medicaid or CHIP program.

Under the special enrollment rules, employees have 30 days (or 60 days for events related to Medicaid and CHIP) to enroll themselves and/or their dependents from the date of the special enrollment event.   Under the new joint rule,  all group health plans must disregard the period from March 1, 2020, until 60 days after the announced end of the COVID-19 national emergency (or such other date announced by the Departments in a future notice) for all plan participants, beneficiaries, qualified beneficiaries, or claimants wherever located in calculating certain benefit-related timeframes listed in the final rule.   The Departments refer to this period as an “outbreak period” and in each example they use April 30th as the end of the national emergency (which was hypothetical and clearly did not happen), which makes the 60-day period end on June 29th.   Depending on how long the outbreak period lasts, this will give participants substantially more time to provide notice of special enrollment events.   The rule contains the following example to help illustrate:

Example 2 (Special enrollment period). (i) Facts. Individual B is eligible for, but previously declined participation in, her employer-sponsored group health plan. On March 31, 2020, Individual B gave birth and would like to enroll herself and the child into her employer’s plan; however, open enrollment does not begin until November 15. When may Individual B exercise her special enrollment rights?

(ii) Conclusion. In Example 2, the Outbreak Period is disregarded for purposes of determining Individual B’s special enrollment period. Individual B and her child qualify for special enrollment into her employer’s plan as early as the date of the child’s birth. Individual B may exercise her special enrollment rights for herself and her child into her employer’s plan until 30 days after June 29, 2020, which is July 29, 2020, provided that she pays the premiums for any period of coverage.

While the HIPAA special enrollment period requires retroactive enrollment for births, adoption and placement for adoption, for each of the other special enrollment events it only requires plans to make the enrollment effective no later than the first day of the first calendar month following timely notification of the event.  If your plan is drafted to provide for prospective enrollment following notification of the special enrollment event, this notice would not require retroactive enrollment during the outbreak period.  It would just extend the enrollment window for which coverage could be added prospectively.  For example, if an employee got married on March 7th and notified you on May 5th that she wanted to add her new husband to her coverage under the plan, the enrollment notification would be timely and your plan would be required to begin covering the spouse no later June 1st (assuming the spouse was otherwise eligible under the terms of your plan).    If your plan document/SPD provides for retroactive enrollment, you should consult with counsel to determine how this extension of time would apply to your plan’s enrollment provisions.

If you have any questions about this new rule or any COVID-19 related benefits issues, please contact anyone on Graydon’s employee benefits team.