Most people are confused about what is a qualifying event. A qualifying event is important because it determines when you can make a change to your employee benefit elections outside of open enrollment. A good employee benefits broker will help you understand when you can or cannot make changes to your group health insurance.
What is a Qualifying Event?
Qualifying events are set forth by IRS Code, Section 125, which may include but not be limited to the following:
- Marriage, death of spouse, divorce, annulment, or legal separation
- Birth, adoption, or death of a dependent
- Change in employment status of spouse or dependent
- Reduction or increase in hours of employment by the employee (switch between part-time to full-time)
- Loss of eligibility status for dependent (marriage of a dependent or dependent over eligible age)
- The employee either no longer works or no longer resides in the service area of their current health plan.
- Addition or elimination of a benefit package option
Some changes that you can make due to a qualifying event include:
- Enroll in or discontinuing coverage
- Adding or removing a spouse and/or dependents
- Switch health plans (if multiple are offered within group)
- Enroll in or modify elections to medical/dependent flexible spending accounts
If you wish to make adjustments to your group health insurance coverage, you will typically be required to submit the request within 30 days of the qualifying event along with any required documentation.
While the rules can seem arbitrary, they are, in fact, essential to the principle of insurance. Without qualifying event limitations, most participants would simply sign up for insurance when they expected to incur a loss. This would defeat the purpose of insurance since it involves pooling funds from many insured entities to pay for losses that only some incur.
If you still have questions about what constitutes a qualifying event or any other questions about group health insurance, please feel free to contact us.Related Topics
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