U.S. Department of Labor
Health Benefits Advisor for Employers
Determining Compliance with the HIPAA Provisions in Part 7 of ERISA
Compliance with the Special Enrollment Provisions - Loss of Coverage
Does the plan provide full special enrollment rights upon loss of other coverage?
A plan must permit loss-of-coverage special enrollment upon: (1) loss of eligibility for group health plan coverage or health insurance coverage; and (2) termination of employer contributions toward group health plan coverage. See ERISA section 701(f)(1); 29 CFR 2590.701-6(a).
When a current employee loses eligibility for coverage, the plan must permit the employee and any dependents to special enroll. See 29 CFR 2590.701-6(a)(2)(i).
When a dependent of a current employee loses eligibility for coverage, the plan must permit the dependent and the employee to special enroll. See 29 CFR 2590.701-6(a)(2)(ii).
Examples: Examples of reasons for loss of eligibility include: legal separation, divorce, death of an employee, termination or reduction in the number of hours of employment - voluntary or involuntary (with or without electing COBRA), exhaustion of COBRA, reduction in hours, "aging out" under other parent's coverage, moving out of an HMO's service area, and meeting or exceeding a lifetime limit on all benefits. Loss of eligibility for coverage does not include loss due to the individual's failure to pay premiums or termination of coverage for cause - such as for fraud. See 29 CFR 2590.701-6(a)(3)(i).
When employer contributions toward an employee's or dependent's coverage terminates, the plan must permit special enrollment, even if the employee or dependent did not lose eligibility for coverage. See 29 CFR 2590.701-6(a)(3)(ii).
Plans must allow an employee a period of at least 30 days to request enrollment. See 29 CFR 2590.701-6(a)(4)(i).
Coverage must become effective no later than the first day of the first month following a completed request for enrollment. See 29 CFR 2590.701-6(a)(4)(ii).
Tip: Ensure that the plan permits special enrollment upon all of the loss of coverage events described above.
