For most types of insurance, a policyholder is permitted to make a change to their coverage at any point of their ownership. However, this isn’t the case with health insurance programs, especially those that are run as part of employee benefits. The only exception to the no-change rule would be a qualifying event.
Generally, a consumer must make any changes to health coverage during a period of open enrollment. This usually takes place in the fall and allows the policyholder to make various adjustments. Of importance is to make changes related to those who are covered.
Once the enrollment period closes, it’s difficult to make any further changes. However, the policyholder can make changes if there is a qualifying event.
A qualifying event is a scenario where a significant change in the policyholder’s life takes place. It allows the insured to alter their policy or, if needed, select a new one. The most common qualifying events are:
Birth or adoption of a new child
Death of a child or spouse
Change in marital status
A shift in work status is also considered a qualifying event. For instance, an employee who was once a contractor might be hired as a full-time employee. When this happens, they are normally allowed to select a new health insurance policy.
Let’s say an employee and their spouse become proud parents of a baby boy. Since all members of a family qualify for coverage, the worker would request that their son be added to the policy. This would be done through their human resources department or directly with the insurance company.
However, the policyholder wouldn’t be able to complete this qualifying event change without proof. Thus, they would need to provide a copy of the child’s birth certificate to either their insurer or the HR department.
When someone leaves a company, they’re entitled to continue their health insurance coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). While this is a temporary solution that carries higher premiums, policyholders use it to maintain their coverage.
While under COBA, the insured is still subject to open enrollment. However, rather than have their coverage roll over, they need to start from scratch. Thus, they can enter their qualifying events at the time they repeat the registration.