The Health Insurance Portability and Accountability Act (HIPAA) provides employees and their dependents with special enrollment rights that allow them to enroll in group health plan coverage outside of open enrollment upon certain life events. These HIPAA special enrollment rights apply only to group health plans and do not extend to excepted benefits or to non-medical benefits or ancillary benefits like disability or accident-only coverage. While most plans other than major medical are not required to allow mid-year enrollment, some plans (e.g., dental or vision plans) may be written with special enrollment rights similar to those under HIPAA.

It is important to distinguish between HIPAA special enrollment events (SEPs) and §125 permitted election change events, as these are often grouped together as “qualifying life events” but serve different purposes.

HIPAA SEPs are more limited in scope and represent the only situations in which a group health plan is legally required to allow an employee to enroll in coverage mid-year. In contrast, §125 events are broader and allow employees to change their existing pre-tax elections mid-year, including increasing, decreasing, or dropping coverage, as long as the change is consistent with the event. Notably, a HIPAA special enrollment event also qualifies as a §125 event, meaning any coverage elected during a HIPAA SEP can generally be made on a pre-tax basis.

HIPAA Special Enrollment Events

Loss of Other Coverage

A HIPAA special enrollment period (HIPAA SEP) will be triggered if an employee or their eligible spouse or dependent experiences a loss of other coverage as defined in the HIPAA SEP rules, including:

• A loss of other non-COBRA coverage (including employer-sponsored, individual, or Medicaid/CHIP coverage) that was due to a loss of eligibility for that coverage;
• A loss of other non-COBRA coverage that was due to a termination of all employer contributions for that coverage; and
• A loss of other COBRA coverage that was due to an exhaustion of the maximum continuation period under COBRA

Note that not all losses of coverage will trigger a HIPAA SEP. Losses of coverage resulting from a voluntary termination of coverage, nonpayment, failure to renew, fraud, or the end of an employer COBRA subsidy will not suffice.

Acquisition of a New Spouse or Dependent

A HIPAA SEP will also be triggered if an employee gains a new dependent through marriage, birth, adoption, or placement for adoption. Upon such an event, the plan must allow the employee, spouse, and new dependent to enroll midyear. Additionally, while not required, many plans are designed to allow any pre-existing eligible dependents to also enroll upon such a HIPAA SEP under what is known as the tag-along rule. Whether a plan has adopted the tag-along rule should be addressed in plan documentation.

New Eligibility for Medicaid or CHIP Subsidy

The third type of HIPAA special enrollment event occurs when an employee or dependent becomes newly eligible for premium assistance under Medicaid or CHIP that would help pay for employer-sponsored coverage. This rule ensures that employees who are approved for Medicaid or CHIP subsidies that would coordinate with the employer’s plan have an opportunity to enroll and take advantage of such subsidies when they become available.

Timeframes

Requesting Enrollment

For most HIPAA SEP events, such as loss of other coverage or acquiring a new dependent, the employee must have at least 30 days from the event to request enrollment. For Medicaid or CHIP-related events, the timeframe extends to at least 60 days from the event. These timeframes are minimums set under the HIPAA SEP rules; a plan could choose to be more generous, but extended timeframes should first be approved by the carrier or stop-loss vendor.

Effective Dates for Coverage

If a request for enrollment is made timely, generally the plan must make coverage effective no later than the first of the month following the month in which the employee makes the request for enrollment. However, if the event triggering the HIPAA SEP is birth or adoption, then coverage must be made effective retroactively to the date of birth or adoption. Failure to request enrollment within the designated timeframe means the individual forfeits the special enrollment right and would have to wait until the next open enrollment period, absent another qualifying event.

Plan Options for Special Enrollees

In general, employees experiencing a HIPAA special enrollment event must be offered all benefit options available to similarly situated employees during open enrollment. This requirement also applies to employees who are already enrolled in coverage, meaning they should be allowed to switch between plan options when a HIPAA SEP occurs. However, making such a change may reset plan accumulators (e.g., deductibles and out-of-pocket maximums). That said, we have seen some variation in how carriers interpret these rules, so we recommend confirming with the carrier (or stop-loss vendor) whether plan changes will be permitted in these situations.

Resources

• HIPAA 101 for Employers Guide
• HIPAA Compliance for Fully Insured Plans Guide
• DOL HIPAA Portability FAQs

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