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Changing Benefit Coverage During the Benefit Plan Year
A Life Event change (also called a Qualified Family Status Change), is a personal change in status which may allow you to change your benefit elections (i.e., add or remove coverage, add or remove a dependent(s)). There are several qualifying events specified by the IRS that allow you to change your benefit coverage during the plan year. If there are no Life Events (or you miss the 31 day deadline), the next opportunity to make changes to your benefit coverage is during the Annual Open Enrollment period, typically held in November of each year.
Your benefit election changes due to life event, along with any required documents (i.e.., documentation of the life event AND dependent verification) must be completed within 31 days of the event. Contact SARH Benefit Team for enrollment instructions or assistance. Based on the applicable Life Event selected, the graph below will guide you through the benefit changes you can make.
QUALIFIED LIFE EVENT | DESCRIPTION | IMPACT ON BENEFIT | IMPACT OF FSA PLANS |
Marital Status | Marriage, death of spouse, divorce, legal separation, and annulment | Employee has 31 days from the qualifying event to add or delete the spouse and/or dependents | Health FSA: Increase or decrease amount in plan (must be consistent with status change). Dependent FSA: Increase or decrease amount in plan. Dependents can dis-enroll if covered under newly acquired spouse’s plan. |
Number of Dependents | Birth, death, adoption, and placement for adoption, legal guardianship | Employee has 31 days from the qualifying life event to add or delete the dependent(s) | Health & Dependent FSA: Employee can enroll or dis-enroll, or increase or decrease amount in plan (must be consistent with changes) |
Employment Status | Termination or commencement of employment (employee or spouse), start or end of an unpaid leave of absence, strike, change in worksite. | Employee has 31 days from the qualifying life event to add or delete the spouse or dependent(s) | Health & Dependent FSA: Employee can enroll or dis-enroll, or increase or decrease amount in plan (must be consistent with changes) |
Termination of Coverage | Benefit plan termination from another job or for your spouse or dependent (s) employment. | Employee has 31 days from the qualifying life event to add the spouse and/or dependents | Health FSA: Increase or decrease amount in plan (must be consistent with status change). Dependent FSA: Increase or decrease amount in plan. Dependents can dis-enroll if covered under newly acquired spouse’s plan. |
Dependent not meeting eligibility requirements | Dependent attains age when no longer eligible for plan(s). | Employee has 31 days from the qualifying life event to remove the dependent. Healthcare reforms states adult dependent can be covered until age 26; unless eligible for coverage under their place of employment. | Health & Dependent FSA: Employee can enroll or dis-enroll, or increase or decrease amount in plan (must be consistent with changes) |
Residence | Change in the place of residence for employee, spouse or dependent (most common is when an employee moves outside of the HMO service area mid-year) | Employee has 31 days from the qualifying event to add, remove, or modify the benefit. | Health & Dependent FSA: No changes allowed. |
Benefit cost increases or benefit coverage is significantly changed | Cost of benefit plans significantly increase or benefits are significantly changed | Employee has 31 days from the qualifying event to make changes. If benefit costs are increasing, employee can drop coverage or elect alternate coverage (if available). If the benefits are significantly reduced, employee can only drop coverage if alternate is available. | Health FSA: No changes allowed. Dependent FSA: Changes can be made if there are significant cost changes (must be consistent with change) |
Judgment, decree or order requires coverage to be provided by employee | Court orders employee to provide coverage for spouse or dependent (benefit plan eligibility rules apply) | Employee has 31 days from the qualifying life event to add, remove, or modify the benefit | Health FSA: Employee can increase or decrease amount in plan (must be consistent with the status change) Dependent FSA: No changes allowed |
Change in coverage under another plan | Spouse or dependent has changes in benefits or coverage during his/her employer’s open enrollment period | Employee has 31 days from qualifying event to add or remove | Health FSA: No changes allowed Dependent FSA: Employee can add coverage or make changes allowed as long as spouse’s FSA plan has a corresponding increase or decrease |
Losing or gaining eligibility for Medicare or Medicaid | Employee or spouse become eligible for Medicare or Medicaid | Employee has 31 days from the qualifying event to add dependent to the benefit plans | Health FSA: Employee can increase or decrease amount in plan (must be consistent with status change). Dependent FSA: Employee can add coverage or decrease amount in plan |
Losing coverage under CHIP (Children’s health Insurance Program) | Dependent loses CHIP coverage | Employee has 60 days from the qualifying life event to add dependent to the benefit plans | Health FSA: Employee can increase or decrease amount in plan (must be consistent with status change) Dependent FSA: Employee can add coverage or decrease amount in plan |
Disabled Dependent child | Must receive documentation of disability before coverage ends (i.e., prior to age 26) in order to continue coverage | Employee has 31 days prior to the end of coverage to provide documentation of disability in order to continue coverage | Health FSA: No changes allowed Dependent FSA: No changes allowed |
Note: The above information is a summary of Section 125 of the IRS tax code. This summary is meant to only cover major points of Family Status Change (aka Life Event). If there is ever a questions or conflict, the formal wording of the IRS or plan documents will govern.