Once a year, during open enrollment, you get to choose what kind of health insurance coverage you need and who’s on your policy. After you make those selections, they remain locked in for the entire plan year… with a few exceptions.
These exceptions are triggered by what are called Qualifying Life Events (QLEs). In this post, we break down what you need to know about QLEs.
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What’s a Qualifying Life Event?
A qualifying life event is the only way to get an opportunity to make changes to your health insurance outside of the open enrollment period. QLEs are usually marked by big moments in your life (think marriage, baby, change in job, etc.) and are the only situations that will open a Special Enrollment Period. These types of momentous life events give you the option to change your health insurance plans to meet the needs of your life shift.
There are four main types of qualifying life events: loss of health coverage, changes in household, changes in residence, and miscellaneous. This isn’t a complete list, but here are some common QLEs that could lead to a chance to amend your health coverage:
Birth of a child
Adoption of a child
Death in the family
Employee turns 26 (and loses prior coverage under parent's/guardian's plan)
Involuntary loss of previous coverage
What Do I Do if I Have a QLE?
In most cases, you’ll be given the option to change your plans completely (depending on what is offered by your employer) or add/drop spouses and dependents. You usually have 30-60 days from the date of the qualifying life event to file for a change in coverage, so it’s important to keep that timeline top of mind if you’re prepping for one of those big life changes.
When filing, you may have to provide documentation to your employer or health insurance company for proof of the QLE. Some examples may include a birth or marriage certificate, filed court papers, or a letter stating loss of coverage.
The type of documentation required is specific for each QLE, so make sure you know exactly what papers you need to amend your health insurance plans. If you’re on Justworks, then you can request a change in coverage and upload the necessary documentation right in our app, making the process easy and seamless.
Generally, once your qualifying life event is verified and the first premium on your new plan is paid, you can start using the coverage. For Justworks customers, new plans go into effect the first of the month of the QLE. So for example, if your QLE is on November 14, the coverage will backdate to begin on November 1.
What Should Employers Know About QLEs?
As an employer, it’s important to adjust payroll when an employee changes coverage with a QLE. For example, if an employee gets married and wants to add their spouse to their medical coverage, you’ll have to withhold the proper amount from their wages. In addition, there’s a change in tax liability that must also be reflected in payroll.
Working with a benefits and payroll solution company, like Justworks, can be a big help in making sure you cross all the t’s and dot all the i’s. Checking with your tax professional is always advisable as well.
We’re all bound to encounter a QLE or two — it’s just a part of life. Having a better understanding of what to expect on the administrative end of these big changes can help make those qualifying life events easier to handle for employees and employers alike.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.