Your Employee Missed Open Enrollment for Health Insurance. Now What?

For businesses that provide healthcare insurance for staff, open enrollment is a hectic time of year. Collecting all the documents needed to assure employees are enrolled properly is a complex process that requires a lot of organizational ability.

Whether you manage open enrollment for health insurance on your own or use an outside consultant, numerous reminders are sent urging employees to review their options, ask any questions and get their paperwork in by the deadline so they don’t miss out.

How long is open enrollment for most employees?

Most employers have their open enrollment last anywhere from 2 to 4 weeks. It’s typical for companies to have their open enrollment period end a few weeks before they submit enrollment forms to benefit providers.

If an employer has their benefits plan start at the beginning of each year, they’ll usually conduct open enrollment in the November prior. However, there are companies that start open enrollment as early as September or October.

What happens if you do nothing during open enrollment?

Missing the open enrollment deadline could result in no coverage or no change(s) in coverage. When a staff member fails to submit their enrollment documentation on time for new coverage, they will have to wait until next open enrollment to join your plan(s).

If they fail to make any changes to their benefits elections during open enrollment, every previous election will remain in place, but they will have to wait until the next open enrollment period to make changes to their plan(s).

Can you apply for health insurance after open enrollment?

Employees who miss open enrollment can sign up for coverage outside of the OE period if they have a qualifying life event — which would make them eligible for a a special enrollment period (SEP).

What is a “qualifying life event” for health insurance?

Qualifying life events (QLEs) are ones that qualify employees to make changes to their health coverage and thus trigger enrollment. They revolve around 2 main categories: basic life events or loss of other coverage.

Basic life events

Basic life events occur when someone becomes eligible or ineligible to join the plan. When a child is born, for example, they can be added to the plan. For marriage and divorce, additions or deletions can be made. The following events allow for the special 30-day window to change coverage:

• Birth of a child
• Adoption of a child
• Marriage
• Divorce
• Death of a spouse that provided health care coverage
• Death of a dependent
• Dependent becomes ineligible (age 26)
• Dependent acquires other insurance

Loss of other coverage

In some instances, employees lose health coverage which can trigger the special 30-day window to change coverage. If an employee divorces, for example, their spouse may remove them from another plan, giving access to yours. These cases of losing health insurance coverage can trigger special enrollment:

Change in employment status

• Separation or reduction of hours that leaves the employee ineligible for benefits
• New hires, or change from part-time to full-time status
• Loss of other coverage: for employees previously covered by a spouse or parent
• Divorce
• Death of a spouse or parent who provided coverage
• Retirement — eligibility for Medicare coverage

Special circumstances

Some special cases also allow employees to make changes outside of the open enrollment period:

• Court orders: Typically in the event of divorce or legal separation, a judge can require businesses to allow employees to make changes to coverage.
• Extended, unpaid leave of absence: employees who take more than 30 days of unpaid leave (non-medical leave) can stop coverage during the leave and reinstate coverage upon their return to work.

What is a special enrollment period?

A special enrollment can occur at any time of the plan year. Employees who have a qualifying life event are allowed to opt in or out of coverage(s) during this time. The special enrollment period is limited: employees who have a qualifying event will have 30 days from the date of the event to make any additions, deletions, or changes in their coverage. Miss the 30-day open enrollment deadline and they will have to wait until the next period to make any elections.

The only exceptions are special enrollment periods that could allow an employee to join or change coverage, but special enrollment is only triggered by qualifying events.

What are health insurance waivers of coverage?

A best practice for business is to require waivers from any employee who declines coverage under an employer plan. Whether they have coverage from a spouse or parent, or simply elect not to purchase, have the staff member sign a waiver acknowledging their choice that clearly outlines the implications of having to wait until the next open enrollment period.

Who is responsible if the employee misses open enrollment?

Provided the employer has given ample notification, it is the employee’s responsibility to enroll themselves or their dependents into a plan or make changes to their coverage. If an employee fails to do so, the employer is not responsible for any losses they incur.

What not to do if your employee misses open enrollment

Some businesses may be tempted to try to work around an open enrollment mishap. Employers may consider asking the employee to resign for a short period of time, then rehire them — triggering a special enrollment qualifying event. This could prompt your insurance carrier to deny coverage. It’s important to check with your carrier to verify any required waiting period to reinstate benefits before you make a decision to ask an employee to resign.

Employers must stress that options for employees to gain healthcare coverage for the coming year are limited if they miss the open enrollment period. The consequences for the coming year could be devastating if there is a serious medical issue. The responsibility, however, is ultimately in the hands of the staff member.

This post was originally published in August 2018.