The U.S. Department of Labor (the “DOL”), in conjunction with the U.S. Department of Health and Human Services (the “HHS”) and the Treasury (collectively, the “Departments”), have jointly issued Frequently Asked Questions (“FAQs”) Part 35, regarding implementation of the Affordable Care Act and other matters. One topic covered in these FAQs is special enrollment for group health plans under HIPAA. Here is what the FAQs say on this topic:
Background. Group health plans are required to provide special enrollment periods to current employees and dependents, during which otherwise eligible individuals who previously declined health coverage have the option to enroll under the terms of the plan (regardless of any open enrollment period). Generally, a special enrollment period must be offered for circumstances in which an employee or dependents lose eligibility for any group health plan coverage, or health insurance coverage, in which the employee or their dependents were previously enrolled, and upon certain life events such as when a person becomes a dependent of an eligible employee by birth, marriage, or adoption.
Under these rules, special enrollment periods are available in several circumstances set forth in the Departments’ regulations, including:
— when (subject to certain exceptions) an individual loses eligibility for coverage under a group health plan or health insurance coverage (such as an employee and dependents’ loss of coverage under the spouse’s plan);
— when an employer terminates contributions toward health coverage (other than COBRA continuation coverage); or
— when coverage is no longer offered to a group of similarly situated individuals.
The Departments’ regulations require that employees receive a notice of special enrollment at or before the time they are first offered the opportunity to enroll in the group health plan.
New Question. If an individual who enrolled in individual market health insurance coverage, including coverage purchased through an Affordable Care Act Marketplace (a “Marketplace”), loses eligibility for that coverage, is the individual entitled to a special enrollment period in an employer-sponsored group health plan for which the individual is otherwise eligible and had previously declined to enroll?
Answer. YES. Employees and their dependents are eligible for special enrollment in a group health plan if they are otherwise eligible to enroll in the plan, and at the time coverage under the plan was previously offered, they had other group health plan or health insurance coverage (regardless of whether the coverage was obtained inside or outside of a Marketplace) for which they have lost eligibility. Accordingly, if an individual loses eligibility for coverage in the individual market, including coverage purchased through a Marketplace (other than loss of eligibility for coverage due to failure to pay premiums on a timely basis or termination of coverage for cause, such as making a fraudulent claim or an intentional misrepresentation of a material fact), that individual is entitled to special enrollment in group health plan coverage for which he or she is otherwise eligible. These individuals will be eligible for special enrollment in the group health plan coverage regardless of whether they may enroll in other individual market coverage, through or outside of a Marketplace.