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Please! Can I? Handling Health and Welfare Enrollment Exceptions

December 06, 2022 (3 min read)

Open enrollment brings its special issues. Mid-year issues arise, too. What if you’re confronted with an employee who wants continued coverage for their sick spouse, who enrolled in a high-deductible plan and now wants a lower deductible? Or the parent who wants to enroll their 28-year-old? The answer seems clear: It’s, no—but sometimes we want to relent. Outside of special enrollment exceptions and the over-lapping family status changes in cafeteria plans, employees and their dependents are locked-in to their open enrollment choices, at least until the next plan year. What should you do in administering the plan?   

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    Review these rules that explain how the Health Insurance Portability and Accountability Act of 1996 (HIPAA), amended ERISA to require plan sponsors to allow employees to enroll themselves or their eligible dependents in group health plans on the occurrence of certain specified events (i.e., outside of the sponsor's open enrollment period). The special enrollment rules operate in conjunction with the rules that permit mid-year changes to an employee's pre-tax cafeteria plan elections under Internal Revenue Code Section 125.
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