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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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  • HIPAA Special Enrollment Rights
    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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    See and learn more about the requirements for cafeteria plans imposed by the Internal Revenue Code. This practice note provides guidance on drafting and implementing a cafeteria plan, which is an employee welfare benefit program employers can use to help employees pay for certain expenses such as health insurance, dental insurance, life insurance, unreimbursed medical expenses, and dependent care services, all using pre-tax dollars.

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    • ERISA. DOL finalizes regulations reversing Trump-era rules restricting ERISA retirement plan investment in view of environmental, social and governance (ESG) factors, like climate change. The new rules allow ERISA plan fiduciaries to consider ESG factors in selecting retirement plan investments and exercising shareholder rights. See prepublished version.
    • Executive, Incentive, and Equity-Based Compensation. The SEC adopts new rules that will require publicly traded companies to "claw back" incentive-based executive compensation that a company awarded to an executive based on materially misreported financials, which later required an accounting restatement, regardless of whether the restatement was caused by misconduct. The amendments are effective Jan. 27, 2023. 87 Fed. Reg. 73,076 (Nov. 28, 2022).
    • Executive, Incentive, and Equity Based Compensation. Glass, Lewis & Co. (GL), corporate governance consultants, updates it policy guidance for the 2023 proxy season. For U.S. companies, GL's guidelines amends and clarifies its policies on board activities, including (1) cyber risk, oversight of environmental and social issues, and changing regulations around director exculpation; (2) gender and underrepresented community diversity; (3) accountability for climate-related disclosures in companies with material risk exposure; and (4) ISS's approach on proposals requesting racial equity audits and severance payments. GL 2023 Proxy Voting Policies.
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