The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides individuals with many rights regarding their health care. Although the law is often associated with privacy issues, it also provides a number of other rights that are relevant to health benefits, including HIPAA special enrollment rights.
Special, Open and Initial Enrollment Periods
When employers offer group health insurance and other employee benefits, they need to give their employees the opportunity to enroll in coverage for themselves and their dependents. Usually, this is done through three types of enrollment periods:
- Initial Enrollment Period: When employees become eligible for a group health plan and other benefits, they receive an initial enrollment period to select coverage for the rest of the plan In some organizations, employees may qualify for coverage as soon as they begin work. In others, there is a waiting period of up to 90 days before employees qualify for benefits.
- Open Enrollment Period: Each year, plan options, costs and coverage details may change. Employees and their dependents may also have different needs than they did the year before. The annual open enrollment period gives employees an opportunity to review their benefit options and make selections. For most businesses, new plans will go into effect on January 1, so the open enrollment period will happen around November or December.
- Special Enrollment Period: Employees may be able to enroll in plans outside the initial and open enrollment periods by making use of a special enrollment period. Special enrollment periods are typically triggered by life events, such as divorce, marriage or childbirth, or by changes in health coverage. Employees and their dependents have some rights to special enrollment periods under various laws, including HIPAA.
What is a HIPAA special enrollment period?
The HIPAA special enrollment period is an additional enrollment opportunity that is guaranteed under HIPAA. Under certain circumstances, group health plans must offer individuals and their dependents the opportunity to enroll in a health insurance plan, even if they previously declined coverage and there is not an open enrollment period taking place.
Circumstance 1: Losing Group or Other Health Coverage
If an individual loses eligibility for health coverage under a group or other health insurance plan, they are entitled to a special enrollment period. These special enrollment period rights also apply when an employer terminates contributions to a health plan.
For example, say Jim and Cathy are married, and both work full-time for different companies. Jim has health coverage under Cathy’s employer-sponsored health plan. Since he’s already covered, Jim declines group health insurance through his employer. Later in the year, Cathy loses her job (and, consequently, her group health coverage), so Jim wants to enroll himself and Cathy in his employer’s group health plan. The HIPAA special enrollment period provides an opportunity to do this.
Circumstance 2: Marriage, Birth, Adoption or Placement
An individual who becomes a new dependent through marriage, birth, adoption or placement is eligible for a special enrollment period.
For example, if an employee gets married, the employee’s spouse has the right to a special enrollment period to enroll in the employee’s group health plan. Likewise, if an employee has a baby, they can enroll the baby in the plan – and the same is true for employees who adopt children or have children placed with them.
Circumstance 3: Eligibility or Loss of Coverage Under Medicaid or CHIP
Medicaid and state-sponsored Children’s Health Insurance Programs (CHIP) provide low-income individuals with health coverage. In addition to qualifying for coverage directly through these state programs, some individuals may qualify for premium assistance that allows them to enroll in other types of health coverage.
An employee or dependent who loses coverage through Medicaid or CHIP is eligible for a special enrollment period. Individuals are also eligible for a special enrollment period if they become eligible for group health plan premium assistance under such programs.
Other Laws Impacting Special Enrollment Periods
According to the Department of Labor (DOL), individuals may have special enrollment rights under the Children’s Health Insurance Program Reauthorization Act (CHIPRA) and the Employee Retirement Income Security Act (ERISA), in addition to their HIPAA special enrollment rights.
Timelines for Special Enrollment
Although individuals have the right to special enrollment opportunities, they must exercise these rights in a timely manner.
The DOL says employees must request enrollment within 30 days of the loss of coverage or the major life event (such as marriage or birth) that triggers a special enrollment period. If employees or their dependents are entitled to a special enrollment period due to changes in their Medicaid or CHIP status, they must request enrollment within 60 days of the loss of coverage or eligibility for premium assistance.
There are also rules about when health coverage must start. When a special enrollment period is triggered by birth, adoption or child placement, coverage should begin no later than the day of the triggering event. For example, if an employee’s baby is born on June 4, coverage must start on June 4.
If the special enrollment period is triggered by marriage or loss of eligibility for other coverage, then coverage should start on the first day of the month after the plan administrator receives the request for enrollment. For example, if a plan administrator receives an enrollment request due to loss of coverage on March 15, the new coverage should start on April 1.
Anti-Discrimination and Pre-Existing Conditions
When honoring HIPAA special enrollment periods, plan sponsors should be aware of rules and regulations regarding anti-discrimination and pre-existing conditions.
The DOL says HIPAA prohibits health plans from denying coverage based on certain health factors and from charging more than similarly situated individuals based on these health factors. These eight health factors are:
- Medical conditions, including physical and mental illness
- Health status
- Claims experience
- Genetic information
- Receipt of health care
- Medical history
- Evidence of insurability, including conditions arising out of acts of domestic violence
- Disability
Furthermore, under the ACA, group health plans are prohibited from imposing exclusions related to pre-existing conditions. This means that plans cannot limit or deny coverage based on health conditions that were present before enrollment.
Have more questions about employee benefits?
Understanding special enrollment rights is critical for both employers and employees to help ensure regulatory compliance and access to health benefits. By staying informed and seeking compliance assistance when necessary, employers can foster a supportive work environment and employees can avoid gaps in coverage during times of transition.
Whether you’re looking for individual health coverage or seeking to optimize your employee benefits strategy, Higginbotham can help. Talk to an employee benefits specialist today to explore your options.
