If your company is one of the many companies currently going through annual open enrollment period, then you have probably read the term “eligible life events” or “qualifying life events” a couple dozen times by now. It’s important to know and understand which life events qualify, because many people only have one chance per year to elect their health benefits unless they have a qualifying life event, which gives them an opportunity to change their benefits elections.
Why do qualifying life events matter?
Most companies negotiate group health insurance costs once per year, and it’s more cost efficient for both the insurance company and the employer to keep a relatively steady number of people in the plan they elect at the beginning of the year. Insurance companies agree to lock in rates for the year in exchange for keeping people from switching plans at will. However, it wouldn’t be fair for the insurance companies not to allow people to change plans when they have a major life event that changes their needs. So there is a built in clause that allows people to change their health care coverage when they experience certain qualifying life events.
What are qualifying life events?
As mentioned above, qualifying life events are major events in your life that qualify you to change your health care coverage outside of the open enrollment period. Major life events include:
- Marriage, civil union, divorce, annulment, legal separation.
- Birth, adoption, taking in a foster child, or becoming a legal guardian.
- Change in spouse’s work status.
- Death of spouse or dependent.
- Change in status of dependent’s eligibility (e.g. change of student status or becoming too old for coverage).
- Possibly more, depending on plan.
These are common qualifying life events, so be sure to read the fine print in your benefits enrollment package. Also keep in mind that you usually only have 30 days from the date of the qualifying life event in which to make a change in your health insurance plan. Insurance companies or your Human Resources department may also require proof of the qualifying life event, so be ready to fax a copy of a birth or marriage certificate, death certificate, adoption papers, etc. Specifics vary from plan to plan, so be sure to read your plan thoroughly before electing your benefits plan. You may also wish to get insurance rate quotes from another insurance source before automatically assuming your group plan offers the best rates. My wife and I discovered we could save a couple thousand dollars per year with a comparable individual health plan.