Published on May 11, 2022. Show Health insurance can be confusing and challenging for both employers and employees. If you feel stuck in your current health plan, you may be asking yourself, “Can I change my health insurance plan mid-year?” The good news is that you’re not locked into your health insurance plan forever. However, there are rules for mid-year changes that are vastly different based on if you’re an employer or an employee. Employers can usually make plan changes at any time, but they face complex restrictions and potential penalties. Employees have more flexibility in what they can change, but can only do so during specific enrollment times. This blog will guide employers and employees through their options for making mid-year changes to their health insurance plans. Can I change my health insurance plan mid-year?EmployersHealth insurance changes are generally done at the start of a plan year, giving your employees time to consider their options during the open enrollment period. However, as an employer, you’re able to make changes to your health plan at any point during the year. While this may seem enticing, changing employer-sponsored health insurance plans outside of open enrollment could leave employers prone to restrictions and compliance challenges. So be sure to check your current health plan document for any limitations or penalties. EmployeesIf employees want to switch health plans or make changes to their current plan, they only have two options—during the open enrollment period or a special enrollment period. The annual open enrollment period typically runs from November 1 to December 15, but the exact dates can vary depending on which state you’re in. During this time, an employee can renew their current health plan or search for other coverage options. Coverage usually begins on January 1 or February 1, depending on enrollment. Employees can make as many health insurance plan selections and changes during the annual open enrollment period as long as they finalize their choice by the end of the period. Once the period is over, changes can’t be made unless they have a qualifying event triggering a special enrollment period—more on those below. Which are the requirements to make changes outside the open enrollment period?EmployersEven though employers can make changes to their coverage at any time during the year, they need to follow specific requirements to stay in compliance and avoid penalties if the changes are made outside of open enrollment. The three requirements below are necessary to consider for employers making mid-year plan changes:
EmployeesOutside of open enrollment, an employee can only change their health plan during a special enrollment period. A special enrollment period can occur year-round and applies only to those who have experienced a qualifying life event. Several life events qualify for a special enrollment period, including:
In most cases, employees have 60 days from the date of their qualifying life event to change or buy a health plan. Like open enrollment, employees can shop for and compare plans by working with a broker or visiting their state or federal health insurance marketplaces. In some cases, proof of the qualifying life event is required before enrollment. What kinds of changes can I make to my plan mid-year?EmployersA popular reason employers make changes to their current health plan is to control rising health insurance costs. However, employers also make a few other common changes outside the open enrollment period. The following are changes employers can make mid-year without penalty:
EmployeesThe IRS provides specific instances when employees can make mid-year changes to their health benefit. Employees can make mid-year plan changes if they have a qualified life status change that would affect their health insurance policy. Qualified life status changes include:
Employers aren’t required to allow employees mid-year elections changes except if making changes under HIPAA special enrollment rights. For clarity, employers should include in their plan documents and summary plan description which circumstances entitle an employee to make mid-year election changes. How employers can use an integrated HRA to provide their employees more coverage mid-yearMaking mid-year health plan changes can be difficult for employers. If you’re looking to provide a better health benefit for your employees, a health reimbursement arrangement (HRA) is worth looking into. With an integrated HRA, also known as a group coverage HRA (GCHRA), you can keep your existing group health insurance plan and provide more comprehensive health coverage to your employees. Integrated HRAs work with traditional group health insurance to reimburse employees tax-free for qualified medical expenses that aren’t fully paid for in their plan, such as deductibles, coinsurance, copays, and other out-of-pocket medical care. Only employees enrolled in the employer-sponsored coverage can participate in the HRA. With integrated HRAs, employers set a monthly allowance that works for their budget. While some HRAs have annual contribution limits, integrated HRAs have no minimum or maximum contribution requirements. Unlike a health savings account (HSA), HRAs are not pre-funded accounts. The employer only pays out when an employee submits a medical expense for reimbursement. Additionally, unused allowance amounts stay with the employer if an employee leaves the company. The great thing about integrated HRAs is that employers can sign up for one at any point during the year without an enrollment period. Integrated HRAs work with any group health plan, so there’s no need to make mid-year changes to your plan. Employers can simply implement an integrated HRA to supplement their health plan and begin providing their employees with tax-free reimbursements for healthcare items. Learn more about the integrated HRA with our complete guide ConclusionChoosing a health plan is a big decision for employers and employees. If you’re an employer that wants to improve your health insurance plan, but doesn’t want to go through the mid-year hassle of making changes, implementing an integrated HRA at your organization is a great option. With an integrated HRA, you can offer your employees a more personalized health benefit without changing your current group health coverage details. Don’t wait to give your employees an HRA—schedule a call with PeopleKeep and we’ll get you started! Originally published on May 11, 2022. Last updated May 11, 2022. Share: |