Everything you need to know about ICHRA special enrollment

The comprehensive guide to managing ICHRA outside of standard open enrollment

When you have an ICHRA, your employees get health insurance plans through the marketplace. The open enrollment period is typically Nov. 1–Jan. 15, but there are also events that trigger mid-year special enrollments.

During these special enrollment periods, companies have obligations to their employees and must meet certain regulations. 

This guide provides business owners with clarity and direction on mid-year health plan modifications. And with Take Command by your side, you'll have the resources and guidance necessary to make these changes with confidence and ease.

Let’s walk through what you need to know about ICHRA special enrollments.

Enrollment Terms and Phrases

Open Enrollment

The period of time when the marketplace is open for employees to purchase healthcare plans, including plans for an ICHRA.

Special Enrollment

The enrollment period triggered by 1) An employee’s qualifying life event such as marriage or birth of a child or 2) When an employer starts offering an ICHRA.

Essential Guidelines for Employers

Here are some things you need to know to support your employees and make sure your business is in compliance during an ICHRA special enrollment.

ERISA Requirements

ERISA is a federal law that protects the interests of healthcare plan participants, and certain ERISA requirements kick in when an employer offers an ICHRA. 

During special enrollment, employers offering an ICHRA must follow ERISA’s core rules (plan document, summary plan description, fiduciary duties, and claims process) plus the ICHRA-specific notice requirements that tie into Marketplace special enrollment. 

The employer isn’t responsible for securing the individual insurance, but they must provide employees with the tools, notices, and rights to use their ICHRA dollars during a qualifying life event.

ACA Mid-Year Notification

When an employer offers an ICHRA, the Affordable Care Act requires that employees are informed of their rights to special enrollment triggers in the marketplace. This includes a mid-year notification requirement when an employee becomes newly eligible for the ICHRA outside of open enrollment.

The ACA’s mid-year notification ensures employees who become newly eligible for an ICHRA outside of open enrollment get a fair shot to buy coverage on the Marketplace, using the special 60-day enrollment window. It’s the employer’s job to deliver this notice on time with all the required details.

Special Enrollment Triggers for Employees

Understanding Qualified Life Changes and Eligibility Events

Employees can make health plan changes outside standard periods through a trigger called a qualifying life event or eligibility event. These guidelines, chiefly outlined by the IRS, are in place to accommodate significant life shifts that may affect an individual's insurance needs. 

Some common QLEs are marriage, childbirth, or aging out of a parent's coverage. Each circumstance grants a short timeframe to review health plan choices. To adjust plans mid-year, employees typically must furnish documentation, such as a marriage or birth certificate.

IRS Guidelines on QLEs

The IRS grants QLE status to specific life events; these trigger the eligibility for mid-year insurance adjustments: 

• Change in marital status: This includes marriage, divorce, or legal separation
• Change in the Number of Dependents: Events such as the birth or adoption of a child, or the death of a dependent
• Change in employment status: This could be the result of starting a new job, going from full-time to part-time, or losing a job
• Loss of other health coverage: Examples include losing eligibility for a plan due to age (e.g., turning 26 and aging out of a parent’s plan) or losing coverage through a spouse's plan after a divorce
• Residential moves: Relocating to a different ZIP code or county might impact the available network of providers or plan options
• Other significant events: Entering into Medicare or Medicaid, and other specific situations recognized by the IRS can also be considered qualifying life events

For most of these events, employees have a 60-day window from the occurrence of the event to request a change in their insurance coverage.

Learn More About QLEs

How Employers Can Set Clear Guidelines on Mid-Year Changes

It’s important that employers are proactive in their communication and procedures around mid-year health plan changes. This will ensure smooth transitions and minimize confusion for employees. Here's how employers can establish clarity: 

1. Detailed documentation: Incorporate clear guidelines on qualifying life events in the company's benefits documentation, ensuring that scenarios and procedures are defined in user-friendly terms.
2. Employee training sessions: Consider holding periodic informational sessions or workshops to educate employees on their rights, obligations, and the processes associated with mid-year changes.
3. Dedicated point person or team: Assign HR personnel who can provide guidance, answer questions, and assist employees through the process. 
   Ensure these representatives are well-versed in both company policies and IRS guidelines.
4. Real-life examples: Use practical examples to explain how each qualifying event works, and what actions employees should take in each situation. This can simplify understanding and provide a roadmap for employees facing such changes.
5. Open channels of communication: Encourage employees to approach 
   HR with any questions or uncertainties. A proactive approach can prevent misunderstandings and ensure smooth transitions for both the employee and the organization.
6. Regular review and procedure updates: As guidelines evolve, and as the company learns from experiences, it's vital to periodically review and, if necessary, refine the policy documentation and processes.

By understanding IRS guidelines and creating a supportive infrastructure for employees, employers can ensure a streamlined process for mid-year insurance changes, accommodating both the needs of the business and the life circumstances of their employees.

Get Advice from Take Command

Take Command experts can answer your enrollment questions (open, special, or otherwise!) and help you understand your role and responsibilities.

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