With the COVID-19 crisis, many US workers are losing their jobs and their eligibility for employer-provided healthcare coverage.

Even if your workforce isn’t affected, your healthcare plans could be impacted by this trend.

Why?

Because during the year, employees can make changes to their pre-tax benefits when they experience a qualified life event (QLE). Loss of coverage for either the employee or their eligible dependent is considered a QLE, and that may result in employees looking to enroll in your healthcare coverage or add dependents in the coming weeks and months.

Employers need to be prepared for the potential increase in requests for changes associated with loss of coverage.

Here are two scenarios that can result in an enrollment opportunity:  

1. Your employee loses coverage. Your employee waived healthcare coverage under your plan because they were covered as a dependent under their spouse or domestic partner’s plan, or potentially a parent’s plan if they are under 26.
2. Your employee’s dependent loses coverage. Your employee has eligible dependents, but they were covered under another employer’s plan, typically the spouse or domestic partner’s plan.

In either of these cases, there is an opportunity for the employee to make changes to their qualified benefits.

*Important note: When a dependent loses their employer-provided coverage, that’s considered a QLE. However, if that employer offers a COBRA subsidy and that individual continues their coverage, the end of the subsidy period is NOT considered a QLE.

If you haven’t dusted off your QLE rules in a while, now is the time to make sure you understand how you are processing these requests. You should review your plan rules and plan documents to ensure they are current.

Some details to consider:

• Are employees aware of their ability to make changes if they or a dependent loses other coverage? How easy is it for them to find this information and initiate a request?
• Do you require documentation of the loss of the other coverage, which may be a copy of a termination of coverage notification from the prior employer? Do you have capacity to process this documentation if you have more requests than usual?
• If the employee is enrolling in coverage and adding dependents, what is your dependent verification process? Does it apply when the employee previously waived coverage and is electing it now and including dependents? Or does it only apply when the employee is adding dependents to existing coverage? Again, what is your capacity to process any required documentation?

You’ve already been managing loss-of-coverage QLEs as part of your regular ongoing administration. However, it might have been a small volume over the course of any given year.

Considering the widespread workforce impacts of the coronavirus, you may be faced with more of these requests than is typical. It makes sense to be prepared by understanding how you or your administrator are processing these requests to ensure plan rules are followed. There should be a well-defined and executed process in place. Also consider communicating to employees to ensure they know when and if they can add dependents or enroll in coverage as a result of widespread workforce changes.

Getting ready for the potential for these QLEs can help you manage your workload while addressing the needs of your employees efficiently, effectively and in compliance with your plan rules and DOL regulations.