Compliance Corner: HIPAA Special Enrollment Rights

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By: Colin Clark | Staff Attorney

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) was enacted to protect the privacy and security of individuals’ medical information. It sets standards for how healthcare providers, insurers, and other entities handle personal health information (“PHI”), ensuring that such data is kept confidential and secure. Among its various provisions, HIPAA also includes special enrollment rights, which allows individuals to enroll in a health plan outside of the usual open enrollment period if they experience certain qualifying events. So, what exactly are special enrollment rights and when do they apply?

What Are HIPAA Special Enrollment Rights?

In general, group health plans typically offer eligible employees two regular opportunities to elect health coverage—an initial enrollment period when they first become eligible and an annual open enrollment period before the beginning of each plan year. In addition to these two opportunities, HIPAA requires group health plans to provide special enrollment periods outside of the regular enrollment period due to specific life events. Special enrollment must be requested within a specific timeframe, typically within 30 or 60 days after such qualifying event occurs.

Which Health Plans are Affected by Special Enrollment Rights?

• Self-insured plans must provide special enrollment rights.
• Fully insured plans must provide special enrollment rights.
• There are certain categories of coverage that are except from HIPAA’s special enrollment rules, such as limited-scope vision and dental benefits.
• Retiree-only plans and most health flexible spending accounts (FSAs) are also exempt from HIPAA’s special enrollment rules.

When Do Special Enrollment Rights Apply?

Special enrollment rights must be provided in several specific scenarios:

Loss of Other Health Coverage

Employees who lose their existing health insurance due to job loss, reduction in work hours, or the end of COBRA continuation coverage are eligible for special enrollment.

For example, an employee declines to enroll in health benefits for herself and her family because the family already has coverage through her spouse's plan. Coverage under the spouse's plan then ceases. Under the special enrollment rules, that employee then can request enrollment in her own company's plan for herself and her dependents.

Change in Family Status

HIPAA requires a group health plan to provide special enrollment opportunities to certain employees who acquire a new spouse or dependent by marriage, birth, adoption, or placement for adoption.

The regulations provide that the following individuals are eligible to enroll upon the acquisition of a new dependent through birth, marriage, adoption, or placement for adoption:

• a current employee who is eligible but not enrolled;
• a current employee who is eligible but not enrolled, and the spouse of such employee;
• a current employee who is eligible but not enrolled, and the newly acquired dependent of such employee;
• the spouse of an employee who is a participant;
• a current employee who is eligible but not enrolled, and the spouse and newly acquired dependent; and
• a newly acquired dependent of an employee who is a participant.

However, HIPAA is very clear that only the employee, spouse, and any newly acquired dependents receive special enrollment rights under this provision. Thus, other dependents (for example, siblings of a newborn child) are not entitled to special enrollment rights upon the employee's acquisition of a new dependent.

Individuals Who Lose Medicaid

If an employee or dependent ceases to become eligible for Medicaid and subsequently loses their Medicaid coverage, a HIPAA special enrollment right becomes available. The affected individual has at least 60 days after the coverage termination to request special enrollment.

Eligibility Under CHIPRA

Under the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), group health plans and group health insurance issuers must offer special enrollment opportunities. Plans and issuers must permit employees and dependents who are eligible for, but not enrolled in, a group health plan to enroll in the plan upon: losing eligibility for coverage under a State Medicaid or CHIP program, or becoming eligible for State premium assistance under Medicaid or CHIP.

In this scenario, the employee or dependent must request enrollment within 60 days of the loss of coverage or the determination of eligibility for premium assistance.

When Do Special Enrollment Rights Take Effect?

The answer to this question depends on what triggers an employee’s right to special enrollment. Those employees taking advantage of special enrollment as a result of a birth, adoption, or placement for adoption begin coverage no later than the day of the event.

For special enrollment due to marriage or loss of eligibility for other coverage, the new coverage will begin on the first day of the first month after the plan receives the enrollment request. For example, if the plan receives the request on March 3, coverage would begin on April 1.

What are the Notice Requirements Associated with Special Enrollment Rights?

Employees must receive a description of special enrollment rights on or before the date they are first offered the opportunity to enroll in the group health plan. In addition, employers that maintain a group health plan in a state with a CHIP or Medicaid program that provides for premium assistance for group health plan coverage must provide a notice (referred to as the Employer CHIP Notice) to all employees to inform them of possible opportunities in the state in which they reside.

For convenience, the Department of Labor has a model special enrollment notice that group health plans may use as a guide when crafting a special enrollment notice.