Limited avenues for making changes to health coverage

Q         We have an employee who wants to drop our medical coverage to join her father's policy. Is it possible for her to drop coverage mid-year and join her father's plan?

A   Typically, outside of open enrollment periods during the last two months of the calendar year, there are only a handful of qualifying events that permit individuals to make changes to employer-sponsored health insurance. Canceling coverage outside of one of these qualifying events will cause both you and the employee to incur tax penalties under Section 125 of the Internal Revenue Code. Unless one of the circumstances below applies to your employee, she will not be able to drop the coverage without penalty.

The qualifying events that allow an employee access to a special enrollment period, or window, to make such coverage changes are limited to major life changes in the household or residence or an overall loss of eligibility for qualifying health coverage. The qualifying household events include major changes in life status during the last 60 days that affect coverage, such as a death, marriage, divorce, birth, and adoption or placing a child for foster care. The qualifying changes to residence include moving to a new county or ZIP code, moving from a foreign country, moving to or from the place you attend school if you are a student, moving to or from the place you both live and work if you are a seasonal worker, or moving from a shelter or transitional housing.