From the Hotline: Health Plan Change During Qualified Life Change

Question: During a qualified life event change, may an employee change his or her actual health plan election from one program to another, such as from a health maintenance organization (HMO) plan to a preferred provider organization (PPO) plan?

Answer: Under the Health Insurance Portability and Accountability Act (HIPAA) special enrollment rights applicable to group health plan benefits, the regulations do permit a participant to select among all benefits plans made available to similarly-situated individuals. Therefore if this event is recognized, the employee may elect between all plans for which he or she would otherwise be eligible, such as moving from the HMO to the PPO health plan. According to 29 C.F.R. § 2590.701-6, Special enrollment periods:

Special enrollees must be offered all the benefit packages available to similarly situated individuals who enroll when first eligible. For this purpose, any difference in benefits or cost-sharing requirements for different individuals constitutes a different benefit package. In addition, a special enrollee cannot be required to pay more for coverage than a similarly situated individual who enrolls in the same coverage when first eligible.