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We're not in the HIPAA special enrollment category here because there is no loss of eligibility for the parent's plan. In other words, this isn't a loss of coverage caused by the parent terminating employment (or otherwise losing eligibility) or the child reaching age 26 and aging out. So the special Outbreak Period extensions won't apply, and employer is not required to offer the enrollment opportunity. But this would still qualify under the Section 125 permitted election change event based on the employee and parent having different plan years. So the child could use that permitted election change event to enroll in your plan mid-year as of 11/1/21 (then use OE to enroll for the 1/1/22 plan year). You'll just want to confirm that the carrier (or stop-loss if self-insured) permits mid-year enrollment on the basis of this different plan year permitted election change event. You'll also want the employee to certify the she has coverage through a parent that is ending as of 11/1 because of the different plan year for the parent's employer (and have no reason to believe that the employee's certification is incorrect). Here's the reg on point: Treas. Reg. §1.125-4(f): (f) Significant cost or coverage changes. (1) In general. Paragraphs (f)(2) through (5) of this section set forth rules for election changes as a result of changes in cost or coverage. This paragraph (f) does not apply to an election change with respect to a health FSA (or on account of a change in cost or coverage under a health FSA). … (4) Change in coverage under another employer plan. A cafeteria plan may permit an employee to make a prospective election change that is on account of and corresponds with a change made under another employer plan (including a plan of the same employer or of another employer) if— (i) The other cafeteria plan or qualified benefits plan permits participants to make an election change that would be permitted under paragraphs (b) through (g) of this section (disregarding this paragraph (f)(4)); or (ii) The cafeteria plan permits participants to make an election for a period of coverage that is different from the period of coverage under the other cafeteria plan or qualified benefits plan. … (6) Examples. The following examples illustrate the application of this paragraph (f): … Example (2). (i) Employer N sponsors an accident or health plan under which employees may elect either employee-only coverage or family health coverage. The 12-month period of coverage under N’s cafeteria plan begins January 1, 2001. N’s employee, A, is married to B. Employee A elects employee-only coverage under N’s plan. B’s employer, O, offers health coverage to O’s employees under its accident or health plan under which employees may elect either employee-only coverage or family coverage. O’s plan has a 12-month period of coverage beginning September 1, 2001. B maintains individual coverage under O’s plan at the time A elects coverage under N’s plan, and wants to elect no coverage for the plan year beginning on September 1, 2001, which is the next period of coverage under O’s accident or health plan. A certifies to N that B will elect no coverage under O’s accident or health plan for the plan year beginning on September 1, 2001 and N has no reason to believe that A’s certification is incorrect. (ii) Under paragraph (f)(4)(ii) of this section, N’s cafeteria plan may permit A to change A’s election prospectively to family coverage under that plan effective September 1, 2001. Here are more details in the context of spouses with different plan years (same rule applies): https://www.theabdteam.com/blog/changing-health-plan-elections-based-on-spouses-different-plan-year/

It's also worth bearing in mind that, if you don't make the 45-day window, not only do you lose the ability to use DFVCP, but the per-day penalty calculations start at July 31. You do not start the daily penalty clock at October 15, even if you timely filed for an extension.

They're not going to take the $12k out of your $18k, dont worry about that. An offset implies a taxable event. So you will not receive a new check but you will get a 1099 to report $12k as retirement income, subject to taxes and applicable penalties. IMHO They're not trying to yank you.