HIPAA Special Enrollment Periods

[French]

Been a while since one of these questions has been brought to my attention so I am requesting your assistance. I think the answer is cut and dry but I've been wrong before.

Employee is married and elected family coverage in our medical plan but only lists one child Spouse has individual coverage at her current employer. She gives birth 2 weeks ago and is currently out on short term disability with her employer. Employee has requested one of 2 actions: (1) add spouse and newborn to our medical plan or (2) drop coverage entirely with us and join spouse's plan

Can he do either under HIPAA? With respect to #1, it is the addition of the spouse that has me unsure despite everything that I've read and for #2 it is dropping coverage outside of our Open enrollment period.

Your help/comments are greatly appreciated.

[papogi]

My thoughts:

#1: The IRS has spoken of the "tag along" rule which would allow other eligible dependents to be added to the plan when a new dependent is acquired. This basically allows it under Section 125, but the underlying health plan must also allow it. This is not a Special Enrollment event for the spouse, so your underlying health plan very well could prevent the spouse from being added until open enrollment.

#2: Treas Reg 125-4(f)(4)(i) allows this for the pre-tax deductions for the coverage. As long as the spouse's plan allows the family on their health plan, then your employee can drop coverage under your health plan via the cessation of required contributions language.

[Guest BenefitsLawyer]

Under the HIPAA special enrollment regs, the birth of a child triggers a special enrollment right for the employee (if not already enrolled), the spouse (if not already enrolled), and the new child. Other children who were not previously covered do not have a special enrollment right upon the birth of a new child. See 29 CFR sec. 2590.701-6(b)(2).