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Guidance on short-term relocation (or extended travel) vs change of residence as a Qualifying Life Event?


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Posted

Is there any guidance on the difference between a true change in residence and extended travel (i.e., length of time)? 

In February of this year Employee submitted an election change form to remove spouse from health coverage due to spouse's move out of the country. 6 weeks later Employee requested to add spouse back to health coverage due to spouse's move back into the US. Employee has now requested to remove spouse from health coverage again due to spouse's move out of the country again. The Employer thinks the spouse travels back and forth to the couple's home country a few times a year for 6 weeks at a time.  Are these qualifying life events? 

Posted

If (and only if) the move to another country results in the loss of eligibility for coverage, then I would permit an election change each time the move occurs.  I don't think there is any rule regarding a time frame for such moves or whether such move has to be "permanent."  

Posted

Yeah I think it's borderline and could reasonably be interpreted as a change in residence each time depending on the specific facts and circumstances.

Here's my thoughts I've posted on this issue:

https://www.newfront.com/blog/spouse-relocates-outside-u-s-moves-u-s-2

Spouse Moves Into Country

In this example, the employee’s spouse is moving into the country from an area where the plan does not provide full coverage. The employee’s spouse therefore will have a change in residence affecting eligibility for the plan. This means that the employee may change his or her election to cover the spouse upon the spouse’s change in residence to the U.S.

Spouse Moves Out of Country

In this example, the employee’s spouse is moving out of the country to an area where the plan does not provide full coverage. The employee’s spouse therefore will have a change in residence affecting eligibility for the plan. This means that the employee may change his or her election to revoke coverage for the spouse upon the spouse’s change in residence outside the U.S.

What is a Change in Residence?

There’s no formal definition or exact timeframe to determine “residence” that applies here. The analysis is based on all facts and circumstances.

In other words, if the spouse is going somewhere on vacation, there’s no permitted election change event. If the spouse is changing residence for some period to the foreign country, then relocating to reside back in the U.S., there will be permitted election change event upon each event.

This isn’t very precise, but it’s also generally not an issue in practice. The employee will certify to the change in residence in most cases, and there is no reason for the employer to question that certification unless the employer suspects fraud. Fraud would likely only be an issue if the employer had reason to believe that the dropping/re-enrolling request was really a based on the spouse’s short vacation.

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