If you and your legal spouse are both eligible for employee health benefits, you should explore each company's health insurance options to see which is best for you and your wallet.
If you want to switch to a spouse’s policy, or your spouse wants to enroll in yours, it’s usually a simple task to accomplish. However, it’s important to get the timing right and to know when you’re eligible for special enrollment periods (SEPs).
By taking the time to figure out which plan is best, you can save money and hassle. In this article, we’ll go over how to switch to a spouse’s policy during and outside the annual enrollment period and what circumstances can trigger a SEP.
Switching to a spouse’s policy during open enrollment
Changing your coverage is easy if you want to switch to a spouse’s health insurance policy during open enrollment. You simply need to cancel your current health coverage and enroll in your spouse’s policy.
If you’re making the change to cut back on employer-sponsored plan costs, timing the change during open enrollment means you can start saving right away. Most organizations align their plan year with the calendar year. Open enrollment generally begins in November for coverage starting January 1.
Ensure that your policy and your spouse’s policy follow the same plan year with the same effective date for changes made during open enrollment to avoid a gap in coverage. You should also confirm that your spouse’s policy will meet your needs regarding covered services and available providers.
For example, if you or any dependent children visit a specific primary care physician, you’ll want to ensure your spouse’s policy has them in their network.
If you’re switching from group health insurance to a qualified small employer health reimbursement arrangement (QSEHRA) or an individual coverage HRA (ICHRA), your spouse must be enrolled in an individual or family health insurance plan before they can participate in the HRA on a tax-free basis.
Changing health coverage outside an open enrollment period
Changing your coverage to a spouse’s policy outside of the open enrollment period can be challenging. Your current policy’s coverage period may not match your spouse’s plan period, and coverage could be refused1 until open enrollment rolls around again.
There are a few specific instances2 where you can make changes. For example, if you have a cafeteria plan and had your hours reduced to fewer than 30 hours per week, or if you purchased a single coverage health plan on the marketplace or a state health insurance exchange, you can drop your current health insurance midyear.
Additionally, if your employer offers you a QSEHRA or an ICHRA, this triggers a special enrollment period (SEP), giving you 60 days from when you are offered the HRA to change to your spouse's family plan.
Special enrollment periods
A SEP lets you enroll in health coverage outside the annual open enrollment period. Under specific circumstances, you may qualify to switch to your spouse’s health insurance during a SEP.
Certain life events trigger SEPs, including:
- Changes in household size, such as marriages, birth (or adoption) of a child, or divorce
- Change in your primary place of residence
- Loss of health insurance coverage, typically due to job loss
- When a spouse’s company stops making contributions toward their health coverage
- When a spouse loses Medicaid eligibility, no longer has access to Children’s Health Insurance Program (CHIP) coverage, or meets the eligibility requirements for premium assistance for group health insurance under those programs
- When your employer offers you a QSEHRA or an ICHRA
If you qualify for a SEP, you must show your company proof of your change in circumstances—such as a marriage certificate, annulment document, or child’s birth certificate—before the company will consider you qualified.
It’s essential to complete this verification process as quickly as possible. If you don’t submit proof within 30 days, your health plan selection may be canceled. You can reapply for the SEP and restart the verification process only if your qualifying event was less than 60 days ago, so don’t delay if you need to switch coverage outside open enrollment.
If you’d like to drop your current health insurance coverage and switch to your spouse’s policy, or vice versa, your first step should be to review each policy carefully so you and your spouse can choose the type of coverage that works best for you. You can typically switch health insurance plans during open enrollment, but you may be eligible for a SEP if you have a qualifying life event.
Reviewing all potential costs of switching policies is vital, as additional fees could cancel out any potential savings. Picking the best health insurance plan can take some research, so it’s critical to take your time to make the right decision for you and your family.
This post was originally published on November 4, 2020. It was last updated on March 24, 2023.1. https://khn.org/news/switching-to-a-spouses-plan-can-be-difficult-if-timing-isnt-right/