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As it relates to employee benefits, a qualifying event is any situation that brings about a change in the benefits extended by an employer to and through that employee. The exact impact of that event may be positive, in that the employee becomes eligible for additional benefits. At the same time, a qualifying event may lead to the loss or reduction of certain benefits as the personal circumstances of the employee undergoes some type of shift or change.
One of the most common examples of a qualifying event is the end of employment. In this scenario, a number of benefits that were once extended to the employee are no longer provided. This often includes participation in a group insurance plan. Depending on the circumstances surrounding the termination of the employment, the employee may be provided with extended coverage by the employer for a short period of time, or become eligible to participate in some sort of government sponsored transition insurance plan for a specified period of time. Participation in this type of continued insurance coverage is usually optional, with the former employee required to file documentation to receive the coverage and arrange for payments within 30 to 60 days after the employment is terminated.
At other times, the qualifying event may involve a reduction in working hours of the employee, effectively changing his or her status from full-time to part-time. In this scenario, the employee loses any events associated with full-time employment, while retaining any benefits offered to part-time employees. For example, the shift may mean the loss of the ability to accrue personal or vacation days, but may still allow the employee to participate in a group health insurance plan.
Changes in personal circumstances may also be classed as a qualifying event. Should an employee experience a divorce, there will often be a change in the type of benefits provided under the terms of a group health insurance plan. As a result of the divorce from the employee, the former spouse typically loses coverage under the plan, although many plans do allow the employee to retain family coverage as a means of providing insurance for minor children. In other instances, the employee’s insurance status may be shifted from family coverage to individual coverage, which in turn impacts the premium paid by the employee and the employer for participation in the group plan.
When a qualifying event takes place, employees normally have a specified window of time to make arrangements for the changes that come about as a result of that event. The duration of that window is impacted by any governmental regulations that may apply, along with any policies and procedures that the employer and the benefits provider have developed in compliance with those regulations. People who experience some type of qualifying event should work with human resources personnel at their place of employment to determine what impact a specific qualifying event has on their status and benefits, and what action should be taken to claim any benefits that are offered under the new circumstances.
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