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Term: Qualifying Event

25 Nov 2014

An event that triggers a change in a policyholder’s insurance coverage. Qualifying events include life events that allow a policyholder to change coverage types, as well as events that may result in the policyholder losing coverage.

Insurance contracts for individual policyholders typically have durations of one year. In the case of insurance offered through an employer, individuals choose the type of coverage that they want during an open enrollment period. After that period closes the individual is unable to change the type of insurance coverage unless a qualifying event occurs. In some cases, insurance companies may offer more than one open enrollment period, and states may also have regulations that require insurers to offer multiple open enrollment periods.

If an individual misses the open enrollment period and was unable to sign up for an insurance policy, he or she will need to demonstrate that a qualifying event occurred in order to be considered for a special enrollment period. Types of qualifying events that can trigger a coverage adjustment include a change in the number of dependents, change in marriage status, and change in employment status. Individuals will most likely need physical documentation to prove that a qualifying event occurred. Examples of documentation include birth or death certificates, marriage certificates or divorce papers, as well as proof that the individual moved to a different coverage area.

Employees who obtain insurance coverage through their employers may lose that coverage if they are fired from their position. In order to prevent the employee from being without insurance until a new job is found, employees are often able to purchase COBRA insurance. COBRA is short for Consolidated Omnibus Budget Reconciliation Act, and was created by Congress in 1986.

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