4. In § 146.117, revise paragraphs (a)(1), (a)(4), (b)(1), (b)(3), and example 2 in paragraph (b)(4), and add examples 3, 4, and 5 in paragraph (b)(4), to read as follows:
(a) Special enrollment for certain individuals who lose coverage —(1) In general. A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, is required to permit current employees and dependents (as defined in § 144.103 of this chapter) who are described in paragraph (a)(2) of this section to enroll for coverage under the terms of the plan if the conditions in paragraph (a)(3) of this section are satisfied. Paragraph (a)(4) of this section describes procedures that a plan or issuer may require an employee to follow and describes the date by which coverage must begin. The special enrollment rights under this paragraph (a) apply without regard to the dates on which an individual would otherwise be able to enroll under the plan.
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(4) Applying for special enrollment and effective date of coverage —(i) Request. A plan or issuer must allow an employee a period of at least 30 days after an event described in paragraph (a)(3) of this section (loss of eligibility for coverage, termination of employer contributions, or exhaustion of COBRA continuation coverage) to request enrollment (for the employee or the employee's dependent). For this purpose, any written or oral request made to any of the following constitutes a request for enrollment —
(A) The plan administrator;
(B) The issuer;
(C) A person who customarily handles claims for the plan (such as a third party administrator); or
(D) Any other designated representative.
(ii) Tolling of period for requesting special enrollment. (A) In the case of an individual whose coverage ceases, if a certificate of creditable coverage with respect to that cessation is not provided on or before the date coverage ceases, then the period for requesting special enrollment described in paragraph (a)(4)(i) of this section does not end until 30 days after the earlier of—
( 1 ) The date that a certificate of creditable coverage with respect to that cessation is provided; or
( 2 ) The date 44 days after coverage ceases.
(B) For purposes of this paragraph (a)(4), if an individual's coverage ceases due to the operation of a lifetime limit on all benefits, coverage is considered to cease on the earliest date that a claim is denied due to the operation of the lifetime limit.
(Nonetheless, the date of a loss of eligibility for coverage is determined under the rules of paragraph (a)(3) of this section, which provides that a loss of eligibility occurs when a claim that would meet or exceed a lifetime limit on all benefits is incurred, not when it is denied.)
(C) The rules of this paragraph (a)(4)(ii) are illustrated by the following examples:
Example 1.
(i) Facts. Employer V provides group health coverage through a policy provided by Issuer M. Individual D works for V and is covered under V 's plan. V fails to pay M the premiums for the coverage period beginning March 1. Consistent with applicable state law, M terminates the policy so that the last day of coverage is April 30. On May 15, M provides D with a certificate of creditable coverage with respect to D 's cessation of coverage under V 's plan.
(ii) Conclusion. In this Example 1, the period to request special enrollment ends no earlier than June 14 (which is 30 days after May 15, the day a certificate of creditable coverage is provided with respect to D ).
Example 2.
(i) Facts. Same facts as Example 1, except D is never provided with a certificate of creditable coverage.
(ii) Conclusion. In this Example 2, the period to request special enrollment ends no earlier than July 13. (July 13 is 74 days after April 30, the date coverage ceases. That is, July 13 is 30 days after the end of the 44-day maximum tolling period.)
Example 3.
(i) Facts. Individual E works for Employer W and has coverage under W 's plan. W 's plan has a lifetime limit of $1 million on all benefits under the plan. On September 13, E incurs a claim that would exceed the plan's lifetime limit. On September 28, W denies the claim due to the operation of the lifetime limit and a certificate of creditable coverage is provided on October 3. E is otherwise eligible to enroll in the group health plan of the employer of E 's spouse.
(ii) Conclusion. In this Example 3, the period to request special enrollment in the plan of the employer of E 's spouse ends no earlier than November 2 (30 days after the date the certificate is provided) and begins not later than September 13, the date E lost eligibility for coverage.
(iii) Reasonable procedures for special enrollment. After an individual has requested enrollment under paragraph (a)(4)(i) of this section, a plan or issuer may require the individual to complete enrollment materials within a reasonable time after the end of the 30-day period described in paragraph (a)(4)(i) of this section. In these enrollment materials, the plan or issuer may require the individual only to provide information required of individuals who enroll when first eligible and information about the event giving rise to the special enrollment right. A plan or issuer may establish a deadline for receiving completed enrollment materials, but such a deadline must be extended for information that an individual making reasonable efforts does not obtain by that deadline.
(iv) Date coverage must begin. If the plan or issuer requires completion of additional enrollment materials in accordance with paragraph (a)(4)(iii) of this section, coverage must begin no later than the first day of the first calendar month beginning after the date the plan or issuer receives enrollment materials that are substantially complete. If the plan or issuer does not require completion of additional enrollment materials, coverage must begin no later than the first day of the first calendar month beginning after the date the plan or issuer receives the request for special enrollment under paragraph (a)(4)(i) of this section.
(b) Special enrollment with respect to certain dependent beneficiaries —(1) In general. A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, that makes coverage available with respect to dependents is required to permit individuals described in paragraph (b)(2) of this section to be enrolled for coverage in a benefit package under the terms of the plan. Paragraph (b)(3) of this section describes procedures that a plan or issuer may require an individual to follow and describes the date by which coverage must begin. The special enrollment rights under this paragraph (b) apply without regard to the dates on which an individual would otherwise be able to enroll under the plan.
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(3) Applying for special enrollment and effective date of coverage —(i) Request. A plan or issuer must allow an individual a period of at least 30 days after the date of the marriage, birth, adoption, or placement for adoption (or, if dependent coverage is not generally made available at the time of the marriage, birth, adoption, or placement for adoption, a period of at least 30 days after the date the plan makes dependent coverage generally available) to request enrollment (for the individual or the individual's dependent). For this purpose, any written or oral request made to any of the following constitutes a request for enrollment—
(A) The plan administrator;
(B) The issuer;
(C) A person who customarily handles claims for the plan (such as a third party administrator); or
(D) Any other designated representative.
(ii) Reasonable procedures for special enrollment. After an individual has requested enrollment under paragraph (b)(3)(i) of this section, a plan or issuer may require the individual to complete enrollment materials within a reasonable time after the end of the 30-day period described in paragraph (b)(3)(i) of this section. In these enrollment materials, the plan or issuer may require the individual only to provide information required of individuals who enroll when first eligible and information about the event giving rise to the special enrollment right. A plan or issuer may establish a deadline for receiving completed enrollment materials, but such a deadline must be extended for information that an individual making reasonable efforts does not obtain by that deadline.
(iii) Date coverage must begin —(A) Marriage. In the case of marriage, if the plan or issuer requires completion of additional enrollment materials in accordance with paragraph (b)(3)(ii) of this section, coverage must begin no later than the first day of the first calendar month beginning after the date the plan or issuer receives enrollment materials that are substantially complete. If the plan or issuer does not require such additional enrollment materials, coverage must begin no later than the first day of the first calendar month beginning after the date the plan or issuer receives the request for special enrollment under paragraph (b)(3)(i) of this section.
(B) Birth, adoption, or placement for adoption. Coverage must begin in the case of a dependent's birth on the date of birth and in the case of a dependent's adoption or placement for adoption no later than the date of such adoption or placement for adoption (or, if dependent coverage is not made generally available at the time of the birth, adoption, or placement for adoption, the date the plan makes dependent coverage available). If the plan or issuer requires completion of additional enrollment materials in accordance with paragraph (b)(3)(ii) of this section, the plan or issuer must provide benefits (including benefits retroactively to the date of birth, adoption, or placement for adoption) once the plan or issuer receives enrollment materials that are substantially complete.
(4) Examples. * * *
Example 2.
(i) Facts. Individual D works for Employer X. X maintains a group health plan with two benefit packages—an HMO option and an indemnity option. Self-only and family coverage are available under both options. D enrolls for self-only coverage in the HMO option. Then, a child, E , is placed for adoption with D. Within 30 days of the placement of E for adoption, D requests enrollment for D and E under the plan's indemnity option and submits completed enrollment materials timely.
(ii) Conclusion. In this Example 2, D and E satisfy the conditions for special enrollment under paragraphs (b)(2)(v) and (b)(3) of this section. Therefore, the plan must allow D and E to enroll in the indemnity coverage, effective as of the date of the placement for adoption.
Example 3.
(i) Facts. Same facts as Example 1. On March 17 (two days after the birth of C ), A telephones the plan administrator and requests special enrollment of A, B, and C. The plan administrator sends A an enrollment form. Under the terms of the plan, enrollment is denied unless a completed form is submitted within 30 days of the event giving rise to the special enrollment right (in this case, C 's birth).
(ii) Conclusion. In this Example 3, the plan does not satisfy paragraph (b)(3) of this section. The plan may require only that A request enrollment during the 30-day period after C 's birth. A did so by telephoning the plan administrator. The plan may not condition special enrollment on filing additional enrollment materials during the 30-day period. To comply with paragraph (b)(3) of this section, the plan must allow A a reasonable time after the end of the 30-day period to submit any additional enrollment materials. Once these enrollment materials are received, the plan must allow whatever coverage is chosen to begin on March 15, the date of C 's birth.
Example 4.
(i) Facts. Same facts as Example 3, except that A telephones the plan administrator to request enrollment on April 13 (29 days after C 's birth). Also, under the terms of the plan, the deadline for submitting the enrollment form is 14 days after the end of the 30-day period for requesting special enrollment (thus, in this case, April 28, which is 44 days after C 's birth). The form requests the same information for A, B, and C (name, date of birth, and place of birth) as well as a copy of C 's birth certificate. A fills out the enrollment form and delivers it to the plan administrator on April 28. At that time A does not have a birth certificate for C but applies on that day for one from the appropriate government office. A receives the birth certificate on June 1 and furnishes a copy of the birth certificate to the plan administrator shortly thereafter.
(ii) Conclusion. In this Example 4, A, B, and C are entitled to special enrollment under the plan even though A did not satisfy the plan's requirement of providing a copy of C 's birth certificate by the plan's 14-day deadline. While a plan may establish such a deadline, the plan must extend the deadline for information that an individual making reasonable efforts does not obtain by that deadline. A delivered the enrollment form to the plan administrator by the deadline and made reasonable efforts to furnish the birth certificate that the plan requires.
Example 5.
(i) Facts. Same facts as Example 4. On May 3 (after A has delivered the enrollment form to the plan administrator but before A provides the birth certificate) A submits claims for all medical expenses incurred for B and C from the date of C 's birth.
(ii) Conclusion. In this Example 5, the plan must pay all of the claims submitted by A. Because the plan requires that individuals seeking special enrollment complete additional enrollment materials, it is required to provide benefits once it receives enrollment materials that are substantially complete. The form that A submitted on April 28 was substantially complete. Because C 's birth is the event giving rise to the special enrollment right, on April 28 A, B, and C become entitled to benefits under the plan retroactive to the date of C 's birth.
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5. Add new § 146.120 to read as follows: