How to navigate qualifying life events (QLEs) with compliance and confidence

As an HR leader, you're the go-to resource when employees experience major life changes—marriage, birth, divorce, loss of coverage—and need to make adjustments to their benefits. But these situations don’t always align with open enrollment periods, and that’s where qualifying life events (QLEs) come into play.

In this guide, we’ll walk through:

• What counts as a QLE
• What benefits it impacts
• Key misconceptions that cause confusion
• How to guide employees through the process
• Important documentation and compliance considerations

Whether you're building a benefits playbook or answering a tough QLE question at your desk, this guide will help you support employees while maintaining compliance.

What is a qualifying life event (QLE)?

A qualifying life event is a specific change in an employee’s personal situation that allows them to make mid-year changes to their benefit elections. Without a QLE, employees are generally locked into their choices until the next open enrollment—especially for pre-tax benefits governed by IRS Section 125 rules.

Why this matters: Employees often assume they can make benefit changes freely. As an HR leader, it’s your role to guide them through QLE rules while safeguarding your organization’s compliance.

Common examples of QLEs

Here are the types of events that typically qualify:

Household changes

• Marriage or divorce
• Birth, adoption, or placement for adoption
• Death of a dependent
• Gaining or losing a dependent (e.g., custody changes or court orders)

Coverage or employment changes

• Loss of other coverage (e.g., through a spouse or parent)
  • Important note: Loss of coverage must be involuntary. Voluntary cancellations (e.g., member-requested plan termination) are not considered QLEs.
• Change in employment status (e.g., new job, loss of job, reduction in hours)
• Employer no longer offering a plan
• COBRA coverage ending

Relocation

• Moving to a new ZIP code or region that affects provider networks
• Moving to or from the U.S.

Other qualifying changes

• Gaining U.S. citizenship or lawful status
• Release from incarceration
• Court order to provide coverage for a child
• Significant income changes (relevant for ACA Marketplace plans)

What benefits are impacted?

Here’s a high-level chart showing how QLEs affect employer-sponsored benefits:

Special focus: birth events

One of the most common and most easily mishandled QLEs is the birth of a child.

What employees may not realize:

• The newborn is typically covered automatically under the birthing parent’s plan for the first 30 days.
  • Important note: Automatic coverage should be verified by both the employee and HR. There are some situations where coverage is not automatic. For example, on some level funded plans, the employee has to elect for the baby to be auto-covered for the first 30 days or they will not receive that coverage.
• If not formally added to the plan within that QLE window, coverage ends on day 31.
• Many employers only allow 30 days to report a birth, but a best practice is to allow 60 days to accommodate new parents during a busy, stressful time.

HR Action Tip: Consider a 60-day window for birth QLEs and communicate this clearly in your parental leave and benefits materials.

Timing, documentation & compliance risks

Timing matters

Most plans require QLEs to be reported within 30 or 31 days, though some allow up to 60 days. Missed windows typically result in no changes allowed until the next open enrollment.

Documentation

Carrier-accepted documentation is required (e.g., birth certificate, loss of coverage letter). Be sure to:

• Align your internal QLE policies with carrier documentation requirements
• Avoid informal exceptions or inconsistent approvals

IRS Compliance Risk: Allowing out-of-cycle changes without a valid QLE can violate Section 125 rules and jeopardize your plan’s pre-tax status. Always follow defined processes and avoid unauthorized exceptions.

Ensure your policies align with your carrier

HR policies must line up with carrier documentation and system logic. For example:

• Your plan may allow 60 days to add a newborn, but your carrier may only accept changes within 30.
• Accepting documentation the carrier doesn’t recognize may lead to claim denials or enrollment errors.

Best Practice: Regularly audit QLE procedures with your broker or carrier. Ensure what you communicate to employees reflects what your carriers will accept.

Common misconceptions about QLEs

Here are six myths employees (and sometimes employers) believe—along with the reality:

1. Any major life change counts as a QLE

Myth: Buying a home or changing job roles enables benefits changes.

Reality: Only specific events defined by the IRS—like marriage, birth, or loss of coverage—qualify.

2. Plan changes can be made anytime after the event

Myth: There's no rush to update benefits.

Reality: QLEs must be processed within 30 or 60 days, depending on plan rules.

3. Any change is allowed in response to a QLE

Myth: A birth lets you change all your benefits.

Reality: Changes must be consistent with the QLE. Adding a baby allows family coverage changes—not dropping vision insurance.

4. All benefits follow the same QLE rules

Myth: Medical, dental, vision, and FSAs are all treated equally.

Reality: Rules vary by plan type. Some voluntary or supplemental benefits may not allow mid-year changes at all.

5. Employees can drop coverage for personal reasons

Myth: A dependent gaining other coverage or financial hardship qualifies.

Reality: Personal preferences do not qualify—only IRS-defined QLEs do.

6. Employers can make exceptions at their discretion

Myth: HR can allow changes outside QLE rules to “do the right thing.”

Reality: IRS rules are strict. Making unauthorized exceptions can risk your entire plan’s tax-advantaged status.

Final thoughts: QLEs are opportunities—and compliance obligations

Qualifying life events represent moments when employees need support, and HR’s role is to guide them with empathy, accuracy, and consistency. But they also carry compliance obligations, especially when benefits are offered on a pre-tax basis.

By educating employees, coordinating closely with carriers, and applying rules fairly, you can help employees navigate life’s biggest changes—without putting your plan at risk.