Protect Your Future: Documents You Should Always Keep Up to Date
Keeping your documents up to date can be tedious, and often, confusing. However, it's important to understand what life changes may require you to review your important documents. Spend some time each year during your enrollment period or after a qualifying life event to review your documents and make changes as needed.
Dependent vs Beneficiary
As you update your documents, you will encounter the terms dependent and beneficiary. What do these mean? In short, a dependent is someone who is eligible to be covered by employee benefit plans. A beneficiary can be a person or a legal entity that is designated by you to receive a benefit, such as a life insurance benefit.
For example, you may assign your spouse as a dependent on your medical plan, and also assign your spouse as a beneficiary to receive your life insurance benefit if you were to pass away. It is possible to be both a dependent and a beneficiary, but this is not always the default. An example of this is that you could assign your parent as a beneficiary on your life insurance, but your parent would not qualify as a dependent for your medical plan.
Qualifying Life Events
There are specific events that will allow you to make changes to your benefit coverages outside of your normal plan year enrollment if the event corresponds to the change you want to make. Here are a few examples of the most common reasons, but this list is not exhaustive.
- Loss of health coverage
- Losing coverage because of a job change
- Losing eligibility to certain plans
- Turning 26 and losing coverage through a parent's plan
- Changes in household
- Birth or adoption of a child
- Marriage or divorce
- Death in the family
- Changes in residence that impact benefit plan coverage
- Moving to a home in a new ZIP code or county
- Moving to the U.S. from a foreign country or U.S. territory
- A student moving to or from the place they attend school
- Other qualifying events if they impact benefit plan coverage
- Changes in your income that affect the coverage you qualify for
- Becoming a U.S. citizen
- Leaving incarceration
Your employer or insurance provider can provide you with the specific details on your policies and how your life events may affect them.
Review Your Employee Benefits
When you experience a qualifying life event, it's important to review your health coverage as well as any supplemental policies you hold. For example, you will want to make sure your life insurance beneficiaries are up to date, and you have the correct dependents listed on any of your benefit plans.
Another qualifying life event is a change in your income if it affects your eligibility for employee benefits. If you experience a change in your income, be sure to review your disability insurance policies to make sure your coverage matches your current income.
As your family grows, you may transition from an individual to a family health insurance plan. But don't drag your feet; many providers will require you to make these changes within a limited time frame, often 60 days from the date of your qualifying life event.
Review Your Reimbursement Account Contributions
For reimbursement accounts, you are only allowed to make changes to your contributions outside of your enrollment period if you have experienced a qualifying life event and if your employer allows it. We recommend speaking with your employer to see if they allow mid-year plan changes.
Due to COVID-19, there have been several updates to reimbursement account rules for Healthcare Flexible Spending Accounts, Dependent Care Accounts, and Health Savings Accounts for the calendar year 2020. Please review the Reimbursement Account FAQs for the latest updates on updates due to COVID-19.
Review Your Life Planning Documents
In addition to your current medical and supplemental insurance, you should review any financial or health planning documents every year or after a qualifying life event.
- Last Will and Testament
- Durable Power of Attorney
- Medical Power of Attorney
- Living Will
Keeping your documents up to date can be tedious, but it's important to review every policy you own at least once a year. Interested in learning more about staying organized? Learn more about storing medical bills
This blog is up to date as of July 2020 and has not been updated for changes in the law, administration or current events.