Health insurance plans which are compliant with the Affordable Care Act are intended to run from January 1st until December 31st without change. This rule is designed to make it impossible to change a plan in mid-year to cover additional risks or to avoid paying contracted premiums. There are supplementary plans and state or federal support to help meet these contingencies.
However, the ACA recognizes the need for plan changes in certain defined circumstances, a.k.a. Life Events which qualify you for a Special Enrollment Period (SEP) i.e. outside the period of Open Enrollment (November 1st_December 15th).
The events which qualify for health insurance under SEP can be divided into 3 categories.
Loss of health insurance coverage
If you or anyone loses qualifying health coverage through no fault of their own you may qualify for a Special Enrollment Period (see below).
Changes in household
Something happens to change the status of the individuals covered by your plan
(see our article qualify for special enrollment period 2020, changes in the household).
Changes in residence
You move to another State, County or Zip Code (see below)
(see our article changes in residence? qualify for special enrollment period),
Loss of health insurance
You are legally obliged to have ACA compliant health insurance. Although there is no penalty for not having cover, you will be responsible for all medical and care costs incurred while uninsured. It is therefore vital that you seek advice as soon as you become aware that you may lose the coverage on which you and your family depend.
If you or anyone in your household have been insured but lose coverage (or have been advised that coverage will be withdrawn) for reasons beyond your control you qualify for a Special Enrollment Period. Your SEP will commence 60 days before the notified date of cessation and close 60 days after.
Loss of job-based coverage
If you lose or change your job you may also lose your Group Health Insurance. Most employers are obliged to offer you COBRA (Consolidated Omnibus Reconciliation Act) which will continue your existing coverage but you will be responsible for the full premium. You will have 60 days from termination discuss your needs with your advisor (Health Insurance Exchange).
Your options will be to: –
- opt to continue coverage through your former employer
- select an ACA compliant plan through a Health Insurance exchange
- take short term coverage if you are expecting an early return to group coverage
- remain uninsured (be sure you understand the consequences)
For a fuller explanation of COBRA see our related article CONTINUE HEALTH INSURANCE AFTER TERMINATION
Loss of individual coverage (including Medicaid)
You may have an SEP if: –
- Your individual plan or your Marketplace plan is discontinued. Your insurer is legally bound to give you 60 days’ notice. They may offer you an alternative but it is your opportunity to review your coverage
- You turn 26 during at any time when covered as a dependent.
- You are a student and lose your eligibility. (GOOD NEWS – YOU GRADUATED) but you must take steps to ensure that you are covered either as a dependent (under the age of 26) or independently.
- You lose eligibility because you have moved out of the plan’s service area
- Your individual or group plan coverage ends before the end of the calendar year.
In all these cases you have 60 days from the date of the ‘special event’ to complete alternative arrangements.
Loss of Medicaid
If you are, or were on Medicaid you will cease to be eligible if your financial circumstances change such that you exceed the program limits or you become ineligible for pregnancy-related, or medically imperative Medicaid.
If a child on your plan turns 18 during the plan year, they will cease to be eligible for CHIP (Children’s Health Insurance Program). This ‘event’ entitles the plan holder to an SEP (60 days) days to review their insurance plan bearing in mind that they can extend coverage to dependents up age 26.