If you lose your employer-sponsored coverage because of a change in job during the COVID-19 pandemic — or if you can’t cover premiums for marketplace coverage because of an income loss — you might have some options. Find out more about how special enrollment periods and other programs might help you keep health insurance in the face of impacts from coronavirus.
What Is a Special Enrollment Period and How Does it Work With Coronavirus?
Typically, you can only apply for ACA-approved coverage in the healthcare marketplace during an open enrollment period. That period differs each year and can depend on the state you’re in, although most commonly, it runs from early October to Mid-December.
But individuals who experience a qualifying event during the year outside of the open enrollment period may be eligible for a special enrollment period. The list of qualifying events includes losing coverage through an employer-sponsored plan within the past 60 days — or being notified that you will lose that coverage in the next 60 days.
One of the most common ways someone might lose employer-sponsored coverage is by losing or quitting their job. This includes being laid off, which is something that many people have experienced (and many more continue to worry about) during COVID-19. You can also lose employer-sponsored coverage if your spouse or other relative loses their job and you’re covered on their plan.
In some cases, you might not lose your job, but your employer may reduce your hours; for example, falling from full-time employment to part-time could cause you losing access to benefits only available to full-time employees.
In these cases, you’re eligible for a special enrollment period during this coronavirus. This period lasts up to 60 days from the date you lose coverage in the qualifying event. You must apply for coverage within that period — or within the 60 days before you know the qualifying event is going to happen.
Is the ACA Special Enrollment Period Your Only Option?
If you lose coverage from an employer-sponsored plan, you might have other options. The first one is COBRA.
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which was passed by the federal government in 1985. That’s a big, complicated name, but here’s what you need to know: If you lose your job with a covered employer, they have to offer you a chance to continue purchasing insurance coverage for a limited period of time. This helps you bridge the gap between losing one job with coverage and finding another without completely losing your benefits.
The caveat here is that you typically foot the full bill for your coverage under COBRA. Prior to losing your job, if you have employer-sponsored coverage, the employer was probably paying some portion of your monthly premiums. Under COBRA, you can be charged up to 102% of the total cost of the actual premium. That extra 2% is to help cover any administrative fees that might be incurred by the benefits office in handling your coverage.
COBRA can be expensive, so consider all your options before you choose it. And know that if you choose COBRA and later lose those benefits, you may qualify for a special enrollment period in the marketplace again. This can occur if your COBRA costs change or your employer stops the coverage for any reason.
Another potential option to consider if you lose employer health care coverage during coronavirus (or anytime) is short-term coverage. Short-term medical coverage plans are often referred to as catastrophic plans. They don’t qualify as ACA-compliant plans because they don’t include all the benefits required, but they do cover emergency medical and major hospital treatments. This can help ensure that you’re covered if you experience a serious illness or injury that requires inpatient treatment.
What if Your Income Drops Because of COVID?
Sometimes, you might already have an ACA-compliant individual plan from the marketplace. Typically, when you apply for such plans, you enter your income. That information is used to see if you qualify for subsidies to help you pay for your health insurance.
If your income drops because your hours are cut, or you take a pay cut due to coronavirus, you should update your information with the insurance marketplace immediately. It might be that you can be considered for a subsidy — and a reduction in the portion of the premium you pay — based on your income change.
You should also contact your insurance company. Many companies have programs that allow them to offer premium discounts or other assistance to individuals experiencing a financial crisis.
Whatever you do, don’t ignore the issue. Often, you may have a grace period during which insurance will not be canceled if you miss a payment. This is especially true if you’re receiving certain types of financial aid to help pay for the insurance. But you shouldn’t wait and rely solely on that grace period, believing that you can bring your financial situation around in a month or two. Reach out to the insurance company to learn more about your options so you can make educated decisions.
Work With an Insurance Agent
Whether you’re buying insurance during an open enrollment period or looking to cover yourself and your family after a job loss, the key to sustainable insurance coverage is smart shopping. By looking at all of your options, making use of all assistance available to you, and choosing the right plan for you and your budget, you can help increase the likelihood you can afford the insurance long-term.
Reach out to the agents at TrueCoverage today for experienced help in comparing plans and finding the best plan for you. You can also browse coverage and apply for medical insurance and other types of insurance online via our website.
Our goal is to provide you with the information and assistance you need to make the best possible decisions — whether you’re doing so because of unfortunate pandemic events or during a normal open enrollment period.