Life Changing events and enrollment period guide:
Historically, I utilized and benefited from employer sponsored health plan, but in retirement that plan is a thing of the past- I do miss it and didn’t appreciate it as much as I should have. However, even while I was on the employer sponsored health plan, I had questions related to deductibles, what is covered, and life changing events and enrollment periods. I always thought, if I had questions and I work in the insurance industry, what about the average Joe or Jane who has doesn’t have the experience advantage I have (see article on health insurance literacy).
Hence the idea for a Life changing events and enrollment period guide…
Affordable Care Act
Before the Affordable Care Act (ACA), if you wanted or needed health insurance your employer didn’t offer, many would apply to a private insurer any time of year and be offered a policy priced according to your gender, age and health history.
The ACA has impacted insurers’ ability to price policies based on those personal details, and everyone has to have a health plan or pay a penalty for not having health insurance. Therefore “open enrollment period” is the only time you can apply for a plan — unless there is a “Life Changing event”.
The importance of open enrollment periods is to protect insurance companies. If people has the ability to sign up at any time, insurers would face what’s called a moral hazard: Some people would only sign up for insurance once they found out they needed an operation, surgery, had an illness, etc. This would be impossible way to fund the system. Insurance doesn’t work if only the people who will file claims are the same people buying the policies; adverse selection is something insurers try to avoid. That’s the purpose of open enrollment.
When is open enrollment?
Open enrollment is the period each year when you can sign up for health insurance, change your existing health plan or cancel coverage.
Open enrollment for workplace health insurance usually occurred near the end of a calendar year (Nov-Dec), and the coverage usually started on Jan. 1 of the next year, though the exact time frame will depend on who provides your health insurance and your company plan. Speak with your HR department for specific details.
For individual and public health plans, open enrollment periods are (these periods can change each year and are subject to change):
- Federal and state ACA exchanges: Nov. 1 to Jan. 31
- Medicare: Three months before and three months after your 65th birthday, as well as Jan. 1 to Mar. 31.
- Medicaid: no open enrollment; you can join or cancel Medicaid year-round.
- Children’s Health Insurance Plans: no open enrollment; you can join or cancel CHIP year-round.
Life Changing events
As a father of two, married, real estate investor, and angel investor – I can attest that life will throw you some curve-balls. That’s what makes the journey so special and unique for each of us.
Many things are planned and others can be unplanned. When it comes to the things planned and in your control, it’s nice to plan the insurance or financial implications, and changes to important things like health insurance.
Preparation and discipline to plan are good traits for those trying to navigate the insurance market.
Special enrollment periods/Life Changing events
If you experience a qualifying life event that affects your insurance needs, you can take advantage of a special enrollment period.
If you have insurance through your employer, your company’s HR department should work with you to update your plan if you experience a qualifying life event. Your company may only allow 30 days to change your plan, so don’t wait to inform HR if you experience the following and need to change your coverage:
- Marriage, divorce or legal separation.
- Adoption or birth of a child.
- Death of a spouse or child.
- A child on your policy turns 26.
- Taking or returning from a leave of absence.
- A change in your work schedule that causes you to gain or lose coverage.
- Change in residence or work location of you or a dependent on the policy.
To add, change or discontinue health insurance outside of open enrollment in a public health plan, the same life events apply, plus a few more. These also count as qualifying life events for existing or potential Medicare and ACA plan beneficiaries:
- Losing job-based coverage, either through your employer or a family member’s.
- Losing individual health coverage through a private plan.
- Losing eligibility for Medicare, Medicaid or CHIP.
- You or one of your covered dependents gain or lose other benefits coverage due to a change in employment status — for example, beginning or ending a job.
- Changes in your income that affect the coverage you qualify for.
- Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act Corporation shareholder.
- Becoming a U.S. citizen.
- Leaving jail or prison.
- AmeriCorps members starting or ending their service.
If you have an ACA plan and one of these events occurs, please review with your provider, but you will likely have 60 days from the time of the event to secure new health insurance or update your policy without facing the tax penalty.
There are other, more complicated life events that may qualify you for special enrollment in public programs, and those are considered on a case-by-case basis. You’ll have to apply at www.Healthcare.gov to know for sure.
Can I get health coverage outside Open Enrollment?
I’ve never experienced this issue personally, but according to Healthcare.gov, if you need health coverage outside of open enrollment and don’t qualify for special enrollment, you may still have options.
- If you make less than about 138% of the federal poverty level, you may be eligible for Medicaid, which enrolls year-round. CHIP, which is for low-income children, also enrolls year-round. Medicaid and CHIP eligibility requirements vary by state, so check your state’s guidelines to know if you qualify.
- If you don’t qualify for Medicaid or CHIP and still need coverage, you can look into short-term health insurance policies, which are often inexpensive.
- However, most temporary health plans cover less than traditional policies and do not satisfy the ACA’s individual mandate. That means that even with a temporary plan, you’ll likely still have to pay the tax penalty for going uninsured for 90 days or more in any calendar year.
Thoughts
Prepare and plan for your health insurance needs. It is easy while young and fit to think nothing bad can happen to you. This is a classic error by most young people. I never thought I would be old either, and trust me… it sneaks up on you.
Pay attention to open enrollment periods, you may be out of luck if you want health insurance outside of open enrollment. Be a shark and sign up for each year early during the next open enrollment.
If you miss an enrollment period or elect, take steps to minimize your health risks by living carefully, avoiding dangerous sports and activities, keeping a clean home and vehicle, eating healthy, and staying away from anyone who even looks sick. Please note, I think this is a dangerous and risky way to live life. I am a big fan of buying insurance, specifically health insurance.
Please Note, with the Affordable Care Act under consideration for repeal and replace, this guide is subject to change – please speak with an agent, broker, company representative, or visit heathcare.gov for more information about your specific needs.
Please comment below if you have any questions or comments.
