Understanding special enrollment periods for health insurance

En Español

Even a minor illness or injury can lead to considerable costs. The best way to reduce this risk is through health insurance. In general, you can only enroll for health care coverage two ways: during an open enrollment period or during a special enrollment period because of a qualifying event.

What is open enrollment?

For a few months each year, you are able to enroll in a health insurance plan through your employer, through your state's government-run insurance marketplace or directly through an insurance company.

For a workplace health insurance plan, your employer creates its own enrollment window, usually once or twice per year, and it’s up to you to make necessary changes within that timeframe.

Individual health insurance purchased through a state insurance marketplace or direct from an insurance company, follow an annual open enrollment beginning in late fall and running through the beginning of the following year. The next enrollment period is currently scheduled to start in November 2018. During this period, you can change your current plan or obtain new coverage.

What do I do if I missed open enrollment?

If you do not sign up for health insurance during the allocated time, you must wait until the next open enrollment period unless you have a qualifying event that makes you eligible for a special enrollment period or SEP.

If you have a qualifying event, you can purchase health insurance or change your existing coverage without waiting until the next open enrollment. If you do not have a qualifying event, you're required to maintain your insurance as is until the following enrollment period. Because of the Affordable Care Act’s individual mandate, you will incur a monthly fine (see penalty description below) if you don’t obtain health insurance or lose your health insurance and don’t get replacement coverage.

Can I make changes to my health insurance policy after open enrollment?

You cannot make changes to your policy unless you have a qualifying event. Your health insurance plan is locked in for the next year after you sign up during open enrollment. The only way you can make changes to it is if you have a life event that makes you eligible for a special enrollment period (SEP) to open up.

What is a qualifying event?

The standards of what determines a qualifying event are largely the same across the board.  Special enrollment provisions are listed in various places, such as the Health Insurance Portability and Accountability Act (HIPAA), Sections 125 of the Internal Revenue Code (IRC), section 9801 of the IRC, and the special enrollment period section of the Affordable Care Act (ACA).

There are two types of triggers for SEPs:

• Loss of eligibility for health coverage
• Certain life events

The basic life events that create a SEP include marriage, birth or adoption, death of a spouse or dependent, job loss, job change, retirement, reduction in work hours and relocation. In New York, women who become pregnant may add or change coverage, but that is the only state that offers that option. 

A few life events do not qualify for a special enrollment period include a promotion or demotion with no change in your wage-bargaining status; paid or unpaid leave outside of Family Medical Leave Act parameters; and changes in your childcare expenses.

Most qualifying events trigger a special enrollment period whether you have a marketplace plan, individual plan or workplace plan; however, that is not always the case. According to Kaiser Family Foundation, some events only qualify you for a special enrollment period in the Marketplace and do not apply to the outside market. The exceptions are situations related to citizenship, native status and exceptional circumstances.

Also, the changes you make to your health plan due to a qualifying life event should be consistent with the event. For example, if you get married, you can drop your health insurance, but only if you’re enrolling in your spouse’s health plan. See the table below for a full description of qualifying life events.

*Insure.com works to keep an updated and comprehensive list; however, the special enrollment chart may not apply to every benefit plan (especially dental and group life insurance that may be included in your workplace plan) and individual circumstances should be verified with your health insurance administrator.

Loss of coverage due to job loss                    

If you lost your health care coverage outside of open enrollment due to a job loss, you should have a few options.

You may enroll with your spouse’s insurance. Employer-based health plans must provide a special enrollment period of at least 30 days. Some workplace plans allow more time, so check with your spouse’s health insurance administrator to find out how long your plan allows for changes to be made if you are eligible for a special enrollment period.

Another option is buying an individual health insurance plan through the Marketplace or directly from an insurance company or broker. If your spouse and dependents also lost their coverage, you can get a family plan. This gives you a SEP that starts up to 60 days before and 60 days after your loss of coverage date, which is helpful because it allows you to search for coverage if you know in advance you're losing your job and health insurance plan. 

You also have the option of maintaining your current insurance. Most large employers offer COBRA, which is the option to continue under your employer's group plan for up to 18 months. COBRA is costly, since you continue to pay your portion of the fee, plus the portion your employer was paying, plus an administrative fee.

Another option is to enroll in publicly-subsidized Medicaid, which sometimes becomes available when a person's income drops dramatically. Medicaid typically covers children, the disabled and certain other vulnerable groups, but some states have expanded it to cover low-income adults.

How do I make a change or obtain insurance during a special enrollment period?

If you are shopping for a policy from the Marketplace, you can answer a few screening questions to see if you qualify for a special enrollment period. If so, you can make your changes or obtain a policy online or by phone. 

The Marketplace requires proof of eligibility for the SEPs, so be prepared to show documentation of your eligibility for it.

If you have health insurance through your employer, you need to contact your health insurance administrator to inform them of your situation. The administrator should confirm your situation opens up a special enrollment period and can help you make your changes to your policy.  Proof of the event, is generally required – such as birth, death, job loss of spouse, etc. 

There are time limits to your special enrollment period: 60 days after the triggering event normally with the Marketplace, and 30 days typically for workplace plans. It’s necessary to act quickly.  If you don’t apply during this period, you’ll have to wait for the next open enrollment period to open up. 

It is important to give truthful information when applying for insurance and trying to get a special enrollment period to open up.  Anyone who intentionally provides false or untrue information are subject to penalties under federal law. 

When does the change take effect?

Most changes for workplace plans go into effect the first of the month, which follows the event or the date you reported the event seeking coverage or changes. For cancellations, it may be the last day of the month after the event. Mid-month changes normally only are done in the event of a birth or death. Plan rules can vary, so speak with your health insurance administrator to find out for certain.

With most Marketplace plans, if you enroll by the 15^th of the month, coverage begins the first day of the next month. However, if you enroll after the birth of a child, coverage can begin, retroactively, the day the baby is born – even if you don’t enroll the baby until up to 60 days after the birth.

Medicare has different rules

Enrollment for Medicare comes with its own set of rules. A person becomes eligible for Medicare at age 65, unless the person has been receiving disability and social security payments. The initial enrollment period (IEP) is seven months. It begins three months before the enrollee's birth month, goes through the month of his 65th birthday, then continues for three months. Enrollment may be completed anytime within that window.

Each year, there is an open enrollment period, which runs from Oct. 15 to Dec. 7, when you can make changes to your Medicare plan or Medicare drug plan.  If you want to make changes outside of the open enrollment period, certain living or coverage changes are considered qualifying events and will create a special enrollment period. You can find the full list on Medicare.gov.

If you didn’t sign up for Medicare Part A or Part B when you were first eligible, but you enroll later, you will be hit with a late enrollment penalty. For Part A, your monthly premium could go up by as much as 10 percent. You’ll have to pay this higher premium for twice the number of years you could have carried Part A, but didn’t sign up.

For Part B, if you failed to sign up when first eligible, you’ll have to wait until the general enrollment period (Jan. 1 – March 31 and coverage starts July 1) to enroll, and you will have to pay a late penalty for as long as you have Part B. Your late enrollment penalty is paying up to 10 percent for each 12-month period that you could have had Part B, but didn’t sign up for it. 

What if I don’t want insurance?

You don't have to buy it, but you will pay anyway. If you can afford insurance but choose not to buy it, the government will levy a fine called the "individual shared responsibility payment." This fine amounts to 2.5 percent of your income or a set penalty, whichever is more, and is paid when you file your federal income tax return. You owe the fee for any month you, your spouse or your dependents are uninsured, if you are uninsured for three months or longer. If you are uninsured for less than three months, you are covered by a “short gap” exception and will not be subject to a fine.

The penalty is inflating rapidly. It maxed out at $285 per household in 2014, and $975 per household in 2015. In 2016, the fee caps at $2,085 - the equivalent of the average premium for a bronze-level health insurance package through the government insurance marketplace.

What if I missed enrollment, and I don't have a qualifying event?

Some health insurance companies offer short-term health insurance coverage that can provide protection until the next window rolls around. You can compare providers and easily purchase a health insurance policy. Short-term coverage is not considered to meet the minimum essential coverage required by the ACA’s mandate and would subject you to a penalty if you go three months or more without the required coverage.

What do I need to know before the next enrollment window?

Choosing a health insurance package can be daunting, so take time to understand what you are purchasing, whether during the standard enrollment window or a special enrollment period.

If you have questions about finding the right plan for your needs, you may benefit from finding a reputable, licensed insurance broker, or working with one of your state marketplace’s navigators, whose job it is to point people toward workable plans.

Maintaining health coverage will help you and your dependents save money should you find yourself with a sudden medical emergency or if you are managing health issues. Understanding when you’re eligible to make changes is key to avoiding mistakes and missed opportunities that could lead to fines, high-cost policies, or medical bills for which you’d be on your own to pay.