Many families live one medical emergency away from financial hardship. To protect themselves, most employees rely on affordable health insurance plans obtained through their employers or the individual market. However, those plans cannot be purchased at any time.
Health insurance plans that comply with the Affordable Care Act must be purchased during the annual open enrollment period. However, there are circumstances that may prevent families from purchasing a health plan during that time frame. In this article, we talk about which options are still available once you miss open enrollment.
The basics about open enrollment
For people who receive health benefits through their employers, open enrollment often takes place during the fall and lasts between a few weeks and a month. Some companies are flexible when scheduling their open enrollment periods to make sure all employers have enough time to decide which plan suits them best. In general, employers notify workers about when the next open enrollment period begins well ahead of time. Workers who have not received notification can request information about upcoming enrollment period with the Human Resources department.
Workers who purchase health insurance on their own must also be aware of open enrollment. However, open enrollment is only relevant if they have a plan that complies with the Affordable Care Act, or ACA. In general, those health insurance policies can only be purchased during open enrollment, or during special periods for people who went through significant events, such as marriage or job loss. Those who have short-term health insurance policies, or limited benefit plans, do not have to worry about open enrollment as those can be purchased throughout the year.
The open enrollment period for ACA-compliant health insurance policies is determined by the U.S. Department of Health and Human Services. Before 2017, the open enrollment period for individual health insurance plans, both on and off-exchange, ran from November 1 through January 31.
In 2017, Congress modified the open enrollment period to be much shorter, and now runs from November 1 until December 15. The change also modified the date when coverage becomes effective. Before 2017, coverage started in February or March. Now, it begins the following January, making the coverage period fall within a single year.
Some states like California objected the change, passing legislation to make open enrollment last until January 31. The District of Columbia has also announced a similar initiative. This means that from 2019 onwards, not all states will have the same open enrollment period. Workers are advised to check with their local health insurance provider for information about local open enrollment dates.
Open enrollment is a good period to assess the quality and benefits of a health insurance plan. Families can take advantage of the period to look for policies that are more affordable, or have better coverage. However, a person can miss open enrollment for several reasons. They could have not found a health insurance plan that met their budget or forgot about it. If so, there are several alternatives to remain protected by a health insurance policy.
What happens if you miss open enrollment?
Workers who miss their employers’ open enrollment period may have a hard time obtaining health insurance benefits. In fact, those workers might have to wait a full year before they can enroll again. Some companies operate their health benefits with automatic renewal, which means employees will be automatically signed up to the same plan they had the previous year.
Some companies are more flexible when it comes to accepting health insurance applications outside of open enrollment periods. Most refuse to make exceptions because of contractual agreements with health insurance providers. However, there is a special enrollment period where people can purchase a health insurance policy. This special period is only available under certain circumstances.
Under certain circumstances, people can trigger a special enrollment period to get health insurance
A health insurance plan can only be purchased outside of the open enrollment period if a person qualifies for special enrollment. This special period is available to individuals who have had a recent life event or circumstance.
The first thing that can trigger a special enrollment period is a qualifying life event. This includes cases where people unexpectedly lose their health coverage, there is a change in household size or residence. For example, many adults are covered by their spouses’ health insurance plans. If their spouse becomes unemployed, the special enrollment period is triggered due to job loss. The same happens when people get married, give birth, adopt a child, get divorced or a family member dies. In most cases, these life events demand changes in a person’s health insurance policy, which is why a special enrollment period becomes available.
The second thing that can make a special enrollment period happen is a qualifying life circumstance. For example, people who receive U.S. citizenship or permanent residence are eligible to purchase a health insurance policy right away even if open enrollment has ended for the year. The same applies for citizens who have been released from prison, or lose their eligibility for programs such as Medicaid or the Children’s Health Insurance Program (CHIP).
There are other, more specific, life circumstances that can also trigger a special enrollment period. These include starting or ending service with AmeriCorps, becoming a shareholder of the Alaska Native Claims Settlement Act (ANCSA) Corporation, or being a member of a federally-recognized tribe. People can request a full list of qualifying life circumstances from their health insurance company.
The special enrollment period has a duration of 60 days. If someone fails to purchase a health insurance plan during that period, they will have to wait until the next open enrollment period begins. During special open enrollment, families and individuals can sign up for health insurance policies that meet minimum requirements set by the Affordable Care Act. They are also not limited to purchasing health plans tied to their employers. If they wish, individuals can shop for health insurance through the individual market. This may be a good option if they expect to lose or switch jobs in the near future.
In some cases, people can miss open enrollment and no qualifying life events or circumstances have taken place. If so, the options to purchase health insurance narrow significantly. However, there are still some alternatives people can check out.
Medicaid and CHIP are options if special enrollment is not available
Enrollment for Medicaid and the Children’s Health Insurance Program (CHIP) is open throughout the year. This means anyone who is eligible or becomes eligible can sign up right away to either program. However, unlike health insurance plans available in the marketplace, Medicaid and CHIP have income and eligibility requirements people must meet.
Before the Affordable Care Act was approved, only children, qualified pregnant women, people with disabilities, and senior citizens were allowed to enroll in Medicaid. To qualify due to income, a family of four had to earn less than $15,000 to become eligible. Nowadays, Medicaid income requirements are more relaxed. A single individual earning less than $15,000 annually can be eligible to enroll in the program. Parents with dependent children have lower requirements to join.
A family, or their children, will often become eligible for CHIP if their total annual income is at or below $30,000. Some high-income states such as New York and California have set it up at around $45,000 instead. However, homeless children and families receiving temporary financial assistance are automatically eligible.
If someone missed open enrollment, they can try and sign up for Medicaid or CHIP instead until the next period begins. However, if they are unable to qualify, the best option is purchasing a short-term health insurance plan that is not minimum essential coverage.
A non-minimum essential coverage short-term health insurance plan can be a solution
Only health insurance plans that must meet minimum essential coverage are tied to an open enrollment period. Other health insurance plans that do not meet those coverage requirements can be purchased at any moment. This includes health insurance plans that are fixed indemnity, short-term, focus on critical illness or supplement accidents.
Out of all these options, short term health insurance policies are the most similar to traditional health plans. However, insurance companies are not forced to include essential health benefits in short-term plans. As a result, customers should carefully analyze what a specific policy covers before purchasing it. Also, insurance companies can reject short-term policy applications due to pre-existing conditions. In fact, most short-term policies do not cover incidents caused by a pre-existing condition. This makes it better for some people to remain uninsured until the next open enrollment period.
As of 2018, short-term health insurance plans have a maximum duration of three months. The Trump administration has proposed legislation to extend the duration of short-term plans to 364 days. If the law is approved, families who miss open enrollment will have to purchase short-term health insurance only once. However, some states have enacted laws that limit short-term policies to three or six months, which may cause longer policies to be unavailable.
Non-minimum essential coverage plans do not comply with the individual mandate in the Affordable Care Act. This means that individuals and families who purchase them have to pay a penalty. However, the non-compliance penalty was reduced to $0 by the Tax Cuts and Jobs Act of 2017, starting in 2019.