Imagine this scenario:
It’s shortly after completion of graduate school, you are 26 years old and ready to start your professional life. As far as health insurance goes, due to Obamacare, you’ve been able to get health insurance on your parents health care plan. You quickly land your dream job, which is a perfect fit for your background and credentials. Things are looking great. Then, you are suddenly and unexpectedly diagnosed with a chronic illness. Fortunately, you are able to continue at your job, however, your illness requires a regular trip to the clinic, lab work, and continual maintenance.
Suddenly, the unthinkable happens – you lose your job, a definite qualifying event. With that, you also lose your health insurance coverage. You have a half-dozen medical appointments scheduled over the next three months, your prescriptions are running low, and you just found out you need an outpatient procedure within the next four weeks.
What can you do? Do you skip some of your medication to prolong it until you find a new job? Do you postpone your appointments and risk aggravating your medical condition?
Great news: you might not need to do any of these things, all of which could greatly compromise your health and exasperate your symptoms. Job loss is likely considered a “qualifying life event” that makes you eligible for a special enrollment period for an Obamacare plan – which cannot exclude pre-existing conditions and covers treatment of chronic illnesses.
You are not alone. As many as 8-10 million Americans endure a qualifying life event every year – many of whom are unaware that they could actually get health insurance plan under the ACA due to experiencing this qualifying event, and continue unnecessarily uninsured until the next open enrollment period.
Importance of Qualifying Life Event
Generally speaking, Obamacare plans are available during what’s known as “open enrollment.” It is a six-week period beginning November 1 through December 15. During open enrollment, current policyholders can update or renew their health insurance plan, while new enrollees have the opportunity to select their health care coverage from amongst the many health insurance plans available on the highly competitive health insurance marketplace.
However, once open enrollment closes, so does the opportunity to select health care coverage until next year’s annual open enrollment period, unless an applicant qualifies for a “special enrollment period,” or SEP. To qualify for a SEP, the applicant must be able to show a qualifying life event has occurred, including job loss like that explained in the story above.
What are Qualifying Life Events?
What is considered a qualifying life event?
- Loss of Health Coverage
The scenario described above is one of the most common events that can trigger eligibility for special enrollment. Loss of employer-sponsored coverage can occur as a result of job loss, termination, resignation or being laid off/downsized. An enrollee can seek coverage within 60 days from the loss, or within 60 days prior to an anticipated loss of coverage. Other scenarios under this category include loss of eligibility for Medicaid due to increase in income, loss of eligibility for Medicare due to change in disability status, or turning 26 and being disqualified to remain on a family healthcare plan.
- Changes in Family Status
Marriage, divorce, spousal abandonment or legal separation are considered qualifying events if the change in marital status is accompanied by a loss of health insurance coverage. Likewise, the birth of a child means new parents can add a baby or adopted child at any point and need not wait for the ACA open enrollment period. If a death in the family results in loss of insurance for anyone included in the policy, this qualifying life event will allow for special enrollment.
- Residential Transition
Moving from one place to another may be a qualifying life event so long as the migration triggers a loss of healthcare coverage. It could include moving to a new county or state, leaving for or returning home from school, moving due to seasonal employment or moving from a temporary shelter or residential facility.
- Changes in Status
Many changes in personal status could allow for special enrollment. Gaining U.S. citizenship or lawful residence opens up an opportunity to obtain health care insurance coverage. Release from incarceration or returning to the U.S. from a period abroad are also generally qualifying life events. Members of AmeriCorps returning home are usually eligible, as are any individuals who gain membership in a federally-recognized Native American tribe.
Situations That May Not Qualify
Unfortunately, not all major life developments are considered qualifying events for purposes of the SEP. Situations that may not qualify include:
- Nonpayment of premium: A policyholder that is dropped due to nonpayment of insurance premium cannot generally apply for a new plan until open enrollment occurs again. However, if nonpayment was due to financial hardship, there may be options like Medicaid or a short-term plan to bridge the gap.
- No loss of coverage: Any of the qualifying life events described above must be accompanied by a proven loss of coverage directly correlated to the event. Otherwise, the event does not meet the criteria.
- Voluntary changes: Some changes in circumstance resulting in loss of coverage are considered voluntary and therefore not eligible for a SEP. This includes, for example, relocating for an extended vacation or dropping coverage deliberately.
Remember, special enrollment periods are available for those who – not by their own choice – lost healthcare coverage and need to regain their health insurance prior to the open enrollment period – which does not occur until November 1st of each year.
What Kind Of Documents Do I Need For A Qualifying Life Event?
Documentation often depends on the event and could include:
- Birth certificates for every person who will go on your health insurance policy, adoption records, and marriage licenses that show you have added family members and need to modify your health insurance coverage.
- Divorce papers or death certificates that show family members who provided health insurance have left you without coverage.
- New housing rental agreements or mortgages that show you have moved into a new health insurance plan area.
These are just a few of the types of documents you may need. If you think you are experiencing a qualifying life event, speak to your health insurance provider to see what documents might be necessary for eligibility.
A licensed Fiorella Insurance Agent can help you choose insurance that’s right for you.
If you find yourself uninsured but did not experience a qualifying life event, there may be other options out there to provide coverage for yourself and your family. For instance, if based on family size you are considered at or below the poverty level (or within 138% in some states), you may be eligible for coverage under Medicaid. Plans known as short term health insurance are also available at a lower cost than Obamacare plans, but are only meant as an interim solution – and do not offer the broad array of protections as found in plans covered by the Affordable Care Act. Contact a Fiorella Insurance Agent to learn about your options.