Q. If I don’t enroll in a new plan by March 31, what are my options after that?
A. It’s strongly recommended that you enroll in a plan by the end of March. If you don’t, in most cases your options will be very limited for the rest of this year. The next open enrollment period begins on November 15, with coverage effective dates starting January 1, 2015.
Depending on your circumstances, there are some exceptions. Medicaid enrollment is available year-round for those who qualify. So if your income drops to a Medicaid-eligible level later in the year, you’ll be able to enroll at that point.
For people in states that did not expand Medicaid, if you’re currently in the coverage gap and remaining uninsured simply because you have no other affordable option, keep in mind that if your income rises above 100 percent of poverty level later in the year, you can enroll in a subsidized plan at that time, but only if you created a marketplace (exchange) account before March 31.
That part is particularly important. If you don’t create a marketplace account during open enrollment, you would not be eligible to purchase a plan outside of open enrollment based on a change in income, as that is not a qualifying event.
But for people who are already enrolled through the exchange (even if they’re currently in the coverage gap), a change in income can be reported to the exchange when it occurs, and subsidy eligibility will be recalculated. So if you’re in a state that isn’t expanding Medicaid, it’s still important to create an account with the exchange during open enrollment.
Special enrollment period
If you have a qualifying event later in the year, you’ll have access to a special open enrollment period. Qualifying events include marriage, divorce, the birth or adoption of a child, loss of other minimum essential coverage, or a permanent move to a new geographical area where the available health plans are different from what was available in your prior location.
So in a worst-case scenario you could get married or move to a new state in order to have access to a special open enrollment period. But enrolling before March 31 is a much easier solution.
If you do not have a qualifying event, there is no way to enroll in an ACA-qualified individual health insurance policy outside of normal open enrollment, either on or off-exchange. This is very different from the old individual health insurance market, where people could apply for coverage at any time (but of course, approval used to be contingent on health status, which is no longer the case).
Other plans – and their limits
Unless you have a qualifying event or become eligible for Medicaid or employer-sponsored coverage, your only options after open enrollment ends will be for plans that are not minimum essential coverage.
This includes discount plans, critical illness coverage, dental and vision plans, accident supplements, and short-term policies. Of the plans that are available outside of open enrollment, short-term policies are probably the best coverage option, but they should not be considered a good substitute for an ACA-qualified plan.
Although ACA-qualified policies are all guaranteed issue during open enrollment, short-term policies are not regulated by the ACA and will continue to be medically underwritten and provide no coverage for pre-existing conditions. Discount plans and supplemental policies tend to be guaranteed issue, but their coverage is gossamer thin and provides no cap on out-of-pocket exposure.
It’s also important to note that short-term policies have set expiration dates. And while loss of other health insurance that is considered minimum essential coverage is a qualifying event that triggers a special open enrollment period, short-term policies are not minimum essential coverage.
So if you have a short-term plan that will expire later this year, it’s essential that you replace it now, before open enrollment ends. You will not be able to purchase an ACA-compliant plan outside of open enrollment when your short-term policy expires.
Keep in mind that short-term policies are not renewable. Depending on your state’s regulations, you may be able to purchase a new short-term policy when your existing one expires, but that purchase will require new underwriting, and the new policy will not cover pre-existing conditions, including any that began while you were covered under the first short-term policy.
The plans available outside of open enrollment will provide meager coverage compared with the ACA-qualified plans currently being sold on and off-exchange. And purchasing them will not satisfy the individual mandate. If you opt to have coverage through a supplemental or discount plan or a short-term policy, you’ll still be subject to the shared responsibility penalty unless you qualify for an exemption.
In 2014, the penalty for not having health insurance is $95 per adult (half that amount per child) or 1 percent of household income, whichever is greater. But it rises to $695 per adult or 2.5 percent of household income by 2016.
To summarize, it’s imperative that you enroll in a new plan before March 31. Waiting until after that date will significantly limit your available options, will likely mean that you owe a penalty to the IRS, and could leave you fully responsible for any medical expenses you incur this year.