This spring and summer, more than 2 million Americans have already flocked to the health insurance marketplaces in their states, enticed by larger health insurance subsidies during a one-time special enrollment period (SEP). This SEP was created to address the COVID-19 pandemic and allow people to take advantage of the extra subsidies created by the American Rescue Plan (ARP).
But this limited enrollment opportunity is about to end in most states.
There are a few state-run exchanges where the COVID-related SEP has already ended, and a few others where it extends past August 15. But in most of the country, August 15 is the last day to sign up for 2021 coverage without needing to show proof of a qualifying life event.
How many people bought individual health insurance during the SEP?
HHS reported that 2.1 million people had already enrolled in coverage under this SEP by the end of June. This is two to three times higher than typical enrollment volume during that time of year (when a qualifying event would normally be necessary).
And enrollment likely increased even more in July, when the additional subsidies were made available for people who had received unemployment compensation in 2021.
What happens when the SEP ends on August 15?
Once the COVID/American Rescue Plan special enrollment period ends in your state, regular individual-market enrollment rules will apply. This means that you’ll need a qualifying event in order to enroll in coverage with a 2021 effective date.
The next open enrollment opportunity will start nationwide on November 1, but that enrollment period will be for coverage that takes effect January 1, 2022.
Why review your coverage before the SEP deadline?
Even if you’re already enrolled in a health plan through the marketplace in your state and you’re happy with your coverage, you should take a few minutes to double-check everything before the SEP ends.
You can update your account to make sure that you’re receiving the enhanced subsidy amount available under the ARP. And if you need to switch plans to best take advantage of that subsidy, now’s your chance to do so.
This could be the case, for example, if you’re newly eligible for cost-sharing reductions because you’ve received unemployment benefits this year. (You need to be enrolled in a Silver plan to receive that benefit.)
It could also be the case if you’re currently enrolled in a plan that costs less than your new subsidy amount. You might find that you can upgrade your coverage and still have minimal premiums each month.
One thing to note: Before you make a plan change, make sure you understand whether deductible and out-of-pocket amounts will transfer to the new plan. They probably will, as long as you stick with the same insurer.
If you’re enrolled through HealthCare.gov and you don’t update your account to activate the new subsidies, you should still see your subsidy amounts updated as of September. HHS will be updating accounts in August to align the ARP’s subsidy structure with the income amounts that enrollees had previously projected for 2021.
This will be helpful in terms of giving people more affordable coverage for the final few months of the year, as opposed to having to wait until tax season to claim the extra subsidy. But there will be no opportunity to change your 2021 coverage at that point, unless you have a qualifying event.
Why should you enroll now if you haven’t already?
Millions of Americans are already enrolled in health coverage through the exchanges. But there are still millions more who are uninsured or enrolled in non-ACA-compliant coverage such as short-term health plans or health care sharing ministry plans.
If that’s you or someone you know, the current enrollment period is an excellent opportunity to make the switch to comprehensive major medical health insurance. And chances are, it’ll be less expensive than you’re expecting, especially if it’s been a while since you checked your coverage options.
There are several reasons for this:
- For 2021 and 2022, the ARP has reduced the amount that people have to pay for their coverage, even if they were already eligible for subsidies.
- The ARP has also eliminated the “subsidy cliff” for those two years. The law makes subsidies available to households that earn more than 400% of the poverty level, if they would otherwise have to spend more than 8.5% of their income on the benchmark plan.
- People who have received even one week of unemployment compensation this year are eligible for full premium subsidies and cost-sharing reductions. That means they can get a free (or nearly free) Silver plan, but the benefits will be upgraded to platinum-level.
Will my premiums be higher if I wait until November?
The current SEP is for 2021 coverage, whereas the open enrollment period that starts in November will be for 2022 coverage. If you buy health coverage now, you’ll be locking in your premiums for the rest of this year.
In January 2022, your premium is likely to change, though we don’t yet have a clear picture of exactly how premiums will be changing. Across the states where rate filings have been made public, we’re seeing insurers proposing mostly single-digit rate increases, although there have also been some decreases and a handful of larger increases proposed.
But since most marketplace enrollees receive premium subsidies, changes in benchmark premium prices (and the related changes in subsidy amounts) will play a significant role in how much your net premiums change for 2022.
Should I enroll before the deadline if I’m uninsured?
If you’re uninsured, there’s no benefit to skipping coverage now and waiting for the start of open enrollment. That will just guarantee that you won’t have coverage in place until January, and your 2022 premium will be the same either way.
If a sudden and serious health condition were to arise while you’re uninsured, you would have no way to obtain coverage that starts before January 2022 unless you experience a qualifying event.
When will my coverage start if I enroll during the SEP?
As is always the case, your coverage won’t take effect immediately. If you enroll during the current SEP in most states, your plan will take effect the first of the following month.
How long will my coverage last if I enroll by the SEP deadline?
ACA-compliant individual/family health plans renew each year on January 1. This is true regardless of when you sign up for the plan. So if you’re enrolling during the current SEP, the specifics of your health plan – including the monthly premium – will remain the same through the end of December. (Note that your after-subsidy monthly premium could change if your income changes later in the year.)
At that point, your plan will likely be available for renewal for 2022, but the premiums and the coverage details might change. So for example, the deductible and out-of-pocket limit might change, and your premium will almost certainly change – due to both the change in your own plan’s premium, as well as changes to your subsidy amount caused by fluctuations in the benchmark premium amount in your area.
If I enroll now, do I need to enroll again in November?
In most cases, coverage will auto-renew if you don’t log back into your account during the fall open enrollment to manually pick your coverage for 2022. But for a variety of reasons, auto-renewal is not in your best interest.
Instead, you should plan to spend at least a few minutes this fall comparing your options for 2022. Even though the open enrollment window is just around the corner (it starts November 1) the options for 2022 might be very different from what you’re seeing right now for the rest of 2021. Insurers are joining the marketplaces in many states, and existing insurers are expanding their coverage areas.
That can affect plan availability as well as subsidy amounts, so you’ll want to plan to spend some time reconsidering your options for 2022.
Is there any way to enroll in 2021 coverage after August 15?
In California, DC, New Jersey, New York, and Vermont, the COVID-related special enrollment period is already scheduled to extend past August 15. (In Vermont, this applies to uninsured residents. Current enrollees who wish to switch plans must do so by August 15.) But even in those states, it’s in your best interest to enroll sooner rather than later, in order to take advantage of the enhanced subsidies that are available under the American Rescue Plan.
After August 15, in most states, you’ll need a qualifying event to be able to sign up for coverage that starts prior to January 2022. You’ll have access to open enrollment this fall, but that coverage won’t take effect until January, even if you enroll right away on November 1.
What do I need to do if I’m getting a COBRA subsidy?
The American Rescue Plan’s COBRA subsidy continues through the end of September. Assuming your COBRA or state continuation coverage is eligible to continue past that date, you’ll have the option to keep it by paying the full premiums yourself as of October, or switch to a self-purchased individual/family plan instead.
If you want to switch to a self-purchased plan, you can enroll in a plan in the marketplace in September and have your new coverage take effect seamlessly on October 1. Although the COVID-related special enrollment period will have ended by that point, you’ll be eligible for a special enrollment period triggered by the termination of the COBRA subsidy.
If you’re choosing to switch to a new plan when the COBRA subsidy ends, you’ll want to pay close attention to details regarding any deductible and out-of-pocket costs you’ve accumulated this year. As a general rule, you should assume that those will reset to $0 when you switch to an individual market plan. But it’s possible that your insurer might allow you to transfer them if you switch to an individual plan offered by the same insurer that provides your group coverage.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health insurance marketplace updates are regularly cited by media who cover health reform and by other health insurance experts.