Q. If I don’t enroll in a health insurance plan by the open enrollment deadline (January 31), what are my options after that?
A. It’s strongly recommended that you enroll in a plan by January 31. If you don’t, in most cases your options will be very limited for the rest of 2016. Open enrollment won’t come around again until late 2016, for coverage effective January 2017.
There were widespread extensions to open enrollment in 2014, and many cases people were still enrolling long after the official deadline. In 2015, a short overall extension was granted in most states, along with an extended open enrollment period for people who found out about the ACA’s shared responsibility penalty after the scheduled end of open enrollment.
However, it’s unlikely that we’ll see significant extensions to open enrollment in future years, as people are much more aware of the deadlines, penalties, and open enrollment format now.
Depending on your circumstances, there are some exceptions that will allow you to enroll outside of open enrollment.
Medicaid enrollment is available year-round for those who qualify. If your income drops to a Medicaid-eligible level later in the year, you’ll be able to enroll at that point.
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 by January 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 (unless you’re in Nevada, where all off-exchange plans are available year-round with a 90-day waiting period). This is very different from the pre-2014 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 / temporary health insurance 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 that are 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 2015, the penalty for not having health insurance is $325 per adult (half that amount per child) or 2 percent of household income, whichever is greater. It’s significantly higher in 2016, at $695 per adult or 2.5 percent of household income.
To summarize, it’s imperative that you enroll in a new plan by January 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 in 2016.