Q. My son is covered on my employer’s policy through July 31, but because he’s turning 26, he’ll have to find his own coverage. Can he enroll in a new plan with coverage starting on August 1, or did he need to have purchased a plan during open enrollment?
Because his triggering event is the loss of eligibility for an employer-sponsored plan, his open enrollment window begins 60 days before his coverage ends, and continues for 60 days after it ends (Federal regulations code 155.420(d)(6)(iii) explains the details). So he can apply before his current policy ends in order to have seamless coverage.
The special open enrollment window also allows him to enroll at any time in the 60 days after his existing policy ends, but he would have a gap in coverage. There is a special effective date rule when the qualifying event is loss of other coverage: the new policy is effective the first of the month following enrollment, without regard for the normal 15th of the month application deadline, as long as the individual applies for the new plan on or before the date that the old plan ends.
So if he were to apply anytime in July, his new policy will be effective August 1. If he applies in August, by the 15th of the month, his new policy will be effective September 1 (the exchange has the option to allow him to enroll until August 31 and still get a September 1 effective date, but they aren’t required to do so; they can instead assign him an October 1 effective date in that scenario).
His opportunity to enroll would also continue into September, but the new coverage wouldn’t be effective until October 1 at the earliest. There’s an exemption from the ACA’s individual mandate penalty (which is still in effect in 2018) for people who have a short gap in coverage with a duration of less than three months. So as long as his new plan is effective by October 1 (ie, leaving him with a two-month gap, for August and September), he would be exempt from the individual mandate penalty for 2018, assuming he maintains his new coverage for the remainder of the year.