Chapter 3: Special Enrollment Guide

Involuntary loss of coverage is a qualifying event

If you’ve lost or are losing your coverage, a special enrollment period offers you time to enroll in a new health plan with no coverage gap

The Insider's Guide to Obamacare's Special EnrollmentInvoluntary loss of coverage is a qualifying event that triggers a special enrollment period. If you lose your plan, you’ll have a chance to enroll in a new plan, either on or off the exchange in your state. Here’s how it works:

The coverage you’re losing has to be considered minimum essential coverage. So if, for example, your short-term plan is ending, that doesn’t count as loss of coverage, since a short-term plan is not considered minimum essential coverage. (One exception to this rule has to do with loss of pregnancy-related Medicaid coverage. This is not considered minimum essential coverage, but its termination does trigger a special enrollment period).

It’s important to note that plans can be considered minimum essential coverage even if they’re not compliant with the ACA. Grandmothered and grandfathered plans count as minimum essential coverage, but do not have to be ACA-compliant. If those plans terminate, the insured has access to a special enrollment period.

Loss of coverage due to rescission does not count as a qualifying event. Rescission is relatively rare now that the ACA has been implemented, but the law does still allow for rescission in the event of fraud or intentional misrepresentation on the part of the insured.

But other than rescission, “involuntary” loss of coverage just means that you didn’t cancel the plan yourself, or lose your coverage because you stopped paying premiums.

Most non-elderly adults have coverage through an employer-sponsored plan. If they leave their employer – voluntarily or involuntarily – and lose access to their employer-sponsored health insurance as a result, that’s considered involuntary loss of coverage. So if you choose to leave your job and as a result lose your health insurance, you’ve got access to a special enrollment period to get a new plan.

The special enrollment period applies even if you have the option to continue your employer-sponsored plan under COBRA. You can choose to elect COBRA, or you can use your special enrollment period to pick a new plan in the individual market. So take your time and compare the options available to you.

Death, divorce, or legal separation

HHS had originally intended to add a new SEP (for people already enrolled in an exchange plan) effective in 2017 for people who lose a dependent or lose dependent status as a result of a death, divorce, or legal separation, even if they didn’t lose coverage.

But in May 2016, HHS eliminated the requirement that exchanges add this SEP in 2017. Exchanges have the option to do so, but will not be required to offer a SEP triggered by death, divorce, or legal separation. Of course, if the death, divorce, or legal separation results in loss of coverage, the normal SEP rules for loss of coverage would apply.

For example, a person who is covered as a dependent on an employer-sponsored plan would lose access to the plan if the employee were to die. Even if 36 months of COBRA were to be available to that person, he or she would also have access to a SEP in the individual market, triggered by loss of coverage. But on the other hand, an enrollee who loses a family member does not necessarily have access to a SEP at that point, unless one of the other qualifying events applies.

Special enrollment period details

The special enrollment period triggered by loss of coverage begins 60 days before your existing plan’s termination date, so it’s possible to get a new ACA-compliant plan without any gap in coverage. This is true regardless of whether the health plan that’s ending is an individual plan or an employer-sponsored plan.

You also have 60 days after your plan ends during which you can select a new ACA-compliant plan.

If you enroll before the date your old plan ends, the effective date of the new plan will be the first of the month following the loss of coverage, regardless of the date you enroll. So for example, if your plan is ending July 31, you can enroll in June or July and your new plan will be effective August 1.

But if you enroll in the 60 days after your plan ends, the exchange (or carrier, if you’re enrolling outside the exchange) can either allow a first-of-the-following-month effective date regardless of the date you enroll, or they can use their normal enrollment deadline, which is typically the 15th of the month in order to have coverage effective the first of the following month.

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