- If your insurer left the marketplace on December 31, you’re eligible for a special enrollment period (SEP).
- Loss of coverage due to rescission does not count as a qualifying event.
- If you leave your job and, as a result, lose your health insurance, you’re eligible for an SEP in the individual market.
Involuntary 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 in the individual market.
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.
Plans that terminated December 31, 2017
If your health plan terminated at the end of 2017 and you didn’t pick a new plan by the end of open enrollment (December 15, in most states), your special enrollment period continues until March 1, 2018. (That’s 60 days after your previous plan ended.)
Insurers in numerous states left the exchanges at the end of 2017 or shrank their coverage areas. If your insurer is no longer offering plans in the exchange in your area, you’re eligible for a special enrollment period. This is true even if the exchange mapped you to a replacement plan from another insurer when you didn’t select a plan during open enrollment. CMS confirmed in October 2017 that people whose plans are discontinued would be eligible for the special enrollment period, despite the fact that the exchange would automatically match these consumers to a new plan if they didn’t pick one themselves (this applied to HealthCare.gov, but most of the state-run exchanges followed a similar protocol).
CMS confirmed that the special enrollment period applies in cases where an insurer exits the market in a particular area (on or off-exchange, or both), but it also applies in situations where an insurer replaces all of its PPO plans with HMOs, for example. But more minor adjustments, like changes to the deductible or copay, would not result in a special enrollment period.
State-based exchanges have some flexibility in terms of some special enrollment periods, although CMS indicated that the special enrollment period for people whose plans are discontinued at year-end is available in every state, including state-based exchanges, regardless of whether the exchange mapped those enrollees to plans from different insurers or not.
However, Your Health Idaho said that they would map BridgeSpan enrollees to new plans (if the enrollees didn’t pick their own new plans by December 15), but that they were NOT allowing a special enrollment period for those enrollees. So this is a bit of a gray area for state-based exchanges. If you’re in a state-based exchange and your insurer left the market (this only applies to a few state-based exchanges), pay close attention to the communications you received from the exchange.
The special enrollment period applies to people who had off-exchange coverage from a health insurer that exited the individual market at the end of 2017, or shrank its coverage area. Since there’s no system to auto-enroll people onto new plans outside the exchange when carriers leave the market, these people became uninsured as of January 1 if they didn’t select a new plan. (They had until December 31 to select a new plan and still have coverage effective January 1, 2018, because the effective date rules are different if you’re using a special enrollment period triggered by loss of other coverage).
The special enrollment period for people whose plan was discontinued on December 31, 2017 will continue for 60 days, through March 1.
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 are not 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.
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 exchange updates are regularly cited by media who cover health reform and by other health insurance experts.