Health insurance qualifying events are occurrences that can impact the amount of health insurance coverage you require or the policies available for purchase. These qualifying life events are necessary to access special enrollment periods, during which you can select a new health policy or upgrade your existing coverage. However, if you miss the open enrollment period and do not experience a qualifying life event, there are still alternative options to purchase health insurance.
What Constitutes a Qualifying Life Event?
A qualifying life event refers to situations that bring about changes in your life that affect your health insurance options or requirements. According to the IRS, a qualifying event must have an impact on your insurance needs or alter the health insurance plans you qualify for. In either case, a qualifying life event would trigger a special enrollment period, making you eligible to choose a new individual insurance policy through the state marketplace. Insurers evaluate qualifying events on a case-by-case basis, and you can find a complete list of such events on healthcare.gov.
Understanding Special Enrollment Periods (SEP)
Under the Affordable Care Act (ACA), a special enrollment period is a specific timeframe during which you can enroll in or modify your health insurance coverage. This period lasts for 60 days from the date of a qualifying life event. Within these 60 days, you have the opportunity to enroll in a new health plan.
Once the 60 days have passed, the SEP concludes. At that point, you would need to apply for a new policy to obtain coverage. If you fail to select a policy and do not have existing coverage, you will be left without health insurance. Alternatively, you may be eligible to enroll in state programs such as Medicaid.
Qualifying Events for Employer-Sponsored Programs
Qualifying life events can also impact group health insurance and flexible spending accounts (FSA) offered through your employer. FSAs allow you to pay for out-of-pocket medical, dental, or vision care expenses using tax-free funds. If you experience a qualifying life event, you will be given the opportunity to make changes to your FSA plan. For instance, if you have a child and wish to increase your contribution to your flexible spending account, you can do so because adding a dependent is considered a qualifying life event.
Group health insurance is influenced by qualifying life events since they may change the amount of coverage required or the individuals covered by the policy. The Health Insurance Portability and Accountability Act (HIPAA) permits employees who experience a qualifying life event to enter a special enrollment period, during which they can select a new group health plan. This can be particularly useful for newly married individuals who wish to add their spouse to their health insurance policy.
Should I Consider COBRA Insurance?
If you are terminated from your job or decide to quit, it will trigger a qualifying life event. In this case, you will have two options during the special enrollment period: acquire a new health insurance policy or extend your current coverage under COBRA.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) temporarily extends job-based insurance coverage provided by employers. It allows employees to retain their group health insurance plans when they would typically lose coverage after being laid off. However, choosing COBRA can be expensive, as your employer will no longer contribute to the premium payments.
You have the option to voluntarily cancel or stop paying premiums on a collective coverage policy. However, it’s important to note that this would not be considered a qualifying life event. Therefore, you would not qualify for a special enrollment period if you wanted to purchase individual health insurance. Therefore, if you have recently been laid off or resigned, we recommend evaluating the costs of health plans and COBRA before making a decision.
How to Confirm a Qualifying Event
After applying for Marketplace coverage during a special enrollment period, you may need to provide documentation of your qualifying life event to confirm that you meet the eligibility requirements. Once you have chosen a health insurance plan, you will have 30 days to submit documents to the insurance provider that detail your qualifying life event. It’s important to note that your policy will begin once you have selected a plan, but you will not be able to utilize the insurance until your eligibility is confirmed and the initial premium is paid. If your separation is not approved, the policy may be canceled, or you may need to submit additional documents to support the qualifying event.
Can I Cancel Health Insurance without a Qualifying Event?
You can cancel your individual health insurance plan at any time without a qualifying life event. However, once you cancel your policy, you will not be able to enroll again until the next open enrollment period. During this time, you will lack health insurance coverage, which can be costly if you experience an injury.
On the other hand, employer-sponsored health policies cannot be canceled at any time. If you wish to cancel an employer plan outside of the company’s open enrollment period, you must have a qualifying life event. According to section 125 of the internal revenue code, canceling without a qualifying life event will result in tax penalties for both you and your employer.
What If I Missed Open Enrollment and Have No Qualifying Life Event?
If you missed the open enrollment period and do not have a qualifying life event, you may still be eligible for public programs such as Medicaid or the Children’s Health Insurance Program (CHIP). Both programs offer year-round enrollment and can be beneficial for families who cannot afford individual health insurance. Another option, if you are not eligible for Medicaid, might be short-term or temporary health insurance. These plans are directly offered by insurance providers and can be purchased at any time without a qualifying life event. However, these policies can be expensive and may not include benefits like prescription drug coverage.