Buying Health Insurance Outside of Open Enrollment

The official Open Enrollment deadline to purchase personal health insurance was March 31, but there were a couple of extensions and exceptions made.  Now, we’re well past the deadline and extensions, yet there are plenty of reasons why someone may need to purchase health insurance between now and the next Open Enrollment — which is November 15 to January 15. CMS calls these reasons “qualifying events”. A qualifying event triggers a “Special Enrollment Period”, so applications can be submitted either on or off the Marketplace.

Below is a list of qualifying events sent out by one of the carriers in Georgia last week (May 7, 2014).  This list in not exhaustive, but it covers the most common types of events. I modified the list and inserted some comments after a couple of qualifying events listed.  Last week CMS provided guidance and clarification regarding qualifying events. This guidance represents quite a change in a couple of areas (see notes below).

o    Change for Effective Date if a Pre-ACA (Affordable Care Act) Individual Plan is Terminated in 2014—the effective date will be the 1st of the month following receipt of the application.

To clarify:  If a pre-ACA plan (whether it’s grandfathered or not) is terminated — or up for renewal, then this is considered a qualifying event. So, if a current plan renews prior to Jan 1., then you can apply for an ACA-compliant plan.

o    Change for Newborn—A birth triggers a Special Enrollment Period that allows the family to enroll for coverage, change a plan or add the baby as a new dependent.  Also, the baby can be enrolled in a Child-only policy.

o    Change for Marriage— A marriage triggers a Special Enrollment Period that allows a new couple to enroll for coverage, change a plan or add a dependent(s).

o    Proof of State Residency for Non-US Citizens— Non-US citizens need to confirm their state residency to ensure that they are eligible for plans selected.

o    COBRA – A Qualifying Event is triggered when COBRA coverage is exhausted at the end of the COBRA period.

Anyone on COBRA qualifies for a SEP if they enroll before July 1, 2014 (this is a big change).

From the Marketplace, “Important: If you currently have COBRA continuation coverage, you may qualify for a Special Enrollment Period for a limited time only. This allows you to enroll in a Marketplace plan instead. In order to take advantage of this one-time Special Enrollment Period, you must enroll in a new plan by July 1, 2014.”

o    Legal Guardianship – Legal guardianship is a qualifying event and treated similar to a birth or adoption.

o    Permanent Move – Proof of prior and new residence location is required.

o    Employer’s Bankruptcy – If this results in the loss of coverage for retirees, then this is considered a qualifying event.

I will be happy to provide anyone with a complete list of qualifying events that shows whether or not supporting documentation is needed, deadlines for application submission, and earliest effective dates allowed.

The guidelines above are provided for individuals and families who want to enroll in ACA-compliant plans.  However, there are other plans on the market. Just be careful with non-compliant plans because some of them have serious gaps in coverage; other plans are very good.

Non-compliant plans are available ANYTIME, but they are medically underwritten and pre-existing conditions can be excluded.  Since these plans are not ACA-compliant, the policyholder would be subject to a penalty ($95 per person, per year; or 1% of household income, whichever is greater). However, there is a place for these types of plans.  Many of these short-term medical or non-compliant plans are relatively inexpensive, especially for healthy folks who don’t see the doctor very often.

In the past (pre-ACA), the risk of purchasing a short-term medical plan was that if someone developed a serious medical condition while on the plan, they could not renew the plan or get coverage elsewhere.  This is no longer an issue since anyone can apply for a plan during Open Enrollment periods regardless of their health condition.

There are plenty of options available for people, so it’s not a good idea to call the Marketplace or an advisor who doesn’t fully understand individual and small group health insurance. Many folks are told they simply have to wait until next year and they don’t realize there are viable options that should be considered today!

Greg Sanders       Peachtree Insurance Advisors       678-236-1600