By Sydney Frazer of Stride Health
Almost all insurance types—dental, vision, life, disability, car, accident—can be bought at any point in the year. Health insurance is unique in that you can only buy it during a specific window. This window is referred to as Open Enrollment Period (OEP). This period of time generally runs from from November 1 to December 15 with the exception of a few states with extended Open Enrollment Periods.
This might seem counterintuitive—why can you sign up for vision insurance whenever you want, but are limited to a 45 day period to get health insurance, arguably one of the most confusing and important insurance plans you will choose? OEP does exist for a reason though, a very important one. If you could buy health insurance whenever you wanted, when would you buy it? When you got sick, right? OEP was created to prevent this and help maintain a needed balance for health insurance companies. How? It balances the amount of money going into and coming out of insurers’ pockets. This means insurance companies can pay out money towards claims because of the regular flow of money coming in via premiums. Without OEP, the health insurance industry would be unstable, and insurance companies likely wouldn’t be able to pay claims.
OEP limits the time you have to purchase a plan with no strings attached to 45 days. There is an exception though! If you lose your health coverage from a different source (like an employer or spouse) outside of OEP, you have 60 days to enroll in a new plan. This time is called a Special Enrollment Period (SEP) and is triggered by your loss of coverage, known as a qualifying event. This rule applies to plans sold on the federal and state exchanges, as well as to plans from private insurance companies and brokers.
There are several qualifying events that exist. Almost all of the qualifying events require you to lose your health coverage in order to be eligible. There are only a few exceptions to this including becoming a citizen, leaving jail, or qualifying for a subsidy. Each of these qualifying events falls into one of these four broad categories:
- Loss of health coverage: loss of job-based coverage, loss of COBRA coverage, loss of individual health care for a plan or policy you bought yourself, loss of eligibility for Medicaid, Children’s Health Insurance Program, or Medicare, loss of coverage through a family member
- Changes in household: getting married, having a baby, adopting a child, or placing a child for foster care, getting divorced or legally separated, death of someone on your individual health insurance policy
- Changes in residence: moving to a new zip code or county, moving to the US from a foreign country, moving to or from a the place you attend school (if you’re a student), moving to or from the place you live and work (if you’re a seasonal worker), moving to or from a shelter or other transitional housing
- Other: gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder, leaving incarceration, AmeriCorps VISTA members starting or ending their service, becoming a US citizen
These are seven of the most common qualifying events that you should be familiar with as a freelancer in case you experience one.
Loss of job-based coverage
Losing job-based coverage is a qualifying event that falls under the category “loss of health coverage.” This happens when you lose health insurance coverage through your company or spouse’s company. People lose job-based coverage for all sorts of reasons including: your hours were cut and you are no longer eligible for job-based coverage, you quit or were fired from a job that provided coverage, your company dropped health insurance coverage as a whole, or your job-based coverage doesn’t cover enough to qualify for minimum essential coverage. Be sure to note that you qualify for SEP when you lose job-based coverage even if you quit your job! However, losing coverage because you didn’t pay your premium does not qualify you for SEP. In addition, voluntarily dropping job-based coverage without leaving your job does not qualify you for SEP.
Turning 26 and losing coverage through your parent’s plan
Turning 26 and losing coverage through a parent’s plan also falls under the category “loss of health coverage.” With the creation of the Affordable Care Act (ACA), people are allowed to stay on a parent’s health insurance plan until they turn 26. Under the ACA, 26 is when people become responsible for health insurance. That is why turning 26 is considered a qualifying event. If you are not on a parent’s health insurance plan, turning 26 is not a qualifying event for you.
Getting married or divorced
Getting married or divorced is considered a “change in household.” If you get married, you have a qualifying life event. While you might be more excited about going on your honeymoon or writing your thank you cards, getting insurance figured out with your new spouse should be one of your top priorities. If you don’t have coverage, you can join your spouse’s plan (and same goes for the reverse). In addition, if either of you want to make a change in coverage and find a new plan, this is the time to do it. Either you or your spouse had to have had coverage prior to getting married to make this a qualifying event for you. Getting a divorce also qualifies you for SEP. In addition, so does getting legally separated. You are only eligible for SEP through a divorce if you lost existing coverage because of the divorce. If you didn’t have coverage prior to the divorce, this does not qualify you for SEP.
Having a baby or adopting a child
Having a baby or adopting a child is also considered a “change in household.” This means anyone who gains a dependent is eligible for SEP. If you already have coverage, you can add your dependent to your plan; you can also switch coverage if you add the child to the new plan. If you don’t have coverage before this, you can’t enroll now. However, you can enroll the dependent. Coverage for dependents is retroactive to the day of the event. This means coverage is back-dated to the date in which you gave birth or adoption went through. Placing a child for foster care also makes you eligible for SEP under this qualifying event. If you didn’t have coverage prior to having a baby, adopting a child, or placing a child in foster care, you do not qualify for SEP.
Death in the family
A death in the family, also considered a “change in household,” qualifies you for SEP. If you lose coverage because of a death in your family, you can enroll in health insurance outside of OEP. Additionally, if your dependents lost coverage due to the death, you can change your plan to cover them. Lastly, if you aren’t eligible for your plan any more because of the death of someone on the policy, you are eligible for SEP. If you didn’t have coverage before the death in the family, this is not a qualifying event for you.
Moving to a new zip code or county
Moving to a new zip codes or country is considered a “change of residence.” This move must be permanent; it can’t just be for a vacation or to receive medical care. If you move to a new state, you will always qualify for SEP because each state carries different health plans. However, a move within a state can also qualify you for SEP because some plans are only offered in specific regions of a state. If you move to a new region within the same state, the new region must either have plans that weren’t available in your previous region or not have your previous plan in order to qualify you for SEP. You must have had coverage within the past 60 days before moving in order for relocating to be a qualifying event for you.
Becoming a United States citizen
Becoming a U.S. citizen falls under the category of “other.” If you gain US citizenship, become a US national, or become lawfully present in the US, you are eligible for SEP. This is because you are considered newly eligible to purchase coverage from the exchanges. Unlike all the other qualifying events, you have to enroll through the exchange for this to apply. With all the other qualifying events, plans that are enrolled in off the exchange are also eligible for SEP. You don’t need to have had previous coverage in order to make this a qualifying event for you.
Qualifying events exist to ensure that you can enroll in health insurance if you experience a significant change or event in your life that affects your health insurance needs. Keep in mind that if you have a qualifying event, you will be required to provide documentation supporting eligibility for the specific qualifying event you are claiming. The type of documentation will vary based on the qualifying event you are claiming. While SEP might seem confusing, remember that it is in place to make sure you can always enroll for coverage if you experience a major life change.
Do any of these qualifying events apply to you? If so, find a plan that suits your needs today!