A job loss is NOT a qualifying event

Loss of coverage is a qualifying event; loss of a job is not

Loss of a job is not a qualifying event under the Affordable Care Act
There are numerous qualifying events that trigger special enrollment periods under the ACA. Loss of a job is not one of them.. Paul Bradbury/Creative RF/Getty Images

Prior to 2014, individual health insurance could be purchased at any time during the year. But in all but five states, the availability of coverage depended in large part on the applicant's medical history. Healthy applicants could get coverage, while applicants with pre-existing conditions often found that plans were either prohibitively expensive, or altogether unavailable.

That all changed in 2014, with the advent of guaranteed issue health insurance nationwide.

But the trade-off is that the purchase of coverage is now limited to the annual open enrollment or a special enrollment period triggered by a qualifying event

There are quite a range of life circumstances that count as qualifying events, and it makes sense why they trigger special enrollment periods: The arrival of a new baby necessitates a special enrollment period because otherwise the baby would have to be uninsured until the following year. Loss of coverage necessitates a special enrollment period, since people can lose coverage for a variety of reasons throughout the year.

Job loss does not trigger a special enrollment period

But one area that is potentially confusing is the loss of a job. This is often lumped in with other qualifying events, but a close look at the list of qualifying events under the ACA shows that job loss is not among them.

One of the reasons for the confusion might stem from the fact that employer-sponsored health insurance is the most common form of health insurance in the US, and when people lose a job - either voluntarily or involuntarily - they're often faced with the simultaneous loss of their health insurance coverage.

To be sure, loss of health insurance coverage is a qualifying event, and that's true even if you're offered the option to extend your benefits via COBRA or state continuation. But it's the loss of coverage - not the loss of the job - that triggers a special enrollment period in that case. If you don't have job-based health insurance that will terminate when you lose your job, the loss of your job in and of itself is not a qualifying event.

A drop in income is also not a qualifying event

Loss of a job is typically correlated with at least a temporary drop in income. But the only income-related qualifying events are for people who are either

  • in the Medicaid coverage gap in a state that hasn't expanded Medicaid and experience an increase in income that puts them above 100% of the poverty level and thus eligible for subsidies, or
  • already enrolled in a plan through the exchange and experience a change in income that makes them either newly-eligible for subsidies, or newly-ineligible for subsidies.

Of course, in states that have expanded Medicaid, if your income drops to a Medicaid-eligible level, you'll be able to enroll in Medicaid at that point, as Medicaid enrollment continues year-round.

But if you're enrolled in a plan outside the exchange, or if you're uninsured, and you experience a drop in income, that does not allow you to enroll in a health plan or switch to a different health plan, unless you also experience a qualifying event at the same time.

This point is particularly important to understand if you purchase your own health insurance but do so outside the exchange in your state. In many cases, people who purchase plans outside the exchange do so because their income makes them ineligible for premium subsidies in the exchange (for 2016 coverage, the upper income limit for subsidies is $97,000 for a family of four). So they're paying full price for their coverage regardless of whether they buy through the exchange or not. Some may see it as more trouble than it's worth to purchase coverage through the exchange, particularly if they were put off initially by the difficulties that the exchanges experienced during their launch in 2013/2014.

On-exchange coverage offers flexibility

The problem with this approach is that it can be difficult to know for certain that one's income and job are 100% certain for the coming year. If your income exceeds 400% of the poverty level and you buy a health plan through the exchange - paying full price, since you're not eligible for subsidies - you're setting yourself up for flexibility if you happen to need it later in the year. If your income drops to under 400% of the poverty level and you become eligible for premium subsidies, you'll have an opportunity begin receiving subsidies at that point, and you'll also have the option to switch to a different plan in the exchange.

You'll also have the option to continue paying full price for your health plan and then claim your premium subsidies as a lump-sum tax credit when you file your tax return. This is particularly helpful for people whose income varies, as they might not be certain of what their total income is until they file a tax return.

But all of this flexibility depends on purchasing coverage through the exchange in the first place.

If you bought your plan outside the exchange, you can't claim any subsidy on your tax return. And you can't switch to an on-exchange plan mid-year unless you have a qualifying event... which doesn't include loss of a job or a drop in income. 


Cornell University Law School, Legal Information Institute, 45 CFR 155.420 Special Enrollment Periods, Accessed 2/19/2016

Kaiser Family Foundation, Health Insurance Coverage of the Total Population, 2014. Accessed 2/19/2016.

Continue Reading