Was Your Health Plan Cancelled? You've Got A Special Enrollment Period

If your coverage was terminated, you have 60 days to pick a new plan

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For people who buy their own health insurance, open enrollment ends on January 31. This applies to coverage purchased in the exchange as well as coverage purchased directly through health insurance carriers (off-exchange), although off-exchange plans in Nevada can be purchased year-round, with waiting periods for coverage to begin.

Employers can purchase health plans for their employees year-round although their employees will then have an annual open enrollment period.

Native Americans can purchase private coverage in the exchanges year-round, and people who qualify for Medicaid or Children's Health Insurance Program (CHIP) can also enroll in coverage year-round.

Enrollment limited after January 31

But for the most part, the ability to enroll in an individual health insurance plan after open enrollment ends is quite limited. There are numerous qualifying events that trigger special enrollment periods, although the federal government has clarified that they're going to be conducting audits from now on, to ensure that the special enrollment period rules are being enforced.

This is important, because risk pool stability depends on reducing or eliminating the possibility of people going without health insurance while they're healthy, and then signing up for coverage when they're in need of healthcare. Insurers have noted that claims costs are 55% higher among people who enroll during a special enrollment period, compared with people who enroll during general open enrollment.

Because of this, there is concern that perhaps people who opted not to enroll during open enrollment were finding ways to "game" the special enrollment period system later in the year if they needed healthcare. 

In addressing this concern, the Centers for Medicare and Medicaid Services (CMS) eliminated some unnecessary special enrollment periods and announced the systems that will be put in place going forward to ensure that special enrollment period rules are being followed.

Lost coverage 12/31? You've got until 2/29 to enroll

While special enrollment period rules will likely be more strictly enforced starting in 2016, there are still plenty of qualifying events that trigger special enrollment periods. If you experience one of several life changes or lose access to your old insurance, a special enrollment period ensures that you won't be stuck without health insurance for the rest of the year (this makes sense, as it would be unfair to make people wait until the following year to get coverage if they moved to a new state mid-year, for example).

One of the qualifying events that triggers a special enrollment period is loss of minimum essential coverage. Minimum essential coverage is the coverage you're required to have in order to avoid the ACA's penalty for being uninsured. It includes some plans that aren't ACA-compliant, but not all of them; for example, short-term insurance plans aren't considered minimum essential coverage, so the termination of a short-term plan does NOT trigger a special enrollment period.

But if you had "real" health insurance in place and then you lose access to it (by leaving a job, for example, or getting divorced), or the plan itself terminates, you qualify for a special enrollment period during which you can enroll in a new plan on the exchange or directly through a health insurance carrier.

The special enrollment period starts 60 days before the date your coverage ends, and continues for 60 days afterward.

This applies to a significant number of people whose coverage ended on December 31, 2015; for these individuals, a special enrollment period will continue until February 29:

  • Anyone who was enrolled in one of the ten CO-OPs that ceased operations at the end of 2015 (in New York, CO-OP members lost coverage on November 30, so their special enrollment period continues until January 29, which is before the end of general open enrollment).
  • Residents in Oregon and Colorado whose grandmothered plans were terminated at the end of 2015.
  • People who had coverage through WIN Health in Wyoming, Moda Health or Columbia United Providers in Washington state, Assurant/Time in any state, or who were in a similar situation in another state where their health insurance coverage was terminated at the end of the year due to carrier ceasing operations in the area.

What about effective dates?

Exchanges have flexibility in terms of effective dates granted for loss of coverage enrollments that are completed after the prior coverage terminates. In the 60 days leading up to the loss of coverage, the exchange has to allow the person to have coverage effective the first day of the month following loss of coverage, regardless of the date the enrollment is completed.

But in the 60 days after the date coverage is lost, the exchange can opt to follow normal effective date rules (generally, plan selections must be made by the 15th of the month to be effective the first of the following month, although three states have later deadlines), or can opt to allow first of the following month regardless of the date the enrollment is completed. Check with your exchange (or the carrier if you're doing a direct-to-carrier enrollment) if you're unsure of the rules regarding effective dates.

If you're enrolling after December 31, you'll have a gap in coverage regardless of how the exchange manages effective dates. There's no provision for retroactive coverage for people enrolling in the 60 days following loss of coverage, so people who lost coverage December 31 and enroll between January 1 and February 29 will have a one to three-month gap in coverage, depending on when they enroll and how the exchange determines their effective date.

Note that a three-month gap in coverage would trigger a prorated penalty under the ACA.

Mapping isn't the same as loss of coverage

It's important to note that health insurance carriers can "crosswalk" (map) enrollees to new plans that have been modified to have different benefits, networks, etc. This is not the same thing as loss of coverage, though, and does not generate a special enrollment period. Ted Cruz recently - and very publicly - confused loss of coverage with the mapping of his Blue Cross Blue Shield of Texas PPO plan to an HMO plan.

If in doubt, contact the exchange, a broker or navigator, or the carriers in your state to determine whether you qualify for a special enrollment period.

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