Life Insurance Changes: Open Enrollment Options Explored

Life insurance is an important financial safety net for you and your family. While it is not possible to change your life insurance plan outside of the Open Enrollment period, there are certain circumstances that qualify you for a Special Enrollment Period (SEP). A SEP allows you to change your plan outside of the usual enrollment dates. These circumstances are known as qualifying life events and include changes in your family status, such as having or adopting a baby, or the death of a spouse or dependent. Changes in your employment status, such as losing your job, or moving to a new area where your current plan is not available, also qualify you for a SEP. It's important to note that you typically have a limited time frame, usually 30 to 60 days, to make changes to your plan during a SEP.

Changes in family status

• Birth or adoption of a child: Adding a new child to your family, whether by birth or adoption, is a significant life change. You can adjust your life insurance plan by adding the new member to your coverage to ensure they receive the necessary care.
• Death of a covered dependent: If you experience the loss of a spouse or dependent, it is considered a qualifying life event. This allows you to make changes to your life insurance plan, such as enrolling in your employer's plan or seeking individual coverage.
• Marriage: When you get married, you may want to add your spouse and any newly eligible children to your life insurance coverage. On the other hand, if your spouse has coverage, you may choose to be covered under their plan instead.
• Divorce or legal separation: In the event of a divorce or legal separation, you will need to remove your ex-spouse from your life insurance coverage. Your ex-spouse has the option to continue coverage through other means, such as COBRA.
• Changes in your spouse's coverage: If your spouse gains or loses health coverage, or if their employer's coverage changes significantly during their open enrollment period, you may need to adjust your life insurance elections.
• Foster care or guardianship: Gaining a child through foster care or becoming a legal guardian can be considered a qualifying life event. This allows you to add the child to your life insurance coverage.
• Child turning 26: When your child reaches the age of 26, they are no longer eligible for coverage under your life insurance plan. This is considered a qualifying life event, allowing you to decrease your enrollment or switch your covered family member.

It is important to note that the specific guidelines for changes in family status may vary depending on your insurance plan. Be sure to review the requirements and guidelines provided by your insurance provider to understand how to make changes to your life insurance coverage in response to changes in family status.

Changes in employment status

• Separation or reduction of hours that results in a loss of eligibility for the employer's benefits.
• New hires or a change from part-time to full-time status.
• Loss or gain of other employer-sponsored coverage through another source, such as a spouse or parent.
• Death of a spouse or parent who provided coverage.
• Retirement and eligibility for Medicare coverage.

Additionally, if you are re-employed after a break in service of more than three days, or if your pay increases enough for premiums to be withheld, you may also qualify for a change in your insurance plan. It's important to note that simply getting a new job or changing jobs within an organization is typically not considered a qualifying life event for special enrollment.

If you experience a change in employment status, it's important to act quickly as you usually have a special enrollment period of 30 to 60 days to make changes to your insurance plan or choose a new one. Check with your insurance provider or plan administrator to understand your specific options and deadlines.

Losing health insurance

Losing your health insurance can be a stressful experience, but there are several options to help you continue receiving coverage. Here are some detailed instructions and considerations to keep in mind:

Understand Qualifying Life Events (QLEs):

• A QLE is a significant change in your life that allows you to update your health insurance outside the usual enrollment period. Examples of QLEs include losing your job, aging out of your parents' plan when you turn 26, the birth or adoption of a child, the death of a spouse or dependent, and moving to a new area.
• It's important to act quickly, as you typically have 30 to 60 days during the special enrollment period after the life event to choose a new plan or make necessary changes.

Explore your options:

• Option 1: Enroll in a Marketplace Plan - Losing job-based health insurance qualifies you for a Special Enrollment Period to enroll in a Marketplace plan for the rest of the year. You need to apply within 60 days of losing your previous coverage. Your coverage can start the first day of the month after you lose your previous insurance. When applying, you'll find out if you qualify for savings on monthly premiums or a tax credit to lower your monthly insurance payment.
• Option 2: Sign up for COBRA coverage - COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your job-based health plan for a limited time, usually 18 months, after your job ends. You pay the full premium yourself, plus a small administrative fee. Contact your employer to learn about your COBRA options, as you need to elect this coverage within 60 days of losing insurance.
• Option 3: Join a Family Member's Policy - If you are under 26, you may be able to join a parent's health insurance policy within 30 days of losing your own coverage. This option may involve extra premium costs for your parents but is often one of the least expensive options for replacement coverage.
• Option 4: Sign Up for Medicaid - Medicaid is a joint federal and state program that offers insurance to low-income U.S. citizens. Visit Medicaid.gov to check your eligibility, as it varies by state. Low income alone may qualify you in many states, but income limits will differ.
• Option 5: Buy Short-Term Health Insurance - If you're unable to buy coverage through a special enrollment period or other means, consider short-term health insurance (if your state allows it). These policies are sold directly by insurance companies and brokers and are considerably less expensive than other plans. However, they do not have to meet Affordable Care Act requirements for minimum essential coverage, so read the list of exclusions carefully.

Important considerations:

• Deadlines - Keep in mind the deadlines associated with each option, as they typically start from the date you lose your previous coverage.
• Documentation - Secure the necessary documents promptly, such as proof of job and insurance loss, which you'll need when applying for new coverage.
• Compare options - Weigh the pros and cons of each option and consider factors such as cost, coverage, and your specific healthcare needs.
• Consultation - Consult a financial advisor or a healthcare benefits specialist to help you navigate your choices and make the most suitable decision for your circumstances.

Remember, while losing your health insurance can be daunting, you have multiple pathways to continue your coverage. Don't hesitate to seek help and carefully review your options to make an informed decision.

Gaining access to an individual coverage HRA

Step 1: Understand the Requirements

Firstly, it's important to note that ICHRA is available to employers of any size, but they must have at least one employee who isn't a self-employed owner or their spouse. ICHRAs are only for employees, not self-employed individuals.

Step 2: Determine Eligibility

To be eligible for an ICHRA, employees must be enrolled in individual health insurance coverage, such as a plan purchased through the Marketplace or a private insurance company, or have Medicare coverage (Part A and Part B, or Part C).

Step 3: Design the Plan

Employers need to design their ICHRA plan, defining which employees are eligible and establishing reimbursement limits. The plan can be customized to meet the specific needs of the business and its employees, with different levels of coverage offered to different classes of employees (e.g., full-time, part-time, seasonal, etc.).

Step 4: Communicate the Benefit to Employees

Once the plan is designed, employers should communicate the benefit to their employees, providing practical information such as the start date, annual HRA allowance, and how to obtain coverage.

Step 5: Provide Resources for Employees to Purchase Individual Health Insurance

Employers can assist their employees by providing tools and information to guide their decision-making in choosing a health insurance plan on the individual market.

Step 6: Establish Legal Plan Documents

It is crucial to have legal plan documents in place, including a formal plan document and summary plan document. These documents must include the ICHRA policies, reimbursement eligibility, claims processes, and information on privacy and other procedures.

Step 7: Set Up ICHRA Administration

ICHRA administration involves tasks such as on-boarding employees, substantiating employee claims, reimbursement, record-keeping, and tax reporting. While it is possible to administer ICHRA in-house, it is recommended to outsource it to an HRA administrator for better privacy, record-keeping, and to stay up-to-date with changing regulations.

By following these steps, employers can effectively set up and offer an individual coverage HRA to their employees, providing them with access to health benefits that meet their individual needs.

Changes in residence

In the United States, you may qualify for a Special Enrollment Period (SEP) if you move to a new home in a new ZIP code or county, or to the US from a foreign country or US territory. Moving to or from the place you attend school (if you're a student) or moving to or from a place you both live and work (if you're a seasonal worker) can also trigger an SEP.

It's important to note that moving only for medical treatment or vacation does not qualify you for an SEP. Additionally, you must have had qualifying health coverage for at least one day during the 60 days before your move. If you're moving from a foreign country or US territory, you don't need to provide proof of prior coverage.

To make changes to your health insurance plan due to a change in residence, you typically have a window of 30 to 60 days during the special enrollment period after the life event to choose a new plan. However, each plan has its own guidelines, so be sure to check with your plan administrator to understand your options.

Frequently asked questions