Life-Changing Loss: Health Insurance's Impact On Life's Direction

Losing health insurance is a significant change in one's life, and it is recognized as such by the US government. This change in circumstance is classified as a qualifying life event (QLE) and allows people to enroll in health insurance outside of the yearly Open Enrollment Period. This is made possible by a Special Enrollment Period (SEP), which is triggered by a QLE and allows people to apply for essential health insurance coverage 60 days before or after the event.

Losing job-based coverage

Losing job-based health insurance is a significant change in your life and is classified as a qualifying life event (QLE) by official government sources. This life event allows you to make changes to your health insurance plan and is a stressful but opportune moment to explore your options.

Your Options:

There are two main options to consider when you lose your job-based health insurance:

• Enroll in a Marketplace plan: Losing your job-based health insurance makes you eligible for a Special Enrollment Period (SEP) to enroll in an ACA-compliant health plan. The American Rescue Plan (ARP) has enhanced ACA premium subsidy eligibility, making it more likely for you to find subsidised coverage. You will need to apply for Marketplace coverage within 60 days of losing your job-based coverage. Your coverage can begin the first day of the month after your job-based coverage ends. During this process, you will find out if you qualify for savings on your monthly premiums, a tax credit to lower your monthly insurance payment, or free or low-cost coverage from Medicaid or the Children's Health Insurance Program (CHIP).
• Sign up for COBRA coverage: COBRA continuation coverage allows you to temporarily keep your job-based health insurance plan for a limited time, usually 18 months, after your employment ends. You will need to pay the full premium yourself, plus a small administrative fee. Contact your employer to learn about your COBRA options, as many employers are required by law to provide this opportunity.

Important Considerations:

• Timing is crucial: You have 60 days before and after losing your coverage to apply for a new individual health insurance plan.
• Compare your options: Individual health insurance plans may be less expensive than your former group plan and can provide more flexibility in terms of staying with you regardless of your employment status.
• Avoid gaps in coverage: If you enrol before the group coverage ends, your new Marketplace plan will typically take effect the first of the month after your old plan ends. In most states, you can avoid a gap in coverage even if your old plan ends mid-month.
• Explore short-term plans: If you are unable to secure new coverage before your job-based insurance ends, consider a short-term health plan to bridge the gap until your new plan takes effect. However, note that short-term plans are not comprehensive and cannot substitute for ACA-compliant health coverage.
• Understand Medicaid eligibility: If your income has dropped significantly, you may be eligible for Medicaid. Check with your state Medicaid office or the health insurance exchange for more information.

Losing COBRA coverage

Losing health insurance can be considered a "qualifying life event" and, as such, allows for a Special Enrollment Period (SEP) to apply for essential health insurance coverage. This period is 60 days before or after losing your coverage. Losing COBRA coverage is included in this category, so if you are about to lose your COBRA benefits, you will have the opportunity to purchase your own health coverage.

COBRA coverage is offered by your former employer when you lose job-based coverage. It is not mandatory to enroll in COBRA, and you can compare the cost of it with other plans available through the Marketplace. You can switch from COBRA to a Marketplace plan if your coverage is running out, or if you have to start paying the full cost of the coverage.

If you choose to end your COBRA coverage early, you will have to wait until the next Open Enrollment Period to get Marketplace coverage, unless you experience another qualifying life event. This could include getting married, having a baby, or losing health coverage.

It is important to plan ahead and contact your insurer or the Marketplace in advance to avoid a coverage gap.

Losing individual health insurance coverage

Losing your individual health insurance coverage can be classified as a "qualifying life event", allowing you to enroll in health insurance outside the yearly Open Enrollment Period. This is known as a Special Enrollment Period (SEP).

There are several reasons why someone might lose their individual health insurance coverage, including losing their job and employer-sponsored insurance, losing eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP), and turning 26 and losing coverage from a parent's health plan.

If you lose your individual health insurance coverage, you may qualify for a 60-day special enrollment period to buy your own health plan. This period begins 60 days before your existing plan's termination date and continues for another 60 days after the plan ends. It's important to act quickly, as you will experience a coverage gap if you don't sign up for a new plan before your current plan ends.

During this special enrollment period, you can explore several options to secure new coverage:

• Continue your employer's plan through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows individuals to maintain their employer-sponsored insurance for a limited period after job loss, reduction in hours, or other life events. This option is available for up to 18 months, and premiums cannot exceed 102% of the plan's cost.
• Join a family member's policy: If your spouse or parents (if you are under 26) have a health insurance policy, you may be able to join within 30 days of losing your coverage. This option may involve extra premium costs for your family member.
• Purchase Marketplace Coverage: You can buy an Affordable Care Act (ACA) policy at HealthCare.gov. There are various plans available, and you can compare prices and coverage options to find one that suits your needs and budget.
• Sign up for Medicaid: Medicaid is a joint federal and state program for low-income U.S. citizens, offering insurance that is often as good as or better than private coverage. To check your eligibility, visit Medicaid.gov and select your state.
• Buy Short-Term Health Insurance: If you are unable to buy coverage through a special enrollment period or other means, you can consider short-term health insurance. These policies are sold directly by insurance companies and brokers in specific states. They do not meet Affordable Care Act requirements and are less expensive, but they also do not cover pre-existing conditions and may not accept all applicants.

It is important to note that losing your individual health insurance coverage can be a stressful event, but understanding your options and acting promptly will help you secure new coverage to meet your healthcare needs.

Losing eligibility for Medicaid or CHIP

Losing eligibility for Medicaid or the Children's Health Insurance Program (CHIP) is considered a "qualifying life event" in the United States, which can make you eligible for a Special Enrollment Period (SEP) and allow you to enroll in health insurance outside the yearly Open Enrollment Period.

The Open Enrollment Period is an annual period that usually lasts from November 1 to January 15, during which individuals and families can purchase a health plan through the Health Insurance Marketplace. A Special Enrollment Period ensures that you can apply for essential health insurance coverage 60 days before or after a qualifying life event, such as losing eligibility for Medicaid or CHIP.

If you are no longer eligible for Medicaid or CHIP, here are some options to stay covered:

• Get a Marketplace health plan: Most people qualify for savings to lower their monthly premium and the cost of care. You can apply and enroll in a Marketplace plan as early as 60 days before your Medicaid or CHIP coverage ends to avoid a gap in coverage.
• Re-apply for Medicaid or CHIP through your state: You may still qualify even if your eligibility status has changed.
• Choose between a job-based plan or Marketplace coverage: If your employer offers health insurance, you may be able to switch to their plan or enroll in a new one through the Marketplace.
• Sign up for Medicare: If you meet the qualifications, such as being 65 or older, you may be able to enroll in Medicare.

It's important to plan ahead and contact your insurer or the Marketplace to understand your coverage options and any necessary documentation. Losing eligibility for Medicaid or CHIP is a significant change that can impact your access to essential healthcare services, so taking proactive steps to maintain coverage is crucial.

Losing eligibility for Medicare

There are several reasons why a person may lose their eligibility for Medicare. Firstly, if an individual does not pay their Medicare premiums, their coverage may be discontinued. Secondly, if a person moves out of the country, their Medicare coverage will no longer be valid. They may retain Part A (hospital insurance) if they return, but Part B benefits will either have to be continued by paying from abroad or dropped. Thirdly, Medicare benefits will be discontinued during a period of incarceration in a federal prison; however, coverage will resume upon release. Lastly, if an individual enrolls in a Medicare Advantage Plan, most of their Part A and Part B coverage will now come from the Medicare Advantage Plan, as opposed to the Original Medicare coverage.

It is important to note that losing eligibility for Medicare does not mean a complete loss of health insurance options. Individuals in this situation may be able to re-enroll during the Annual Enrollment Period (AEP) or a Special Enrollment Period (SEP). Additionally, they may be eligible for Medicaid, which has different eligibility criteria, including income limits that vary by state.

Frequently asked questions