Alyssa Lane
Changing medical insurance mid-year can be a tricky process, with specific rules for employers and employees. Generally, you can only change your health insurance plan during the yearly Open Enrollment Period, which usually lasts from November 1 to January 15. However, there are two windows of opportunity to change your health insurance plan: the Open Enrollment Period and the Special Enrollment Period. The latter is a time outside the yearly Open Enrollment Period when you can sign up for health insurance if you've had certain life-changing events, such as losing health coverage, moving, getting married, having a baby, or adopting a child.
Changing Medical Insurance Mid-Year
| Characteristics | Values |
|---|---|
| Can I change my health insurance mid-year? | Yes, but there are rules for mid-year changes that vary depending on whether you're an employer or an employee. |
| When can I change my health insurance? | There are two windows of opportunity: Open Enrollment Period and Special Enrollment Period. |
| When is the Open Enrollment Period? | The Open Enrollment Period is an annual period that usually lasts from November 1 to January 15 (specific dates may vary by state). |
| When is the Special Enrollment Period? | A Special Enrollment Period is a time outside the yearly Open Enrollment Period when you can sign up for health insurance if you've had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount. |
| What is a qualifying life event? | A qualifying life event is a change in your life situation that may impact your current health insurance coverage and make it necessary to enroll in a new plan. Examples include a loss of health coverage, a change in your household, or a change in residence. |
| Can employers change their health insurance plan mid-year? | Yes, employers can generally make changes to their health insurance plan at any point during the year but must meet specific requirements to avoid penalties. |
| Can employees change their health insurance plan mid-year? | Employees can only make changes during specific enrollment times, such as the Special Enrollment Period. |
| What are some reasons for changing health insurance mid-year? | Changes in your plan's network, needing more or less coverage, moving to a new area, changes to your employment, or changes to your family size. |
| What are the consequences of changing health insurance mid-year? | Employees may be left liable for covering a greater share of their medical costs. To combat this, adding a Health Reimbursement Arrangement (HRA) to your health benefit is recommended. |
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What You'll Learn
Special enrollment periods
During a Special Enrollment Period, you can make changes to your Medicare Advantage and Medicare drug coverage. For example, you can switch from your current plan to another Medicare Advantage Plan with drug coverage or Medicare drug plan, or drop your current plan and return to Original Medicare. It's important to note that these changes are evaluated on a case-by-case basis and may depend on your specific circumstances.
For employees enrolled in an insurance policy, Special Enrollment Periods can provide an opportunity to shop for and compare different plans. Employers can also make mid-year changes to their health insurance plans, but they must meet specific requirements to avoid penalties. Integrated Health Reimbursement Arrangements (HRAs) are another option to consider, as they can be added to existing job-based health benefits at any time during the year without an enrollment period.
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Qualifying life events
Generally, you keep the same health insurance plan for the year. However, you can make changes to your plan outside the yearly Open Enrollment Period if you experience a qualifying life event. A qualifying life event is a life-changing situation that may impact your health insurance coverage and make it necessary to enroll in a new plan.
- Loss of health coverage: If you or anyone in your household lost qualifying health coverage in the past 60 days or expects to lose coverage in the next 60 days, you may qualify for a Special Enrollment Period.
- Change in residence: Moving to a different zip code, county, or state that changes your health plan area. You don't need to provide proof if you're moving from a foreign country or United States territory.
- Change in household: If your household size increases due to marriage, birth, adoption, foster care, or court order, you can add the new dependent to your current plan or enroll them in any plan for the remainder of the year.
- Gaining U.S. citizenship: Becoming a U.S. citizen can qualify you for a Special Enrollment Period.
- Income changes: If your household income decreases and you now qualify for savings on a Marketplace plan, you may be able to change your insurance plan mid-year.
It's important to note that the rules for mid-year changes may vary depending on whether you're an employer or an employee. Employers can generally make changes to their health insurance plan at any point during the year but must meet specific requirements to avoid penalties. Employees, on the other hand, may have more flexibility in what they can change but can only do so during specific enrollment times, such as during a Special Enrollment Period.
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Employer-based changes
If you are an employer, you are not locked into your health insurance plan and can generally make changes at any point during the year. However, there are complex restrictions and potential penalties to navigate. For instance, employers are not required to allow employees to make mid-year election changes unless they are making changes under HIPAA special enrollment rights.
If your health plan includes a waiting period before employees can participate, you may want to consider adding this plan design feature, bearing in mind that the Affordable Care Act prohibits waiting periods that exceed 90 days. If you are thinking about cancelling your insurance plan mid-year, you must confirm all termination provisions under your current plan document and insurance contract, decide on the formal company action needed to terminate the plan, and notify employees in writing 60 days prior to the plan termination.
There are several reasons why an employer may want to change their insurance plan mid-year. One reason could be to save money on their group policy. For example, employers may consider switching to a cheaper health plan, like a high-deductible health plan (HDHP), to reduce monthly premiums. Another reason could be to maintain access to providers. For example, if an insurer and a doctor/hospital are unable to reach an agreement on a contract, the network contract ends, and employers may want to consider switching plans so that their employees can continue to see their doctor or use familiar facilities.
To help employees pay for medical expenses, small employers who don't offer group health coverage can set up a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). This allows employees to use it to help pay their household's health care costs, such as their monthly premium, for qualifying health coverage.
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Health reimbursement arrangements
Generally, once you enroll in a health insurance plan, you keep it for the year. However, there are certain circumstances under which you can change your health insurance plan mid-year. If you are an employee, you may be able to make changes during specific enrollment times. If you are an employer, you can usually make changes to your health insurance plan at any point during the year but must meet specific requirements to avoid penalties.
One option to consider when changing your health insurance plan mid-year is adding a health reimbursement arrangement (HRA) to your health benefit. HRAs are a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. With integrated HRAs, employers can reimburse employees tax-free for qualified medical expenses that their health insurance plan doesn't fully cover, such as deductibles, coinsurance, and other out-of-pocket costs. Only employees enrolled in an employer-sponsored health insurance plan can participate in the HRA. Employers can set a monthly allowance that fits their budget, and there is no need for a pre-funded account as the employer only pays out when employees submit medical costs for reimbursement.
There are two main types of HRAs: integrated HRAs and individual coverage HRAs. Integrated HRAs work alongside traditional employer health plans, such as group health insurance. Employers can sign up for an integrated HRA at any point during the year without an enrollment period. On the other hand, individual coverage HRAs can be offered by employers as an alternative to traditional group health plan coverage. This type of HRA can be used to reimburse employees for premiums for individual health insurance, giving employees more flexibility in choosing their health insurance plan.
In conclusion, while changing your health insurance plan mid-year can be challenging, there are options available such as health reimbursement arrangements (HRAs) that can provide greater flexibility for both employers and employees. HRAs allow employers to reimburse employees for medical expenses that their health insurance may not cover, and there are different types of HRAs to suit the needs of the employer and employees.
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Open enrollment
The open enrollment period for Individual & Family ACA Marketplace plans is November 1 through January 15 or 16 in most states. If you get health insurance through your work, your employer sets the open enrollment period, which is usually in the fall so that your benefits can start at the beginning of the calendar year. Medicare's Annual Enrollment Period (AEP) is from October 15 to December 7 every year. During this time, you can join, switch, or drop a plan.
Outside of the open enrollment period, you can still make changes to your health insurance plan if you have a life event that qualifies you for a Special Enrollment Period. This could include losing health coverage, moving, getting married, having a baby, or adopting a child. You may also qualify if your household income is below a certain amount. During a Special Enrollment Period, you can enroll in a new plan, renew your current plan, or change plans.
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Frequently asked questions
You can only change your insurance plan if you have a qualifying life event, such as losing health coverage, moving, getting married, having a baby, or adopting a child. You can usually change your insurance plan up to 60 days after a qualifying life event.
Qualifying life events include changes to your living situation that make you eligible to change your plan’s elections. For example, if you switch to your new partner’s plan after your marriage, or increase coverage for a child you are expecting, you or your partner can upgrade policies to cover more people.
You can shop for and compare plans by working with a broker or visiting your state or federal health insurance marketplaces. You may be required to provide proof of the qualifying life event before enrollment.
If you are unable to change your insurance plan, you may be able to add a health reimbursement arrangement (HRA) to your health benefit. An HRA is an employer-funded group health plan that reimburses employees for qualified medical expenses their plan doesn't fully cover. Alternatively, you can consider opening a health savings account (HSA) to set aside tax-free money to cover medical costs.
Contact the billing office to discuss options for reducing the balance or setting up a payment plan. Medical providers are often willing to negotiate to ensure they receive payment.
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