Dropping Out Of Insurance: A Life-Changing Event?

A qualifying life event (QLE) is a change in your situation that makes you eligible for a Special Enrollment Period (SEP), allowing you to enrol in health insurance outside the yearly Open Enrollment Period. While dropping out of insurance is not explicitly mentioned as a QLE, loss of health coverage is a QLE. This includes losing existing health coverage, such as job-based, individual, and student plans, as well as losing eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP). Therefore, dropping out of insurance can be considered a life-changing event that triggers a Special Enrollment Period, allowing individuals to make changes to their health insurance plan.

Loss of health insurance

Losing your health insurance is a qualifying life event (QLE) that allows you to enrol in a new health insurance plan outside of the annual Open Enrollment Period. This is known as a Special Enrollment Period (SEP).

Reasons for Loss of Health Insurance

There are several reasons why someone might lose their health insurance, including:

• Turning 26 and losing coverage through a parent's insurance plan
• Losing job-based coverage
• Losing COBRA coverage
• Losing individual health insurance coverage for a current plan bought by the insured
• Losing eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP)
• Losing coverage through a family member

Special Enrollment Period

A Special Enrollment Period is triggered when an individual loses their health insurance coverage for reasons other than voluntary cancellation, non-payment of premiums, or rescission. During the SEP, individuals have 30 to 60 days before or after the qualifying event to make plan changes or sign up for new coverage.

Options for Health Insurance Coverage after Losing Insurance

• Purchase a short-term health plan: Short-term health insurance can provide temporary coverage until another policy takes effect. These plans are typically inexpensive and can be purchased at any time of the year. However, they do not cover pre-existing conditions and may not include essential health benefits.
• Buy an ACA-compliant individual plan: Individuals can purchase ACA-compliant plans through the state health insurance exchange, which offers premium subsidies and cost-sharing reductions to make coverage more affordable.
• Check Medicaid eligibility: Medicaid provides free or low-cost health coverage for individuals and families who meet certain income and eligibility requirements.
• Get coverage through an employer: Employer-sponsored health insurance often offers substantial benefits and lower premiums.

Change in residence

Moving house is a significant life change that may affect your health insurance options. A change in residence is a qualifying life event that allows you to change your health plan outside of the annual Open Enrollment Period. This is especially true if your new location impacts the insurance options available to you.

A change in residence is a qualifying life event when it involves relocating to a new zip code, county, or state that changes your health plan area. This means that your current coverage is no longer available in your new location, or there are new plans to consider.

Examples of Qualifying Changes in Residence

• Moving to a different zip code, county, or state
• For students, moving to or from school
• For seasonal workers, moving to or from a work location
• Moving in or out of a shelter or transitional housing
• Moving to the US from a US territory or foreign country

Documentation for a Change in Residence

When enrolling in a new plan, you may be required to provide documentation of your qualifying life event. For a change in residence, this could include:

• New rental agreements
• Deeds or mortgages
• Proof of residency from your old and new addresses
• Driver's license or state identification card
• Official school documentation
• Letter from your employer confirming you relocated for work
• Green card, education certificate, or visa if you moved to the US from another country

Change in household

Changes in household are a qualifying life event (QLE) that triggers a Special Enrollment Period (SEP) for health insurance. A QLE is a change in your life situation that makes you eligible to enroll in health insurance outside of the annual Open Enrollment Period. This period is usually from November 1 to January 15, though the dates vary by state. A SEP is a window of time when people can enroll in health insurance outside of the Open Enrollment Period.

• Marriage: When you get married, you have 60 days from the date of marriage to change your coverage, including adding your spouse to your employer-sponsored health plan.
• Divorce: In the event of a divorce, the spouse who does not hold the policy may be able to purchase their own individual plan through an SEP.
• Having a baby or adopting a child: You typically have 60 days from the date of a baby's delivery or a child's adoption to enroll coverage for them.
• Death of a family member: If you share health coverage with a family member who passes away, it is a QLE. This includes the loss of the primary holder of your family's health insurance policy, the loss of a minor child, and the loss of a family member whose income contributed to insurance coverage.

If you experience a change in your household, it's important to contact your insurer or the Marketplace to understand your coverage options and what documentation you need to provide.

Change in employment status

A change in employment status can be a life-changing event that impacts your health insurance coverage. Here are some ways in which changes in your employment status can affect your insurance:

Loss of Job-Based Coverage

Losing your job and the employer-sponsored insurance that comes with it is a significant life event that can trigger a Special Enrollment Period (SEP). This allows you to enrol in a new health insurance plan or change your existing plan outside the standard Open Enrollment Period. It's important to note that if you voluntarily dropped your job-based coverage or lost it due to non-payment of premiums, you typically won't qualify for an SEP.

Re-employment after a Break

Re-entering the workforce after a break in employment can be a qualifying life event. If you find yourself re-employed after a break in service of more than three days, you may be eligible to make changes to your insurance coverage. This could include enrolling in a new plan or modifying your existing coverage.

Changes in Pay Status

Changes in your pay status can also impact your insurance situation. If your coverage was terminated during a leave without pay, or if your leave without pay status lasted for more than 365 days, you may qualify for a special enrollment period to adjust your insurance coverage. Additionally, if your pay increases to a level where premiums can be withheld, this too could be a qualifying life event.

Transition from Temporary to Entitled Appointment

Transitioning from a temporary appointment to an appointment that entitles you to a government contribution towards your health insurance can be considered a qualifying life event. This change in employment status gives you the opportunity to review and make changes to your insurance plan.

Transition to or from Part-Time Career Employment

A shift in your career from full-time to part-time or vice versa can be a significant change that impacts your insurance eligibility. This type of employment status alteration can trigger a special enrollment period, allowing you to adjust your insurance coverage to suit your new circumstances.

Turning 26

The special enrollment period provides a 4-month window to choose a health insurance plan, including the 60 days before and after your 26th birthday. This period helps individuals avoid a coverage gap, which is a period without health insurance coverage, during which individuals would have to pay the full price for healthcare services, including medical emergencies.

It is important to note that the specific date when coverage under a parent's plan ends can vary. For private health insurance through an employer, the end date is typically determined by the employer and could be the last day of the birth month or the end of the calendar year. For those covered by their parents' Affordable Care Act (ACA) plan, coverage will usually continue until the last day of the calendar year.

To ensure continuous coverage, it is recommended to contact the insurance company or the Marketplace in advance to understand the options and choose a suitable plan. This proactive approach will help individuals make informed decisions about their health insurance and avoid any gaps in coverage as they transition to independent health insurance at the age of 26.

Additionally, turning 26 and losing coverage from a parent's health plan is considered a loss of health coverage, which is one of the basic types of qualifying life events. This event triggers the special enrollment period, allowing individuals to enroll in a new plan outside of the annual Open Enrollment Period.

Frequently asked questions