Understanding Insurance Cancellation: Qualifying Life Event?

A qualifying life event (QLE) is a change in your situation that can make you eligible for a Special Enrollment Period (SEP), allowing you to enroll in health insurance outside the yearly Open Enrollment Period. While the specifics vary depending on the region and type of insurance, QLEs generally include circumstances that may impact your current health insurance coverage and make it necessary to enroll in a new plan. This could include losing your health coverage, changes in your household, or a change in residence.

Loss of health coverage

In the United States, a qualifying life event (QLE) is a change in your situation that can make you eligible for a Special Enrollment Period (SEP). This allows you to enrol in health insurance outside the yearly Open Enrollment Period.

If you or any member of your household loses their existing coverage, you may qualify for an SEP. This could be due to losing your job and employer-sponsored insurance, or other involuntary loss of coverage, such as from divorce or the death of a family policyholder. It's important to note that voluntarily dropping your coverage, such as by choosing to drop off a parent or guardian's plan, does not qualify for an SEP.

To enrol in a new health plan during an SEP, you typically have 60 days before or after the qualifying life event. However, this may vary depending on the state and specific circumstances. Contacting your insurer or the Marketplace can help clarify your options and any necessary documentation.

Changes in household

Household changes involve a circumstance in which one or more members of your immediate household become eligible or lose eligibility for coverage under an existing plan. These may include, but are not limited to:

• Getting married, divorced, or legally separated
• Having a baby, adopting a child, or receiving a foster child
• Death of the primary policyholder in the family

Marriage: For those getting married, you’ll be allowed a 60-day window from the date of marriage to change your coverage, including adding a spouse to your employer-sponsored health plan.

Divorce or legal separation: 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 if they have a divorce decree or proof of legal separation. However, this can get complicated depending on legal proceedings and state rules.

Giving birth and adopting are both considered qualifying life events, as you are adding a new dependent to your health insurance and changing the size of your household. Typically, parents have a 60-day window from a baby’s delivery or a child’s adoption to enrol coverage for their little one.

It is important to note that the documentation required for qualifying life events may vary depending on the specific event and the state you live in. Therefore, it is always recommended to contact your insurer or the Marketplace to understand your coverage options and the specific documentation required.

Changes in residence

Types of Residence Changes that Qualify

There are several types of changes in residence that qualify as a QLE:

• Moving to a different zip code or county: If you relocate to a new zip code or county, it may trigger a QLE if it changes your health plan area.
• Student housing: If a student moves to or from their place of study, this can be considered a QLE.
• Seasonal worker housing: Similarly, if a seasonal worker moves to or from their place of work and residence, this can qualify as a QLE.
• Transitional housing: Moving to or from a shelter or other transitional housing is also considered a QLE.
• International relocation: Moving to the US from a US territory or foreign country can be a QLE.
• Domestic relocation: Moving within the US to a different state that changes your health plan area may also be a QLE.

Documentation for Residence Changes

When enrolling in a new plan due to a QLE, you may be required to provide documentation of your move. This could include proof of residency from both your new and old addresses, such as new rental agreements, deeds, or mortgages. It is important to note that documentation requirements may vary, so it is recommended to contact your insurer or the Marketplace to understand what specific documents are necessary for eligibility.

Loss of job-based coverage

Losing job-based coverage is a qualifying life event (QLE) that allows you to make changes to your health insurance plan outside of the yearly Open Enrollment Period. This includes losing your job and employer-sponsored insurance.

If you leave your job and lose your health insurance, you are eligible for a Special Enrollment Period (SEP) to enroll in a new health plan with no coverage gap. The SEP is a period during which you can apply for essential health insurance coverage 60 days before or after a qualifying life event. This is generally the only time when you can sign up for a new health insurance plan or change an existing plan outside the Open Enrollment Period.

If you have the option to continue your employer-sponsored plan with COBRA, losing your group health plan is still considered a loss of coverage qualifying life event. You can choose to elect COBRA, or you can use your special enrollment period to pick a new plan in the individual market. Your special enrollment period begins 60 days before your employer-sponsored policy ends and continues for another 60 days after the plan ends, even if you had the option to extend your coverage with COBRA.

If you are able to cancel your employer-sponsored health plan, make sure your spouse's coverage does not require you to enroll in their health plan under the spousal provision. Depending on your state's policies, you may be required to keep your employer-offered health insurance if your employer pays more than 50% of the premium on the lowest-premium plan available. That must be your primary insurance, but you can still have your spouse's insurance as secondary insurance through a coordination of benefits.

If you know you will soon experience a qualifying life event, contacting your insurer or the Marketplace in advance can help avoid a coverage gap. If you experience an unexpected life change, contact your insurer or the Marketplace as soon as possible after the event occurs to understand your coverage options.

Death in the family

The death of a family member is a qualifying life event (QLE) for health insurance. This includes the death of the primary policyholder in the family, the loss of a minor child, or the loss of a family member whose income contributed to the insurance coverage.

If you share health coverage with a family member who passes away, you may be eligible for a Special Enrollment Period (SEP) to change your insurance plan outside of the yearly Open Enrollment Period. An SEP is a window of time when people can enroll in health insurance outside of the Open Enrollment Period. It is typically triggered by a QLE.

To sign up for health insurance after experiencing a QLE, you will typically have 60 days before or after the qualifying life event to apply for health coverage. However, this timeframe may vary depending on the state and specific circumstances.

When enrolling in a new plan, you may be required to provide documentation of the qualifying life event, such as a death certificate. It is recommended to contact your insurer or the Marketplace to understand your coverage options and any specific requirements.

Frequently asked questions