Understanding Life Events: Impact On Health Insurance Options

Life can be unpredictable, and sometimes we experience significant changes that impact our health insurance coverage. These events, known as Qualifying Life Events (QLEs), allow individuals to make adjustments to their health insurance plans outside of the usual annual Open Enrollment Period. QLEs are typically divided into four main categories: Loss of Health Coverage, Changes in Household, Changes in Residence, and Other Qualifying Events. These include situations like losing job-based or employer-sponsored health insurance, getting married or divorced, moving to a different state, or turning 26 and aging out of a parent's health plan. Understanding QLEs is essential for navigating health insurance options and ensuring continuous coverage during life's unexpected twists and turns.

Loss of health coverage

Losing health coverage is a qualifying life event (QLE) that can make you eligible for a Special Enrollment Period (SEP). This allows you to enroll in a new health insurance plan outside the yearly Open Enrollment Period.

There are several ways in which you can lose your health coverage, which can be categorised as either an involuntary or voluntary loss of coverage. An involuntary loss of coverage occurs when you lose your coverage for reasons other than cancellation by choice, non-payment of premiums, or rescission. This can include losing your job and employer-sponsored insurance, losing your eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP), or turning 26 and losing coverage from your parent's health plan. In these cases, you may qualify for an SEP, which will give you time to enroll in a new health plan with no coverage gap.

On the other hand, a voluntary loss of coverage occurs when you cancel your health insurance plan by choice. This can include cancelling your plan because you no longer need it or because you can no longer afford the premiums. In these cases, you may not qualify for an SEP and will need to explore other options for coverage, such as Medicaid or other government-run health insurance programs.

It is important to note that the rules and regulations regarding loss of health coverage as a qualifying life event may vary depending on your location and the specific health insurance plan you have. Additionally, the effective date rules for your new plan will depend on whether you apply before or after your old plan ends. If you apply before your old plan ends, your new plan will typically take effect on the first day of the month following the loss of coverage. If you apply after your old plan ends, there may be a gap in coverage, and your new plan will take effect on the first day of the following month.

Changes in household

Examples of Changes in Household

• Having a baby or adopting a child: Adding a new dependent to your health insurance policy is considered a QLE. Typically, parents have 60 days from a baby's delivery or a child's adoption to enrol coverage for their child.
• Experiencing a death in the family: If a family member who was providing you with health insurance coverage passes away, this is a QLE. Examples include the loss of the primary holder of your family's health insurance policy, the loss of a minor child, or the loss of a family member whose income contributed to insurance coverage.
• Marriage: Getting married is a QLE as the size of your household is changing, and coverage must be adjusted to reflect that. You will 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: A divorce decree or proof of legal separation may allow the spouse who does not hold the policy to purchase their own individual plan through an SEP.
• Receiving a foster child: If you receive a foster child, this is a QLE, and you will be able to make changes to your health plan.

Documentation for Changes in Household

When enrolling in a plan after a qualifying life event, you may be required to provide relevant documentation. For changes in household, this could include birth certificates, adoption records, marriage licenses, divorce paperwork, or a death certificate.

Changes in residence

If you move out of your current health plan's service area, you may need to switch to a new plan. This is because your current plan may not cover services in your new area. For example, if you move out of an HMO's service area, you will likely need to change your coverage.

To enrol in a new plan or change your existing coverage, you will typically have 30 to 60 days before or after the move to make these adjustments. It is important to plan ahead and contact your insurer or the Marketplace in advance to avoid a coverage gap.

When enrolling in a new plan, you may be required to provide documentation of your move. This could include new rental agreements, deeds, or mortgages that show you have moved into a new health insurance plan area.

Other qualifying events

Qualifying life events (QLEs) are changes in your situation that can make you eligible for a Special Enrollment Period, allowing you to enroll in a health insurance plan outside of the yearly Open Enrollment Period. Here are some examples of "other qualifying events" that fall outside of the basic categories of Loss of Health Coverage, Changes in Household, and Changes in Residence:

• Changes in your income that affect the coverage you qualify for.
• Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder.
• Changes in your legal status, such as becoming a U.S. citizen or gaining lawful presence.
• Changes in your incarceration status, such as leaving incarceration (jail or prison) or being released from jail or prison.
• AmeriCorps members starting or ending their service.
• Cancellation of a hardship exemption.
• Gaining or losing a dependent due to divorce, legal separation, or death.
• Misconduct or misinformation during your enrollment, such as being enrolled in the wrong plan or not receiving timely notice of a qualifying event.
• Returning from active military duty and losing coverage.
• Gaining access to an individual coverage HRA (ICHRA) or being provided with a qualified small employer health reimbursement arrangement (QSEHRA).

Loss of employer-sponsored coverage

Losing your employer-sponsored health insurance is a life event that qualifies you to make changes to your health plan or sign up for a new one. This is the case whether you leave your job voluntarily or involuntarily.

If you lose your job-based health insurance, you are eligible for a Special Enrollment Period (SEP). This is a window of time outside of the yearly Open Enrollment Period when you can enrol in a new health insurance plan. In most states, you have 60 days from the date of losing your coverage to apply for a new plan, but this may vary depending on your location. The 60-day window may begin 60 days before the loss of your coverage and end 60 days after. During this time, you can either elect COBRA, which allows you to continue your employer-sponsored plan, or pick a new plan in the individual market.

If you choose to elect COBRA, you have 60 days to decide, starting from the later date of your coverage end date or the date you are given the COBRA election notice. Your coverage will be retroactive, coinciding with the date your employer-sponsored plan ended. However, if you want to avoid a gap in coverage, you should sign up for your new plan before your employer-sponsored plan ends.

If you are eligible for subsidies, you will need to get your plan through the exchange marketplace. Premium tax credits and cost-sharing subsidies are available only for plans in the individual market and only if you qualify for them.

Frequently asked questions