Insurance Status: What Changes It?

A change in status for insurance, also known as a qualifying life event (QLE), is a life-changing situation that can impact your health insurance options. These events allow you to purchase or change your insurance coverage outside of the yearly Open Enrollment Period. Examples of QLEs include getting married, having a baby, losing health coverage, moving to a different zip code or county, and turning 26 and losing coverage from a parent's plan. When a QLE occurs, you typically have a limited time frame, such as 30 or 60 days, to make changes to your insurance plan. It's important to notify your insurance provider as soon as possible and provide the necessary documentation to support your qualifying life event.

Characteristics of a Change in Status for Insurance

Getting married or divorced

Health Insurance

In terms of health insurance, getting married or divorced is considered a "qualifying life event" (QLE) or "qualifying life change." This means that you may be able to add or remove your spouse from your health insurance plan outside of the usual Open Enrollment Period. Typically, you will have a specific time frame, such as 31 or 60 days, before or after the marriage or divorce, to make these changes. It is important to notify your health insurance provider as soon as possible and provide the necessary documentation, such as a marriage or divorce certificate.

Car Insurance

Your marital status can also impact your car insurance rates. On average, married couples tend to pay lower premiums for car insurance compared to single, widowed, or divorced individuals. This is because married drivers are often considered more financially stable and safer, resulting in fewer claims. As a result, insurance companies view married couples as "lower-risk" clients. However, if you get divorced, your insurance rates may increase since divorced drivers are generally seen as riskier and tend to file more claims.

Additionally, getting married or divorced can lead to administrative tasks related to your car insurance. You may need to update your name and address with your insurance company and the relevant vehicle registration authorities. There may be associated admin fees for making these changes. It is important to inform your insurer of any changes in your marital status, address, or name to ensure your policy remains valid and compliant.

Having a baby or adopting a child

Health Insurance

The birth of a child or adoption is considered a qualifying life event for health insurance. This means that you will have a special enrollment period, typically lasting 60 days from the date of the event, to make changes to your health insurance plan. During this time, you can enrol your newborn or adopted child in a health insurance plan, regardless of the time of year. If you already have health insurance, you can use this special enrollment period to add your child to your existing plan. It is important to note that pregnancy itself is not considered a qualifying life event, but the baby's birth is.

Timing and Documentation

Most health insurance providers require you to make these changes within a specific timeframe. For example, in Texas, you have 31 days from the date of the birth or adoption to add or change coverage for yourself and your child. In Minnesota, you have 30 days to add medical, dental, and optional life coverages, and 60 days to drop these coverages if needed. Be sure to notify your health insurance provider as soon as possible after the birth or adoption to initiate these changes and avoid any delays. You may be required to provide certain documentation, such as birth certificates or adoption records, to prove the qualifying life event.

Life Insurance

In addition to health insurance changes, having a baby or adopting a child may prompt you to reevaluate your life insurance coverage. A term life insurance policy can provide financial protection for your children if something unexpected happens to you. Child life insurance is also an option to consider, especially if you plan to have multiple children.

Home Insurance

If your growing family leads to a move to a bigger home or significant home improvements, you will want to review your home insurance policy. Shop around for quotes to ensure you're getting a fair price, and don't forget to update your insurance company on any home improvements to adjust your coverage accordingly.

Other Insurance Considerations

Moving to a new area

Health Insurance

Moving to a different zip code or county can be considered a QLE for health insurance. This change in residence allows you to sign up for a new health insurance plan or modify your existing plan outside of the standard Open Enrollment Period. It is important to notify your health insurance provider as soon as possible after moving to understand your options and make any necessary changes to your coverage.

If you move within the same state, you typically only need to update your address and may not need to select a new plan. However, if you move to a different state, you will need to start a new application and enroll in a plan in your new state. Each state has different health insurance requirements, and you need to ensure you have coverage that applies in your new location.

Car Insurance

When it comes to car insurance, moving to a new area, especially out of state, can result in changes to your insurance rate and coverage. Rates are often influenced by the area's claims history, so a move to a neighbourhood with fewer thefts, break-ins, and accidents can lead to lower rates, while a move to an area with higher claims could increase your rate.

If you're moving out of state, it's essential to check with your current car insurance provider to see if they offer coverage in your new state. Insurance agents are typically licensed in a single state, so you may need to switch providers. Additionally, each state has unique laws and requirements for insurance coverage, which can include mandatory minimum coverage levels and specific types of coverage, such as underinsured/uninsured motorist protection or personal injury protection.

Even if you're staying within the same state, it's important to notify your car insurance company of your change of address. Your new location and commute distance may impact your insurance rate.

In summary, moving to a new area can trigger a QLE for health insurance, allowing you to make changes to your coverage. For car insurance, a move can result in adjustments to your insurance rate and coverage, and you may need to switch providers, especially if you're moving out of state. Be sure to review the requirements of your new state and update your insurance information promptly to ensure continuous coverage.

Loss of health insurance

Losing your health insurance can be a stressful life event, but it is what is known as a qualifying life event (QLE) or a qualifying life change, which means you have the opportunity to sign up for a new health insurance plan or change an existing plan outside of the yearly Open Enrollment Period. This is known as a Special Enrollment Period.

There are many reasons why someone might lose their health insurance coverage, and some of these include:

• Losing a job and, as a result, losing coverage from an employer-sponsored plan.
• Losing coverage due to a raise in income.
• Losing coverage because a plan expired, such as COBRA.
• Losing student coverage because you are no longer a student.
• Turning 26 and losing coverage from a parent's plan.
• Turning 19 and no longer qualifying for a child-only plan.

It is important to note that a voluntary loss of coverage, such as failing to pay your premium or cancelling your coverage, is not considered a qualifying life event. However, if you lose your coverage involuntarily, you have 60 days to enrol in a new health insurance plan.

Change in employment status

A change in employment status is a qualifying life event (QLE) that allows individuals to make changes to their existing insurance coverage. This includes situations where an individual is hired for a new job, quits their job, or is laid off. Moving from part-time to full-time employment is also considered a change in employment status.

When an individual experiences a QLE, they are given the opportunity to add or change their insurance coverage within a specified time frame, often 30 to 60 days after the event. For example, if an individual is hired for a new job, they may need to satisfy a waiting period before becoming eligible for their new employer's insurance plan. On the other hand, if an individual quits their job or is laid off, they may lose their existing job-based coverage and will need to make adjustments to their insurance plan.

It is important to note that the timeframe for making changes to insurance coverage after a QLE may vary depending on the specific circumstances and the employer's or insurance provider's policies. Therefore, it is advisable to review the plan rules and notify the relevant parties, such as the insurance provider or HR department, as soon as possible after experiencing a change in employment status.

In addition to changes in employment status, other types of QLEs include changes in marital status, number of dependents, residence, and income that affect insurance coverage eligibility or requirements. These events allow individuals to make necessary adjustments to their insurance plans outside of the standard open enrollment period.

Frequently asked questions