Lost Your Health Insurance? Not Open Enrollment? What Now?

If you’ve lost your health insurance and you’re looking for a replacement health plan, you may be alarmed to learn that your state's health insurance exchange (and off-exchange market, where you buy coverage directly from an insurer instead of through the exchange) limits plan purchases to an annual open enrollment period. But what happens if you’re losing your health insurance and have months to go before the next open enrollment period? How do you get health insurance and avoid being uninsured?

Man leaving an office with his belongings in a cardboard box
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One-Time COVID/American Rescue Plan Enrollment Window in 2021

Although your loss of coverage is a qualifying event that will open a special enrollment period (described in more detail below), most Americans have access to what is essentially an extended open enrollment period in 2021. In most states, this window continues through August 15, 2021, although there are some states with earlier or later deadlines—some even extending through the end of 2021.

The extra enrollment opportunity in 2021 is designed to address the ongoing COVID pandemic and to ensure that people have an opportunity to take advantage of the American Rescue Plan's additional premium subsidies.

In most states, the COVID/ARP enrollment window is available to new enrollees and existing enrollees who wish to change plans, although some states have taken a more restrictive approach. But in general, most people will find that they can simply enroll in a plan through their state's exchange, through the middle of August in most states, without having to show proof of a qualifying event.

But if your state is no longer offering this extra enrollment opportunity, never fear: Your loss of coverage will still open a special enrollment period and you'll be able to select a new plan.

It's important to understand that the American Rescue Plan also provides a full government subsidy for the cost of COBRA or state continuation coverage, through September 2021, for people who involuntarily lose their job or experience a reduction in their work hours. If you're losing your job and your health insurance and have the option to continue it with COBRA or state continuation, you'll want to consider that option and see how it compares with purchasing a plan in the individual market.

Part of the decision will depend on how much you've already spent in out-of-pocket costs, how much you expect to spend by September, whether you'll be able to pay the full cost of COBRA after September, and whether you'll want to transition to an individual/family plan at that point (there will be a special enrollment period available for people whose COBRA/state continuation subsidy is ending, so that will be an option for those who want it).

Special Enrollment Period

Depending on when and why you lost your health insurance, you may be eligible for a special enrollment period on your state’s Affordable Care Act health insurance exchange (and special enrollment periods due to loss of coverage apply outside the exchange too). A special enrollment period allows you to sign up for health insurance even though it’s not open enrollment.

Special enrollment periods are time-limited and are triggered by specific types of events. If you dawdle and don’t enroll in a new plan before the end of your special enrollment period, you’ll have to wait until the next open enrollment period to sign up.

Are You Eligible for Special Enrollment?

Certain qualifying events trigger a special enrollment period (SEP) that will let you sign up for a plan on your state’s health insurance exchange, or directly through a health insurance carrier in the off-exchange market (no financial assistance is available outside the exchange). Losing your existing coverage (as long as it's minimum essential coverage) will trigger a special enrollment period, as long as you didn't cancel the plan yourself, lose it due to non-payment of premiums, or lose it due to rescission. Here are some specific examples of loss of coverage events that will make you eligible for a special enrollment period:

  • You get laid off and lose your job-based health insurance.
  • You get divorced and lose the health insurance your former spouse’s job provided.
  • You turn 26 and aren’t eligible for coverage under your parent’s health plan anymore.
  • Your spouse dies causing you to lose the health insurance he or she provided.
  • You move out of your current health plan’s service area and it won’t cover you at your new address (note that moving to a new area is only a qualifying event if you already had minimum essential coverage at your prior location).
  • Your employer cuts back on your work hours making you ineligible for job-based health insurance.

One thing that doesn’t trigger a special enrollment period is losing your health insurance because you didn’t pay the monthly premiums or because you voluntarily canceled the coverage. This isn’t included as a triggering event because it would allow people to game the system and switch to a new health plan whenever they wanted. For example, you could buy a health plan with lousy coverage inexpensively and then change to a plan with better coverage when you get sick. This would defeat the purpose of an open enrollment period.

Loss of a job (without an accompanying loss of employer-sponsored health insurance) and/or a drop in income is also not a qualifying event unless you're already enrolled in an individual market plan, in which case you might have the opportunity to switch to a different plan if the change in income changes your eligibility for premium subsidies and/or cost-sharing reductions.

How Special Enrollment Works

Here’s an example.

You have health insurance through your job, but your company isn’t doing very well financially. A couple of months after the Obamacare open enrollment period closes, you get laid off and lose your job-based health insurance.

You may be eligible to continue your current health plan using COBRA or state continuation, but instead, you decide you’d rather get a new health plan on your state’s health insurance exchange (as noted above, COBRA is free through September 2021 under the American Rescue Plan, for people who would otherwise lose their coverage due to involuntary job loss or involuntary reduction of hours).

You’re eligible for a special enrollment period because you just lost your job-based health insurance due to being laid off. Note that you're eligible to get a plan in the individual market—on or off-exchange—even if you also have the option to continue your job-based insurance via COBRA or state continuation. You have the full 60-day election period to pick COBRA or an individual market plan, and you're allowed to change your mind within that 60-day window too, which wasn't the case prior to 2017.

You go to your health insurance exchange’s website or call your exchange and enroll in a new health plan. If your employer’s plan was covering your spouse and kids, they’re eligible for a special enrollment period, also. You can each sign up for individual health insurance or you can get a family plan on the exchange.

Since your income has taken a hit by being laid off, you may also qualify for a subsidy to help you pay the monthly health insurance premiums. Subsidy eligibility is based on your income and can be paid directly to your new insurance company to lower the amount you have to pay each month for coverage. There are also subsidies that help to lower your out-of-pocket maximum and cost-sharing obligations like deductibles, copayments, and coinsurance.

The subsidy that reduces your cost-sharing and out-of-pocket maximum is called cost-sharing reductions, or CSR, and it's only available if you have eligible income and you pick a silver plan in the exchange. The subsidy to reduce your premiums can be used with any metal level plans in the exchange (bronze, silver, gold, or platinum).

You apply for these subsidies through your health insurance exchange as you’re going through the health insurance enrollment process. Subsidies can only be used with health insurance purchased on your state’s Affordable Care Act health insurance exchange. So although your special enrollment period will give you the option of enrolling outside the exchange if you prefer, you can’t get a subsidy to help pay for health insurance not purchased through your exchange (but again, there's a different subsidy, provided by the American Rescue Plan, which will cover the cost of COBRA or state continuation coverage through September 2021).

Depending on your household income, Medicaid may be available, or your kids may qualify for coverage under the Children's Health Insurance Program. If you're enrolling through your state's health insurance exchange and applying for financial assistance, the exchange will first check to see if any members of the household are eligible for Medicaid or CHIP. If not, they will next check to see if the household is eligible for premium subsidies and/or cost-sharing subsidies to help with the costs associated with private health insurance.

No SEP If You're Losing Coverage That Isn't Minimum Essential Coverage

Involuntary loss of coverage is a qualifying event that triggers a special enrollment period, but only if the coverage you're losing is considered minimum essential coverage. If you have coverage that is not considered minimum essential coverage (a short-term plan, for example, or a fixed- indemnity policy), the loss of that plan would not trigger a special enrollment period in the individual insurance market.

This is especially important to understand if you have coverage under a short-term plan, as those policies have pre-determined termination dates. Short-term plans in some states can last for up to a year and insurers have the option to renew them for a total duration of up to three years. But when a short-term plan ends, you're not eligible to sign up for an ACA-compliant individual market plan (in the exchange or outside the exchange) if it's outside of open enrollment (note that there's an exception in Idaho, for people who have coverage under an "enhanced" short-term plan for at least 11 months).

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