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

Man leaving an office with his belongings in a cardboard box
Losing your health insurance gives you access to a special enrollment period to get a new plan.

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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 in every state except Nevada) only allows you to sign up for a health plan during the 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?

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. 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. Through 2019, the option to switch plans due to a change in income (that made you newly-eligible for subsidies) was limited to people who had coverage in the exchange. But as of 2020, this provision also applies to people who have coverage outside the exchange, allowing them to switch to an on-exchange plan with subsidies.

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. 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. 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 (that includes COBRA and state continuation of small group coverage; if you opt to keep your coverage via COBRA or state continuation, you'll have to pay the full premium yourself).

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 the majority of the states have imposed stricter rules than that (you can click on your state on this map to see how short-term plans are regulated). So even though the federal government has expanded short-term plans, there are still quite a few states where the plans are limited to just three or six months in duration. And 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.

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  1. Norris, Louise. healthinsurance.org. I’m leaving my job – and my insurance – on April 30. Do I qualify for open enrollment on May 1? or do I have to take COBRA?

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