Is Losing Insurance a Qualifying Event?

Health insurance enrollment typically occurs during specific periods each year, known as Open Enrollment. Outside of this annual window, certain life changes can create an exception, enabling individuals to enroll in health coverage. Losing health insurance can sometimes be one of these significant life events, triggering what is known as a Special Enrollment Period.

Understanding Qualifying Events

A qualifying event represents a significant life change that allows individuals to enroll in health insurance coverage outside of the standard annual Open Enrollment Period. A Special Enrollment Period (SEP) is granted following a qualifying event, providing a limited timeframe to select a new health plan. It is important to distinguish these events from simply deciding to change health plans, as a qualifying event must typically involve a loss of minimum essential coverage or a substantial shift in personal circumstances.

Loss of Coverage That Qualifies

Involuntary loss of health coverage is recognized as a qualifying event, allowing access to a Special Enrollment Period. Losing job-based coverage due to layoffs, termination, or a reduction in work hours that results in loss of eligibility is a common example. This applies not only to the employee but also to any dependents covered under that plan.

Individuals who age off a parent’s health insurance plan upon turning 26 experience a qualifying loss of coverage. Other qualifying losses include losing eligibility for government-sponsored programs like Medicaid or the Children’s Health Insurance Program (CHIP). If an employer discontinues offering health coverage entirely, this also serves as a qualifying event for affected employees.

The expiration of Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, after its maximum duration, is another specific qualifying event. However, it is the expiration of COBRA, not merely electing it, that triggers this opportunity.

Significant life changes within a household can also lead to a qualifying loss of coverage for certain family members. Divorce or legal separation can result in a spouse or dependents losing coverage under a former partner’s plan, making this a qualifying event. The death of the primary policyholder also qualifies, as it often leads to dependents losing their existing health coverage.

Loss of Coverage That Does Not Qualify

Not all instances of losing health coverage are considered qualifying events for a Special Enrollment Period. Voluntarily deciding to terminate a health insurance plan, perhaps to save money, does not open a Special Enrollment Period. If coverage is lost because premiums were not paid on time, this is not a qualifying event.

Losing coverage due to misrepresentation or fraud on the part of the enrollee also prevents access to a Special Enrollment Period. If an employer changes health plans but you retain access to comparable coverage, this does not qualify you for an SEP.

Losing a health plan that was not considered “minimum essential coverage” (MEC) under the Affordable Care Act (ACA) does not trigger a Special Enrollment Period. MEC includes most job-based plans, Marketplace plans, Medicare, and Medicaid. Therefore, losing limited benefit plans or certain short-term plans, which often do not meet MEC standards, would not qualify an individual for an SEP.

Actions After a Qualifying Event

After a qualifying event that leads to a loss of health coverage, prompt action is necessary. Individuals typically have a specific window, often 60 days from the date of the event or loss of coverage, to enroll in a new plan through a Special Enrollment Period. In some cases, such as losing Medicaid or CHIP coverage, this period might extend to 90 days.

Act quickly, as missing this deadline means waiting until the next annual Open Enrollment Period to obtain coverage. The primary avenue for new coverage after a qualifying event is the Health Insurance Marketplace. If the qualifying event allows, such as a marriage, enrollment might also be possible in a spouse’s existing employer-sponsored plan. Individuals with significant income changes potentially qualifying them for Medicaid or CHIP can apply for these programs at any time.

When applying, proof of the qualifying event is required to confirm eligibility for the Special Enrollment Period. This documentation varies by event but can include a termination letter from an employer, a divorce decree, a birth certificate, a death certificate, or a notice from a previous insurer confirming loss of coverage. New coverage begins on the first day of the month following plan selection, provided the first premium is paid and eligibility is confirmed.