May 20, 2016
One MAJOR difference brought about by the ACA is in the enrollment process for health insurance. If you purchase your own insurance through the Marketplace or directly through an insurance company, there are two ways in which you can enroll in coverage:
- During Open Enrollment: Open Enrollment is scheduled to take place from November 1st – January 31st each year. During this period, anyone can sign up for coverage or change the plan they currently have. There are no medical questionnaires and you cannot be denied coverage for pre-existing conditions.
- During a Special Enrollment Period (SEP): After Open Enrollment has ended, you can only enroll in new coverage or change your plan if you experience a “qualifying event” in your life. These include:
- The loss of employer-based coverage or government coverage like Medicaid or Veteran’s benefits.
- Marriage, birth of a child/adoption, divorce
- Moving to a new state or coverage area
- Death of a spouse or child
- Turning 26 and being taken off your parents’ health plan
- Becoming a U.S. citizen
- Being released from incarceration
You can see if you might qualify for a Special Enrollment Period with this screening tool: https://www.healthcare.gov/screener/.
You have 60 days after a Qualifying Event occurs to sign up with a Special Enrollment Period.
If you need coverage but do not qualify for a SEP, you will have to wait until the next Open Enrollment Period to sign up for qualified coverage. You can get short-term coverage to bridge the gap, but that coverage is not considered “qualified” – you would still have to pay a penalty for the months you have no insurance or the short-term insurance.
The reason that these rules have been put in place is to prevent people from waiting to sign up for coverage until they have health issues and need insurance. Since you can no longer be denied for pre-existing conditions, the financial model of the new system depends on having healthy members enrolled to offset the costs of those with medical issues. Allowing people to sign up only when they need coverage would destroy the financial assumptions behind the ACA model.