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Will you owe a penalty under Obamacare?

January 14, 2021

Key takeaways

  • State penalties: Massachusetts, Washington, DC, New Jersey, California, and Rhode Island have penalties.
  • There is no longer a federal penalty for being uninsured.
  • 4 million tax filers were subject to a penalty for being uninsured in 2016
  • Penalties were capped at the national average cost of a bronze plan; states with individual mandate penalties are generally using the state’s average bronze plan rate as a maximum penalty.
  • Here’s an overview of how the penalty worked
  • Exemptions were more common than penalties (New exemptions became available in 2018.)
  • Federal tax return no longer asks about health coverage, but some state returns include that question and Form 8962 is still applicable if you get a premium subsidy.

No longer a federal penalty, but some states impose a penalty on residents who are uninsured

Although there is no longer an individual mandate penalty – or “Obamacare penalty” – at the federal level, some states have implemented their own individual mandates and associated penalties:

  • Massachusetts implemented an individual mandate in 2006, and it’s remained in effect ever since. The state has not double-penalized people while the federal mandate penalty was in effect, but starting in 2019, the state once again began assessing penalties on people who are uninsured and not exempt. The penalty in Massachusetts is calculated as 50 percent of the cost of the lowest-cost plan that the person could have purchased. There’s no penalty if your income is up to 150 percent of the poverty level. If your income is between 150.1 and 300 percent of the poverty level, your penalty is 50 percent of the premium for the lowest-cost ConnectorCare plan, and if your income is over 300 percent of the poverty level, your penalty is 50 percent of the cost of the lowest-cost bronze plan available through the Massachusetts Health Connector. Revenue generated from the penalty is used to help cover the cost of ConnectorCare coverage for people with income under 300 percent of the poverty level.
  • New Jersey has implemented an individual mandate, effective in 2019, with a penalty modeled on the ACA’s penalty. The maximum penalty is based on the average cost of a bronze plan in New Jersey. Revenue generated from the penalty is used to fund the state’s new reinsurance program.
  • The City Council in the District of Columbia approved an individual mandate, with a penalty modeled on the ACA’s penalty. The measure was signed into law by Mayor Muriel Bowser in September 2018, and took effect in January 2019. The maximum penalty is based on the average cost of a bronze plan in DC. Revenue from the penalty is used for outreach and enrollment assistance, as well as programs that improve the availability and affordability of coverage in the District.
  • California has an individual mandate as of 2020, with a penalty modeled on the ACA’s penalty. Revenue from the state’s individual mandate is used to help cover the cost of the state’s new premium subsidies, which extend to higher income levels than the ACA’s premium subsidies.
  • Rhode Island has an individual mandate as of 2020, with a penalty modeled on the ACA’s penalty. Revenue collected via the penalty is used to fund the state’s new reinsurance program.

Vermont enacted legislation to create an individual mandate as of 2020, but lawmakers failed to agree on a penalty for non-compliance, so although the mandate took effect in 2020, it has thus far been essentially toothless (the same as the federal individual mandate, which remains in effect but has no penalty for non-compliance). Vermont could impose a penalty during a future legislative session, but the most recent legislation the state has enacted (H.524/Act63, in June 2019) calls for the state to use the individual mandate information that tax filers report on their tax returns to identify uninsured residents and “provide targeted outreach” to help them obtain affordable health coverage.

2014-2018: Everything you need to know about the federal individual mandate penalty

Although the ACA included provisions to make it easier to buy health insurance – including Medicaid expansion, premium subsidies, and guaranteed-issue coverage – it also included an individual mandate that requires Americans to purchase health coverage or face a tax penalty, unless they were eligible for an exemption).

But the GOP tax bill that was signed into law in late 2017 repealed the individual mandate penalty, starting in 2019 (See Part VIII, Section 11081 of the text of the Tax Cuts and Jobs Act). Although the law was enacted in 2017, there was a delay of more than a year before the Obamacare penalty repeal took effect, and people who were uninsured in 2018—after the law was enacted—still had to pay the individual mandate penalty when they filed their tax returns in 2019.

The individual mandate penalty helped to keep premiums lower than they would otherwise have been. There was no Obamacare penalty back when insurers were allowed to reject applicants with pre-existing conditions, but with coverage now guaranteed-issue, it was important to have a mechanism to ensure that healthy people would remain in the pool of insureds. The individual mandate was part of that, but the ACA’s premium subsidies are likely playing an even larger role, as they keep coverage affordable for most middle-class enrollees, regardless of whether they’re healthy or not.

The Congressional Budget Office has estimated that premiums in the individual market will generally trend 10 percent higher without the individual mandate penalty than they would have been with the penalty. Unsurprisingly, most of the rate filings for 2019 included a rate increase related to the elimination of the penalty. That is now baked into the standard premiums going forward, so the higher rates apply in future years as well.

The individual mandate has long been the least-popular consumer-facing provision of the ACA, although most Americans already had health insurance before the ACA, and didn’t need to worry about the penalty for being uninsured.

It’s worth noting that the elimination of the individual mandate penalty is the crux of the Texas v. US (California v. Texas) lawsuit, which seeks to overturn the entire ACA. The case was heard by the Supreme Court in November 2020, and a ruling is expected in the spring or early summer of 2021.

Uninsured tax filers were more likely to get an exemption than a penalty

Although there were still 33 million uninsured people in the US in 2014, the IRS reported that just 7.9 million tax filers were subject to the penalty in 2014 (out of more than 138 million returns). According to IRS data, 12 million filers qualified for an exemption.

The number of filers subject to the ACA’s penalty was lower for 2015 (on returns that were filed in 2016), as overall enrollment in health insurance plans had continued to grow. The IRS reported in January 2017 that 6.5 million 2015 tax returns had included individual shared responsibility payments. But far more people—12.7 million tax filers—claimed an exemption for the 2015 tax year. For 2016, the IRS reported that 10.7 tax filers had claimed exemptions by April 27, 2017, and that only 4 million 2016 tax returns had included a penalty at that point.

A full list of exemptions and how to claim them is available here, including a summary of how the Trump administration made it easier for people to claim hardship exemptions (hardship exemptions continue to be important in 2019 and beyond, as they’re necessary for people age 30 and older to be able to purchase catastrophic health insurance plans).

Most Americans weren’t affected by the penalty

As noted above, only 4 million tax returns for 2016 included the ACA’s individual mandate penalty (as of late April, 2017; people who got a tax filing extension hadn’t yet filed by that point, so the total number of filers who owed a penalty likely ended up higher than 4 million). The vast majority of tax filers had health insurance, and even among those who didn’t, penalty exemptions were more common than penalty assessments.

Most Americans already get health insurance either from an employer or from the government (Medicaid, Medicare, VA); they didn’t need to worry about the penalty because employer-sponsored and government-sponsored health insurance count as minimum essential coverage.

Individual market major medical plans available on or off-exchange are considered minimum essential coverage, and so are grandfathered plans and grandmothered plans. And although health care sharing ministries are not considered minimum essential coverage, people with sharing ministry coverage were eligible for one of the exemptions under the ACA.

Plans that aren’t considered major medical coverage are not subject to the ACA’s regulations, and do not count as minimum essential coverage, meaning people were subject to the penalty if they relied on something like a short-term plan and were not otherwise exempt from the Obamacare penalty. Things like accident supplements and prescription discount plans may be beneficial, but they do not fulfill the requirement to maintain health insurance.

How big were the penalties?

The IRS reported that for tax filers subject to the penalty in 2014, the average penalty amount was around $210. That increased substantially for 2015, when the average penalty was around $470. The IRS published preliminary data showing penalty amounts on 2016 tax returns filed by March 2, 2017. At that point, 1.8 million returns had been filed that included a penalty, and the total penalty amount was $1.2 billion — an average of about $667 per filer who owed a penalty.

Although the average penalties are in the hundreds of dollars, the ACA’s individual mandate penalty is a progressive tax: if a family earning $500,000 decided not to join the rest of us in the insurance pool, they would have owed a penalty of more than $16,000 for 2018. But to be clear, the vast majority of very high-income families do have health insurance.

Today, the median net family income in the United States is roughly $56,500 (half of U.S. families earn less; half earn more.) For 2018, the penalty for a middle-income family of four earning $60,000 was $2,085 (the flat-rate penalty would have been used, because it was larger than the percentage of income penalty; see details below, under “how the penalty works”). This is far less than the penalty a more affluent family would have paid based on a percentage of their income.

The penalty could never exceed the national average cost for a bronze plan, though. The penalty caps are readjusted annually to reflect changes in the average cost of a bronze plan:

  • The IRS announced in Revenue Procedure 2015-15 that the maximum 2015 penalty was $2,484 for a single individual and $12,420 for a family of five or more (both slightly higher than the maximum penalty amounts for 2014).
  • For 2016, Revenue Procedure 2016-43 increased the maximum penalty to $2,676 for a single individual, and $13,380 for a family of five or more, if they were uninsured in 2016.
  • For 2017, Revenue Procedure 2017-48 increased the maximum penalty to $3,264 for a single individual, and $16,320 for a family of five or more. The significant rate increases that we saw for 2017 (roughly 25 percent) mean that the average bronze plan was quite a bit more expensive in 2017 than it was in 2016. And that means that the maximum penalty was also quite a bit higher.
  • Rates increased considerably again for 2018, although the bulk of the rate increase was on silver plans (due to the elimination of federal reimbursement for cost-sharing reductions). According to Revenue Procedure 2018-43, the national average cost of a bronze plan increased to $3,396 in 2018 for a single individual and $16,980 for a family of five or more. This is the last year that the IRS had to calculate the national average cost of a bronze plan, since the federal individual mandate penalty no longer applies as of 2019. But as noted above, several states have or are implementing individual mandates with maximum penalties based on the average local cost of a bronze plan.

The maximum penalties rarely applied to very many people, since most wealthy households were already insured.

No longer a question on federal tax return about health coverage (but it’s still on some state returns, and Form 8962 is still applicable if you get a premium subsidy)

From 2014 through 2018, the federal Form 1040 included a line where filers had to indicate whether they had health insurance for the full year (see the upper right corner, under the spaces for Social Security numbers).

But since 2019, Form 1040 has no longer included that question, as there’s no longer a penalty for being without coverage.

But state tax returns for DC, Massachusetts, New Jersey, California, and Rhode Island do include a question about health coverage. Maryland’s tax return also asks about health insurance coverage, in order to try to connect uninsured residents with affordable coverage. Colorado’s tax return will have a similar feature as of early 2022 (but Maryland and Colorado do not penalize residents who don’t have health insurance).

In addition, nothing has changed about premium subsidy reconciliation on the federal tax return. People who receive a premium subsidy (or those who enroll through the exchange in a full-price plan but want to claim the subsidy at tax time) will continue to use Form 8962 to reconcile their subsidy. Exchanges, insurers, and employers will continue to use Forms 1095-A, B, and C to report coverage details to enrollees and the IRS.

health-reform-penalty

How the penalty worked

[Note that in most cases, the states that are implementing their own individual mandates are following this same basic outline in terms of how the penalty works, with the details based on the federal penalty levels that applied in 2018.] Your individual mandate tax is the greater of either 1) a flat-dollar amount based on the number of uninsured people in your household; or 2) a percentage of your income (up to the national average cost of a Bronze plan , as determined by the IRS and adjusted annually to reflect changes in premiums).

This means wealthier households will wind up using the second formula, and may be impacted by the upper cap on the penalty. For example: for 2017, an individual earning less than $37,000 would pay just $695 (flat-dollar calculation) while an individual earning $200,000 would pay a penalty equal to the national average cost of a bronze plan ($3,396 for 2018). This is because 2.5% of his income above the tax filing threshold would work out to about $4,740, which is higher than the national average cost of a bronze plan. The IRS publishes the national average cost of a bronze plan in August each year; that amount is used to calculate penalty amounts when returns are filed the following year.

1) Flat-dollar amount

In 2014, the flat-dollar penalty was $95 per uncovered adult (it climbed to $325 in 2015, and $695 in 2016) plus half that amount for each uninsured child under age 18. Your total household penalty is capped at three times the adult rate, no matter how many children you have.

In 2014, that was $285 ($975 in 2015, and $2085 in 2016). Starting in 2017, the flat-rate penalty is subject to annual adjustment for inflation. But for 2017, the IRS confirmed that there was no inflation adjustment, so the flat-rate penalty continued to be $695 per adult in 2017, with a maximum of $2,085 per family. And for 2018, that was once again the case, as the IRS confirmed that the flat rate penalty would remain unchanged in 2018. After 2018, there is no longer be a penalty imposed by the IRS, although New Jersey, Massachusetts, and DC now impose their own penalties; California and Rhode Island will join them in 2020.

2) Percentage of income

In 2014, the penalty was 1 percent. It rose to 2 percent in 2015, and to 2.5 percent for 2016 and beyond.

The penalty is capped at the average cost of a Bronze plan, which for 2018 was $3,396 for an individual and $16,980 for a family of five or more (those maximum amounts are prorated monthly for tax filers who were uninsured for only part of the year). The percentage of income penalty is calculated based on the household’s income above the tax filing threshold.

For most people, “household income” is simply adjusted gross income from Form 1040. But if you have non-taxable Social Security benefits, tax-exempt interest, or foreign earned income and housing expenses for Americans living abroad, you’ll need to add those amount to your AGI from your 1040. Be sure to include income from any dependents who are required to file a tax return.

The post Will you owe a penalty under Obamacare? appeared first on healthinsurance.org.

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How to keep your health insurance when you move to another state

January 11, 2021
  • How do I obtain new coverage when I move to a new state?
  • If you’ll have an unavoidable gap in coverage, a short-term plan might be a good option to bridge the gap.
  • How will my health insurance provider network change when I move to a new state?

Since individual market coverage is regulated and marketed at the state level, a new plan is needed when you move from one state to another. But prior to 2014, health insurance was often an obstacle for people who wanted to move to a new state. In all but five states, individual market coverage was medically underwritten, so people with pre-existing conditions often found it difficult, expensive, or impossible to enroll in new coverage if they were going to need to purchase their own plan (as opposed to getting coverage from an employer, Medicare, or Medicaid).

Many states had state-run high-risk pools, and federal pre-existing condition insurance pools (PICP) were implemented in the years leading up to 2014. But high-risk pools could impose waiting periods for new arrivals to the state, and coverage through the risk pools was often prohibitively expensive and generally had benefit caps that weren’t always adequate.

That’s all a thing of the past, thanks to the Affordable Care Act. In every state, health insurance is guaranteed-issue for all applicants during open enrollment and special enrollment periods — and moving to a new state will trigger a special enrollment period as long as you already had coverage before your move. And the price is the same regardless of whether you have pre-existing conditions. Premiums can vary based on age, zip code, and tobacco use, so you might find that coverage in your new area is priced differently. But if you’re eligible for premium subsidies, the subsidy amount will adjust to reflect the cost of the benchmark plan in your new area.

How do I get new health insurance coverage when I move to a different state?

If you work for a large employer that has business locations throughout the country, you may find that your coverage remains unchanged with your move. But if you buy your health insurance in the individual market, you’ll have to purchase a new plan.

Individual market coverage is guaranteed-issue thanks to Obamacare, but it’s only available for purchase during open enrollment, and during special enrollment periods triggered by qualifying events. Moving to an area where different health plans are available (which includes moving to a new state) is a qualifying event, as long as you already had coverage in your prior location. (This prior coverage requirement took effect in July 2016.)

So you cannot move to a new state in order to take advantage of a special enrollment period if you were uninsured prior to the move. But as long as you had coverage before the move, you’ll have a 60-day enrollment window during which you can pick a new plan – in the exchange or off-exchange – in your new state.


It’s optional for exchanges to allow access to special enrollment periods in advance of a move (as opposed to only after the move has occurred), but there’s no requirement that exchanges offer this feature. So your enrollment period likely won’t begin until the day you move, and the earliest effective date you’ll be eligible for will be the first of the following month. (Normal effective date rules are followed in this case, which means that in most states, you need to enroll by the 15th of the month in order to have coverage effective the first of the following month; this requirement will no longer be used by HealthCare.gov as of 2022, when they will simply allow coverage to be effective the first of the month after you enroll, regardless of the date you enroll.)

That means you may end up having a gap in coverage, depending on the date you move and how far into your 60-day enrollment period you are when you select a new plan in your new state. You’ll want to find out how your current health insurance plan works in your new state; you may only have coverage for emergencies once you leave the state in which your policy was issued.

If you’re concerned about the possibility of having a gap in coverage, you could enroll in a short-term plan to cover you until your new plan takes effect. Short-term plans are not regulated by the ACA, and they don’t count as minimum essential coverage. But they’re specifically designed to cover short gaps in coverage, and they’re perfect for a situation in which your new plan will be taking effect within a few weeks and you only need “just in case” coverage in the meantime.

A short-term plan can have an effective date as early as the day after you apply, and short-term plans are available in nearly every state. Be aware, however, that they generally don’t cover any pre-existing conditions, and they can also reject your application if you have significant pre-existing medical conditions.

How will my health insurance provider network change when I move to a new state?

Particularly in the individual market, health insurers have been moving towards HMOs and narrower networks. So it’s becoming rare for plans to offer network coverage in multiple states. Be prepared for the fact that you will almost certainly have a new provider network with your new plan.

It’s also important to note that even if your health insurer is a big-name carrier that offers plans throughout the country, it will have different individual market plans in each state. So although you might have a Cigna plan already, and Cigna might also be available in the individual market in the state where you’re moving, you’ll need to re-enroll in the new plan once you move.

And although Blue Cross Blue Shield is a household name in the health insurance market, their coverage varies from state to state. The Blue Cross Blue Shield name is licensed by 36 different health insurance carriers across the country; a Blue Cross Blue Shield plan in one state is not the same as a Blue Cross Blue Shield plan in another state.

Additional resources

You can also browse our extensive collection of state health insurance resources, and details about the health insurance exchanges in each state. If your income doesn’t exceed 138 percent of the poverty level (or even higher, if you’re pregnant or looking for coverage for your children), you’ll want to pay attention to the details about how each state’s Medicaid program works and what you need to know about switching to a new state’s Medicaid program.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post How to keep your health insurance when you move to another state appeared first on healthinsurance.org.

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Avoid scams while shopping for insurance

January 9, 2021

It’s been more than seven years since the health insurance marketplaces (exchanges) first opened for business. Well over 11 million people have enrolled in plans through the exchanges for 2021, and some people also have ACA-compliant individual market coverage obtained outside the exchanges (directly from insurers). And thanks in large part to the ACA’s expansion of Medicaid, enrollment in Medicaid coverage has grown by nearly 20 million people since 2013 (there’s been a significant increase in Medicaid enrollment as a result of the COVID pandemic). And the uninsured rate is still in the single digits, despite the fact that it’s been rising during the Trump administration’s tenure, after dropping to a record low by 2016.

But while there’s plenty to celebrate, any major change like the ACA — especially with the subsequent decade of additional health care reform debate — comes with scammers who take advantage of the confusion that invariably surrounds a major policy shift. Here are some tips to keep in mind:

Scammers tap into confusion over ACA

The ACA was signed into law in 2010, and almost immediately, scammers began looking for ways to make a quick buck. Soon after the law passed, Jim Quiggle, spokesman for the Coalition Against Insurance Fraud, says he wasn’t surprised by the sudden influx of health insurance scams. “Crooks are exploiting the mass confusion over what the health reform means to the average consumer,” Quiggle said. “With each new aspect of reform, another opportunity for fraudulent marketing opens up.”

Quiggle explained that rip-off artists go door to door and use blast emails or pop-up ads to convince unsuspecting customers that they’re selling “ObamaCare.” And, to create a sense of urgency, the scammers tell potential scam victims that the law requires them to buy the insurance they’re selling and do it before an “enrollment period” closes.

It’s true that the ACA created an annual open enrollment period for individual market health insurance; outside of open enrollment, coverage can only be obtained if you have a qualifying event (prior to 2014, people could apply for individual health insurance whenever they liked, but the applications were then medically underwritten and could be rejected based on medical history). But again, buyer beware. If in doubt, double-check the facts with a third party to make sure you’re dealing with a legitimate source of coverage.

Marc Young, spokesman for Insurance Commissioner Kim Holland, co-chair of the National Association of Insurance Commissioners’ Anti-Fraud Task Force, explains that criminals sometimes cleverly mask themselves as insurance companies, selling plans that are completely fraudulent. “Unfortunately, the criminals provide all of the materials that legitimate companies provide,” Young says. “They’ll use the industry language to describe levels of coverage. They’ll issue authentic-looking insurance cards.”

Some companies will even set up storefronts in communities, selling policies and sticking around just long enough to file bogus claims – only to completely vanish into thin air overnight. These companies are “very deceptive, very misleading, with very professional looking materials,” Young says.

Again, it’s a good idea to double-check with your state’s department of insurance to make sure that the person and company you’re dealing with are both licensed to do business in your state.

Understand your state’s exchange

In addition to outright scams like identity theft, consumers need to be aware of the possibility that some agents might try to portray their agency as “the exchange” and attract customers who think they’re purchasing coverage through the official exchange. This is further complicated by the fact that licensed agents and brokers who are certified by their state’s exchange can help consumers enroll in exchange plans.

Individual policies can still be purchased outside of the exchanges. Like exchange plans, they are ACA-qualified which means they are guaranteed issue, cover the essential health benefits, and have the ACA’s limits on out-of-pocket maximums. Some are sold by carriers who also sell policies in the exchange, but some carriers only offer plans outside the exchange.

From a consumer perspective, the primary difference between exchange and non-exchange plans is the availability of subsidies. Premium subsidies and cost-sharing subsidies are only available on plans that are purchased through the exchange. Each state has just one official exchange where subsidies are available and in 36 states as of 2021, it’s Healthcare.gov.

If you’re in DC or one of the 14 states that run their own exchanges, you can still use Healthcare.gov to get to the exchange website in your state so that there’s no doubt you’re on the correct site. If a certified broker or agent assists you with your exchange plan application, you will still be submitting your application on the official exchange web site. If you’re submitting an application anywhere else, you’re applying for an off-exchange plan and subsidies will not be available.

It’s important to understand, however, that there are approved direct enrollment entities that are authorized to enroll people in on-exchange plans via their own websites, without having to use the actual exchange website. HealthSherpa is an example of this; they only enroll people in on-exchange plans, and enrolled 1.9 million of the 8.2 million people who signed up for plans through the federally-run marketplace (HealthCare.gov) for 2021. CMS has a list of entities that are approved to provide direct enrollment. But if you’re using one of them, you’ll still want to confirm that you’re enrolling in an on-exchange plan, if that’s your preference.

Know how the law affects you, or doesn’t

Another commonly misunderstood aspect of the ACA – and one that scammers have tried to target – is that the majority of Americans do not need to obtain health insurance through the exchanges.

Most Americans haven’t had to make any changes at all under the ACA. If you get your coverage through Medicare, Medicaid, or your employer, you do not need to worry about the exchanges at all.

[If you’re enrolling in Medicaid, you may be able to do so through the exchange, depending on why you’re eligible for Medicaid. For MAGI-based Medicaid (most enrollees under the age of 65), some states have switched their entire application system to run through the exchange, so check with your state Medicaid office if you have questions.]

In addition to being a portal for Medicaid enrollment, the exchanges were primarily designed to provide a shopping platform for people who purchase individual health insurance (and for small-business health plans if the employer chooses to obtain coverage through the SHOP exchange, which is still available in some states). This includes people who already had individual health insurance prior to 2014, as well as people who were previously uninsured and didn’t have access to a group plan through an employer. But nearly two-thirds of the population have either employer-sponsored coverage or Medicare — and can ignore the exchanges — while another 20 percent have Medicaid and may be able to ignore the exchange, depending on how their states have set up the enrollment and renewal process.

If you’re purchasing individual health insurance, the exchanges are likely the best option if you’re eligible for subsidies. If not, you can shop both in and out of the exchange to find the policy that best fits your needs and budget. Although the exchanges’ online comparison and enrollment features have been heavily publicized, applicants can also enroll by mail or in person. You can contact your state’s department of insurance to verify that the person, agency, or website you’re working with is certified with the state’s exchange.

If you’re shopping for an off-exchange plan, your state’s department of insurance can help you make sure you’re working with a properly licensed agent and buying a legitimate health insurance policy.

Watch out for fakes and frauds

Navigators and brokers will not charge you any sort of fee for their services (in a few states, brokers are allowed to charge fees if they’re not paid a commission by the insurer; but these fee-based brokers are rare and there are extensive rules regarding the disclosures they have to provide to their clients). The only money you need to pay is your first month’s premium, either when you enroll or once you get the invoice. If people are asking you for any additional fee, be wary of a scam.

Seniors who are enrolled in Medicare don’t need to do anything differently. They benefit from Obamacare, but don’t need to make any changes to their coverage and certainly don’t need to “enroll in Obamacare” or do anything with the exchanges.

If you enroll in a health plan, you’ll need to provide relatively extensive personal information, particularly if you’re applying for premium subsidies (and if you get a premium subsidy, you have to reconcile it on your tax return). There’s no legitimate way to enroll in just a minute or two with nothing more than a name and social security number, so be wary of potential scams in which the salesperson is attempting to gather some basic — but personal — information under the pretense of enrolling you in health coverage.

If the plan you’re enrolling in will take effect immediately, chances are it’s not an ACA-compliant plan. The same is true if it excludes pre-existing conditions or doesn’t cover some of the essential health benefits. Here’s more about how you can determine whether the plan you’re considering is compliant with the ACA.

Discount card scams leave consumers holding the bag

Some salespeople offer discount medical cards or “buyers clubs” – some of which legitimately provide discounts on certain expenses such as prescription drug costs and dental services through a network of providers. In some cases, however, unscrupulous marketers are overstating the size of those networks, or offering unbelievable discounts – “sometimes up to 85 percent off,” Quiggle says.

And, in some cases, consumers are being drawn into those plans on the false promise that the discount card programs will pay for major medical expenses. “We see cases where people are showing up at hospitals presenting their discount card because they think they have health insurance, only to be told they’ll have to pay for services out of pocket,” Quiggle says.

In other cases, consumers incur large medical expenses, then find out that “pre-authorized surgeries” or other large expenses won’t be reimbursed.

Discount plans have existed since long before the ACA was written. But since they’re not considered insurance, they’re not regulated under the ACA, which means that unless a state takes steps to limit them, they can still legally be sold. They don’t provide much in the way of benefits though, particularly in the case of a large claim.

What has changed as a result of Obamacare is the affordability of real health insurance for people with low- and mid-range incomes. Discount plans stood out in the past because of their price, which was far cheaper than real health insurance. But because of the ACA’s premium tax credits (subsidies), the average after-subsidy premium for the 86 percent of exchange enrollees who got a subsidy in 2020 was just $84/month.

Ignore exchange naysayers

It’s inevitable that there have been some unscrupulous people who attempt to sell worthless “insurance” under the guise of Obamacare. If a policy seems too good to be true, it probably is. If in doubt, contact your state’s department of insurance before you submit an application.

Consumers should also be aware that some groups have a vested interest in fighting against Obamacare. They are often politically motivated, and aren’t above spreading outright lies about the ACA in order to turn people against it. Focus on what’s best for you and your family, and ignore people who tell you to avoid the exchanges without having any knowledge of your specific situation.

There is no one-size-fits-all when it comes to healthcare, which is why there are a variety of plans available in the individual market, both in and out of the exchanges. Open enrollment for 2021 individual market coverage ended in most states in December 2020, but opportunities to enroll in ACA-compliant coverage are available year-round if you experience a qualifying event. If you do, take your time, compare all of the available plans, seek help from a reputable source, and be sure that you read the fine print on the plans you’re considering before you enroll.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Avoid scams while shopping for insurance appeared first on healthinsurance.org.

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How to buy health insurance during the COVID-19 crisis

January 7, 2021

Can you buy health insurance now?

  • Open enrollment for 2021 is still ongoing in 10 states and DC, and Maryland has opened a new COVID-related special enrollment period for uninsured residents.
  • If you’re losing your existing health coverage (or if you have another qualifying event or are Native American), you can buy ACA-compliant coverage today, but probably will have to wait until the start of next month before the coverage is in force.
  • If you’ve lost your job due to the pandemic, your loss of income may make you eligible for Medicaid and CHIP – and enrollment is available year-round.
  • Consumers in most states can buy short-term coverage at any time during the year and coverage can be effective within days – often by the next business day (but COVID coverage requirements don’t apply to short-term plans in most states).
  • If you aren’t eligible for a special enrollment period (or Medicaid, Medicare, or CHIP), you can’t buy ACA-compliant coverage until open enrollment.
  • People with modest incomes in New York, Minnesota, and Massachusetts can enroll in health programs year-round.

The COVID-19 pandemic has caused millions of Americans to lose their jobs, and in many cases, that means losing health insurance as well. About half of all Americans get their health insurance from an employer’s plan, and it’s a cruel irony that so many people have lost their jobs in the midst of a time when we need health coverage more than ever. A Commonwealth Fund analysis found that by June 2020, nearly 15 million Americans had lost their employer-sponsored health insurance. And about 5.4 million of them became uninsured (as opposed to switching to another form of health coverage), resulting in the largest-ever increase in the uninsured rate.

But the good news is that loss of coverage triggers a special enrollment period during which you can buy ACA-compliant individual health insurance. You can buy your new coverage on- or off-exchange, although premium subsidies and cost-sharing reductions are only available through the exchange.

Loss of a job does not, in and of itself, trigger a special enrollment period. The special enrollment period only applies if you’re losing health coverage (the plan you had must have been minimum essential coverage – which all employer-sponsored plans are – and you can’t have voluntarily canceled the plan or lost it due to non-payment of premiums).

A drop in income that makes a person newly-eligible for financial assistance in the exchange will trigger a special enrollment period during which a person can switch plans – but that only applies if they already had minimum essential coverage in place before the income change.

If you’re uninsured, whether it’s a recent development or a long-term situation, you may still be able to obtain coverage for 2021. Here’s a summary of your options:

1. ACA-compliant coverage via extended open enrollment or a COVID-19 special enrollment period

A handful of states are offering special enrollment periods in response to the coronavirus pandemic.

Click to see which states are offering special enrollment periods in response to the coronavirus pandemic.

In most states, open enrollment for 2021 health plans ran from November 1 to December 15, 2020. This gave people an opportunity to sign up for new individual/family health coverage if they needed it. And in 10 states and DC, open enrollment is still underway as of early January 2021.

In addition, Maryland has opened another COVID-related special enrollment period for uninsured residents (people who don’t currently have minimum essential coverage), which will continue through March 15, 2021. Unlike normal enrollment period rules, Maryland is allowing retroactive coverage in some cases, and effective dates that are never more than two weeks after the enrollment is submitted.

Maryland previously offered a COVID special enrollment period that ran from March to December in 2020. Most of the other fully state-run exchanges also offered special enrollment periods in 2020 to address the COVID pandemic, allowing people without health coverage a chance to sign up without having to wait for open enrollment or experience a specific qualifying event. But with the exception of Maryland, those windows are no longer ongoing.

Most states use HealthCare.gov, which is run by the Department of Health and Human Services (HHS). Throughout 2020, the Trump administration refused to open a special enrollment period through HealthCare.gov – despite the fact that several states that use the federally run exchange asked HHS to do so. The Biden administration might open a COVID-related special enrollment period after taking office in January 2021; this is one of the recommendations that state insurance commissioners have made to President-elect Biden, and it’s well within the scope of immediate changes the incoming administration could make to ensure more people are covered.

The takeaway point here is that if you’re uninsured, you’ll want to check to see if open enrollment is ongoing in your state (it continues through the end of January in a few states), and keep an eye out to see if a COVID-related special enrollment period becomes available via HealthCare.gov. If you’re eligible to enroll — either because the exchange is offering an extended enrollment period or a special enrollment period, or because you’ve experienced a qualifying event — it’s in your best interest to enroll in an ACA-compliant plan as quickly as possible.

2. Loss-of-coverage special enrollment period (and other SEPs that might apply to your situation)

If you’re in a state where open enrollment has ended, you’ll need to have a qualifying event in order to enroll in coverage. Our guide to qualifying events and special enrollment periods covers all of the details about how these work, including rules for effective dates and prior coverage requirements.

And if your income has taken a hit, know that if you enroll in a plan through the exchange during a special enrollment period, you may qualify for financial assistance (premium subsidies and cost-sharing subsidies). Use this subsidy calculator to estimate the size of your subsidy.

For most qualifying events, your coverage will take effect either the first of the next month, or the first of the month after that, depending on how late in the month you enroll. Typically, if you enroll during the first 15 days of the month, your coverage will take effect on the first day of the next month. Enroll after the 15th and coverage won’t kick in until the first of the following month.

But the effective date rules are different if your qualifying event is the loss of your existing health coverage. If you’re losing your coverage, you can enroll up until the last day you have coverage and your new plan will take effect the first of the following month. Since health plans usually terminate on the last day of a month, this means you can have seamless coverage in most cases, as long as you enroll by the day that your old plan ends, and assuming your old plan is ending on the last day of the month (if your plan is ending on a day other than the last day of the month, it will likely not be possible to have seamless coverage unless you’re able to qualify for Medicaid). So for example, if you’re getting laid off and your employer-sponsored coverage is going to end on January 31, you have until January 31 to enroll in a new plan (on- or off-exchange) and your coverage will take effect August 1.

It’s important to understand that in many cases, you’re only eligible for a special enrollment period if you already had some sort of minimum essential coverage in place before the qualifying event – this is obviously true if your qualifying event is loss of coverage, but it’s also true for several other qualifying events. You can read more about the rules for each type of qualifying event here.

Native Americans can enroll in plans through the exchange year-round, although the coverage doesn’t take effect until the first of the next month or the first of the month after that, depending on the enrollment date. As is the case with special enrollment periods, Native Americans must enroll by the 15th to have coverage effective the first of the next month.


Not eligible for a SEP or Medicaid (or CHIP, a Basic Health Program, Medicare, etc.)? Unless a blanket COVID special enrollment period is opened via HealthCare.gov (and other state-run exchanges follow suit), you’ll have to wait until next fall’s open enrollment to buy coverage, and the plan won’t take effect until next January. But as described below, a short-term health insurance plan might still be an option, and it would allow you to have coverage this year.

3. Losing your income? Apply for Medicaid.

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Millions of Americans have faced a sudden drop in income as a result of the COVID-19 pandemic. But the majority of the states have expanded Medicaid under the Affordable Care Act, which allows residents with low income (up to 138 percent of the poverty level) to enroll in Medicaid.

Medicaid enrollment is year-round, as is CHIP (Children’s Health Insurance Program) enrollment. And CHIP eligibility extends to higher income levels than Medicaid. For both Medicaid and CHIP eligibility, income is calculated on a monthly basis, so they are available if your current income is within the eligible range – even if your income later in the year is expected to be much higher.

Medicaid coverage can also be immediate, or backdated to the first of the month or even a previous month, depending on the state and the circumstances. (States can seek federal approval to eliminate prior month retroactive coverage availability, and some have done so under the Trump administration). So you won’t have to wait for your Medicaid coverage to take effect.

In states that have not expanded Medicaid, coverage is not available based solely on income; low-income residents have to also meet other criteria, such as being pregnant, caring for minor children, being elderly, or being disabled. But if you’re facing a loss of income, you’ll want to check with your state’s Medicaid program to see if you might be eligible for coverage.

When your income picks back up in the future and makes you ineligible for Medicaid, that will trigger a loss-of-coverage special enrollment period during which you can enroll in a private individual market plan or an employer-sponsored plan if one is available to you. Note that in order to qualify for the additional federal Medicaid funding that’s being provided to states to address the COVID-19 pandemic, states cannot take action to terminate Medicaid coverage until after the COVID-19 emergency ends. Your Medicaid coverage can be terminated if you request it — perhaps because you become eligible for a new employer’s plan, or your income increases enough to make you eligible for premium subsidies in the exchange — or if you move out of state. But otherwise, your Medicaid coverage should continue until the end of the COVID-19 emergency period. If you request a termination or move out of state, however, your Medicaid coverage will end and that will trigger a special enrollment period during which you can sign up for a private plan.

This federal poverty level calculator will help you determine whether you meet the Medicaid eligibility level for your state. Your eligibility for ACA subsidies also depends on your income and percentage of the federal poverty level (FPL).

  • Related: Frequently asked questions about eligibility for health insurance.

4. The short-term fix

For millions of Americans who aren’t eligible for a SEP or Medicaid, buying a short-term medical plan offers the fastest way to get some level of coverage in place. Short-term plans aren’t ACA-compliant, but can still provide protection from catastrophic medical expenses – and you can purchase the plans at any time during the year.

That means you could buy a short-term plan today and – if you’re approved through the underwriting process – you could have coverage in force as soon as tomorrow.

Short-term coverage is temporary, but federal regulations now allow short-term plans to have initial terms of up to 364 days, and total duration, including renewals, of up to three years. Many states have their own rules, however, that limit short-term plans to shorter durations than the federal rules allow.

Many short-term health plans have voluntarily agreed to waive cost-sharing for COVID-19 testing. But the general rules that the federal government imposed to require insurers to fully pay for COVID-19 testing and COVID-19 vaccines do not apply to short-term plans, so their actions on this are voluntary rather than mandated (unless a state takes action to further regulate short-term plans). And although many ACA-compliant health plans agreed to temporarily waive cost-sharing for COVID-19 treatment in 2020 (as opposed to just testing, as required by law), very few short-term plans agreed to take this step.

And the basic rules of thumb for short-term plans still apply: Pre-existing conditions are generally not covered at all, and insurers will tend to look back at your medical records if and when you have a claim, to make sure that the claim isn’t related to any condition you might have had before enrolling. Short-term plans are also not required to cover the ACA’s essential health benefits, which means that some of the treatment you might need for COVID-19 (or other conditions) might not be covered at all by the plan. Many short-term plans do not, for example, cover outpatient prescription drugs. Others place limits on how much they’ll pay for inpatient hospital care.

  • Related: Read about short-term plan availability in your state.
  • Related: Is short-term health insurance right for you?
  • Related: ‘So long’ to limits on short-term plans?

5. NY, MN, and MA residents with fairly low income can enroll year-round

New York and Minnesota have Basic Health Programs (the Essential Plan and MinnesotaCare), both of which offer year-round enrollment and are available to residents with income up to 200 percent of the poverty level.

Massachusetts has a program called ConnectorCare, which is available to residents with income up to 300 percent of the poverty level. ConnectorCare enrollment is available year-round, but only for people who are newly eligible or who haven’t enrolled previously.

If you’re in one of these states and have an eligible income, you may still be able to sign up for coverage regardless of what time of year it is.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post How to buy health insurance during the COVID-19 crisis appeared first on healthinsurance.org.

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Qualifying events that can get you coverage

January 6, 2021

Key takeaways

  • You’ll need to provide proof of your qualifying event in order to enroll in a new plan.
  • Learn more about the specific qualifying events in the individual market and the rules that apply to them.
  • Who doesn’t need a qualifying event?
  • Need coverage at the end of the year? A short-term plan might help to bridge the gap to January 1.

Open enrollment for health insurance plans in the individual market (on- and off-exchange) runs from November 1 to December 15 in most states. DC, California, and Colorado have extended open enrollment windows, and most of the other fully state-run exchanges generally extend their enrollment windows by at least a week each year.

Once open enrollment ends, ACA-compliant plans are only available to people who experience a qualifying event. The plans available outside of open enrollment without a qualifying event are not regulated by the ACA, and most are not a good choice to serve as stand-alone coverage (short-term health insurance is intended to serve as stand-alone coverage for a short period of time, but it’s much less robust than ACA-compliant coverage).

Qualifying events

Outside of open enrollment, you can still enroll in a new plan if you have a qualifying event that triggers your own special open enrollment (SEP) window.

People with employer-sponsored health insurance are used to both open enrollment windows and qualifying events. In the employer group market, plans have annual open enrollment times when members can make changes to their plans and eligible employees can enroll. Outside of that time frame, however, a qualifying event is required in order to enroll or change coverage.

In the individual market, this was never part of the equation prior to 2014 — people could apply for coverage anytime they wanted. But policies were not guaranteed issue, so pre-existing conditions meant that some people couldn’t get coverage or had to pay more for their policies.

All of that changed thanks to the ACA. Individual coverage is now quite similar to group coverage. As a result, the individual market now utilizes annual open enrollment windows and allows for special enrollment windows triggered by qualifying events.

So you could still have an opportunity to enroll in ACA-compliant coverage outside of the open enrollment window if you experience a qualifying event. Depending on the circumstances, you may have a special open enrollment period – generally 60 days but sometimes there’s an additional 60-day window before the event as well – during which you can enroll or switch to a different plan.

Got a qualifying event? You’ll need proof

It’s important to note that HHS began ramping up enforcement of special enrollment period eligibility in 2016, amid concerns that enforcement had previously been too lax.

In February 2016, HHS confirmed that they would begin requiring proof of eligibility in order to grant special enrollment periods triggered by birth/adoption/placement for adoption, a permanent move, loss of other coverage, and marriage (together, these account for three-quarters of all qualifying events in Healthcare.gov states).

The new SEP eligibility verification process was implemented in June 2016. In September 2016, HHS answered several frequently asked questions regarding the verification process for qualifying events, and noted that SEP enrollments since June were down about 15 percent below where they had been during the same time period in 2015 (after staying roughly even with 2015 numbers in the months prior to the implementation of the new eligibility verification process).

But HHS stopped short of issuing an explanation for the decline: it could be that people were previously enrolling who didn’t actually have a qualifying event, but it could also be that the process for enrolling had become more cumbersome due to the added verification step, deterring healthy enrollees from signing up. The vast majority of people who are eligible for SEPs do not enroll in coverage during the SEP, and this could simply have been heightened by the new eligibility verification process.

Nevertheless, the eligibility verification process was further stepped-up in 2017, thanks to “market stabilization” rules that HHS finalized in April 2017.

Starting in June 2017, HHS was planning to implement a pilot program to further enhance SEP eligibility verification (this plan was created by HHS under the Obama Administration). Fifty percent of SEP enrollees were to be randomly selected for the pilot program, and their enrollments would be pended until their verification documents were submitted. They’d have 30 days to submit their proof of SEP eligibility, and as long as they did so, their policy would be effective as of the date determined by the date of their application/plan selection (so for example, a person could enroll on July 10 for an August 1 effective date, but the enrollment would then be pended. If the applicant submitted proof of SEP eligibility on August 5, the enrollment would be completed, with coverage effective August 1).

Under the new rules finalized in April 2017, however, that SEP eligibility verification process began to apply to 100 percent of SEP applications, starting in June 2017. So if you’re planning to enroll in a HealthCare.gov plan outside of open enrollment, be prepared to provide proof of your qualifying event when you apply. Most of the state-run exchanges have followed suit, and HHS has proposed a requirement that state-run exchanges conduct SEP eligibility verification for at least 75 percent of all SEP applications by 2022.

The SEP verification program has generated controversy, with some consumer advocates noting that it could further deter healthy people from enrolling when they’re eligible for a SEP. At Health Affairs, Tim Jost suggested some alternative solutions, including a requirement that insurance carriers pay broker commissions for SEP enrollments in order to incentivize brokers to help more people enroll (at that point, insurers were increasingly paying no commissions for SEP enrollments, although many have started doing so in more recent years), and a requirement that group health plans provide certificates of creditable coverage to people losing their group coverage (this used to be required, but isn’t any longer; reinstating a requirement that the certificates be issued would make it easier for people to easily prove that they had lost coverage and had thus become eligible for a SEP).

But as a general rule, be prepared to provide proof of your qualifying event when you enroll.

Off-exchange special enrollment periods

Note that most qualifying events apply both inside and outside the exchanges. There are a few exceptions, however. For policies sold outside the exchanges, there are a few qualifying events that HHS does not require carriers to accept as triggers for special enrollment periods (however, the carriers can accept them if they wish). These include gaining citizenship or a lawful presence in the US or being a Native American (within the exchanges, Native Americans can make plan changes as often as once per month, and enrollment runs year-round).

In addition, when exchanges grant special enrollment periods based on “exceptional circumstances” those special enrollment periods apply within the exchanges; off-exchange, it’s up to the carriers as to whether or not they want to implement similar special enrollment periods.

And carriers tend to have fairly strict rules regarding proof of SEP eligibility. If you’re enrolling directly with an insurer, outside of open enrollment, you will need to provide proof of your qualifying event (the insurer will let you know what will count as acceptable documentation; these same documentation requirements are generally enforced for on-exchange enrollments as well).

What counts as a qualifying event?

Although special enrollment period windows are generally longer in the individual market, many of the same life events count as a qualifying event for employer-based plans and individual market plans. But some are specific to the individual market under Obamacare. [For reference, special enrollment period rules for employer-sponsored plans are detailed here; for individual market plans, they’re detailed here and described in more detail below and in our guide to special enrollment periods.]

When will coverage take effect if I enroll during a special enrollment period?

For most qualifying events, in states using HealthCare.gov and some of the state-run exchanges, applications completed by the 15th of the month will be given a first-of-the-following-month effective date.

Massachusetts and Rhode Island both allow enrollees to sign up as late as the 23rd of the month and have coverage effective the first of the following month.

Applications received from the 16th (or the 24th if you’re in MA or RI) to the end of the month will have an effective date of the first of the second following month. (Marriage, loss of other coverage, and birth/adoption have special effective date rules, described below.)

Starting in 2022, the federally-run marketplace (HealthCare.gov, which is used in 36 states as of 2021) will eliminate the requirement that applications be submitted by the 15th of the month in order to get coverage the first of the following month. For all special enrollment periods, coverage will simply take effect the first of the month after the application is submitted. States will have the option to require this of off-exchange insurers, and fully state-run exchanges will also have the option to switch all of their special enrollment periods to first-of-the-following-month effective dates, regardless of when the application is submitted.

Note that in early 2016, HHS eliminated some little-used special enrollment periods that were no longer necessary. For example, the special enrollment period that had previously been available for people whose Pre-Existing Conditions Health Insurance Program (PCIP) had ended; coverage under those plans ended in 2014; but there’s still a special enrollment period for anyone whose minimum essential coverage ends involuntarily).

12 special open enrollment triggers

The qualifying events that trigger special enrollment periods are discussed in more detail in our extensive guide devoted to qualifying events and special enrollment periods. But here’s a summary:

[Note that in most cases, the market stabilization regulations now prevent enrollees from using a special enrollment period to move up to a higher metal level of coverage; so if you have a bronze plan and move to a new area mid-year, for example, you would not be allowed to purchase a gold plan during your special enrollment period.]

Involuntary loss of other coverage

The coverage you’re losing has to be minimum essential coverage, and the loss has to be involuntary. Cancelling the plan or failing to pay the premiums does not count as involuntary loss, but voluntarily leaving a job and thus losing employer-sponsored health coverage does count as an involuntary loss of coverage. In most cases, loss of coverage that isn’t minimum essential coverage does not trigger a special open enrollment.

[There is an exception for pregnancy Medicaid, CHIP unborn child, and Medically Needy Medicaid: These types of coverage are not minimum essential coverage, but people who lose coverage under these plans do qualify for a special enrollment period (this includes a woman who has CHIP unborn child coverage for her baby during pregnancy, but no additional coverage for herself; she will qualify for a loss of coverage SEP for herself when the unborn child CHIP coverage ends). And although they are not technically considered minimum essential coverage, they do count as minimum essential prior coverage in the case of special enrollment periods that require a person to have previously had coverage (this is a requirement for most special enrollment periods).]

Your special open enrollment begins 60 days before the termination date, so it’s possible to get a new ACA-compliant plan with no gap in coverage, as long as your prior plan doesn’t end mid-month. (See details in Section (d)(6)(iii) the code of federal regulations 155.420, and the updated regulation that makes advance open enrollment possible for people with individual coverage as well as employer-sponsored coverage.) You also have 60 days after your plan ends during which you can select a new ACA-compliant plan.

If you enroll prior to the loss of coverage, the effective date is the first of the month following the loss of coverage, regardless of the date you enroll (ie, if your plan is ending June 30, you can enroll anytime in May or June and your new plan will be effective July 1). But if you enroll in the 60 days after your plan ends, the exchange can either allow a first-of-the-following-month effective date regardless of the date you enroll, or they can use their normal deadline, which is typically the 15th of the month in order to get a plan effective the first of the following month.

As noted above, starting in 2022, the federally-run marketplace (HealthCare.gov) will eliminate the requirement that enrollments be submitted by the 15th of the month to have coverage effective the first of the following month. So as of 2022, a person who loses coverage and enrolls in a new plan after the coverage loss will simply have coverage effective the first of the month after the enrollment is submitted.

Individual plan renewing outside of the regular open enrollment

HHS issued a regulation in late May 2014 that included a provision to allow a special open enrollment for people whose health plan is renewing — but not terminating — outside of regular open enrollment. Although ACA-compliant plans run on a calendar-year schedule, that is not always the case for grandmothered and grandfathered plans, nor is it always the case for employer-sponsored plans.

Insureds with these plans may accept the renewal but are not obligated to do so. Instead, they can select a new ACA-compliant plan during the 60 days prior to the renewal date and 60 days following the renewal date. Initially, this special enrollment period was intended to be used only in 2014, but in February 2015 HHS issued a final regulation that confirms this special enrollment period would be on-going. So it continues to apply to people who have grandfathered or grandmothered plans that renew outside of open enrollment each year. And HHS also confirmed that this SEP applies to people who have a non-calendar year group plan that’s renewing; they can keep that plan or switch to an individual market plan using an SEP. [Note that if the employer-sponsored plan is considered affordable and provides minimum value, the applicant is not eligible for premium subsidies in the exchange.]

Becoming a dependent or gaining a dependent

Becoming or gaining a dependent (as a result or birth, adoption, or placement in foster care) is a qualifying event. Coverage is back-dated to the date of birth, adoption, or placement in foster care (subsequent regulations also allow parents the option to select a later effective date). Because of the special rules regarding effective dates, it’s wise to use a special enrollment period in this case, even if the child is born or adopted during the general open enrollment period.

The current regulation states that anyone who “gains a dependent or becomes a dependent” is eligible for a special open enrollment window, which obviously includes both the parents and the new baby or newly adopted or fostered child. But HealthCare.gov accepts applications for the entire family (including siblings) during the special open enrollment window.

The market stabilization rule that HHS finalized in April 2017 added some new restrictions to this SEP: If a new parent is already enrolled in a QHP, he or she can add the baby/adopted child to the plan (or enroll with the new dependent in a plan at the same metal level, if for some reason the child cannot be added to the plan). Alternatively, the child can be enrolled on its own into any available plan. But the SEP cannot be used as an opportunity for the parent to switch plans and enroll in a new plan with the child. New rules issued in 2018 clarify that existing dependents do not have an independent SEP to enroll in new coverage separately from the person gaining a dependent or becoming a dependent. But they do state that an individual who gains a dependent “may enroll in or change coverage along with his or her dependents, including the newly-gained dependent(s) and any existing dependents.” That would seem to indicate that a new parent who already has individual market coverage does have the option to switch to a different plan using the SEP. As is the case with other SEPs, if you live in a state that is running its own exchange, check with your exchange to see how they have interpreted the regulations.

Marriage

If you get married, you have a 60-day open enrollment window that begins on your wedding day. However, rules issued in 2017 limit this special enrollment period somewhat. At least one partner must have had minimum essential coverage (or lived outside the U.S. or in a U.S. Territory) for at least one of the 60 days prior to the marriage. In other words, you cannot use marriage to gain coverage if neither of you had coverage before getting married.
Assuming you’re eligible for a special enrollment period (which includes providing proof of marriage), your policy will be effective the first of the month following your application, regardless of what date you complete your enrollment. Since marriage triggers a special effective date rule, it might make sense to use your special enrollment period if you get married during the general open enrollment period. For example, if you get married on November 27, you can select a new plan that day (or up until the 30th) and have coverage effective December 1 if you use your special enrollment period triggered by your marriage. But if you enroll under the general open enrollment period, your new coverage won’t be effective until January 1.

Divorce

If you lose your existing health insurance because of a divorce, you qualify for a special open enrollment based on the loss of coverage rule discussed above.
If a court orders a parent to obtain health insurance as part of a custody agreement, the exchange must allow the parent the option to backdate the coverage to the date the court order was issued, although the parent can also opt for the normal effective dates described above.
Exchanges also have the option of granting a special enrollment period for people who lose a dependent or lose dependent status as a result of a divorce or death, even if coverage is not lost as a result. This special enrollment period was due to become mandatory in all exchanges as of January 2017, but HHS removed that requirement in May 2016, so it’s still optional for the exchanges. In most states, including the 36 states that use HealthCare.gov, divorce without an accompanying loss of coverage generally does not trigger a special enrollment period.

Becoming a United States citizen or lawfully present resident

This qualifying event only applies within the exchanges — carriers selling coverage off-exchange are not required to offer a special enrollment period for people who gain citizenship or lawful presence in the US.
There are special rules that allow recent immigrants to qualify for premium subsidies in the exchange even with an income below the poverty level, since they aren’t eligible for Medicaid until they’ve been in the US for at least five years.

A permanent move

This special enrollment period applies as long as you move to an area where different qualified health plans (QHPs) are available. This special enrollment period is only available to applicants who already had minimum essential coverage in force for at least one of the 60 days prior to the move (with exceptions for people moving back to the US from abroad, newly released from incarceration, or previously in the coverage gap in a state that did not expand Medicaid; there’s also an exemption for people who move from an area where there were no plans available in the exchange, although there have never been any areas without exchange plans).

For people who meet the prior coverage requirement, a permanent move to a new state will always trigger a special open enrollment period, because each state has its own health plans. But even a move within a state can be a qualifying event, as some states have QHPs that are only offered in certain regions of the state. So if you move to a part of the state that has plans that were not available in your old area, or if the plan you had before is not available in your new area, you’ll qualify for a special open enrollment period, assuming you had coverage prior to your move.

HHS finalized a provision in February 2015 that allows people advance access to a special enrollment period starting 60 days prior to a move, but this is optional for the exchanges. It was originally scheduled to be mandatory starting in January 2017 (ie, that exchanges would have to offer a special enrollment period in advance of a move), but HHS removed that deadline in May 2016, making it permanently optional for exchanges to allow people to report an impending move and enroll in a new health plan. If the exchange in your state offers that option, you can enroll in a new health plan on or before the date of your move and the new plan will be effective the first of the following month. If you enroll during the 60 days following the move, the effective date will follow the normal rules outlined above (ie, in most states, enrollments submitted by the 15th of the month will have first of the following month effective dates, although HealthCare.gov will remove this deadline as of 2022).

In early 2016, HHS clarified that moving to a hospital in another area for medical treatment does not constitute a permanent move, and would not make a person eligible for a special enrollment period. And a temporary move to a new location also does not trigger a special enrollment period. However, a person who has homes in more than one state (for example, a “snowbird” early retiree) can establish residency in both states, and can switch policies to coincide with a move between homes (HHS has noted that this person might be better served by a plan with a nationwide network in order to avoid resetting deductibles mid-year, but such plans are not available in many areas).

An error or problem with enrollment

If the enrollment error (or lack of enrollment, as the case may be) was the fault of the exchange, HHS, or an enrollment assister, a special enrollment period can be granted. In this case, the exchange can properly enroll the person (or allow them to change plans) outside of open enrollment in order to remedy the problem.

Employer-sponsored plan becomes unaffordable or stops providing minimum value

An employer-sponsored plan is considered affordable in 2021 as long the employee isn’t required to pay more than 9.83 percent of household income for just the employee’s portion of the coverage. And a plan provides minimum value as long as it covers at least 60 percent of expected costs for a standard population and also provides substantial coverage for inpatient and physician services.

A plan design change could result in a plan no longer providing minimum value. And there are a variety of situations that could result in a plan no longer being affordable, including a reduction in work hours (with the resulting pay cut meaning that the employee’s insurance takes up a larger share of their household income) or an increase in the premiums that the employee has to pay for their coverage.

In either scenario, a special enrollment period is available, during which the person can switch to an individual market plan instead. And premium subsidies are available in the exchange if the person’s employer-sponsored coverage doesn’t provide minimum value and/or isn’t affordable.

An income increase that moves you out of the coverage gap

There are 13 states where there is still a Medicaid coverage gap, and an estimated 2.3 million people are unable to access affordable health coverage as a result. (Wisconsin has not expanded Medicaid under the ACA, but does not have a coverage gap; Oklahoma and Missouri will expand Medicaid in mid-2021 and will no longer have coverage gaps at that point).

For people in the coverage gap, enrollment in full-price coverage is generally an unrealistic option. HHS recognized that, and allows a special enrollment period for these individuals if their income increases during the year to a level that makes them eligible for premium subsidies (ie, to at least the poverty level).

As mentioned above, the new market stabilization rules only allow a special enrollment period triggered by marriage if at least one partner already had minimum essential coverage before getting married. However, if two people in the coverage gap get married, their combined income may put their household above the poverty level, making them eligible for premium subsidies. In that case, they would have access to a special enrollment period despite the fact that neither of them had coverage prior to getting married.

Gaining access to a QSEHRA or Individual Coverage HRA

This is a new special enrollment period that became available in 2020, under the terms of the Trump Administrations’s new rules for health reimbursement arrangements that reimburse employees for individual market coverage. QSEHRAs became available in 2017 (as part of the 21st Century Cures Act) and allow small employers to reimburse employees for the cost of individual market coverage (up to limits imposed by the IRS). But prior to 2020, there was no special enrollment period for people who gained access to a QSEHRA.

As of 2020, the Trump administration’s new guidelines allow employers of any size to reimburse employees for the cost of individual market coverage. And the new rules also add a special enrollment period — listed at 45 CFR 155.420(d)(14) — for people who become eligible for a QSEHRA benefit or an Individual Coverage HRA benefit.

This includes people who are newly eligible for the benefit, as well as people who were offered the option in prior years but either didn’t take it or took it temporarily. In other words, anyone who is transitioning to QSEHRA or Individual Coverage HRA benefits — regardless of their prior coverage — has access to a special enrollment period during which they can select an individual market plan (or switch from their existing individual market plan to a different one), on-exchange or outside the exchange.

This special enrollment period is available starting 60 days before the QSEHRA or Individual Coverage HRA benefit takes effect, in order to allow people time to enroll in an individual market plan that will be effective on the day that the QSEHRA or Individual Coverage HRA takes effect.

An income or circumstance change that makes you newly eligible (or ineligible) for subsidies or CSR

If your income or circumstances change such that you become newly eligible or newly ineligible for premium tax credits or newly-eligible for cost-sharing subsidies, you’ll have an opportunity to switch plans. This rule already existed for people who were already enrolled in a plan through the exchange (and as noted above, for people in states that have not expanded Medicaid who experience a change in income that makes them eligible for subsidies in the exchange — even if they weren’t enrolled in any coverage at all prior to their income change).

But in the 2020 Benefit and Payment Parameters, HHS finalized a proposal to expand this special enrollment period to include people who are enrolled in off-exchange coverage (ie, without any subsidies, since subsidies aren’t available off-exchange), and who experience an income change that makes them newly-eligible for premium subsidies or cost-sharing subsidies.

This special enrollment period was added at 45 CFR 155.420(d)(6)(v), although it is optional for state-run exchanges. HealthCare.gov planned to make it available as of 2020, although there have been numerous reports from enrollment assisters indicating that it’s still difficult to access as of mid-2020. This is an important addition to the special enrollment period rules, particularly given the “silver switch” approach that many states have taken with regards to the loss of federal funding for cost-sharing reductions (CSR). In 2018 and 2019, people who opted for lower-cost off-exchange silver plans (that didn’t include the cost of CSR in their premiums) were stuck with those plans throughout the year, even if their income changed mid-year to a level that would have been subsidy-eligible. That’s because an income change was not a qualifying event unless you were already enrolled in a plan through the exchange (or moving out of the Medicaid coverage gap). But that will change in 2020 in states that use HealthCare.gov, and in states with state-run exchanges that opt to implement this special enrollment period.

[It’s important to keep in mind, however, that a mid-year plan change will result in deductibles and out-of-pocket maximums resetting to $0, so this may or may not be a worthwhile change, depending on the circumstances.]

As of 2022, there will also be a special enrollment period for exchange enrollees with silver plans who have cost-sharing reductions and then experience a change in income or circumstances that make them newly ineligible for cost-sharing subsidies. This will allow people in this situation to switch to a plan at a different metal level, as the current rules limit them to picking only from among the other available silver plans.

For people already enrolled in the exchange, SEP applies if the plan substantially violates its contract

A special enrollment period is available in the exchange (only for people who are already enrolled through the exchange) if the insured is enrolled in a QHP that “substantially violated a material provision of its contract in relation to the enrollee.” This does not mean that enrollees can switch to a new plan simply because their existing carrier has done something they didn’t like – it has to be a “substantial violation” and there’s an official channel through which such claims need to proceed. It’s noteworthy that a mid-year change in the provider network or drug formulary (covered drug list) does not constitute a material violation of the contract, so enrollees are not afforded a SEP if that happens.

Who doesn’t need a qualifying event?

In some circumstances, enrollment is available year-round, without a need for a qualifying event:

  • Native Americans/Alaska Natives – as defined by the Indian Health Care Improvement Act – can enroll anytime during the year. Enrollment by the 15th of the month (or a later date set by a state-run exchange) will result in an effective date of the first of the following month. Native Americans/Alaska Natives may also switch from one QHP to another up to once per month (the special enrollment periods for Native Americans/Alaska Natives only apply within the exchanges – carriers selling off-exchange plans do not have to offer a monthly special enrollment period for American Indians).
  • Medicaid and CHIP enrollment are also year-round. For people who are near the threshold where Medicaid eligibility ends and exchange subsidy eligibility begins, there may be some “churning” during the year, when slight income fluctuations result in a change in eligibility.

    If income increases above the Medicaid eligibility threshold, there’s a special open enrollment window triggered by loss of other coverage. Unfortunately, in states that have not expanded Medicaid, the transition between Medicaid and QHPs in the exchange is nowhere near as seamless as lawmakers intended it to be.

  • Employers can select SHOP plans (or small group plans sold outside the exchange) year-round. But employees on those plans will have the same sort of annual open enrollment windows that applies to any employer group plans.

Need coverage at the end of the year?

If you find yourself without health insurance towards the end of the year, you might want to consider a short-term policy instead of an ACA-compliant policy. There are pros and cons to short-term insurance, and it’s not the right choice for everyone. But for some, it’s an affordable solution to a temporary problem.

Short-term insurance doesn’t cover pre-existing conditions, so it’s really only an appropriate solution for healthy applicants. And for applicants who qualify for premium subsidies in the exchange, an ACA-compliant plan is also likely to be the best value, since there are no subsidies available to offset the cost of short-term insurance.

But if you’re healthy, don’t qualify for premium subsidies, and you find yourself without coverage for a month or two at the end of the year, a short-term plan is worth considering. You can enroll in a short-term plan for the remainder of the year, and sign up for ACA-compliant coverage during open enrollment with an effective date of January 1. The temporary health plan would certainly be better than going without coverage for the last several weeks of the year, and it would be considerably less expensive than an ACA-compliant plan for people who don’t get premium subsidies.

So for example, if your employer-sponsored coverage ends in October and you want to use a short-term plan to bridge the gap to January, that may be a good option. Be aware, however, that it may not be a good idea to drop your ACA-compliant plan and switch to a short-term plan at the end of the year, particularly if you’re in an area with limited availability of ACA-compliant plans. The market stabilization rules allow insurers to require applicants to pay any past-due premiums from the previous 12 months before being allowed to enroll in new coverage. If you receive premium subsidies and you stop paying your premiums, your insurer will ultimately terminate your plan, but the termination date will be a month after you stopped paying premiums (if you don’t get premium subsidies, your plan will terminate to the date you stopped paying for your coverage). In that case, you essentially got a month of free coverage, and the insurer is allowed to require you to pay that month’s premiums before allowing you to sign up for any of their plans during open enrollment.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Qualifying events that can get you coverage appeared first on healthinsurance.org.

https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance.png 512 512 wpmaddoxins https://www.maddoxinsured.com/wp-content/uploads/2020/12/maddox-insurance-agency.png wpmaddoxins2021-01-06 01:46:262021-01-07 15:01:28Qualifying events that can get you coverage

Miss open enrollment? You’ve got options.

January 4, 2021

Key takeaways

  • Native Americans and people eligible for Medicaid/CHIP can enroll year-round.
  • If you’ve got a qualifying event, you can enroll in coverage.
  • If none of those apply, a short-term plan is the closest thing to real insurance in most states.
  • Federal regulations allow a short-term plan (with renewals) to last up to 36 months, although about half the states have more restrictive rules.

In the individual/family health insurance market (ie, coverage that people buy for themselves, as opposed to getting from an employer), open enrollment for 2021 coverage ended on December 15 in most states. But there are some states with extended enrollment deadlines, several of which are ongoing as of January 2021. And Maryland has opened a COVID-related special enrollment period for uninsured residents, which continues through March 15, 2021.

Millions of Americans purchased ACA-compliant plans through the exchanges — and outside the exchanges — during open enrollment. But there are still millions of Americans who don’t have coverage as of early 2021 (the uninsured rate has been increasing since 2017, due to the Trump administration’s approach to health care reform).

If you didn’t sign up for health insurance during open enrollment, you may have to wait until November 2021 to sign up for a plan that will take effect in 2022. But you may find that you can still get coverage for 2021, even if open enrollment has ended in your state. Let’s take a look.

Native Americans, those eligible for Medicaid/CHIP can enroll year-round

Native Americans can enroll in exchange plans year-round.

And people who qualify for Medicaid or CHIP can also enroll at any time. Income limits are fairly high for CHIP eligibility, so be sure you check your state’s eligibility limits before assuming that your kids wouldn’t be eligible – benefits very much extend to middle-class households.

And in states where Medicaid has been expanded, a single individual earning up to $17,608 can enroll in Medicaid. (This amount will be higher after the FPL numbers for 2021 become available). Most states have expanded Medicaid, and Oklahoma and Missouri will join them in mid-2021. But there are still 14 states (dropping to 12 once Medicaid expansion takes effect in Oklahoma and Missouri) where there is a Medicaid coverage gap and assistance is not available for most adults with income below the poverty level.

Similarly, if you’re on Medicaid and your income increases to a level that makes you ineligible for Medicaid, you’ll have an opportunity to switch to a private plan at that point, with the loss of your Medicaid plan serving as the qualifying event that triggers a special enrollment period.

A qualifying event at any time of the year will likely to allow you to enroll

Applicants who experience a qualifying event gain access to a special enrollment period (SEP) to shop for plans in the exchange (or off-exchange, in most cases) with premium subsidies available in the exchange for eligible enrollees.

HHS stepped up enforcement of special enrollment period eligibility verification in 2016, and further increased the eligibility verification process in 2017. So if you experience a qualifying event, be prepared to provide proof of it when you enroll.

And in most cases, the current rules limit SEP plan changes to plans at the same metal level the person already has. The state-run exchanges (ie, the ones that don’t use HealthCare.gov) can use their own discretion on this, but in general, if you’re enrolling mid-year, be prepared to provide proof of the qualifying event that triggered your special enrollment period, and know that you might not be able to switch to a more robust or less robust plan (eg, from bronze to gold or vice versa) during your SEP. And understand that in most — but not all — cases, the current SEP rules allow you to change your coverage but not necessarily go from being uninsured to insured. So you may be asked to provide proof of your prior coverage in addition to proof of the qualifying event.

For example, although a permanent move to an area where different health plans are available used to trigger a SEP regardless of whether you had coverage before the move, that’s no longer the case. You must have coverage in force before your move in order to qualify for a SEP in your new location. The same is true of getting married: In most cases, at least one spouse must have already had coverage in order for the marriage to trigger a SEP.

And without a qualifying event, major medical health insurance is not available outside of general open enrollment, on or off-exchange. This is very different from the pre-2014 individual health insurance market, where people could apply for coverage at any time. But of course, approval used to be contingent on health status, which is no longer the case.

If you’re curious about your eligibility for a special enrollment period, call (800) 436-1566 to discuss your situation with a licensed insurance professional.

The closest thing to ‘real’ insurance if you missed open enrollment

For people who didn’t enroll in coverage during open enrollment, aren’t eligible for employer-sponsored coverage or Medicaid/CHIP, and aren’t expecting a qualifying event later in the year, the options for 2021 coverage are limited to policies that are not regulated by the ACA and are thus not considered minimum essential coverage.

And most of these plans are designed to be supplemental coverage, rather than a person’s only health coverage. This includes things like limited-benefit plans, accident supplements, critical/specific-illness policies, dental/vision plans, and medical discount plans.

But there are a few types of coverage that are available year-round (generally only to fairly healthy individuals), and that can serve as stand-alone coverage in a pinch:

Farm Bureau plans in a few states

In Kansas, Tennessee, Indiana, and Iowa, members of Farm Bureau who are healthy enough to get through medical underwriting can enroll in Farm Bureau plans that are technically not considered insurance — and thus don’t have to comply with insurance regulations — but that are available for purchase year-round.

Farm Bureau plans are also available in Nebraska, without medical underwriting, for people who are actively engaged in agriculture, but these plans use the same November 1 – December 15 open enrollment period that applies to ACA-compliant plans in Nebraska.

Health care sharing ministry plans

There are also health care sharing ministry plans available nearly everywhere, and although they are not compliant with insurance laws, they are better than nothing and are available year-round to people who meet their eligibility criteria.

Short-term health plans

Short-term health insurance is available in all but eleven states, and can serve as decent coverage if your other alternative is to remain uninsured. In most states, it’s the closest thing you can get to “real” health insurance if you find yourself needing to purchase a policy outside of open enrollment without a qualifying event.

For most of 2017 and 2018, short-term plans were capped at three months in duration, due to an Obama administration regulation. But HHS finalized new rules that drastically expanded the allowable duration of short-term plans as of October 2018.


The Obama-Administration HHS implemented the regulation to cap short-term plans at three months in an effort aimed at “curbing abuse” of short-term plans. At that point, under HHS Secretary Sylvia Matthews-Burwell, HHS noted that short-term plans are exempt from having to comply with ACA regulations specifically because they’re supposed to only be used to fill gaps in coverage — but instead, people had been using them for up to a year at a time, effectively removing healthy people from the ACA-compliant risk pool and destabilizing it over the long-run.

In 2017, several GOP Senators asked HHS to reverse this regulation and go back to allowing short-term plans to be issued for durations up to 364 days. And the Trump administration confirmed their commitment to rolling back the limitations on short-term plans in an October 2017 executive order. The new rules took effect in October 2018, implementing the following provisions:

  • Short-term plans can now have initial terms of up to 364 days.
  • Renewal of a short-term plan is allowed as long as the total duration of a single plan doesn’t exceed 36 months (people can string together multiple plans, from the same insurer or different insurers, and thus have short-term coverage for longer than 36 months, as long as they’re in a state that permits this).
  • Short-term plan information must include a disclosure to help consumers understand the potential pitfalls of short-term plans and how they differ from individual health insurance.

But states can still impose stricter rules, and over half the states do so. Some are long-standing rules, while others are newly-adopted rules that states have implemented in an effort to prevent the Trump administration rules from destabilizing their individual insurance markets and pushing healthy people into less comprehensive coverage.

Although premium subsidies (a type of tax credit) are not available for short-term plans, the retail prices on these policies are more affordable than the retail price (ie, unsubsidized) on ACA-compliant plans, and they do still serve as a good stop-gap if you just need the policy to cover you for a few months when you’re in between other policies. However, if your income makes you eligible for the Obamacare premium subsidies, it’s essential that you enroll through your state’s exchange during open enrollment (or a special enrollment period triggered by a qualifying event like losing access to your employer-sponsored health insurance); otherwise, you’re missing out on comprehensive health insurance and a tax credit.

Some short-term plans have provider networks, but others allow you to use any provider you choose (keep in mind, however, that you’ll likely be subject to balance billing if your plan doesn’t have a provider network, since the providers will not be bound by any contract with your insurer regarding the pricing for their services).

And short-term policies are not required to be renewable; the new federal rule allows insurers to offer renewable short-term plans, but does not require them to do so. Depending on your state’s regulations and your insurer’s business plan, you may be able to renew your short-term plans, or you may be able to purchase a new short-term policy when your existing one expires. But if you’re buying a new policy, the purchase will require new underwriting, and in most cases, the new policy will not cover pre-existing conditions, including any that began while you were covered under the first short-term policy.

Unlike ACA-compliant plans, short-term policies have benefit maximums. But the limits on some short-term plans tend to be more reasonable than the infamous pre-ACA “mini-med” plans that barely covered a few nights in the hospital. Lifetime maximums of $750,000 to $2 million are common on short-term plans. While this is not as good as regular individual insurance plans that no longer have annual or lifetime benefit caps, it’s roughly similar to a lot of the plans that were available several years ago in the individual market. And the concept of a “lifetime” limit doesn’t really matter when you’re talking about a plan that lasts for at most 36 months (the maximum amount of time a single plan can remain in effect under the new federal rules), since you won’t be able to purchase another short-term plan if you develop a serious health condition.

But you’ll see plenty of short-term policies with much lower benefit limits. As a general rule, you’ll want to focus on plans that offer at least $1 million in benefits — health care is shockingly expensive.

Short-term insurance applications

The application process is very simple for short-term policies. Once you select a plan, the online application is much shorter than it is for standard individual health insurance, and coverage can be effective as early as the next day.

There are no income-related questions (since short-term policies are not eligible for any of the ACA’s premium subsidies), and the medical history section is generally quite short – nowhere near as onerous as the pre-2014 individual health insurance applications were.

Keep in mind that although the medical history section generally only addresses the most serious conditions in order to determine whether or not the applicant is eligible for coverage, short-term plans generally have blanket disclaimers stating that no pre-existing conditions are covered.

And post-claims underwriting is common on short-term plans. So although the insurer may accept your application based simply on what you disclose when you apply, they can — and likely will — go back through your medical history with a fine-toothed comb if and when you have a significant claim. If they find anything indicating that the current claim might be related to a pre-existing condition, they can rescind your coverage or deny the claim. So although a short-term plan might work well to cover a broken leg, it’s going to be less useful if you end up with a health condition that tends to take a while to develop, as the insurer may determine that the condition, or something related to it, began before your coverage was in force. This story is a good example of how this works.

Clearly, short-term plans are not as good as the ACA-regulated policies that you can purchase during open enrollment or during a special enrollment period. Short-term insurance is not regulated by the ACA, so it doesn’t have to follow the ACA’s rules: The plans still have benefit maximums, and they are not required to cover the ten essential benefits. (Most often, short-term plans don’t cover maternity, prescription drugs, preventive care, or mental health/addiction treatment), they do not have to limit out-of-pocket maximums, and they do not cover pre-existing conditions. They also still use medical underwriting, so coverage is not guaranteed issue.

The majority of short-term plans do not cover outpatient prescriptions. Using a pharmacy discount card may lower medication costs without health insurance, and some discount prices may be lower than an insurance copay.

Not a qualifying event: losing short-term coverage

Although loss of existing minimum essential coverage is a qualifying event that triggers a special open enrollment period for ACA-compliant individual market plans, short-term policies are not considered minimum essential coverage, so the loss of short-term coverage is not a qualifying event (loss of a short-term plan is a qualifying event for employer-sponsored coverage, however, so you’d be able to enroll in your employer’s plan when you short-term plan ends).

Let’s say you lose your job and your employer-sponsored health plan. You then have a 60-day window during which you can enroll in an ACA-compliant plan.

You also have the option to buy a short-term plan at that point, and it may be available with a term of up to a year, depending on where you live. But when the short-term plan ends, you would no longer have access to an ACA-compliant plan (you’d have to wait until the next open enrollment, and a plan selected during open enrollment would become effective on January 1) and although you could purchase another short-term plan, your eligibility would depend on your current medical history. [Some short-term plan insurers offer guaranteed renewability under the new federal rules, meaning that people can renew the plan, without going through medical underwriting, and keep it for up to 36 months. But not all insurers offer this option.]

Although short-term plans do not provide the level of coverage or consumer protections that the new ACA-compliant plans offer, obtaining a short-term policy is better than remaining uninsured. But your best bet is to maintain coverage under an ACA-compliant policy; if you’re not enrolled, you’ll want to do so if you experience a qualifying event (most people don’t take advantage of their qualifying events, perhaps unaware that their opportunity to enroll is limited).


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

The post Miss open enrollment? You’ve got options. appeared first on healthinsurance.org.

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