Individual health insurance has endured huge changes since the passing of the Affordable Care Act. The biggest change has been Guaranteed Issue, where anyone can purchase coverage at the same cost as anyone else the same age with no preexisting condition limitations and coverage for all Medical needs starting the first day of coverage. Some states already had similar rules, giving insurance companies an idea of how these changes would affect their enrollment. The biggest problem they saw in these states were customers who would not buy insurance until they already had a medical need arise, never paying into an insurance plan until they had expenses that exceeded their premium dollars. Insurance companies immediately stated that they would not participate in individual insurance plans, driving lawmakers to add in special rules to protect insurers from these “insurance as needed” customers.
The special rules introduced were the Individual Mandate, the Open Enrollment and the Special Enrollment rules. The Individual Mandate encourages everyone to maintain coverage, even when healthy. Outside of Open Enrollment or a Special Enrollment Period, one cannot sign up for an ACA compliant individual health insurance plan. Under the new law’s Individual Mandate, you are allowed to choose to not have coverage, but will possibly face annually increasing penalties for choosing to go without coverage. This encourages enrollment from those who would otherwise risk going without coverage. In 2018, the penalty for anyone without qualified coverage for the year is 2.5% of the household income for any adult and half of that for any child under 18. For an example: A household of 5, with two adult parents, two children under 18 and one 19-year-old child, none of which have qualified coverage, and a household income of $70,000 will not only lack coverage but have a penalty of $7,000 (2.5% x 3 adults 1.25% x 2 children = 10% of $70,000 = $7,000). In 2019, the mandate will no longer have a penalty attached.
Open Enrollment
Open Enrollment is the time of year that anyone can sign up for an individual medical insurance plan without having a Special Enrollment Event. To sign up for coverage beginning on January 1st, one must sign up for coverage in the Open Enrollment period. For example, the Open Enrollment period for 2019 is November 1st through December 15th, 2018. In past years, Open Enrollment has been longer to encourage a better sign up for the annual enrollment. If you are planning on signing up during this time, do not miss the deadline!
Special Enrollment
Special Enrollment Periods are triggered by a Qualifying Life Event which allows additions or enrollment outside of Open Enrollment. Special Enrollment periods give you 60 days before a known loss in coverage and 60 days after all Qualifying Life Events to sign up for coverage. In most cases, coverage will start the first of the month after signing up or the Qualifying Life Event, whichever is later.
Qualifying Life Events:
- Loss of other qualified coverage (unless loss is due to failure to pay premium)
- Losing existing coverage from employment, COBRA, individual or student plans
- Losing eligibility for Medicare, Medicaid or CHIP
- Turning 26 and losing parent’s plan’s coverage
- Change in household, such as marriage, divorce, birth (coverage begins immediately), adoption or death
- Change in residence to another County or State
- Change in income that will qualify for a subsidy
- Becoming a US Citizen
- Leaving incarceration
Email us today with any questions and when you are ready to sign up for your Individual Coverage!
