Open Enrollment Explained (And What Happens if You Miss It)

Open Enrollment is the short period of time when you enroll in or make changes to your employee benefits elections. These changes can include adding or dropping coverage, adding or removing dependents, or enrolling in benefits for the first time. Open enrollment allows you to take advantage of important benefits, such as health, vision, dental and life insurance, a health savings account (HSA), and a retirement plan.

The decisions you make during the open enrollment period can significantly impact your life and your finances, so it is important to weigh your options carefully. Most employers tend to hold open enrollment approximately 30-60 days before their plan renews, which is Jan 1.

If you miss your employer’s open enrollment deadline, you could lose coverage for yourself and your loved ones and be subject to a fine imposed by the Affordable Care Act (ACA). Missing this deadline also means you cannot make changes or enroll in benefits until the next open enrollment period.

One exception to this rule is if you experience a life-changing qualifying event that would trigger a special enrollment period (SEP). Events such as getting married or divorced, having or adopting children, or losing eligibility for other health coverage can trigger special enrollment rights. In some cases, you can also qualify for special enrollment if you become eligible for a premium assistance subsidy under Medicaid or a State Children’s Health Insurance Program (CHIP).

What Happens If I Don’t Take Any Action?

You could remain uninsured until the next open enrollment period opens up. However, accidents and diseases can strike at any time, so the cost of being uninsured can add up quickly.

Starting with the 2019 plan year (for which you’ll file taxes in April 2020), the Shared Responsibility Payment no longer applies at the federal level. Prior to this, you would pay a fee called the individual shared responsibility payment when you filed your federal taxes if you did not purchase health insurance. This was commonly referred to as the individual mandate.

Even though the individual mandate has been removed at the federal level, there are still 5 states which enforce the mandate at the state level as well as the District of Columbia.

They are:

• Massachusetts
• New Jersey
• Vermont
• California
• Rhode Island
• District of Columbia (Washington D.C.)

For these states, you’ll need to check with your tax preparer on fees for not having health coverage.

Can I Apply for Health Insurance After Open Enrollment?

Employees who miss open enrollment can sign up for coverage outside of the OE period if they have a qualifying life event — which would make them eligible for a special enrollment period (SEP).

What is a “Qualifying Life Event” for Health Insurance?

Qualifying life events (QLEs) are ones that qualify employees to make changes to their health coverage and thus trigger enrollment. They revolve around two main categories: basic life events or loss of other coverage.

Basic Life Events

Basic life events occur when someone becomes eligible or ineligible to join the plan. When a child is born, for example, they can be added to the plan. For marriage and divorce, additions or deletions can be made. The following events allow for the special 30-day window to change coverage:

• Birth of a child
• Adoption of a child
• Marriage
• Divorce
• Death of a spouse that provided health care coverage
• Death of a dependent
• Dependent becomes ineligible (age 26)
• Dependent acquires other insurance

Other Causes of Coverage Loss

In some instances, employees lose health coverage which can trigger the special 30-day window to change coverage. If an employee divorces, for example, their spouse may remove them from another plan, giving them access to yours. These cases of losing health insurance coverage can trigger special enrollment:

Change in Employment Status

• Separation or reduction of hours that leaves the employee ineligible for benefits
• New hires or change from part-time to full-time status
• Loss of other coverage: for employees previously covered by a spouse or parent
• Divorce
• Death of a spouse or parent who provided coverage
• Retirement — eligibility for Medicare coverage

Special circumstances

Some special cases also allow employees to make changes outside of the open enrollment period:

• Court orders: Typically, in the event of divorce or legal separation, a judge can require businesses to allow employees to make changes to coverage.
• Extended, unpaid leave of absence: employees who take more than 30 days of unpaid leave (non-medical leave) can stop coverage during the leave and reinstate coverage upon their return to work.

Be Prepared!

Missing your employer’s open enrollment deadline can be costly. Be proactive—mark deadlines on your calendar and create reminders on your phone so you do not miss your employer’s open enrollment period. If you miss the deadline, be sure to talk to your HR manager immediately.

Everyone’s healthcare needs are unique, and talking to an expert is crucial while selecting the right coverage for you and your family. Simple Health Quotes has an experienced customer support team specializing in comprehensive insurance plans.