Health insurance often feels tied to one annual deadline. Miss Open Enrollment, and it can seem like you’re stuck waiting until the next enrollment period before you can choose a new plan.
That isn’t always the case.
Certain changes in your life can qualify you for a Special Enrollment Period, giving you an opportunity to enroll in Marketplace health insurance outside the annual Open Enrollment window. Losing coverage after leaving a job is one of the most common examples.
That distinction can be especially important when you’re between jobs, moving to a new employer, or unexpectedly losing the coverage you relied on. Instead of assuming you need to remain uninsured or immediately accept the first continuation option you’re offered, it’s worth finding out whether your situation gives you another opportunity to shop for coverage.
What Is a Qualifying Life Event?
A qualifying life event, commonly called a QLE, is a significant change in your circumstances that may make you eligible for a Special Enrollment Period outside the normal annual enrollment window.
HealthCare.gov groups common qualifying events into several categories, including losing health coverage, changes in your household, certain moves, and other major eligibility changes.
Examples can include:
- Losing qualifying employer-sponsored health insurance.
- Turning 26 and losing coverage through a parent’s health plan.
- Getting married.
- Having or adopting a child.
- Getting divorced and losing health coverage as a result.
- Moving to a new area in circumstances that meet Special Enrollment requirements.
- Losing eligibility for Medicaid or CHIP.
- Certain other changes affecting your coverage eligibility.
A job change deserves a little clarification. Simply accepting a new position doesn’t automatically create a Special Enrollment Period. If changing or leaving jobs causes you to lose your existing job-based health coverage, however, that loss can qualify you.
That applies whether you voluntarily leave your employer or your employment ends unexpectedly. What matters for Marketplace Special Enrollment is generally the loss of qualifying coverage, rather than the reason you left the job.
For a broader overview of the rules, Healthcare.gov provides a useful guide to qualifying life events and Special Enrollment Periods.
How Does a Special Enrollment Period Work?
A Special Enrollment Period gives eligible consumers a limited window to choose Marketplace coverage outside Open Enrollment.
When you’re losing job-based health insurance, you generally have 60 days before your coverage ends and 60 days after it ends to select a Marketplace plan. Applying before your employer coverage expires can make the transition considerably easier because your new coverage may be able to begin the first day of the month after the old coverage ends.
You may also be asked to provide documentation confirming the qualifying event and the date your previous coverage ended or will end. This could include information from your former employer or health plan. If documentation is required, following the Marketplace instructions promptly can help prevent delays in activating your new coverage.
The limited window is important. Waiting too long after losing coverage can mean losing your Special Enrollment opportunity and having to wait until the next Open Enrollment Period unless another qualifying event occurs.
If you know your employer-sponsored insurance is about to end, there’s no advantage in waiting until you’re already uninsured to start exploring your options.
Health Insurance Between Jobs: What Are Your Options?
Finding health insurance between jobs doesn’t necessarily mean choosing between COBRA and having no coverage at all.
Depending on your circumstances, you may have several paths to consider.
COBRA continuation coverage may allow you to remain on the same employer-sponsored plan you had before leaving your job. That continuity can be valuable if you’re receiving ongoing care, want to keep the same provider network, or have already made significant progress toward your deductible.
The trade-off is cost. Once you’re no longer an active employee, you can generally be required to pay the full cost of COBRA coverage yourself, plus an administrative charge. The U.S. Department of Labor notes that COBRA premiums can reach the full cost of coverage plus up to a 2% administration fee.
A Marketplace health plan is another possibility. Losing job-based coverage can create a Special Enrollment Period, allowing you to compare new plans rather than continuing the employer plan. Depending on your expected household income and other eligibility factors, you may also qualify for premium tax credits or additional Marketplace savings.
Depending on your state and individual circumstances, private health insurance options may also be available. American Way Health compares ACA Marketplace and private medical plans, allowing you to look at different plan structures, networks and costs rather than assuming one type of coverage is automatically right for you. Availability and eligibility can vary by state and plan.
If you’d like a deeper overview of what happens immediately after employer coverage ends, our guide to I Lost My Job: What Happens to My Health Insurance? walks through the broader decision-making process.
COBRA vs. Marketplace: Which One Makes More Sense?
There isn’t a universal winner in the COBRA vs. Marketplace comparison.
COBRA’s biggest advantage is continuity. You’re generally keeping the employer-sponsored coverage you already know, which can be particularly valuable if you want to maintain access to current doctors, specialists or an ongoing course of treatment.
Marketplace coverage gives you the opportunity to shop again.
That can be worthwhile if the full COBRA premium is significantly higher than what you were paying as an employee, your healthcare needs have changed, or you want to see whether you’re eligible for Marketplace savings.
When comparing your options, look beyond the monthly premium and consider:
- Whether your preferred doctors, hospitals and specialists participate in the plan’s network.
- How your prescriptions are covered.
- The deductible and out-of-pocket maximum.
- Copays and coinsurance for the care you regularly use.
- Your expected household income and potential eligibility for Marketplace savings.
- How long you expect to need coverage before another employer plan becomes available.
There’s also an important timing rule to understand once you choose COBRA. If your COBRA coverage later reaches its normal expiration, that loss can create another Special Enrollment Period. Voluntarily cancelling COBRA in the middle of the year, however, generally doesn’t create a new Marketplace Special Enrollment Period by itself. During annual Open Enrollment, you can choose to leave COBRA and move to a Marketplace plan even if the COBRA coverage hasn’t expired.
That makes it worth comparing the alternatives before making your initial decision.
Starting a New Job Can Change the Equation Again
Moving between jobs can create another layer of decisions when your new employer offers health insurance.
An offer of employer-sponsored coverage can affect whether you’re eligible for Marketplace premium tax credits. If the employer plan meets federal affordability and minimum-value standards, you generally won’t qualify for Marketplace subsidies even if you decide not to enroll in the employer plan.
This is one reason health insurance between jobs shouldn’t be viewed as a one-time decision.
Your best option during the transition may change once your new benefits begin, your household income changes, or you become eligible for employer-sponsored coverage again.
Reviewing those details before enrolling can help you avoid paying for unnecessary overlapping coverage or selecting a plan based on assumptions that no longer apply.
Don’t Let the Enrollment Window Pass
Losing health insurance can create urgency, especially when it happens at the same time as a job change or another major transition.
The answer isn’t necessarily to rush into whichever option reaches you first.
Start by confirming when your existing coverage ends. Determine whether the loss qualifies you for a Special Enrollment Period, then compare the plans and continuation options available to you before the deadline passes.
If your coverage hasn’t ended yet, beginning that process early can make it easier to line up your next plan and reduce the possibility of a gap in coverage.
The important thing is recognizing that Open Enrollment isn’t always your only opportunity to get health insurance. A qualifying life event may open another door when you need coverage most.
Your Next Step
Understanding whether you qualify for a Special Enrollment Period is only the beginning. The next decision is determining which available coverage actually makes sense for your healthcare needs and budget.
American Way Health helps individuals and families compare ACA Marketplace and private health insurance options from a broad range of insurance companies nationwide. Our licensed advisors can help you understand your eligibility, compare plan costs and networks, and review the options available in your area.
Whether you’ve recently lost employer-sponsored coverage, changed jobs, or experienced another qualifying life event, you may have more options than you realize.
Ready to find out what coverage is available? Get your free personalized quote and let us help you compare your options.