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How Life Changes Impact Health Insurance

Alvin Nelson
February 8, 2021
Alvin Nelson

How Life Changes Impact Health Insurance

Many events can happen in our lives. Someone might lose their job, get married, have a death in their family, or perhaps even turn 26 years old. These events can impact health insurance in many ways, and how someone can adapt their healthcare or find healthcare for these events can vary.

This article will discuss what life changes are eligible Qualifying Life Events to that can allow someone to alter their healthcare, either expanding the coverage they have or allowing them to reduce their rates.

What Qualifies As A "Life Event"?

Usually, changes in health insurance should be done during open enrollment. Any sort of change that doesn’t call for an immediate change in benefits or rates is made at this time for the foreseeable year of healthcare coverage. However, life works outside these normal open enrollment periods. Sometimes events in life can call for someone to alter their health insurance.

A Qualifying Life Event (QLE) is an event that qualifies for changing healthcare coverage. These events occur outside this open enrollment period and may qualify for a Special Enrollment Period.

A Special Enrollment Period allows a person to change their insurance to adapt to Qualifying Life Events. These periods are available for health insurance from both businesses and the Marketplace. Please be aware: Sometimes Special Enrollment Periods vary in the number of days one may apply. It’s wise to consult the insurance provider early to understand the period they designate.

For example, if a baby was born and the father wants to cover the child under insurance, he would be eligible for a Special Enrollment through his insurance to cover the child as a birth is a qualifying life event.

There are many kinds of qualifying life events that impact health insurance, and details that can be difficult to navigate. Let’s look over the common life events.

Planning For Life Changes

There are several events in life that people often plan for that qualify for a Special Enrollment Period. These events are forecasted and not sudden.

Marriage

If two people are planning to marry, and one of the spouses wishes to cover their partner, then they are allowed to enroll their spouse onto their insurance often within 60 days from the marriage. Insurance companies will require a marriage certificate issued by the local government to verify the marriage.

Birth or Adoption of a Child

If someone or a couple is expecting to give birth to a child or adopt a child, they are allowed to enroll these children under their insurance often within 60 days from the birth or adoption. Insurance companies will require either the birth certificate or adoption papers to verify.

Divorce

If someone is divorced and loses health insurance due to the legal separation as they were dependent on the health insurance plan, they are eligible for Special Enrollment to an available insurance plan. However, if divorce results in a continuation of health insurance, according to HealthCare.gov, the person is not eligible. However, if this person would also move to a different address, they are eligible.

Change of Address

If someone would move to a different ZIP code, or in some cases like a student or a seasonal worker moving to where they study or work, they are eligible for special enrollment after the change of address is verified. Sometimes, if a major event isn’t a qualifying event like divorce, a change of address can still be used to start a special enrollment period.

Loss of Dependent

If someone would leave the household, the insurance holder can adjust their insurance under special enrollment to reflect these changes in the number of people covered in the household.

Aging Out

This is an event when a dependent on a household insurance plan turns 26 years old. This person qualifies for special enrollment for their personal insurance plan, or through their employer. The person who previously covered this individual qualifies for special enrollment to adjust their insurance for the loss of a dependent. Both parties have 30 or 60 days from the birthday to make these changes.

Changing of Jobs

When someone would start a new job, they are offered through their employer a special enrollment to sign up for health insurance. It’s wise to speak to employers before accepting a job for what health insurance is offered, and once hired to fully read the coverage available.

Other Qualifying Sudden Changes

These changes in health insurance happen when we least expect them, and there can be different rules to watch out for. While these events can be very stressful for some people, it’s good to keep in mind in case they do happen.

Death

If someone under the insurance plan suddenly passes away, the person who covered the deceased previously qualifies for special enrollment to adjust their insurance. This must happen within the specified number of days from the death and show a certificate of death to the insurance provider.

Loss of a Job

If someone loses their job and is not moving to a different job immediately, they will lose health insurance. However, they are eligible for the Continuation of Health Coverage, called “COBRA”, by paying for health insurance directly. The cost of insurance will be entirely out-of-pocket for a specified duration of time. The rates are often far higher than their previous rate as employers pay a portion of health insurance along with employee contributions. They are also able to buy a Marketplace insurance plan, but again, will have to pay in full.

Documenting Life Events

No matter what happens in life, insurance companies might require documentation to verify these changes. Speak to the insurance provider about what documents are needed. HealthyCare.gov suggests that people looking to change Marketplace health insurance should send these documents within 30 days.

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There are several factors that impact your monthly premium; including, but not limited to your age, geographical location, annual income, dependents, and the type of plan you choose. Monthly premiums do not include out-of-pocket costs.

The advertised price may not be typical. It was generated using the Kaiser Family Foundation's subsidy calculator that was accessed on September 16, 2020. The following parameters were used: 21 year old adult, non-tobacco user, annual income of $24,700 in 2020, no children, and no available coverage through a spouse's employer. The resulting monthly premium was $30 per month (or $360 per year after $2,751 in subsidies) for a Bronze Plan. Even when using the same parameters, this result is subject to change.