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How major life events can affect your health insurance planning

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Sometimes you know ahead of time that a major event will happen in your life. Examples might include getting married or divorced, changing jobs or having a baby. Other times, such as at a death, you may not have advance warning. Either way, you’ll have a lot to think about. One thing to keep in mind is your health insurance. How can you make sure you stay covered? How can you get the best coverage for you and your family?

This article discusses the kinds of life events that may give you a chance to make changes in your health insurance. It notes how you may need to document those events. And it describes the kinds of choices you may make when those events happen or are about to happen.

Qualifying life events

The usual time to sign up for health insurance is during open enrollment. That’s the once-a-year period when businesses allow employees to join a plan or switch plans. The government also has an open enrollment period for its Health Insurance Marketplace or Exchange. In addition, both businesses and the Marketplace allow you to make changes to your health insurance anytime if certain major life events happen. Such an event is called a qualifying life event or qualifying status change.

When those events happen, the time to make changes to your health insurance is short. For job-based insurance, most businesses give their employees 30 days from the time of the life event. Events that qualify for job-based plans may include getting married, having a baby or losing coverage under your spouse’s plan. For a Marketplace plan, you have 60 days to make your changes, in what are called special enrollment periods.

These are the types of qualifying life events that the Marketplace recognizes for its special enrollment periods:

  • Loss of health insurance. For example, you may qualify if you lose a job, costing you your job-based coverage. Other examples include losing eligibility for Medicaid or the Children’s Health Insurance Program (CHIP). If you lose coverage through a family member—say, if you turn 26 and can no longer be on your parents’ plan, or you get divorced and are no longer on your spouse’s plan—you may qualify for a special enrollment period. The coverage loss must have happened in the last 60 days, or you must expect it to happen in the next 60 days.
  • Changes in household size. Examples include getting married, childbirth or adopting a child. The change must have happened in the past 60 days.
  • Changes in residence. Household moves may qualify you for a special enrollment period. Examples include moving to a new zip code or county or moving to the United States from a foreign country. (If you move from a foreign country, you must be a US citizen or national or have one of several immigration statuses to use the Health Insurance Marketplace.)
  • Other qualifying changes. An assortment of other changes may qualify you for a special enrollment period, such as becoming a US citizen or leaving prison.
  • Complex issues. There are several complicated or exceptional circumstances that may qualify you for special enrollment. One example would be if misinformation from an agent or broker kept you from enrolling during the plan’s open enrollment period. Another would be if a hurricane or other natural disaster prevented you from enrolling during open enrollment.

For the complete list of life changes that can qualify you for a special enrollment period in the Marketplace, click here. That link also allows you to answer some questions to see if you qualify.

Documenting a life event

To make a change to your health insurance, you may need to provide documentation for your life event. For example, if you got married, you may need to supply a marriage certificate or marriage license. To see a list of documents and deadlines needed for Marketplace special enrollment periods, click here.

Making choices

A major life event gives you a chance to rethink your current coverage (or lack of coverage). The choices you can make will depend on the kind of life event. The following are some examples.

Marriage, birth, adoption. Suppose you’re getting married or having or adopting a child. You may decide to make a change as simple as adding your new spouse or new child to your current plan. But you may also consider whether your current plan is meeting your needs or will be the best fit for your growing family. If your employer offers a choice of plans, or if you get your coverage through the Marketplace, you may choose a different plan from the one you have now. If you prefer your new spouse’s plan to yours, you can switch to it. If you currently don’t have coverage, you can sign up for it.

There are many factors to consider when choosing between plans. How much will each plan cost? Can you see your regular doctors? Will the plan cover the care you need?

Divorce, death, loss of dependent. You also have choices to make if you get divorced or if a spouse dies. If you were formerly covered by your spouse’s plan, you can enroll in new coverage. If a dependent dies or moves to a separate plan, you can cancel coverage for the dependent.

Loss of job. If you leave a job and start a new one, you can switch to your new employer’s coverage. If you lose your job without another job in place, you can stay on your employer’s plan for up to 18 months through what is called COBRA. Or you can buy a Marketplace plan. There may be still another option. If you’re married and your spouse has coverage, you can join your spouse’s plan as a dependent. You have these choices no matter what the reason was for losing your job—for example, whether you quit, got fired or were laid off.

If you lose a job, you’ll need to think carefully about which option is best for you and your family. With COBRA, you keep the plan you’re used to, but it’s often very expensive. That’s because employers usually pay at least part of the insurance premium for their employees. With COBRA, you have to pay the whole premium. In weighing COBRA versus a Marketplace plan versus a spouse’s plan, you have to consider the pros and cons of each, including costs and level of coverage.

Spouse’s loss of job. Suppose your spouse loses a job, and you were covered under the spouse’s plan. Now you can choose to enroll in a plan at your own job. Or you can shop for a plan in the Marketplace.

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