Health insurance regulations are very precise on when and how an individual or family member may join a medical benefits program. Obviously when you first start a new job you have a set period of time that the company will allow you to review the health insurance documentation and make a decision on whether or not you want to sign up for benefits.
If you wait past the open period of time to enroll for benefits you will be prevented from obtaining benefits coverage until one of two things occurs: either the company’s open enrollment date comes or you have a qualifying life change (also called a qualifying life event) that lets you into the plan.
What is a Qualifying Life Change?
You are only allowed back onto a health insurance plan outside of open enrollment if you have a qualifying life change. There are only certain events that count as qualifying life changes, and knowing those will help you know when you can get onto your health insurance plan.
Change in Family Status
A family status change can mean several things. Basically, it means you have increased or decreased the number of eligible family members to be on the insurance plan. This can be the result of marriage, divorce, legal separation, annulment, birth of a child, adoption of a child, adding foster children to your care, or by adding stepchildren to your household through marriage. This can also happen when your children receive coverage of their own elsewhere or is no longer part of your household. And naturally if a spouse or dependent dies, you can make an immediate change to your health insurance coverage.
Change in Insurance Coverage Through Employment
You can also add or drop insurance based on coverage changes for your spouse. A spouse that is unemployed and on your employer’s group insurance coverage can be dropped from that coverage if they become employer and have an insurance option with their new employer.
Why Are Qualifying Life Events So Important?
Understanding when and how you are allowed to add or drop insurance coverage is an important financial consideration. Going without health insurance is extremely risky – all it takes is one unexpected stay in a hospital to ruin you financially for life. No one would willingly go without health insurance if they had another option, but making a mistake with your qualifying life events could lead to you inadvertently being unable to add coverage when you need it most.
If you discover you have made a mistake with your qualifying life event the next time you will be able to make a change is during open enrollment with your employer (or through your spouse’s employer; which would then give you a qualifying event with your employer). If you discover you have a gap in coverage you will need to go to the healthcare marketplace to buy individual coverage. Buying independent insurance can be costly, but at minimum you should get a quote for catastrophic medical insurance. Catastrophic health insurance requires you to provide the first several thousand dollars through self-insurance via a high-deductible. This can drop your monthly insurance cost while still covering you in the event you end up with a six figure hospital bill.