Need a Health Plan? You're Out of Luck Until 2015

Unless you qualify for a special enrollment period, the window has closed on buying individual health insurance this year.

May 18, 2014 at 10:51AM

Much attention has been paid to the more than 8 million Americans who signed up for health insurance by the first open enrollment deadline, March 31, 2014. No one knows how many Americans are still uninsured.

If you didn't get around to signing up, here's the bad news: It's probably too late to buy an individual health insurance plan for 2014 because the open enrollment period has ended-with specific exceptions.

And the next open enrollment period starts Nov. 15 for coverage beginning in 2015.

"Nobody is going to let you on," says Carol Taylor, employee benefit advisor, D&S Agency in Roanoke, Va., a United Benefits Advisers partner firm.

That means when you file your 2014 taxes next April, you may have to pay a fine. If you are due a refund, the IRS can withhold $95 per person or 1 percent of your household income, whichever is greater, up to $285, says Charles Coonrod, principal of Foundation Strategies in Katy, Texas, also a UBA firm. That includes a $47.50 or 0.5 percent of household income penalty for every child who doesn't have health insurance coverage. The fines for 2015 and beyond will be even greater.

This open enrollment period does not apply to folks who have group health insurance through work. Watch for your employer's announcement about open enrollment for 2015 plans, usually in the fall.

Qualifying life events
The only way you can get health insurance coverage between now and the end of the year is if you have a qualifying life event or a complex situation related to an application to the government-run marketplace, Taylor says.

The qualifying events for "special enrollment" are:

  • Losing a job with group health insurance.
  • Getting married.
  • Getting divorced and losing coverage from your ex-spouse's employer.
  • Having a baby.
  • Adopting a child or placing a child for adoption or in foster care.
  • Moving to a new home outside your insurer's coverage area.
  • Becoming a citizen.
  • Turning age 26 and being kicked off your parent's plan.
  • Leaving prison
  • Having what the government calls a "complicated case," such as missing open enrollment due to a hospitalization or natural disaster. See the definition of complicated cases.

If you qualify for a special exemption because of any of these events, you have 60 days to sign up.

Job loss and coverage
Job loss gets you in the door for buying a new health plan outside open enrollment.

"Whether you resign or get fired, it's the same. You're losing your health coverage and would be eligible under a qualifying event," says Taylor, a member of the National Association of Health Underwriters legislative council.

But job loss brings another coverage option: COBRA. If you quit your job, you are eligible to opt for COBRA coverage. COBRA coverage allows you to keep your job-based health coverage for 18 months but you must pay the entire premium plus a small administrative fee. Your employer no longer pays any portion of your premium.

If your COBRA coverage ends outside the open enrollment period, you could qualify for a special enrollment period. However, should you decide to end your COBRA coverage early, you won't be able to enroll in a plan outside open enrollment.

With any insurance, should you quit making your premium payments and lose your coverage, you won't be eligible for replacement coverage until open enrollment starts again.

Income and eligibility
Another way you might qualify to sign up for a health plan now is if you enrolled in coverage through the government-run marketplace and your income or household status changes enough to affect your eligibility for tax credits or cost-sharing reductions.

You can enroll in Medicaid or sign up your children for the Children's Health Insurance Program (CHIP) at anytime. These systems both require income eligibility.

Without an open enrollment period, lawmakers and health insurance companies were afraid that people would wait to buy insurance until they got sick and needed it, says Brian Luciani, CEO of Group Insurance Associates in Woodbridge, Conn., also a UBA firm.

"The whole concept of the law was to get everyone covered," Coonrod agrees.

Luciani says that if you don't have health insurance and want to avoid paying the penalty, your best bet is to get a job that has health insurance. Most employers allow their employees to join their health plan within 30 days of hiring.

Penalties for being uninsured
The penalties for not having health insurance are prorated. If you're uncovered for only part of the year, you will owe 1/12th of the annual penalty for each month you don't have coverage. You will pay less if you are able to buy insurance sometime during the year.

If you believe you qualify for special enrollment and are denied, you can appeal the decision.

The next open enrollment period for 2015 coverage is Nov. 15, 2014, through Feb. 15, 2015. If you sign up in November, coverage can start as soon as Jan. 1, 2015. You might want to set reminders to be sure to get health insurance during the next open enrollment period.

In 2016, the fine rises to 2.5 percent of income or $695 per person, whichever is higher.

Luciani predicts that when the penalties for being uninsured increase starting next year, more people will be motivated to sign up during open enrollment.

This article Need a Health Plan? You're Out of Luck Until 2015 originally appeared on Insurance.com.

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