Special Enrollment Periods for Individual Health Insurance

Individual health insurance (also known as individual/family health insurance) is the kind that you buy yourself instead of obtaining from an employer. There’s an annual window each year—in most states, from November 1 to January 15—when enrollment is open to purchase these plans.

Outside of that window, special enrollment periods allow people to buy individual health insurance or switch to a different plan when they experience certain circumstances or life events.

The rules for individual health insurance special enrollment periods stem from the Affordable Care Act (ACA) and subsequent regulations. They are unique to the individual market and the rules are not the same for employer-sponsored plans. This article will explain how special enrollment periods work for people who buy their own health insurance.

What Is a Special Enrollment Period?

A special enrollment period is a window during which a person can enroll in health coverage or switch to a different plan outside of the normal annual open enrollment period.

In the individual market, special enrollment periods generally run for 60 days following a qualifying life event, although some extend for 60 days before and after the event. Some special enrollment periods allow people to enroll in or switch to any available health plan, whereas others are more limited.

Most individual health insurance special enrollment periods require a qualifying life event. But some are simply available to a particular population (such as Native Americans or certain applicants with low income) without a specific life event.

Most special enrollment periods also require that the person have minimum essential coverage before the qualifying life event. In other words, most special enrollment periods tend to be an opportunity to change coverage rather than an opportunity to newly enroll in coverage—but there are some exceptions.

Why Are Special Enrollment Periods Necessary?

Prior to 2014, individual health insurance could be purchased year-round. But in nearly every state it was also subject to medical underwriting. This meant that the health insurance company would look at the applicant’s medical history when deciding whether to offer them a policy (and if so, how much to charge for it and whether to exclude any preexisting conditions, which are medical conditions they had before enrolling).

The Affordable Care Act changed all of that. Under the ACA, individual health insurance is guaranteed issue, which means insurers can no longer consider an applicant’s medical history.

But the flip side is that coverage is no longer available year-round. Instead, it now follows the same sort of rules that had long been used for employer-sponsored coverage: You can only enroll during open enrollment or during a special enrollment period.

Without limited enrollment windows, people could simply wait until they need medical care and then buy coverage, potentially causing a death spiral (premiums rapidly increase due to changes in the covered population) in the insurance market.

How Are Special Enrollment Periods Regulated?

The federal government has created regulations (detailed in the Code of Federal Regulations, in 45 CFR § 155.420) that pertain to special enrollment periods for individual health insurance. Note that these are not the same rules that apply to special enrollment periods for employer-sponsored health insurance (those are detailed in the Code of Federal Regulations, 29 CFR § 2590.701-6).

The individual market includes plans purchased through the health insurance exchange as well as plans purchased directly from a health insurance company (also known as “off-exchange” plans). Most special enrollment periods apply both on-exchange and off-exchange, although there are some that are only available on-exchange.

The federal rules for special enrollment periods apply in every state that uses the federally run exchange (HealthCare.gov). And many of them also must be offered in states that run their own exchanges.

But some federally created special enrollment periods are optional for state-run exchanges. And some state-run exchanges go above and beyond the federal rules, offering additional special enrollment opportunities for their residents.

So, to some extent, special enrollment periods for individual health insurance do vary a bit from one state to another.

Qualifying Life Events

There is a long list of qualifying events that will create a special enrollment period for ACA-compliant individual health insurance. They include:

Involuntary loss of other minimum essential coverage: Involuntary loss means that the person didn’t cancel the plan themselves, fail to pay the premiums, or lose the coverage as a result of rescission (termination due to fraud or misrepresentation).

But loss of employer-sponsored coverage does count as involuntary loss of coverage, even if the person voluntarily left their job or reduced their hours enough to no longer qualify for coverage. And the special enrollment period is available regardless of whether a person is eligible for Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance (insurance plan that an employee continues paying premiums on and whose benefits carry over after that person leaves the job).

Loss of coverage that isn’t minimum essential coverage, such as a short-term health plan (temporary coverage when you experience a lapse in permanent coverage) or healthcare sharing ministry plan (healthcare plan with shared costs among members who share religious or ethical beliefs), does not result in a special enrollment period.

Marriage: In most cases, at least one spouse must have had minimum essential coverage prior to the marriage in order to trigger a special enrollment period.

Gaining or becoming a dependent: This can be by birth or adoption, and it also applies when a child support order is issued.

A permanent move to a location where different health plans are available: In most cases, there is a requirement that the person already had minimum essential coverage prior to the move.

Individual health plans are regulated and sold at the state level, so a move to a different state will trigger a special enrollment period. But if different health plans are sold in different parts of a state (which is often the case) a move within the state can create a special enrollment period.

A change in subsidy eligibility: The ACA provides income-based premium subsidies and cost-sharing reductions for people who enroll in health coverage through the exchange.

Depending on the circumstances, a person can be eligible for a special enrollment period, allowing them to switch to a different plan if they experience an income change that makes them newly eligible or newly ineligible for either type of financial assistance.

A person who is in the “coverage gap” in a state that hasn’t expanded Medicaid (state-sponsored health insurance) will qualify for a special enrollment period if their income increases to above the poverty level.

Becoming a U.S. citizen or lawfully present resident: It’s also important to note that lawfully present immigrants can qualify for subsidies in the exchange, even with income below the poverty level. Citizenship is not required for subsidy eligibility.

Certain changes to employer-sponsored coverage: If your employer-sponsored health plan (or your circumstances, including your income) change and the result is that your employer-sponsored health plan is no longer considered affordable or no longer provides minimum value, you’ll qualify for a special enrollment period, during which you can switch to individual health insurance if you choose to do so.

Gaining access to a QSEHRA or ICHRA: If you become eligible for employer reimbursement of individual health insurance premiums, either via a qualified small employer health reimbursement arrangement (QSEHRA) or individual coverage health reimbursement arrangement (ICHRA), you’ll qualify for a special enrollment period, during which you can sign up for individual health insurance.

Your health plan renews sometime other than January 1: If you’re enrolled in an employer-sponsored plan that renews midyear or an individual market plan that renews midyear—including grandmothered plans (in place since before January 1, 2014) or grandfathered plans (in place on March 23, 2010, when the ACA was signed into law—you can choose to drop that coverage (instead of renewing it) and use a special enrollment period to switch to an ACA-compliant individual market health plan.

(Note that if you’re eligible for employer-sponsored coverage that’s considered affordable and that provides minimum value, you would not be eligible for any subsidies in the exchange if you choose to switch to an individual market plan.)

Exceptional circumstances: This is a catch-all category that can include things like natural disasters that prevented a person from enrolling during open enrollment, or errors made by the exchange or the health plan.

Some state-run health insurance exchanges use this category to allow a special enrollment period due to pregnancy. Others use it to create a special enrollment period for people who utilize the state tax return process to determine their eligibility for health coverage benefits.

Summary

Because the individual health insurance market no longer uses medical underwriting (coverage is guaranteed issue, regardless of medical history), enrollment is limited to an annual open enrollment period.

But certain qualifying life events—such as loss of other coverage, marriage, or moving to a new area—will allow a person to enroll in individual market coverage outside of the annual open enrollment period.

A Word From Verywell

If you need to purchase health insurance outside of the annual open enrollment period, check to see if you’re eligible for a special enrollment period. If you are, you’ll generally have at least 60 days to submit an application and select a plan.

In most cases, you can do this through the exchange or directly through an insurance company. But keep in mind that financial assistance is only available through the exchange. Most people are eligible for financial assistance, so it’s likely in your best interest to seek coverage in the exchange during your special enrollment period.