What Counts as a Qualifying Life Event?

We all know that it’s possible to change our health insurance plans during open enrollment. But what if you want to change your insurance at some point during the months between open enrollment periods? You can’t do so on a whim, but you may be able to take advantage of a special enrollment period when you have a qualifying life event. Here’s how it works.

A financial advisor can help you create a financial plan for your health costs and needs.

What Is a Qualifying Life Event?

A qualifying life event is a change in your family status or health insurance needs that requires a change in your health insurance coverage. If you buy a plan through the government’s Marketplace, you have a 60-day period from the time of a qualifying life event to change your health plan. If you get health insurance through your employer, you generally have 30 days from the qualifying event to change your coverage.

Types of Qualifying Life Events

Qualifying life events generally fall into categories like household changes, coverage changes, status updates, moving or shifts in income. Each type of event can create a special enrollment window where you’re permitted to adjust your health coverage.

Change in Household

So what counts as a qualifying life event? There are the big, obvious ones: birth, death, marriage and divorce. If you need to add or subtract someone from your coverage after one of these events, you have a right to do so in the 60- or 30-day window. If you get married or divorced, become pregnant, have a baby, adopt a child or give a child up for foster care or adoption you qualify for a special enrollment period through the health insurance Marketplace.

Coverage Change

Other qualifying events relate to coverage. If you didn’t get health insurance through your job because you had insurance through your spouse’s job and then you lose that coverage, you’re entitled to enroll in your company’s health plan within 30 days. If you lose your employer-sponsored health insurance because you quit or are laid off, you qualify for a special enrollment period in the Marketplace. If you age out of being on your parent’s plan, you qualify for special enrollment too.

If you were covering your spouse on your health plan at work and they then received insurance through a new employer, you’re allowed to take your spouse off your insurance. That way, your spouse’s premiums will no longer be deducted from your paycheck.

If you or your spouse becomes eligible for a benefits program like Medicaid, Medicare or CHIP, you can change your coverage or cancel it altogether. The same goes for losing eligibility for one of those programs, since you can add coverage outside of open enrollment.

Related Article: 10 Health Insurance Terms You Should Know

Status Change

There are other qualifying life events that relate to your status. If there’s a change in your disability, tax filing, citizenship, immigration or tribal membership status, you’re eligible to change your health insurance coverage. If you become incarcerated or are released from incarceration, you qualify too.

Moving

Moving to another county or zip code may qualify as a life event. Be sure to start a new Marketplace application via healthcare.gov if you don’t have employer-sponsored insurance. Or if the state you move to uses its own exchange, you can sign up for coverage through the state website.

In some cases, moving to a different area within the same state can count as a qualifying life event as well. That’s because certain states have health plans that are only available to residents living in specific regions.

SmartAsset: What Counts as a Qualifying Life Event?

Change in Income

If you have health insurance through the Marketplace, it’s a good idea to report any changes to your income. If your income goes up, you might lose eligibility for subsidized coverage. If you don’t report your income change, you might have to repay subsidies when you file your federal tax return. If your income goes down, it’s in your best interest to report the change promptly because you may qualify for subsidies.

Check out our free tax calculator.

Making the Change

If you’re getting your health insurance through the Marketplace, you’ll have to log in and follow the instructions for enrolling in a special enrollment period. This will mean updating your health insurance application with your new life change.

It’s also important to remember that reporting qualifying life events and income changes may change your eligibility for the premium tax credit, alter your out-of-pocket costs, or affect your available coverage options.

If you’re tweaking your employer-sponsored health insurance you’ll need to talk to your HR representative or supervisor. Or if your company uses an outside HR support site like TriNet you’ll need to log on and follow the instructions for changing your coverage.

Bottom Line

A qualifying life event can allow you to change your health insurance coverage outside of the annual enrollment period. Depending on your circumstances, update your health plan within 30 to 60 days of the event.

Tips to Pay for Health Care Costs

A financial advisor can help you create a financial plan to boost your income and pay for medical costs. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re looking for other ways to pay for health care costs, a health savings account (HSA) can allow you to invest for future medical expenses and enjoy special tax breaks. Find out here if you’re eligible.