What Does Open Enrollment Mean in Health Insurance – All You Should Know

Open enrollment is a specified, limited period within the year when individuals can enroll, review, or change their health insurance coverage. For most insurance providers, the open enrollment period is typically once a year, with an indicated deadline.

Since the open enrollment period is a set period, you must understand the applicable rules, deadlines, and requirements to enable you to make an informed health insurance coverage and enroll on time.

This article will provide a comprehensive overview of what open enrollment means in health insurance, including its importance, eligibility, and how to prepare for open enrollment.

What Can You Do During Open Enrollment?

During the open enrollment period, you can:

1. Sign up for a new health plan
2. Renew your current plan
3. Change the terms of your current plan, e.g., add or remove beneficiaries, reduce or increase the scope of coverage
4. Change to a new plan

Open Enrollment for Different Types of Health Insurance Plans

The open enrollment period for health insurance varies from one health plan to another and from state to state. Below is an overview of the open enrollment periods for popular health insurance plans:

• Individual or family health insurance. Typically, the open enrollment period for individual or family health insurance plans is between November 1st and December 15th each year. For most of them, coverage starts on January 1st of the following year and through the rest of the year. However, there might be slight variances between plans.
• Medicare. The open enrollment period for Medicare starts from October 15th to December 7th each year.
• Employer-sponsored health insurance. Open enrollment dates for employer-sponsored health insurance plans vary from employer to employer. A majority have one enrollment period in the year, others have multiple enrollment periods, yet others have open enrollment throughout the year. Confirm with your employer about their open enrollment period.

Keep in mind that open enrollment periods may change from year to year. Therefore, contact your health insurance provider or the health insurance marketplace for up-to-date information on open enrollment periods for your health plan. Or, check the Health Insurance Marketplace for the specific open enrollment dates for your or a prospective health plan in your state.

What Happens If You Miss the Open Enrollment Period?

There may be dire consequences if you miss the open enrollment period for your health insurance.

First, you will not be able to enroll or make changes to your current plan until the next enrollment period. Typically, that would mean an entire year without health insurance coverage unless you have a life event that qualifies you for the special enrollment period.

If you find an insurance provider that is willing to enroll you outside of their enrollment period, yet you do not qualify for the special enrollment period, you will likely be charged higher premiums, and there may be increased out-of-pocket expenses. Also, there may be coverage limits on pre-existing conditions. Also, you may have access to only a small network of providers and hospitals.

Another major consequence of missing the open enrollment period is that you may be subject to a penalty under the individual mandate provision of the Affordable Care Act. The penalty amount is based on your income and family size and can be as high as 2.5% of your household income.

Therefore, it is important to enroll and renew your insurance plan within the open enrollment period. If you have a current plan, it ensures continuity in coverage to the next year. If you want to change or apply for the first time, it gives you ample time to compare plans and find a suitable one that suits your budget and coverage needs.

Nevertheless, if you cannot enroll within the open enrollment period for one reason or another, consider seeking special enrollment. To be eligible for special enrollment, you must have a qualifying life event such as job loss, divorce, birth, or adoption. Consult with the health insurance provider to determine if you qualify for the special enrollment.

If you do not qualify for special enrollment, consider taking up short-term health insurance to provide you with temporary coverage until the next open enrollment for major health insurance plans. Note that short-term health insurance is not required to cover pre-existing conditions and is not considered minimum essential coverage under the Affordable Care Act.

Types of Health Insurance Plans That Do Not Have an Open Enrollment Period

A few health insurance plans do not have an open enrollment period. These include:

• Medicare supplement plans. Also known as Medigap plans, Medicare supplement plans offer coverage for aspects not covered by the original Medicare plan. Private insurance companies offer these supplemental plans and do not have a specified open enrollment period. However, if you are enrolling for the first time, you should do so within the initial enrollment period.
• Medicaid. Medicaid is a national and federal government health insurance program for low income individuals and families. Enrollment is open throughout the year. You may sign up at any time as long you are eligible.
• Employer-Sponsored Health Insurance. As mentioned earlier, some employer-sponsored health insurance plans may have an open enrollment period, but some do not.
• Children’s Health Insurance Program (CHIP). CHIP is a health insurance program for middle- to low-income children. There is no specified open enrollment period; you may enroll at any time throughout the year.

How to Get Ready for Open Enrollment

The key to successful health insurance enrollment is planning and preparing for the open enrollment period. Below are tips for getting ready for the open enrollment period.

1. Review your current coverage. Carefully assess your current health insurance plan. Are you satisfied or dissatisfied with it? Does it meet your health care needs? Is there anything you would like to change about it? Have there been recent changes in your income or health status that would affect the suitability of your current plan? Also, consider whether your current provider network offers you adequate coverage.
2. Compare plans. If you are dissatisfied with your current plan, research alternatives that best fit your needs and budget. You can use online tools like the federal health insurance marketplace or your state’s health insurance exchange to compare plans and enroll. When comparing plans, consider your budget and other applicable costs such as copayments, deductibles, co-insurance, and other out-of-pocket expenses. Also, check the next open enrollment period.
3. Choose your preferred plan. Narrow down to the best-suited option. If you are having difficulty selecting, consult with a health insurance agency. Once you have identified your preferred plan, review its eligibility criteria and enrollment procedure. Read through the terms and conditions for the coverage and seek clarifications from the provider if need be. Then, prepare your paperwork for enrollment.
4. Enroll. Once you have chosen a plan for you and your family, enroll during the open enrollment period. Enrolling earlier in the enrollment period is best to allow you ample time to make any necessary amendments to your application and for approval.

Conclusion

The open enrollment period is crucial for enrolling or making changes to your health insurance plan. It is usually once per year for most health plans. However, a few health plans, such as Medicaid, Medigap, and CHIP, are open throughout the year.

Stay up to date with the open enrollment period for your current or prospective health plan to ensure you do not miss it. If you do, you will have to wait until the next enrollment period, typically a year. This would mean that you will not have main coverage in place and may be subject to penalties according to the Affordable Care Act.

FAQs

What is the difference between annual enrollment vs open enrollment?

Annual and open enrollment are similar in that they are both set periods when applicants can enroll in a new plan or make changes to their existing coverage. However, they differ because annual enrollment applies to employee-sponsored health plans while open enrollment applies to plans offered by health insurance providers and exchanges.

What is the difference between initial enrollment vs open enrollment?

The initial enrollment period refers to a period within which an eligible individual can enroll in a health plan for the first time. It typically applies to employer-sponsored plans and government programs such as Medicaid and Medicare.

On the other hand, the open enrollment period is a specified period each year when you can enroll or make changes to your health insurance coverage.