What is Open Enrollment?
Updated: Mar 11
Health insurance carries a negative stigma in the United States because there are so many different options and types of plans. How do you know you’re choosing the right one? With a little bit of topical education, this stigma can disappear. If you feel trapped by your current plan, open enrollment is the perfect time to shop for good health insurance that will cover all of your personal needs.
Today we are going to learn about open enrollment & what you can expect while shopping the health insurance market.
Open enrollment is a period of time each year when you can sign up for health insurance or change your plan (if your health insurance plan is provided by your current employer, open enrollment is also an opportunity to disenroll if you don’t want the coverage you are currently holding). If you don’t sign up for health insurance during the open enrollment period, you probably can’t sign up for health insurance until the next open enrollment period, unless you experience a qualifying event.
If you’re eligible and apply for health insurance during the open enrollment period, the insurance company providing the health plan you select must insure you. The company is not allowed to use medical underwriting or require evidence of insurability, both of which could make it harder for you to get health insurance.
What Types of Health Insurance Use Open Enrollment Periods?
Open enrollment periods are common and in place for Medicare, Job-based health insurance, and Individual market health insurance. Individual market health insurance is available during open enrollment as of late due to the Affordable Care Act (enrollment windows apply both in the health insurance exchanges and outside the exchanges.)
When Is Open Enrollment?
The time of year for open enrollment depends on the health care plan you choose:
Medicare open enrollment (for Medicare Advantage and Part D plans) runs from October 15 to December 7 each year, and there is a separate open enrollment period from the 1st of January to the 31st of March for people who already have Medicare Advantage. Note that the Medicare open enrollment periods do NOT apply to Medigap plans, which don’t have an annual open enrollment period.
Medigap plans are only available without medical underwriting during your initial enrollment period or during one of the very limited special enrollment periods that apply to those plans, although a few states have implemented rules that allow Medigap enrollees to make changes to their plans on an annual basis.
When you have job-based health insurance, your employer sets the open enrollment periods that can occur at any time of the year. However, normally the enrollment period is set in the fall so that the coverage you select can begin on the first day of January of the next calendar year.
Open enrollment in the individual market, both on and off an exchange, runs from November 1 to December 15 in most states. This is the schedule followed by HealthCare.gov, which is the exchange platform that’s been used in 38 states as of 2020. The other 12 states and DC have more flexibility with their enrollment schedules, and most of them tend to offer longer enrollment windows. There are 3 states that have permanently extended their insurance enrollment windows are Washington DC, Colorado, and California.
More Open Enrollment Opportunities
Most employers allow you to sign up for or change other job-based benefits during open enrollment. Generally, you’re only allowed to make these changes during open enrollment. For example, you may be able to set up a flexible spending account or health savings account (FSA contributions are established prior to the start of the plan year and normally cannot be changed later in the year without a qualifying event HSA contributions can be stopped, started, or changed anytime, but you must have HSA-qualified health insurance in order to make contributions, and your ability to enroll in an HSA-qualified health plan will be limited to the annual enrollment window. Note that to address the COVID-19 pandemic, the IRS is allowing employers to relax the rules for mid-year FSA contribution changes).
What is Special Enrollment?
Sometimes life doesn’t go according to plan, thankfully, the government understands that to a degree. Insurance plans that use an open enrollment system also have an exception that lets you enroll outside of open enrollment under “extenuating circumstances” known as qualifying life events. When you experience a qualifying event, you’re eligible for a special enrollment period that allows you to sign up for health insurance outside of open enrollment. If you think you qualify for special enrollment and want to learn more about it, check out our article all about special enrollment.
Related Article: Do I Qualify for the Special Enrollment Period?
Overall, health insurance is a lot to process, whether trying to figure out what plan is best suited for me currently or will be in the future, to deciding how much you’re willing to pay out of pocket to receive the care from the physician or specialist of your choosing. Like it or not, open enrollment is the time you have to make these hard decisions. I hope that this article on open enrollment has given you insight and educated you on how to choose the best option for you.