Beginning October 1, 2013, you will ONLY be able to purchase a QHP or qualified health plan during open enrollment periods, unless you experience a qualifying event, such as loss of a job (more on this later). The open enrollment period for 2013/14 will run from October 1, 2013 through March 31, 2014. This will be for an effective date of January 1, 2014, or later. For 2014 and subsequent years, the open enrollment period will run from October 1, through December 7, which coincides with the Medicare open enrollment period. Again, you will ONLY be able to purchase qualified health plans during this time, unless there is a qualifying event. You will not be able to change plans or change companies except during open enrollment without a qualifying event.
Open enrollment periods are nothing new. They have been used by both small and large groups for a long time, so many people are used to them. The differences, however, that are coming up at the end of the year are:
- Individual/family policies will now have open enrollment periods, also.
- The open enrollment periods will be uniform for everyone, as stated above. All individual and group plans will have the exact same open enrollment periods, instead of having groups with different open enrollment periods throughout the year. For example, in the past if your small group got coverage beginning July 1, your open enrollment period would correspond to your effective date of July 1. That will no longer be the case. All qualified health plans will in the future be effective on January 1, or the date of the qualifying event, if there is one. Once you have a qualifying event, say on February 1, your next effective date will revert to the following January 1. The good news here is that you will always have a full year for your calendar year deductible (January 1-December 31), except in those years where you may experience a qualifying event that requires you to purchase a plan outside of open enrollment.
Why have open enrollment periods to begin with? Why not let everyone purchase or change plans year round? The answer is simple. Because there will be no more rate ups or declines for preexisting conditions, if people could purchase coverage year-round, many people would simply decide to wait to purchase insurance only when they needed it. The thinking is, “I have no preexisting problems, so why have insurance when I can purchase it at any time?” Then you fall off the proverbial ladder, and all of a sudden have two broken arms and want coverage. If you don’t have insurance, and fall off that ladder in May, you are out of luck until the following January, by which time you will probably be mostly healed, and your medical bills will be your responsibility. Think of open enrollments as another penalty for not having a qualified health plan at all times.
Another example would be if you did purchase insurance, but decided to go with a plan that has higher out-of-pocket costs to you in order to save on the monthly premium, you would be “stuck” with that plan until the following January 1. Therefore, if you were diagnosed with cancer, for example, in March, you would have to stay with your higher out-of-pocket plan until the following January. During the open enrollment period that year, you could, however, change to any plan that you wanted with a January 1, effective date, including a lower out-of-pocket plan (generally with a higher monthly premium). It will, therefore, be important for you to weigh all of the factors and choose wisely during open enrollment. You will not have to keep the plan you choose forever, but you will generally have it for a full year before you will be able to change plans.
As is the case now with small and large groups, certain qualifying events will allow people and/or groups to purchase coverage during the remainder of the year that is not open enrollment period. We haven’t been given all of the parameters yet, but you can expect that these types of situations will most likely be the qualifying events that will allow you to purchase outside of open enrollment:
- Loss of existing insurance.
- Loss of job coverage. Not sure how COBRA is going to be affected, or if it will be. The primary need for COBRA is actually going to disappear with HealthCare Reform, so maybe COBRA will eventually disappear, also, but nothing about that seems to have popped up on the radar yet. I also don’t see the need for HIPAA or continuation plans in the future, but maybe I am missing something.
- Insurance company stops selling coverage in your state or goes out of business.
- You move from an area where your insurance offers coverage into an area where you would not be covered. For example, you have a local HMO in Indiana and move to Florida, where you are not covered.
- Spousal coverage. You lose coverage due to divorce or your spouse going on Medicare and you are on your spouse’s group policy.
- Birth. Obviously, all babies are not going to be born during open enrollment, so whenever they are born they can be added to existing coverage or be covered individually.
Again, since specifics are not yet available, these are just examples of all of the many qualifying events there will probably be. To confuse matters even further, qualifying events will be different for 2013/14 than they will be in 2014 and successive years. There will be many more qualifying events in 2014 than in later years. This is primarily due to the fact that currently policies have effective dates all throughout the year, and in the future, all policies will correspond with the open enrollment period of October 1-December 7, with an effective date of the following January. The year 2014 will be used to bring all of those policies in line with an effective date of January 1.
As indicated in my most recent previous blog, BASICALLY EVERYONE who is not on Medicare or a LARGE GROUP (50+ employees) plan will want to at the very least explore options during open enrollment. If you haven’t read my most recent previous blog*, please do so, so that you will understand why this is true for almost all people on individual/family policies and small groups. The first open enrollment period is going to be absolutely crazy for everyone involved. I cannot think of a better way to explain the chaos that I am expecting. I have a list with several hundred people on it already to meet with during open enrollment. I will begin setting appointments in August or September for October. If you will want a January 1, effective date, your policy must be issued by December 15, which means that you cannot wait until the end of the year to apply, otherwise you will get a later effective date, such as February 1. Please notify me, if you wish to get your name or your small group’s name added to the list.
Even though I highly recommend that individuals/families and small groups check out their options during open enrollment, one of the things that WILL help to make the transition smoother is that as long as you have insurance that carries over into 2014, you will NOT be REQUIRED to make any changes until your plan expires in 2014, and you may not even be required to make any changes at that time, if your plan is already a qualified health plan. For instance, if you purchase a plan on September 1, 2013, it will be good until August 31, 2014, and you can choose to postpone making any decisions about Obamacare until your policy renews.
Yes, it is all very complicated, and that is why you will continue to need the value added services of an experienced agent or broker, who has kept up-to-date on Obamacare. Here are some expectations that Aetna, Inc. has provided in a recent webinar:
- The individual market is expected to grow from 15 million lives to 34 million lives (more than double) between 2013 and 2014.
- The small group market is expected to DECLINE from 36 million lives to 30 million lives during the same period.
- The uninsured market is expected to drop from 49 million lives to 33 million lives in the first year.
- The Medicaid market is expected to grow from 55 million lives in 2013 to 66 million lives in 2014.
It is not inconceivable in my opinion that more people will purchase new/change plans in October to early December of this year, than would normally do so in a several year period. For those of you who are trying to keep up with what is going to take place, you will be ahead of the game, that is for sure. The media has not yet focused enough attention on the upcoming changes, but that will correct itself as time progresses. By September, the media will be covering it daily. It’s going to be that BIG.
Watch for upcoming blogs:
- Premium and cost sharing subsidies/who will get and how they will work
- Exchanges-what they are and what they may or may not mean for you
- Credible coverage and essential health benefits-what are they and how things are changing for the better
- Changes to allowable risks and how they may affect your decisions
- Mandatory coverage and penalties for not complying
- Rate expectations-what seems to be real and what seems to be hype
- How are things going to work specifically in Florida
*Go to www.chalfanthealthinsurancefl.com and click on “blog” tab.