A final rule was issued by the U.S. Department of Health and Human Services (HHS) and the Treasury Department on September 12, 2021. It addressed issues related to affordable access to marketplace coverage, including reversing some Trump-era policies as well as introducing some new ones.
One of the new policies put in place was the creation of a unique special enrollment period (SEP) specifically to help low-income Americans get access to affordable health coverage outside of the annual open enrollment period.
While open enrollment typically only lasts from November to January in most states, special enrollment periods, triggered by qualifying life events, allow Americans to get coverage in other parts of the year.
If you’re new to special enrollment periods, this article will explain:
- How special enrollment periods work
- What makes the new low-income SEP different from existing SEPs
- How to find out if you qualify based on your household income
- When coverage starts if you enroll during the low-income SEP
What is a special enrollment period?
A special enrollment period is a time when you’re allowed to make changes to your health insurance plan even though it’s not an open enrollment period as defined by the Affordable Care Act (ACA).
Having one dedicated time during the year for Americans to enroll in coverage keeps people from enrolling in a plan only when they get sick, however, it also limits consumers’ ability to get coverage if they miss the deadline.
Experiencing a qualifying life event, such as getting married or having a baby, triggers an SEP that allows you to enroll in coverage outside of the annual open enrollment period. An SEP typically lasts 60 days before or after the qualifying life event.
What is the low-income special enrollment period?
The new SEP was created to make it easier for low-income Americans to enroll in marketplace coverage throughout the year—not just during open enrollment or when they experience a qualifying life event.
Studies show that fewer than 15% of SEP-eligible people actually enroll in coverage during their special enrollment period. This might be because they don’t understand their coverage options, aren’t sure they’ll be able to afford coverage, or because the process of getting approved for an SEP can be confusing.
This is especially true for low-income Americans, young people who are less experienced with health insurance, and people who aren’t proficient in the English language.
That’s why the new SEP, which isn’t time-limited based on a qualifying life event like existing SEPs, is a huge benefit. An individual that qualifies for the low-income SEP can enroll in a plan at any time during the year, giving them the time they need to research their options or even get help finding a plan that works for them.
How do I know if I qualify for the low-income special enrollment period?
An easy way to figure out if you qualify for the low-income SEP is if you already know you qualify for a premium tax credit, also known as a health insurance subsidy. If you qualify for a premium tax credit under the changes made by the American Rescue Plan, you’ll also qualify for the low-income special enrollment period.
More specially, if your household income is below 150% of the federal poverty level (FPL) you’re considered low-income and will qualify.
If you’re not sure if you’re eligible, there are several online tools available to help you calculate whether or not you qualify for premium tax credits (and in turn, qualify for the low-income SEP), including the Kaiser Family Foundation’s Health Insurance Marketplace Calculator.
This new low-income SEP is estimated to help roughly 1.3 billion Americans get access to affordable coverage year-round.
When does coverage start?
It’s important to note that if you enroll in coverage after qualifying for the low-income SEP, your coverage won’t begin immediately. This prevents individuals from only enrolling in coverage when they get sick, which causes premiums to go up.
Instead, coverage will begin on the first of the following month from when you enrolled in a plan. So if you sign up for a plan on March 18, your coverage will begin on April 1.
The American public has long asked for a solution to the challenge of getting access to affordable healthcare, especially outside of the annual open enrollment period. This new low-income special enrollment period is an answer to that call, and will help the number of insured individuals grow across the country.