When you buy your own health insurance coverage in Utah, one of the most important things to understand is the concept of enrollment periods. Why? Because these are the only times during the year you can secure new coverage.
Why enrollment periods exist
Enrollment periods exist to dissuade Utahns from waiting to enroll coverage until they get sick. Since the Affordable Care Act (ACA), or Obamacare, took effect in 2014, Utah individual health insurance has been “guaranteed-issue”. This means the insurance company must give you health insurance regardless of your current medical condition. (Prior to 2014, Utah individual health insurance was medically underwritten and you could be denied coverage due to your medical condition.)
When health insurance is guaranteed-issue, some people try to “game the system” by waiting until they become sick to buy it. This is called adverse selection and it creates a huge sustainability problem for health insurance companies. If we all waited until we got sick to buy coverage, only sick people would buy it and premiums would rise uncontrollably until the market collapsed. Enrollment periods help keep people from gaming the system by making it riskier for them to go without coverage.
The two types of enrollment periods
You can only purchase individual health insurance during two types of enrollment periods: 1) “Open Enrollment” Periods, and 2) “Special Enrollment” Periods.
The annual Open Enrollment Period (OEP)
Each year, the government sets aside a specific enrollment period called annual Open Enrollment. Open Enrollment is the only time of the year you can buy an individual health insurance policy in the U.S. without having a life event. During this time, you can buy any individual or family health insurance plan available in your state for the upcoming year. Open Enrollment starts November 1st and runs through January 15th. To secure coverage effective January 1st, you must enroll in a plan by December 15th. If you enroll after December 15th, your coverage will take effect on February 1st.
Special Enrollment Periods (SEPs)
If you want to buy health insurance outside of Open Enrollment, you must qualify for a Special Enrollment Period. To qualify for special enrollment, you generally must have had a qualifying life event in the last 60 days or expect to have one in the next 60 days. Life events include getting married, having a baby, losing a job, moving, and more. These life events create a Special Enrollment Period during which you can buy an individual or family health insurance in your state for the remainder of the year.