What If You Miss the Individual Health Insurance Enrollment Deadline?

Find out what can happen if you don't obtain coverage in time.

If you don't have an employer or other source to provide you with health insurance coverage under a group plan, you'll have to obtain individual health insurance coverage on your own. You can do so through one of the health exchanges established under the Affordable Care Act (also called Obamacare). Obtaining your coverage through your exchange isn’t mandatory—you can also obtain individual coverage directly from a private health insurer. But you must get your coverage through your state exchange to qualify for Obamacare health insurance premium tax credits available for lower and modest income people.

However, you must ordinarily apply for coverage during the annual open enrollment period. The open enrollment period ordinarily runs from November 1 through January 31 each year (although in past years it has been extended beyond the January 31 deadline). What happens if you don’t obtain coverage by the deadline? Several things, none of them good.

First, you may have to pay a penalty to the IRS. The exact amount of the penalty is based on your household income. For 2016, the penalty is the greater of $695 or 2.5% of your household income, up to a maximum of $2,085 per person. The penalty for children is half the amount for adults. For 2017 and later, the penalty amount is indexed for inflation. However, you could be exempt from having to pay the penalty: It only applies to taxpayers who can afford insurance but do not purchase it. Low-income individuals are exempt from the penalty, and there are several other exemptions as well. For details, see www.healthcare.gov/health-coverage-exemptions/.

Second, the aforementioned Obamacare health insurance subsidies will be unavailable to you and your family for the year, potentially costing you hundreds or thousands of dollars you could have had to help pay for your coverage.

What happens if you decide that you made a mistake not obtaining coverage and want to purchase it for the remainder of the year? You could be well out of luck—that is, you may be unable to purchase individual non-group health insurance coverage for the rest of the year, either through your state exchange or directly in the open market from a private insurer. This means you’ll have to bear all of your health costs for the year out of your own pocket. You’ll have to wait until the next open enrollment period to obtain individual coverage starting the following year.

Qualifying Life Events

After the open enrollment period ends, individual non-group health insurance coverage will be available for purchase only for individuals who have a “qualifying life event” during the year. This includes:

  • losing your existing health insurance coverage—for example, because you quit your job, were laid off, or your work hours were reduced below the level required for you to qualify for employer-provided coverage
  • you got married, divorced, or legally separated
  • you gave birth to or adopted a child
  • you lost your coverage because you moved to another state or a part of the same state outside of your health plan service area
  • you lost eligibility for Medicaid—for example, because your income grew
  • you are no longer eligible to receive coverage as someone else’s dependent—for example, you turn 26 and are no longer eligible for coverage through your parents’ plan
  • you timely enrolled in coverage through your state exchange, and your income increases or decreases enough to change your eligibility for subsidies, or
  • you become a U.S. citizen.

Once a qualifying life event occurs, you have 60 days to obtain individual coverage, either through your state health insurance exchange or private insurers. This period is called your “special enrollment opportunity.”

Note carefully that the following are not qualifying life events:

  • getting sick
  • getting pregnant (but you can get coverage once you give birth)
  • losing your coverage because you didn’t pay your premiums, or
  • voluntarily quitting your existing health coverage.

Thus, for example, you can’t go without coverage past open enrollment deadline and then decide you want to enroll because you get sick (or pregnant).

You Can Enroll In Medicaid Any Time

You can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) in your state at any time. There is no open enrollment period for these programs, which are designed to help the poor. Every state’s Medicaid eligibility rules are different. For details, visit the Medicaid & CHIP coverage webpage at heatlhcare.gov.

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