The deadline for getting major medical insurance coverage ended and Open Enrollment doesn’t start again for months, but there are still options available.
Some of your clients may actually qualify for a Special Enrollment Period, allowing you to sell them a health plan through the Marketplace. Some examples of possible qualifying events include:
- Marriage or divorce
- Having a baby, or adopting a child
- Moving, becoming a citizen or getting out of jail
- Losing other health coverage for a reason other than non-payment
People who already enrolled in the Marketplace can change their coverage in the case of all of those events. They can also change a health plan if you have a change in income that affects eligibility for a tax credit or cost-sharing reduction.
Members of federally recognized Indian tribes can also sign up for or change health plans once per month at any time of the year, and anyone who qualifies for Medicaid is allowed to enroll at any time.
One factor that health insurance agents need to be account for is whether their clients’ chosen carrier is offering commissions during SEP. The majority of major med. carriers have gone to 0% commissions outside of OEP, but there are a select few carriers in a various states that still pay a commission, oftentimes reduced. It’s suggested that agents contact carriers or their FMO to find out exactly what they’ll get paid on SEP business before spending time selling.
One other viable option for clients looking to buy outside of OEP is Short Term insurance. Short term insurance is temporary coverage designed to fill gaps in health coverage. Short term plans provide coverage for a limited amount of time, oftentimes for just a few months.
Short term insurance is an ideal solution for people who are between jobs, or those who expect to gain insurance through an employer in a short amount of time. For example, some jobs have a 90 day waiting period from the time an individual is hired, until their health insurance coverage starts.
If your client missed the deadline for Marketplace insurance, or need insurance to cover themselves until the next Open Enrollment, short term insurance will cover them in case of a health emergency.
It is important to note that short-term policies are not required to be ACA-compliant, like major medical plans are. They can offer limited protection from costs associated with medical events, for a limited period of time. Short term plans can have substantial drawbacks, such as the exclusion of coverage of pre-existing conditions. Many also don’t cover maternity costs, another ACA requirement for major medical plans.
One benefit of Short Term insurance, besides its availability outside of OEP, is the commissions are usually much higher than ACA plans. In addition, some Short term carriers offer advances, and some have created work arounds for the new 90 day law, which went into effect in April. (Short term insurance policies are now limited to 90 days, when previously agents could write a policy for up to 364 days.)
Fixed-benefit indemnity medical is another insurance option available outside of open enrollment. While fix-benefit indemnity plans don’t provide comprehensive cover, they can give your clients limited protection against the costs associated with routine health care.
Fixed-benefit indemnity medical plans provide set benefits, usually in the form of a cash payout, to cover health services like doctor’s visits, urgent care, and x-rays. There’s usually no annual deductible, but you are limited to a specific cap. Benefits are typically paid out to the policy holder, who then can use that cash to cover medical expenses.
Fixed-benefit indemnity medical also don’t qualify as minimum essential coverage under ACA requirements, which means they don’t provide the same benefits as major medical health insurance plans. Clients may still be in danger of a tax penalty if they’re primarily covered by this type of plan, but it can offer a degree of protection for people who would otherwise be uninsured until the next Open Enrollment.
Another supplemental insurance product that could be beneficial if bought either with major medical, or even by itself if your client is unable to get major medical, is critical illness insurance. Critical illness insurance covers you in the case of one of the critical illnesses listed in the insurance policy. These policies typically make a lump sum cash payment if the policy holder is diagnosed with a specified illness, such as heart attack, cancer, or stroke.
One other insurance product available outside of Open Enrollment is accident insurance. Individual accident insurance is a way to pay for medical and out-of-pocket expenses that add up quickly after an accidental injury. When a client has a covered accident, they receive cash benefits directly, which they can spend on medical expenses, or even expenses related to their care, such as transportation and lodging needs.
Once again, accident insurance is intended to help consumers mitigate the costs associated with medical care, not as a long term substitute for major medical health insurance. Even with short term, fixed-benefit indemnity medical, critical illness, or accident insurance, clients may still face tax penalties under the ACA. However, they may offer degree of protection in the case of the unexpected health problem during non-Open Enrollment time periods.