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What Are IRS Qualifying Life Events For Health Insurance?

Edward Neeman Published: June 14, 2018 Updated: February 07, 2018

Newlyweds cutting cake

If you're shopping for health insurance, especially an affordable plan with qualifying coverage, you may already know about the Open Enrollment Period. Open Enrollment takes place every year starting on November 1, and usually lasts 90 days, except under President Trump when it only lasted 45 days. The Open Enrollment season is when every American can sign up for health insurance plans through the health insurance marketplace, or make changes to their existing policies. But what happens if you don't find the coverage you need or need to make a change to your policy outside the somewhat short window?

Luckily, the Affordable Care Act took into account that people will often have significant changes to their current situation that may require them to make adjustments to their finances, including their health insurance plan. Here's how it works.

What Is An IRS Qualifying Life Event?

An IRS qualifying life event, or QLE, is a change in your circumstances that will require changes to their health insurance. A QLE allows you to make changes or purchase new health insurance policies outside the Open Enrollment Period. These time-periods help ensure you can maintain the coverage they need throughout the year.

List Of IRS Qualifying Life Events

Here are the four main categories of events that are qualifying life events.

  • Loss of Coverage - There are many events that can cause you to lose their existing health coverage. Losing benefits due to turning 26 and no longer eligible for parental plans. One could also lose their eligibility for state or federal insurance programs. These policies may even have been cut by their employer if major changes took place at the company. This QLE gives you the opportunity to purchase a new policy or make changes to your existing one.
  • Changes in Household - Some major changes in household size are QLE. This can include a marriage, divorce, birth of a child, adoption of a child, as well as the death of a household member. Any of these events count as an IRS qualifying life event.
  • Change in Residence - Moving to a new location for work, school, or just because you need a change of scenery can often make an insurance policy useless. This is due to insurance policies being specific to certain areas and only allow doctors and facilities in that area. Moving to a new location can make it impossible to access those doctors. This counts as a qualifying life event to purchase a new policy in the new area.
  • Other Qualifying Life Events - There are various other types of changes that can be a qualifying event to allow for health insurance changes. This can include changes in income that can change your ability to pay the policy currently held. Receiving citizenship or exiting prison can also be major changes that are QLE. 

How Long Do You Have To Enroll After Your Qualifying Life Event?

After a qualifying life event, you have 60 days to make changes to their health insurance policy. This enrollment period allows you the time needed to get health insurance quotes and visit the health insurance marketplace to find a policy that will best fit their life with the new changes.

What Is A Special Enrollment Period?

The Special Enrollment Period is the name of the 60-day timeframe you are given to make changes to their health insurance policy without penalties. This period falls outside the yearly Open Enrollment period where anyone can sign up for health insurance.

Do You Qualify For A Special Enrollment Period?

If there have been major changes in your life, you may qualify for a Special Enrollment Period. If one or more of the qualifying life events have occurred, you should contact your health insurance company to ensure your eligibility. Even if you are qualified for this enrollment period, you will need to provide proof of these changes. This proof varies widely depending on the specific qualifying life event. Contacting the insurance company for their specific requirements may be the best option.

Do You Need A Qualifying Life Event To Cancel Health Insurance?

You can drop your insurance coverage at any time. There is no special event or reason necessary to do this. However, if you cancel your health insurance policy, you may not be able to enroll in a new policy until the Open Enrollment Period. Voluntarily discontinuing health insurance does not qualify as a life event to make changes. This can leave you and your family without health insurance until the next Open Enrollment.

Where To Sign Up For Health Insurance During Your Special Enrollment Period

If you qualify for a Special Enrollment Period, you will be able to sign up for health insurance anywhere. The marketplace will be available for you to browse new coverage options, and you will still be eligible for federal subsidies which can only be used for Obamacare plans. However, you can choose to switch your coverage over to a private health insurance plan. Depending on your area and situation, private health insurance plans may be the more affordable health insurance option for you. Compare health insurance quotes your area with First Quote Health to learn what your best option will be.