1. California Health Insurance
  2. California Health Care
  3. Covered California Enrollment
  4. Open Enrollment Period
  5. Special Enrollment Period
  6. Life Events
  7. Lost or Will Soon Lose Coverage

Voluntary and Involuntary Loss of Coverage

Posted: September 25, 2024


Have you recently lost your health insurance coverage? Will you lose your coverage soon? If so, you may still have options for health insurance that can cover your medical needs. If you lose coverage before the next open enrollment period, you may qualify for special enrollment under certain conditions, like how you lost your coverage. This could be your opportunity to apply for new health insurance and avoid a coverage gap.

This article will help you understand how voluntary and involuntary loss of coverage relates to new plan enrollment so you can explore your options.

How Does Involuntary Loss of Coverage Happen?

Losing your health care coverage can be stressful, but there are solutions. Lots of things could result in loss of health coverage, like:

  • If you were enrolled in an employer-sponsored plan and left or lost your job, you probably lost coverage.
  • If you qualified for Medi-Cal based on your income and now earn more, you may have lost coverage.
  • If you were on COBRA coverage and it expired, you’ve lost coverage.
  • If you had student coverage and you’re not a student anymore, you’ve lost or will soon lose coverage.
  • If you were on a family plan with your parents and turned 26, you’ve probably lost coverage.
  • If you were on a child-only plan and turned 19, you no longer qualify for that coverage.
  • If your insurer left the market, you may have lost coverage.

Is Involuntary Loss of Coverage a Qualifying Event?

Typically, you would need to wait for an open enrollment period to start a new plan. Fortunately, if your loss of coverage was involuntary, it is usually a qualifying life event for special enrollment. Your involuntary loss of coverage is a qualifying life event as long as either:

  1. The coverage you’ve lost meets the requirements for minimum essential coverage according to the Centers for Medicare and Medicaid Services, or
  2. Your case is an exception according to the Department of Health and Human Services (HHS), such as losing pregnancy-related Medicaid coverage, or
  3. Your short-term health insurance plan terminates, and you intend to apply for a new employer-sponsored plan rather than an individual plan.

There is one situation in which you can involuntarily lose a qualifying plan and yet not qualify for special enrollment. This happens on occasions when individuals lose their plans due to rescission. Legal rescission happens when an insurer cancels an entire policy because the individual committed fraud or intentional misrepresentation of facts when applying.

Involuntarily losing coverage due to rescission when the insurance company had a legal right to do this is not a qualifying life event. Other involuntary losses of coverage that meet the requirements noted above do count as qualifying life events for special enrollment.

If your loss of coverage qualifies you for special enrollment, you can buy a new plan even if we’re not in an open enrollment period.

Special Enrollment and COBRA

If you lose your job and your employer-sponsored coverage along with it, you may be able to continue enjoying health coverage through the COBRA program. But it’s still true that your regular employer-sponsored coverage ending is a qualifying event for special enrollment. This means you can choose to elect for COBRA and take advantage of the next special enrollment that opens when it expires or decline COBRA coverage and choose a new plan in your current special enrollment period.

Whichever option you choose, compare the costs and benefits of COBRA coverage against a new plan and consider the risks of any coverage gaps. Remember, special enrollment is only available for 60 days, so you will not have the option to switch from COBRA to a new plan after that until your COBRA expires or the next open enrollment or qualifying life event comes along. Understand that qualifying for COBRA does not affect special enrollment qualifications.

Is Voluntary Loss of Coverage a Qualifying Event?

If you voluntarily lose your health care coverage, this will not be considered a qualifying life event to obtain a health insurance plan outside of the open enrollment period. A voluntary loss of coverage can include:

  • Failing to pay your premium
  • Dropping your coverage while you are working for your employer
  • Canceling your COBRA coverage before the term expires

If you have lost coverage for any of these reasons, you may not qualify for a special enrollment period.

How Does Special Enrollment Work?

You may be eligible for a special enrollment period any time you experience a qualifying life event, such as:

  • Involuntary coverage loss
  • Having a baby
  • Getting married
  • Adopting a child
  • Gaining citizenship

In most cases, your special enrollment period lasts for 60 days after your qualifying life event. If you know in advance when you will lose your qualifying coverage involuntarily, you may also be able to access special enrollment in the 60 days leading up to your lapse in medical insurance coverage. If you want to take advantage of your special enrollment period, apply for a new health insurance plan as soon as possible to avoid a gap in coverage.

What Are Your Insurance Options?

Your health insurance options fall under five categories for easier comparison. Each is distinguished by the percentage of the health care costs your insurance pays versus what you pay:

  • Catastrophic: Your insurance will pay less than 60% of your health care costs. These plans are intended only for those who are under 30 or who are experiencing financial hardship.
  • Bronze: Your insurance will pay 60% of your health care costs while you pay the remaining 40%.
  • Silver: Your insurance will pay 70% of your health care costs while you pay the remaining 30%.
  • Gold: Your insurance will pay 80% of your health care costs while you pay the remaining 20%.
  • Platinum: Your insurance will pay 90% of your health care costs while you pay the remaining 10%.

Get a Quote From Health for California for a Health Insurance Plan

At Health for California, we can help you find the health insurance plan that’s right for you. With the right plan, you can ensure your medical needs are covered at a rate you can afford. We’ll help you compare the benefits, rates, coverages and metallic tier of every available plan to ensure you get the best deal at an affordable price.

Our quotes will include the insurance carrier’s name, the plan type, the plan category, what you can expect to pay and the total cost of the plan. If you are seeking health insurance, request a free quote from Health for California.