The exact date of your open enrollment period may also depend on your employer. If you have coverage through your employer, they will set your open enrollment period. This period may be completely at odds with the “normal” Medicare period in the fall, and it can occur at any time throughout the year. That said, many employers do choose to keep their open enrollment periods in the fall to make things more convenient.
Open enrollment in the individual market lasts from November 1st to December 15th for the most part. This period is set forth by Healthcare.gov, which is used by most states. Some states offer longer enrollment periods than others, and Native Americans always have the ability to enroll at any time throughout the year.
As with group insurance plans through your employer, other insurance plans also offer special enrollment to those who have experienced qualifying life events. During this special enrollment period, you can cancel and change your health insurance.
Cancellation might not be easy – even if you do this during the open enrollment period. Many group health plans offered by employers establish a 90-day waiting period. This means that you may need to wait for three months after getting a new job before you actually enjoy any coverage. During this period, it might be a good idea to explore alternative options, such as CrowdHealth.
As you can see, canceling your health insurance at any time is possible… but with some serious caveats. Canceling outside of the open enrollment period could create a “gap” during which you’re not covered. This is obviously something you want to avoid. In addition, some states will hit you with a tax penalty if you cancel your coverage, especially if being insured is mandated under state law.
So why do insurance companies make this so difficult? Health insurance is based on contracts that typically last 12 months. To make things more straightforward, this 12-month period begins at the same time each year. This allows insurance companies to easily negotiate new contracts with providers in their networks. But it certainly isn’t convenient for you – the consumer. This is just one example of how the health insurance system in the United States can be extremely complicated.