My Health Insurance Lapsed

“To sum it up…”

• If your health insurance lapsed due to a change in jobs, you are eligible for COBRA coverage or a special enrollment period to enroll in a Marketplace plan
• If your coverage lapsed because you missed payments, you do not qualify for a special enrollment period
• You can appeal your coverage cancellation or another health insurance decision
• If you do not have health insurance, you may be responsible for paying the individual mandate penalty fine
• If your health insurance only lapses for a short period of time, you may be eligible for the short coverage gap exemption and not pay the fine

If your health insurance lapses because you left your job, you can enroll in COBRA coverage. With COBRA, you can keep your insurance and pay group rates for a short period of time after you leave your job.

However, it will typically still be more expensive than when you were employed because your employer will no longer contribute a portion of the premium.

Companies with more than 20 employees are usually required to offer COBRA. Spouses and beneficiaries of the covered employee are often entitled to COBRA coverage, as well. Employees and their dependents cannot use COBRA if the employee was fired from due to gross misconduct.

When you lost your employer-based coverage or COBRA coverage, you might also qualify for a special enrollment period, which allows you to enroll in a Marketplace plan outside of the open enrollment period.

If you lose your job-based or COBRA insurance because of non-payment or you dropped coverage voluntarily, you will not qualify for a special enrollment period. Enter your zip code above to compare free health insurance quotes and get covered ASAP!

What happens if my coverage lapses because I missed a payment?

If you miss a payment on your Marketplace plan, you will typically get a 90-day grace period before being dropped from your plan. You qualify for this grace period if you are eligible for advanced tax credits and you have already paid a full month’s premium.

You have to pay all of your outstanding balance during your grace period to ensure that you are not dropped from your plan. You do not qualify for a special enrollment period if you are dropped for non-payment. You will have to wait until the next open enrollment period to apply for a new plan.

Can I appeal an insurance company decision?

If you feel that your coverage was wrongly terminated, you can appeal the decision. You can either ask for an internal appeal or external review. The insurance company will reevaluate their decision if you request an internal appeal. However, there is no guarantee that they will overturn their decision.

Do I have to pay a fine when my coverage lapses?

If you let your coverage lapse, you may have to pay the individual mandate penalty fine. You have to pay the fee for each month that you went without health insurance.

The fee is either 2.5 percent of your household income or $695 per adult in the house and $347.50 per child in the house with an annual maximum set to $2,095. You will have to pay the fee when you file your federal taxes for the previous year.

If you do not pay the fee, the IRS will hold the amount back from any future tax refunds. The IRS does not use any typical means of collections or impose any criminal penalties on those who do not pay.

What is the short coverage gap exemption?

There are some exemptions to the penalty fine. If you only let your coverage lapse for less than two full months, you might qualify for a short coverage gap exemption. You will claim this exemption when you file your taxes. You can only claim this exemption once in any given year.

What to do When Your Health Insurance Lapses

If your health insurance lapsed, you still have coverage options. If you lose your insurance due to non-payment, you will not qualify for a special enrollment period, but you might be able to appeal the decision. If you lose your insurance due to a change in jobs, you are eligible for a special enrollment period or COBRA coverage.

If you lose your insurance due to a change in jobs, you are eligible for a special enrollment period or COBRA coverage.

To find your own healthcare coverage fast, enter your zip code below and get FREE health insurance quotes from your state’s top providers!

1. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-compliance
2. https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/
3. https://www.healthcare.gov/apply-and-enroll/health-insurance-grace-period/
4. https://www.healthcare.gov/appeal-insurance-company-decision/
5. https://www.healthcare.gov/fees/fee-for-not-being-covered/
6. https://www.healthcare.gov/exemptions-tool/#/results/2016/details/short-gap