An SEP for your growing family

If your family grows during the year, you’re likely eligible for a special enrollment period. There are several situations that can trigger the SEP in this case.

If you become a dependent or gain a dependent as a result of any of those circumstances, you and your dependents are eligible for a 60-day special enrollment period, on or off-exchange.

SEP restrictions

The marketplace stabilization rule that HHS finalized in 2017 added some new restrictions to the SEP, however, including requirements that at least one new spouse already had health insurance coverage in place before the marriage, and that these SEPs cannot be used to “upgrade” coverage to a different metal level — so new parents who already have insurance can add their baby to their plan, or can purchase a separate plan for the baby alone, but cannot switch the whole family to a plan at a higher metal level during the SEP.

The American Rescue Plan’s health insurance affordability provisions are still in effect – and for many, enrollment is still possible now.

In other words, two uninsured people cannot get married in order to gain access to a SEP, and the SEP triggered by gaining a dependent cannot be used as an opportunity for the parent to switch to a plan at a different metal level.

In 2018, HHS clarified that while the SEP for gaining a dependent or becoming a dependent applies both on- and off-exchange, it does not apply independently to existing dependents. So if Sue already has two children and then gives birth to a third child, she can enroll in a new health plan (subject to the restrictions described above) by herself, or she can enroll with some or all of her dependents on the plan. She also has the option to enroll just the new baby on his own plan. But she does not have the option to enroll only her two older children on a new plan.

HHS also clarified that the prior coverage requirement would be waived if the applicant lived (prior to the qualifying event) in an area where there were no plans available in the exchange. There were concerns heading into 2017 and 2018 that some areas would end up with no exchange insurers. But that no longer appears to be an issue, as insurers joined or rejoined the exchanges in large numbers in 2019, 2020, 2021, and again for 2022.

Marriage

If you get married, you have the opportunity to add your spouse to your plan, or shop for a new plan. You have 60 days to enroll, and the effective date will be the first of the month following the plan selection.

So if you get married on June 5 and enroll in a new health plan on June 30, your coverage will be effective on July 1. Because of the flexibility with effective dates, it may be beneficial for newlyweds to utilize their special enrollment period even if they get married during open enrollment.

For example, a couple who gets married on November 26 and enrolls in a new health plan on November 28 can get a December 1 effective date if they utilize their special enrollment period. Since open enrollment would be ongoing at that point in the year, they’d also have the option of enrolling without a special enrollment period, but their effective date would be January 1.

In a rule change that took effect in 2017, newlyweds are only eligible for a SEP if at least one spouse already had coverage for at least one of the 60 days prior to the wedding (unless they were living in a U.S. territory or foreign country prior to the marriage, or were both in the Medicaid coverage gap and their combined income moves them out of it, or are Native American; as noted above, there’s also an exemption if they lived, prior to getting married, in an area where no plans were available in the exchange, although there are no areas where that has happened).

In addition, the marriage SEP can no longer be used as an opportunity to upgrade to a higher metal level, unless the newlyweds are newly eligible for cost-sharing subsidies, in which case they can switch to a silver plan in the exchange, regardless of what metal level their coverage was before the wedding.

As of 2022, there is also an option for people receiving CSR benefits on a silver plan to switch to a plan at a different metal level if they experience a change in household income that makes them newly ineligible for CSR. HHS has also finalized a rule change for 2022 that allows people who are newly ineligible for premium subsidies to switch to a plan at a lower metal level.

Birth, adoption, or placement for foster care or adoption

If you gain a dependent or become a dependent as a result of a birth or adoption, you’re eligible for a special enrollment period. But HHS placed some new restrictions on this SEP as of 2017. The parents do not have to be insured at the time of the birth/adoption for the SEP to apply, but if they are, they can either add the child to their current plan (or another plan at the same metal level, if for some reason, the child cannot be added to the existing plan), or they can enroll the child alone in a new plan at any metal level.

If the parents are not insured at the time of the birth/adoption, they can enroll in a plan at any metal level, along with the child. But if they are already insured, they cannot use the birth/adoption as an opportunity for the family to upgrade to a plan at a different metal level. (It’s noteworthy, however, that rules issued in 2018 clarify that the SEP is intended to apply to both the person becoming a dependent as well as the person gaining a dependent. As such, the 2018 rule states that the person gaining a dependent “may enroll in or change coverage along with his or her dependents, including the newly-gained dependent(s) and any existing dependents.” This would seem to indicate that the new parent does have the option to switch plans as a result of this SEP, but it’s unclear how this meshes with the 2017 market stabilization rule.)

If a child is placed with you for foster care or adoption, the date that you become responsible for the child’s care is the qualifying event, even if an adoption or foster agreement is pending and has not yet been finalized.

The special enrollment period runs for 60 days following the birth, adoption, or placement for foster care/adoption. The coverage effective date is typically backdated to the date of the birth/adoption/placement, but at the enrollee’s request, the exchange can allow for an effective date of the first of the month after the birth, adoption, or placement for foster care/adoption, or for the first of the second following month if the enrollment is completed after the 15th of the month.

Child support order

In 2015, HHS added child support orders to the list of qualifying events under the category of gaining or becoming a dependent. The court order can be a qualified medical child support order or other order from a state or federal court that requires the dependent to be covered under a health plan.

The special enrollment period continues for 60 days following the court order. HHS finalized slight rule adjustments in 2018 to align the effective date rules for gaining a dependent as a result of a child support order with the effective date rules that apply to other circumstances in which a person gains a dependent. So coverage is typically backdated to the date of the court order, but at the enrollee’s request, the exchange can allow the enrollee to select an effective date of the first of the month following the enrollment, or to simply follow normal effective date rules (meaning that in most states, enrollments completed by the 15th of the month will have coverage effective the first of the following month, although this 15th-of-the-month deadline will no longer apply on HealthCare.gov as of 2022).

(If you’re uncertain about your eligibility for a special enrollment period, call (619) 367-6947 to discuss your situation with a licensed insurance professional.)

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.