Your Effective Date of Coverage Will Vary Under the Affordable Care Act

The rush to apply for health insurance coverage on healthcare.gov and the subsequent rash of reported problems with enrolling in the new marketplace really is much ado about nothing at this point. Why, you ask? Well, whether you successfully apply for health insurance on the marketplace today or you wait until December 15th, you’re still going to have the same coverage effective date which is January 1, 2014.

We’re currently in what healthcare.gov calls an open enrollment period. This is the period of time during which individuals who are eligible to enroll in a Qualified Health Plan can enroll in a plan in the Marketplace.

If you successfully apply for health insurance coverage anytime between now and December 15, and make your first premium payment, your new health coverage starts on January 1, 2014. Easy peasy. What happens though if you apply for coverage after the December 15th initial open enrollment period? Things start to get a little bit tricky.

Rolling Open Enrollment Dates

During the rest of the Affordable Care Act open enrollment period through March 31, 2014, you must enroll and pay your first premium between the 1st and 15th day of the month to have your coverage effective date begin the first day of the following month. If you apply for coverage between the 16th and the end of the month, then your coverage effective date begins on the first day of the second following month.

Sorry if this is a little confusing. Let me break it down with some examples.

Example 1 – Applied for Coverage on December 21, 2013

Let’s say you miss the initial open enrollment period and apply for coverage on December 21, 2013. Since you applied for coverage and paid your premium after the 15th day of the month, your coverage will be effective on the first day of the second following month. In the case of this example, your coverage would be effective on February 1, 2014.

Example 2 – Applied for Coverage on March 4, 2014

You’ve waited till the end of the open enrollment period to apply for coverage, hoping that some of the kinks in healthcare.gov will finally be worked out. You’ve applied for coverage and paid your first premium on March 4, 2014. Since you applied for coverage between the 1st and 15th day of the month, your coverage will begin on April 1, 2014.

Open Enrollment Period Closes on March 31, 2014

It’s important to keep in mind that the open enrollment period for 2014 health insurance coverage closes on March 31, 2014. You must enroll in coverage by this date to ensure that you won’t be paying a penalty for not having health coverage. The only way to obtain health coverage after the open enrollment period is through a qualifying life event like a job loss, birth or divorce.

The Real Test

I’m expecting the real test for healthcare.gov to begin right around December 1, as media outlets finally begin pushing out information about the effective coverage deadline for January 1, 2014. That’s exactly why we’re seeing such a push to fix the marketplace websites by Thanksgiving – the critical implementation dates of the Affordable Care Act are fast approaching.

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