Open enrollment applies to employer-sponsored health insurance and coverage purchased from a government Marketplace. The open enrollment process can differ by benefit sponsor. Some open enrollment processes require you to take action every year, while others only need your input when you must add, change, or eliminate a benefit. Employers that only offer one health plan might not extend an open enrollment period. Open enrollment doesn’t apply to the U.S. federal government’s Children’s Health Insurance Program (CHIP) and Medicaid programs, which allow qualified applicants to apply for benefits at any time. The federal government sets open enrollment dates for its Health Insurance Marketplace. Employers determine open enrollment dates for the benefits they sponsor.
Example of Open Enrollment
Although time periods and procedures may vary, the open enrollment process is relatively straightforward, regardless of who provides your benefits. Changes made during open enrollment typically take effect on Jan. 1 of the following year. For instance, if you change your health care plan on Nov. 15 during open enrollment, your current coverage will continue through Dec. 31 and the new plan will kick in the next day. But under certain circumstances, open enrollment dates can change. For example, in 2021, the federal government held Marketplace open enrollment from mid-February through mid-May due to the COVID-19 pandemic.
Making Changes
Depending on the benefits you have, open enrollment may enable you to make several types of changes. For instance, you may need to add or remove certain dependents, cancel a health plan, switch to another plan, or enroll in an insurance plan for the first time. During open enrollment, you can apply online for a new marketplace health plan or make changes to existing marketplace coverage. Some employers also offer open enrollment websites. Employers may also require you to complete and submit a form, either on paper or electronically.
Active Enrollment vs. Passive Enrollment
Open enrollment may follow active or passive rules. It’s important to understand which type of procedures apply to your benefits.
Active enrollment requires you to re-enroll for a benefit each year during open enrollment. For example, you would need to re-enroll in your health insurance plan annually, even if you don’t need to make any changes.Passive enrollment enables you to retain a benefit without re-enrolling. For instance, if you were happy with your dental insurance plan, your coverage would automatically re-enroll from one year to the next, without any participation by you during open enrollment.
Special Enrollment Period
You may qualify for a “special enrollment period” if you experience certain qualifying life events. If you have a federal Marketplace plan, you may need to enroll within a specific time frame: from 60 days before to 60 days after the event, depending on the type of event. Employer-based plans must provide a special enrollment window of at least 30 days before or 30 days after the qualifying event. Qualifying special enrollment period events can include:
A change in the number of household members: Getting married or divorced, adopting or giving birth to a child, or placing a child for foster care A change in locations: Moving to a new ZIP code, to or from transitional housing, to attend school, or from another country or U.S. territory A change in Marketplace eligibility: Newly eligible for Marketplace coverage due to becoming a U.S. citizen, release from incarceration, a change in income, or gaining status as a federally recognized tribe member Loss of health insurance: Losing employer-sponsored health insurance due to job loss, loss of insurance due to a decrease in salary, or aging out of a parent’s health care coverage after turning 26
The federal Marketplace is only available to people who live in the United States, U.S. citizens, and U.S. nationals. Incarcerated citizens are not eligible for Marketplace health insurance.
Preparing for Open Enrollment
Open enrollment gives you the opportunity to modify your benefits to fit your current or future needs. For example, if you plan to have a baby in the coming year, you may need a different health care plan and a new life insurance policy. Or you may need to switch to a new health insurance plan to cover a teenager who’s going away to college.
FSA and HSA Accounts
Open enrollment also allows you to adjust a flexible savings account (FSA) or health savings account (HSA). These types of accounts enable you to deposit pre-tax income to pay health care costs. If you don’t have an FSA or HSA, you might want to open one during open enrollment—or you might need to adjust the contributions to an existing account.
Other Benefits
Open enrollment is also the time to get rid of benefits you don’t use. Perhaps you can drop pet insurance because your beloved dog recently died. If you’re unsure what benefits you pay for, check out the payroll deductions on your paycheck stub, which should itemize all contributions. If your benefits include life insurance, decide if you need to add or remove certain beneficiaries. Consider, for example, benefit changes needed to accommodate upcoming retirement plans or a new domestic partner or spouse.
