Does My Coverage Roll Over into the Following Year?

Last week’s video recommended an approach of extreme conscientiousness in approaching annual coverage decisions. After all, one’s options can change for the better so you need to review them. Anyone who took our advice last week will probably know if they have to act to renew their existing coverage this year or that it will simply “roll over” or automatically renew into the following year.

Let’s review this automatic renewal issue by the type of coverage one has.

Group coverage through an employer or union:

Although employers and unions vastly limit the number of coverage options (which we believe is positive) compared to what one faces as an individual purchasing coverage on their own, there are typically additional elections to make such as whether to enroll in a flexible spending account, dental or vision coverage or additional life insurance. Please don’t miss the enrollment deadline which varies by employer. Elections from the previous year may automatically renew for the next year, but you need to be sure and we always suggest that even if you are simply renewing the same coverage for the next year, be proactive about it.

Individual coverage:

Many individual plans will roll over from year to year AND insurers are obligated to inform covered individuals if they are discontinuing a product or leaving the market altogether which would force an individual to re-enroll. Given that plans have an obligation to inform, we have been surprised at how many individuals we’ve encountered since the beginning of the Affordable Care Act (ACA) reforms in 2014, who were oblivious to their situation and had a gap in coverage due to not re-enrolling.

Before 2014 one could apply for individual coverage at any time during the year but that changed with the ACA reforms. In 2014, individual coverage applications changed to be more like group coverage and Medicare. There is always a “window” unless you’ve experienced the type of life event which provides the opportunity to enroll off-cycle. Of course, the annual “window” can vary depending on your state of residence. Generally speaking, it has been longer in states that run their own Marketplace as compared to the federal site, healthcare.gov. The “window” has also been lengthened or shortened due to politics and then COVID but the deadline for coverage effective January 1st has remained December 15th since the ACA reforms of 2014 took effect. For 2022, three states, Kentucky, Maine and New Mexico will have state-based marketplaces rather than using the federal portal, healthcare.gov. Again, know your situation and what you need to do.

Original Medicare:

When an individual enrolls in Medicare Part A, that is typically a decision for life. Medicare.gov refers to those who pay for Part A being able to disenroll but only a small portion of the population pays a premium for Part A. With Medicare Part A there is never a need to be concerned about one’s coverage rolling over. Medicare Part B is a bit more involved. Most people will be on Medicare Part B at age 65. Those who are not on Part B due to active coverage through work or a spouse’s work can defer Part B enrollment. Once on Part B, an individual is typically on it forever unless returning to the workforce or a spouse’s returning to the workforce results in becoming eligible for active group coverage. Part B will otherwise remain in place as long as Part B premiums are paid. For most Americans, Part B premiums are paid from their Social Security payment. If you have deferred Social Security, however, and are on Medicare Part B, you will be billed for your premium. Please pay those bills timely or you will be terminated from your Medicare Part B.

Medicare Advantage Plans:

Automatically renew unless the plan will no longer be offered the next year. Always be sure.

Medicare Part D Plans:

Automatically renew unless the plan will no longer be offered the next year. Always be sure.

Private Medicare Supplements:

Medicare supplements typically remain in place forever as long as payment is made and you remain eligible for the coverage because you haven’t moved out of the service area. Most plans are portable to another location but if you enroll in one that is not and move to another service area, you may not be eligible.

Retiree Medical:

Although retiree medical is tied to a group or union, there is typically an annual election period of some sort that will communicate whether your existing coverage will automatically renew unless you make another election. For many retirees, this is entirely an on-line process. Whether you still receive a packet in the mail or have to log on to a portal, carefully review your enrollment material.

Summary

The U.S. healthcare system is fragmented and complex and it can be unforgiving. Appreciating the complexity, educating yourself, always reading correspondence from an employer or insurer, and knowing when you need to act and within what timeframe will help you avoid a gap in coverage.

As we’ve emphasized in previous videos, never leave anything related to healthcare coverage to chance.