Health insurance and Medicare plans that you buy on your own or get at work as part of a group plan usually run on a calendar year schedule – January 1 to December 31. That’s all 365 days.
This timing is helpful to know when you’re figuring out how much you’ve spent towards reaching your deductible or your out-of-pocket maximum within the year that you’re insured. The point to remember is that health plans may not last for 365 days if you buy them short of the calendar year, such as in month two (February) of the 12 months of the year – and so on.
Health insurance and Medicare plans generally make changes to covered benefits, deductibles, co-payments, and monthly premiums at least at the start of each calendar year. This practice can affect you in accruing your payments toward your deductible or through new yearly policy changes.
Keeping and Leaving Health Insurance: When you buy a health insurance plan toward the end of one year for the next year, make sure that you’re signing up for the correct year. For instance, plans for 2020 have been available since the last months of 2019. So even if you purchased a 2020 plan in, for example, November of 2019, that insurance didn’t start until January 1, 2020, for the 12 months of 2020.
You can also switch health insurance plans each year. Since 2014, insurance companies subsidized under the Affordable Care Act must cover you if you’re sick or have a pre-existing condition, and they can’t charge you extra for your conditions. But other insurance plans without that protection often have long waiting periods, of up to a year, before benefits kick in, as one way of not paying previous medical bills due to an existing condition.
You can sign up to have your plan renew automatically each year, although doing so will put you at risk of higher costs or other changes you may not be aware of. You may also be able to cancel your plan before it expires if you don’t like it. Think twice about automatic renewal, however, as plans change constantly. Going automatic pilot can backfire.
When Does My Health Insurance Plan End? Technically, your health insurance continues year after year if you decide to remain in your plan. Health plans can last indefinitely, even if the plan details and benefits change significantly from one year to the next. For instance, your member ID may remain the same each year, but nearly all other aspects of your coverage may change substantially.
If You Get Health Insurance From Your Employer: If you enroll for health insurance through your workplace, your plan year may not follow a calendar-year schedule. The plan will not be able to kick you off as an individual. However, you could face big changes. For example, your employer can change health insurance companies, or you can ask to leave the plan. Changes to employer-sponsored plans will usually take effect on January 1 — but not always. Keep alert to company memos about your healthcare coverage.
If You’re Leaving Your Employer’s Health Plan: You can continue on your employer’s health plan using an option called COBRA, a program that continues your work-sponsored plan for up to 18 months, while your spouse and dependents may remain covered for up to three years. However, COBRA is costly, because your employer will no longer contribute, meaning you’ll have to pay the full cost of the plan.
If you’re dealing with medical issues, COBRA may be worth it, despite your far higher premium and coverage costs. However, most people leaving employer-sponsored insurance do better buying new health insurance coverage on their own (which you can do as a “life-changing event” at any time that you lose your health coverage at work).
What About Temporary Health Insurance? Also known as short-term health insurance plans, these policies can start any time but only last for anywhere from a few months to a year. Temporary health insurance plans nearly always only accept healthy people with no hint of pre-existing conditions, and they have severely limited benefits. Therefore, they are often purchased as a short-term bridge to fuller major medical insurance coverage. Short-term plans are not compliant with the Affordable Care Act, meaning they cover few, if any, of the ACA’s 10 essential health benefits, often not even immunizations.
While these plans often offer a fraction of standard monthly premium payments, you get what you pay for in actual coverage. You should check carefully for what is and isn’t covered – right down to Emergency Room visits and inpatient treatment.
Your ability to renew short-term coverage depends on your health status and your state’s insurance regulations. People who get ill while on a short-term plan risk being dropped rather than renewed, often just when they need treatment most.
What About My Medicare Supplement, Part C, or Part D Plan? Medicare plan years generally keep to the same schedule as health insurance plans for people under the age of 65. However, the guidelines for enrollment and plan renewal are different, and sometimes complicated, depending on what coverage you have. Learn more on our Medicare info webpages.