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Eligible + Enrolled = Entitled

Today’s video is focused on three important terms which are related but often misunderstood. In the U.S. healthcare system, one must be eligible for coverage and properly enrolled in that coverage to be entitled to the coverage.

Let’s define these terms:

  • Eligibility means you qualify for the coverage. That could be due to your employment status, your relationship to someone else with employment status, the state you reside in and/or your income, depending on the type of plan.
  • Enrollment means you went through the process of electing that coverage in the time period you needed to and paid for the coverage, if required.
  • Entitlement means you are both eligible and enrolled.

In the video I refer to a woman who called us with a question. She had been divorced for years but (from the conversation) it appeared her ex-husband never reported the divorce to his employer and must have been annually enrolling her as his spouse. The ex-wife did not understand that the insurance company would consider this insurance fraud and if they learned of her situation could very well move to recoup what they had spent on her over the years as well as take action against the husband.

It had never occurred to her that she wasn’t entitled to the coverage. After all, the insurance company had sent her a new card for years and paid her claims. Her question was, “My husband remarried. Will the employer cover the new wife and continue to cover me?” Oh my.

You are not eligible for coverage simply because an insurance company sent you an ID card. This particular woman had been properly enrolled in coverage, but was not entitled to coverage because she was not actually eligible for that coverage. With group coverage, eligibility is tied to your status as a worker or your relationship to the worker. When a worker is no longer eligible for coverage due to working too few hours or leaving the job, the employed person and dependents are no longer eligible for the active group coverage and will be offered COBRA or mini-COBRA. They can also buy coverage as individuals in that circumstance.

Eligibility for Individual coverage that you purchase on your own is tied to paying premiums on time and residing in the service area. Government programs like Medicaid, Child Health Plus, and Medicare are different but all require that you be eligible and properly enrolled to be entitled to coverage. The most common problem related to this issue – and it is a serious problem – is losing coverage of some sort (no longer being eligible), being eligible for other coverage and missing the enrollment window. In sum, not enrolling timely and, as a result, narrowing your coverage options or missing them altogether until the next open enrollment period, start of a new job with coverage, or a qualifying event like marriage.

And our system isn’t standard. In general, one has 60 days after the involuntary loss of coverage to enroll in other coverage. That’s true for a COBRA election or buying coverage in the individual market. That’s also true in moving to a new area. But, as we’ve already discussed, one has only 30 days from date of birth or adoption to add a child to a parent’s plan. As we’ve also discussed, Medicare rules march to a most unique drummer and vary by Part of Medicare and type of Enrollment Period. As we’ve also discussed, individuals applying for individual coverage can always enroll during the annual open enrollment period but state deadlines vary and some rules and enrollment periods change from year to year.

You always want to be covered in a totally legitimate way so that your claims that should be covered must be covered by the insurer. Often, applying for coverage without a Human Resources person looking out for you can be frustrating. Even applications where receipt has been confirmed can be lost or deemed incomplete.

If you don’t understand your situation well enough, get help from someone who does and act timely.

Please watch the video and please encourage others to join in to improve “coverage literacy.” Thanks.