Background on Temporary Relief during COVID-19
During the COVID-19 pandemic, relief was provided to Medicaid enrollees by pausing Medicaid coverage terminations and allowing coverage to continue automatically without an annual eligibility review. Under the Consolidated Appropriations Act of 2023, this continuous enrollment in Medicaid expired on March 31, 2023. Now, state agencies are reviewing Medicaid enrollee eligibility which may result in many individuals losing Medicaid or CHIP coverage and having to transition to another type of coverage.
As a reminder, individuals losing eligibility for Medicaid or CHIP, have a minimum special enrollment period of 60 days from the loss of coverage to enroll in an employer group health plan if they properly notify their employer’s plan.
Due to the exceptional circumstances of resuming regular eligibility and enrollment practices for the first time in three years, the Centers for Medicare & Medicaid Services (CMS), Treasury, and Department of Labor (DOL) are worried that many individuals will need more than 60 days to enroll in other coverage, as they may not realize they have lost Medicaid coverage until the next time they seek medical care.
New CMS Temporary Special Enrollment Period
To help remedy this issue, CMS recently announced on Healthcare.gov that they are offering a temporary special enrollment period anytime between March 31, 2023, and July 31, 2024, for individuals who lose Medicaid or CHIP coverage and want to enroll in coverage on the Exchange.
CMS Recommendation to Employer Group Health Plans
On July 20, 2023, the CMS, Treasury and the DOL requested in an open letter to employers, plan sponsors, and health plan issuers, that they amend their group health plans (GHPs) to temporarily allow an extension for individuals who lose Medicaid or CHIP coverage and seek to enroll in GHP coverage from March 31, 2023 through July 31, 2024 (the same extension period as the Exchange). Note, enrollment would be on a prospective basis only.
Recommended Employer Action
- CMS encourages employers to remind employees of their Medicaid or CHIP renewals and to update their contact information with their state agency. Employers may use these CMS resources to help with any messaging to employees.
- Employers can work with their insurance carriers on the options available for their plans in supporting employees who may lose Medicaid or CHIP coverage and should obtain approval from their insurers or stop loss carriers before making any plan changes or allowing a late plan enrollment.
- Employers should also consider how their cafeteria plan may limit elections and whether an interim plan amendment is necessary.
- COBRA Administrators should be informed that COBRA participants may be able to add dependents that lose Medicaid or CHIP coverage during any extended special enrollment period, if an extension is adopted by the plan.
- If the temporary window is not adopted, employers will want to be prepared to communicate with employees who request a special enrollment period outside the 60-day window. Employers may remind employees that they may be eligible for free or low-cost health coverage through the Exchange. More information is available on the Healthcare.gov website.
- CMS Open Letter to Employers dated July 20, 2023
- Medicaid.gov Resources for Unwinding and Returning to Regular Operations After COVID-19
- Medicaid.gov Employer Fact Sheet
- HealthCare.gov Medicaid-to-Marketplace Resource Page
Disclaimer: The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog. © 2023 Sequoia. All Rights Reserved.