The end of the COVID-19 pandemic brought many changes for group health plans, including wind down and transition efforts in connection with the end of the COVID-19 Public Health Emergency.
Medicaid or CHIP Coverage During the Pandemic
The Families First Coronavirus Response Act, passed in 2020, increased federal Medicaid and CHIP funding for states during the COVID-19 Public Health Emergency and prohibited states from disenrolling Medicaid and CHIP recipients to ensure continuous health coverage. The Consolidated Appropriations Act of 2023, passed in late 2022, permits states to restart the Medicaid or CHIP eligibility determination process and resume terminating Medicaid and CHIP coverage on April 1, 2023 for individuals who are no longer eligible.
With the end of the National Emergency on July 10, 2023, the Department of Labor, the Department of the Treasury, and the Center for Medicare and Medicaid Services (CMS) (collectively, the Departments) issued a letter directed to employers sponsoring group health plans on July 20, 2023. This letter encourages plan sponsors to extend the HIPAA special enrollment period (SEP) beyond the minimum 60-day period (as required by statute) for individuals losing Medicaid and Children's Health Insurance Program (CHIP) coverage[1].
Employees and their dependents who lose Medicaid or CHIP coverage are generally entitled to a HIPAA SEP to enroll in a group health plan as long as they provide notice within 60 days of losing Medicaid or CHIP coverage.
Departments Letter
This resumption of Medicaid or CHIP eligibility determinations (and terminations) after three years of continuous enrollment is unprecedented. As a result, the Departments anticipate that many individuals will need longer than the typical 60-day window after the loss of Medicaid or CHIP coverage to apply for and enroll in other coverage.[2] The Departments letter provides an example of employees only realizing that they lost Medicaid or CHIP coverage when they attempt to access care as they may have missed notices from their state agencies.
To address this concern, CMS announced a temporary special enrollment period on Healthcare.gov for Marketplace-eligible individuals losing Medicaid or CHIP coverage to enroll between March 31, 2023 and July 31, 2024.
Along the same lines, the Departments letter encourages employer-sponsored group health plan sponsors to extend the HIPAA SEP beyond the minimum 60-day period for individuals losing Medicaid or CHIP coverage in an effort to maintain health coverage for these individuals and their family members. This letter confirms that there are no legal or regulatory barriers that would prevent group health plans from permitting longer deadline timeframes than the standard 60-day SEP requirement for individuals who lose Medicaid or CHIP coverage to enroll in a group health plan.[3]
Employer Impact
Since the Departments letter only encourages, but does not require, employers sponsoring group health plans to extend the HIPAA 60-day SEP for individuals losing Medicaid or CHIP coverage, employers may choose not to amend their group health plans to permit a longer SEP. These employers should consider the following action items to assist their employees losing Medicaid or CHIP coverage:
- Encourage employees enrolled in Medicaid or CHIP coverage to update their contact information with their applicable state agency
- Provide employees losing Medicaid coverage with a helpful CMS fact sheet
- Train their Human Resources staff to assist eligible employees with group health plan enrollment after losing Medicaid or CHIP coverage
However, if an employer does, in fact, decide to extend the SEP for loss of Medicaid or CHIP coverage, they are advised to take the following steps:
- Amend their group health plans, including their Section 125 cafeteria plans
- Distribute a summary of material modification (SMM) to clarify the SEP for this purpose
- Coordinate this SEP change with their carriers (for fully insured plans) and stop-loss carrier (for self-funded plans) for any necessary approvals
- Provide clear communications to plan participants of this SEP change
Risk Strategies is here to help. Contact us directly at benefits@risk-strategies.com.
[1] ERISA §701(f)(3).
[2] The Departments letter cites a recent HHS report projecting approximately 3.8 million individuals who lose Medicaid eligibility will be eligible for employment-based coverage.
[3] https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-58.pdf.
