The Department of Labor (DOL) is encouraging plan sponsors to amend their group health plans to extend the period for special enrollment, as many employees will soon lose eligibility for Medicaid and other government health coverage.
Generally, eligibility for Medicaid coverage must be renewed each year, however, during the COVID-19 pandemic, most Medicaid coverage terminations were paused to minimize coverage loss during the public health emergency. This pause expired on March 31 under the terms of the Consolidated Appropriations Act, 2023.
Medicaid agencies are in the process of resuming eligibility and enrollment operations, which includes renewing coverage for all individuals enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) and terminating coverage for individuals who are no longer eligible.
It is anticipated that individuals will need more than the typical 60-day window after loss of Medicaid or CHIP coverage to apply for enrollment in other coverage because of this unprecedented resumption of renewals after a three-year gap. In addition, many employees may not realize that they lost Medicaid or CHIP coverage until they try to access care.
The Centers for Medicare & Medicaid Services (CMS) have announced a temporary special enrollment period on to address the issue. Marketplace-eligible consumers who lose Medicaid or CHIP coverage any time between March 31, 2023, and July 31, 2024, will be able to enroll. The DOL is advising plan sponsors to follow along with CMS to allow individuals losing coverage to enroll at any time during this annual redetermination process.
Recent guidance indicates that there are no legal or regulatory issues that would stop group health plans from allowing for special enrollment periods beyond the minimum 60 days as required by statute. The only potential barrier would come due to the need to review and amend, if necessary, both health plans and cafeteria plans, since plans likely only outline the 60-day period.
To assist with the continuation of coverage for employees, employers and plan sponsors are encouraged to:
- Spread the word regarding Medicaid and CHIP renewals;
- Make sure that eligible employees are able to easily enroll in employment-based plans upon losing Medicaid or CHIP Coverage; and
- Remind employees about eligibility for free or low-cost health coverage available through the Marketplace if they are not eligible for employment-based plans.
Notably employers are not obligated but are encouraged to provide this expanded special enrollment offer opportunity.
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