Employers urged by CMS to extend Special Enrollment Period for Medicaid and CHIP Loss of Coverage

The annual process of requiring individuals to renew their eligibility for Medicaid coverage, which was paused during the COVID-19 Public Health Emergency period, resumed on March 31, 2023. This is resulting in millions of Americans losing coverage under Medicaid and the Children’s Health Insurance Program (CHIP).

Accordingly, the Biden-Harris Administration is urging employers and other plan sponsors to extend the special enrollment period under their group health plans to ensure their employees and families losing coverage as a result remain connected to coverage.

Employer Action Items

Employers are encouraged to consider the following:

• Work with their insurers and third-party administrators to extend the special enrollment deadline to enroll eligible employees and their dependents in their group health plans during the annual redetermination process.
• Encourage their employees enrolled in Medicaid or CHIP to update their contact information with their state agency. Messaging assistance is available here, and an employer fact sheet here.
• Ensure human resources’ staff are prepared to assist employees with the transition to employment-based coverage outside of open enrollment.
• Remind employees of the potential availability of free or low-cost coverage through the Marketplace.
• Amend plan documents and cafeteria plan documents to reflect any extension granted.

Summary

To receive additional federal funding, many states maintained continuous enrollment for individuals enrolled in Medicaid during the COVID-19 pandemic, despite any changes in eligibility status. Medicaid’s continuous enrollment requirement ended on March 31, 2023, under the terms of the Consolidated Appropriations Act, 2023. Thus, states that maintained continuous Medicaid enrollment during the COVID-19 pandemic resumed regular eligibility and enrollment operations, which include terminating coverage for individuals who are no longer eligible.

HIPAA requires group health plans to provide special enrollment opportunities in certain situations, including when employees or their dependents lose eligibility for Medicaid or CHIP coverage. Employees normally have 60 days to request special enrollment. Given the “exceptional circumstances” surrounding the renewals for the first time in more than three years, the Biden-Harris Administration anticipates that many individuals will need more time to apply for and enroll in other coverage.

In this respect, the Centers for Medicare & Medicaid Services (CMS) has announced a temporary special enrollment period on Healthcare.gov, for individuals losing Medicaid or CHIP coverage anytime between March 31, 2023, and July 31, 2024, to enroll in a Marketplace plan. It is strongly urging employers and other plan sponsors to do the same.

More Information

The CMS memorandum is available here.

For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.