New Exchange Special Enrollment Periods and Hardship Exemptions
Business Solutions: Health Care Reform Bulletin
Under the Affordable Care Act (ACA), individuals may only enroll in health insurance through an Exchange during a permitted enrollment period (such as an open enrollment or a special enrollment period). The initial open enrollment period for Exchange coverage ended on March 31, 2014. The open enrollment period for 2015 will begin on Nov. 15, 2014, and extend through Feb. 15, 2015.
On May 2, 2014, the Department of Health and Human Services (HHS) issued a Bulletin providing special enrollment periods (SEPs) in the federally-facilitated Exchange (FFE) for the following individuals:
- Individuals who are enrolled in (or eligible for) COBRA coverage;
- Individuals whose individual market plans renew outside of the Exchange’s open enrollment period; and
- AmeriCorps/VISTA/National Civilian Community Corps (NCCC) members.
If certain conditions are met, the SEPs allow these individuals to enroll in qualified health plans (QHPs) outside of an open enrollment period. HHS encourages state-based Exchanges (SBEs) to adopt similar special enrollment periods for these individuals.
In addition, the Bulletin provides a hardship exemption from the individual mandate’s penalties for all months prior to the effective date of coverage for all individuals who obtained minimum essential coverage (MEC) effective on or before May 1, 2014, even for individuals who purchased coverage outside of the Exchange. This exemption is available for eligible consumers in FFE and SBE states.
Overview of Special Enrollment Periods
Individuals may be allowed an SEP in an Exchange following certain triggering events, such as marriage or birth of a child. SEPs permit individuals to enroll in QHPs outside of open enrollment. In addition, an SEP will be provided in cases where a consumer faces exceptional circumstances, as determined by HHS, that occur on or around plan selection deadlines.
The effective date of any coverage elected during an SEP follows rules similar to those applicable during open enrollment. This means that coverage would generally be effective as of the first day of the month for elections made by the 15th of the preceding month, and on the first day of the second following month for elections made between the 16th and the last day of a given month. However, special rules apply when birth, adoption or placement of a child is the special enrollment triggering event. In general, SEPs triggered by exceptional circumstances will have prospective coverage effective dates.
SEP for COBRA Enrollees
COBRA gives group health plan participants and beneficiaries the right to choose to continue their group health plan benefits for limited periods of time under certain circumstances, such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce and other life events.
Individuals qualify for SEPs when they are initially eligible for COBRA due to a loss of other MEC and when their COBRA coverage is exhausted. In addition, COBRA enrollees may choose QHPs in the Exchange during an open enrollment period and if they are determined eligible for any other SEPs outside of the open enrollment period.
HHS recognizes that, due to insufficient information, persons eligible for COBRA and COBRA enrollees may not have understood that they can only enroll in Exchange coverage during the open enrollment period and SEPs described above. Thus, the Bulletin provides an additional SEP based on exceptional circumstances so that persons eligible for COBRA and COBRA enrollees may enroll in coverage through the FFE. These individuals will have through July 1, 2014, to select QHPs in the FFE.
Eligible individuals should contact the Exchange call center (1-800-318-2596) to activate the SEP. They should inform the call center that they are calling about their COBRA benefits and the Exchange. Once determined eligible for the SEP, consumers can then view all plans available to them and continue the enrollment process over the phone or online through creating an account on www.healthcare.gov or signing in to their existing accounts.
SEP for Individual Market Renewals Outside of Open Enrollment
Health insurance issuers in the individual market must provide a limited open enrollment period beginning 30 calendar days prior to the date the policy year ends in 2014. Based on this timeline, consumers may have reasonably expected to have an option not to renew non-calendar year individual market policies and to receive an SEP in the FFE outside of the open enrollment period. Thus, the Bulletin provides an SEP consistent with the limited open enrollment period for individual market plans.
Under this SEP, individual market consumers will be able to report to the FFE that they will not renew their plan up to 60 days before the renewal date, and can get coverage in the FFE effective the first of the month following the renewal date. Consumers will also have 60 days from the renewal date to select QHPs in the FFE. If a QHP is selected after the renewal date, coverage will be prospective based on the date of plan selection. These individuals should indicate “loss of other coverage” on their Exchange application, if they would like to apply for and enroll in a QHP offered by the Exchange, if otherwise eligible.
SEP for AmeriCorps/VISTA/NCCC Members
The Bulletin establishes an SEP in the FFE for individuals who are:
- Beginning service in the AmeriCorps State and National, VISTA or NCCC programs; or
- Concluding their service in the AmeriCorps State and National, VISTA or NCCC programs and are losing access to short-term limited duration coverage or self-funded coverage through these programs. (These types of coverage are not MEC.)
AmeriCorps State and National, VISTA and NCCC members have 60 days from their triggering event (that is, either the date they begin service or the date they lose access to short-term limited duration coverage or self-funded coverage) to select QHPs through the FFE. Coverage will be prospective based on the date of plan selection.
In addition, the Bulletin provides a hardship exemption from the individual mandate for AmeriCorps State and National, VISTA or NCCC members who have short-term limited duration coverage or self-funded coverage under these programs. The exemption is available to consumers in states with an FFE or SBE. Consumers will need to request the hardship exemption using the hardship exemption form, which is available at www.healthcare.gov/exemptions. (Individuals in Connecticut must contact Access Health CT to apply for this exemption.)
Hardship Exemption for Coverage Effective On or Before May 1, 2014
In prior guidance, HHS provided hardship exemptions from the individual mandate for months in 2014 prior to the effective date of coverage for:
- Individuals who enrolled in QHPs prior to the close of the initial open enrollment period on March 31, 2014; and
- Individuals who received an SEP for being “in line” by March 31, 2014, and selected new coverage in the FFE.
Some consumers may not have realized that the hardship exemption relief was limited solely to individuals who purchased QHPs through the Exchanges. According to HHS, individuals who obtained other forms of MEC, effective as of May 1, 2014, outside of the Exchange (including group or individual plans) are, to a large extent, similarly situated to those who purchased QHPs with a May 1, 2014 effective date. Thus, the Bulletin provides a comparable hardship exemption for all months prior to the effective date of coverage for individuals who obtained MEC effective on or before May 1, 2014, outside of the Exchange. This exemption is available to consumers in states with an FFE or SBE. Individuals are not required to submit an exemption application to the Exchange.
Please contact Business Solutions for more information on Exchange enrollment periods.
Source: Department of Health and Human Services