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Congress passed legislation which ends the Medicaid continuous enrollment requirement related to the COVID-19 pandemic on April 1, 2023.

Primarily due to the continuous enrollment provision, Medicaid enrollment has grown substantially compared to before the pandemic and the uninsured rate has dropped. But, when the continuous enrollment provision ends, millions of people could lose coverage that could reverse recent gains in coverage.

1. Medicaid enrollment has increased since the start of the pandemic, primarily due to the continuous enrollment provision.

2. KFF estimates that between 5 million and 14 million people will lose Medicaid coverage once the continuous enrollment provision end.

3. The Medicaid continuous enrollment provision has stopped “churn” among Medicaid enrollees.

4. States are required to develop plans for how they will resume routine operations when the continuous enrollment provision ends.

5. Maximizing streamlined renewal processes can promote continuity of coverage when the continuous enrollment provision ends.

6. States can obtain temporary waivers to pursue strategies to support their unwinding plans.

7. People who have moved since the start of the pandemic, those with limited English proficiency (LEP) and people with disabilities, may be at greater risk for losing Medicaid coverage when the continuous enrollment provision ends.

8. States can partner with MCOs, community health centers, and other partners to conduct outreach.

9. Timely data on disenrollments and other metrics will be useful for monitoring how the unwinding is proceeding.

10. The number of people without health insurance could increase if people who lose Medicaid coverage are unable to transition to other coverage.

HOW DOES THIS AFFECT EMPLOYER GROUPS?

Employers should allow employees (and dependents) who lose Medicaid eligibility to enroll in their group
health coverage as special enrollees, assuming they are eligible under the terms of the plan and timely
request enrollment. Employers should note that HIPAA’s 60-day deadline for requesting special enrollment is
extended during the COVID-19 outbreak period.

To make health coverage more portable, HIPAA requires group health plans to provide special enrollment
opportunities outside of their regular enrollment periods in certain situations, including when there is a
termination of eligibility for Medicaid or a state Children’s Health Insurance Program (CHIP).

Employees and their dependents are eligible for special enrollment if:
The employee or dependent is covered by a Medicaid plan or under a state CHIP;
The Medicaid/CHIP coverage of the employee or dependent is terminated as a result of loss of eligibility for
the coverage; and
The employee and dependent are otherwise eligible to enroll in the employer’s group health plan.

When an employee loses eligibility for Medicaid, the employee and any eligible dependents (including a
spouse) may enroll during a special enrollment period. If an employee’s dependent loses eligibility, then the
dependent and the employee may qualify for special enrollment.

In general, health plan coverage should begin no later than the first day of the calendar month after the plan
receives a timely special enrollment request.

GRADUAL UNWINDING OF MEDICAID CONTINUOUS ENROLLMENT

States that maintained continuous Medicaid enrollment during the COVID-19 pandemic must, over time,
return to normal eligibility and enrollment operations. The Centers for Medicare and Medicaid Services (CMS)
has provided states with up to 12 months following the end of continuous enrollment to initiate renewals for
individuals currently enrolled in Medicaid in a process referred to as “unwinding.” This gradual unwinding
means that not all ineligible employees will lose their Medicaid coverage on April 1, 2023; rather
coverage will be lost over the span of approximately one year, depending on each state’s unwinding timeline.
According to CMS, states could begin their 12-month unwinding period and initiate the first Medicaid renewals
that may result in disenrollment as early as Feb. 1, 2023.

DEADLINES FOR REQUESTING SPECIAL ENROLLMENT

Employees must have at least 60 days after a loss of eligibility for Medicaid or CHIP coverage to request
special enrollment. However, various deadlines related to employer-sponsored group health plans have been
extended during the COVID-19 pandemic, including the deadline for requesting special enrollment following a
loss of Medicaid/CHIP eligibility.
These deadlines are extended by disregarding an “outbreak period.” The outbreak period began in March 2020
and continues until 60 days after the end of the COVID-19 national emergency. On Jan. 30, 2023, the Biden
administration announced its plan to end the COVID-19 national emergency on May 11, 2023. Under this
timeline, the outbreak period will end on July 10, 2023.

The COVID-19-related deadline extensions end when the outbreak period is over or, if earlier, after an
individual has been eligible for a specific deadline extension for one year. Thus, on July 10, 2023, health plans
can go back to the normal 60-day deadline for requesting special enrollment following a loss of Medicaid/CHIP
eligibility; however, any days during the outbreak period must be disregarded to determine the enrollment
deadline that applies to a specific individual. For example, if an individual loses Medicaid eligibility on April 1,
2023, the outbreak period is disregarded, and the 60-day period to request special enrollment would begin on
July 10, 2023.

Many employers sponsor cafeteria plans (or Section 125 plans) to allow employees to pay for their health
coverage on a pre-tax basis. As a general rule, participant elections under a cafeteria plan must be made on a
prospective basis and cannot be changed until the beginning of the next plan year. However, cafeteria plans
may recognize certain midyear election change events to allow employees to make election changes during a
plan year.

A cafeteria plan may be designed to permit midyear election changes that correspond with HIPAA’s
special enrollment rules. This allows participants to pay for their health coverage on a pre-tax basis when
they obtain coverage during a special enrollment period. If a cafeteria plan does not allow midyear election
changes for HIPAA special enrollment events, eligible employees and dependents must still be allowed to
enroll in health plan coverage and pay their premiums on an after-tax basis.

BOTTOM LINE

Employer groups should expect to see an increase in inquiries about enrolling in their group health insurance plan beginning in the second quarter of 2023.

Read More: https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-the-unwinding-of-the-medicaid-continuous-enrollment-provision/