Are Your Employees Losing Their Medicaid Coverage?

Question: We have several employees (and family members) who have health coverage through Medicaid. We’ve heard that Medicaid’s enrollment rules are changing now that the COVID-19 pandemic is over. How can we help our employees maintain their health coverage through these changes?

Answer: Prior to the COVID-19 pandemic, states were required to renew coverage for people with Medicaid or Children’s Health Insurance Program (CHIP) coverage at least once a year and disenroll individuals who no longer qualified for coverage. During the pandemic, many states maintained continuous enrollment for individuals enrolled in Medicaid or CHIP despite any changes in eligibility status. Medicaid’s continuous enrollment provision ended on March 31, 2023. State Medicaid agencies are now resuming regular eligibility and enrollment operations, which includes terminating Medicaid and CHIP coverage for individuals who are no longer eligible.

Employers who have employees enrolled in Medicaid or CHIP should encourage their employees to make sure their state Medicaid or CHIP agency has their up-to-date contact information. State agencies may ask covered individuals to complete a renewal form to determine if they still qualify for coverage. Employees should monitor their mail for any notifications from state Medicaid or CHIP agencies and promptly respond to any requests for information.

If an individual is no longer eligible for Medicaid or CHIP, they can transition to another form of health coverage, such as coverage under an Affordable Care Act (ACA) Marketplace or employment-based coverage. In general, employees who lose Medicaid or CHIP coverage and are eligible for job-based health coverage have 60 days to request special enrollment under their employer’s health plan. However, due to special pandemic-related deadline relief, employees who lost Medicaid or CHIP eligibility on or before July 10, 2023, may be able to request special enrollment until at least Sept. 8, 2023.

In addition, individuals who lose Medicaid or CHIP coverage are eligible for a special enrollment period for coverage offered through an ACA Marketplace and for individual health insurance coverage outside the Marketplaces within 60 days before or 60 days after the date of the loss of coverage. The Centers for Medicare and Medicaid Services has also created a temporary special enrollment period in the federal Marketplace for qualified individuals and their families who lose Medicaid or CHIP coverage due to the unwinding of Medicaid’s continuous enrollment; they can apply for coverage by July 31, 2024.

The Biden administration is encouraging employers to match these steps and extend their special enrollment periods beyond the minimum 60-day period for individuals losing Medicaid or CHIP coverage. Employers who decide to extend their special enrollment periods should update their plan documents for the change and communicate the extended special enrollment period to employees through an updated summary plan description (SPD) or summary of material modifications (SMM). Employers with fully insured health plans should also confirm that the extended special enrollment window is consistent with any enrollment requirements imposed by their carriers.

Please reach out to your client advisor with any questions.