ACA COVERAGE BY SPECIAL ENROLLMENT PERIOD
COVID-19 has caused a lot of changes with the way we live life in the United States. Several states have allowed for special enrollment periods, allowing you to enroll in an ACA plan even though you may not have a normal special election period.
In some cases, the state-run enrollment windows have since closed, but since July, special enrollment periods for uninsured residents in some states have continued. Uninsured people who enroll in a health plan on the exchange during a COVID-19 special enrollment period can get income-based premium subsidies and cost-sharing reductions. The availability of assistance is the same as it is during a regular annual enrollment period.
Normally, special enrollment periods follow regular effective date rules, but the COVID-19 special enrollment periods have different rules that vary by state, including some that have been allowed retroactive coverage dates.
This is quite different from the normal rules for private health insurance, which usually cannot have a retroactive effective date unless the coverage is for a newborn or a newly adopted child.
If you are uninsured, you will want to check to see if your state has a special enrollment period (or check with our office). If so, it may be in your best interest to enroll in an ACA plan as quickly as possible.
If you are in a state that uses healthcare.gov, you will need to rely on the regular special enrollment periods that are always available. For many people, the loss of coverage special election period will apply, but you will need to enroll within 60 days of losing your existing coverage.
SPECIAL ENROLLMENT PERIOD (SEP) FOR LOSS OF COVERAGE
If you’re in a state that uses HealthCare.gov, or one of the states where a COVID-related special enrollment period has already ended – or if you already have coverage and want to pick a different plan – you’ll need to have a qualifying event in order to enroll in coverage. And if your income has taken a hit, know that if you enroll in a plan through the exchange during a special enrollment period, you may qualify for financial assistance (premium subsidies and cost-sharing subsidies).
For most qualifying events, your coverage will take effect either the first of the next month or the first of the month after that, depending on how late in the month you enroll.
Typically, if you enroll during the first 15 days of the month, your coverage will take effect on the first day of the next month. Enroll after the 15th and coverage will not kick in until the first of the following month.
But the effective date rules are different if your qualifying event is the loss of your existing health coverage. If you are losing your coverage, you can enroll up until the last day you have coverage and your new plan will take effect the first of the following month.
Since health plans usually terminate on the last day of a month, this means you can have seamless coverage in most cases, as long as you enroll by the day that your old plan ends, and assuming your old plan is ending on the last day of the month (if your plan is ending on a day other than the last day of the month, it will likely not be possible to have seamless coverage unless you’re able to qualify for Medicaid).
So for example, if you’re getting laid off and your employer-sponsored coverage is going to end on July 31, you have until July 31 to enroll in a new plan (on- or off-exchange) and your coverage will take effect August 1.
If you are not eligible for a SEP or Medicaid/Medicare, you will have to wait until open enrollment to buy coverage, which means the plan will take effective January 1st.
APPLY FOR AHCCCS/MEDICAID IF YOU LOST YOUR INCOME
Millions of Americans are facing a sudden drop in income because of the COVID-19 pandemic. But most of the states have expanded Medicaid under the Affordable Care Act, which allows residents with low income (up to 138 percent of the poverty level) to enroll in Medicaid. Medicaid enrollment is year-round, as is CHIP (Children’s Health Insurance Program) enrollment. And CHIP eligibility extends to higher income levels than Medicaid. For both Medicaid and CHIP eligibility, income is calculated monthly, so they are available if your current income is within the eligible range – even if your income in the first few months of the year was much higher.
Medicaid coverage can also be immediate or backdated to the first of the month or even a previous month, depending on the state and the circumstances. (States can seek federal approval to eliminate prior month retroactive coverage availability, and some have done so under the Trump administration). So, you will not have to wait for your Medicaid coverage to take effect.
In states that have not expanded Medicaid, coverage is not available based solely on income; low-income residents must also meet other criteria, such as being pregnant, caring for minor children, being elderly, or being disabled. But if you are facing a loss of income, you will want to check with your state’s Medicaid program to see if you might be eligible for coverage.
When your income picks back up in the future and makes you ineligible for Medicaid, that will trigger a loss-of-coverage special enrollment period during which you can enroll in a private individual market plan or an employer-sponsored plan if one is available to you.
Note that to qualify for the additional federal Medicaid funding that’s being provided to states to address the COVID-19 pandemic, states cannot take action to terminate Medicaid coverage until after the COVID-19 emergency ends.
Your Medicaid coverage can be terminated if you request it — perhaps because you become eligible for a new employer’s plan, or your income increases enough to make you eligible for premium subsidies in the exchange — or if you move out of state.
But otherwise, your Medicaid coverage should continue until the end of the COVID-19 emergency period. If you request termination or move out of state, however, your Medicaid coverage will end and that will trigger a special enrollment period during which you can sign up for a private plan.
SHORT TERM MEDICAL PLANS
For millions of Americans who are not eligible for an SEP or Medicaid, buying a short-term medical plan offers the fastest way to get some level of coverage in place. Short-term plans are not ACA-compliant but can still provide protection from catastrophic medical expenses – and you can purchase the plans at any time during the year. This means you could buy a short-term plan today and – if you are approved through the underwriting process – you could have coverage in force as soon as the next business day.
Short-term coverage is temporary, but federal regulations now allow short-term plans to have initial terms of up to 364 days, and total duration, including renewals, of up to three years.
Many states have their own rules, however, that limit short-term plans to shorter durations than the federal rules allow.
Many short-term health plans have voluntarily agreed to waive cost-sharing for COVID-19 and the insurers that offer “enhanced” short-term plans are also waiving cost-sharing for COVID-19 treatment.
But the general rules that the federal government imposed to require insurers to fully pay for COVID-19 testing do not apply to short-term plans, so their actions on this are voluntary rather than mandated (unless a state takes action to further regulate short-term plans).
And although many ACA-compliant health plans have agreed to temporarily waive cost-sharing for COVID-19 treatment (as opposed to just testing, as required by law), very few short-term plans have agreed to take this step.
And the basic rules of thumb for short-term plans still apply: Pre-existing conditions are generally not covered at all, and insurers will tend to look back at your medical records if and when you have a claim, to make sure that the claim isn’t related to any condition you might have had before enrolling.
Short-term plans are also not required to cover the ACA’s essential health benefits, which means that some of the treatment you might need for COVID-19 (or other conditions) might not be covered at all by the plan. Many short-term plans do not, for example, cover outpatient prescription drugs. Others place limits on how much they will pay for inpatient hospital care.
If you are 65 years old or older (or quickly approaching age 65), now is the time to consider moving to Medicare. You will be incredibly surprised about how affordable it is (compared to employer plans), and the coverage is phenomenal. You will have 63 days to make the switch to Medicare (from the date you lost your existing coverage). And if you have had creditable coverage, you will pay no late enrollment penalty.
You can enroll in Medicare either online at ssa.gov, or by contacting your local Social Security office. We can help you with this process, and we will take the time to give you a very thorough understanding of how Medicare works. One thing you will need to decide is if you want to cover the 20% that Medicare doesn’t cover by enrolling in a Medicare Supplement (Medigap) plan, or if you want to enroll in a Medicare Advantage plan (which works very similar to your employer plan).