Employers asked to extend special enrollment period for Medicaid redeterminations

The Biden administration is encouraging employers to help their employees remain insured as Medicaid redeterminations resume. In a letter released on July 20, 2023, the Centers for Medicare & Medicaid Services, the Department of Labor and the Department of the Treasury ask employer sponsors of group health plans to allow their employees who lose Medicaid coverage to enroll in their group health plan at any time over the next year via an extended Special Enrollment Period (SEP).

In general, eligibility for Medicaid is assessed annually; however, during the COVID-19 pandemic, the federal government paused annual redeterminations to ensure more people continued to have access to health coverage. Those relief measures expired as of April 2023, and states are now reviewing people’s eligibility for the first time in three years; as a result, millions of Americans are losing Medicaid coverage.

As background, group health plans are required to give employees a minimum of 60 days to enroll in their group health plans upon the loss of Medicaid or Children’s Health Insurance Program coverage. However, the Biden administration is now asking group health plans to extend that period, as employees might need more time to transition to employer-sponsored health insurance — for example, if they miss state agency notices and do not realize they have lost coverage until they go to access care.

The letter further reminds employers that the Affordable Care Act marketplace has already extended the SEP through July 31, 2024.^[1]

While the letter did not mention timing, since Medicaid redeterminations are currently ongoing, employers can consider making any changes to group health plans effective immediately.

Going forward

• Employers sponsoring self-insured group health plans should determine whether they want to extend the SEP for loss of Medicaid and amend plan documents accordingly. This is not required, and an employer is free to choose the length of the extension, if any, that will be offered.
• Employers sponsoring fully insured group health plans should discuss any SEP extensions with their insurance carriers and coordinate plan document changes.
• Employer plan sponsors should discuss potential cost implications of an extended SEP with their plan consultants and actuaries.
• Employers choosing to extend the SEP should communicate any changes to employees.

Footnote

1. “For additional details on the potential impacts to employers due to Medicaid redeterminations, see “Medicaid redeterminations may impact group health plans,” Insider, April 2023. Return to article undo