April 14, 2021
On January 28, 2021, the Department of Health and Human Services (HHS) announced a special enrollment period (SEP) for Federally-facilitated Exchanges (also known as Marketplace coverage). On March 23, 2021, the Centers for Medicare and Medicaid Services extended the SEP to August 15, 2021. This extended special enrollment period means that:
- From February 15 to August 15, 2021, individuals will be able to apply for and obtain health coverage through HealthCare.gov. Individuals also will be able to access this Exchange coverage through agents and brokers.
- The special enrollment period will be available in the 36 states that use the HealthCare.gov platform. The 14 states (plus DC) that operate their own State-based may announce similar special enrollment extensions.
- Individuals may be eligible for premium tax credits that subsidize Exchange coverage. The American Rescue Plan Act (discussed in this webinar) temporarily expanded eligibility and increased the amount of these premium tax credits for many individuals. These subsidies generally are not available to individuals who are offered employer-sponsored coverage.
What Does This Mean for Employers?
Although the special enrollment period does not directly affect employers or their group health plans, it may have some indirect effects:
- Many part-time, temporary, and other employees who are not eligible for employer-sponsored coverage will have the option of obtaining Exchange coverage—in many cases, with substantial subsidies.
- Former employees who lose coverage due to an involuntary termination or reduction in hours will be eligible for the 100% COBRA premium subsidy available from April 1 – September 30, 2021. These former employees will need to weigh the benefits of the COBRA subsidy against premium tax credits that may be available for Exchange coverage.
- Former employees who are not (or are no longer) eligible for the COBRA subsidy may find that Exchange coverage is less expensive than unsubsidized COBRA coverage, particularly if they are eligible for premium tax credits, and opt for Exchange coverage instead.
We expect that HHS and other agencies may issue additional guidance on the interplay between Exchange coverage, the COBRA subsidy, and employer-sponsored coverage in the coming weeks.
A more detailed discussion of the SEP and COBRA is available in our April 13, 2021 webinar, which is available here.
If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.
We provide this material for informational purposes only; it is not a substitute for legal advice.