Temporary Medicaid Eligibility Rules Expiring
Beginning April 1, 2023, states have the ability to terminate Medicaid coverage for individuals who fail to meet coverage eligibility requirements. This process, known as Medicaid redetermination, had been paused for the duration of the COVID-19 Public Health Emergency (PHE). However, the Consolidated Appropriations Act, 2023 (CAA) ended the pause on Medicaid redetermination allowing Medicaid coverage to be terminated for individuals who are no longer eligible starting on April 1, 2023.
Prior to the Public Health Emergency, Medicaid eligibility was set on an annual basis. The Families First Coronavirus Response Act paused the normal eligibility process and that pause was set to continue until the end of the PHE. However, the CAA moved the end of the redetermination pause to March 31, 2023. This change means that states can begin removing individuals who no longer meet Medicaid coverage eligibility requirements on April 1, 2023.
With the resumption of the Medicaid redetermination process, individuals previously covered by Medicaid may lose their coverage if they no longer meet Medicaid’s eligibility requirements. Some of these individuals may have been eligible for employer sponsored group health plans but declined coverage under those plans due to their Medicaid coverage. Employers, as group health plan sponsors, may see a rise in the number employees seeking a special enrollment on their plan mid-year due to a loss of Medicaid coverage.
Consequences for Group Health Plans
Individuals who were previously eligible for an employer’s group health plan but lose Medicaid coverage will experience a special enrollment event. This event will allow those individuals to enroll onto their employer’s plan mid-year. The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) amended the Health Insurance Portability and Accountability Act (HIPAA) to require plans to permit special enrollment mid-year due to a loss of Medicaid coverage.
Employers would be well-served to review their special enrollment procedures to ensure they are ready to address any requests for special enrollment due to a loss of Medicaid coverage. Since employers are already required to distribute the HIPAA Notice of Special Enrollment Rights and the CHIPRA Notice, there are no additional notice and disclosure requirements as result of this eligibility change to Medicaid coverage.
Beginning April 1, 2023, employers should be prepared to accommodate employees who lose Medicaid coverage as result of Medicaid redetermination and wish to exercise their special enrollment rights to enroll on the employer’s plan mid-year.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.