It’s Raining SEPs: New Administration Guidance on Special Enrollment Periods and What they Mean for Consumers

On Friday, May 2, 2014 the Center for Consumer Information and Insurance Oversight (CCIIO) released new guidance for the federally facilitated marketplace (FFM) regarding new special enrollment periods (SEPs) for certain individuals. It also allows people who were enrolled in a health plan outside the marketplace by May 1, 2014 to obtain an exemption from the Affordable Care Act’s (ACA) individual mandate penalty.

New SEP for COBRA enrollees

Federal rules allow individuals eligible for COBRA coverage to gain a special enrollment period when (1) they first become eligible because of a loss of employer coverage and (2) when their COBRA coverage is exhausted. But, as we document in Frequently Asked Question #166 of our Navigator Resource Guide, if you take COBRA as you’re leaving employment and then decide later you want to drop it, CCIIO has said you won’t qualify for a special enrollment period.

CCIIO has now changed its tune on COBRA, at least through July 1, 2014. Because the current model notice to employees about their COBRA coverage does not sufficiently address their new options under the ACA, some employees may not fully understand that they can enroll in a marketplace plan.

As a result, CCIIO is providing an additional SEP based on “exceptional circumstances” for these people. If someone is enrolled in COBRA but wants to drop it, they will have 60 days (through July 1, 2014) to contact the FFM’s call center (1-800-318-2596) to request a SEP. They should tell the call center they are calling about “their COBRA benefits and the Marketplace.”

New SEP for people whose individual market policy is up for renewal in 2014

CCIIO has published a proposed regulation allowing people with an individual market policy scheduled to renew in 2014 to gain a special enrollment opportunity in the FFM. But that regulation has not yet been made final, so CCIIO is using this guidance to alert consumers that this SEP is available to them. Consumers whose policy renewal date is approaching can report to the FFM up to 60 days before their policy ends, and they can get coverage in the FFM on the first of the month following the renewal date. After their policy ends, consumers will also have 60 days to enroll through the FFM.

Hardship exemption for people with coverage effective as of May 1, 2014

In general, individuals with more than a 3-month gap in minimum essential coverage (MEC) in 2014 must pay a tax penalty. But in October 2013, CCIIO indicated that anyone enrolling in the marketplaces by March 31, 2014 would be exempt from the individual mandate penalty, even though many would not have coverage in place until May 1st (a potential 4-month gap in coverage). This policy was extended to people that had tried to enroll by March 31st and were “in line” through April 15th.

In this recent guidance, CCIIO observes that many people may not have realized that the exemption would not apply if they enrolled in a health plan outside the marketplace. They therefore extend the exemption to people who enrolled in MEC on or before May 1st outside the marketplace. This will be available to people in both FFM and state-based marketplace states, and people will not be required to submit an application to obtain the exemption.

The guidance also provides SEPs and hardship exemptions to AmeriCorps, VISTA, and National Civilian Community Corps members.

2 thoughts on “It’s Raining SEPs: New Administration Guidance on Special Enrollment Periods and What they Mean for Consumers

  1. If COBRA coverage is available to someone, but the cost of the premiums exceeds the 9% (or is it 8%?) threshold for household income, is he/she eligible to purchase health insurance in the Marketplace in an FFM? Would this person be eligible for an SEP? I have a case of someone who was laid off last year and whose COBRA payments were covered by his previous employer for a few months, but will be expiring soon. For him to pay the full cost of his COBRA far exceeds his family’s household income or his individual income. I have not seen this example addressed anywhere.

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