The Centers for Medicare and Medicaid Services (CMS) released guidance on February 27^th for Marketplaces that have had technical difficulties getting consumers enrolled. The CMS guidance clarifies that if a consumer has had technical trouble trying to enroll, it could constitute an “exceptional circumstance,” and qualify the consumer for coverage (and financial help) on a retroactive basis. This option is only available, however, if the Marketplace – whether state-based or federally facilitated – decides to take it up.

Why is the guidance necessary?

Several state-based Marketplaces continue to struggle with balky websites, including Hawaii, Maryland, Massachusetts, and Oregon. And even though healthcare.gov is working smoothly for a majority of consumers, many are still encountering technical problems. These problems can arise at multiple points in the process.  In some cases, the website’s identity proofing doesn’t work. In others, people can’t get a timely eligibility determination. And in yet others, the website fails before they can complete enrollment in a health plan. However, in all of these cases, consumers have made a good faith effort to enroll and the Marketplace failed them. This recent guidance from CMS acknowledges that these individuals should not suffer because of a technical failure of the Marketplace.

What does the guidance say?

The guidance itself is an excellent example of convoluted legalese. While it answers some questions, it raises yet others. The bottom line, however, appears to be that Marketplaces that have had technical problems preventing people from enrolling may, at their option, make coverage and financial assistance (premium tax credits and cost-sharing reductions) retroactive for consumers who tried but could not finalize an enrollment. The guidance breaks people into two categories:

• Individuals who, because of technical difficulties with the Marketplace, have not been continuously enrolled in any coverage since January 1, 2014.
• Individuals who, because of technical difficulties with the Marketplace, were unable to enroll in a Marketplace plan but are enrolled in a Qualified Health Plan (QHP) outside the Marketplace.

In the former case, if the individual later enrolls in a Marketplace plan and found eligible for premium tax credits and/or cost-sharing reductions, their coverage will be treated as starting on the effective enrollment date they would have had when they originally submitted their application to the Marketplace, if everything had worked as it should. In the case of someone who was unable to sign up through the Marketplace so then enrolled in a QHP outside the Marketplace, if they subsequently are found to be eligible to purchase a plan through the Marketplace, then the Marketplace can deem them to have been enrolled inside the Marketplace from the date they first enrolled in a QHP outside the Marketplace. In such a case, CMS says, “the individual will be treated for all purposes as having been enrolled through the Marketplace since the initial enrollment date.”

How will this actually work?

Let’s try a couple examples to better understand this guidance.

(1)    Jane Smith tried to enroll in coverage on December 14, 2013 but could not complete enrollment because the website crashed. She’s been uninsured since January 1, 2014 and is not able to complete a successful enrollment into a QHP until March 14, 2014.

If Jane’s Marketplace implements the policy outlined in the guidance, both the Marketplace and the insurer would have to consider her enrollment effective January 1, 2014. Her health plan would have to pay any health claims she’s incurred since January 1. Also, while Jane would have to pay her portion of her premiums for January, February, and March, those would be reduced by any premium tax credits she’s entitled to. Similarly, if she’s entitled to cost-sharing reductions, CMS will pay those cost-sharing reduction payments to her insurer on a retroactive basis. The guidance does not answer whether Jane will be subject to individual mandate penalties because she went 3 months without coverage.

(2)    John Robbins tried to enroll in coverage on January 12^th, 2014 but had technical problems. Needing coverage quickly, John enrolled in a QHP outside the Marketplace with an effective date of February 1, 2014. However, because he believes he’s eligible for premium tax credits, he tries again to enroll in a Marketplace plan offered by his current insurer on March 14^th, 2014 and this time is successful.

If John’s Marketplace implements the policy outlined in the guidance, both the Marketplace and John’s insurer would be required to deem John as enrolled in a Marketplace QHP as of February 1, 2014, the date he first enrolled in the plan outside the Marketplace. John would be entitled to any premium assistance or cost-sharing reductions he’s eligible for, effective February 1. However, the guidance also states that John would be responsible for paying his portion of the premium back to February 1, 2014.

The guidance also states that John would be entitled to a special enrollment period (SEP), which would allow him to change to a Marketplace QHP prospectively. If John changes insurers, then CMS would provide any premium tax credits and cost-sharing reductions he’s eligible for to his new insurer prospectively.

What are some of those unanswered questions?

• Who does this apply to? This retroactive coverage option appears to be available to consumers only if their Marketplace implements it. The guidance does not distinguish between state-based (SBMs) and federally facilitated Marketplaces (FFMs), and CMS has not yet indicated whether this opportunity will be available in FFM states.
• What kinds of technical problems qualify someone for retroactive coverage? The guidance doesn’t specify exactly what technical problems would constitute an “exceptional circumstance” such that someone would qualify for retroactive coverage.
• If someone enrolls in an individual plan outside the Marketplace, how do they know it’s a QHP? Under the law, QHPs must have a certification from the Marketplace that they meet certain standards. However, many plans on the individual market outside the Marketplace do not have this certification, and it may not always be apparent from a plan’s marketing materials whether or not it is a QHP. Consumers in John Robbins’ situation may need to ask their insurer to find out if they’re enrolled in a QHP.
• I want to apply for retroactive coverage. How do I do so? Good question! The guidance doesn’t say, and presumably it’s up to each Marketplace to decide the process by which someone would apply for retroactive coverage, as well as the documentation they would need to provide.

With this latest guidance, CMS is acknowledging that consumers should be held harmless when the Marketplace website fails them. But CMS should take it a step further so that retroactive coverage and financial assistance are available to all consumers who can’t enroll because of technical problems, no matter what state they live in.