New special enrollment period offers lifeline to affordable health insurance

Americans now have significant new opportunities to access health insurance outside the traditional open enrollment window. In what can be a challenging economic environment, staying up-to-date on coverage availability options is especially important for those facing financial pressure. After tax season closes, many individuals — such as the self-employed, contractors, freelancers, and gig workers — become more acutely aware of their earnings and the financial pressures they face. Access to a special enrollment period (SEP) to unlock potential savings on essential health insurance can be game-changing.

The Centers for Medicare & Medicaid Services approved a special enrollment period (SEP) aimed at assisting individuals and families whose income is at or below 150% of the federal poverty level (FPL). This qualifier for special enrollment was originally introduced in 2021 but this fall was extended and made permanent. For individuals, brokers, and HR administrators, this can offer much-needed flexibility to gaining access to essential health benefits.

Bridging the coverage gap

As of last spring, states were required to resume Medicaid Redeterminations (also known as “Medicaid unwinding”), which were temporarily paused during the COVID-19 pandemic. This annual process, where states individually reassess the eligibility of Medicaid recipients, has resulted and could continue to result in a staggering number of individuals losing coverage entirely. As of April 2024, over 20 million people — or 21% of enrollees — have been disenrolled. According to states with available data, the majority – or 69% – of those who were disenrolled lost their coverage due to procedural reasons, such as failing to return required paperwork. While some of these individuals may still be eligible for Medicaid, the implementation of this 150% SEP provides an additional safety net so low-income families and those affected by this “unwinding” can maintain continuous access to health insurance.

And it seems that regulators  agree. Just last month, in an April ruling on Patient Protections and the Affordable Care Act, policymakers stated that they “believe that the availability of the 150% FPL SEP has made significant strides in ensuring that this population has real opportunities to enroll in free or extremely low-cost…coverage.”

Understanding the 150% FPL SEP

This newly extended SEP is aimed at bridging the gap and is especially relevant now in the midst of the current coverage landscape. This SEP presents a massive opportunity for brokers and professionals to provide access to coverage for the most vulnerable without having to wait for the next open enrollment period or being contingent on a major life event.

Who qualifies?

• Income Criteria: To be eligible, individuals must have a household income at or below 150% of the FPL: Eligibility for 2024 is based on 2023’s federal poverty level, making the threshold is $21,870 for a single individual and $45,000 for a family of four.
• APTC Eligibility: Individuals must be eligible for advance payments of the premium tax credit (APTC), which helps lower the cost of monthly premiums (in other words, not eligible for Medicaid).

This SEP is mandatory for the 32 states operating under the Federal Health Insurance Marketplace (HealthCare.gov) in 2024, including heavily populated states like Florida, Texas, and South Carolina. While the 150% SEP is optional for states with their own marketplaces — such as California, Idaho, New York, and New Jersey — many state-based marketplaces have elected to offer it as well.

What sets this SEP apart is its unique flexibility. Unlike other qualifying events that require enrollment within a specific window, individuals eligible for the 150% SEP can apply and select a health plan at any time, with coverage starting on the first day of the following month. This flexibility is particularly crucial for low-income individuals, who often face unpredictable financial and life circumstances and would significantly benefit from this higher level of flexibility.

Related: CMS: U.S. employers to spend $1.3T on health benefits this year

Education, assistance, and proactive engagement

Brokers and HR administrators play a vital role in informing clients and employees about this SEP, ensuring that potential qualifiers are aware of their eligibility and understand the complexities of navigating the system. This includes everything from choosing the right options to understanding the basics of the application process. If you have clients at risk of losing Medicaid or with fluctuating incomes that might put them within the 150% FPL range, it’s important to reach out. Consider yourself a lifeline, providing the necessary resources and assistance to help them navigate the enrollment process.

Familiarizing yourself with and utilizing platforms like HealthCare.gov and the various state-based marketplaces to facilitate enrollment is important. Additionally, there are enhanced direct enrollment providers that offer modern platforms to simplify the process for both you and your clients. These tools can also help them manage and understand their income as it changes.

Lastly, stay engaged with your clients and employees beyond the enrollment process. Offering consistent support and guidance can help them maintain their coverage while preparing yourself to address any issues that might unexpectedly arise. Work with your clients to confirm their income levels for APTC eligibility, educate them on relevant deadlines, and help them find the best coverage that meets their overall needs and budgets. As mentioned above, the 150% FPL SEP has no strict application deadline — however, to ensure coverage starts promptly, it’s best to select a plan before the end of the month.

Bryan Giaimo is the GM of Enterprise Solutions at Stride, a portable benefits platform for independent and gig economy workers. Since Stride’s founding, the company has helped over 4 million gig workers and self-employed Americans access health care coverage and other financial benefits.