By now, you’ve certainly heard about—and hopefully you’re taking advantage of—the three-month special enrollment period in the individual market. For those who haven’t paid close attention, here’s a quick summary to get you up to speed.
- The Affordable Care Act originally called for three-month annual enrollment periods for individual plans sold through the Marketplace, and indeed that’s the way it worked in 2014, 2015, and 2016. In 2013, you’ll recall that there was an initial six-month enrollment period for plans with 2014 effective dates.
- In 2017, just months after taking office, the Trump administration reduced the annual open enrollment period from three months to six weeks. The open enrollment period now begins November 1 and ends December 15.
- President Biden, citing the need for health insurance during the COVID-19 health emergency, signed an executive order on January 28 that, among other things, creates a three-month special enrollment period (SEP) beginning February 15 and ending May 15. Read the White House statement about the executive order here.
- During the SEP, applicants can “enroll in or change your Health Insurance Marketplace® plan due to the coronavirus disease 2019 (COVID-19) emergency” according to Healthcare.gov. Coverage is effective the first of the month after the application is submitted.
- To help promote this special enrollment opportunity, the Biden administration has increased funding for the Navigator program and increased the Healthcare.gov marketing budget, both of which were slashed during President Trump’s time in office. As ThinkAdvisor explains, “HealthCare.gov will spend about $50 million on outreach, and the campaign will include both digital and broadcast advertising.”
Selling Like Hotcakes
In a March 3 press release, CMS says it “plans to release a report on new plan selections for each month of the 2021 SEP,” so right now we only have numbers for the first two weeks, February 15 – February 28. During that time, “more than 206,000 Americans signed up for health insurance” coverage, an “increase from 76,000 and 60,000 consumers signing up for health insurance during the same period in 2020 and 2019.” During previous special enrollment periods, only consumers who had a qualifying event could sign up for coverage, so it’s clear that this new SEP will help to reduce the number of people without health insurance.
Millions More Losing Coverage
That said, we have to keep in mind that, because of the pandemic, millions of Americans have lost their employer-sponsored health insurance coverage. Back in January, the Commonwealth Fund wrote about this topic, admitting that it’s difficult to determine just how many have lost their group health coverage. The reason is because some employers, after reducing their employees’ hours, furloughing workers, or making the difficult decision to lay off workers permanently, continued to pay a portion of the cost of their employees’ health insurance or COBRA premiums.
So, while the Commonwealth Fund concluded that, “between February and June 2020, 7.7 million workers lost jobs with ESI [employer-sponsored insurance], and the ESI of these workers covered 6.9 million dependents, for a total of 14.6 million affected individuals,” not all of these individuals were on the group health insurance plan to begin with, and others were able to continue their coverage with the company’s assistance. The Commonwealth Fund estimated that about half of those folks actually lost their employer-sponsored insurance.
The article also cites estimates from the Urban Institute “that, on average from April to December 2020, 7.3 million workers and their dependents would lose ESI as a result of the recession.” A Blue Cross Blue Shield Association report suggesting “that only 3.1 million people lost ESI between March and September” was also cited.
Long story short, we don’t really know how many people have lost their health coverage as a result of the pandemic, but we know it’s a lot, so it stands to reason that some of these individuals, if they did not take advantage of the special enrollment period when they initially lost coverage or the open enrollment period at the end of 2020, might sign up for coverage during the current special enrollment period. Perhaps, as they say, the third time’s the charm.
Many Enrollees Will Qualify for Subsidies
It’s also worth pointing out that many of the individuals who are interested in the special enrollment period will likely qualify for a premium tax credit. With so many people out of work as a result of the pandemic, household incomes for millions of Americans are lower than normal. That means that prospective clients who would not have qualified for a premium tax credit in recent years certainly could now.
And, as you may have heard, the American Rescue Plan Act (ARPA), the $1.9 trillion bill signed into law by President Biden on March 12, increases the amount of the premium tax credits for many individuals and families. As CMS explains, nobody who qualifies for a tax credit will pay “more than 8.5% of their household income towards the cost of the benchmark plan or a less expensive plan,” so many individuals currently receiving a PTC will see an increase in the amount of their subsidy.
The new law also “addresses the ‘subsidy cliff’ for those with household incomes above 400% of the federal poverty level (FPL). Instead of no premium tax credits for individuals and families making more than 400% FPL, the new law will make premium tax credits available to these families and caps how much of a family’s household income the family needs to pay towards their premiums at 8.5%, based on the cost of the benchmark plan.”
This means that some of your clients who already qualified for a premium tax credit may qualify for a larger amount; it also means that clients and prospects who previously did not qualify for a PTC may now be eligible. In other words, agents finally have some good news to share and a LOT of new prospects to share it with.
We’ll post additional information about the new, higher tax credits soon, but for now you may want to take a look at HHS Fact Sheet about the American Rescue Plan and its impact on Marketplace plans.
Consumers applying for Marketplace coverage can take advantage of tax credit changes beginning April 1.
Training May Be Required for SEP Sales
Every carrier is a little different, and some might require agents to complete a special training in order to sell policies or get paid for sales made during a special enrollment period, so be sure to check with the carriers you represent and complete any required training as quickly as possible.
This is a good time to remind you that AHCP works with a number of carriers that might be able to help your clients. For a list of carriers and products by state, be sure to check out the carrier page on the AHCPSales.com website. If you need appointment paperwork for any carriers you do not currently represent, please let us know.