Key Points:

• If a person’s income does not exceed 150% of the federal poverty level, they might be eligible for a Special Enrollment Period.
• This special enrollment period does not have limitations on how often it can be used, or the type of health plan that can be selected.
• Client has to be eligible for premium tax credits in order to take advantage of this SEP.
  When this article was published, February 9th, 2022, this SEP has not taken effect yet.
• Most people with very low incomes can now enroll in subsidized Marketplace coverage.

In September 2021, the U.S. Department of Health & Human Services finalized a new special enrollment period (SEP) in states that use HealthCare.gov (optional for other states), granting year-round enrollment in ACA-compliant health insurance if an applicant’s household income does not exceed 150% of the federal poverty level (FPL) and if the applicant is eligible for a premium tax credit (subsidy) that will cover the cost of the benchmark plan.

This SEP became available on the HealthCare.gov website (and enhanced direct enrollment entity websites) as of March 21, 2022. It was available prior to that only by calling the HealthCare.gov call center and completing the application over the phone. But it is now available online as well.

Visitors to HealthCare.gov need to select “see if you can enroll” and then select the option that says “Medicaid, CHIP, or a new Special Enrollment Period based on income.” The prescreener tool will then ask questions to determine whether the person/household’s income is in the eligible range. If so, the special enrollment period opportunity will allow them to proceed with the enrollment. Enhanced direct enrollment entities have similar enrollment pathways.

In finalizing this SEP, HHS noted it’s beneficial for low-income consumers to have additional enrollment opportunities, and that this is in keeping with the executive order to strengthen Medicaid and the ACA, signed by President Biden in January.

What does this new special enrollment period allow eligible applicants to do?

Under the new special enrollment period, eligible applicants can enroll in an ACA-compliant health plan through the marketplace at any time during the year. Coverage will take effect the first of the following month. (If a state-run exchange chooses to offer this SEP, they can use that same approach or choose to have a deadline of the 15th of the month for coverage to start the first of the following month. As of 2022, HealthCare.gov allows all SEP enrollments to have coverage effective the first of the following month, regardless of the application date.)

This special enrollment period does not have limitations on how often it can be used, or the type of health plan that can be selected. But people with income up to 150% of the poverty level are strongly encouraged to select a Silver plan.

At that income level, Silver plans have built-in cost-sharing reductions that make the coverage better than a Platinum plan. And for as long as the American Rescue Plan’s subsidy enhancements are in effect — at least through the end of 2022 — the two lowest-cost Silver plans are premium-free (in most states) for applicants with income up to 150% of the poverty level.

A person with an eligible household income who is already enrolled in an exchange plan can use this SEP to pick a different plan, although deductible and out-of-pocket spending would reset to $0 for the year when the new plan starts.

However, the new rules do clarify that if a current enrollee is adding a dependent to their plan, they can either add the dependent to the existing plan, or switch to a Silver level plan and enroll the new dependent in that plan. But the SEP cannot be used to switch the current enrollee to a non-Silver plan together with the new dependent.

Who is eligible for this special enrollment period?

To be eligible for this SEP, an applicant’s household income cannot exceed 150% of the federal poverty level. For a single person enrolling in coverage for 2022 in the continental U.S., 150% of the poverty level amounts to an income of no more than $19,320. For a household of five, it’s $46,560. (Note that the prior year’s poverty level guidelines are used, and that the poverty levels are higher in Alaska and Hawaii).

You have to be eligible for premium tax credits in order to take advantage of this SEP. So regardless of income, the SEP is not available to a person who is eligible for Medicaid, premium-free Medicare Part A, or an employer-sponsored health plan that provides minimum value and is considered affordable. The SEP is also not available to people in the coverage gap (which exists in 11 states as of 2022), because they are not eligible for premium tax credits.

This SEP is only available on-exchange, since premium tax credits aren’t available outside the exchange.

(Note that to get on-exchange coverage, you can enroll directly through the exchange, or through an enhanced direct enrollment website, or with the help of an agent or broker. If you have questions, you can call (312) 726-7266 to speak with one of our licensed agents.)

This special enrollment period may or may not be permanent

This special enrollment period is fairly unique in that it may or may not be permanent. HHS has clarified that the new SEP is only available for as long as people at this income level are eligible for premium-free benchmark plans. The American Rescue Plan (ARP) enhanced premium tax credits (subsidies) for 2021 and 2022. The result is that people with income up to 150% of the poverty level do not have to pay premiums for the benchmark plan. (In some states, these plans still cost a dollar or two, due to additional state-mandated benefits.

Although the American Rescue Plan only provides these enhanced subsidies through the end of 2022, the version of the Build Back Better Act that passed the House in November 2021 called for them to be extended through 2025 (that’s for the increase in subsidy amounts and the elimination of the income cap for subsidy eligibility; it calls for the unemployment-based subsidies to be extended through 2022). But that legislation stalled in the Senate.

There is optimism that some parts of the Build Back Better Act, including the enhanced premium subsidies, could be enacted on a piecemeal basis before the end of 2022, but this is still very much up in the air. So the new SEP may only be available through 2022, or it may end up being available in future years; it all depends on whether Congress extends the ARP’s enhanced subsidies.

How do I prove my eligibility for this SEP?

To gain access to this SEP in the federally run marketplace (HealthCare.gov), you just have to attest to the fact that your income is in the eligible range.
If the income information the government has on file doesn’t match the income the applicant has projected, the exchange may request proof of the projected income to ensure that it is actually no more than 150% of the poverty level.

If an applicant does not provide proof, the federally run marketplace can terminate the premium tax credit that’s being paid on the enrollee’s behalf, meaning that the person would then be paying full-price for their coverage (or will simply find coverage terminated when they fail to pay the full premium in the first month it’s required).

Does the SEP for individuals with income under 150% FPL apply in every state?

Not necessarily. State-run exchanges (there are 18 as of the 2022 plan year) are not required to offer this SEP. But as of early 2022, several state-run exchanges (Colorado, Maine, Pennsylvania, New Jersey, California, and Rhode Island) had already debuted the new SEP.
Several other state-run exchanges have no need for this SEP, because they have other programs with year-round availability. This includes:

• New York and Minnesota, both of which have Basic Health Programs that cover people with income up to 200% of FPL
• Massachusetts, which offers Connector Care to people with income up to 300% of FPL (enrollment is open year-round to people who are newly eligible or who have not been covered under the program in the past)
• DC, which offers Medicaid to adults with income up to 215% of the poverty level

Some of the remaining state-run exchanges may decide to allow this SEP as of 2022, and others may choose not to offer it at all. Some state-run exchanges may find that it’s too operationally challenging to make this SEP available for 2022, and may postpone it until 2023 (assuming that the ARP’s subsidy enhancements are extended).

State-run exchanges have flexibility in terms of how they implement this SEP. As noted above, some may choose not to offer this SEP at all. For those that do offer it, proof of income might be required in order to trigger the SEP, or they may follow the federal government’s lead and allow the SEP eligibility to be based on the income attested by the consumer.

But HealthCare.gov is the exchange used in the majority of the states, and this SEP is available in all of those states for as long as the ARP-style subsidy enhancements are in effect.

What else do you need to know about eligibility for the SEP?
Although access to this SEP is largely based on income, there are several points to keep in mind:

In most states, there is a fairly narrow income window for eligibility for this SEP, since Medicaid is available to adults in most of the country with income up to 138% of the poverty level. So this SEP would only be available to applicants with income between 139% and 150% of the poverty level (note that Medicaid enrollment, for both adults and children, is always available year-round).

In the dozen states where Medicaid has not been expanded, this SEP is available to households with income between 100% and 150% of the poverty level. (There’s a coverage gap in those states for many adults with income below the poverty level, and this SEP does not change that.)

Recent immigrants (who aren’t eligible for Medicaid due to their new immigrant status) can qualify for this SEP with income between 0% and 150% of the poverty level.

People receiving unemployment compensation may be able to qualify for this SEP in 2022 and future years, if additional legislation is enacted. In 2021, income was determined to be 133% of the federal poverty level for people receiving unemployment compensation, regardless of how much it actually was. The Build Back Better Act called for this to be extended through 2022, with income above 150% of FPL disregarded for people receiving unemployment compensation. This would continue to allow these applicants to be eligible for this SEP, as eligibility is based on having an income of no more than 150% of the poverty level. But as of early 2022, the Build Back Better Act has stalled and its future is very uncertain. Some aspects of it may be enacted piecemeal or as part of other legislation.