When we see the recent onslaught of news about Medicaid redeterminations (aka “the unwinding of Medicaid”), we might automatically relate it to individuals and not necessarily realize that some employees might have declined their company’s benefits and enrolled in Medicaid during the pandemic.
Medicaid is a joint federal and state program that provides medical insurance coverage to certain low-income adults, children, pregnant women, older adults, and people with disabilities. Each state administers its own Medicaid program. Individuals applying for Medicaid have to provide documentation and information to qualify, and it’s not like traditional health insurance where you continue to have coverage as long as you pay your premiums. Medicaid’s annual renewal process includes a redetermination, which means an individual must re-apply for Medicaid each year. If someone is no longer deemed eligible for Medicaid, they will no longer have health insurance and need to get health coverage elsewhere.
In 2020, legislation was passed that paused the regular annual redetermination process due to the pandemic. The pause meant that individuals would not have to re-apply every 12 months and would remain eligible for Medicaid until the end of the public health emergency (PHE) or if other legislation was passed. Spoiler alert—the PHE is slated to end on May 11, 2023! However, the Consolidated Appropriations Act (annual budget with a bunch of appropriations bills thrown in) was passed in December 2022, which subsequently unbound the Medicaid redetermination pause from the ending of the PHE and assigned a timeline for states to get back to the normal course of redetermination business.
States have 14 months to complete redeterminations for Medicaid enrollees beginning April 1, 2023. States can begin reviewing and sending requests for documentation now but cannot terminate someone from Medicaid before April 2023. Most states will be processing redeterminations throughout the full 14-month window, so no need to worry it will happen all at once.
Why do Medicaid redeterminations matter to employers?
An employee who is eligible for their employer’s benefits but declined because they were eligible to enroll in Medicaid may become ineligible during the Medicaid redetermination process. This will cause a special enrollment period and employers need to be well versed on its process.
A special enrollment period is any time, outside of an employer’s regular open enrollment, where an eligible employee can sign up for coverage or change coverage due to a qualifying event where an eligible employee can enroll in or change coverage. Loss of Medicaid eligibility is a qualifying event whether the loss applies to the employee or their eligible spouse or dependent. Keep in mind, an employee, spouse, or eligible dependent in this situation needs to actually be eligible for the employer’s coverage as outlined in the Affordable Care Act and the employer’s plan documents.
An employee losing eligibility has 60 days to notify their employer of the event and request enrollment. Once notified, the employer needs to be ready to provide enrollment materials and educate the employee on what is available. Enrollment must occur no later than the 1st of the month following the timely request for enrollment. Aside from that, there are several documents and notices that must be provided to new enrollees based on several different laws. A few of the required notices include a Summary Plan Description, Summary of Benefits and Coverage, and the Uniform Glossary, among others.
Employees often seek help and guidance from their employers about benefits. While employers are not responsible for educating employees on Medicaid, having a clear understanding of what Medicaid redetermination means and an employer’s potential role is important. This allows for appropriate support to employees and ensures the employer’s compliance with the laws, rules, and regulations governing employee benefits.