Government announces sweeping SEP changes


January 30, 2016

By Jan. 20, 2016, about 11.5 million people had purchased Affordable Care Act (ACA)-compliant coverage, including those in all 50 states and the  District of Columbia. By the end of 2016,  up to 14.7 million consumers are predicted to purchase plans. Consumers must purchase ACA-compliant plans during the Open Enrollment Period (OEP), which ends on Jan. 31, 2016.

But despite their best intentions, some people may not enroll on time. However, the Centers for Medicare and Medicaid Services (CMS) may offer Special Enrollment Periods (SEPs). As they provide additional time to purchase insurance, SEPs are popular. The SEP that ran from Feb. 23-June 30, 2015, drew 944,000 beneficiaries through the federal platform.

However, the CMS is making changes to the SEP program, as revealed in a Jan. 19, 2016, memo. The CMS feels that these changes  will help with future planning and necessary improvements. In addition, the agency is taking steps to make sure applicants provide accurate information. Those found to have intentionally provided false or untrue information may face penalties under federal law. These changes include:

1.) Carriers’ requests — The first cause for change involves the various insurance carriers offering Marketplace plans. These companies have demanded fewer SEPs. The Tax Season SEP, which ran from  March 15-April 30, 2015, will not be repeated in 2016. Six more SEPs will be eliminated, including those for:

  • Consumers who enrolled with too much in advance payments of the premium tax credit due to redundant or duplicate policies
  • Consumers affected by errors in the treatment of Social Security Income for tax dependents
  • Lawfully present non-citizens affected by system errors in determination of their advance payments of the premium tax credit
  • Lawfully present non-citizens with incomes below 100 percent FPL (federal poverty level) who experienced processing delays
  • Consumers eligible for COBRA and not sufficiently informed about their coverage options
  • Consumers previously enrolled in the Pre-Existing Condition Health Insurance Program (PCIP)

2.) SEP abuses – To prevent potential SEP-related crimes, the CMS will provide education to those involved  (e.g., consumers, brokers, issuers) regarding eligibility guidelines. This includes people who have permanently relocated, gaining access to new health plans. These individuals may request SEPs for short-term or temporary moves.

3.) Review of rules, requirements — The CMS’s changes will address the enforcement and understanding of how the SEPs actually work. The CMS program integrity team is performing an assessment of consumers’ changes and reviewing nationwide records to check if SEPs were properly conducted.

Beneficiaries may have another SEP option. Consumers who have lost their current coverage may be granted year-round, individual SEPs. These may also be provided to consumers experiencing Qualifying Life Events (QLEs), including: marriage, childbirth and changes in income or employment. If found eligible, these SEPs usually begin 60 days after a QLE; however, they may be permitted up to 60 days before a QLE, to prevent coverage gaps.