Open Enrollment in Non-Group Plans –
New COBRA Exceptions & Waiver Process

 

A recent case referral to the Community Resource Center brought to light a little known aspect of the new law instituting limited open enrollment periods for Commonwealth CHOICE and other individual plans (as reported in the MGH Community News, in October 2010). The case involved a man who had access to COBRA coverage, but was nearing the end of the federal COBRA subsidy, meaning he would soon be responsible for the full cost of his premiums. Could he enroll in a Commonwealth CHOICE plan (or other non-group plan) now, which might be less expensive than paying full price for his COBRA coverage?

Background

You may recall that the open enrollment limitation was part of the effort to reduce health-care costs. Previously, individuals could purchase insurance at any time during the year. Some would buy insurance only when they needed medical services and then drop the coverage after the insurance paid for the cost of treatment. This practice causes health insurance rates to increase. The new law is designed to encourage individuals to buy coverage and keep it, rather than drop it when they do not need it, thereby driving costs lower for everyone.

The new law, that went into effect on December 1, 2010. The next open enrollment period is July 1 - August 15, which will be the annual dates.

There are exceptions to the Open Enrollment limit for those who:

• Had health insurance coverage for the last 18 months; and
• Did not experience a break in coverage of more than 62 days; and
• Do not currently have access to employer-sponsored coverage (that meets the state's   Minimum Creditable Coverage standards for being insured and avoiding tax penalties); and
• Do not currently have access to Medicare, or MassHealth; and
• Did not lose coverage due to fraud or non-payment; and
• Act within 62 days of losing:

• Employer-sponsored health insurance coverage
• COBRA or mini-COBRA benefits*
• Government-subsidized health benefits such as MassHealth, Commonwealth Care, TRICARE, etc.
• Coverage due to the loss of dependent status through divorce, age-out, death of a spouse, legal separation, or the end of a domestic partnership
• A health plan that serves an area where you no longer live
• A qualified Student Health Insurance Plan

New COBRA Exceptions

A new bulletin from the Massachusetts Division of Insurance expands this right so that one does not have to wait until no longer eligible for COBRA (the 18 or 36 month eligibility period has expired). Now, in certain circumstances, one may drop COBRA coverage, or never take it in the first place, and still qualify to buy on the individual market outside of open enrollment. Mass. Division of Insurance Bulletin 2011-03, “Additional Qualifying Event for Enrollment of Individuals in Merged Market”, issued February 24, 2011, states in part:

Those with “Continuation Coverage” (through the Mass. “Mini-COBRA” or the COBRA federal law). Will be considered to have lost eligibility for employment-based coverage and to have experienced a qualifying [event] (i.e., be eligible for a special Open Enrollment period) if they have 

• waived Continuation Coverage and the sixty-day election period for Continuation Coverage has expired, or
• canceled Continuation Coverage after at least sixty days of fully paid coverage. 

Carriers shall enroll eligible individuals who have had a qualifying event into an individual health plan within 30 days of receipt of a completed application if the eligible individual applies for such coverage within 30 days of the qualifying event.  (Emphasis added.)

In the case referred to the CRC, the patient had been receiving the federal COBRA subsidy for 15 months, so met the second criteria above (“canceled Continuation Coverage after at least sixty days of fully paid coverage”). Therefore he should be able to apply for Commonwealth Choice or other non-group plans without having to wait for either open enrollment or his COBRA eligibility to expire, as long has he applies within 30 days of dropping his COBRA.

Open Enrollment Waivers

Since we last reported on this issue, the process for applying for a waiver has also been clarified. If you do not qualify for the exceptions explained above, and believe you cannot wait for an open enrollment period to obtain coverage, you may apply to the Office of Patient Protection for an open enrollment waiver, which would allow you to apply during closed enrollment.

Three possible waiver options:

• Just moved to Massachusetts
• Eligible for an employer’ s plan, but that plan does not meet the state’s Minimum Creditable Coverage standards for being insured and avoiding tax penalties
• Financial hardship - unable to afford current health plan. This does not apply to people eligible for an employer’s plan.

To apply for a waiver you need a denial letter. On the Connector website you can go through an eligibility tracker for non-Open enrollment where you can download a denial letter. You will need that denial letter to apply for a waiver from the Massachusetts Department of Public Health’s Office of Patient Protection.

Waiver instructions and form: http://www.mass.gov/Eeohhs2/docs/dph/patient_protection/waiver_form.pdf

More information:Health Insurance Open Enrollment and Waivers, MA Office of Patient Protection

Anniversary Dates

New Subscribers

• Subscribers enrolling during a closed enrollment period must “renew” in July 2011 during open enrollment. These subscribers will be offered a short plan year that runs through July 31, 2011

• Subscribers that enrolled during the one-time January-February 2011 open enrollment period may:
• Renew during the July/Aug 2011 open enrollment

OR

• Maintain their coverage until their anniversary of Feb 1 or Mar 1 in 2012

Renewing Subscribers – Anniversary Date of April, May, June, or July 2011 may:

• Change carriers and plan within Commonwealth Choice at the time of their renewal
• Renew into the same plan for a 12-month contract (i.e., renew 4/1/11 and then renew again 4/1/12)

OR

• Renew at the time of their anniversary date and then renew again during the July/Aug 2011 open enrollment period

NOTE: Individuals who are scheduled to renew with another carrier may renew into Commonwealth Choice (i.e. FCHP may refer their direct business to CommChoice to renew.)

Renewing Subscribers –Anniversary Date October 2011 and after

• May choose to “renew” or change during the July/Aug 2011 open enrollment period
• If they do not act during the July/Aug 2011 open enrollment period, then they may not change their plan or carrier at the time of their renewal. They will be “locked in” to their plan (at a higher rate) until the July/Aug 2012 open enrollment period

Note: For September renewals, individuals must act by the end of the open enrollment period (i.e., August 15, 2011).

Thanks to Kim Simonian, MPH, Associate Director, Patient Access, Partners Health Care Community Benefit Programs and to the staff of the Healthcare For All Hotline for their help with this article.

-Adapted from: “ IMPORTANT! New Restrictions on Buying Health Insurance are in Effect”, e-mail, MA Health Care Training Forum, February 25, 2011, http://www.mass.gov/Eoca/docs/advisories/buying_nongrp_health.pdf, retrieved 2/25/11, Bulletin 2011-03; “Additional Qualifying Event for Enrollment of Individuals in Merged Marke”; Issued February 24, 2011, Joseph G. Murphy, Commissioner of Insurance, February 24, 2011, and the Connector Website.

 

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