The federal public Exchange Marketplace healthcare.gov had already opened a 3-month special enrollment period from February 15, 2021, through May 15, 2021. With the passage of the American Rescue Plan Act of 2021 (ARPA) making significant enhancements to premium tax credits starting April 1, 2021, the Department of Health and Human Services (HHS) decided it was important to give Americans another 3 months through August 15, 2021, to take advantage of the new premium tax credits. The 14 states running their own Exchanges will make their own decisions in determining how long any special enrollment period should last.
Applicable large employers (ALEs) will want to be mindful that employees with 30+ hours of service per week who purchase Exchange coverage with a premium tax credit can trigger a penalty to the employer under §4980H if the employee is not eligible for coverage providing “minimum value” or the minimum value coverage offered them does not meet an “affordability” safe harbor.
Some (but not all) employers recognize new eligibility to enroll in the Exchange as a qualifying event allowing the employee to drop the medical plan mid-year without access to COBRA. There is also special permission this year for employers to determine whether you’d like to allow employees to revoke coverage mid-year in 2021 without needing to have a qualifying event to do so (again, without access to COBRA). You’ll want to ensure you follow the terms of your own cafeteria plan document (or the new special permission you intend to adopt in your cafeteria plan document for just this year) in determining whether to allow an employee to drop medical coverage due to newly enrolling in the Exchange.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.