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CMS Officials Grant More Exemptions Allowing People to Buy Coverage Outside of Open Enrollment

By Rebecca Adams, CQ HealthBeat Associate Editor

May 2, 2014 -- Federal officials have broadened the number of people who can buy individual health coverage this year before a new health law open enrollment period begins on Nov. 15.

Individuals who can obtain temporary employer-provided coverage after leaving a job, people whose individual plans will renew outside of the sign-up periods and those in national service programs like AmeriCorps are eligible to sign up before open enrollment.

The Obama administration also expanded the number of people who would not face a penalty if they opt not to buy coverage.

The changes were announced by the Centers for Medicare and Medicaid Services (CMS) in a guidance bulletin.

Separately, the Department of Labor and CMS said that employers would have to change health insurance notices about the right to choose to get work-related coverage after a job loss through the Consolidated Omnibus Budget Reconciliation Act, known as COBRA.

The COBRA notices will be changed so that people starting or leaving a job will be told that if they lose coverage that meets the standards of the health care law, they can buy a health plan through its insurance marketplaces.

"In many cases, workers eligible for COBRA continuation coverage can save significant sums of money by instead purchasing health insurance through the marketplace," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi in a statement. "COBRA continues to play an important role in helping workers and families maintain coverage after a job loss, and it is important that workers know that in some cases there is a marketplace option as well."

The health care law (PL 111-148, PL 111-152) requires people to purchase individual coverage within defined enrollment periods. The first was supposed to be from Oct. 1 until March 31, although administration officials extended it through mid-April. The next open enrollment period is scheduled from Nov. 15 until Feb. 15, 2015.

One of the reasons for having a set open enrollment period was to give people a deadline and motivate them to stop delaying the purchase of insurance.

But the administration has granted a wide range of exemptions. People can buy coverage when they move, lose insurance that met the law's coverage standards or get married, divorced or become parents, among other circumstances.

Another set of people who can sign up outside the enrollment periods are those who had trouble enrolling in coverage for reasons ranging from a natural disaster to errors on, the federal website handling enrollment for 36 states.

The guidance announced last week broadens the coverage opportunities for people who live in states served by the federal marketplace. States are encouraged to use the same guidelines. CMS spokesman Aaron Albright said the agency did not have any estimates of how many additional people might gain coverage because of the changes.

CMS officials are providing a one-time opportunity for people who are eligible for COBRA to buy coverage through the marketplace instead. Those people have until July 1 to buy a marketplace plan.

Ordinarily, there are only two chances for people who qualify for COBRA to choose a marketplace plan outside of the open enrollment period. Those opportunities come when people first qualify for COBRA but before they actually get benefits, or when the COBRA benefit period ends.

CMS officials said that they thought that people on COBRA might have been confused this year. They may not have understood that they either need to buy a marketplace plan during open enrollment, or when they first are eligible for COBRA or when their COBRA benefits are exhausted. So federal officials are giving them more time to buy a marketplace plan.

People with individual policies whose coverage years end before the next sign-up period also will qualify for a special enrollment period. Consumers will have 60 days from the date that their plan is supposed to renew to choose a plan in the marketplace.

A third group of people who won the chance to sign up before the fall are volunteers through federally-sponsored programs such as AmeriCorps and VISTA. The coverage that AmeriCorps and VISTA volunteers get typically doesn't meet the requirements of the health care law, meaning they wouldn't be able to buy a marketplace plan outside of the normal sign-up period if they lose coverage.

The guidance stated that the volunteers will have 60 days either from the day they start their service or after they lose their coverage to buy a marketplace plan.

"We are going to see a continuing evolution about special enrollment periods in order to me sure that that there are adequate opportunities for people who are facing different circumstances to get into the system and get their coverage," said Families USA Director of Organizational Strategy and Enrollment Program Director Rachel Klein.

The advocacy group had asked the administration this year to allow COBRA-eligible people and AmeriCorps volunteers, along with several other types of people, to sign up outside of the enrollment periods.

The federal memo also provided two exemptions from the penalty in the law for failing to buy insurance. The health care law requires anyone who doesn't have coverage for three months in a row to pay a fine equal to the greater of 1 percent of the person's income or $95.

The guidance stated that AmeriCorps and VISTA volunteers with noncompliant coverage will qualify for an exemption from the individual mandate penalty. People who bought individual health insurance outside of the marketplace that took effect by May 1 also would not have to pay a penalty if they were without coverage until then.

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