What the recent changes to the Individual Marketplace means for Employers

What the recent changes to the Individual Marketplace means for Employers

On Thursday, January 28, 2021, President Biden signed an executive order to reopen the Affordable Care Act (ACA) federal insurance marketplace for a three-month period from February 15  to May 15. By reopening the marketplace, the Biden Administration is providing an extended window for people to secure affordable health benefits in a time when millions are unemployed amid a global pandemic. This could provide additional options for your furloughed employees, those on leave of absence, or other employees to access healthcare. Keep in mind, this does not exempt employers from continuing to offer benefits through the stability period or from extending COBRA offers of coverage. If your employees are unpaid, there are potential impacts to benefits and you face the greatest potential for inadvertently triggering a Penalty B under the ACA law. Read Am I at risk for penalties if I temporarily let my employees go to learn more about what triggers a penalty.

Make sure you are up-to-date with the latest information on ACA eligibility.
Losing employment-based health coverage allows an employee and their spouse and dependents to enroll in individual health insurance coverage, including through their state’s health insurance exchange marketplace. This special enrollment period (“SEP”) lasts for 60 days. People who opt for exchange marketplace coverage may qualify for cost-sharing reductions and a tax credit that lowers monthly premiums. The marketplace enrollment process also will determine if the employee and any dependents qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Plan.

Being offered COBRA continuation coverage does not limit eligibility for coverage or a premium tax credit through an exchange marketplace so long as the employee or dependent selects exchange coverage within 60 days before or after the loss of other coverage. Typically, if they fail to enroll within the 60-day window, they will have to wait until the next open enrollment period. This year, however, the reopening and extended enrollment period for the marketplace exchanges provides an additional opportunity for these employees to enroll,  thereby increasing potential B penalty risks for employers that have not continued to extend offers of affordable minimum essential coverage through stability periods for employees who are otherwise deemed ACA eligible.

If you’re an employer and have employees who need to find health coverage outside of your company plan, here are the top four things you can share about the individual marketplace.

  1. In order to sign up for healthcare coverage outside of the six-week open enrollment window in years past, you needed to prove that you went through a major life change such as a marriage, childbirth, or loss of a job. During the 2021 extended enrollment period, no such proof is required to enroll.
  2. Coverage may be more affordable than you think. The prices on Healthcare.gov do not always reflect the lowest cost that may be available. Applicants may qualify for tax credits that reduce the cost based on their income and household size. You must complete the marketplace application here to see your specific cost.
  3. To activate your coverage, you must pay your fist monthly premium. However, when you are insured under marketplace insurance you must pay your premiums directly to your insurance company, not to the Health Insurance Marketplace. While shopping for Marketplace coverage, click here to see the 10 essential health benefits that are covered by all Marketplace health insurance plans.
  4. Employers covered by the Fair Labor Standards Act are required to send a notice to their employees in the first 14 days of their employment that includes:
    • The existence of the marketplace and description of services included;
    • The employee’s eligibility for premium tax credit dependent on their share of total allowed costs; and
    • The implications that purchasing a plan though the Marketplace has on their employer contributions.

For more information on the contents of the notice read here.

Consider sharing this blog or directing your employees to HealthCare.gov as an option for continuing their health benefits until they can come back full-time.