On March 27, 2024, the Biden Administration revealed its final rule that is intended to streamline and simplify Medicaid and CHIP enrollment processes under the ACA.
The Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes rule also aims to deliver continuous health coverage for millions of people. They include children, older adults, and people with disabilities.
In a statement, HHS Secretary Xavier Becerra said of the rule, “It removes outdated barriers to health insurance and helps fulfill the promise of the Affordable Care Act (ACA), especially for those in vulnerable and underserved communities.”
Key Points of Final Rule Under the ACA
First introduced in 2022, the regulation simplifies the process of enrolling in Medicaid under the ACA. Further, it helps to reduce disruption in coverage caused by “burdensome administrative processes or unnecessary paperwork.” A fact sheet provided by the Center for Medicaid and Medicare Services (CMS) provides more detail. Several key points are highlighted below:
Streamlining application and enrollment: The process of applying and enrolling in Medicaid is simplified by requiring states to provide a reasonable period for applicants to return documentation when determining eligibility. A previous requirement to apply for other benefits as a condition of Medicaid eligibility is removed.
Helping people to enroll and stay enrolled in Medicaid: Provisions to minimize disruption to coverage include limiting requests for information about a change in circumstances, and accepting renewals through multiple modalities (i.e., online, in-person, mail). At least 15 days must be allowed for individuals to return information requested. If documentation is needed for an individual to retain coverage, a minimum of 30 days must be allowed.
To enhance the integrity of Medicaid and CHIP under the ACA, the rule also:
- Defines the types of documentation to be maintained to determine eligibility.
- Requires retention of Medicaid/CHIP records and documentation in most cases for three years.
- Requires storage of records in electronic format.
- Requires states to make records available within 30 days upon request unless there are circumstances beyond the state agency’s control.
- Establishes minimum standards for states to complete a timely determination of eligibility at renewal, and following a change in circumstances.
- Prohibits states from conducting renewals more frequently than every 12 months. The requirement for in-person interviews for older adults and those with disabilities is also prohibited.
Additional provisions for CHIP are also introduced, including the elimination of annual and lifetime limits on children’s coverage, and the removal of waiting periods for CHIP coverage.
By strengthening federal laws for Medicaid and CHIP enrollment, the rule enhances protections, regardless of variations in state law. It comes into effect 60 days after publication, although compliance dates vary by provision. Requirements relating to improving transitions between Medicaid and CHIP are effective upon publication. States have 12 months after the effective date to comply with CHIP requirements.
The new rule also complements one published in September 2023 that finalized changes for people who are eligible for both Medicaid and Medicare.
ACA Coverage Continues to Expand
The Affordable Care Act (ACA) aims to increase the affordability and accessibility of healthcare and is gaining in popularity. Research from the Kaiser Family Foundation (KFF) found that 6 in 10 people now have a favorable view of the ACA. Another KFF poll found that most people want to see its provisions expanded, as the cost of healthcare also tops the public’s list of financial worries.
CMS’s 2024 Open Enrollment Report reflects those findings. Over 21.4 million consumers either selected, or automatically reenrolled in, health insurance coverage during this year’s Open Enrollment Period. Further, a total of 45 million Americans are enrolled in coverage related to the ACA. That’s a record high.
But there’s a note of caution. If Trump, as the Republican Party’s presumptive presidential nominee, takes the White House in 2024, significant changes to the ACA are possible. That said, it is expected to remain in some form.
Employer Compliance with Medicaid Final Rule and ACA
All Applicable Large Employers (ALEs) who have responsibilities under the ACA’s Employer Mandate are affected by the new rule. The Employer Mandate requires employers to offer Minimum Essential Coverage (MEC) that is both affordable and meets Minimum Value to at least 95% of employees and their dependents. An ALE is an employer with an average of at least 50 full-time employees.
In 2024, the affordability threshold for employers fell to a record low. Organizations that fail to offer employees affordable healthcare coverage, and track and report on compliance are subject to fines. IRS penalties increased in 2024.
To ensure compliance, business processes should be reviewed and streamlined to remove any potential disruption to employee enrollment and renewal of coverage.
Staying on top of changes is vital for employers to ensure compliance under the ACA and mitigate IRS penalty risks. Trusaic software solution ACA Complete delivers best practices for ALEs, including implementing a monthly process for verifying coverage eligibility, and tracking enrollment to minimize disruption to coverage.
