May 24, 2016

New CMS Rule Addresses Potential 'Gaming' of Special-Enrollment Period Loopholes

Special enrollment periods (SEPs) allow people to enroll in health care coverage outside of general enrollment windows if they can cite life-changing events such as the birth of a child, job loss or a permanent move. Insurance carriers have persistently complained to the Centers of Medicare and Medicaid Services (CMS) that SEPs are being gamed by healthy consumers who stay out of the Exchange until they have expensive health care needs. Given the ease of setting up a new address, the permanent-move SEP has been particularly subject to abuse.

In the interim final rule released on May 6, CMS announced that, in order to qualify for permanent-move SEPs, people must prove that they had ACA-compliant health care coverage in the previous 60 days and provide a proof of address change. Mike Adelberg, senior director for FaegreBD Consulting, acknowledged the need for tighter regulations in Inside Health Insurance Exchanges.

“The lenient SEP rules, particularly with regard to change of address, have become subject to gaming. Existing regulations made it difficult for CMS to tighten the rules,” Adelberg said. “With this regulation, CMS now will be able to address one of the primary SEP problem areas.”

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