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An SEP if your income doesn’t exceed 150% of the federal poverty level

Under the new special enrollment period, eligible applicants can enroll in an ACA-compliant health plan through the marketplace year-round

A new special enrollment period allows applicants with an income that doesn't exceed 150% of the federal poverty level to enroll in ACA-compliant health insurance through the marketplace at any time during the year.

Reviewed by our health policy panel.

In September 2021, the U.S. Department of Health & Human Services finalized a new special enrollment period (SEP) in states that use HealthCare.gov (optional for other states), granting year-round enrollment in ACA-compliant health insurance if an applicant’s household income does not exceed 150% of the federal poverty level (FPL) and if the applicant is eligible for a premium tax credit (subsidy) that will cover the cost of the benchmark plan.

This SEP became available on the HealthCare.gov website — and enhanced direct enrollment entity websites — as of March 21, 2022 (it was available prior to that only by calling the HealthCare.gov call center and completing the application over the phone). Visitors to HealthCare.gov need to select “see if you can enroll” and then select the option that says “Medicaid, CHIP, or a new Special Enrollment Period based on income.” The prescreener tool will then ask questions to determine whether the person/household’s income is in the eligible range. If so, the special enrollment period opportunity will allow them to proceed with the enrollment. Enhanced direct enrollment entities have similar enrollment pathways.

In finalizing this SEP, HHS noted it’s beneficial for low-income consumers to have additional enrollment opportunities, and that this is in keeping with the executive order to strengthen Medicaid and the ACA, signed by President Biden in January.

What does this new special enrollment period allow eligible applicants to do?

Under the new special enrollment period, eligible applicants can enroll in an ACA-compliant health plan through the marketplace at any time during the year. Coverage will take effect the first of the following month. (If a state-run exchange chooses to offer this SEP, they can use that same approach or choose to have a deadline of the 15th of the month for coverage to start the first of the following month. As of 2022, HealthCare.gov allows all SEP enrollments to have coverage effective the first of the following month, regardless of the application date.)

This special enrollment period does not have limitations on how often it can be used, or the type of health plan that can be selected. But people with income up to 150% of the poverty level are strongly encouraged to select a Silver plan. At that income level, Silver plans have built-in cost-sharing reductions that make the coverage better than a Platinum plan. And for as long as the American Rescue Plan’s subsidy enhancements are in effect — at least through the end of 2025, thanks to the Inflation Reduction Act — the two lowest-cost Silver plans are premium-free (in most states) for applicants with income up to 150% of the poverty level.

A person with an eligible household income who is already enrolled in an exchange plan can use this SEP to pick a different plan, although deductible and out-of-pocket spending would reset to $0 for the year when the new plan starts.

However, the new rules do clarify that if a current enrollee is adding a dependent to their plan, they can either add the dependent to the existing plan, or switch to a Silver level plan and enroll the new dependent in that plan. But the SEP cannot be used to switch the current enrollee to a non-Silver plan together with the new dependent.

Who is eligible for this special enrollment period?

To be eligible for this SEP, an applicant’s household income cannot exceed 150% of the federal poverty level. For a single person enrolling in coverage for 2022 in the continental U.S., 150% of the poverty level amounts to an income of no more than $19,320. For a household of five, it’s $46,560. (Note that the prior year’s poverty level guidelines are used, and that the poverty levels are higher in Alaska and Hawaii).

You have to be eligible for premium tax credits in order to take advantage of this SEP. So regardless of income, the SEP is not available to a person who is eligible for Medicaid, premium-free Medicare Part A, or an employer-sponsored health plan that provides minimum value and is considered affordable. The SEP is also not available to people in the coverage gap (which exists in 11 states as of 2022), because they are not eligible for premium tax credits.

This SEP is only available on-exchange, since premium tax credits aren’t available outside the exchange.

(Note that to get on-exchange coverage, you can enroll directly through the exchange, or through an enhanced direct enrollment website, or with the help of an agent or broker. If you have questions, you can call (619) 367-6947 to speak with one of our licensed agents.)

This special enrollment period may or may not be permanent, but will continue through at least 2025

This special enrollment period is fairly unique in that it may or may not be permanent. HHS has clarified that the new SEP is only available for as long as people at this income level are eligible for premium-free benchmark plans.

The American Rescue Plan (ARP) enhanced premium tax credits (subsidies) for 2021 and 2022, and the Inflation Reduction Act (IRA) extended the enhanced subsidies through 2025. Under the ARP/IRA, people with income up to 150% of the poverty level do not have to pay premiums for the benchmark plan. (In some states, these plans still cost a dollar or two, due to additional state-mandated benefits.)

If the ARP-style subsidy enhancements are allowed to expire at the end of 2025, this SEP will also cease to be available at that point (without further action from HHS). But if Congress enacts additional legislation to further extend the ARP-style subsidy enhancements, the SEP would also continue to be available.[/hio_question]

How do I prove my eligibility for this SEP?

To gain access to this SEP in the federally run marketplace (HealthCare.gov), you just have to attest to the fact that your income is in the eligible range.

If the income information the government has on file doesn’t match the income the applicant has projected, the exchange may request proof of the projected income to ensure that it is actually no more than 150% of the poverty level.

If an applicant does not provide proof, the federally run marketplace can terminate the premium tax credit that’s being paid on the enrollee’s behalf, meaning that the person would then be paying full-price for their coverage (or will simply find coverage terminated when they fail to pay the full premium in the first month it’s required).

Does the SEP for individuals with income under 150% FPL apply in every state?

Not necessarily. State-run exchanges (there are 18 as of the 2022 plan year) are not required to offer this SEP. But as of early 2022, several state-run exchanges (Colorado, Maine, Pennsylvania, New Jersey, California, and Rhode Island) had already debuted the new SEP.

Several other state-run exchanges have no need for this SEP, because they have other programs with year-round availability. This includes:

  • New York and Minnesota, both of which have Basic Health Programs that cover people with income up to 200% of FPL
  • Massachusetts, which offers Connector Care to people with income up to 300% of FPL (enrollment is open year-round to people who are newly eligible or who have not been covered under the program in the past)
  • DC, which offers Medicaid to adults with income up to 215% of the poverty level

Some of the remaining state-run exchanges may decide to allow this SEP as of 2022, and others may choose not to offer it at all. Some state-run exchanges may find that it’s too operationally challenging to make this SEP available in 2022, and may postpone it until 2023.

State-run exchanges have flexibility in terms of how they implement this SEP. For those that do offer it, proof of income might be required in order to trigger the SEP, or they may follow the federal government’s lead and allow the SEP eligibility to be based on the income attested by the consumer.

But HealthCare.gov is the exchange used in the majority of the states, and this SEP is available in all of those states for as long as the ARP-style subsidy enhancements are in effect.


What else do you need to know about eligibility for the SEP?

Although access to this SEP is largely based on income, there are several points to keep in mind:

  • In most states, there is a fairly narrow income window for eligibility for this SEP, since Medicaid is available to adults in most of the country with income up to 138% of the poverty level. So this SEP would only be available to applicants with income above 138% of the poverty level, but not more than 150% of the poverty level (note that Medicaid enrollment, for both adults and children, is always available year-round).
  • In the dozen states where Medicaid has not been expanded, this SEP is available to households with income between 100% and 150% of the poverty level. (There’s a coverage gap in 11 of those states for many adults with income below the poverty level, and this SEP does not change that.)
  • Recent immigrants (who aren’t eligible for Medicaid due to their new immigrant status) can qualify for this SEP with income between 0% and 150% of the poverty level.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health marketplace updates are regularly cited by media who cover health reform and by other health insurance experts.

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Stuart Tischler
Stuart Tischler
8 months ago

Has Healthcare.gov indicated if and when this will take effect?

Louise Norris
Editor
8 months ago

Not yet. We’re watching it closely.

Barbara Harris
Barbara Harris
3 months ago

Are they eligible if they have not had coverage in the last 60 days?

Louise Norris
Editor
3 months ago
Reply to  Barbara Harris

Yes. This window provides an ongoing opportunity for people to enroll, and it’s not contingent on having had any prior coverage. They just need to be eligible for premium tax credits and have a household income that doesn’t exceed 150% of the poverty level.

Tonya
Tonya
1 month ago

What happens if they enroll with this SEP, then their income goes up? Are they ok if they report the increase in income? Does that disqualify them back to the SEP?

Louise Norris
Editor
1 month ago
Reply to  Tonya

No, they would not lose their coverage in that case. When they report the income change, it would change the amount of their subsidy (or they can wait and reconcile it on their tax return, which would likely involve paying back a chunk of the premium subsidy that was paid on their behalf).

The exchange can request various documentation as proof of income at the time the person applies for coverage. As long as their income isn’t more than 150% FPL when they enroll, the enrollment will be valid and the coverage will remain in effect even if their income changes later on.

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