Now that we’ve passed the important deadline of March 31, 2014 for signing up on the Affordable Care Act health care exchanges, employers are asking questions about options for employees who did not get into the exchange. Such as, is it too late for them to get coverage? Most of the time this question comes from employers with mid-year renewals (that is, renewals that are after March 31) who are thinking about canceling coverage or limiting eligibility and thinking their employees would be barred from getting into the exchange for the remainder of 2014. I have heard this argument made in collective bargaining as well as by unions arguing that employers are legally prevented from terminating coverage mid-year because of the enrollment limitation.

Well, in addition to the various extensions provided to employers, and the expansion of the enrollment period by a few weeks for those who had already started apps, the ACA also contains provisions that allow for enrollment in the exchange throughout the whole year. They’re calling this the special enrollment period. As explained in the glossary section of the exchange website Healthcare.gov, a special enrollment period is “a time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. In the marketplace, you generally qualify for a special enrollment period of 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. If you don’t have a special enrollment period, you can’t buy insurance through the marketplace until the next open enrollment period.”

Other triggering events that can require the exchange to allow an employee a special enrollment period include: errors, misrepresentations, or inaction by an officer, employee, or agent of the exchange or HHS; obtaining the status of a citizen; or exceptional circumstances, including natural disasters like earthquakes or floods.

So, in many ways, special enrollment rights in the exchanges look a lot like the special enrollment rights provided in HIPAA for employer-sponsored plans. For employers, this means that determining whether or not to continue a plan in its current form, to terminate coverage or to change eligibility for coverage, should not assume that employees who lose coverage would be barred from the exchanges for the remainder of 2014.

Keith R. McMurdy is a partner with Fox Rothschild focusing on labor and employment issues; he can be reached at kmcmurdy@foxrothschild.com or (212) 878-7919.

The information in this legal alert is for educational purposes only and should not be taken as specific legal advice.

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