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A health insurance “easy enrollment” program is a system that uses data from state tax returns to connect people with available health insurance benefits.
Since eligibility for modified adjusted gross income (MAGI)-based Medicaid, Children’s Health Insurance Program (CHIP), and premium tax credits are based on income, the data submitted in a tax return can be used to determine whether a household is eligible for any of these programs.
This article will describe easy enrollment systems, how states have implemented them, and considerations for using them.
Easy Enrollment Systems
The easy enrollment system first has to be created by a state, then a tax filer must grant the state revenue department permission to share pertinent information with the state’s health insurance exchange.
The exchange can then use that information to determine whether anyone in the household might be eligible for Medicaid or a premium tax credit. If they are, the exchange can reach out to the household to help them enroll.
As of 2021, the exchanges are fully state-run in 14 states and DC, while the other 36 states rely on the federally run HealthCare.gov.
The states that have established or are considering easy enrollment programs are all among those that run their own exchanges. This makes it fairly simple, as both the revenue department and the exchange are run by the state.
It’s not clear how feasible an easy enrollment program could be in a state that uses HealthCare.gov, although it’s possible that something similar could eventually be established between the IRS and HealthCare.gov.
From 2014 through 2018, the IRS did ask tax filers whether they had health insurance. But that was to ensure compliance with the Affordable Care Act’s individual mandate. People who didn’t have coverage were subject to a penalty.
An easy enrollment system does not have any penalty attached. It’s simply a means of connecting people with the financial assistance for which they’re eligible.
People who are uninsured are often unaware of the assistance available to them, either in the form of Medicaid/CHIP or premium tax credits and cost-sharing reductions that can be used with private health plans.
An easy enrollment program allows the state to sort this out for uninsured residents using tax return data. This helps people who might otherwise not know what’s available or how they can obtain coverage.
Easy Enrollment Special Enrollment Period
Medicaid and CHIP have open enrollment year-round for people who are eligible for these programs. But individual/family health insurance can normally only be purchased during the annual open enrollment period in the fall or during a special enrollment period triggered by a qualifying life event.
Since the tax filing season happens in the spring—well after the end of the annual open enrollment period—an easy enrollment program must also include a special enrollment period for people who are determined to be eligible for premium tax credits based on the information in their tax returns.
Without this, they’d have to wait until the fall to sign up for coverage and until the following January for it to take effect.
Maryland Easy Enrollment Program
Maryland was the first state to create an easy enrollment program. It debuted in 2020, based on legislation (SB802) that the state enacted in 2019.
Starting with the 2019 tax returns filed in early 2020, Maryland’s state tax return includes a section called “Maryland Health Care Coverage” (see page 2 of the 2020 Maryland individual tax return). In this section of the tax return, residents indicate whether they or their spouse is without health insurance.
Then there’s a box they can check that grants the Maryland Comptroller (the head of the Department of Revenue) permission to share information from the tax return with the Maryland Health Benefit Exchange (Maryland Health Connection) “for the purpose of determining pre-eligibility for no-cost or low-cost health care coverage.”
If an uninsured tax filer or spouse indicates that they would like their tax return information to be shared with the exchange, the exchange will then use it to determine eligibility for Medicaid or premium tax credits. For tax credit eligibility, the exchange will also need to confirm whether or not the person has access to an affordable employer-sponsored plan.
If the household is eligible for premium tax credits, the Maryland health insurance exchange will grant them a 35-day special enrollment period to enroll in coverage and take advantage of the tax credits. If the household is eligible for Medicaid, they will be notified and can enroll anytime, as Medicaid enrollment continues year-round.
Maryland’s easy enrollment program was first used as of February 2020, when people began filing their 2019 tax returns. The program continued through July 15 of that year because the tax filing deadline was extended until July 15, 2020, due to COVID-19.
Maryland Health Connection announced that by July 13, a total of 41,000 people had checked the box on their tax returns granting permission for their data to be transmitted to the exchange, and 3,700 people had enrolled in private individual/family health plans through the “easy enrollment” program.
Likely, more people enrolled later in July and in August since people had until July 15 to file their tax returns and were then granted a 35-day enrollment window after the exchange determined that they were eligible for premium tax credits.
Colorado Easy Enrollment Program
Colorado passed legislation (HB1236) in 2020 to create an easy enrollment program that will be in effect as of 2022.
This means, when Colorado residents file their 2021 tax returns, they’ll be able to check a box indicating whether they would like Connect for Health Colorado (the state’s exchange) to use their tax return data to determine whether they might be eligible for Medicaid, CHIP, or a premium tax credit.
If the exchange determines that the person is potentially eligible for a premium tax credit, a special enrollment period will be provided, during which the person can complete enrollment in a health plan offered through the exchange.
New Jersey Easy Enrollment Program
In June 2021, New Jersey lawmakers unanimously passed S3238. The legislation, which is expected to be signed into law by Governor Phil Murphy, calls for the state to create an easy enrollment program similar to Maryland’s and Colorado’s.
It would debut in either early 2022 or early 2023 (for 2021 or 2022 tax returns), depending on how quickly the infrastructure can be implemented.
The legislation indicates that a special enrollment period will be available to anyone who is not determined eligible for Medicaid (it would apply to people who need to purchase private insurance). The duration of the special enrollment period would be determined by the New Jersey Department of Banking and Insurance, but would have to be at least 14 days.
Pennsylvania Considering Easy Enrollment Program
In addition to Maryland, Colorado, and New Jersey, other states are considering the possibility of an easy enrollment program.
New Mexico lawmakers considered HB272 in 2021. Although it passed the New Mexico House of Representatives, it did not progress in the Senate and thus failed to pass before the end of the legislative session.
But lawmakers in Pennsylvania are considering HB1030, which would create an easy enrollment program. If enacted, it would function much like the programs in Maryland, Colorado, and New Jersey.
Tax filers would indicate on their Pennsylvania tax return whether or not they have health insurance. If they do not, they would be able to grant permission for the applicable financial data from their tax return to be shared with the Pennsylvania exchange (Pennie).
The exchange would then use the information to determine eligibility for Medicaid or premium tax credits. And for people eligible for premium tax credits, a 60-day special enrollment period would be granted, during which they could enroll in a plan through the exchange.
An easy enrollment program allows an individual to connect information from their state tax return to the health insurance exchange in their state to determine enrollment eligibility. It must be set up by the state and then used by individuals. A special enrollment period is also needed.
A Word From Verywell
There is no downside to easy enrollment programs, and quite a bit of potential upside. Although this concept is new and thus far not widely available, more states are likely to implement similar programs in the coming years.
An easy enrollment program that connects the health insurance exchange with tax return information is an efficient way of using data that the state already collects, and it will help to reduce the number of people who don’t have health insurance.
If you’re uninsured and your state implements an easy enrollment program, it’s in your best interest to use it. All you have to do is check the box on your tax return noting that you’d like the exchange to check to see if you’re eligible for financial assistance with your health coverage.
You won’t be providing any information that isn’t already on your tax return. And the worst that can happen is that they’ll say you’d have to pay full price for your coverage. But chances are, you’ll be eligible for some sort of financial assistance and able to enroll in either free or low-cost coverage.