Aug, 05, 2022

Leveraging Section 1902(e)(14) Waiver Authority Amid Unwinding

Kinda Serafi, Kaylee O’Connor, and Patricia Boozang, Manatt Health


States are required to maintain enrollment for their Medicaid enrollees through the end of the public health emergency (PHE) as a condition of receiving enhanced Federal Medical Assistance Percentage under the Families First Coronavirus Response Act. When the federal PHE ends, states will resume Medicaid redetermination processes for nearly 80 million enrollees and address an unprecedented volume of other outstanding eligibility and enrollment actions within a condensed period of time.[1] Medicaid and Children’s Health Insurance Program (CHIP) agencies will also be charged with facilitating smooth transitions of coverage to the Marketplace to ensure eligible individuals retain access to care and to protect against disproportionate coverage loss among people of color.

To support states in their efforts to successfully “unwind” from the Medicaid continuous coverage requirement and resume normal eligibility and enrollment operations, the Centers for Medicare & Medicaid Services (CMS) has made available a number of time-limited 1902(e)(14) waiver authorities. Section 1902(e)(14)(A) of the Social Security Act allows for waivers “as are necessary to ensure that states establish income and eligibility determination systems that protect beneficiaries.” CMS had previously leveraged 1902(e)(14) authority when states were transitioning their eligibility and enrollment systems to come into compliance with the Affordable Care Act. In the context of the COVID-19 pandemic, CMS has extended this temporary authority to states, pursuant to the March 3, 2022 CMS State Health Official (SHO) letter, in order to “promote enrollment and retention of eligible individuals by easing the administrative burden states may experience in light of systems limitations and challenges.”

The unwinding related section 1902(e)(14) strategies newly available to Medicaid and CHIP agencies can provide significant relief to states facing pending eligibility and enrollment actions and processing delays, workforce and systems limitations, and other operational challenges. Ensuring eligible individuals do not lose coverage for procedural or administrative reasons and supporting those who are ineligible for Medicaid/CHIP transition to Marketplace coverage will be paramount for all states as they begin to resume normal operations. This expert perspective outlines the time-limited targeted enrollment flexibilities that CMS has availed to states through section 1902(e)(14) waiver authority and discusses considerations beyond the strategies described in federal guidance and supplemental resources.

Flexibilities Available Under Section 1902(e)(14)

CMS has established a set of temporary section 1902(e)(14) flexibilities that it will consider during (and, in some cases, after) the 12-month period of unwinding, based on individual state need and in appropriate circumstances. In addition to pursuing one or more of the strategies outlined below, states may propose additional strategies—all of which are subject to CMS approval.

Renew Individuals Based on SNAP Eligibility. Several states grappling with high volumes of pending redeterminations have pursued section 1902(e)(14) waiver authority to renew Medicaid eligibility for Supplemental Nutrition Assistance Program (SNAP) participants whose gross income, as determined by SNAP, is under the applicable Modified Adjusted Gross Income (MAGI) income standard. Under this authority, a state can extend coverage for any individual who is eligible for SNAP, without conducting a separate MAGI redetermination and despite the differences in household composition and income counting rules.[2] States that are well positioned to pursue this authority include states (1) that have Express Lane Eligibility for children, given their systems are already configured, and (2) with integrated eligibility systems, as SNAP income data may be readily available for the Medicaid redetermination process. States that do not have integrated systems should also consider pursuing this authority, but will need to develop a systems solution for identifying individuals already determined eligible for SNAP and sharing such information with the Medicaid agency. While CMS guidance restricts this flexibility to non-disabled individuals under age 65, states may request (and, per the April 19 and July 26, 2022 CMS All State Calls, CMS will permit) extending this flexibility to non-MAGI populations. CMS also confirmed during the CMS All State Call on July 26, 2022 that it will allow states to pursue section 1902(e)(14) waiver authority to renew Medicaid eligibility for Temporary Assistance for Needy Families participants, and subsequently approved Alabama’s request to do so. This flexibility is available to states through the end of the 12-month unwinding period.

Conduct Ex-Parte Renewals for Individuals with No Income and No Data Returned. States can receive temporary section 1902(e)(14) waiver authority to complete ex-parte renewals[3] of individuals with no income (“zero-dollar income”) and no financial data, as long as the individual’s attestation of such income has been verified within the last 12 months prior to the start of the PHE, or no earlier than March 2019, and the state has adhered to its verification plan and applicable federal requirements.[4] In other words, if the state Medicaid agency has previously determined an enrollee to have zero income and no data sources are returned as part of the ex-parte renewal process, the enrollee can be found eligible for Medicaid and no further action or documentation verification is required by the enrollee. Of note, CMS’ guidance initially limited the time period for when the income was last verified to the last twelve months of the renewal; but, based on states’ feedback, CMS–during the April 19, 2022 CMS All State Call–expanded the timeframe to the last 12 months prior to the start of the PHE. This flexibility, which CMS has already granted for a number of states, is effective through the end of the 12-month unwinding period.

For more information on improving ex-parte rates to support the Medicaid renewal process during unwinding, see this recent State Health and Value Strategies toolkit, which contains a diagnostic assessment that states can use to examine current ex parte processes and identify and deploy additional strategies to increase their ex parte rates.

Conduct Ex-Parte Renewals for Individuals with No AVS Data Returned Within a Reasonable Timeframe. Under Section 1940 of the Act, states are required to verify assets through the Asset Verification System (AVS) for certain non-MAGI enrollees. If the AVS does not return information within the state-established timeframe, the state is obligated to request additional information and/or documentation from the enrollee. States that adopt this “streamlined asset verification” flexibility can assume resources have not changed when the AVS does not return any information or when the AVS does not return information within a reasonable timeframe, and complete ex-parte renewals of enrollees without requesting further documentation verification of assets. States must still comply with applicable federal requirements. This flexibility, which a number of states have taken up, is effective through the end of the 12-month unwinding period.

Accept Updated Enrollee Contact Information From Managed Care Plans. In light of the anticipated number of people who may have moved residences and not provided an updated mailing address, states are concerned about not being able to reach individuals via mail when seeking to redetermine coverage. Currently, when a state receives updated address information from a managed care plan, CMS has required that states send a notice to the address on file and provide a reasonable period of time for the enrollee to verify the accuracy of the contact information. States that are unable to do so given operational or systems constraints have the flexibility to forego this requirement under section 1902(e)(14), treat the updated contact information from the plan as reliable, and use it to update the enrollee record. States can also treat in-state contact information from the National Change of Address or United States Postal Service returned mail databases as reliable without first sending a notice to the address on file (as Arizona, Louisiana, Virginia, and other states have already done).[5] This Medicaid/CHIP flexibility is effective until 14 months after the end of the month in which the PHE ends and will protect enrollees by reducing the risk of procedural terminations.

Extend Automatic Reenrollment into Medicaid Managed Care Plans. Federal regulations require a state to automatically re-enroll an individual into their previous Medicaid managed care plan if they lose coverage for two months or less but then subsequently re-enroll. States, such as Kentucky and Missouri, have obtained 1902(e)(14) authority to expand the time period for when an individual may be automatically re-enrolled in a managed care plan from two months up to 120 days. CMS clarified on the May 17, 2022 CMS All State Call that this flexibility does not reinstate coverage retroactively. It is effective for 17 months after the end of the month in which the federal PHE ends.

Extend the Timeframe to Take Final Administrative Action on Fair Hearing Requests. Some states anticipate high volumes of Medicaid fair hearings, which will impact their ability to timely process requests. States have pursued section 1902(e)(14) authority to temporarily extend the timeframe to take final administrative action on fair hearing requests.[6] If seeking the flexibility to delay the timeframe to process fair hearings, states must comply with certain guardrails that protect enrollees which include: (1) providing benefits pending the outcome of a fair hearing decision, regardless of whether an enrollee requested such benefits; and (2) forgoing recoupment of the cost of benefits if the state’s determination of ineligibility is upheld. CMS indicated on May 3, 2022 that it will also consider state requests to use 1902(e)(14) authority to extend the timeline for enrollees to request a fair hearing to beyond the 90 days allowed under existing regulations, mirroring a time-limited Section 1135 waiver flexibility that many states have availed themselves to during the PHE.[7] This section 1902(e)(14) flexibility is effective through the end of the 23rd month after the end of the month in which the federal PHE ends.

Additional State-Requested Flexibilities. CMS will consider additional state-proposed section 1902(e)(14) waiver requests for unwinding strategies beyond those outlined above, such as delaying the resumption of premiums until a full redetermination is completed. Strategies must: (1) improve the state’s ability to process renewals; and (2) protect enrollees. CMS will consider flexibilities that help streamline application and enrollment processing in order to promote continuity of coverage.

How to Request Section 1902(e)(14) Waiver Authority

To take advantage of the time-limited section 1902(e)(14) waivers described above, states must submit a letter to CMS and can do so efficiently by using CMS’ template language. States seeking flexibilities that go beyond or that differ from CMS’ template language (e.g., requesting to expand the timeframe to the last 12 months prior to the start of the PHE for the “Conduct Ex-Parte Renewals for Individuals with No Income and No Data Returned” flexibility) should clearly state their requests. States will need to incorporate program-specific detail and revise the template language, as necessary, to reflect their specific circumstances for each unwinding-related flexibility requested. States can decide the effective date for each 1902(e)(14) waiver (and may request retroactive start dates for CMS’ consideration) they seek to implement. They can also elect to request additional flexibilities after submission of their initial template.

See CMS’ new COVID-19 PHE Unwinding Section 1902(e)(14)(A) Waiver Approvals page linked here.


Taken together, section 1902(e)(14) flexibilities can support Medicaid agency efforts to ensure continuity of coverage for eligible individuals at the end of the PHE. These flexibilities can help states by: improving ex-parte renewal rates; ensuring enrollees receive notices, renewal packets, and requests for information; reducing the administrative workload; and mitigating disproportionate coverage loss among Black, Latino(a), and other people of color. As states prepare for the end of the Medicaid continuous coverage requirement and plan for unwinding, it is likely that they will identify other flexibilities that would aid in protecting enrollees and promoting continuity of coverage. Given federal partners’ willingness to collaborate with states in innovative ways amid unwinding, state policymakers should think creatively and propose section 1902(e)(14) flexibilities that are needed for successfully resuming agency operations.

[1] The PHE is currently in effect through July 14, 2022, and is expected to be extended further. The federal Medicaid continuous coverage requirement is in effect until the end of the month in which the PHE ends (currently July 31,2022).

[2] For additional information, see Strategy 3 outlined in the CMS SHO Letter #13-003.

[3] Ex-parte renewals are renewals using all available data sources that do not require additional action (e.g., information, documentation) from the enrollee.

[4] See 42 CFR §§ 435.916 and 435.956.

[5] This authority does not apply to out-of-state address information; states must still reach out to the enrollee to confirm out-of-state residence.

[6] Requests for expedited fair hearings are excluded in accordance with 42 CFR § 431.224.

[7] Using temporary section 1135 waiver authority, states may allow enrollees in Medicaid managed care and fee-for-service more than 120 days and 90 days, respectively, to request a fair hearing.