Preparing to Implement the 12-Month Continuous Enrollment for Children Requirement: Questions and Answers
Cindy Mann, Julia Smith and Michelle Savuto, Manatt Health
Introduction
In late 2022, Congress enacted section 5112 of the Consolidated Appropriations Act, 2023 (CAA), requiring states to provide children under age 19 determined eligible for Medicaid or the Children’s Health Insurance Program (CHIP) with 12 months of continuous enrollment (CE)[1] effective January 1, 2024.
To support states in implementing CE, the Centers for Medicare & Medicaid Services (CMS) issued sub-regulatory guidance, including a State Health Official (SHO) Letter and Frequently Asked Questions (FAQs),[2] expanding on the CAA’s new requirement, particularly for states that had not adopted optional one-year CE coverage for children prior to January 1. This Q&A is intended to serve as an added resource for states as they newly take up CE for children or modify existing CE policies to meet the CAA requirement. As noted, some issues remain open pending further CMS guidance.
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Eligibility for and Exceptions to Continuous Enrollment
1. Question: The CAA requires 12 months of CE for children in Medicaid and CHIP. Are there circumstances in which a child’s required CE period would last less than 12 months?
Answer: Yes. While CE generally provides 12 months of CE, as outlined in the SHO letter, if any of the following exceptions occurs during a child’s CE period, the CAA’s CE requirement no longer applies and the state must terminate CE or eligibility, as appropriate.
- Child reaches age 19.[3]
- Child ceases to be a state resident.
- Child or child’s representative requests a voluntary termination of eligibility.
- Eligibility is determined to have been erroneously granted because of agency error, fraud, abuse, or perjury attributed to the child or the child’s representative.
- Child is deceased.
2. Question: If a household reports that a child in their CE period has moved out of the household and now resides out of state, but is not able to provide a new address for the child, should the state continue to provide CE to the child?
Answer: If the child is no longer a state resident, the relevant exception to CE applies (see above) and the state may terminate Medicaid/CHIP coverage. If information is reported by the family, the state can take appropriate action, such as sending a notice to the household stating the reason for the termination and providing them an opportunity to respond. If residency information comes from an electronic data source, the state will need to first confirm the information with the family before terminating the child’s coverage.
3. Question: Does CE apply to children who are eligible based on receipt of Supplemental Security Income (SSI) or Title IV-E assistance, such as foster care, guardianship assistance, or adoption assistance?
Answer: Yes, the CAA requires that states provide 12 months of CE for all children under 19 in a mandatory or optional Medicaid eligibility group as described in section 1902(a)(10)(A) of the Social Security Act (SSA), which applies to children receiving SSI or Title IV-E assistance.[4]
4. Question: If a child is determined eligible for Medicaid under a mandatory or optional eligibility group that is subject to the CAA’s CE requirement and requires a determination of disability or medical need as a condition of eligibility (e.g., the Katie Beckett group), and the child no longer meets the medical requirements for that eligibility group, may the state terminate coverage during the 12-month CE period?
Answer: No, a change in medical circumstances is not an exception to CE under the CAA and therefore, not a permissible basis for termination. At redetermination, if the child is not eligible under the child’s prior eligibility group, under longstanding federal rules, the state must consider whether the child may be eligible under one or more other eligibility groups prior to terminating eligibility.
Transfers from Medicaid to CHIP, and From CHIP to Medicaid During a Continuous Enrollment Period
5. Question: Can or must a state transition coverage for a child from Medicaid to CHIP coverage during the CE period if that transfer is supported by a change in the child’s circumstances?
Answer: No, a child who is determined eligible for Medicaid is guaranteed 12 months of Medicaid coverage, even if the child experiences a change in circumstances that would otherwise support a transfer from Medicaid to a separate CHIP program.
6. Question: Must a state transfer a child from CHIP to Medicaid if they are found eligible for Medicaid during the CE period?
Answer: Yes, a child who is determined eligible for Medicaid during a CHIP CE period must be transferred to Medicaid. This requirement currently applies in connection with the state plan option to provide CE in CHIP[5] and will continue to apply in connection with mandatory CE under the CAA. The child must be provided CE in Medicaid for the remainder of the 12-month CE period that began under CHIP.
CMS has not yet provided guidance on whether states have the option to begin a new 12-month CE period under Medicaid upon the effective date of the child’s Medicaid eligibility. If a child is transferred from CHIP to Medicaid, the federal medical assistance percentage rate may change as well, such that it matches the child’s current enrollment status.
Operationalizing Continuous Enrollment
7. Question: How does the CE requirement work for members that do not undergo an annual renewal process, such as children who are automatically qualified for Medicaid based on receipt of SSI or Title IV-E assistance?
Answer: Children who will not undergo an annual renewal process and who became eligible for Medicaid during the 12-month period preceding January 1, 2024, or who become eligible after January 1, 2024, must be provided 12 months of CE, with the 12-month period starting on the effective date of the child’s Medicaid eligibility.
For example, a child in a 1634 state[6] who became eligible on the basis of SSI in April 2023, with an eligibility effective date of April 1, 2023, must be provided CE until March 31, 2024. If the child loses SSI or the child’s other automatic basis of eligibility during the 12-month period, the child must remain continuously enrolled for the remainder of the 12-month period (unless one of the CE exceptions applies). Continued eligibility under a different eligibility category would then be considered at the child’s next regularly scheduled renewal. Many children in these situations will continue to qualify under the children’s eligibility group.
CMS has not provided guidance on how to calculate the CE period for a child who has not undergone an annual Medicaid eligibility review (because of their automatic eligibility for another program) and who has been enrolled in Medicaid for longer than 12 months.
8. Question: For a child that is entitled to retroactive coverage, when does the CE period begin?
Answer: The child’s renewal date/CE period is attached to the application effective date, not the retroactive coverage date.
9. Question: If a child is renewed via ex parte and a parent/caregiver subsequently returns a renewal form that includes information impacting the child’s eligibility (e.g., income over limit), should the state maintain the child’s enrollment?
Answer: Yes, if the child is renewed via ex parte, their eligibility determination is final and the child must be provided CE, subject to the limited exceptions identified in the SHO letter. According to CMS guidance issued in the context of unwinding, in instances where the child appears to be eligible via an ex parte review and the parent or caretaker has not yet completed the renewal process for other members of the household, the state may either:
- Option 1. Treat the ex parte determination as a final determination, effective following the end of the current coverage and CE period. Under this option, the state would maintain the child’s coverage until the end of the 12-month CE period, while acting on the new information for other household members.
- Option 2. Hold the final determination of eligibility for the child until the parent’s eligibility determination is made. Under this option, the state would consider the new information submitted as part of the household’s renewal if relevant to the child’s eligibility.
10. Question: Do children enrolled in CHIP who did not pay a premium during the CE period have to pay back all unsubmitted payments before they can be renewed?
Answer: CMS has not expressly addressed this question in guidance. However, under current federal rules,[7] a child with unpaid premiums or enrollment fees may be barred from renewal only if the state has a lock-out period and then only for the length of the state’s premium lock-out period (which cannot exceed 90 days).
The Streamlining Eligibility and Enrollment Notice of Proposed Rulemaking, if finalized as written, would eliminate premium lock-out and waiting periods in CHIP.[8]
[1] Also referred to as continuous eligibility.
[2] In a separate FAQ on Transitional Medical Assistance (TMA), CMS addressed how TMA applies in connection with CE (see Questions 13-15).
[3] The state may only terminate CE; the child may still be eligible for Medicaid or CHIP.
[4] See SSA section 1902(a)(10)(A)(i)(II) and section 1902(a)(10)(A)(i)(I), respectively.
[5] Per 42 CFR 457.342(a).
[6] Defined as a state that has requested that the SSA make Medicaid eligibility determinations about persons receiving SSI payments pursuant to a “1634 agreement.”
[7] See 42 CFR § 457.570 (providing that a state may not “Require the collection of past due premiums or enrollment fees as a condition of eligibility for reenrollment once the State-defined lock out period has expired, regardless of the length of the lock-out period.”; id. at § 457.10 (“Premium Lock–Out is defined as a State-specified period of time not to exceed 90 days that a CHIP eligible child who has an unpaid premium or enrollment fee (as applicable) will not be permitted to reenroll for coverage in CHIP. Premium lock-out periods are not applicable to children who have paid outstanding premiums or enrollment fees.”)