On March 26, CMS published two guidance memoranda that, according to most media reports, extended the www.healthcare.gov March 31 open enrollment deadline through April.  Critics cried “foul” immediately.  After all, HHS Secretary Kathleen Sebelius and subordinates had testified before Congress that they lack statutory authority to extend the deadline.  Here’s what CMS actually did, beginning with the crucial context.

ACA § 1311(c)(6) required Secretary Sebelius to set the 2014 open enrollment period by July 1, 2012, and gave her discretion to change it only for later years.  So, HHS executives correctly testified that they lack authority to extend the 2014 open enrollment deadline.  But  HHS already (45 CFR § 155.420) had permitted “special enrollment” after the open enrollment deadline for a long list of reasons, including loss of minimum essential coverage, addition of a dependent (or becoming a dependent), becoming “lawfully present,” erroneous enrollment or non-enrollment, and an insurer violation of its HHS contract.  One of the two CMS memos published March 26, largely ignored by the general media, summarized neatly these ten additional grounds:

Exceptional Circumstances: A consumer faces exceptional circumstances as determined by CMS, such as a natural disaster, medical emergency, and planned system outages that occur on or around plan selection deadlines.

Misinformation, Misrepresentation, or Inaction: Misconduct by individuals or entities providing formal enrollment assistance (like an insurance company, Navigator, certified application counselor, Call Center Representative, or agent or broker) resulted in one of the following:

• A failure to enroll the consumer in a plan;

• Consumers being enrolled in the wrong plan against their wish;

• The consumer did not receive advanced premium tax credits or cost-sharing reductions for which they were eligible.

Enrollment Error: Consumers enrolled through the Marketplace, but the insurance company didn’t get their information due to technical issues.

System errors related to immigration status: An error in the processing of applications submitted by immigrants caused the consumer to get an incorrect eligibility result when they tried to apply for coverage.

Display Errors on Marketplace website: Incorrect plan data was displayed at the time the consumer selected the QHP, such as plan benefit and cost-sharing information.

Medicaid/CHIP – Marketplace transfer: Consumers who were found ineligible for Medicaid or CHIP and their applications weren’t transferred between the State Medicaid or CHIP agency and the Marketplace in time for the consumer to enroll in a plan during open enrollment.

Error messages: A consumer is not able to complete enrollment due to error messages.

Unresolved casework: A consumer is working with a caseworker on an enrollment issue that is not resolved prior to March 31st.

Victims of domestic abuse: A consumer who is married, and is a victim of domestic abuse. Consumers who are in this category can apply and select a plan through May 31, 2014.

Other system errors: Other system errors, as determined by CMS, which hindered enrollment completion.

The other March 26 CMS memo, titled, “Affordable Exchanges Guidance,” seems to add just a few details to that list.   Here are its operative statements:

CMS will provide consumers who tried to enroll during the open enrollment period, but did not complete the process by March 31, a limited amount of additional time to finish the application and enrollment process.

CMS will process information related to paper applications received by April 7 to capture those consumers who were “in line” with paper applications or whose applications were pending submission or review of supporting documentation on March 31. These consumers will be able to select a plan through April 30 to allow them time to receive an eligibility notice, and the coverage will also be effective May 1.

Consistent with previous CMS guidance, consumers who receive a special enrollment period for being “in line” by March 31 and select new coverage within the timeframes outlined in this guidance will be able to claim a hardship exemption from the shared responsibility payment for the months prior to the effective date of their coverage, because they will be treated as if they had enrolled in coverage by March 31.

Now for the alley-oop.  How will the government distinguish “special” online applicants who were “in line” on March 31 from those who just showed-up late?  Apparently, by taking their word for it.  More specifically, according to Administration officials, the determination will be made by the applicant, not by www.healthcare.gov.  We’ll resist the temptation to post here our concept drawing of the new web page button that applicants will click to apply late, no questions asked.

Even after May 1 (assuming no further “in line” extension), the “special enrollment” window will be open, and it seems to be rather wide.  Group health insurers seeking to identify and underwrite risk pools properly may have to accept an uncomfortably high level of uncertainty.