What Is an Easy Enrollment Program for Health Insurance?

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 2023, the exchanges are fully state-run in 17 states and Washington, D.C., while the other 33 states rely on the federally-run HealthCare.gov.

Almost all of the states that have established easy enrollment programs are also states that run their own exchanges. This makes it fairly simple, as both the revenue department and the exchange are run by the state.

But Illinois and Virginia have both established easy enrollment programs while also using HealthCare.gov. For the time being, that means their easy enrollment programs can only be used to enroll people in Medicaid/CHIP (both state-run programs). They can provide information about enrolling in a private plan through HealthCare.gov. But because the federal government runs the exchange, those states cannot offer a special enrollment period to allow the person to do so as soon as their tax return is filed.

However, Virginia plans to have a fully state-run exchange by the fall of 2023, so they will be able to start offering a special enrollment period as of the spring of 2024, for people who use the easy enrollment program and are eligible to enroll in coverage through the exchange.

It’s possible that the IRS and HealthCare.gov could eventually establish a federally-facilitated easy enrollment program that would use data from federal tax returns. But that hasn't happened yet, and states that use HealthCare.gov don't have the flexibility to offer their own special enrollment periods.

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.

(Note that three of the states that do impose a penalty for being uninsured—ie, an individual mandate—have established easy enrollment programs that are either in effect or will be soon. But they're separate from the states' individual mandates and are an effort to make it as easy as possible for residents to get enrolled in health coverage.)

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.

As noted above, this is only possible if the state runs its own exchange rather than relying on HealthCare.gov, which is run by the federal government. So most of the states that have created easy enrollment programs do run their own health insurance exchanges as well.

Which States Have Easy Enrollment Programs?

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.

Since then, several other states have established easy enrollment programs. The programs have been created in the following states:

• Maryland
• Colorado
• Massachusetts
• Pennsylvania
• Virginia (Medicaid/CHIP only until Virginia's state-run exchange debuts for 2024 coverage)
• New Mexico (will be available as of early 2023)
• Illinois (Medicaid/CHIP only; will be available as of early 2023)
• New Jersey (available as of early 2024)
• Maine (available as of early 2024)
• California (available as of early 2024)

All of these states have added (or will soon add) a question to the state tax return, asking the filer whether they have health insurance, and if not, whether they would like the state to use the information from their return to determine potential eligibility for free or low-cost health coverage.

As noted above, three of these states—Massachusetts, California, and New Jersey—already have a requirement that residents maintain health coverage, with a penalty assessed via the tax system for those who are uninsured and ineligible for an exemption. So their tax returns already asked about health insurance, but the easy enrollment program adds a new pathway for gaining coverage.

If an uninsured tax filer or spouse indicates that they would like their tax return information to be shared with the exchange and/or the state Medicaid agency, the information will then be used 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 state runs its own exchange, it can offer a special enrollment period at that point, allowing people who are eligible for premium tax credits to sign up for coverage at that point, rather than waiting until the fall open enrollment period to get coverage for the following year.

Regardless of whether the state runs its own exchange or not, people who are eligible for Medicaid or CHIP can be enrolled immediately, as those programs are available year-round.

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.

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.

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.

Summary

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. These programs are set up by the state and then used by individual tax filers.

Medicaid/CHIP enrollment is available year-round, but a special enrollment period must be offered in order to allow people to sign up for private coverage via the easy enrollment program. If a state offers an easy enrollment program but does not run its own health insurance exchange, it can use the easy enrollment program to get people signed up for Medicaid/CHIP, but it cannot offer a special enrollment period for private health insurance. So most of the states that have created easy enrollment programs are also states that run their own health insurance exchanges.

A Word From Verywell

There is no downside to easy enrollment programs, and quite a bit of potential upside. 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.