↓ Skip to main content
Syam Adusumilli
Adjacent Gaps · ADJ.14

Executive Summary: The Returning Citizen at a Small Employer: The Coverage Gap Nobody Talks About

By Syam Adusumilli · 2 min read
Executive Summary Read the full article.

ADJ.14 — Adjacent
#

Approximately 600,000 people are released from state and federal prisons annually, per Bureau of Justice Statistics data. A significant share find employment at small businesses willing to hire returning citizens. Most arrive with no health coverage. Most states terminate Medicaid eligibility upon incarceration; reapplication processing takes 30 to 90 days. The employer’s 90-day waiting period stacks on top of the Medicaid reapplication gap, producing 120 to 180 days without coverage at the most vulnerable moment of reintegration. For returning citizens with substance use disorder, the gap between incarceration (where MAT may have been initiated) and insurance coverage (where MAT would be a covered benefit) is exactly the window where relapse risk is highest.

Three levers close or narrow the gap. First, eliminate or reduce the waiting period. No federal law requires a minimum waiting period; ERISA permits up to 90 days. Eliminating it removes the plan-side gap entirely; notify the stop-loss carrier because the change affects when new enrollees enter the risk pool. Second, DPC membership from day one. DPC has no waiting period; it begins when the employer pays the monthly fee. At $75 to $100 per month, DPC costs $225 to $300 for a three-month bridge, giving the returning employee a physician who knows their medication history and provides the continuity that neither the Medicaid system nor the employer plan delivers during the gap. Third, connect the employee to telehealth MAT platforms such as BICYCLE Health or Workit Health on or before the hire date, ensuring treatment initiated during incarceration does not lapse during the coverage void.

The Work Opportunity Tax Credit under IRC Section 51 provides up to $9,600 for hiring individuals released from prison within the past year. DPC membership at $80 per month is less than $1,000 annually. The WOTC credit exceeds the cost of every intervention identified. The employer who eliminates the waiting period, adds DPC from day one, and bridges behavioral health access has completed the commitment the hire began.