The announcement late last week by the Justice Department that they would no longer defend the ACA’s individual mandate or consumer protection provisions sent shockwaves throughout the healthcare industry and may have major implications for the law’s future. While Democratic-led states have stepped up to defend the law in the Trump Administration’s absence, the future of the ACA is once again uncertain. A ruling by the courts to strike down the mandate, on the basis that with the penalties zeroed-out that it no longer functions as a tax, could threaten the very foundation that the law is built upon. NAHU’s Vice President of Government Affairs Marcy M. Buckner and Vice President of Congressional Affairs John Greene join the podcast this week to break down the details of this announcement and what the legalese means for you and your clients.Trump Administration to No Longer Defend the ACA’s Individual Mandate
This afternoon the Trump Administration released a final rule regarding Association Health Plans as well as a fact sheet on the new rule. The rule was in response to an executive order issued by President Trump on October 12 directing federal agencies to expand the availability of AHPs, short-term limited duration insurance policies and Health Reimbursement Arrangements. The proposal calls for a revision to ERISA in order to redefine “employer” to allow more groups to qualify as associations and treating health coverage sponsored by an employer association as a single group health plan that would not be subject to the ACA’s essential health benefits.
The final rule does not differ much from the proposed rule that came out in January, and the Congressional Budget Office now estimates that 4 million Americans, including 400,000 who otherwise would lack insurance, will join an AHP by 2023.
The goal of the rule is to provide small-business owners, employees of small businesses and family members of working owners/employees more coverage options, more affordable pricing, enhanced ability to self-insure, less regulatory burden and complexity, and reduced administrative costs.
The rule does this by eliminating the requirement that an association exist for a bona fide purpose other than offering health coverage. To qualify under the rule, employers would need to be either in the same trade, industry, line of business or profession, or have a principal place of business within a region that does not exceed the boundaries of the same state or the same metropolitan area. Therefore, AHPs could cross state lines if the metropolitan area includes more than one state. These plans would be subject to state regulation of insurance and plans across multiple states could be subject to varying rules. The Department of Labor has committed to continuing to partner with states to protect consumers and enforce state regulations.
Under the final rule, self-employed individuals, sole proprietors and common-law employees would be permitted to join an AHP. These individuals would be treated as an employee of the trade or business for purposes of being covered by the AHP. The proposal includes non-discrimination protections to avoid potential of adverse selection. It would require that the association not restrict membership based on any health factor, as defined in the HIPAA/ACA health nondiscrimination rules. These include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, and disability.
The final rule has staggered dates for implementation:
- All associations (new or existing) may establish a fully insured AHP on September 1, 2018.
· Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on January 1, 2019.
· All other associations (new or existing) may establish a self-funded AHP on April 1, 2019.
Be Well Insurance Solutions will continue to provide our members with guidance on the implementation of this new rule, and will work with both state and federal policymakers as they oversee the offerings of these new AHPs.
NAHU’s Washington Update is on hiatus this week. In lieu of our usual collection of articles and podcast, we are summarizing the most recent regulatory action affecting our industry.
On Wednesday, February 15, the Trump Administration released its first significant health policy action, a proposed rule intended to stabilize the individual and small group private health insurance markets for 2018. The 71-page proposal released by the Centers for Medicare and Medicaid Services (CMS) includes the following significant components:
- A proposed change to the planned individual market open enrollment period for 2018. Currently, the individual market open enrollment period is slated to be the same as this year, November 1, 2017-January 31, 2018. The rule proposes to change the 2018 period to November 1-December 15, 2017, which would not only reduce the enrollment time by half, but also make the period overlap significantly with the Medicare annual enrollment period as well as with open enrollment time for the many employer-sponsored plans that operate on a calendar-year renewal cycle.
- Proposed changes to actuarial value (AV) calculations, which should impact plans available in both the individual and small group markets nationally in 2018. Generally, the proposed rule would expand the variation allowed of the AV of metal level (bronze, silver, gold and platinum) plans of -4/+2 percentage points, rather than +/- 2 percentage points. This proposed change would impact all non-grandfathered individual and small group market consumers whose purchasing options are composed of metal level plans. Under the proposed standard, for example, a gold plan could have an AV between 76 and 82%, which would expand the range of cost-sharing options available. The proposed rule would not change the de minimis range for the silver plan variations (the plans with an AV of 73, 87 and 94%) available on the federal exchange at this time. The de minimis variation for a silver plan variation of a single percentage point would still apply. Also, bronze plans already had an expanded allowable variation, so the change for expanded bronze plans would be from +5/-2 percentage points to +5/-4 percentage points.
- A proposed requirement that all new consumers who seek to enroll in exchange coverage during a special enrollment period (SEP) via HealthCare.gov complete expanded pre-enrollment verification (currently only 50% were slated to be subject to expanded verification). This expanded eligibility verification would begin on July 1, 2017. Consumers with SEPs would be able to submit their applications and select a plan and coverage start date, but the consumers’ enrollment would be “pended” and their information would be held by HealthCare.gov and not released to the issuer until SEP eligibility was confirmed. Consumers would have 30 days to provide documentation, and they would be able to upload documents into their account on HealthCare.gov or send their documents in the mail. The proposed rule urges state-based exchanges to take similar action and requests comment as to whether they should be compelled to do so.
- A planned tightening of SEP eligibility requirements relative to people who have a previous history of nonpayment of premiums, documentation of a move, and gaining a SEP for a marriage. In addition, CMS indicates it will impose a more rigorous test for future uses of the exceptional circumstances SEPs, including requiring supporting documentation where practicable, and will also include a review of the current list of exceptional circumstances.
- The proposal would ban metal plan changes during the coverage year for individual market consumers generally and limit special enrollment coverage options available via HealthCare.gov to prevent adverse selection. The rule asks for comments as to whether state-based exchanges should have to act similarly.
- If an individual was behind on premium payments and then reenrolled in coverage, the proposed rule would allow issuers to apply a premium payment to an individual’s past debt owed for coverage from the same issuer enrolled within the prior 12 months.
- To make it easier for issuers to build networks, CMS proposes a write-in process to identify essential community providers (ECPs) who are not on the Department of Health and Human Services list of available ECPs for the 2018 plan year and lower the ECP standard to 20% (rather than 30%).
- New deference to state reviews for network adequacy in states in which a federally facilitated exchange is operating, provided the state can demonstrate their authority is at least equal to the “reasonable access standard” outlined in the law and that they have means to assess issuer network adequacy, regardless of whether the exchange is a state-based or federal exchange.
- Finally, the proposal contains a commitment to soon issue a revised timeline for health insurance issuers to decide if they would like to participate as qualified health plans in the individual and SHOP exchange marketplaces for plan year 2018. The revised timeline is intended to provide issuers with additional time to implement the market reform changes proposed in this rule and give them a greater incentive to compete in the individual and small group marketplaces.
Comments are due on this proposed rule by March 7, 2017. NAHU is currently evaluating the provisions of the proposal and how they may impact our members, their clients and the stability of the individual and small group markets. CMS has also asked for additional market stabilization ideas to be submitted, so NAHU will provide them with a detailed letter on behalf of the membership about both the potential of the proposed rule and our additional ideas to improve the private individual and group marketplaces.
National Association of Health Underwriters 1212 New York Ave NW, Ste 1100, Washington, DC 20005
Ph. 202.552.5060 Fax 202.747.6820 www.nahu.org
Views 9 questions for the Trumpcare architects
By Perry Braun
As a new plan is presented for debate and discussion by the Trump administration — with the goal of building an affordable plan — here are my questions:
- With respect to healthcare costs, there are two key drivers. One is consumption, which is defined as the number of medical services and prescription drug services are consumed. The second is the price for each service. The equation is units times price equals cost. How is any new plan going to manage the units consumed — short of rationing or establishing a que system to receive services as a strategy?
- Price per unit is a function of costs borne by the provider of a service or the producer of product. Short of price controls as a strategy, what is the detail in the plan to control costs?
- As to affordability: What tax credits/deductions or subsidies exist in the future to fund the goal of insurance for everyone? What will be the insurance market reforms (specifically those that address premium rate setting and benefit mandates, which are linked to one another) in the local markets? What will be the insurance carrier reforms (selling across state lines, for example) and the state regulator involvement in the future? How will this affect the networks that consumers/patients can access? What prohibitions will exist, if any, as it relates to health savings accounts?
- Employer and employee stakeholder groups: What mandates, regulations, penalties and reporting requirements are they to own and meet?
- Individuals participating in the individual marketplace: What financial relief will be provided to purchase a product and to access their benefits? Will they be able to tailor their benefits to fit their needs or are they subject to mandated benefits?
- Hospitals and physicians: From the financial standpoint, what impact, if any, will this have on their uncompensated care costs, costs that work their way back into the insurance payment system? How is the ‘patients first’ concept translated in improvements into cost and quality?
- State insurance regulators: What level of authority will they have over the insurance reform provisions in their state?
- Technology companies (payroll, benefit administration) have made tremendous investments to conform to the rules and requirements. What happens next?
- For advisers: How do they adjust to the new world and what is the impact to their business models?
With the new administration committing to repeal and replace Obamacare, we are all left to wait and see the details of the plan — and adjust accordingly.”
Read Full Article Here: http://bit.ly/2knbT69
Shared from: Business Insider
By: Rebecca Harrington
Executive Order, January 20: Declaring Trump’s intention to repeal the Affordable Care Act
One of Trump’s top campaign promises was to repeal and replace the Affordable Care Act, commonly called Obamacare.
His first official act in office was declaring his intention to do so. Congressional Republicans have been working to do just that since their term started January 3, though there’s dissent among Republicans over whether or not to complete the repeal process before a replacement plan is finalized and strident Democratic resistance to any repeal of the ACA.
On Wednesday, the Trump Administration submitted a proposed rule to the Office of Management and Budget designed to help stabilize the ACA marketplaces. Details on the rule are not currently available as it has not yet been published, but it is expected to address a number of immediate fixes to stabilize the marketplaces in the coming year. The administration is also in the process of releasing an executive order directing the Department of Labor to review the fiduciary rule, which currently imposes significant requirements on health savings accounts. NAHU will continue to monitor these regulatory items and will update members as details become available. The proposed rule on stabilizing the marketplace is the first regulation directed at the department of Health and Human Services since President Trump took office two weeks ago.
NAHU has called on the Trump Administration, and previously the Obama Administration, to implement several changes that would improve stability in the individual marketplaces. We have suggested that the administration could restrict the use of special enrollment periods (SEPs) to reduce their abuse and also implement more stringent documentation requirements. Similarly, we have called on reducing the current 90-day grace period for individuals with premium tax credits down to 30 days for non-payment. We also suggest allowing “grandmothered” policies to continue beyond their 2017 expiration date and removing limitations on “grandfathered” policies. And we have called on the administration to simplify the employer reporting requirements. NAHU CEO Janet Trautwein’s testimony before the Senate Health, Education, Labor and Pensions Committee included many of these suggestions.
The proposed rule follows an executive order (EO) issued by President Trump on Monday, which requires that for every new regulation that is issued, two previous regulations must be eliminated. Based on interim guidance released today and a previous executive order from 1993 that is still in effect, the rule will apply to any “significant” regulation that imposes an annual economic cost of $100 million or more. Agencies issuing regulations starting on September 30 will need to identify two existing regulations to eliminate prior to the new regulation being issued, as well as fully offset total incremental cost of the new regulation. Regulations addressing health, safety or financial emergencies may request a waiver from this requirement. This EO order fulfills a campaign pledge that was part of President Trump’s 100-day plan, and follows a listening session last Monday with a dozen business executives from several large companies where he promised to cut regulations by 75%. President Trump has issued seven executive orders and 11 presidential memorandums since taking office on January 20.
NAHU is continuing to work with the Trump Administration and congressional leadership to determine the best approach and timing for change in our healthcare system. We will continue to update you as any other regulatory changes, EOs or legislation are released. In the meantime, all statutes and regulations enacted by the ACA continue to be in place and NAHU members should continue to work with their clients to be in compliance with the law. Additionally, if you have suggestions regarding our work with the Trump Administration and members of Congress on the future plans to reform the ACA that you would like to share with NAHU, you can send your thoughts and ideas to ACAreform@nahu.org.