The Departments of Labor, Health and Human Services, and Treasury published a final rule on March 18, 2015 that amends the definition of excepted benefits to allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to individuals who are purchasing individual health insurance in the private market, including through the Affordable Care Act (ACA) Health Insurance Marketplace. The rule establishes the following pilot programs for wraparound coverage: a pilot allowing wraparound benefits only for Multi-State Plans in the Marketplace, and a pilot allowing wraparound benefits for part-time workers or retirees who enroll in an individual market plan (or Basic Health Plan coverage). There are several significant conditions and limitations to this type of coverage. The wraparound coverage must provide meaningful benefits beyond coverage of cost sharing (e.g., coverage of services considered to be out-of-network by the primary plan, reimbursement for the full cost of primary care or non-formulary prescription drugs), and may not consist of an account-based reimbursement arrangement. This type of wraparound coverage could be offered as excepted benefits to coverage that is first offered no earlier than January 1, 2016 and no later than December 31, 2018 (a year later than initially proposed), and that ends on the later of: (1) the date that is three years after the date wraparound coverage is first offered; or (2) the date on which the last collective bargaining agreement relating to the plan terminates after the date wraparound coverage is first offered.
On October 23, 2014, CMS published the proposed methodology for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS proposes to use the same methodology in 2016 as was established in the final 2015 payment notice, with updated values. Comments will be accepted through November 24, 2014.
Obama Administration Finalizes Employment Orientation Limit Applicable to ACA Health Coverage Waiting Period
On June 25, 2014, HHS and the Departments of Labor and Treasury are publishing a final rule addressing the treatment of employment orientation periods for purposes of the Affordable Care Act (ACA) health insurance coverage waiting period limitation. The ACA generally bars employer-sponsored group health plans and group health insurance issuers from imposing a health coverage waiting period of more than 90 days after an employee is “otherwise eligible for coverage.” Being “otherwise eligible” to enroll in a plan means having met the plan's substantive eligibility conditions, which could include satisfying a bona fide employment-based orientation period. Under the June 25 final rule, such bona fide employment-based orientation periods may not exceed one month. The rule is intended to “ensure that an orientation period is not used as a subterfuge for the passage of time, or designed to avoid compliance with the 90-day waiting period limitation.” The final regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.
A number of Congressional panels have focused on following health policy issues recently, including the following:
- The House Ways and Means Health Subcommittee examined various Medicare hospital issues, including the CMS two-midnights policy, short inpatient stays, outpatient observation stays, Recovery Audit Contractor audits, and the appeals backlog.
- The House Energy and Commerce Committee held a hearing on two bills that seek to equalize payments between different providers: (1) the Medicare Patient Access to Cancer Treatment Act of 2014, which would establish payment parity under the Medicare program for ambulatory cancer care services furnished in the hospital outpatient department and the physician office setting; and (2) the Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014, which would provide bundled payments for post-acute care services under Medicare Parts A and B.
- The House Oversight and Government Reform Committee held hearings entitled "Examining the Federal Response to Autism Spectrum Disorders" and "Medicare Mismanagement: Oversight of the Federal Government Effort to Recapture Misspent Funds."
- The Senate Special Committee on Aging focused on the role of health care providers in advance care planning.
- The Senate Commerce, Science and Transportation Committee examined the ACA minimum medical loss ratio (MLR) requirements, which requires health insurers to provide rebates to consumers if the plans do not spend sufficient proportion of premium dollars on medical care.
Recent Congressional hearings on health policy issues include the following:
- House Energy and Commerce Committee hearings on the “Helping Families in Mental Health Crisis Act”; the FDA’s proposed changes to generic drug labeling; and legislation intended to improve predictability and transparency in Drug Enforcement Agency and FDA regulation (H.R. 4299, H.R. 4069, and H.R. 4250).
- A House Ways and Means Health Subcommittee hearing on final Treasury Department regulations implementing the employer mandate and employer information reporting requirement provisions of the ACA..
In addition, on April 9, 2014, the Senate Health, Education, Labor and Pensions Committee is holding a hearing on “Addressing Primary Care Access and Workforce Challenges: Voices from the Field.”
CMS has extended the Affordable Care Act (ACA) insurance enrollment period for individuals (1) who have had difficulty signing up for a health insurance plan through an Affordable Insurance Exchange by March 31, 2014, or (2) who have not signed up by March 31 due to a wide range of circumstances. First, in a March 26, 2014 document, CMS announces it has established a “special enrollment period” for individuals who cannot complete the enrollment process “despite their best efforts” for reasons such as “high consumer traffic across various consumer enrollment channels…leading up to the March 31 deadline.” Provided that consumers who were “in line” pay their first month’s premium by the deadline set by their chosen insurance company, CMS anticipates that enrollments made in an unspecified time period after March 31 will have a May 1 coverage effective date. Consumers who receive a special enrollment period for being “in line” and select new coverage within the timeframes outlined in the 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.
CMS also has compiled all of the categories CMS has identified to date that warrant special enrollment periods after the end of the March 31 open enrollment period, including situations involving: certain exceptional circumstances; misinformation, misrepresentation, or inaction by entities providing formal enrollment assistance; enrollment error; system errors related to immigration status; display errors on Marketplace website; Medicaid/CHIP - Marketplace transfer problems; error messages; unresolved casework; victims of domestic abuse; or other system errors that hindered enrollment completion.
On February 24, 2014, the Departments of HHS, Labor, and Treasury published final regulations that generally bar employer-sponsored group health plans and group health insurance issuers from imposing a health coverage waiting period of more than 90 days after an employee is otherwise eligible for coverage. Other conditions for eligibility are generally permissible, such as being in an eligible job classification, achieving job-related licensure requirements specified in the plan's terms, or satisfying a reasonable and bona fide employment-based orientation period. Note that the rules do not require coverage be offered to any particular individual or class of individuals, nor do they require any waiting period to be imposed). The 90-day waiting period limitation provisions apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. A companion proposed rule would limit to one month the length of a bona fide employment-based orientation period for purposes of the waiting period rules. Comments on the proposed regulations will be accepted until April 25, 2014.
CMS has announced that in light of persistent problems individuals have had enrolling in qualified health plans (QHPs) through some state-run Marketplaces, it will now allow individuals to access premium tax credits and cost-sharing reductions on a retroactive basis in certain circumstances. Specifically, in guidance dated February 27, 2014, CMS states that if a Marketplace was unable to provide timely eligibility determinations during the initial open enrollment period for the 2014 coverage year, it may be considered an “exceptional circumstance” for individuals who were unable to enroll in a QHP as a result. In such cases, CMS will make available advance payments of the premium tax credit and advance payments of cost-sharing reductions on a retroactive basis once the Marketplace has determined that the individual is eligible for such assistance and the individual has enrolled in a QHP through the Marketplace. Notably, CMS also provides an individual in this exceptional circumstance who is enrolled in a QHP offered outside of the Marketplace when he or she receives a determination of eligibility will be treated as having been enrolled through the Marketplace since the initial enrollment date.
On February 4, 2014, CMS released draft operational and technical guidance to health insurance issuers that seek to offer Qualified Health Plans (QHPs) in a Federally-Facilitated Marketplace (FFM) and/or a Federally-Facilitated Small Business Health Options Program (FF-SHOP) in 2015 and beyond (unless superseded in future years by subsequent regulations or guidance). Among many other things, the draft guidance addresses: the certification process and standards for QHPs (including the rate review process and network adequacy standards); QHP performance and oversight policies; and various consumer protection requirements. CMS will accept comments on the policies set forth in the guidance (to the extent that they are not the subject of separate rulemaking processes) until February 25. 2014.
IRS Issues ACA Employer "Shared Responsibility" Guidance; Delays Compliance Deadlines for Certain Employers
On February 12, 2014, the Internal Revenue Service (IRS) published final regulations modifying the timeline under which certain employers will be required to make “shared responsibility” payments if they do not provide qualified health insurance for their full-time employees and dependents pursuant to the Affordable Care Act (ACA). Specifically, under a new “transition relief” policy, the IRS is delaying the shared responsibility payment obligation for employers with 50 to 99 full-time equivalent employees from 2015 until 2016, although such employers will have to submit reports regarding their employees’ coverage in 2015. In order to qualify for transition relief, employers must certify that they have not laid-off workers to drop below the 100 employee threshold and must not eliminate or materially reduce their coverage offerings. The regulations also provide that employers subject to the employer responsibility provisions in 2015 (i.e., employers with 100 or more full-time equivalent employees) must offer coverage to at least 70% of full-time employees to avoid a penalty, rather than 95% (the 95% threshold will take effect in 2016). The regulations also clarify whether certain types of employees or employees in certain occupations are considered full-time (such as volunteer firefighters and emergency responders, educational employees, and seasonal workers) and clarify other open questions from the prior proposed regulations.
GAO Report Confirms Insurance Coverage Prior to Medicare Linked to Better Health, Lower Program Spending
This post was written by Nancy Sheliga.
The Government Accountability Office (GAO) has released a report examining the effect of prior health insurance coverage on Medicare beneficiaries. The report specifically focuses on the health status, program spending, and use of services by Medicare beneficiaries with and without continuous health insurance coverage before Medicare enrollment. According to the GAO, Medicare beneficiaries with prior insurance initially used fewer or less costly medical services than those without prior insurance. Because the difference in total spending was the greatest during the first year in Medicare, the GAO hypothesizes that beneficiaries without prior continuous insurance may have had a pent-up demand for medical services in anticipation of coverage at age 65. In addition, the report finds that beneficiaries without prior continuous insurance have higher total and institutional outpatient spending but not higher spending for physician and other noninstitutional services, suggesting that they require more costly and intensive medical services or that they are continuing prior patterns of visiting hospitals more than physician offices. Finally, in line with previous research, the GAO found that beneficiaries with continuous health insurance coverage for approximately six years before enrolling in Medicare were more likely than those without prior continuous insurance to report being in good health during their first six years in Medicare.
CMS has published its proposed methodology and data sources necessary to determine federal payment amounts made to states that elect to establish a Basic Health Program (BHP) under the Affordable Care Act (ACA) to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges. The BHP, which will be available for states to implement effective January 1, 2015, is intended to make affordable health benefits coverage available for individuals under age 65 with household incomes between 133% and 200% of the federal poverty line who are not otherwise eligible for Medicaid, the Children’s Health Insurance Program, or affordable employer sponsored coverage. Comments will be accepted until January 22, 2014.
CMS has published an interim final rule with comment period that sets a December 23, 2013 deadline for individuals to select a qualified health plan through an Exchange for an effective coverage date of January 1, 2014, to conform to a previously-announced policy. The prior regulation imposed a December 15, 2013 deadline. State Exchanges may select a different deadline. The rule pertains to the individual market and Small Business Health Options Program in both the Federally-facilitated Exchanges and State Exchanges; it does not change the plan selection or premium payment dates for coverage offered outside of the Exchanges.
The Obama Administration has announced a “hardship” exemption for certain individuals who have been notified that their individual health insurance policies have been cancelled and will not be renewed. In such cases, if the individual believes that the plan options available in the ACA Health Insurance Marketplace/Exchange are more expensive then the cancelled health insurance policy, the individual will be eligible for a hardship exemption from the “shared responsibility” payment and will be able to enroll in catastrophic coverage, if available (catastrophic coverage plans previously were limited to individuals under age 30 meeting certain conditions).
On December 2, 2013, CMS published a proposed rule that would establish 2015 payment parameters and oversight provisions for federally-facilitated Health Insurance Exchanges under the ACA. The rule specifically addresses risk adjustment, reinsurance, and risk corridors programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally-facilitated Exchanges. It also proposes additional standards for composite rating, privacy and security of personally-identifiable information, the annual open enrollment period for 2015, the actuarial value calculator, cost sharing for dental plans, the meaningful difference standard for qualified health plans offered through a federally-facilitated Exchange, patient safety standards for issuers of qualified health plans, and the Small Business Health Options Program. Comments will be accepted until December 26, 2013.
On November 15, 2013, the House of Representatives voted 261 to 157 to approve H.R. 3350, the “Keep Your Health Plan Act,” which would allow health plans available on the individual market as of January 1, 2013 to continue in 2014 without meeting new ACA plan standards. Continued enrollment in such a grandfathered policy would be considered to satisfy the ACA’s minimum essential coverage requirement, exempting the enrollee from the “shared responsibility” penalty under the ACA. . The Obama Administration has stated that the president would veto H.R. 3350 because it “rolls back the progress made by allowing insurers to continue to sell new plans that deploy practices such as not offering coverage for people with pre-existing conditions, charging women more than men, and continuing yearly caps on the amount of care that enrollees receive.” As previously reported, the Obama Administration has announced an alternative transition policy that would allow insurance issuers, subject to state insurance commissioners’ approval, to continue coverage that would otherwise be terminated or cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage if the coverage was in effect on October 1, 2013 and the insurer meets certain conditions.
Congressional Panels Continue Focus on ACA Insurance Enrollment, Security, and Cost Issues, and Other Health Policy Topics
Congress continues to examine issues associated with enrollment in qualified health plans under Healthcare.gov. For instance:
- The House Science, Space, and Technology Committee held a hearing entitled “Is My Data on Healthcare.gov Secure?” (see).
- The Senate Small Business and Entrepreneurship Committee focused on “Affordable Care Act Implementation: Examining How to Achieve a Successful Rollout of the Small Business Exchanges”; and
- The House Oversight and Government Reform Committee has held hearings entitled “ObamaCare Implementation: Sticker Shock of Increased Premiums for Healthcare Coverage,” and “ObamaCare Implementation: High Costs, Few Choices for Rural America,” while on December 6 the panel has scheduled a hearing entitled “ObamaCare Implementation, The Broken Promise: If You Like Your Current Plan You Can Keep It.”
In other policy areas, the Senate Special Committee on Aging has scheduled a December 11 hearing on “Protecting Seniors From Medication Labeling Mistakes,” along with a December 18 hearing entitled “The Future of Long-Term Care Policy: Continuing the Conversation.” In addition, on November 20, the House Energy and Commerce Subcommittee on Health held a hearing on public health legislation. Specifically, the Subcommittee is considering the following bills: H.R.610, to provide for the establishment of the Tick-Borne Diseases Advisory Committee; H.R.669, to enhance awareness about unexpected sudden death in early life; H.R. 1098, to reauthorize certain traumatic brain injury and trauma research programs; H.R.2703, to provide liability protections for volunteer practitioners at community health centers; H.R.1281, to reauthorize newborn screening programs; draft legislation to reauthorize the poison center national toll-free number, national media campaign, and grant program; and draft legislation to reauthorize a controlled substance monitoring program.
President Obama announced on November 14, 2013 that HHS has adopted an administrative policy to allow insurers to continue to offer certain health insurance policies scheduled to be cancelled effective January 1, 2014 because of more stringent coverage requirements under the ACA. In short, under the“transitional” policy outlined in a letter to state insurance commissioners, health insurance issuers may choose to continue coverage that would otherwise be terminated or cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage if the coverage was in effect on October 1, 2013 and the insurer meets certain conditions, including notification to the affected insureds regarding: (1) any changes in the options that are available to them; (2) which of the specified market reforms would not be reflected in any coverage that continues; (3) their potential right to enroll in a qualified health plan offered through a Health Insurance Marketplace and possibly qualify for financial assistance; (4) how to access such coverage through a Marketplace; and (5) their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms. State agencies responsible for enforcing the specific market reforms are “encouraged to adopt the same transitional policy.” The letter notes the risk corridor program should help ameliorate unanticipated changes in premium revenue for health insurers, although the Administration will consider additional regulatory changes to provide additional assistance. The policy applies to health insurance coverage that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, but the Administration has left open the possibility of extending the transition policy. Despite this announcement, House Speaker John Boehner has indicated that the House will proceed with its scheduled vote tomorrow on H.R. 3350, the “Keep Your Health Plan Act.”
Congressional committees continue to focus on the experience of consumers and insurers since the HealthCare.gov insurance portal launched on October 1, along with potential issues related to the security of personal data transmitted through the site. For instance, House hearings this week include an Oversight and Government Reform Committee hearing on “ObamaCare Implementation: The Rollout of HealthCare.gov”; a Homeland Security Committee on “Cyber Side-Effects: How Secure is the Personal Information Entered into the Flawed Healthcare.gov?"; and an Energy and Commerce Committee hearing titled “Obamacare Implementation Problems: More than Just a Broken Website.” Next week, the Energy and Commerce Committee also will examine the security of the HealthCare.gov site.
In other policy areas, on November 14, the House Small Business Committee is holding a hearing on “Self-Insurance and Health Benefits: An Affordable Option for Small Business.” On November 15, the Energy and Commerce Subcommittee on Health will review the FDA’s implementation of the Food and Drug Administration Safety and Innovation Act, and on November 19 the panel will focus on federal regulation of mobile medical apps and other health software.