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Now That ACA Remains in Place Maybe We Should Keep An Eye On This Recent HHS Letter to Governors.

“……We are seeking to empower states with new opportunities that will strengthen their health insurance markets.”

Thomas E. Price, M.D., The Secretary of Health and Human Services (HHS), A Letter To Governors, dated March 13, 2017

 

On March 13, 2017, the Department of Health and Human Services (HHS) sent a letter to state governors to highlight Section 1332 of the Affordable Care Act (ACA). Beginning in 2017, Section 1332 allows states to apply for a State Innovation Waiver from certain ACA requirements.

With the lawmakers firmly stuck in the healthcare mud, one wonders if some states might start to make health insurance changes on their own. Under a little known provision of the Affordable Care Act (Section 1332) called the State Innovation Waiver, states have the ability to make changes by applying for waivers from certain major provisions of the law beginning this year (2017).  These waivers are intended to allow states the flexibility to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance, while retaining some of the consumer protections of the ACA.

Examples of things that may be waived include:

  • Establishment of qualified health plans (QHPs);
  • Consumer choices and insurance competition through the Exchanges;
  • Premium tax credits and cost-sharing reductions for plans offered within the Exchanges;
  • The employer shared responsibility rules; and
  • The individual mandate.

While this provision and Price’s recent letter on the subject seemingly flew under the radar, you have to wonder if we might start to see some states initiating their own changes to Obamacare. If this is going to happen, we’ll likely start hearing about it in the next few months.  Sometime this summer is when carriers submit rate increases or announce intentions to withdraw from the individual market all together.  Analysts are predicting both to happen.  It’s anticipated carriers will request huge rate increases — sticker shock on steroids — for individual plans on and off exchange.  And, more carriers are expected to be leaving the individual market.  Aetna and UnitedHealthcare are already out, and Bloomberg recently reported that Anthem (BlueCross and Blue Shield in 14 states) is leaning toward exiting in most if not all of its markets.

I doubt anyone really knows where all this is going, or where it will end up. Maybe some states will act, maybe not.

One thing that’s almost certain: Access to employer sponsored health plans will be more important than any time since Obamacare (ACA) became law.

Here’s a link to more info:  HHS Promotes ACA Section 1332 Waivers

ARE YOU WONDERING ABOUT THE “CONTROLLED GROUP” QUESTION? HERE’S WHAT YOU NEED TO KNOW

The “Controlled Group” question is popping up for many employers with much greater frequency as part of various and sundry regulatory applications, audits, surveys, reporting requirements and underwriting questionnaires.

Netting it out in layman’s terms — at least as it relates to health insurance and ACA compliance — a controlled group may exist when multiple companies fall under common ownership.

The ACA includes a provision under which companies that have a common owner (or are otherwise generally related) are combined and treated as a single employer for purposes of determining if the companies collectively employ at least 50 FTEs (the combo of full-time EEs and full-time equivalent EEs).

EMPLOYER REIMBURSEMENT OF INDIVIDUAL HEALTHPLAN PREMIUMS REMAINS A BANNED PRACTICE UNDER ACA

While this was more of a hot topic when the full monty of healthcare reform was implemented back in 2014, some employers perhaps unaware of the turmoil in the individual marketplace still ask about reimbursing employees for individual health insurance policies.

The IRS, the Department of Labor and Health and Human Services have all released several directives and guidelines that pretty clearly prohibit the practice. The most recent was issued in December 2015 (n-15-17).

Definition of Predicament: People Who Don’t Have Access to Employer Coverage, Aren’t Medicare Eligible, and Don’t Qualify for Subsidies

Yes, this is a bit anecdotal. Nevertheless, I think it’s  worth reporting and some may find it interesting.

First, recently our team managed the annual open enrollment process for the group health plan of one of our employer clients. After a quick but thoughtful evaluation of options, one employee who was previously covered by an individual market policy opted to enroll on the employer’s group plan (family coverage) and terminate coverage under the individual market plan. Both the individual plan and the group plan were Qualified Health Plans (QHP) under ACA. The plans had similar benefits. And, they were underwritten by the same large insurance carrier.

Savings?

$600 a month in gross premium. That’s quite a spread.  Add in the employer contribution and the savings to the employee were even greater.

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