On September 28, 2015, the House of Representatives approved by voice vote without opposition two bills that would amend the Affordable Care Act (ACA). Given the rancor that surrounds anything related to the ACA in our sharply partisan—and largely nonfunctional—Congress, this is a remarkable occurrence worthy of note.
The first bill, HR 1624, the Protecting Affordable Coverage for Employees Act (PACE), would amend the provision of the ACA that would otherwise have provided that as of January 1, 2016, all employers with 100 or fewer employees would be regarded as small employers. Under current law in most states, employers with one to 50 employees are considered small employers while employers with 51 to 100 employees are considered large employers. The PACE Act would leave the one to 50 definition in place, although states would have the option of expanding the definition of small employer to cover employers with up to 100 employees. The bill had bipartisan support with 235 cosponsors.
This change is important. Small employers are treated very differently under the ACA than large insurers for purposes of insurance regulation. Insurers covering small employers must, for example, cover the ten essential health benefits and can only offer plans that fit into the actuarial value levels (platinum, gold, silver, and bronze) defined by the ACA. Small group plans participate in the risk adjustment program and are part of a single risk pool for setting premiums. Insurers may only consider age, geographic location, family composition, and tobacco use in setting rates for small groups. Large group plans are not bound by any of these requirements.
Most states have long defined a small group as consisting of 50 or fewer employees, which is how the term was defined by the Health Insurance Portability and Accountability Act which preceded the ACA. The drafters of the ACA had hoped that extending the definition to encompass groups as large as 100 would both reduce premiums for the under 50 groups by enlarging the risk pool to cover mid-size (51 to 100 employee) groups and extend the small group protections of the ACA to a larger population.
As 2016 neared, however, it has become increasingly clear that the change might do more harm than good. The apolitical American Academy of Actuaries, for example, predicted that increasing the size of small groups would likely raise premiums for the mid-size groups and might also raise premiums for small groups. It also raised the concern that healthy mid-size groups might self-insure, leaving primarily unhealthy groups in the small group insured market.
Many insurers write only in the large group market, therefore changing the definition of small group would likely result in many groups seeing their coverage cancelled. The definition change would also leave mid-size employers subject both to the employer mandate (which does not apply to employers with fewer than 50 employees) and the small group insurance requirements (which do not apply to employers with over 100 employees), a result that could appear unfair. The National Association of Insurance Commissioners, joined many business groups in opposing the transition and supporting the PACE legislation.
The CBO estimated that the PACE Act would reduce the deficit by $400 million over ten years because it would reduce premiums in the mid-size employer market, thus increasing taxable income of employees. It is thus one of the few potential amendments to the ACA that does not increase the deficit and require a "pay-for." Other ACA amendments with bipartisan support have run into trouble when the question of how to pay for them was raised.
In March of 2014, the administration issued guidance allowing state regulators to permit employers in the 51 to 100 market to renew existing large group coverage for policy years beginning on or before October 1, 2016. Most states followed suit. But mid-size employers who did not have coverage as of January 1, 2016 and who purchased it thereafter (as they would have to do to avoid the employer mandate tax if one of their employees received marketplace coverage), would have to purchase coverage in the small group market. The PACE Act, if adopted by the Senate and signed by the President, would effectively make the transition policy permanent and extend its protection to mid-size employers purchasing coverage in the future.
There will be some tangles to work out if the PACE Act becomes law. A number of states have adopted the federal requirement into their own law and may make the transition as a matter of state law (as the PACE Act allows them to do). Insurers have presumably filed their 2016 rates assuming the current requirement would go into effect and likely cannot refile in most states this late in the year. But mid-size groups will presumably be able to find coverage in the large group market and the disruption in most states will probably be less than if the current law stayed in effect without the PACE Act amendment.
The Equitable Access To Care And Health Act Passes The House
HR 2061, the "Equitable Access to Care and Health Act" or the "EACH Act" also passed the House by a voice vote on September 28. It had bipartisan support from 176 sponsors. The EACH Act extends the ACA's religious conscience exemption from the individual mandate to purchase health insurance to cover an individual who is a member "of a religious sect or division thereof . . ., who relies solely on a religious method of healing, and for whom the acceptance of medical health services would be inconsistent with the religious beliefs of the individual." This language is commonly used to describe Christian Scientists, although it could conceivably cover other faith-healing denominations as well.
The ACA currently contains a religious conscience exemption, but it extends only to groups that reject all insurance, including Medicare and Social Security, like the Amish and some conservative Mennonite groups. Social legislation has traditionally, however, also made special provision for Christian Scientists and the failure of the ACA to do so can be regarded as an oversight. To obtain the exemption, applicants must attest that they have not received medical services during the prior year. Certain services, such as dental or vision services or vaccinations are not included. The bill also clarifies that it does not preempt state laws governing provision of medical services to children.
Parallel legislation to both the PACE and EACH act is pending in the Senate. The EACH Act in the Senate (S 352) has 30 bipartisan sponsors while the PACE Act (S 1099) has 45. If these bills can move in the Senate—without toxic amendments—we may finally see a path forward to improve rather than repeal the ACA, the direction favored by a majority of Americans.
Of course, if one is looking for evidence that political division over the ACA still reigns in Congress, one need look no further than the budget reconciliation act legislation shaping up in the House. More on that in a future post.
CMS Mails Notices To Consumers Enrolled In MEC And Marketplace Plans
On September 28, 2015, CMS announced that it is beginning to mail notices to consumers whom it has identified as being enrolled in both minimum essential coverage (MEC) Medicaid or the Children's Health Insurance Plan (CHIP) coverage and coverage through a marketplace plan with advance premium tax credit (APTC) or cost-sharing reduction payment (CSR) assistance. Consumers enrolled in both programs will be required to refund some or all APTC payments they receive for marketplace coverage while they are enrolled in MEC Medicaid or CHIP, and thus must promptly terminate marketplace coverage upon being enrolled in MEC Medicaid or CHIP.
Individuals are not eligible for APTC or CSR assistance if they are enrolled in MEC Medicaid or CHIP coverage. (Consumers can be enrolled in marketplace coverage while receiving some limited forms of Medicaid, such as family-planning only coverage.)
Nevertheless, some individuals are in fact enrolled in both marketplace and MEC Medicaid or CHIP coverage, usually because they applied for Medicaid or CHIP while already receiving marketplace coverage (for example, because their income dropped), and failed to terminate their marketplace coverage when they were determined eligible for Medicaid or CHIP. CMS has now begun conducting Periodic Data Matching (PDM) using the synchronous non-Employer Sponsored Coverage (ESC) MEC database to identify consumers identified in both forms of coverage. CMS also reviews data received from state Medicaid or CHIP agencies concerning dually enrolled individuals.
CMS will mail a notice to consumers whom it identifies as enrolled in both programs notifying them of potential tax liability and offering instructions as to how they can terminate their marketplace coverage either online or through the call center. Consumers who receive the notice but are in fact no longer enrolled in Medicaid or CHIP need take no action, but can contact their state Medicaid or CHIP agency to confirm that they are in fact no longer enrolled.
Consumers who receive the notice and who do not believe that they are enrolled in Medicaid or CHIP should contact their state agency to ensure that they are not in fact enrolled. Consumers who discover they are enrolled in Medicaid or CHIP but who are in fact no longer eligible for Medicaid or CHIP but are rather eligible for marketplace coverage should contact their state Medicaid or CHIP agencies for a redetermination of eligibility.
Consumers who wish to be enrolled in both marketplace and Medicaid coverage may do so, but will have to pay the full premium for marketplace coverage without APTC or CSR assistance. If an enrollee has both marketplace and Medicaid or CHIP coverage, Medicaid remains the payer of last resort under Medicaid coordination of benefits/third party liability rules.
The PDM process is limited to the federally facilitated marketplace (FFM), although state-based marketplaces are also supposed to have data matching programs. Ten FFM states were able fully to participate in the first round of the PDM, although they will be included in future rounds. Although this is the first time CMS is conducting data matching on this issue, it has consistently advised marketplace enrollees that they cannot be enrolled in Medicaid or CHIP and receive APTC or CSR assistance.
Information For Large Employers
Finally, the IRS posted at IRS.gov on September 17, 2015, an information center for applicable large employers. This center provides a single site with links to other IRS pages with information on large employer reporting requirements, the large employer responsibility requirement, and transitional relief from the employer responsibility requirement. The IRS has also released Publication 5165, a Guide for Electronically Filing Affordable Care Act (ACA) Information Returns, describing communication procedures, transmission formats, business rules, and validation procedures for the electronic filing of the ACA required reporting forms (IRS forms 1094-B, 1095-B, 1094-C, and 1095-C), which are first required to be filed by employers and insurers in 2016 for 2015.
from Health Affairs Blog http://ift.tt/1iZxdtv
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