Editor’s note: Last month, Health Affairs launched “Eye on Health Reform, a series of articles by Tim Jost on the health reform discussion and the debate over repealing, replacing, and repairing the Affordable Care Act. These articles appear first online and then in the printed journal; the second in the series was published online on Monday. Health Affairs subscribers who love reading Tim on Health Affairs Blog will enjoy this new series; if you are not already a Health Affairs subscriber and want access to Eye on Health Reform and other great Health Affairs content, subscribe now.
On March 15, 2017, the Centers for Medicare and Medicaid released its Final Enrollment Report for the 2017 Open Enrollment Period, November 1, 2016 to January 31, 2017. It also released public use files with more granular state-level plan selection and demographic information.
In total, 12.2 million consumers selected or were automatically enrolled in marketplace qualified health plans for the 2017 open enrollment period in the 39 states that use HealthCare.gov and the 12 state-based marketplaces (SBMs). This is down from 12.7 million for the 2016 open enrollment period. Plan selections were running ahead of 2016 through mid-January 2017 but flatlined in the last week of January, following President Trump’s inauguration. An additional 764,972 signed up for coverage in New York and Minnesota under the ACA’s Basic Health Care Program.
New consumers made up 31 percent of the total at 3.8 million. This compares to 4.9 million, or 39 percent for 2016. A total of 8.4 million consumers reenrolled, of which 5.3 million actively reenrolled and 2.8 million were auto-enrolled. This compares to 7.8 million re-enrollees for 2016, of which 4.6 million were actively reenrolled and 2.8 million auto-enrolled. It is not surprising that as the marketplace ages, a higher proportion of enrollees would be continuing their coverage. The higher percentage of active re-enrollees likely reflects greater consumer engagement, but also may reflect more plans leaving the marketplaces for 2017.
By age, 36 percent of plan selections were younger than 35, 37 percent were 35 to 54, and 28 percent were 55 or above. Enrollments were up from 2016 by a percentage point each for the enrollees under 18 and above 55, and down a percentage point each for those 18 to 34 and 35 to 54. By plan type, 74 percent of enrollees selected silver plans, up from 71 percent in 2016; the level of bronze plan selection remained the same, but gold plan selections dropped from 6 percent to 3 percent.
By sex, 46 percent of HealthCare.gov consumers were male, 54 percent female, the same as 2016. By race, 0.66 million HealthCare.gov consumers were African-American, down from 0.71 million in 2015, while the number of Hispanic consumers was up from 0.92 million to 0.96 million.
More than eight in ten, or 83 percent, of plan selections had premium tax credits (the same as 2016) and 58 percent had cost-sharing reductions. The percentage receiving premium tax credits varied significantly by state, however, with 91 percent of Nebraska enrollees receiving APTC but only 59 percent of New York consumers. APTC amounts for HealthCare.gov enrollees who received them averaged $383 per person, up from an average of $290 in 2016. Average bronze plan monthly premiums for HealthCare.gov premium tax credit recipients increased from $88 to $100 while silver plan monthly premiums increased from $100 to $101.
IRS Waives Employer Penalties For Failure To Provide Notice About New Tax-Favored Health Savings Vehicle Pending Guidance From Agencies
The 21st Century Cures Act, adopted in December of 2016, created a new health care financing mechanism, the qualified small employer health reimbursement arrangement (QSEHRA). Employers with fewer than 50 employees can pay money into these accounts tax free and employees who are covered by insurance can use the funds in the accounts to pay for medical expenses, including individual market health insurance premiums.
Small employers intending to make QSEHRAs available must, under the statute, give written notice to eligible employees of the amount of benefits under the arrangement and of the employee’s obligation to inform any health insurance exchange to which the employee might apply for premium tax credits (for which the employee may be partially eligible) of the employee’s receipt of QSEHRA benefits. The notice must also inform the employee of the employee’s obligation to pay the shared responsibility penalty for months in which the employee is not insured and of the fact that any QSEHRA reimbursements during such a month would be taxable. Employers who fail to provide the notice are subject to a penalty.
Employers intending to establish a QSEHRA must send this notice 90 days before the beginning of a year in which the QSEHRA will be offered. Since the Act was passed at the end of 2016, employers were given until 90 days from enactment (until March 13, 2017) to send out the notice. But the agencies have not yet put out guidance implementing the Act. The IRS has issued a notice, therefore, stating that no penalties will be imposed for failing to provide the required notice until further guidance is issued by the agencies, and that employers will have at least 90 days from the issuance of that guidance to provide notice. In the interim, employers can provide their employees notices that reflect a reasonable, good faith interpretation of the statute.
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