Tag Archives: Affordable Care Act

Trump Administration Freezes Billions of Dollars in Payments to Affordable Care Act Risk Adjustment Program

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Over the weekend, the Centers for Medicare & Medicaid Services (CMS) issued a statement saying it was halting billions of dollars of payments to insurers under the Affordable Care Act’s risk adjustment program due to conflicting federal court decisions on the program. This move will likely disrupt the insurance market in the Exchanges and could lead to more premium increases next year.

The purpose of the risk adjustment program, a permanent program, is to reduce the incentive for health insurers to select and cover only healthy individuals in the Exchanges. It shifts money from plans with healthier members to those with larger numbers of sicker members to help mitigate high costs of coverage for less healthy individuals.

America’s Health Insurance Plans (AHIP), the association for insurance carriers, expressed concern and stated, “the decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own. It will create more market uncertainty and increase premiums for many health plans—putting a heavier burden on small businesses and consumers, and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies.”

The CMS has asked for additional guidance from the district judge overseeing the case relating to this program, prior to unfreezing the funds.

Administration Eases Restrictions on Association Health Plans

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Due to a move by the Trump Administration, the Department of Labor released the final version of its Association Health Plan rule, which allows industries and small businesses to band together via bona fide associations to buy insurance as part of a plan to encourage competition in health insurance markets and lower the cost of coverage. AHPs will be an important part of employer options for coverage beginning in 2019.

The Association Health Plan (AHP) rule broadens the definition of an employer under ERISA, the Employee Retirement Income Security Act, to allow more groups to form association health plans across state lines, similar to large employers. Key provisions in the final AHP rule include:

  • Expansion of definition of those that can form an Association Health Plan (AHP) – An association that represents a single trade, specific industry or profession can now establish an AHP that provides coverage to their members across the entire country, like a large employer plan. General business organizations and workers, or business owners in unrelated professions can band together to obtain coverage through an association health plan, but they must be in the same geographic region. While this allows for a breadth of types of AHPs – national, statewide or local – by restricting criteria of commonality to establish AHPs across state lines, many existing national associations will be unable to set up AHPs and provide access to affordable insurance options to their members.
  • Association Health Plans (AHPs) can bypass certain requirements of the Affordable Care Act (ACA) – AHPs do not have to meet ACA essential health benefits requirements, thus they do not have to cover all the benefits that are currently required in the health insurance plans presently sold in the state exchanges. While this will allow AHPs more flexibility in customizing plan options, and likely result in lower premium costs, it is important for business owners and workers to note that these plans will likely offer less comprehensive coverage.
  • Association health plans cannot restrict membership based on health status or charge sicker individuals higher premiums – An AHP will operate like a large employer plan and includes nondiscrimination rules ensuring the association cannot deny coverage to anyone that meets their membership requirements and wants to purchase coverage. AHPs can adjust premium costs of members based on age, which is similar to age rating rules in current ACA health exchanges.

WIPP has supported the implementation of AHPs as an effective mechanism for small businesses to pool together to obtain affordable health insurance. WIPP submitted comments to the Department of Labor on the proposed Association Health Plan rule, highlighting that WIPP believes that a successful healthcare market should encompass three core principles: an effective pooling mechanism, a wide array of health plan options, and a protection in place for those with pre-existing conditions.

In addition, WIPP recommended including an additional criterion for commonality of interest to allow employers to band together for the purpose of establishing an AHP through a membership organization or association that is comprised of members regardless of whether they are in the same trade, industry, line of business or profession, and regardless of whether they are located in the same area. Unfortunately, as highlighted above, the Department of Labor did not agree with this more expansive view, leaving national business organizations like WIPP unable to set up an AHP across state lines.

The Department of Labor shared a fact sheet on the new rule that noted important dates for associations or business owners interested in AHPs:

  • 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.

Although the Affordable Care Act envisioned state exchanges rather than AHPs, WIPP believes there is room for both. Though the Obamacare Exchanges initially gave small businesses more coverage options, many plans have dropped coverage, leaving the small business market with fewer coverage options and premium costs have risen year over year. The expansion of AHPs would provide more cost-effective coverage options for small businesses and the self-employed.

Keep It Simple, Silly

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By John Stanford, WIPP Government Relations

 

hc - wippIt’s a favorite phrase of my boss – and WIPP’s Chief Advocate – Ann Sullivan. The idea is nothing new: a simple solution is usually the best. That is why, for years, women business owners used the simplest possible idea for providing health benefits – you (employee) go out and get your own insurance and I (employer) will reimburse you. Simple, right?

They are called Healthcare Reimbursement Arrangements, or HRAs, and bringing them back (for the second time) is one of WIPP’s top healthcare priorities. We are making great progress. The House Ways and Means Committee approved legislation that would allow HRAs to be used for firms with fewer than 50 employees. The House as a whole is expected to vote on the bill next week.

The bill would allow employers to reimburse employees for qualified medical expenses like premiums and out-of-pocket costs. Importantly, employers must offer it to all eligible employees and cannot offer a separate group plan. The reimbursement is capped at around $5,000 for an individual and $10,000 for families and does not count as employee income (meaning no taxes!).

Again, the idea is simple. Employers select an amount to reimburse employees, instead of locking in an insurance plan that may not fit their employees or their budget. But why did we lose HRAs in the first place? That is not so simple.

The Affordable Care Act eliminated caps on health insurance plans—an undoubtedly good thing for when disaster or disease strikes. But, in the opinion of the IRS, these HRAs, by definition, had a cap (however much the employer contributed). So they were outlawed in 2013 or 2014.

2013 or 2014 is a strange way to describe when the IRS banned a certain healthcare plan. But that is what it was – the IRS notices on the issue were so confusing they had to issue additional regulations three times. Policy wonks, insurers, and healthcare consultants were unsure – let alone business owners – about whether they were allowed. And making a mistake on this carries severe penalties; offering a non-conforming plan can trigger a penalty of $100 per day per employee –more than $350,000 a year for a company with 10 employees.

Because of this confusion, WIPP stepped in asking Secretary Burwell to intervene on behalf of women business owners. She did and HRAs were allowed through June 2015. Legislation is needed to bring them back permanently and WIPP is optimistic Democrats and Republicans can work together, as they already have, to get this done. After all, ten million women business owners and their nearly nine million employees are pretty active voters.

It’s pretty simple.

More on how WIPP is working with Congress and the Administration to bring competitively-priced and accessible health options to women business owners is in our blog, Making the Affordable Care Act Work.

 

 

 

 

 

Open Enrollment for 2016 Health Insurance Marketplace Begins

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It’s time to get covered!  HCgov stock imageryMillions of Americans count on HealthCare.gov for quality and affordable health coverage. If you or someone you care about needs health insurance, you should know that Open Enrollment for 2016 coverage runs from November 1, 2015 through January 31, 2016.

Learn about options available in your area by visiting HealthCare.gov or call 1-800-318-2596.

Key Dates and Deadlines

  • November 1, 2015: Open Enrollment for 2016 Marketplace coverage begins.
  • December 15, 2015: Deadline to enroll for coverage starting January 1, 2016.
  • January 15, 2016: Deadline to enroll for coverage starting February 1, 2016.
  • January 31, 2016: Last day of Open Enrollment for 2016 Marketplace coverage.

Helpful Resources for Business Owners & the Self-Employed

New IRS Resource helps Employers Understand the Health Care Law

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Healthcare taxThe new ACA Information Center for Applicable Large Employers page on IRS.gov features information and resources for employers of all sizes on how the health care law may affect them if they fit the definition of an applicable large employer (ALE).

Although the vast majority of employers will not be affected, you should determine if you are an applicable large employer.  If you averaged at least 50 full-time employees, including full-time equivalent employees, during 2014, you are most likely an ALE for 2015.  If you have fewer than 50 full-time employees, you may be considered an applicable large employer if you share a common ownership with other employers. As an applicable large employer, you should be taking steps now to prepare for the coming filing season.

The web page includes the following sections:

  • What’s Trending for ALEs,
  • How to Determine if You are an ALE,
  • Resources for Applicable Large Employers, and
  • Outreach Materials.

Visitors to the new page will find links to:

  • Detailed information about tax provisions including information reporting requirements for employers,
  • Questions and answers, and
  • Forms, instructions, publications, health care tax tips, flyers and videos.

In 2016, applicable large employers must file an annual information return – and provide a statement to each full-time employee – reporting whether they offered health insurance, and if so, what insurance they offered their employees. 

If you will file 250 or more information returns for 2015, you must file the returns electronically through the ACA Information Reports system.  You should review draft Publication 5165, Guide for Electronically Filing Affordable Care Act (ACA) Information Returns, now for information on the communication procedures, transmission formats, business rules and validation procedures for returns that you must transmit in 2016.

Visit the IRS’s new ACA Information Center for Applicable Large Employers resource page for more helpful information.

Making the Affordable Care Act Work

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ACAIn Washington, there are a few axioms on which almost everyone (Rs and Ds alike) can agree. Don’t hold events in August. If the meeting is important, take a cab, not the metro. Social media can be dangerous. And of course, no law is perfect.

The biggest law of the last decade, the Patient Protection and Affordable Care Act (a.k.a. “ACA” or “Obamacare” or “President’s Health Law”, and so on) is certainly a good example of the latter. The bill’s authors, President Obama, and more than just a few Congressional Republicans can agree on that. But that is no different than any other major policy change – they all undergo a period of fixes, tweaks, and changes usually addressing unintended consequences. Blame it on the nature of compromise, the mistakes of over-worked underpaid Hill staffers, or, I kid you not, typos.

If you read recent communications (or belong to the healthcare committee!) you will see that WIPP is supporting some of these changes to benefit women entrepreneurs. In our view, Obamacare is the law of the land* – but that doesn’t mean we cannot change it. Here are the tweaks we have supported recently:

Full Time is 40 Hours – Not 30

The Issue: Obamacare defined a full-time worker as working thirty hours a week. The definition matters for defining whether a business is exempt from the employer mandate (under 50 FTEs is exempt – yes, you have to add in part time employees, but good news: calculator). Just a refresher: if you have more than 50 FTEs and don’t offer health insurance, you may face penalties.

The Fix: The Save America’s Workers Act (creative license is allowed in bill names) changes 30 hours to 40 hours for the week calculation. WIPP supports the bill.

WIPP’s Position: A workweek is a workweek. Dolly Parton sang 9 to 5, not 10 to 4. The law used a thirty-hour definition in an effort to make the math (i.e. $$$) work. In addition, it was a tool to increase the number of low-hour workers that might receive employer-sponsored coverage. While increasing coverage is laudable, it should not have come at the expense of an arbitrary definition at odds with working America. The Obama Administration signaled opposition to the bill because it could undo some of the coverage gained in the past years. Whether or not this is true (wonks on both sides agree, the change would have little impact either way), the principle of the matter is simple: traditional definitions should not be upended on a whim. An American workweek is forty hours. Part-time workers, who also need coverage, should be addressed, but separately.

Bring Back HRAs

The Issue: Some very technical guidance from the IRS last fall removed a simple way for employers to help employees pay for health insurance premiums. Basically, a Health Reimbursement Arrangement, or HRA, let the employee find their own insurance and employers could reimburse employees at their discretion.

The Fix: Two options. One, the IRS could admit this was a bone-headed move and put out new guidance. Unlikely. Two, a few bills in the past Congress would allow HRAs to be allowed for businesses with fewer than 50 employees. WIPP is working with those offices in the new Congress. More to come.

WIPP’s Position: If it ain’t broke, don’t fix it. It worked in the past, now it’s broken. Someone should fix this (so to sum up: it wasn’t broken, the ACA broke it, now it needs a fix). HRAs can be a good part of a solution that gets more people covered. Often business owners look for the path of least resistance – for some businesses, HRAs can be that path. While WIPP reviews every comma of legislation before endorsing, WIPP would likely back legislation that made this change.

Expand Eligibility for the Small Business Tax Credit

The Issue: One of the small business carrots in Obamacare was the Small Business Health Care Tax Credit. But this carrot came with a lot of strings attached (mixed metaphors?). Currently, the tax credit is only available to businesses with fewer than 25 employees and average wages of less than $50,000. Moreover, to receive the full tax credit, which covers up to 50% of employer-paid premiums, businesses must have 10 or fewer employees and average wages of up to $25,000.

The Fix: Expand eligibility for the tax credit. Under the Small Business Tax Credit Accessibility Act, these restrictions would be relaxed to make businesses with up to 50 employees and average wages of up to $80,025 eligible for the tax credit. Additionally, it would extend the number of consecutive years a small business can claim the tax credit from two (current law) to three years. It also removes the requirement that employers claiming the credit contribute the same percentage of the cost for each employee’s health insurance.

WIPP’s Position: WIPP supports the bill. All these efforts stem from the idea that small businesses need help to provide coverage. Accessing that help should be easy, and not limited to a few businesses. We’ve heard from business owners nationwide saying that they simply don’t qualify under these strict requirements.

In a law that in size 8 font is nearly 1,000 pages, with thousands more in regulations**, there are more than three needed fixes. These are a few where WIPP members’ experiences drove us to advocate for these changes. Please let us know if any law is adversely affecting your business. It’s what we are here for.

*The Supreme Court is currently reviewing substantial portions of the law. Depending on their decision, this could all be a moot point.

**WIPP recently visited with Majority Leader Mitch McConnell’s office, which keeps a stack of the regulations, in case you wanted a visual.

John Stanford is part of WIPP’s Government Relations team in Washington, D.C., specializing in federal procurement and healthcare policy. When not bothering lawmakers about needed changes, he can be found in the woods at local golf courses.