ACA Modifications for 2018 and 2019

Earlier this week (4/9/2018) the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) issued final regulations and guidance that profoundly alter the Affordable Care Act (ACA) both immediately, and in 2019 and beyond.  The objective of the new guidance is “…to increase coverage access in the ACA by offering plans that have lower premiums”.  America’s Health Insurance Plans (AHIP), a national advocacy and trade association, said that it “…supports the policies that encourage state flexiiblity, support innovation and promote affordability”.

Most of these changes affect the Individual and Small Group (under 50 employees) market segments; but there is some impact to the large group market as well.  To access the HHS Notice of Benefit and Payment Parameters for 2019 Fact Sheet, click here –
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-09.html

Following is a summary* of the more relevant aspects of the guidance and regulations impacting virtually everyone that has, or is considering purchasing health insurance:

• Relief from the Individual Mandate – Although the individual mandate and associated penalty has been eliminated starting in 2019, the guidance has broadened the so called “hardship exemptions” which allow affected individuals to avoid the individual mandate penalty THIS YEAR, in states that deferred to federally facilitated exchanges (39 states, including Nebraska).   Importantly, the guidance allows the exemption to be retroactive two (2) years, so even affected consumers facing a penalty from 2017 could conceivably avoid the fine.  The guidance stipulates the following broadened use of the hardship exemption:
  • if one lives in a county, borough, or parish in which one or no ACA qualified plan is offered, and the consumer can show that the lack of choice resulted in their failure to purchase qualified coverage; or
  • if one is opposed to abortion, and lives in a location where the only available plan covers abortion services.

NOTE: Federal officials and private researchers have indicated that about half of the U.S counties have one ACA insurer in 2018.

• Beginning in 2019:
  • States will have the authority to cut back on the ACA’s “10 essential health benefits (EHB)”. While states will not be able to summarily eliminate any of the listed benefits; they can allow insurers to include limits on the number of physician office visits and cover fewer prescription drugs, for example. However, plans that cover EHB’s must do so with no annual or lifetime dollar maximum.
  • States will have more options and flexibility in establishing their EHB-benchmark plans.
  • Insurers will no longer be required  to sell the metallic, standardized set of benefit plans (i.e., bronze, silver, gold, platinum).
  • The responsibility for evaluating the adequateness of (PPO) network contracted healthcare providers will shift from the federal government to the states, in states that use healthcare.gov.
  • Insurers will have more latitude in meeting the ACA’s “minimum loss ratio” provision, which requires fully insured plans to rebate premium income amounts that exceed 80% (85% for groups with 100+ employees) of incurred claims.
  • There will be new “income checks” to prevent people form claiming government subsides that wouldn’t otherwise be eligible for such assistance.
  • Federally facilitated exchanges will be required to discontinue tax credits for enrollees who fail to file taxes and reconcile past tax subsidies.
  • Out of pocket maximum limits increase to $7,900 and $15,800 for individual and family coverage respectively.