CMS Releases HHS Notice of Benefit and Payment Parameters for 2019

CMS recently issued the HHS Notice of Benefit and Payment Parameters for 2019, generally for plan years beginning on or after January 1, 2019. The rule is designed to improve affordability for those with high premiums.

The rule includes provisions in the following key areas:

  • Essential Health Benefits (EHB)
  • Qualified Health Plan (QHP) Certification Standards
  • Exemptions
  • Risk Adjustment
  • Advance Premium Tax Credit (APTC) Program Integrity
  • Special Enrollment Periods (SEPs)
  • Medical Loss Ratio
  • Small Business Health Options Program (SHOP)
  • Rate Review

In addition, CMS has extended the transitional policy for one additional year, allowing for the transition to fully ACA-compliant coverage in the individual and small group Health Insurance Marketplaces until 2019.

Click here for more information or contact your Cornerstone representative.

 

ADDITIONAL RESOURCES

States face challenge in curbing premiums after stabilization package fails

CMS issues final 2019 Payment Notice Rule to increase access to affordable health plans for Americans suffering from high Obamacare premiums

QSEHRA Updates

The IRS has issued Notice 2017-67, which contains 59 pages of guidance related to Qualified Small Employer Health Reimbursement Arrangements. The guidance covers the following topics:

  1. Eligible employer
  2. Eligible employee
  3. Same terms requirement
  4. Statutory dollar limits
  5. Written notice requirement
  6. MEC requirement
  7. Proof of MEC requirement
  8. Substantiation requirement
  9. Reimbursement of medical expenses
  10. Reporting requirement
  11. Coordination with PTC
  12. Failure to satisfy the requirements to be a QSEHRA
  13. Interaction with HSA requirements
  14. Effective date

Additionally, the Notice also includes model attestations. Cornerstone will provide updates on what the latest guidance means for brokers as we unpack this new information.

Federal Judge Rejects Democratic Bid to Block Ending CSRs

Recently, President Trump issued an executive order designed to draw people away from the ACA markets. That same day, the administration announced they would no longer make Cost-Sharing Reduction (CSR) payments to insurers.

On October 25, U.S. District Judge Vince Chhabria in San Francisco rejected a bid by Democratic state officials to temporarily block the White House from ending cost-sharing reduction payments to health insurers under the ACA. The goal of the coalition of 19 Democratic attorneys general was to force the federal government to make payments that would help insurance companies lower out-of-pocket costs for low-income policyholders.

 

RESOURCES

Federal Judge Upholds Order to End Cost-Sharing Reduction Subsidies

CSR Funding Removal Talking Points

  1. How will this impact my current 2017 year plan?
    • The loss of CSR funding, as a result of the announcement from President Trump, will NOT impact the current 2017 benefits for any members. The members will still see the same plan designs, benefits, copays, and coinsurance as they have for the prior 10 plus months of 2017.
  2. How will this impact 2018 plans?
    • Many carriers were required to submit two sets of rates to their respective state departments of insurance—one WITH CSRs and one WITHOUT CSRs. The pricing WITHOUT CSRs may now be approved for 2018 coverage. This should not have any impact on plan designs, benefits, copays, and coinsurance for 2018.
  3. Is my plan being terminated by removal of the CSR payments?
    • No, your plan is not being terminated. See answers 1 and 2 for possible effects depending upon the year.
  4. I just received my renewal notice for 2018. Will I receive an additional increase for 2018?
    • Depending on the carrier, the state, and the plans the clients are enrolled in, clients may see another rate increase to adjust for the loss of CSR payments. Some increases could be significant and could exceed double digits. This will be over and above the normal rate increases for another year older, medical trend, carrier exits, and getting to an 85 percent Medical Loss Ratio.
  5. Will the loss of CSR funding affect all of my clients?
    • This depends again on the carrier, the state, and how they have set up the premium adjustments. Some carriers may spread the rate increase across all members on all plans, while other carriers may apply the rate increase to only silver-level plans. More to come on exactly how this will work and how each carrier will handle it.
  6. Is there anything else I need to do at this time?
    • The short answer is no, there is nothing else you need to do. Beginning outreach to your clients, if you haven’t done so already, could be a start. Let them know what to expect and understand exactly what is occurring. This remains a fluid situation and more will come in the following weeks as to the overall rate impact this will have on your clients.
  7. Will my clients lose their subsidies because of this announcement?
    • The CSRs are separate from subsidies qualified individuals receive to lower monthly premium costs.

Click here for an update on the most recent executive order and CSRs.

Update on Executive Order and CSRs

On October 12, 2017, President Trump signed an executive order intended to improve access, increase choices, and lower costs for health care. The order states that it is the policy of the executive branch to facilitate the purchase of insurance across state lines. The order contains three primary directives addressing Association Health Plans, Short-Term Insurance Policies, and Health Reimbursement Arrangements:

  1. Directing the Secretary of Labor to consider proposing regulations or revising guidance to enable more employers to form association health plans (AHP) within 60 days of the date of the order.
  2. Directing the Secretaries of the Treasury, Labor, and Health and Human Services (HHS) to consider proposing regulations or revising guidance to expand the availability of short-term limited duration insurance within 60 days of the date of the order. Specifically, the Secretaries are directed to consider allowing such policies to cover longer periods and to be renewed by the consumer.
  3. Directing the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regulations or revising guidance to increase the usability of Health Reimbursement Arrangements (HRA) and to expand employers’ ability to offer HRAs to employees within 120 days of the date of the order.

The order also directs HHS, in consultation with the secretaries of the Treasury, Labor and FTC, to report to the president on state and federal laws, regulations and policies that limit health competition and choice.

Cornerstone will continue to monitor any proposed changes in response to President Trump’s executive order. While this order may mark the beginning of significant changes to health insurance markets, it remains important for brokers to educate their clients on the current ACA regulations and potential penalties throughout this upcoming open enrollment.

 

Elimination of Payments for Cost-Sharing Reductions

The Cost Sharing Reductions (CSR) were not addressed in the Executive Order issued on October 12, 2017. However, on the same day, the administration announced they would no longer make CSR payments to insurers.

CSRs are a subsidy created by the ACA and paid directly to health insurers. The subsidies provided lower out-of-pocket costs in the form of reduced deductibles, co-pays, and other expenses for silver-level plans purchased through the health care exchange.

The fate of CSRs has been in question for some time due to Congress failing to appropriate funding for the CSRs. During the Obama administration, the House of Representatives successfully sued to end the CSR payments. However, the payments continued while the case was being appealed by the Obama administration. Under the Trump administration, it remained unclear whether or not the appeal and CSR payments would continue. The administration has taken a month-to-month approach in deciding whether or not to pay the CSRs to insurers. Effective beginning with the upcoming October CSR payment, the administration will no longer pay CSRs and takes the position that the CSRs are prohibited, absent an appropriation by Congress.

In response to this announcement, a number of states are reportedly filing suit against the administration in an effort to continue payment of the subsidies.

The CSRs are separate from the subsidies paid directly to qualifying consumers to offset premium costs when purchasing a plan through the exchange. Those subsidies are not affected by this announcement. Additionally, consumers will not see a change in the costs of their plans for the remainder of 2017.

Many insurers have reportedly been preparing for the elimination of the CSR payments by filing an alternative set of rates that reflect significantly higher premiums for 2018 plans.

 

Individual Mandate and Associated Shared Responsibility Payment

The executive order issued last week along with the executive order issued in January does not eliminate the Individual Mandate or its associated penalties. The IRS has repeatedly indicated that the ACA remains the law of the land and that penalties associated with the individual mandate will be assessed. Most recently, in a “Dear Constituent Letter” issued this past June, the IRS indicated:

“The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law, including the requirement to have minimum essential coverage for each month, qualify for a coverage exemption for the month, or make a share responsibility payment.”

The penalty tax is calculated as the greater of either the “percentage of applicable income amount” or the “flat dollar amount.” The greater of these two amounts is then divided by 12 to determine the penalty that is due for each month that the penalty applies.

The penalty amounts for 2018 have not yet been announced.

For 2017 the penalty was calculated according to the following amounts:

Percentage of income

  • 2.5% of household income
  • Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace

Per person

  • $695 per adult
  • $347.50 per child under 18
  • Maximum: $2,085

Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States

Today, President Trump signed an executive order intended to improve access, increase choices, and lower costs for health care. The order begins with a statement that it is the policy of the executive branch to facilitate the purchase of insurance across state lines. The order contains three primary directives addressing Association Health Plans, Short-term Insurance Policies, and Health Reimbursement Arrangements:

  1. Directing the Secretary of Labor to consider proposing regulations or revising guidance to allow more employers to form association health plans (AHPs) within 60 days of the date of the order.
  2. Directing the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regulations or revising guidance to expand the availability of short-term limited duration insurance within 60 days of the date of the order. Specifically, the Secretaries are directed to consider allowing such policies to cover longer periods and to be renewed by the consumer.
  3. Directing the Secretaries of the Treasury, Labor, and Health and Human Services to consider proposing regulations or revising guidance to increase the usability of Health Reimbursement Arrangements (HRAs) and to expand employers’ ability to offer HRAs to employees within 120 days of the date of the order.

The order also directs HHS, in consultation with the secretaries of the Treasury, Labor, and FTC, to report to the president on state and federal laws, regulations and policies that limit health competition and choice.

Cornerstone will continue to monitor any proposed changes in response to the President’s executive order. While this order may mark the beginning of significant changes to health insurance markets, it remains important for brokers to educate their clients on the current ACA regulations and potential penalties throughout this upcoming open enrollment.

Premier Health Plan Exits the Off-Exchange Marketplace

Due to uncertainty surrounding U.S. health care policy, Premier Health Plan will join numerous other carriers in retracting their Premier HealthOne Off-Exchange plans on December 31, 2017.

Affected members will receive notices prior to the open enrollment period for 2018, and will have the option to choose alternative coverage for 2018, including one option from Premier Health Plan: the Premier HealthOne Off-Exchange Bronze 5000 plan, which is only offered from January 1, 2018, through March 31, 2018. After that date, Premier Health Plan will no longer offer coverage on the individual market in Ohio.

Questions? Contact your Cornerstone representative for answers.

RESOURCES

Premier Health Plans Exit the Off-Exchange Marketplace

HHS Tom Price Resigns

Health and Human Services Secretary Tom Price resigned Friday due to investigations into his misuse of private and military transportation at the taxpayers’ expense of nearly $1 million.

President Trump intends to designate Don Wright as acting secretary.

 

RESOURCES

Price Resigns From Trump Cabinet Amid Private Jet Investigations

House Bill 463 for Autism Spectrum Disorder Has Been Passed

House Bill 463 for Autism Spectrum Disorder, intended to include plans that were not included in the Governor’s 2012 Executive Order, has been passed.

The bill will be effective for all new and renewal individual policies and group contracts on or after January 1, 2018, and will impact:

  • Grandmothered and Grandfathered Small Group
  • Grandfathered and non-Grandfathered Large Group (this includes fully insured National
  • business and private exchange)
  • Grandmothered and Grandfathered Individual
  • Self-funded MEWA plan

For more information, click here to read the write up from Anthem.

What is Going on With the 48-Hour Scope of Appointment Rule?

By now, you’ve almost certainly heard about changes to the Medicare Marketing Guidelines and the 48-hour Scope of Appointment (SOA) rule. So what does it mean for agents, and why hasn’t Cornerstone shared this news sooner?

Let’s start at the beginning:

On July 20, 2017, the Centers for Medicaid and Medicare Services (CMS) published their updated Medicare Marketing Guidelines.

That’s when we first spotted there was a BIG change for the 2018 SOA section:

While this was great news, it didn’t mean much without the carriers (plan sponsors) updating their agent guidance. Typically, carriers update their policies to align closely with any changes in the MMG. However, with the late release of such a significant change, many carriers were not prepared to provide official guidance on the updated marketing guidelines. Some carriers and trade associations believed the change to MMG was a mistake and would soon be reversed. Other carriers informally indicated that they would no longer require SOAs to be obtained 48 hours in advance.

We’ve finally started to get some official clarification from our carrier partners, and it is good news for brokers. See the chart below for updates on which carriers will no longer require the SOA to be obtained 48 hours in advance beginning on October 1, 2017:

Carriers no longer requiring the SOA to be obtained 48 hours in advance beginning October 1, 2017
Humana
UnitedHealthcare
Aetna

Caution: We expect most carriers will update their policies to reflect the new MMG guidance. However, if you are writing business for a carrier that has not updated their policies to remove the 48-hour requirement, you should continue to obtain an SOA according to that carrier’s policies or risk possible sales conduct violations. We’ll continue to update the chart as we receive additional information.

Contact your broker advisor or local market director for more information.