FINAL RULE RELEASED ON HRA'S

On June 13, 2019, the Departments of Labor, Health & Human Services and Treasury released final rules concerning Health Reimbursement Arrangements (HRAs).  The 497-page rule includes the creation of two new types of HRAs, the "Individual Coverage HRA” and the "Excepted Benefit HRA."

Advantages of the Individual Coverage HRA include, but are not limited to:

• Funds can be used to reimburse the employee's premiums for an individual health insurance policy.
• Reimbursements made to employees do not count towards the employee's taxable wages.
• The employer can choose to roll-over unused amounts into the following year.
• Coverage can be offered to different classes of employees (e.g.; full-time, part-time, seasonal, salaried, hourly)
• An offer of the Individual Coverage HRA represents an "offer of coverage" under the employer mandate, however, contributions must meet affordability guidelines. The IRS will release further guidelines regarding this later.

The Individual Coverage HRA also comes with restrictions and regulations including but not limited to:

• An offer of an Individual Coverage HRA cannot be made to any employee that is offered a traditional group health plan.
• If an offer of coverage is made to a class of employees, there is a minimum class size that is required. Size is typically 10% of that specific class of employees. For example, if an employer has 200 employees, a minimum of 20 employees would have to be in a specified class.
• Contributions can be in any amount that the employer chooses, but contributions must be consistent for all employees in a specified class.
• The employer must provide notice of the Individual Coverage HRA to employees.
• The employer must be able to substantiate that the employee is enrolled in an individual plan or Medicare (model notices are available).
• The employer must notify employees on an annual basis that the individual health insurance is NOT subject to ERISA.

The final rule also created the "Excepted Benefit HRA" which, starting in January of 2020, will permit employers to finance additional medical care. Employees can use the HRA without having to be enrolled in the group's traditional health plan.

The requirements associated with the "Excepted Benefit HRA" include, but are not limited to:

• The annual contribution is capped at $1,800.
• It must be offered in conjunction with a group health plan, but there is no requirement for the employee to enroll in that plan.
• The "Excepted Benefit HRA" cannot be used to fund group health or Medicare premiums.
• It can fund premiums for dental, vision, or short-term limited duration insurance.

Employers who want to offer the "Individual Coverage HRA" for January 1, 2020, can do so but employees will need to enroll in an individual plan during the 2019 open enrollment period (November 1, 2019 - December 15, 2019).

From Benefitmall, June 20, 2019

Maryland Individual Health Insurance Plans Poised for First Rate Reduction

Maryland individuals who purchase health insurance through the state's five-year-old Affordable Care Act exchange are poised to see the first decrease in their premium costs in 2019.

Following federal approval of a program that aims to stabilize the ACA-born insurance market, Kaiser Permanente and CareFirst BlueCross BlueShield are seeking price decreases for their individual market plans. The drop follows four consecutive years of double-digit percentage hikes. Consumer advocacy groups present at a public hearing on Monday lauded insurance officials' efforts around lowering prices, and said the decreases will be a welcome relief for residents who do not qualify for employer-based coverage and must purchase plans through the state's exchange.

The effort was initiated by a piece of bipartisan legislation passed in the Maryland General Assembly earlier this year. Maryland will put hundreds of millions of dollars behind a reinsurance program, which will allow the state's lone two carriers in the individual market to see major cost savings and stave off the need to again increase premium prices in 2019.

The Maryland Insurance Administration said during the hearing it is still finalizing details with the insurers, and plans to release the final 2019 rates later this week. Pending any major adjustments, the rates will look close to this:

CareFirst's individual HMO members will see about a 22.3 percent premium decrease, and a $104 monthly price decrease compared to 2018 rates.

Kaiser's individual HMO members will see about a 6.3 percent premium decrease, about a $23 per month swing from 2018.

CareFirst's individual PPO members — they are generally the sickest and most costly members in the market overall — will see about a 17.7 percent premium increase, which would result in an average price increase of about $121 per month compared to last year's rates.

Prior to the approval of Maryland's reinsurance plan, requested 2019 rates ranged between 18 percent to more than 90 percent increases. Now, insurers are seeking an average 13.9 decrease overall.

Peter Berry, chief actuary at CareFirst, the state's dominant health insurer, said he's scanned through the company's rate trends for the past 20 years. If the decrease is cleared, he said it would mark this first time in that period that some CareFirst members would see a year-over-year decrease in premiums.

"For the first time since I’ve been looking at health insurance since 1985, I’m speechless in a very good way," said Beth Sammis, president of advocacy group Consumer Health First. "This is a good day for consumers."

Sammis said next, industry officials need to put their efforts behind making sure that Maryland individual consumers understand their new options, and actually purchase these plans for the coming year.

Insurance Commissioner Al Redmer said part of the goal of the reinsurance program is to lure consumers who have opted to go without insurance the last few years due to unaffordability back to the market. The more people who pay into in a given insurance risk pool, the greater the price stability for everyone in the pool.

In an excerpt by Morgan Eichensehr  – Reporter, Baltimore Business Journal
Sep 17, 2018, 2:53pm

Executive Action on Health Care

October 13, 2017

On Oct. 12, 2017, President Trump signed an Executive Order (EO) directing various departments to consider easing some health insurance rules related to small businesses, short-term health insurance policies and Health Reimbursement Accounts (HRAs). Through the EO, the Administration aims to provide Americans with more affordable choices and allow greater control over their health care decisions. This EO, along with the Oct. 12 White House announcement that it will stop making Cost-Sharing Reduction (CSR) payments and Interim Final Rules issued by the tri-agencies (Departments of Health and Human Services [HHS], Treasury, and Labor) last week on contraceptive coverage, are part of the Administration’s ongoing efforts to modify or eliminate certain parts of the Affordable Care Act (ACA).

The EO provides guidance to various agencies, but does not make any immediate changes. Any details about potential changes will only be available once new or updated rules and guidance are released in response to the EO.

Executive Order
Association health plans
Under the EO, the Administration is directing the Department of Labor to consider proposing regulations or revising guidance to expand access to Association Health Plans (AHPs) that will allow small businesses to purchase insurance collectively across state lines. The Administration believes a “broader consumer-friendly interpretation” of ERISA could allow for AHP expansions. By joining an AHP, small employers within the same line of business could purchase plans collectively that would follow large group ACA mandates. Such health plans would not fall under small group market rules. 

AHPs, as currently defined, cannot exclude any employee from participating, cannot determine premium prices based on health status, and must follow community rating rules. AHPs must also comply with other ACA patient protections, such as offering coverage to dependent children up to the age of 26, prohibiting annual or lifetime limits, and having zero cost-share for preventive services. These limitations could change as a result of the EO.

Short-term health plans
The tri-agencies are being asked to consider updating rules on short-term limited duration insurance to allow plans to last as long as 12 months and be renewable. These policies are not required to follow several of the ACA mandates, including covering Essential Health Benefits (EHBs), prohibiting annual limits, offering coverage for pre-existing conditions or ensuring Medical Loss Ratios (MLRs) are met. Currently, these policies can only be sold for periods of three months or less and cannot be renewed after a total of three months.

Health Reimbursement Accounts (HRAs)
The tri-agencies are also directed to consider ways to expand the flexibility of HRAs. The Administration specifically focused on three HRA rules it wants the agencies to consider modifying: making employer HRA contributions tax deductible, allowing HRA funds to be used for premium reimbursement, and allowing HRAs to be used in conjunction with non-group coverage.

Cost-Sharing Reduction (CSR) payments discontinued
Also on Oct. 12, 2017, the White House announced it would discontinue CSR payments to insurers immediately. The ACA requires insurers to reduce cost-sharing for eligible, low-income individuals enrolled in silver plans through their local Marketplaces. This financial assistance is in addition to the Advance Premium Tax Credit. The Administration said because Congress has not appropriated funds for the CSRs, “the government cannot lawfully make the [CSR] payment.” This decision primarily affects insurers who will no longer be reimbursed for the CSRs but are required by law to offer them to eligible customers. As a result, customers who have reduced cost-sharing through the Marketplace should not see an immediate impact.

Expanded exemption for covering contraceptive services
Interim final rules (IFRs) issued Oct. 6, 2017 expanded the current exemption for employers to not cover contraceptive services under their sponsored group health plans. Effective immediately, employers may exclude coverage for contraceptive services based on moral or religious objections. This is in addition to the exemptions already outlined under the ACA for “closely-held” for-profit corporations, religious non-profit organizations and religious employers (e.g., churches).

In addition, employers with religious or moral objections are no longer required to submit a self-certification of their objections to their insurance carrier or file a notice with the HHS – a process that enabled cost-sharing responsibility to be passed to the plan’s issuer or third-party administrator (TPA). Because this accommodation is now optional, it is possible that costs for contraceptive services may not be covered, passing the full financial responsibility of contraceptive services to the customer. Employers who choose to exercise the accommodation process will pass responsibility for covering contraceptive services to the carrier or TPA, alleviating the financial responsibility from their employees and their dependents. 

Excerpt from Cigna Healthcare Informed on Reform