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
