We previously reported that the U.S. Department of Health and Human Services ("HHS") has discouraged hospitals and other third parties from paying patients' premiums or cost-sharing. HHS stated in its November 4, 2013 FAQ that it "has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces." In other words, if hospitals and other providers pay premiums for the sickest patients, HHS has expressed its concern that doing so will shrink the proportion of healthy patients so necessary to keep the insurance risk pool afloat.
In response to the HHS November release, there were questions about whether the FAQ applied to payments of premiums and cost sharing made on behalf of qualified health plan ("QHP") enrollees by certain types of third party payors, including Indian tribes and non-profits. On February 7, 2014, HHS issued two new FAQs addressing these questions.
Specifically, the new FAQs state:
The November 4, 2013 FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, and urban Indian organizations. In fact, QHP issuers and state and federal insurance Marketplaces are encouraged to accept such payments.
As previously stated in the 2015 Draft Letter to Issuers on Federally-Facilitated and State Partnership Exchanges, a Marketplace may permit Indian tribes, tribal organizations, and urban Indian organizations to pay QHP premiums on behalf of members who are qualified individuals, subject to terms and conditions determined by the Marketplaces.
State and federal government programs or grantees – specifically the Ryan White HIV/AIDS Program – may in fact pay premiums on behalf of their members who are eligible to purchase coverage through the Marketplaces.
Private, non-profit foundations may pay premiums and cost sharing for patients if the patients are selected based on defined financial status criteria. The patient's health status may not be considered, and the premium and any cost sharing payments must cover the entire policy year.
Any groups not specifically mentioned in the February FAQ should continue to avoid paying premiums or cost sharing on behalf of patients. While the February FAQ authorizes such payments in specific situations, the cautionary language in the November FAQ still stands, generally, with regard to hospitals, doctors, and all other third parties.