In a move that will not come as a surprise to anyone who has been following the rocky implementation of the Affordable Care Act (“ACA”), the Obama Administration has yet again delayed important provisions of the ACA. In a bulletin released on Wednesday, the Centers for Medicare and Medicaid Services (“CMS”) announced that transitional relief, which allows insurance companies to offer plans that do not comply with the coverage and affordability requirements of the ACA in 2014, has been extended for two years. This transitional relief extension is only applicable to plan years beginning on or before October 1, 2016.
In late 2013, CMS provided transitional relief to health insurance companies allowing such companies to continue to offer plans that did not meet ACA standards for 2014, provided that the state where the plan was sold approved of the continued sale of such non-compliant plans and that the health insurance company met certain requirements, like sending notices to individuals about the option to enroll through a health insurance exchange. That extension was largely precipitated by the fact that many Americans saw their plans cancelled despite the President’s promise that people who liked their plans could keep them. Moreover, the technical difficulties that plagued the rollout of HealthCare.gov, the federal health insurance exchange website, prevented many with cancelled plans from enrolling in a health insurance exchange plan. CMS has stated that this newly announced transition relief will apply not only to individuals, but also to small businesses purchasing insurance in the small group market. As such, insurers can continue to offer non-compliant plans to individuals and small business employers until October 1, 2016. This means that individuals and small businesses could potentially be enrolled in plans that do not meet the coverage and affordability standards under the ACA well into 2017, barring any further changes.
CMS also announced other changes and finalized some provisions under the ACA.
Open Enrollment for 2015 Plans: CMS extended the open enrollment period for 2015 plans available through insurance exchanges—the open enrollment period is now from November 15, 2014 until February 15, 2015, instead of January 15, 2015, as originally announced. The stated purpose for this extension is to give health insurance companies additional time before they need to set rates, give states more time to prepare for enrollment, and to give consumers more time to compare and purchase a plan through an exchange.
Reinsurance and Risk Adjustment Programs: CMS has made certain adjustments to provisions of the Reinsurance and Risk Adjustment Programs—essential elements of the ACA aimed at reducing the risk to insurers during the implementation period of the ACA. The Reinsurance Program provides funding to insurers that incur high claim costs from enrollees due to the possibility of less healthy individuals enrolling in plans. The Risk Adjustment Program limits gains and losses by insurers.
Blueprint Provision: CMS finalized a proposal to move from January 1 to June 15 the date by which a state must have an approved or conditionally approved Blueprint in place for the following year. A Blueprint is a submission to CMS by a state that is seeking to operate a state-based insurance exchange or participate in a state partnership exchange outlining how that state proposes to operate such an exchange.
Out-of-Pocket Expenses: The ACA provides for limits (which must be adjusted annually) on the amount of out-of-pocket expenses paid by individuals and families for healthcare. For 2015, CMS has limited cost sharing for individuals to $6,600 and $13,200 for families, in addition to other changes.
Protecting Enrollees: To implement patient safety standards, CMS has stated that it is aligning standards that apply to health insurance companies selling plans certified as meeting ACA standards to the standards applicable to Medicare Hospital Condition of Participation requirements. CMS believes that this will ensure that consumers will have access to health care that meets adequate safety and quality standards.
Implementing SHOP: CMS made some changes to the Small Business Health Options Program, which small employers (those employers with 50 or fewer full-time employees) can participate in.
The implementation of the ACA has been constantly in flux. In addition to these new delays and revisions, there have also been delays to the Individual Mandate, which generally requires every American to have health insurance or pay a penalty, and the Employer Mandate, which requires certain large employers to provide their employees with health insurance coverage. Be sure to check back with the Health Law Gurus™ for news regarding further changes to the ACA.
To view the CMS bulletin, click here.
To view the CMS press release, click here.