Proposed ACA exchange regulations would tighten enrollment eligibility and allow higher deductible plans

The Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) have issued proposed changes to HHS regulations governing enrollment and coverage in plans offered through Affordable Care Act (ACA) Exchanges. The proposed changes would amend standards relating to special enrollment periods, guaranteed availability, and the timing of the annual open enrollment period in the individual and small group markets for the 2018 plan year. They also would change standards related to network adequacy and essential community providers for qualified health plans, and the rules around actuarial value.

The proposed enrollment changes have long been championed by insurance providers that offer coverage through ACA Exchanges. They claim that existing rules make it too easy for individuals to wait to apply for coverage until they are sick, or to upgrade their coverage when they find out they are sick.
The proposed rules would shrink the dates for open enrollment in the individual market for the benefit year starting January 1, 2018, from a range of November 1, 2017, to January 31, 2018 (the previously established open enrollment period for 2018), to a range of November 1, to December 15.

Special enrollment verification. The CMS is also proposing to tighten the rules for special enrollment periods to increase pre-enrollment verification of eligibility requirements and eliminate some special enrollment periods. The CMS is specifying that, because this proposed change to HHS Reg. §155.420(a)(3) through §155.420(a)(5) is being proposed for special enrollment periods in the individual market only, it is proposing to amend HHS Reg. §155.725(j)(2)(i) to emphasize that these paragraphs do not apply to special enrollment periods under the Small Business Health Options Program (SHOP).

The proposed rules would give more leeway to insurance issuers in designing new plans and to provide additional options for issuers to keep cost sharing the same from year to year. The changes would allow issuers to offer plans with higher deductibles and narrower networks than under the existing rules.

Comment: These rules do not affect ACA-related taxes directly, but they may affect how taxpayers satisfy the individual responsibility requirement under Code Sec. 5000A and the subsidy amount under Code Sec. 36B. The changes would allow individuals to obtain less expensive coverage (through higher deductibles and narrower networks) than presently, which could be a benefit for healthy individuals. For less healthy individuals or people who might become sick, there is no substitute for vigilance with respect to the narrowed ACA Exchange enrollment periods. Also, coverage for which the premium tax credit is calculated (silver plans) may be less expensive than it otherwise would be (due to higher deductibles and narrower networks) which would mean the premium tax credit subsidy would be less for anyone who qualifies for it.

SOURCE: 82 FR 10980, February 17, 2017.

Visit our News Library to read more news stories.