April 25th, 2013
April 2013 has been a quiet month for new Affordable Care Act rules and guidance. Activity to implement the ACA, of course, is moving full speed ahead at the federal level as efforts continue to implement the federal exchange and to gear up for federal enforcement of the market reforms in a number of states. The Centers for Medicare and Medicaid Services (CMS) is in the process of holding stakeholder calls in every state where a federal exchange (now called a “marketplace”) will be established. It is also locating navigator programs, signing up insurers, and preparing for the October 1, 2013 beginning of open enrollment. The states have also been very active, either trying to implement their own state exchanges and the 2014 ACA market reforms or doing everything they can dream up to keep implementation from moving ahead.
Final rules have been issued governing the exchanges, the 2014 market reforms, the premium tax credits, and the premium stabilization programs, while guidance has been issued on the federal exchanges and the navigator program. Final rules on Medicaid eligibility and appeals are expected shortly. A public hearing was held on April 23, 2013 regarding the proposed employer responsibility regulations, while another will be held on May 29, 2013 reviewing proposed individual responsibility regulations. Final rules will follow in due course. In sum, implementation is progressing, although a lot of ground must be covered between now and 2014.
Summary of Benefits and Coverage. In the interim, CMS and the other implementing agencies (the Departments of Labor and Treasury) continue to issue guidance on specific issues, slowly but steadily moving the implementation ball forward. On February 23, 2013, the three agencies issued a set of “Frequently Asked Questions” (FAQs) regarding the Summary of Benefits and Coverage (SBC), as well as a model SBC template and a sample completed SBC. The SBC is a uniform four page (actually four double-sided, or eight page) uniform summary of benefits and coverage that every individual and group plan (including grandfathered and self-insured plans) is supposed to provide to applicants and enrollees describing in terms understandable to the lay reader the benefits and limitations of the plan. All health plans and insurers are to use the same form to facilitate comparison of plans, and thus consumer choice and insurer competition.
The SBC, which was implemented by final regulations issued in 2012, is one of the most popular of the ACA reforms. One particularly useful feature of the SBC is the section that provides “coverage examples,” telling consumers what their plan is likely to cover or not cover if they incur a particular medical condition (such as the birth of a baby). Although awareness of the availability of the SBC is still developing, consumers who have used it have found it very helpful.
The original rule provided a template for insurers and health plans to use for the SBC. The new FAQ updates this template to provide two additional pieces of information that will be needed for 2014. The first is whether a plan meets “minimum essential coverage” requirements — that is, whether it satisfies the requirements of the individual mandate. The second is whether an employer plan meets “minimum value” requirements — whether it pays for at least 60 percent of covered services, thus barring covered employees from receiving coverage through the exchange and protecting the employer from the employer mandate penalty. Plans or insurers that are unable at this point to modify their SBC forms for 2014 may alternatively provide a cover letter or similar disclosure prominently and explicitly stating whether or not the plan provides minimum essential coverage or meets minimum value standards.
The agencies had stated earlier that they would also change the form for 2014 to reflect the statutory elimination of all annual dollar limits on essential health benefits. The agencies are not making this change, but insurers or plans must state that no annual dollar limits are in fact imposed on essential health benefits.
In a major disappointment to consumers, the agencies are not adding any new coverage examples for 2014. The agencies had earlier indicated that additional examples would be added, but have decided for now to only require the two already required: maternity and type-2 diabetes. The agencies also continue to use a flawed approach to calculating the coverage examples that masks differences among plans that can result in significant costs to consumers.
The agencies are extending to plan years beginning in 2014 a number of enforcement safe harbors originally announced as lasting only for one year, and are continuing an enforcement policy that “will continue to be marked by an emphasis on assisting (rather than imposing penalties on) plans, issuers and others that are working diligently and in good faith to understand and come into compliance with the new law.” The agencies continue to excuse closed blocks of business from the SBC requirement, thus making it less likely that enrollees in closed blocks will find a better deal elsewhere. Finally, they extend their “anti-duplication” policy to student health plans, so that if, for example, the health plan insurer provides an SBC to a student, the school is excused from also having to provide it.
The agencies and insurers, of course, have a full plate right now, so it is not surprising that the enforcement agencies are not pressing insurers on the SBC requirement. On the other hand, the SBC is vital for the creation of the transparent competitive insurance market envisioned by the ACA. The patience of consumer groups is wearing thin as the agencies continue to accommodate insurer and employer complaints and demands rather than push ahead aggressively with a pro-consumer agenda.
Culturally and linguistically appropriate care and services. On April 24, 2013, the Office of Minority Affairs of the Department of Health and Human Services also released a set of Enhanced Culturally and Linguistically Appropriate Services (CLAS) Standards. These update and expand the original 2000 CLAS standards. The 15 standards set high aspirational goals for providing effective, equitable, understandable, and respectful quality care and services responsive to diverse cultural beliefs and practices, preferred languages, health literacy, and other communication needs.
While the standards, and the Blueprint that accompanies them, articulate important language and culture access goals, they do little to answer the burning question of how far the exchanges, navigators, health plans, or agents and brokers must go to make written information or oral communication available in the over 300 languages spoken or signed in the United States. The Blueprint does acknowledge the legal obligation of navigators and insurers to provide information in a culturally and linguistically appropriate manner, but does not specify the content of this obligation. A leaked draft of the federal exchange letter to issuers contained more explicit requirements, but the final letter retained vague generalities.
Presumably final exchange standards will go beyond the weak requirements that insurers and health plans must meet for the SBC and for external and internal appeals — basically English and Spanish, and in a handful of counties Chinese, Navaho, and Tagalog. But how many more languages information and communication must be available in, and how quickly and in what form, are important questions that remain to be answered. The CLAS Standards suggest that the bar will be high, but more than suggestion is needed at this point.
The early retiree reinsurance program. In other recent developments, CMS has also taken steps to wind down a transitional program and to smooth the transition to a new program. The early retiree reinsurance program has been one of the most successful but least heralded ACA programs. Recent years have seen dramatic erosion in retiree health care coverage. Whereas 66 percent of large firms offered retiree benefits in 1988, only 25 percent did in 2012.
Although retirees become eligible for Medicare once they turn 65, early retirees who lose coverage are left with high-cost COBRA or nongroup coverage, or becoming uninsured. Once premium tax credits become available in 2014, lower income early retirees will be able to afford coverage. The early retiree reinsurance program provided a bridge to 2014, providing reinsurance for high-cost cases for employers who stuck with their early retiree health care programs. It has allowed the percentage of large employers offering early retiree coverage to remain essentially stable since 2010.
Like the preexisting condition high risk pool, the other ACA bridge program, the ERRP was provided with $5 billion in funding. It covered 80 percent of the cost of claims in excess of $15,000 up to a cap of $90,000 per retiree. At least 2,800 employers and other plan sponsors participated in the program, including state and local governments otherwise strapped for funding during the recession. As expected, the program ran out of funding before 2014. It stopped signing up new participants in May of 2011.
On April 23, 2013, HHS published a notice in the federal register setting final dates for reporting certain information or filing various requests. Most importantly, reimbursement requests must be filed by July 31, 2013; while the last date to submit a request to reopen and revise an adverse reimbursement determination is December 31, 2013.
Transitional CHIP. In another development, CMS issued on April 19, 2013, a set of FAQs regarding a transitional Targeted Low-Income Children’s Health Insurance Program (CHIP) that will go into effect on January 1, 2014. As of 2014, states must cover all children whose families have a modified adjusted gross income (MAGI) of 133 percent of poverty or less with Medicaid. Although the states must disregard 5 percentage points of income above this level (raising the actual eligibility level to 138 percent of poverty), states may not apply other income or expense disregards that they have formerly applied. Some children who are receiving Medicaid, therefore, will lose Medicaid eligibility because the elimination of income disregards that formerly applied will take them above the 138 percent level.
States must enroll these children who lose Medicaid coverage because of the MAGI rules in CHIP. If a state does not currently have a separate CHIP program or has a CHIP program that serves a limited population, it must create a separate CHIP program for these children; states will receive the enhanced CHIP match for covering them. These children must be covered even though they don’t meet certain other CHIP eligibility requirements. Eligibility will last for 12 months unless eligible children reach age 19, die, move out of the state, or request removal from the program; after 12 months, the children will be considered for CHIP eligibility based on existing CHIP eligibility requirements.
Of course, if children who lose Medicaid coverage are already eligible for the state’s existing CHIP program, they may be enrolled in the regular CHIP program as an alternative. The FAQ suggests several approaches states may take to complying with this requirement. The program does not apply to children who lose CHIP coverage because of the application of MAGI standards.Email This Post Print This Post
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