On September 30, 2012, as the federal government reached the end of its fiscal year and teetered on the brink of a shutdown, implementation of the Affordable Care Act moved forward on several fronts. First, the Office of Personnel Management issued a final rule on exchange coverage of members of Congress and their personal staff.
The ACA provides that the federal government can only make health insurance available to members of Congress and their personal staff (as distinguished from other congressional staffers) through qualified health plans made available through the ACA exchanges. OPM published a proposed rule on this congressional coverage on August 8, 2013 (covered here). OPM received 60,000 comments (59,000 of which concerned abortion coverage in the exchange) on the proposed rule.
The final rule makes some important changes in the proposed rule in response to these comments. First, it clarifies that coverage will be only be available through the District of Columbia SHOP exchange. Congress is an employer (although not exactly a small employer), so it makes sense that the coverage would be through the SHOP rather than individual exchange. The usual rule is that SHOP coverage is based on the location of the employer, so it would make sense to locate coverage in D.C.
It is unclear, however, how this will work out for the local office staff back in the state or district, where D.C. networks may not be available. The same problem exists in other states, however, when children of an insured go off to college or snow birds head south for the winter. Presumably at least some plans will have national networks available, including multi-state plans (see below).
Second, the final rule modifies the proposed rule by providing that members and their staff will return to the regular Federal Employee Health Benefits Program upon retirement. The proposed rule provided that they would remain with the exchange. FEHBP coverage wraps around Medicare coverage at age 65, however, and there is no provision for this in the exchanges. The OMB interprets the ACA to apply only to active members and employees, while the general FEHBP provisions apply to retirees, and thus concludes that retirees will not be covered through the exchanges. Exchange coverage for members and their staff will also count toward the five years of coverage that federal employees must accumulate to become eligible for retiree coverage.
A number of other provisions of the proposed rule were not changed. Members will have discretion to designate staff as personal staff eligible for exchange coverage, working together with the House and Senate Administrative Offices. Members and staff will continue to receive federal government contributions, as seems to have been the intent of Congress in adopting the ACA. Members or their staff may, of course, decline these contributions and seek coverage elsewhere
Contributions will be made in the amounts that otherwise apply in the FEHBP — 72 percent of the cost of the weighted average of FEHBP plans or 75 percent of the premium of the chosen plan, whichever is less. Premiums in the FEHBP generally, however, are community rated, while premiums in the D.C. SHOP exchange are age rated. This will mean that young enrollees will face low premiums; older enrollees may have to pay quite a bit out of pocket. Fifty-nine members of the Senate are above 60 years of age, as are nearly 190 House members. Their staffers no doubt tend to be younger.
The rule affirms that abortion coverage through an exchange plan cannot be covered by FEHBP funds. Abortion will be available in some plans, but members and their staff will have to pay for it separately without the use of FEHBP funds. Members representing the territories and their staff will be covered through the D.C. exchange.
Multi-State Plans Available
The OPM also on September 30 announced the availability of the multi-state plan program. OPM has entered into a contract with the national Blue Cross and Blue Shield association to offer multi-state plans. These plans will initially be offered in thirty states and the District of Columbia. The MSP will expand, however, and must cover all states in four years. States will have available as many as 36 plans (Alaska) and as few as 2 plans (a number of states) through the multi-state program.
As there are already Blue Cross and Blue Shield plans available in many of the exchanges, it is unclear how much competition the multi-state plan will add to some markets. It may solve the problems of some Americans, however, who have family members in states other than their exchange home state, or who reside in several states over the course of the year. It may even solve the problem of local congressional staff, as the D.C. exchange has four multi-state plans, which will presumably offer networks in every state where they are available.
Guidance On Applying Supreme Court Same-Sex Marriage Decision
On September 27, 2014, the Center for Medicare and Medicaid Services issued guidances for implementing the decision of the Supreme Court in United States v. Windsor, which struck down the Defense of Marriage Act in the exchanges and in the Medicaid program. Basically, HHS will require the exchanges to follow the IRS rule, thus recognizing same-sex marriages that are valid in the state of marriage for determining household income and family size for purposes of establishing premium tax credit and cost-sharing reduction payment eligibility. This will be true even if the marriage is not recognized in the state or residency. The federal exchange will implement this rule immediately, and state exchanges will do so as soon as reasonably practicable.
State Medicaid and CHIP programs, on the other hand, will be encouraged, but not required, to recognize valid same-sex marriages. Because of the “unique federal-state relationship that characterizes the Medicaid and CHIP programs,” states will not be required to follow the federal rule. The guidance recognizes that where Medicaid and CHIP eligibility are determined based on modified adjusted gross income (MAGI), there will be a benefit gap where premium tax credit eligibility is based on a same-sex marriage and Medicaid is not. It commits CMS to work with the states to resolve these issues. The guidance also provides that where eligibility for Medicaid is based on eligibility for a federal program, such as Supplemental Security Income, eligibility for the federal program will be determined using federal rules, which will probably recognize same-sex marriages, and eligibility for Medicaid will be based simply on the federal eligibility determination.
A Lawsuit Challenging Texas Restrictions On Navigators And Others Who Assist Consumers
Finally, after dozens of lawsuits challenging the ACA, it is interesting to finally see a lawsuit filed to defend it. On September 27, 2013, the Tennessee Justice Center filed a lawsuit representing the League of Women Voters and an assortment of individuals. The plaintiffs challenge an emergency rule of the Tennessee Department of Insurance attempting to limit the activities of navigators, certified application counselors, and “any individual or entity, other than an insurance producer” who facilitates enrollment through an exchange or conducts public education or consumer assistance activities for an exchange. The regulation requires these persons to comply with various requirements, including fingerprinting and background checks, and prohibits them from “discuss[ing] the benefits, terms, and features of a particular health plan over any other health plans and offer[ing] advice about which health plan is better or worse or suitable for a particular individual or employer.”
The complaint claims that the regulation would prevent employers from assisting their employees, members of families from assisting other family members, clergy from helping their congregants, doctors from helping their patients, counselors from helping their counselees, and attorneys from helping their clients with considering their insurance options. The complaint raises claims under First Amendment free speech and association, the Due Process Clause, the Supremacy Clause (because the rule conflicts with ACA regulations) and Tennessee administrative and constitutional law. The plaintiffs have asked the court to enjoin the enforcement of the emergency rule.