Update, December 6: On December 3 and December 4, 2014, the Department of Health and Human Services released additional data regarding the second open enrollment period.  On December 3, HHS issued its second open enrollment statistical report, covering the week of November 22 to 28, 2014.  Not surprisingly, given that most Americans were occupied with the Thanksgiving holiday, activity was down from the first week of open enrollment, with 303,610 plan selections and 520,427 applications submitted, compared to 462,125 plan selections and 1,032,129 applications the first week.  Call center volume and healthcare.gov visits were also down sharply.  As in the first week, about half (49 percent) of the visitors were new consumers and half (51 percent) were consumers renewing coverage.

Consumers have until December 15 to enroll or reenroll and have coverage effective as of January 1, 2015, while open enrollment lasts until February 15, 2015.  Many more enrollments and reenrollments are to be expected before open enrollment wraps up. Moreover, most current enrollees will be automatically reenrolled in their current plan or a similar plan if they do not return to the exchange to choose a 2015 plan, so the statistics do not indicate how many 2014 enrollees will be back for 2015.

A second report, released December 4 by the Assistant Secretary for Planning and Evaluation (ASPE) on Health Plan Choice and Premiums in the 2015 Health Insurance Marketplace, however, emphasizes the importance of current enrollees in fact returning to the marketplace and selecting a plan for 2015 rather than simply being reenrolled passively

The overall picture of the 2015 federally facilitated marketplace (FFM) that appears in the report is quite positive.  There are 25 percent more insurers participating in the FFM for 2015 than 2014. Ninety-one percent of enrollees live in a county with 3 or more insurers. On average, 40 plans are available per county, up from 30 for 2014.  Although premium increases or decreases vary significantly from state to state, on average premiums for the second-lowest cost silver plan have increased only 2 percent, and premiums for the lowest-cost silver plan have increased only 5 percent, before the application of tax credits.

A primary message of the report, however, is that the FFM insurance market is very dynamic and competitive, with premiums increases or decreases varying significantly from plan to plan.  The amount of premium tax credits is set based on the benchmark plan — the second lowest-cost silver plan.  The 2014 second lowest-cost silver plan may very well not be the benchmark plan for 2015.  Thus, an individual who received the maximum premium tax credit by enrolling in the 2014 benchmark plan may receive a smaller tax credit in 2015 if that plan costs more than the 2015 benchmark plan and the enrollee remains with it.  The enrollee will thus have to pay more for the 2014 plan in 2015.

Even enrollees who do not receive a tax credit (and 15 percent of enrollees did not in 2014) may find that they can save money by switching plans for 2015 because less expensive new plans have entered the market or because the relative cost of plans has changed.  More than 7 out of 10 current FFM enrollees can find a lower-cost plan at the same metal level by returning to shop.  The average consumer who bought a silver plan for 2014 can save almost $492 a year by switching plans.  Across all metal levels, 2014 consumers could save almost $2 billion by shopping for a less expensive 2015 plan in the same metal level.

After the application of tax credits, 54 percent of silver plan enrollees could find silver plan coverage for $50 or less per month by returning to the marketplace and shopping for a less expensive plan, while an additional 23 percent could get coverage for $50 to $100.  By contrast, if 2014 enrollees do not switch plans, only 31 percent if will get silver plans for $50 or less, and 27 percent will get silver plans for between $50 and $100 ,after the application of tax credits if they do not shop.  Other changes in 2014 plans may also make it worthwhile for consumers to return to the marketplace to shop.

It is important to understand that changes can be made and savings achieved without changing metal levels, that is, without taking on increased cost-sharing.  While different plans within the same metal level may have somewhat different deductibles, coinsurance, or co-payment levels, they should have very similar total cost sharing levels—that is what it means to have the same actuarial value.  They may, on the other hand, have different provider networks or formularies or vary in other important respects, and less restrictive plans are likely to have higher premiums.  It is also very important that consumers with incomes below 250 percent of poverty think very carefully before changing from a silver plan to a lower-premium bronze plan, as cost-sharing reduction payments, which can reduce dramatically deductibles and co-insurance amounts, are only available with silver plans. Consumers should not change plans simply to save money without checking out other plan features, but for many people a move to a less expensive plan is a desirable option, as the ASPE report makes clear.

Original post: On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) released a Guidance for Issuers on 2015 Reenrollment in the Federally facilitated Marketplace (FFM).  This guidance sets out in great detail—with clarifying examples—the process which the FFM and insurers will use to send and receive enrollments and reenrollments for 2015, including the process that the FFM will use to communicate to an insurer when a 2014 enrollee selects a different insurer for 2015 coverage.  The guidance is primarily directed at insurers but should also be of interest to consumers and those who are assisting them.  It demonstrates, I believe, a much higher degree of planning and intentionality than was evident in the 2014 open enrollment period, when enrollment rules often seemed to be developed on the fly.

This post describes the reenrollment guidance, as well as initial enrollment figures for the FFM and other ACA-related developments.

2015 Reenrollment Guidance

The guidance distinguishes between “active” and “passive” reenrollments.  Reenrollment describes the process through which a 2014 enrollee continues enrollment into 2015.  Active reenrollment occurs when an enrollee returns to the FFM between November 15 and December 15, 2014 to submit a 2015 application and select a qualified health plan (QHP) for 2015 coverage. Passive reenrollment, also called auto-reenrollment, is the process the FFM uses to renew or reenroll individuals who do not return to the FFM to select a 2015 QHP by December 15, 2014.  Renewal specifically refers to reenrollment in the same product.

Any qualified individual can actively enroll in a QHP through the FFM during the 2015 open enrollment period, including 2014 enrollees whose coverage ended prior to December 2014 for nonpayment of premiums.  Individuals whose coverage is in current status as of December 2014 who do not actively select another plan as of December 15, 2014, will generally be passively reenrolled by their 2014 insurer.  Insurers will passively reenroll or renew 2014 enrollees in the same or a similar plan or product that the enrollee was enrolled in for 2014 in accordance with the hierarchy established in the reenrollment final rule issued in September of 2014 if the enrollees take no action prior to December 15 to select a different plan.

Enrollees from 2014 can actively select a plan that is different from the plan that they were enrolled in for 2014 after December 15 up until the close of open enrollment on February 15, 2015, but their choice will not be effective for January 1, and they will be passively reenrolled in their 2014 plan until their 2015 choice is effective following the normal effective date rules

In most instances, individuals who received tax credits in 2014 will continue to receive them for 2015.  Individuals who fail to return to the marketplace to update their eligibility information, however, will most likely continue to get tax credits at the same level as in 2014 unless they did not authorize the FFM to check their tax data for 2015 or that tax data reveals that their income is too high to qualify for tax credits.

Certain circumstances, however, will prevent some 2014 enrollees from being passively reenrolled for 2015.  This group includes enrollees whose insurer will not be offering coverage through the FFM in 2015, enrollees who have moved out of their insurer’s service area (or who were erroneously enrolled in 2014 with an insurer that did not cover their location), and enrollees whose 2014 applications are missing key data.  Enrollees in Nevada and Oregon, which are moving from a state-operated enrollment platform to the FFM platform for 2015, will also need to actively reenroll.

Individuals who are not eligible for passive reenrollment should have received notice from their 2014 insurer regarding this prior to November 15.  The FFM will also provide these individuals with notice of their passive reenrollment, but this notice will not be provided until after December 15, 2014, by which time it will be too late for these individuals to select coverage effective as of January 1, 2015.

Individuals who fall into these categories should contact the call center once they receive the FFM notice.  If they are determined by the FFM to qualify for a special enrollment period because their non-enrollment was “unintentional, inadvertent, or erroneous and is the result of the error, misrepresentation, or inaction” by the FFM or one of its instrumentalities, they may be reenrolled retroactively to January 1.  Individuals who are not passively reenrolled can, of course, enroll in 2015 coverage up until February 15, but they will not have continuous coverage if they do not qualify for a special enrollment period.

Everyone who applied for coverage through the FFM for 2014 and was determined eligible for coverage was, regardless of their current enrollment status, sent a notice by the FFM by November 15, 2014 informing them of the 2015 open enrollment period and describing the reenrollment and redetermination process.   This notice was sent, depending on the individual’s preference, electronically or via paper and in English or Spanish (and with taglines in 15 other languages).  The notices were customized for particular situations, for example, for enrollees whose most recent tax returns indicated that their income exceeded 500 percent of poverty and whose premium tax credits would thus be terminated unless they returned to the FFM to clarify their situation.

Individuals who are affected by an auto-reenrollment transaction will receive an enrollment confirmation message from the FFM.  Those who are passively reenrolled will be informed as to their plan name and ID and whether financial assistance will be applied.  Those who were not successfully auto-reenrolled will be encouraged to actively enroll and to contact the call center to see if they qualify for a special enrollment period.

Where an individual is actively or passively reenrolled, the insurer will receive an 834 initial enrollment transaction report from the FFM.  Insurers will not be sent a termination notice for 2014 policies, and insurers are directed to assume that if they do not receive an 834, that coverage should be terminated at the end of 2014 (but see further information on switched coverage lists below).  If an individual actively enrolls in a plan for 2015, however, and then cancels that coverage before it becomes effective and chooses a different plan, both the cancelled and new plan insurers will be notified through an 834.

The FFM will send passive reenrollment transactions after December 15, 2014 for current enrollees who do not actively enroll as of that date.  All passive reenrollments will be effective as of January 1, 2015, and will be clearly distinguished from active plan enrollment or change-of-circumstances transactions.

Insurers are encouraged to collect premium payments at the time of enrollment or reenrollment.  Insurers may allow binder payments for new plan selections to be made up until mid-January 2015.  Insurers may continue to bill on their normal billing cycle for reenrollments, and binder payments are not required.  Non-payment of the January premium for renewals will trigger the applicable grace period.  Insurers who do not receive an active enrollment by December 15 are encouraged to delay auto-draft payments for January until they receive a passive enrollment transaction from the FFM.  Insurers that mistakenly draw an auto-draft payment for an individual who has selected a different insurer must promptly refund the payment.

2014 enrollees who are receiving tax credits and who are in the 90 day grace period at the end of 2014 and whose coverage is renewed actively or passively will be continuously enrolled if they pay their delinquent premiums before the end of the grace period.  If they fail to do so, the insurer must terminate both 2014 and 2015 coverage.  If the 2015 coverage is not a renewal but rather a reenrollment in a different product, the expiration of a grace period from 2014 will not automatically result in the termination of the 2015 coverage, although the enrollee must pay the first month’s premium for the 2015 product to effectuate coverage.

Life changes triggering a change in circumstances transaction, such as the addition of a baby or spouse, will be reflected in passive reenrollments if reported to the FFM by December 15, 2014.  Changes in circumstances for 2014, and updates to 2015 coverage, that occur after that date must be reported to the call center.  Enrollees who have actively selected a QHP by December 15, 2014, must also contact the call center to report changes in circumstances after that date to update 2015 enrollment.  Passive reenrollments will be updated with the same tobacco status as 2014.

If a 2014 enrollment had a National Producer Number associated with it because an agent or broker had assisted with the enrollment, the NPN will remain associated with the reenrollment unless the enrollee actively reenrolls for 2015, removing the NPN and making a plan selection.  The agent or broker will presumably receive a commission for the 2015 enrollment if the NPN remains the same.  Agents and brokers who are completing an application on behalf of an applicant may search for the consumer’s 2014 application and create a new 2015 application pre-populated with 2014 applicant information.  Enrollees who were directly enrolled through insurers for 2014 may update their eligibility information by either going through their insurer to the FFM or by going directly to the FFM website.

As noted earlier, the FFM will not be sending insurers termination transactions when their enrollees reenroll with a different insurer.  Rather, the FFM will be sending insurers “enrollee switched lists” identifying 2014 current enrollees who have switched to a different insurers. These lists will be sent electronically every day beginning on December 1, 2014 and running at least through December 16, 2014.  The switched list will be cumulative, identifying all 2014 enrollees who have switched coverage as of the day the list was generated.

If an enrollee enrolls with a different insurer, but then switches back to the original insurer, his or her name will be deleted from the switched list, but the insurer will also receive an 834 transaction showing the new enrollment.  Insurers must terminate enrollees identified on the switched list as of the end of the year but must reenroll individuals who do not show up on the switched list, even if they do not receive a passive enrollment transaction until later.  Insurers should reenroll individuals who do not appear on the switched list based on their age as of January 1, 2015, and dependent relationships on file for 2014, and will normally carry forward the 2014 APTC amount.  Special rules are provided for situations where dependents age off of coverage.

Finally, the guidance repeats the rules that apply to Medicare beneficiaries.  An insurer cannot legally sell or issue a health plan that duplicates Medicare coverage to a Medicare beneficiary, but should accept a passive or active reenrollment from a Medicare beneficiary where the transaction does not result in the issuance or sale of a policy.  An insurer should cancel a policy issued to a Medicare beneficiary if the insurer learns of the Medicare coverage before the policy is effectuated, but cannot terminate a policy issued to a Medicare beneficiary once it is effectuated.  The insurer should inform the beneficiary in any event that the policy is an unnecessary duplication.

First Enrollment Figures For The Federally Facilitated Marketplace

On November 26, 2014, CMS released data on activity in the federally facilitated marketplace (FFM) during the first week of the 2015 open enrollment period, November 15-21.  This is the first of a series of weekly snapshots of preliminary data that CMS intends to release on the FFM during the open enrollment period, supplemented by monthly reports on both the FFM and state-operated marketplaces.  The data covers the 35 states using the FFM this year, including Oregon and Nevada, which shifted from using a state website this year to the FFM website.  The New Mexico state exchange also uses the FFM website, and is included in this number, although the Idaho exchange, which used the FFM website last year, is using its own website for 2015.

Although the report shows significant activity during the first week, it must be remembered that enrollment activity, not only for the marketplaces last year but also for other programs with an open enrollment period, picks up very dramatically at the end of the period.  Activity will likely be much greater immediately prior to December 15, the date by which existing enrollees must act to change plans to ensure continuous coverage as of January 1, and February 15, 2015, the close of open enrollment.

During the first week, applications including 1,032,219 individuals were received by the FFM; 462,125 consumers selected a plan. Of these, 48 percent were new consumers (including all consumers from Oregon and Nevada, who are using the FFM for the first time) and 52 percent were renewing coverage.  As explained above, existing enrollees do not need to renew coverage as they will be auto-enrolled in their 2014 plan or a similar plan if they fail to do so.  Consumers are encouraged to reenroll, however, to ensure that their premium tax credits are accurate and that they are enrolled in the most appropriate plan.

The FFM call center received 1,069,378 calls during the first week, of which 101,864 were with Spanish-speaking representatives. The average call center wait time was 3.05 minutes, but only 10 seconds for Spanish speaking representatives.  The FFM’s English website was visited 3,741,725 times during the first week and its Spanish website 95,730 times.  The FFM’s new English-language window shopping tool was visited 1,578,649 times; the Spanish version received 31,620 visitors.

Group Health Plan Requirements Under The ACA And Other Laws

On November 19, 2014 the Employee Benefits Security Administration of the Department of Labor released an updated Compliance Assistance Guide for Health Benefits Coverage under Federal Law.  The lengthy manual covers not only group health plan obligations under the Affordable Care Act, but also under the Health Insurance Portability and Accountability Act (HIPAA), wellness program requirements, the Genetic Information Nondiscrimination Act, mental health parity provisions, the Newborns’ and Mothers’ Health Protection Act, and the Women’s Health and Cancer Rights Act.

The manual is divided into four parts:

  • a general description of the laws with related frequently asked questions;
  • a self-compliance tool that can be used by employers, plan sponsors, plan administrators, third-party administrators, and others to determine compliance with the law;
  • a chart summarizing the notices plans must provide; and
  • model notices that comply with these notice requirements.

The manual is not new, but has been updated in particular with respect to ACA and mental health parity requirements.  The first section in particular provides only general descriptions of requirements of these laws and contains little not included in earlier rules and guidance.  A post from last year on the final Mental Health Parity and Addiction Treatment Act rule included most of the material covered by the mental health parity FAQs.  A couple of topics not covered by that post include combining separate mental and medical/surgical benefit deductibles and information that must be provided to participants and beneficiaries denied mental health benefits.  The compliance tool provides a particularly detailed guide to complex issues like wellness programs, summaries of benefits and coverage, and internal and external appeal requirements.

Although most of the focus in the recent past has been on how ACA requirements affect group health plans, the earlier laws covered by this manual also still apply.  In particular, with respect to large groups they provide rights not guaranteed by the ACA.  Interpretations of the requirements of these earlier statutes, like the HIPAA prohibition against preexisting condition requirements, may also prove useful in interpreting similar ACA requirements.

Federal Appellate Court Dismisses ACA Challenge

On December 2, 2014, yet another Affordable Care Act challenge was thrown out by a federal court of appeals on standing ground.  Kawa Orthodontics, a large employer, had sued challenging the administration’s delay of the effective date of the employer mandate.  Kawa claimed that it had expended time (100 hours) and money to determine how to comply with the employer mandate and had been injured by the administration’s delay in enforcement.  Kawa sought a declaration that the law was illegal and an injunction setting aside the transition relief.  The district court had dismissed the case on standing grounds.

The Eleventh Circuit, in a decision written by Judge Susan Black, held that Kawa had failed to prove any of the three elements that must be shown to establish standing to sue.  First, it had not shown that it had suffered any concrete and particularized injury.  It would have had to spend the time and money researching compliance in any event.  Second, insofar as it suffered any injury, Kawa did not show that the injury was caused by the delay of the mandate rather than the mandate itself.  Finally, Kawa failed to prove that, to the extent it could show an injury caused by the delay, an injunction requiring immediate enforcement of the mandate would redress the injury.  Kawa would not in any event be entitled to money damages, and an injunction would not allow it to recoup its past expenses.

Judge Beverly Martin dissented, asserting that Kawa had in fact suffered injury because it had undertaken compliance expenses two years earlier than necessary and had lost the interest it could have earned on these expenses had it not does so.  This injury was traceable to the government’s decision to delay compliance for two years, and an order requiring immediate implementation of the employer mandate would end the plaintiff’s continued loss of interest on its investment, as the fruits of its investment would be immediately realized.

This is the second appellate court case to reject an employer mandate delay claim on standing grounds.  A third lawsuit filed by the House of Representatives raising the delay issue will face a similar challenge.

For those keeping score, Judge Black, the majority opinion author, is a G.W.H. Bush appointee.  She was joined by Judge Julie Carnes, an Obama appointee.  Judge Martin, the dissenter, is an Obama appointee.