Published Regulations
- Grandfathered Status. Interim Final Regulations (IFRs) were released last June and Final Regulations are scheduled to be released by the end of 2011. An employer that makes very little or no changes to their medical plan that was in effect on March 23, 2010 (the date ACA was signed into law), can postpone some of the mandated benefits required by ACA, fulfilling the promise that “if you like your health insurance plan you can keep it”. When the IFR was released, Federal regulators predicted that, on average, 82% of large employers (100+ employees) would retain their grandfathered status in 2011, while 70% of small employers would. Results since September would seem to indicate that many more employers than anticipated are making plan changes that result in their loss of grandfathered status.
- Preventive Care Benefits Provided Without Cost-Sharing . IFRs were released last July and Final Regulations are scheduled to be released in April of this year. This is the most significant mandate required when a plan loses its grandfathered status. Applicable benefits are based on the recommendations of the U.S. Preventive Services Task Force, but since many of those recommendations are vague, insurance carriers and self-funded plans are challenged to develop specific plan provisions. Hopefully the Final Regulations will provide some clarity.
- Removal of Lifetime Dollar Limits. One of the few clearly-defined mandates in ACA, making this change seems to have had little financial or administrative impact to employer plans.
- Dependent Children Eligible Until Age 26 . While Final Regulations are scheduled for release in April, this mandate also seems to have presented minimal administrative challenges for employers and insurance carriers. Not enough data is available yet to gauge this mandate’s effect on enrollment or plan costs.
- Non-Discrimination Testing Applicable to Insured Plans. This mandate applies to insured plans that lose their grandfathered status, and was designed to be very similar to the testing applied to self-funded programs since the 1980s. Plans are tested to ensure they don’t disproportionately favor highly-compensated employees, both in terms of availability and participation. If the plan is found to be discriminatory, the employer is subject to substantial excise taxes. Originally set to apply to plan years beginning after September 23, 2010, federal regulators were besieged with questions that weren’t addressed in the existing rules. Recognizing the need for more concise guidance, they have postponed enforcement of the testing and penalties until after they publish more clearly defined regulations, which are expected in September 2011.
- Consumer Operated and Oriented Plans (“CO-OP Plans”). HHS has just published a request for input concerning these non-profit alternatives to traditional insurance programs for the individual and small group markets. Loans and grants are scheduled to be dispersed starting in July 2013 for these programs and HHS is looking for feedback as to the structure, sponsorship and operational requirements that would help ensure sustainable success. It’s expected that there be at least one CO-OP plan in each state and a plan could be regional (I.e., cross state lines).
Other Regulations Expected to Be Released in 2011
- Uniform Explanation of Benefits, Coverage Facts and Standardized Definitions (March). Establishes national definitions and standard formats for communicating plan details to participants. This must be provided to all participants by March 2012. Coincident with providing this information, beginning in April 2012 plans/carriers must provide a summary of material modifications a minimum of 60 days prior to the effective date of any such plan changes.
- Requirements to Implement American Health Benefits Exchanges (March). Will lay out the requirements, processes and timetables to establish the State Exchanges for the individual and small group markets. If a state is unable or unwilling to follow these rules, HHS will set up and run an exchange for that state. Iowa has already been working for several years on creating this type of program and it is hoped the new Federal regulations will have minimal impact on that effort.
- Transparency Reporting Rule (March). Plans/carriers must provide information on claims payment policies, number of claims denied and rating practices. Upon request from a covered individual, must provide the amount of cost-sharing for a specific item or service by a plan participating provider.
- Community Living Assistance Services and Supports (CLASS) Act (September). Enrollment and eligibility regulations are expected to be spelled out for the Federally-administered long-term care program. Many industry and policy experts have raised concerns regarding the sustainability of the program as set up in the ACA legislation. In fact, the bipartisan National Commission on Fiscal Responsibility and Reform established last fall by President Obama proposed eliminating the CLASS Act and legislation to do so was introduced in both the last and the current Congress. Given this environment, it’s quite possible this specific portion of ACA will not be implemented.
Court Challenges to the ACA
Sixteen filings have been entered in U.S. District Courts since the ACA was signed into law last March. So far, the score is:
- 2 judges have ruled the ACA constitutional
- 2 judges have ruled it to be unconstitutional ( either in whole or in part)
- 12 judges have dismissed challenges
