On December 22, in addition to wrapping Christmas presents and lighting Hanukkah candles, NAHU Legislative Council members were busy working with the government affairs staff on comment letters. Next week, we will be finalizing our comments on four new pieces of regulatory guidance the Obama Administration released on December 19 and December 22. First up will be comments to the Centers for Medicare and Medicaid Services (CMS) concerning their Draft 2016 Letter to Issuers in the Federally Facilitated Marketplace. This letter to issuers does include provisions about the treatment of brokers and is very similar to the 2015 letter to issuers and other guidance the Department of Health and Human Services (HHS) has issued this year concerning agents and brokers and exchange reenrollments.
However, this issuer letter does include a major concern that NAHU plans to address. This letter assumes that open enrollment for 2016 will begins on October 1, rather than November 15, as in 2015 and that it will end on December 15, 2015. That means the time frame for completing regulatory review begins earlier and is quite compressed and also that the time for helping consumers will be very short and not span over into the new coverage year, which NAHU members report will be an enormous problem. The letter also provides no significant guidance to carriers about the planned shift in small group size to 1-100 in 2016, and NAHU plans to ask again for a delay in this size shift or at the least, extensive guidance about how the shift will be carried out for both carriers and employers on an immediate basis.
NAHU is also reviewing a proposed rule on a new excepted benefit for wraparound coverage. On December 19, the agencies proposed a pilot program to allow employers to offer exchange-subsidy eligible employees a limited wraparound benefit under certain circumstances. It would apply to certain employees who are offered unaffordable employer coverage (costing more than 9.5% of their gross income) and purchase individual coverage through the exchange with premium tax credits. The proposed rule contains a pilot program under which wraparound employer coverage that met certain requirements could be offered to certain employees in two alternative limited circumstances.
Under the pilot program, wraparound coverage would have to begin no later than December 31, 2017, and end no later than three years from the time coverage was initiated or the date on which the last collective bargaining period relating to the wraparound program ends. The limited wraparound coverage would have to provide meaningful benefits other than simply coverage of cost sharing under the eligible individual health coverage. It could not be provided under a coordination-of-benefits provision with the individual coverage or be an account-based reimbursement arrangement. Wraparound coverage could also not just cover cost-sharing because cost-sharing varies depending on the metal-level plan chosen by individuals and the amount would have to be limited so that the average per-employee cost could not exceed the maximum employer contribution for flexible spending accounts. The wraparound coverage would also have to be guarantee-issue and involve no medical underwriting of any kind.
There are two ways proposed for employers to take advantage of this pilot program. Under alternative one, employers could offer wraparound coverage to employees who are not full-time employees if three conditions are met: (1) the employer must offer at least 95% of its full-time employees coverage that meets the employer shared responsibility requirement minimum value and affordability tests (employer avoids both A and B penalties); (2) the wraparound coverage offer is limited to employees who are not full-time employees or retirees and to their dependents; and (3) this population must also offer other creditable group coverage beyond an excepted benefits plan.
The second way an employer could offer employees the proposed wraparound coverage would be in conjunction with multi-state plan coverage. Option two wraparound coverage would have to be approved by the Office of Personnel Management, which administers the multi-state plans offered via the exchanges. To offer this coverage the large employer must offer at least 95% of its full-time employees coverage that meets the employer shared responsibility requirement minimum value and affordability tests (employer avoids both A and B penalties). The employer’s contribution for both primary and wraparound coverage also must be substantially the same as the employer’s contribution for full-coverage for full-time employees.
Finally, we are in the midst of going through a joint notice of proposed rulemaking to amend the Summary of Benefits and Coverage and Uniform Glossary rule (fact sheet) that was issued on December 22. In conjunction with the proposed rule, the Departments released a proposed updated Uniform Glossary and proposed updated summary of benefits and coverage (SBC) templates, SBC language, instructions, and coverage example narratives and calculators. The changes proposed will be effective as of the first open enrollment period or plan year beginning on or after September 1, 2015. While we still say “Bah Humbug” for releasing (and making us wade through) this proposed change to the regulations so close to Christmas, in reality most of the proposed changes are merely an update to make the 2012 regulation in line with the Administration’s already released frequently asked questions, which modify, clarify and condition the 2012 rules (FAQs Parts VII, VIII, IX, X, XIV, and XIX). The proposed regulations and accompanying documents fold in the FAQ guidance and also change to both state and federal laws due to the implementation of the 2014 market reforms.