The National Association of Insurance Commissioners (NAIC) held its spring meeting April 8-11 in Denver. This spring meeting was the first national meeting for a handful of insurance commissioners who were either newly elected or appointed by newly elected governors taking office this past January. Although the meeting is comprised of state insurance commissioners, the actions of the federal government were a focus of many discussions, with state insurance commissioners seeking avenues of relief for many of the flailing state marketplaces suffering from the repeated announcements from carriers that they may be leaving the individual market in 2018.
The Health Insurance and Managed Care (B) Committee held a meeting with an invitation to stakeholders to provide comments on federal legislative and regulatory proposals related to ACA repeal and replace efforts. NAHU submitted comments to the committee, which focused on our platform of suggestions for market stability. In summary, some of NAHU’s legislative priorities for market stabilization include:
- Allowing premium tax credits to be used outside of the Marketplace if there are fewer than two choices offered in a state.
- Allowing any person to purchase the catastrophic category of coverage regardless of age or income status.
- Tightening special-enrollment opportunities to remove subjective eligibility and be allowed only for lifestyle changes such as loss of documented coverage, marriage, divorce, death of a spouse or birth or adoption of a child, and that a person be permitted a maximum 60-day break in coverage.
- Beginning action on allowing and providing funding for states on hybrid high-risk pools (hybrid version to insure risk and not be coverage-issuing pools) to be in effect by January 1, 2019.
- If ACA tax credits are repealed via reconciliation or some other mechanism, they will need to be replaced with another type of tax credit. NAHU feels that the greatest market stability would be obtained by making these credits income-adjusted, which would provide for a larger credit for those who most need it so that they can afford to remain continuously insured.
- Allowing states flexibility in plan design relative to coverage for an essential benefits package but retain coverage for dependents to age 26, prohibition on lifetime limits, mental health parity and prohibition on pre-existing conditions.
Some of the areas where NAHU believes that the new administration could positively impact health insurance markets via thoughtful and targeted regulatory change include but are not limited to:
- Limiting special enrollment periods only to those clearly defined in the ACA and should require submission of documented proof by the 15th of the month before coverage will be effective.
- The extended 90-day grace period for individuals who are receiving premium tax credits should be reduced to the same 30-day grace period for other covered individuals.
- HIPAA Certificates of Credible coverage, which for many years documented periods of coverage and showed when coverage began and ended, were discontinued in conjunction with the ACA.
- If the medical loss ratio is not repealed via reconciliation and until it can be repealed legislatively, there should be regulatory action to redefine the formula for MLR to specifically exclude broker commissions in the same way taxes are excluded from the formula.
- Allowing a more robust form of composite rating in fully insured plans to allow ease of administration for small employers that provide coverage for employees.
- Removing the requirement for standardized benefit plans to be offered in Marketplaces.
- Simplifying the structure and burden of IRC § §6055 and 6056 employer reporting requirements.
- Removing limitations on keeping grandfathered plans to allow greater changes in employee contributions toward coverage, deductibles and other benefit changes based on an annual allowable change vs. lifetime change.
While the larger Health Insurance and Managed Care (B) Committee was reviewing comments on market stabilization, the Senior Issues (B) Task Force and Long-Term Care Innovation (B) Subgroup made plans to develop realistic policy options for Congress, the states and the NAIC to consider for addressing ways consumers can finance their future long-term care needs. The task force will also continue to monitor state adoption of the NAIC’s recently adopted changes to the Model Regulation to Implement the NAIC Medicare Supplement Insurance Minimum Standards Model Act (#651) required by the federal Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The task force also recently established a new subgroup, which was approved by the Executive Committee (EX), to develop a new NAIC model to address LTCI policies of short-duration. The development of this new subgroup is expected to be completed by the NAIC summer meeting in August.
Finally, in the ongoing saga of the NAIC’s drafting of cybersecurity model legislation, the Cybersecurity (EX) Working Group released it’s third version of the draft model in February, but was not prepared to hold an open discussion at last week’s meeting. The NAIC is accepting comments on the third model, and NAHU will be providing comments on the effect the draft model would have on health insurance agents and brokers. Although the third draft was not an item for deep discussion during the meeting, the recent New York cybersecurity regulation was a subject of discussion and the working group heard a presentation from the New York State Department of Financial Services regarding the implementation and status of their Cybersecurity Requirements for Financial Services Companies.
The New York State Department of Financial Services developed the cybersecurity requirements due to current cybersecurity threats to financial institutions, as well as insurers. The cybersecurity requirements emphasize the importance of risk assessment. The New York Superintendent of Financial Services urged the working group to use their recently finalized regulation as a model for the NAIC in place of the recent third draft that the working group released, which has still left much to be agreed upon in the industry before moving forward with adoption by the NAIC.
The next meeting of the NAIC will take place August 5-8, 2017, in Philadelphia.