On January 1, 2019, portions of the U.S. Department of Labor’s (DOL) Final Rule expanding the availability of Association Health Plans (AHPs) went into effect. AHPs allow small businesses to band together and negotiate better deals when buying insurance for their members.

The partial government shutdown hasn’t slowed the raging debate over how states are to implement the DOL’s final rule. On December 28, 2018, a federal judge ordered litigation concerning the rule to continue despite the shutdown.

States have reacted to the final rule in dramatically divergent ways. Some states believe that AHPs will make it finally possible for small employers to offer affordable healthcare options for their employees. Other states worry that AHPs will destabilize the individual insurance marketplace. They predict that healthy people will join AHPs because they are less expensive than other insurance options, and this shift will leave sicker people in a smaller pool with higher premiums.   Continue Reading Taking the Pulse of New Association Health Plans

On May 26, the Departments of Health and Human Services (“HHS”), Labor (“DOL”) and Treasury (collectively, the “Departments”) issued Part XXVII of their FAQs about Affordable Care Act implementation. This latest FAQ provides additional guidance regarding limitations on cost sharing under the ACA, as well as further information and guidance regarding the ACA’s “provider non-discrimination” provision.

With regard to the ACA’s limitations on cost sharing (i.e., the maximum annual limitation on cost sharing/out-of-pocket costs), the FAQ notes that the maximum annual limitation will rise in 2016 to $6,850 for self-only coverage and $13,700 for other than self-only coverage (up from the 2015 amounts of $6,600 for self-only coverage and $13,200 for other than self-only coverage). The FAQ then notes that HHS, in the final HHS Notice of Benefit and Payment Parameters for 2016 (“2016 Payment Notice”), had clarified that the self-only maximum annual limitation on cost sharing applies to each individual, regardless of whether the individual is enrolled in self-only coverage or in coverage other than self-only.

Notably, the FAQ then goes on to expand this “clarification” from the 2016 Payment Notice to all non-grandfathered group health plans, including non-grandfathered self-insured and large group health plans. As a result, for all non-grandfathered group health plans, the self-only limit applies on an individual-by-individual basis, whether the individual is enrolled in self-only, family or some other variant of coverage. Hence, for example, if an employee enrolled in family coverage in 2015 incurs $10,000 in cost sharing, that individual would be limited to the self-only cost-sharing limit for 2015 (i.e., $6,600), and “the plan is required to bear the difference” between the $10,000 in actual cost sharing and the applicable limit – in this case, $3,400. The FAQ is unclear as to how a plan will “bear the difference” in such a situation, and hence there is a lack of certainty as to whether this would involve separately tracking (and limiting) each individual’s cost sharing against the overall self-only limit and/or refunding directly to the individual the “difference.” The FAQs make clear that this interpretation applies to all non-grandfathered group health plans (including high deductible health plans) and is to be applied prospectively, for plan or policy years that begin in or after 2016.
Continue Reading DOL, HHS & Treasury Issue Guidance on Cost Sharing and Provider Non-Discrimination Under ACA