Individual Market
The ACA contains a number of provisions that relate to the regulation of the individual health insurance market.
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- Jennifer Needle
Florida
Contact - Sonya Schwartz
District of Columbia
Contact - Dustin Arnette
Washington
Contact - Rachel Dolan
District of Columbia
Contact - b mantz
District of Columbia
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District of Columbia
Will the qualified health plans for individuals offered on the health insurance exchanges be considered individual health insurance or group health insurance? Does Medicare Secondary Payer rules apply to those qualified health plans offered on the health insurance exchanges?
District of Columbia
Qualified Health plans for individuals and families offered through an exchange will be individual insurance. Group health insurance will only be sold through the SHOP exchanges for small employers- but that insurance will be purchased through the workplace. Do other users know if Medicare Secondary Payer rules (MSP) will apply?
District of Columbia
Regarding the question: Does Medicare Secondary Payer rules apply to those qualified health plans offered on the health insurance exchanges?
MSP rules apply when a person has Medicare, but another payer is responsible for covering certain medical expenses. This typically occurs in workers comp or legal settlements, where the responsible party pays for damages or costs of an accident. Medicare lets the liable party be the primary payer, and then itself serves as the secondary payer.
MSP is not related to Medigap. We're not envisioning a situation where a Medicare beneficiary would also be buying insurance in the Exchanges. So, our answer would be no, MSP rules only apply to Medicare, not to the insurance sold in Exchanges.
Hope that this is helpful!
Washington
A recent California Health Benefit Exchange webinar on QHP plan design issues mentioned that wellness programs offering incentives were not allowed in the individual market (wellness programs are discussed at about 1:14 to 1:20 in the recording). I have also seen other statements to this effect ("insurers may not offer wellness programs that reward based on health status in the individual market").
These statements stem from ACA section 1201 (which amends PHSA section 2705). A reading of the section does not seem to absolutely preclude such programs in the individual market, although there does seem to be support for these statements.
Two questions: First, is this a correct interpretation of the ACA? If so, how would this section be reconciled with state statutes authorizing these programs in the individual market? For instance, Colorado law specifically authorizes the use of such programs (see CRS 10-16-136).
District of Columbia
Hi Dustin-
We read section 1201 (amending PHSA 2705) to apply to employer wellness plans. HIPAA amended ERISA to prevent discrimination based on health status in group health plans. Wellness programs are a specific exception that are provided for. The ACA largely incorporates regulations previously released on wellness programs and also changes the maximum reward of a health contingent wellness program from 20% to 30%. The ACA does provide for demonstrations in ten states in the individual market with the option of expanding (Sec. 2705 (l) of the PHSA as amended). The ACA also allows for grandfathering of current wellness programs in place.
For more information, I've attached a link to an FAQ on the Dept. of Labor website.
Washington
I am wondering what is the 'bare minimum' an issuer could offer in a state off the exchange? Assume in this scenario that the carrier is not competing on the exchange (either by choice, because they were not selected to contract with the state exchange, they were not certified, they were decertified, etc.)
My understanding is that the 'bare minimum' an issuer could offer in the state off the exchange would be a Bronze-level plan (or perhaps just Catastrophic). It is also my understanding that off exchange products do not have to be certified as QHPs.
If anyone has good literature regarding off exchange requirements specifically, it would be helpful. Most materials seem to focus on the exchange offerings/QHPs specifically.
District of Columbia
Hi Dustin-
I think your thinking is on track.
Sec. 1201 of the ACA that amends 2707 of the PHSA states that any issuer that offers insurance coverage in the individual or small group market must ensure that the coverage includes the essential health benefits package- this includes the essential health benefits, but also the cost sharing limitations and the actuarial tiers specified in 1302 (d) (gold, silver, bronze, etc). 1302 (e) stipulates that this also includes catastrophic plans- so it appears the bare minimum is a catastrophic plan (although only certain individuals are eligible to enroll in those- mostly individuals under 30) Also, note that QHPs by definition are plans certified by the exchange- so plans outside the exchange would not be QHPs.
I've attached a couple of documents related to adverse selection that address some of this issues. Hope this is helpful!
Florida
Will a carrier be able to provide the "Short Term Medical Plans" (30, 60 or 90 day options) off the the exchange? Even so, this wouldnt be considered for a Federal subsidy, correct? Nor would it satisfy the Individual Mandate since it isnt static coverage? Has any specific document addressed these plans--
District of Columbia
Hi Jen, Your question is a 3 in 1! Here is our response:
1) Will a carrier be able to provide the "short term medical plans" (30, 60, 90 day options) off the exchange? The answer is likely to be no. Short term medical plans would have to be certified by the exchange, and would have to at least meet the federal definition of qualified health plans. If you look in the final exchange regulations, subpart C where qualified health plans are defined, there are many requirements that the issuers of short term plans would have to meet. In §156.210 QHP rate and benefit information, it requires issuers to set rates for the entire benefit year or for SHOP the plan year.
2) Do short term medical plans satisfy the individual mandate? The answer appears to be no. Short-term plans would have to be one of the types of plans that meet the ACA's "minimum essential coverage" definition for satisfying the individual mandate. Short-term plans are not Government-sponsored programs, employer-sponsored plans grandfathered plans, or other benefits that HHS recognize, the only fit would be if they were they were considered as individual health plans offered in the individual market within a State, which the law recognizes. However, the federal definition of individual insurance in the PHSA that the ACA refers to does not include short-term limited duration insurance. (42 USC 300gg-91(b)(5))
3) Are short term medical plans eligible for a federal subsidy? Eligibility for a federal subsidy is also based off the same "minimum essential coverage" definition, so the answer appears to be no.
Note: There are special rules in development for student health plans, which people sometimes consider part of the short-term medical plan market. See this bulletin from NACUA: http://counsel.cua.edu/fedlaw/nacuanotehealthcarereformstudent.cfm