The Centers for Medicare and Medicaid Services (CMS) and the IRS have each published guidance on matters arising under the Affordable Care Act (ACA). It is too early to tell whether these measures—some of the first guidance published under the ACA by the new administration—are singular acts or signals of guidance to come, as Congress and the White House consider repeal and replacement of the ACA.
Stabilizing the Marketplace: CMS proposed rules to address concerns raised by insurers participating in marketplace exchanges under the ACA. The proposed regulatory changes aim to promote more continuous coverage of individuals, particularly healthier individuals, with the intent of improving the risk pool in exchange plans and supporting competitive and stable individual and small group markets. The proposed changes include:
- Shortening the open enrollment period for 2018 exchange plans. The period will now last from November 1, 2017, through December 15, 2017. The period had been set to last until January 31, 2018. Technically, the rule accelerates a change that was to take place the following year.
- Limiting special enrollment opportunities or individual marketplace coverage; implementing more comprehensive pre-enrollment verification for such special enrollment applications; and allowing an insurer to apply premiums paid by a new enrollee to that enrollee’s debt for a failure to pay premiums for a prior period of coverage with the same insurer (generally within the past 12 months).
- Expanding the de minimis variation in the actuarial values of the metal plan ranges to provide more flexibility to insurers in designing new plans.
- CMS also requested comments on proposals for making the network adequacy requirements less burdensome to issuers. The proposals include:
- Granting states more authority and modifying the process for assessing a plan’s network adequacy.
- Lowering the percentage of essential community providers (ECPs), who primarily serve low-income and medically underserved populations, from the current level of 30 percent back to the 2014 level of 20 percent of the ECPs in the plan’s service area.
- Retaining the write-in process for identifying ECPs.
- CMS is also exploring additional policies to promote continuous coverage requirements for enrollment during a special enrollment period, including a requirement to provide evidence of coverage extending over a longer prior period, a required waiting period before new coverage may take effect, and a late enrollment penalty.
The proposed rules do not require state-based exchanges to adopt the pre-enrollment verification requirements for special enrollment periods but encourage the states to adopt similar rules or practices to ensure market stability.
The comment period on the proposed rule is short: comments are due by 5 p.m. on March 7, 2017.
Individual Tax Return Reporting: The IRS has announced that it will not reject individual income tax returns this year because of a failure by individuals to provide information about whether they have obtained coverage under the ACA’s individual mandate. The IRS had been planning to reject returns for this failure beginning with this year’s filings.
This change in how the IRS processes filings does not remove the item requesting information from the individual return, relieve individuals from the assessments that may apply if they do not obtain health coverage, or alter the reporting obligations that employers, insurers, and other plan sponsors need to meet under the employer and individual mandates.
Changes are imminent for the ACA and a range of other laws and regulations affecting the health care industry. Ballard Spahr attorneys established a Health Care Reform Initiative in 2008 to monitor and analyze health care reform developments. Our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. All Ballard alerts and resource materials are posted on the Health Care Reform Dashboard, an online resource center for news and analysis on health care reform developments under the ACA and beyond.