On November 1, the seventh open enrollment period begins for marketplace coverage under the Affordable Care Act (ACA). We at CHIR are tracking several policy changes that could affect marketplace enrollment and plan affordability in 2020. These include:
- Public Charge Rule: In August 2019, the Department of Homeland Security issued a final rule that broadens the types of public benefits that count against an immigrant’s application for admission to the U.S. or permanent residency. Previously, only an applicant’s use of two public benefits – cash assistance and institutional long-term care – were negatively considered when making a public charge determination. For 2020 and beyond, the Trump Administration expanded this policy to include an individual’s application for health programs such as Medicaid (with some exceptions) and the Supplemental Nutrition Assistance Program (SNAP) as factors for consideration. Application and enrollment in marketplace coverage and the application for and use of premium tax credits and cost-sharing reductions, however, are exempted from the public charge determination test. Though this rule has been finalized, the expansion has been blocked by a federal court and is currently under appeal.
- Health Reimbursement Arrangements (HRAs): In June 2019, the Departments of Treasury, Labor, and Health and Human Services (HHS) issued a final rule that aims to expand the use of HRAs. HRAs are employer-funded accounts in which employers set aside a fixed amount of money to reimburse employees for premiums and medical expenses that are not covered by their insurance plan. In prior years, most employers could only offer HRAs if employees were enrolled in a traditional group health plan that met the ACA’s standards. Under the new rules, employers can offer two new types of HRAs:
- Integrated HRAs: Instead of offering a traditional group health plan, employers can offer employees HRAs to purchase ACA-compliant individual policies; and
- Excepted Benefit HRAs: In addition to offering a traditional group health plan, employers can also offer employees HRAs to purchase an “excepted benefit” (e.g. vision, dental, long-term care coverage) or short-term plan; however, an employee can choose to enroll in only the HRA.
- Association Health Plan (AHP) Court Ruling: The Department of Labor (DOL) issued a final rule on AHPs in June 2018, which loosened the requirements under which a group of employers can join together to form an AHP and become exempt from several federal and state small-group or individual market consumer protections, including many of the ACA’s requirements. Shortly after, attorneys general in 12 states filed a lawsuit challenging the rule and, in March 2019, a federal court found major provisions of the rule to be invalid. This case is currently being appealed and the future of AHP enrollment is uncertain. However, at present, AHPs formed prior to DOL’s 2018 rule are unaffected by the court’s ruling; AHPs formed to meet the DOL rule’s more relaxed standards cannot market to or enroll new members (unless an employee experiences a special enrollment event).
- Direct Enrollment (DE) & Enhanced Direct Enrollment (EDE) Pathways Expand: In 2019, HHS issued guidance to promote the use of DE and EDE pathways. These pathways allow an individual to enroll in marketplace coverage by purchasing a plan through a web broker or health insurer’s website. With DE, an individual begins enrollment on the broker/insurer’s website, is sent to HealthCare.gov for a determination of eligibility for financial assistance, and is then returned to the broker/insurer’s website to complete enrollment. With EDE, individuals can enroll in coverage and receive an eligibility determination for financial help through a broker/insurer’s website without being directed to HealthCare.gov. For 2020, HHS will perform compliance reviews of DE brokers to determine whether they are meeting certain federal standards. HHS has also approved of several new DE/EDE entities, which means that more consumers may start purchasing coverage outside of HealthCare.gov.
- New Special Enrollment Period (SEP) for Advanced Premium Tax Credits (APTCs): In prior years, individuals who were covered under an employer-sponsored plan or a plan purchased through the marketplace could access a SEP if they became newly eligible for APTCs. However, individuals who purchased an individual market plan outside of the marketplace (“off-marketplace”) could not. For 2020, HHS has extended this flexibility to allow individuals who are enrolled in an off-marketplace plan and who experience a decrease in income that makes them newly eligible for APTCs to use a SEP to enroll in an on-marketplace plan. However, this may not be immediately available in all states.
- Changes to the Premium Adjustment Percentage: On an annual basis, HHS sets a premium adjustment percentage, which is a measurement of premium growth and is used to determine the maximum annual limit on cost sharing and required percentage of household income that enrollees must contribute to their premiums. In prior years, the methodology HHS used to determine this percentage was based on projections of average employee premiums for employer-sponsored insurance. For 2020 and beyond, HHS is changing this methodology to measure growth based on both employer-sponsored premiums and individual market premiums. This change means that the premium adjustment percentage will be higher, and, in turn, consumers will experience a higher annual limit on out-of-pocket costs and higher required premium contributions for both subsidy-eligible consumers and those enrolled under an employer plan. As a result, many consumers are likely to experience higher premiums.
We’ll have more information on these policies, as well as answers to hundreds of other frequently asked questions about marketplace enrollment and coverage in our updated and improved Navigator Resource Guide, scheduled to be relaunched in just a few days. Stay tuned!