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Posted May 01, 2017 by Jenifer Dorsey

Final Rule Amends ACA as Tug of War Continues Over Obamacare Repeal 

Although the GOP continues to craft new legislation for repealing and replacing the Affordable Care Act (i.e., Obamacare), none of its proposals have passed. However, some changes are coming anyway—changes that aim to improve the health insurance risk pool, promote more competition within markets and increase consumer choice.[1]

The Centers for Medicare & Medicaid Services and Department of Health and Human Services on April 18, 2017, issued a final rule that amends certain aspects of the Affordable Care Act (ACA). [2] These regulations, which take effect June 19, 2017, are intended to stabilize the individual and small group health insurance markets.

 

Read the full text

 

Read on for a basic breakdown of the four key regulations included in the final rule, and how they could impact you.

1. 2018 open enrollment dates

Buy your coverage before the new year. Open enrollment for individual health insurance plans once lasted three full months, but now consumers will have 6 weeks. Previously, open enrollment for plans effective Jan. 1, 2018, had been scheduled from Nov. 1, 2017, through Jan. 31, 2018.

 

Revised 2018 open enrollment dates are as follows:

Nov. 1 through Dec. 15, 2017[3]

 

Why the change?

By giving consumers less time to shop and purchase coverage, this new regulation is intended to “encourage healthier individuals who might have previously enrolled in partial year coverage after December 15th to instead enroll in coverage for a full year.”[4]

Currently, someone could wait until the end of open enrollment to purchase coverage, thereby giving themselves a month or two without health insurance premium payments. The ACA’s individual shared responsibility provision (i.e., mandate) allows up to three months without minimum essential coverage.

This will be harder to do under the recently published rule, and in theory will help insurers diversify their risk pool (e.g., bring in year-round premiums from healthier enrollees who use less healthcare to balance out the cost of enrollees who require more healthcare).

The potential challenge

If you’ve been trying to save on premiums by waiting until the new year to enroll in coverage, you will no longer be able to do so. If you wait until after Dec. 15, 2017, you will have to prove you are eligible for a special enrollment period to purchase an Obamacare plan.

Temporary coverage such as a short term medical (STM) or supplemental coverage such as a hospital indemnity plan (HIP), plans that are not considered minimum essential coverage under the ACA, may provide you with options until you can secure benefits that qualify as minimum essential coverage.

 

STM vs HIP—what’s the difference?

 

2. Special enrollment periods

Be ready to prove you qualify. Pre-enrollment verification will be required for 100 percent of consumers seeking special enrollment periods in states served by the HealthCare.gov platform.[5] Previously, 50 percent of enrollees requesting special enrollment were subject to pre-enrollment verification.

Why the change?

This requirement was established to help curb “misuse and abuse of special enrollment periods” by those who decided to enroll in coverage after they find out they need healthcare.[6]

The potential challenge

If you don’t qualify for special enrollment you could not only face a tax penalty, you could also wind up uninsured. Again, you may need to consider short term coverage or another type of health benefits to help pay for healthcare until you have minimum essential coverage.

 

How much is STM? Get a quote!

 

3. Skipping premiums

Prepare for back payments. When you enroll in a 2018 plan, health insurance issuers can apply your premium payment to any past debt you owe for previous coverage through that issuer or a different issuer in the same controlled group within the 12 months prior.[7]

In other words, let’s say you were to skip your premium payments in November and December 2017 for one reason or another. When you enroll in a health insurance plan for 2018, through the same issuer, your first premium payments will be applied to your past-due premiums instead of January and February 2018.

Why the change?

Dropping their ACA plans in the last three months of the year is a tactic that some healthy consumers have used to save money on health insurance. The new rules make it more difficult for consumers to dip out by simply skipping premium payments. Consumers will need to contact their insurers to cancel plans and discuss what, if any, effect this action will have on future coverage with the same insurer.

The potential challenge

If you live in an area with a single issuer, you may find it difficult to work around this regulation. You may have to catch up on your payments, or you could find yourself without a major medical  (i.e., Obamacare, ACA) plan.

 

Email us to learn more about hospital indemnity coverage

Or call the number at the top of your screen for a no-obligation quote

 

4. Metal plans

Look for greater variations in cost-sharing across plans. Insurers will be given more flexibility in establishing the actuarial values for metal plans (e.g., gold, silver, bronze).

Why the change?

The final rule explains that this change is intended to “allow issuers greater flexibility in designing new plans and to provide additional options” that will help them A) keep cost-sharing the same from year to year and B) stabilize premiums for consumers.[8]

The potential challenge

Some speculate that while this could help consumers find plans with lower premiums, it could also result in higher deductibles and cost-sharing requirements.[9]

 

Visit NPR.org for more analysis

 

 



[1] Department of Health and Human Services. 45 CFR Parts 147, 155, and 156 . Patient Protection and Affordable Care Act; Market Stabilization. Final Rule. Federal Register. Vol. 82, No. 73. April 18, 2017. https://www.gpo.gov/fdsys/pkg/FR-2017-04-18/pdf/2017-07712.pdf

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Appleby, Julie. “Get Set for Trump Revisions To Affordable Care Act Insurance.” NPR.org. April 13, 2017. http://www.npr.org/sections/health-shots/2017/04/13/523569821/get-set-for-trump-revisions-to-your-affordable-care-act-insurance?sc=tw

Short Term Medical; Hospital Indemnity 

These products are not qualifying health coverage (“Minimum Essential Coverage”) that satisfies the health coverage requirement of the Affordable Care Act. If you don't have Minimum Essential Coverage, you may owe an additional payment with your taxes. The termination or loss of this policy does not entitle you to a special enrollment period to purchase a health benefit plan that qualifies as minimum essential coverage outside of an open enrollment period. These products may include a pre-existing condition exclusion provision.

This document is for general informational purposes only. While we have attempted to provide current and accurate information, this information is provided "as is" and we makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind. External users should seek professional advice from their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.  

About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its subsidiaries since 1980.  The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company), and IHC Specialty Benefits, Inc., a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss).  All products are placed with highly rated carriers.

About IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc. (IHC SB) is a technology-driven, full-service marketing and distribution company that focuses on small employer and individual consumer products through general agents, telebrokerage, advisor centers, and private-label arrangements. IHC SB conducts business under the following brands: Healthedeals.com; Health eDeals Advisors; Aspira A Mas; and PetPlace.com. For more information about IHC SB visit http://www.ihcgroup.com/companies.