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ACA Ruled Unconstitutional – Law Remains in Effect During Appeal

On Dec. 14, 2018, U.S. District Judge Reed O’Connor issued a ruling that determined the Affordable Care Act (ACA) is unconstitutional because of last year’s change to the federal tax law that zeroed out the ACA’s individual mandate penalty. The ruling was in favor of Texas and a number of states in Texas v. United States, which is the most recent in a series of judicial challenges to the ACA. The ruling is expected to be appealed, and the ACA remains in effect.

How did we get here? 
The U.S. Supreme Court has upheld the ACA as constitutional twice since the law was enacted. In the 2012 decision, the Supreme Court ruled that the individual mandate was a tax, which Congress has authority to impose, and therefore the ACA was constitutional.

The plaintiffs in the Texas v. United States litigation argued that when the mandate penalty was reduced to zero in the 2017 Tax Cuts and Jobs Act, the tax was effectively eliminated, so the individual mandate – and ACA as a whole – is unconstitutional. Judge O’Connor agreed that the mandate “can no longer be fairly read as an exercise of Congress’ tax power.” He further stated that because the mandate was essential to the law, it could not be severed (or separated) from the ACA, which means the entire ACA is invalid.

What the ruling means for the ACA today
The Texas v. United States ruling is not an injunction and does not block the operation of the law, so the ACA remains in effect. California is expected to appeal Judge O’Connor’s ruling. The newly elected Democratic majority in the U.S. House is also expected to support the appeal. This is the first step in what is expected to be a long legal process.

On Dec. 15, the Centers for Medicare & Medicaid Services (CMS) stressed that open enrollment for health coverage on the public Marketplaces would continue as planned, and there would be no impact to coverage or subsidies for 2019. While open enrollment ended in most states on Dec. 15, some state-run Marketplaces* have extended open enrollment periods. Individuals interested in purchasing coverage should confirm enrollment deadlines with their state-specific Marketplace.

Potential impact moving forward
If the ruling is upheld on appeals, the entire ACA – containing hundreds of provisions affecting all areas of the health care system – would be struck down. It would void ACA provisions such as protections for people with preexisting conditions, 100% coverage for certain preventive services, dependents remaining on their parents’ health plan until age 26, and more. It could also mean Americans who buy plans on the public Marketplace would be at risk of losing their health coverage, as well as those who receive coverage as a result of Medicaid expansion that has been adopted in 36 states plus the District of Columbia.

Good Advice for Shopping for Health Insurance if your a Self Employed -1099 Worker

There has been ample conversation this week about why enrollments in ACA-compliant coverage obtained through healthcare.gov are down more than 10 percent from the same time period during last year’s open enrollment period (OEP). Top reasons given are the removal of tax penalties for the Individual Mandate, increased availability of such low-cost alternatives as short-term health plans, and steep declines in the government’s marketing budget pertaining to ACA coverage.

All of these variables are likely to prove impactful once we are through the 2019 Open Enrollment Period (OEP19) and have a chance to take a closer look at them. But while we’re in the final stretch and finding coverage for everyone who’s eligible is critical, we want to focus on a group that may be at greater risk of getting the wrong coverage or missing out altogether — 1099 workers, AKA the “gig economy.”

Why would these workers be at greater risk? Often, 1099 (which refers to the tax form they receive for contract-based employment) workers have multiple jobs but none qualify them for company-sponsored health coverage. So, they’re on their own to navigate a process that’s very complex and potentially costly if you don’t know where and how to look.

Here are seven things that freelancers and gig workers should ensure as they get out there and get covered before it’s too late!

You MUST enroll by December 15 in most states. ACA coverage, like most employer-based coverage, requires you to enroll during an annual open enrollment period (OEP). After that, only a change in life status, like having a baby, qualifies you to pick up coverage before 2020. You may have heard that you can enroll in a short-term health plan anytime throughout the year. That’s true but if you want to enroll because you’ve become sick or had an accident, don’t expect to get it because short-term plans can deny coverage based on pre-existing conditions.

Most people qualify for subsidies. According to healthcare.gov, nearly 90% of customers shopping for individual health coverage qualify for a subsidy to help pay their monthly premium, and nearly that many also qualify for cost-sharing reductions (CSRs) that help reduce their out-of-pocket costs when they have to use their insurance throughout the year. The ACA provides subsidies for people who make up to 400% of the FPL annually. That equates to $48,560 for an individual, $100,400 for a family of 4, and $169,520 for a family of 8. Gig workers tend to have income that would qualify them. If you are young and single and killing it with your income, then congratulations but it will unfortunately impact what you pay for insurance.

Use reliable websites and navigators. In Colorado the marketplace website is www.ConnectforHealthCo.com. About two-thirds of states use healthcare.gov and the rest have a “state-based exchange”. To see your options in your state, check out this list on healthcare.gov. and always be sure you’re going with a reputable source. Robocall scammers are a serious problem and you should never enroll based on a recorded message you received.

Beware of plans that aren’t ACA-compliant and those who try to get you to buy them.The Trump Administration expanded the availability of short-term plans to individuals this year. Some brokers are offering them exclusively or selling them first because they can be less expensive than the pre-subsidy rate for ACA-compliant plans—and because brokers get paid more to sell them. But they are NOT comprehensive health coverage — they’re more like cut-rate, collision-only auto insurance that only helps you if you get hit by a bus. ACA-compliant plans offer mental health coverage, maternity care, prescription drug coverage, annual physicals, and free flu shots, among other things and all mandated. Short-term plans offer none of those things. Make sure you know what you’re buying and look for disclaimers, or just ask the broker you’re using, about whether a plan is ACA-compliant.

Know your income. Technically, your subsidy is an “advanced premium tax credit” (APTC), meaning your annual taxes are being diverted to pay a portion (or all) of your health insurance premium. Contract workers may not have consistent income, which can make it tougher to estimate what you may make in the coming year. But you are likely more familiar with how to claim deductions and expenses that can reduce their income and increase the subsidy amount(s) for which you qualify. Be honest about your income but also don’t be too conservative about your income so you don’t miss out on lowering your healthcare costs.

Compare cost and coverage levels. Individual coverage is organized into metal-level tiers that let you know what you’re getting for your money: Platinum (best), gold, silver, and bronze. For most people’s personal health circumstances, silver is more than adequate coverage, which is why it’s selected by about three-quarters of individual market customers. But read the “plan details” before making your final selections to ensure you’re getting what you need for your personal needs. If plan details aren’t available where you’re shopping, find somewhere else to shop!

Look beyond premium costs alone. There are many variables to consider when looking at your insurance, so don’t just find the lowest-cost plan and call it a day. You will also want to look at deductible, which is what you pay out of your own pocket before your insurance kicks in for a lot of services; the copay, which is how much you pay vs. how much your insurance pays for things like doctor visits and prescription drugs, and coinsurance, which is how much you may pay vs. your insurance even after meeting your deductible.

Health insurance is a critical part of both your physical and financial well-being. Don’t miss your opportunity to protect yourself and your family in 2019 and beyond!

Helpful Links for You

Connect for Health Colorado – Colorado’s Affordable Care Act (ACA) Qualified Health Insurance Marketplace

Colorado Division of Insurance – The Colorado Division of Insurance (DOI) regulates the insurance industry in Colorado, and assists consumers by answering their questions, investigating their complaints, and helping them to understand their insurance.

Healthcare.gov – National Health Insurance Marketplace and a great resource for ACA information

ACA Tax Calculator – Estimate your potential ACA penalty

Medicare.gov – The official U.S. government site for Medicare

Healthcare Bluebook – Never overpay for healthcare again

Good Rx – Stop paying too much for your prescriptions

HSA Center – A great resource for Health Savings Account information

9Health Fair – As the largest volunteer-driven, non-profit health and education program in the nation, 9Health Fair is committed to providing life-saving early detection and prevention to help you and your family stay healthy.

LiveHealth Online – See a Doctor 24/7 on your computer or mobile device

Dispatch Health – On-demand Urgent Care in the comfort of your home or work

Final Regulations – 2019 Notice of Benefit and Payment Parameters

On April 9, 2018, the Department of Health and Human Services (HHS) issued final regulations and related guidance on Affordable Care Act (ACA) provisions including Essential Health Benefits (EHBs), out-of-pocket (OOP) maximums, and Marketplace updates and reforms. These regulations, generally effective for plans and plan years beginning on and after Jan. 1, 2019, largely mirror the proposed regulations issued Oct. 27, 2017.

The final rule affords greater flexibility to states for determining EHBs, reduces some regulatory requirements in the individual and small group markets and provides annual benefit provision updates. Additional guidance expands the individual mandate hardship exemptions available for 2018 for people living in states with federally-facilitated Marketplaces.

While the EHB benchmark plan changes most directly impact individual and small group plans, they will affect large group health plans as well. Otherwise, the final regulations are primarily focused on individual and small group Marketplace updates and reforms.

Essential Health Benefits (EHBs)
For plan years beginning on and after Jan. 1, 2020, the final rule allows states greater flexibility in selecting EHB benchmark plans. States are allowed to follow current rules and maintain 2017 benchmark plans, or they may select a new EHB benchmark plan annually from one of the following three options:

  • Choose another state’s 2017 benchmark plan – allows states to select another state’s 2017 benchmark plan, and implement the plan benefits and limits to their own EHB standards, such as changing benefits with dollar limits to non-dollar limits.
  • Replace one or more of the 10 required EHB categories of benefits under its current 2017 benchmark plan with the same categories from another state’s 2017 benchmark plan – giving states the ability to make precise changes to their 2017 benchmark plans at the coverage detail level. For example, State A may select the prescription drug coverage EHB from State B, which uses a different drug formulary.
  • Otherwise, select a new set of benefits to become its benchmark plan – provided the plan meets other specified requirements.

The three options are subject to additional requirements, including two scope of benefits conditions. States must affirm that their new/modified benchmark plan provides a scope of benefits that are equal to, or greater than, the scope of benefits provided under a “typical employer plan,” and is no more generous than the most generous of a set of comparison plans. HHS released final guidance with the methodology states can use for comparing benefits. States have until July 2, 2018, to submit their 2020 EHB benchmark plan to the Centers for Medicare and Medicaid Services (CMS). 

As a reminder, any health plan that covers EHBs must cover these benefits with no annual or lifetime dollar maximums. This includes both fully-insured and self-funded employer-sponsored plans.

2019 out-of-pocket (OOP) maximums
The 2019 OOP maximums increase to $7,900 for individual coverage and $15,800 for family coverage. These coverage limits apply to all non-grandfathered plans, regardless of size or funding type.

Marketplace regulations
The final rule also includes a number of provisions (effective Jan. 1, 2019) intended to strengthen the Health Insurance Marketplace, including:

  • Deferring the network adequacy reviews for qualified health plan (QHP) certification to the states
  • Loosening the audit process for agents, brokers, and issuers who participate in the direct enrollment process
  • Updating the risk adjustment model for insurers with high-cost enrollees
  • Modifying the requirements for Marketplaces to verify eligibility for, and enrollment in, qualifying employer-sponsored coverage
  • Not specifying 2019 standardized plan options (known as simple choice plans)
  • Updating special enrollment period (SEP) rules for coverage effective dates specific to SEPs that allow adding or changing dependents
  • Adding a new SEP for pregnant women who were receiving coverage through the Children’s Health Insurance Program (CHIP) but lose that access
  • Allowing Marketplaces to determine individual affordability exemptions based on affordability of the lowest-cost metal level plan available
  • Allowing enrollees to request same-day termination of coverage
  • Removing several Small Business Health Options Program (SHOP) requirements for online enrollment 

Other market reforms
In addition to Marketplace updates, the final rules also modify other ACA provisions, including:

  • Streamlining the rate review process for states and issuers, including when rates are posted by the states, increasing the threshold at which rate increases require review from 10% to 15%, and establishing a process for states to request a higher threshold
  • Modifying the Medical Loss Ratio (MLR) rules, including simplifying quality improvement activity reporting requirements for issuers and establishing a process for states to use to request adjustments to the 80% MLR standard in the individual market

Review the information at these links for additional details:

Expanded individual mandate hardships
On April 9, 2018, HHS also issued guidance that expands individual mandate hardships. These additional circumstances are available to individuals who live in states that have federally-facilitated Marketplaces. While the individual mandate is effectively repealed beginning Jan. 1, 2019 due to the zeroing out of the penalty, eligible individuals may claim these hardships for the current calendar year or up to two years prior. 

New hardship exemptions include people who:

  • Live in a county, borough, or parish in which no QHP is offered 
  • Live in a county, borough, or parish in which there is only one issuer offering coverage and can show that the lack of choice resulted in them failing to obtain coverage under a QHP

SUPPORT for Patients Act signed into law to combat opioid crisis

On Oct. 24, 2018 the SUPPORT for Patients and Communities Act (SUPPORT Act) was signed into law. This comprehensive legislation addresses the U.S. opioid crisis and takes steps to augment and enhance the nationwide system for preventing and treating opioid addiction. The SUPPORT Act enjoyed tremendous bipartisan support, with a vote of 393-8 in the House and 98-1 in the Senate.

The SUPPORT Act makes changes to a variety of public health and law enforcement policies. Here’s an overview of some of the health care-related policy changes included in the law.

  • Medicaid Institutions for Mental Diseases (IMD) Exclusion: Amends the IMD exclusion to allow state Medicaid programs to receive federal reimbursement for covering certain IMD services up to a total of 30 days annually.
  • Telehealth: Expands coverage of telehealth services under Medicare for the treatment of substance use disorders and co-occurring mental health disorders beginning July 1, 2019. Also directs the Secretary of Health and Human Services (HHS) to issue guidance regarding federal reimbursement for telehealth services and treatment for substance use disorders under Medicaid.
  • Medicare and Medicare Advantage: 
    • Requires e-prescribing for coverage of Part D controlled substances starting in 2021.
    • Requires HHS to establish prior authorization standards for electronic submissions starting in 2021.
    • Requires physicians to screen for opioid use disorders during initial Medicare physical and annual wellness visits.
    • Expands Medicare coverage and bundled payment for opioid addiction treatments.
    • Requires drug management programs for at-risk beneficiaries be implemented by 2022 (currently voluntary).
  • Addiction Treatment: Lifts restrictions on maintenance medications used to treat opioid addiction, allowing more types of health care providers to prescribe the drugs.
  • Opioid Alternatives: Provides funding for research and development of non-addictive painkillers and allows the Food and Drug Administration to require that certain opioids be dispensed in packaging that encourages safe use (e.g., small blister packs).
  • Prescription Drug Monitoring Programs (PDMPs): Gives authority to the HHS Secretary to issue guidelines specifying a uniform electronic format for the reporting, sharing, and disclosure of information for PDMPs. It also gives States the ability to share PDMP data with Medicaid managed care entities under certain parameters. 
  • Grant Funding: Includes new and reauthorized grant funding for a number of initiatives to address the crisis, including funding for Comprehensive Opioid Recovery Centers and reauthorizing funding from the 21st Century Cures Act to provide $500 million annually, in fiscal years 2019-2021, for State Opioid Response Grants. The following may also be of interest to employers and other community stakeholders:
    • Career Act: Helps treatment or recovery services that partner with local employers, community organizations, and/or workforce development boards to support recovery, independent living, and participation in the workforce.
    • Addressing Economic Impacts Pilot Program: Supports local workforce boards in areas with a high rate of substance use disorders to engage and assist employers in establishing job-training/transition services for those in recovery.
    • Peer Support Communities: Supports recovery community organizations to develop, expand, and enhance services including fostering connections between such organizations and employers, behavioral care providers, primary care providers, schools, housing services, and child welfare agencies.

Medical record privacy rules update
Notably, after bipartisan negotiations between both chambers of Congress, a key provision aimed at changing medical record privacy rules did not make it into the final law. Under existing federal regulations (42 CFR Part 2), health care providers operating a Part 2 covered program are prohibited from disclosing a patient’s history with a substance use disorder unless they have the patient’s consent. The House’s opioid bill included a provision to align 42 CFR with existing Health Insurance Portability and Accountability Act (HIPAA) privacy requirements, but it is not included in the SUPPORT Act.