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GoGetCovered: Insurance for Businesses and Individuals

Final Regulations – 2021 Notice of Benefit and Payment Parameters

On May 7, 2020, the Centers for Medicare & Medicaid Services (CMS) issued final regulations and related guidance on a number of Affordable Care Act (ACA) provisions and related health care topics including out-of-pocket (OOP) maximums, prescription drug coupons and cost-sharing, Medical Loss Ratio (MLR) calculations, and Exchange updates and reforms. These regulations are generally effective for plan years beginning on and after Jan. 1, 2021.

2021 OOP maximums

The 2021 OOP maximums will increase to $8,550 for individual coverage and $17,100 for family coverage. These coverage limits apply to all non-grandfathered plans, regardless of size or funding type.

Prescription drug coupons

Beginning in 2021, plans are permitted, but not required, to include coupon amounts and other drug manufacturer direct assistance for prescription drugs as amounts paid toward a covered person’s annual OOP maximum, regardless of whether a generic equivalent is available. This applies to individual, small group, large group, and self-funded plans, to the extent permitted by state laws.

Medical Loss Ratio

Beginning with the 2022 MLR reporting year (i.e., MLR reports filed in 2023), issuers must report expenses of functions outsourced to, or services provided by, other entities consistently with issuers’ non-outsourced expenses. It also requires issuers to deduct prescription drug rebates and price concessions from MLR incurred claims. These rebates and price concessions must be deducted not only when received by the issuer, but also when received and retained by an entity that provides pharmacy benefit management services to the issuer.

Exchange regulations

The final rule includes a number of provisions that impact the Health Insurance Exchanges, including:

  • Maintain user fees from the 2020 plan year for Federally-facilitated Exchanges and State-based Exchanges on the Federal platform, 3.0% and 2.5% of total monthly premiums, respectively;
  • Finalize how Qualified Health Plan (QHP) issuers could voluntarily incorporate value-based insurance design principles into their QHPs;
  • Exchange eligibility enrollment and termination requirements;
  • Establish quality-rating information-display standards for Exchanges; and
  • Finalize changes to the risk adjustment program for insurers with high-cost enrollees.

The final rule also makes improvements, some beginning in January 2022, to Special Enrollment Period (SEP) rules.

Review the information at these links for additional details:

Final Rule Released on HRAs

On June 13, 2019, the Departments of Labor, Health & Human Services and Treasury released final rules concerning Health Reimbursement Arrangements (HRAs). The 497-page rule includes the creation of two new types of HRAs, the “Individual Coverage HRA” and the “Excepted Benefit HRA.”

Advantages of the Individual Coverage HRA include, but are not limited to:

  • Funds can be used to reimburse the employee’s premiums for an individual health insurance policy.
  • Reimbursements made to employees do not count towards the employee’s taxable wages.
  • The employer can choose to roll-over unused amounts into the following year.
  • Coverage can be offered to different classes of employees (e.g.; full-time, part-time, seasonal, salaried, hourly)
  • An offer of the Individual Coverage HRA represents an “offer of coverage” under the employer mandate, however, contributions must meet affordability guidelines. The IRS will release further guidelines regarding this later.

The Individual Coverage HRA also comes with restrictions and regulations including but not limited to:

  • An offer of an Individual Coverage HRA cannot be made to any employee that is offered a traditional group health plan.
  • If an offer of coverage is made to a class of employees, there is a minimum class size that is required. Size is typically 10% of that specific class of employees. For example, if an employer has 200 employees, a minimum of 20 employees would have to be in a specified class.
  • Contributions can be in any amount that the employer chooses, but contributions must be consistent for all employees in a specified class.
  • The employer must provide notice of the Individual Coverage HRA to employees.
  • The employer must be able to substantiate that the employee is enrolled in an individual plan or Medicare (model notices are available).
  • The employer must notify employees on an annual basis that the individual health insurance is NOT subject to ERISA.

The final rule also created the “Excepted Benefit HRA” which, starting in January of 2020, will permit employers to finance additional medical care. Employees can use the HRA without having to be enrolled in the group’s traditional health plan.

The requirements associated with the “Excepted Benefit HRA” include, but are not limited to:

  • The annual contribution is capped at $1,800.
  • It must be offered in conjunction with a group health plan, but there is no requirement for the employee to enroll in that plan.
  • The “Excepted Benefit HRA” cannot be used to fund group health or Medicare premiums.
  • It can fund premiums for dental, vision, or short-term limited duration insurance.

Employers who want to offer the “Individual Coverage HRA” for January 1, 2020, can do so but employees will need to enroll in an individual plan during the 2019 open enrollment period (November 1, 2019 – December 15, 2019).

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!