In the past month,
the federal government has further delayed implementation of certain parts of
the Patient Protection and Affordable Care Act (PPACA), more commonly referred
to as Obamacare. The delays in implementation regard three main topics-
non-grandfathered individual health insurance, the health insurance mandates
regarding businesses, and the implementation of insurance bought through health
insurance exchanges (HIXs).
The provisions of
the PPACA require all individual health care plans to include the ten essential
health benefits. Initially, this requirement was to take effect on January
1, 2014. However, on November 14, 2013, President Obama said that states could
decide whether to allow individuals to renew non-compliant plans through 2014. Hence,
implementation of the provisions requiring plans to include the essential
health benefits was delayed for a year. Yet more recently, on March 5, 2014,
this implementation was delayed by a further two years. States can now choose
to let individuals buy insurance policies that do not provide Obamacare’s
benefit standards through October 2016 and to let individuals keep such
policies through a year after that (through September 2017). About half of the
states have decided to adopt these delays; an estimated 500,000 people have
decided to renew their pre-Obamacare policies into 2014.
Similar delays
have been made regarding businesses. The initial draft of the PPACA mandated
that starting January 1, 2014, businesses with more than 50 full time equivalent
workers (medium sized businesses) must offer insurance to full-time employees.
As of February 10, 2014, this mandate was postponed until January 1, 2016. Although
the employer mandate is taking effect for large businesses (100 or more full
time equivalent employees) only one year late (January 1, 2015), it is being
implemented in a more staged manner than was initially planned. Large
businesses must, in 2015, only offer insurance to 70% of full time employees,
and must then provide insurance to 95% of full time employees from 2016 on.
Some argue that
these recent decisions to push back effective dates for the employer mandate
and the individual health insurance mandate are purely political moves. Everyone
from Congressmen to ordinary citizens have argued that the decision to delay
the full effects of Obamacare until after the mid-term elections is a plot to
maintain Democratic political control and to simultaneously hide the inability
of politicians to actually implement these mandates in a sustainable manner.
Meanwhile, efforts
have been made to enroll as many people as possible in insurance through the
exchanges before the March 31 deadline rolls around. The federal government
announced recently that those who were unable to sign up for a marketplace plan
due to technical difficulties can receive retroactive coverage, retroactive
premium tax credits, and cost-sharing subsidies to the date that they originally
applied. Even those who chose to buy insurance off-exchange due to the
difficulties have the option to switch to a marketplace plan and receive
retroactive subsidies. The federal exchange is honoring these offers; the
fourteen states and the District of Columbia, which decided to establish their
own exchanges, can choose whether or not to honor these options. Regardless, it
is still unclear how the exchanges will determine who qualifies for these
options and what documentation is necessary for qualification. The federal
exchange is also attempting to deal with other glitches; in early February, the
government
announced that if enrollees have encountered benefit display errors,
insurers are encouraged to honor the displayed information. If the insurers do
not honor the information, consumers will be allowed to pick another plan of
the same metal coverage level offered by the insurer. If they cannot find a
good substitute with the insurer, consumers will have 60 days to choose a new
on-exchange plan.
Consumers must
sign up for health insurance- either on-exchange or off-exchange- prior to
March 31, 2014 in order to not be charged the penalty for 2014. The next Open
Enrollment Period will begin in November, 2014 for 2015 coverage. Until the
next Open Enrollment Period, one cannot, with a few exceptions, purchase or
change health insurance policies. However, there are a few circumstances that will
trigger a Special Enrollment Period. This Special Enrollment Period is a period
of 30 days following the following life events during which you are able to
obtain new coverage:
·
Moving to a new state
·
Changes in income
·
Ceasing of prior pre-Obamacare
coverage
·
Loss of job-based health
coverage
·
Changes in family size
o
Marriage
o
Divorce
o
Having a baby
Under the aforementioned
circumstances, one will be able to switch insurance policies. If a
pre-Obamacare plan ends during the course of the year, one might be able to
renew it according to the delay of implementation of the essential health
benefits until 2016. Under other circumstances, one may be able to purchase
insurance- either on or off-exchange- up to 30 days prior to the life event.
Some changes are
approaching for the continuity of the HIX system into 2015. Currently 14 states
and the District of Columbia operate their own exchanges; other states will now
have until June 15, 2014 to determine whether they want to begin to operate
their own exchanges. States that choose not to can still operate under the
federal exchange. Also, the Open Enrollment Period for 2015 coverage on the
exchange has been extended by a month; it will range from November 15, 2014 to
February 15, 2015.
It is imperative to be aware of the changes
in health insurance, and to stay on top of relevant dates.
Until next time,
Andrew Herman
