March 26, 2019
On March 25, 2019, the Trump Administration lent its weight in favor of the December 2018 Texas District Court ruling currently being appealed that would invalidate the Affordable Care Act (ACA), by filing a brief with the 5th Circuit federal appeals court in New Orleans indicating that it backed full repeal of the ACA, not just portions of the law.
The Texas District Court ruling (Texas et. al., vs. The U.S. et., al.) found the totality of the ACA was unconstitutional now that the individual mandate penalty had been reduced to zero. At the time, the Trump Administration had supported striking down some of the provisions of the ACA, but felt that other provisions, including the expansion of Medicaid and the protections for individuals with pre-existing conditions, should remain. Thus, yesterday's decision to support full repeal represents a reversal of the Administration's prior position.
As stated above, this case has been appealed to the 5th Circuit Court of Appeals, which decision is still pending. It is anticipated that it will ultimately reach the U.S. Supreme Court, though probably not until at least 2020. The change in the Administration's position to advocate for full appeal has no immediate impact on the future of the ACA. However, its decision once again brings the law into the national spotlight, just in time for the upcoming presidential election. In the interim, the ACA remains in effect and employers should approach this as business as usual and continue to prepare for upcoming requirements and deadlines to ensure full compliance with the law.
The Centers for Medicare and Medicaid Services (CMS) issued its Health Insurance Exchanges Open Enrollment Report for 2019. Notable statistics include the following:
Enrollees: 11.4 million Americans enrolled in either a federal or state exchange for 2019. Although substantial, this represented a slight decrease of 500,000 from last year.
New Consumers: Nationally, 24% of consumers with a plan selection during the 2019 open enrollment period were new to the Exchange through which they enrolled. This is a decrease from 27% during the 2018 open enrollment period.
Average Premiums: Among all consumers in the 39 states that use the HealthCare.gov platform (the federal exchange), the average monthly premium before application of the tax credit was $612 in the 2019 open enrollment period. This is a decrease from $621 from 2018.
Financial Assistance: 87% percent of consumers in states that use the HealthCare.gov platform received a premium tax credit (subsidy) in the 2019 open enrollment period, compared to 85% in 2018; the average monthly premium after application of the subsidy for these consumers was $87 in the 2019 open enrollment period, compared to $89 in 2018.
In addition, the CMS also indicated that it will allow issuers to continue certain health plans, referred to as "grandmothered" plans, for another year. A grandmothered plan is a term often referred to as a specific type of non-grandfathered plan in the individual and small group insurance market that does not fully comply with ACA's market requirements. The current extension applies for policy years beginning on or before October 1, 2020, provided that all such coverage comes into compliance with the specified requirements by January 1, 2021.
Specifically, states may allow issuers that have renewed coverage under its non-enforcement policy continually since 2014 to renew such coverage for a policy year starting on or before October 1, 2020; however, any coverage renewed under this non-enforcement policy must come into compliance with the relevant requirements by January 1, 2021. According to the CMS, it will work with issuers and states to implement this policy, including options such as allowing policy years that are shorter (but not longer) than 12 months or early renewals with a January 1, 2020 coverage start date. This approach is designed to facilitate changing from non-compliant coverage to ACA compliant coverage, which requires a calendar year policy year in the individual market.
For More Information
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