While former President Donald Trump has threatened to repeal the Affordable Care Act (ACA) if he wins reelection, the landmark healthcare law would be increasingly difficult to dismantle. In this CNN article, McDermott+Consulting’s Rodney Whitlock says the country is “as close as we’ve been to meeting the aspirational goals of 2010 for the ACA.”
The enactment of the Affordable Care Act in 2010 led to a sharp increase in employers self-funding their group health insurance plans, with the market tripling in size in the decade that followed. While larger employers can self-fund their group medical coverage in a relatively efficient manner, it does not work well for smaller employers. As year-over-year spending on healthcare in the United States outpaces growth in real gross domestic product by wide margins, employers of all sizes continue to seek to make group health insurance coverage available to their employees at a reasonable cost. Group captive-funded medical stop-loss insurance offers a way for smaller employers to obtain the full benefit of self-funding. This Special Report explains what group medical stop-loss captives are and how they are structured and regulated.
A recent article by the Kaiser Family Foundation (KFF) and National Public Radio (NPR) raised the prospect that patients may still see surprise medical bills despite the enactment of the No Surprises Act (NSA).
The article, entitled A Surprise-Billing Law Loophole? Her Pregnancy Led to a Six-Figure Hospital Bill, reports the story of a woman who was admitted for an extended inpatient hospital stay and follow-up postpartum procedure after experiencing a serious pregnancy complication. According to the article, the plan initially determined that the hospital was a nonparticipating provider, but the specialty clinic at which she was treated was in the carrier’s network. (The clinic’s doctors admitted patients only to the nonparticipating provider hospital.) The result was some $135,000 in uncovered expenses.
There are two relevant statutory provisions at play here:
A great deal is riding on whether facilities and providers are participating or nonparticipating for NSA purposes, and whether providers are in or out of network for ACA purposes. If it is possible for a nonparticipating facility to have a participating provider, then there would seem to be a gap in the NSA’s protections. In the government’s view, this is not possible, so there is no gap.
The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) weighed in on the issue in Q&As 1 and 2 of recently issued FAQs Part 60. According to the Departments, either:
Under no circumstance, however, can a facility be a “participating” provider for NSA purposes and at the same time claim that they are not subject to the ACA out-or-pocket limits on in-network cost sharing.
The KFF/NPR article does not report the details about the underlying contractual arrangements. This might have been a health maintenance organization or other network-related plan, for example. The article does report that the balance bill was reversed, although no rationale is provided. The lesson here, according to the Departments, is that a plan or carrier cannot be in network for one purpose and out of network for other purposes to evade the surprise billing rules.
The “family glitch” was a regulatory oddity of the Affordable Care Act (ACA). It required the affordability of an employer-sponsored health plan to be determined based solely on the cost of the plan to an individual employee, disregarding the costs to add family members to a plan. This resulted in many families being ineligible for marketplace premium subsidies when purchasing their own health insurance on exchanges. In October 2022, the US Department of the Treasury and Internal Revenue Service (IRS) issued a final rule designed to fix the “family glitch.”
In this Bloomberg Law article, Alden Bianchi and Teal Trujillo examine the rationale advanced by the IRS in support of its changed position in the matter of the “family glitch” and consider how the new position of the IRS might fare if challenged in the wake of West Virginia v. EPA.
Copyright 2023 Bloomberg Industry Group, Inc. (800-372-1033) Reproduced with permission.
The US Departments of Labor, Health and Human Services, and the Treasury (the Departments) have released a series of Frequently Asked Questions (FAQs) in response to Braidwood Mgmt. Inc. v. Becerra, a recent case that invalidated a portion of the Affordable Care Act (ACA) preventive services mandate. The FAQs aim to address inquiries from stakeholders, while also emphasizing the Departments’ opposition to the Braidwood ruling. The Departments urge plans and issuers to continue providing coverage for preventive services at no additional cost to patients.
Since the Biden administration announced its intention to end the COVID-19 National Emergency (NE) and the COVID-19 Public Health Emergency (PHE) on May 11, 2023, a topic of great debate has been the requirement and the coverage of COVID-19 vaccines.
As of March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act has required health plans and issuers to cover COVID-19 vaccines without cost sharing, even when provided by out-of-network providers, during the PHE. Health plans and issuers have been required to cover COVID-19 vaccines within 15 days after any vaccine becomes recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention or receives a rating of “A” or “B” classification recommendation from the United States Preventive Services Task Force (USPSTF). Separately, the Affordable Care Act (ACA) generally requires coverage of vaccines recommended by the ACIP and the USPSTF as preventative care without cost sharing. If a COVID-19 vaccine is provided by an out-of-network provider, however, health plans may begin to impose cost sharing and certain prior authorization and medical management requirements. As a result, after the PHE, COVID-19 vaccines will still need to be covered without cost sharing except in the case of an out-of-network provider.
Due to the ongoing requirements of the ACA, there will be minimal actions that employers need to take after the PHE ends regarding vaccine coverage. The primary changes are that ACIP-recommended COVID-19 vaccines should be covered immediately instead of after a 15-day hold period and that health plans can decide whether to apply cost sharing, prior authorization and medical management requirements to COVID-19 vaccines obtained from an out-of-network provider. A summary of material modifications and/or plan amendment may be required for any changes the health plan makes. Even for plans that are not subject to the ACA, such as grandfathered health plans, participants cannot be balance billed if a vaccine dose was purchased by the federal government. However, the federal government has not received additional funds from Congress to continue to purchase more vaccines for some time. Employers and plan sponsors should stay up to date on developments, as there may be some questions regarding which vaccines must be covered without cost sharing as more vaccines become available.
For any questions regarding the end of the PHE and/or NE, please contact your regular McDermott lawyer or one of the authors.
On January 25, 2023, the US Department of Health and Human Services (HHS) announced that more than 16.3 million people nationwide selected an ACA Marketplace health plan during the 2023 open enrollment period that ran from November 1, 2022, until January 15, 2023, for most marketplaces.
According to HHS, total plan selections include 3.6 million people who are new to the marketplaces for 2023 (22% of the total). The 3.6 million figure is a 21% increase in new-to-marketplace plan selections over last year.
The data included in HHS’s January 25 announcement represents activity through January 15 for the 33 marketplaces using HealthCare.gov, and through January 14 or 15 for the 18 state-based marketplaces in 17 states and the District of Columbia that use their own eligibility and enrollment platforms. Some state-based marketplaces are still in open enrollment and will report updated enrollment data after that period closes. A fact sheet on state-based marketplace open enrollment deadlines can be found here.
The US Departments of Health and Human Services, Labor and Treasury (the Departments) recently issued a proposed rule to eliminate a moral exemption to the Affordable Care Act (ACA) contraceptive mandate and establish an “individual contraceptive arrangement” to permit individuals to obtain contraceptive services at no cost in instances in which their employer does not offer coverage based on its religious beliefs. This is the latest development in the Biden administration’s efforts to increase reproductive health access after Dobbs v. Jackson Women’s Health Organization. The Departments previously issued a reminder to health plans and insurers that the ACA requires contraceptive coverage at no additional cost to individuals.
Multiple Republican lawmakers are opposing a US Department of Health and Human Services (HHS) proposed rule that would expand the Affordable Care Act’s Section 1557 requirement preventing most health plans from discriminating on the basis of sex. According to this SHRM article, the rule applies to health insurers or plans that receive federal funds or that contract with the government. McDermott lawyers previously wrote about this proposed rule, noting that the definition of a covered entity is “similar in many ways to the 2016 Final Rule” but “does not explicitly include employee benefit group health plans as covered entities subject to Section 1557.”
A North Carolina health plan’s refusal to cover gender dysphoria treatment violated the Affordable Care Act. According to this Law360 article, the December ruling by US District Judge Loretta C. Biggs is a win for participants and parents of transgender children enrolled in the North Carolina State Health Plan for Teachers and State Employees. McDermott’s Warren Haskel, Dmitriy Tishyevich and Lauren H. Evans represented the health plan’s participants.
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