On January 31, 2020, the Department of Health and Human Services (HHS) published its proposed Notice of Benefit and Payment Parameters for 2021. This proposed rule provides additional guidance pertaining to the benefit and payment criteria that is imposed under the Affordable Care Act (ACA), primarily pertaining to:
- Annual Limitations on Cost-Sharing. This is the allowable annual out-of-pocket maximum amount a non-High Deductible Health Plan places on an individual before the plan pays 100% of all medical costs. For 2021, the out-of-pocket maximums would increase from:
- Individual: $8,150 to $8,550
- Family: $16,300 to $17,100
- Individual Mandate Affordability Exemption. This provision provides an exemption from the Individual Mandate fee if the reason why an individual does not have health coverage is because they cannot afford it. This is calculated based on the health care premiums not exceeding a certain percentage of an individual’s household income. For 2021 the proposed rule would increase the percentage from 8.24% to 8.27%. It is important to note that in 2018 the Trump administration reduced the individual mandate fee to $0, effective January 2019, so if an individual does not have coverage they would not be penalized. Thus, HHS proposes that individuals should seek an exemption for acquiring health care going forward, for example, in order to be eligible for catastrophic coverage or Marketplace incentives.
- Special Enrollment Periods (SEP) through the Exchanges. This provision allows an individual to enroll in coverage through the Marketplace outside of Open Enrollment, for example being fired from ones job, a divorce, etc. The proposed rule would make certain changes to these existing events, such as:
- Allow Exchange enrollees (and their dependents) who are enrolled in silver plans and become newly ineligible for cost-sharing reductions to change to a qualified health plan (QHP) one metal level higher or lower, if they choose.
- Require Exchanges to apply plan category limitations to dependents who are currently enrolled in Exchange coverage and whose non-dependent household member qualifies for an SEP to newly enroll in coverage and seeks to enroll in a plan with the dependent.
- Shorten the time between the date a consumer enrolls in a plan through certain SEPs and the effective date of that plan, and revert to the single retroactive effective date and binder payment rule that provides consumers who have an SEP with a retroactive effective date the option to pay one month’s premium and only receive prospective coverage.
- Allow individuals and their dependents who are provided a qualified small employer health reimbursement arrangement (QSEHRA) with a non-calendar year plan to qualify for the existing SEP for individuals enrolled in any non-calendar year group health plan or individual health insurance coverage, based on the last day of their plan year.
Additionally, the proposed rule requests individuals to provide feedback on a new automatic re-enrollment process for consumers enrolled in $0 plans on the exchange. The new automatic re-enrollment process would add stipulations to carry over enrollments, such as those receiving a premium tax credit on their coverage through the exchange would need to take action for the next Open Enrollment timeframe to re-enroll into coverage, otherwise the tax credit they currently receive could be significantly reduced or discontinued. Per HHS, this change would help reduce incorrect tax credits being provided and give the chance to re-evaluate the credits on an annual basis. Comments on the automatic re-enrollment proposal are due to the HHS by March 2, 2020
Lastly, all of the above changes are proposed by HHS and have not been finalized. Therefore, the proposed changes do not impact ACA regulations that apply to current Medical plans both on and off the Marketplace.
Contact your Cowden representative for more information on this or other compliance issues.