HHS Reports on PPACA Errors and Success While Republicans Pounce

As the new Patient Protection and Affordable Care Act (PPACA) enrollment system opened for business November 15th, HHS admitted that the previously reported total enrollment of 7+ million individuals in the first year was overstated because the number erroneously included 380,000 dental plan only subscribers. CMS also reported that through September the number of individuals enrolled in Medicaid and CHIP exceeded 9 million, a 16% increase over the previous enrollment period. Republicans continued their oversight of the law via the House Science Oversight Subcommittee by grilling Todd Park, the former chief technology officer in the White House Office of Science and Technology Policy, about the original shortcomings experienced under HealthCare.gov. Democrats defended Mr. Park who said his role was limited to oversight of the website’s development. As to the states which were unsuccessful in establishing their own state-run exchanges, despite receiving millions in PPACA development funds, Senators John Barrasso (R-WY), Charles Grassley (R-IA) and Orrin Hatch (R-UT) sent a letter to HHS Secretary Sylvia Mathews Burwell requesting that the agency quickly address the “waste” that occurred. Addressing a criticism of the restrictive provider networks included under some health plans being offered under the PPACA, the National Association of Insurance Commissioners (NAIC) reported that they will soon unveil a model law that states can adopt which would: require insurers to provide information on how they put their networks together; the standards they use to form their networks; and require insurers to have adequate networks across all health insurance products they offer. Of note, apparently the model law will not include an appeals process for providers who are left out of any given insurer network.

PPACA Regulations Revealed

The Centers for Medicare and Medicaid Services (CMS) released a proposed rule which would set benefit and payment parameters for 2016 on individual and small group health plans sold inside and outside the PPACA exchanges. Included are payment parameters and provisions related to the risk adjustment, reinsurance, and risk corridors programs; cost sharing parameters and cost-sharing reductions; and user fees for Federally-facilitated Exchanges. Also included are additional standards for the annual open enrollment period for the individual market for benefit years beginning on or after January 1, 2016. As to the insurer payments that Republicans have criticized, HHS said that “in the unlikely event that risk corridors collections, including any potential carryover from prior years, are insufficient to make risk corridors payments for the 2016 program year, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.” Also, among the changes, HHS said the agency will scrutinize practices considered discriminatory with respect to age and placing certain drugs in a high cost-sharing tier. The rule would also clarify when individuals would be exempt from the mandated coverage rule. The annual limits on cost-sharing would be set at $6,850 for self-only coverage and $13,700 for other than self-only coverage. In addition, health insurers would have to institute a quality improvement strategy. The Internal Revenue Service (IRS) also released final regulations clarifying the PPACA’s minimum essential coverage requirements under which individuals must be covered in order to avoid the penalty “tax”. The IRS said that contributions to flexible spending accounts (FSAs) made available for the current year are taken into account in determining an individual’s required contributions. The IRS said that contributions to a health reimbursement arrangement (HRA) will count toward calculating the affordability, but not the minimum value, of a health plan if an employee can’t use the contributions to pay premiums for the primary plan. The IRS also issued Notice 2014-76 which identifies the hardship exemptions to the tax penalty that a taxpayer may claim on a 2014 tax return without obtaining a hardship exemption certification from the Health Insurance Marketplace. The Office of Personnel Management (OPM) released a proposed rule that clarifies the approach used to enforce the applicable requirements of the PPACA with respect to health insurance issuers that contract with OPM to offer multi-state plan (MSP) options.

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