New guidance on state innovation waivers under the Affordable Care Act
The Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of the Treasury (collectively, the Departments) have issued new guidance (press release; fact sheet) on waivers authorized by section 1332 of the Affordable Care Act (ACA), which was intended to let states design innovative ways to insure their residents. The newly termed “State Relief and Empowerment Waivers” will let states allow the sale of insurance policies that do not meet all of the ACA’s standards, using criteria that are more flexible than those established by the Obama administration. These alternative plans may provide less robust coverage than would be allowed under the previous guidance, and would not necessarily have to cover pre-existing conditions. The new standards were effective on October 22, but the administration is accepting comments on them through December 24. See Why the new ACA waivers matter (Axios, 10/23/18); CMS expands flexibility for state ACA innovation waivers (FierceHealthcare, 10/22/18); Trump Officials Make It Easier for States to Skirt Health Law’s Protections (New York Times, 10/22/18). For a very thorough explanation of the new guidance, see Administration Proposes Significant Policy Changes for State Insurance Markets through New 1332 Waiver Regulations (National Academy for State Health Policy blog, 10/23/18).
Proposed rule would allow small employers to offer reimbursement for individual insurance plans
As explained in an October 23, 2018, news release, the U.S. Departments of the Treasury, Health and Human Services, and Labor have issued a proposed regulation that would expand the use of “health reimbursement arrangements” (HRAs), which provide a tax-preferred way for employers to reimburse employees for certain health care expenses. The proposed regulation would permit small and medium-sized employers to reimburse employees for the cost of purchasing individual health insurance coverage, which is not permitted under current regulations. The employee would “own” the coverage, so could keep it even if he or she left the employer and was no longer covered by the HRA. The proposed regulation would also allow employers offering traditional employer-sponsored coverage to offer an HRA of up to $1,800 per year (indexed annually for inflation) to reimburse an employee for certain qualified medical expenses, including premiums for short-term, limited-duration insurance plans. In the preamble to the proposed rule, the administration notes that the proposed rule has the potential to create detrimental “market segmentation” – leading those with high health care needs into some types of plans, and those with lower risks into other types. The proposed rule includes provisions intended to prevent this problem, but advocates are concerned that this could still occur. See Trump administration plans to revamp employer-based health care (The Hill, 10/22/18).