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Changes to Medicare Rules for 2020

03/19/19

Applies mostly to newly eligible Medicare Beneficiaries

Effective January 1, 2020, a federal law will go into place which will affect the Medicare Supplement plans available to newly eligible Medicare beneficiaries. Newly eligible Medicare beneficiaries are defined as people who are eligible for Medicare on or after January 1, 2020. The new legislation is called the Medicare Access and CHIP Reauthorization Act of 2015 (or MACRA).

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QUESTION: How will Medicare Supplement plans change for newly eligible Medicare beneficiaries?

 

ANSWER: Newly eligible Medicare beneficiaries effective January 1, 2020 will not be able to enroll in Medicare Supplement plans that cover the Part B deductible. That means Plans C, F, and high-deductible Plan F will not be options for them (Wisconsin uses a different plan design but essentially this means the Part B Deductible rider will no longer be available). Instead, they’ll be able to enroll in Plans A, B, D, G (HdG), K, L, M, and N, all of which include some type of cost-sharing component. Some plans will be available to these Medicare beneficiaries on a guaranteed issue basis, meaning they don’t have to pass medical underwriting.  

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QUESTION: What about everyone else?

 

ANSWER: There are, of course, many people who do not fall into the “newly eligible” definition shown above. These people are eligible and enrolled in Medicare benefits before January 1, 2020. They’re sometimes referred to as “not newly eligible,” and, very simply, the MACRA legislation does not affect them in any way. They won’t lose their plans, and they don’t need to switch plans. If they’re already on a Medicare Supplement plan, including Plan C or Plan F, they can stay on it. They can even buy a Plan C or Plan F after January 2020, because they were eligible for Medicare before then.

ACA Found Unconstitutional and Struck Down by Federal Judge in Texas

12/18/19

No immediate effects or changes to the law or your health plan

Over the past several months, there has been discussion about a federal court case (Texas v. the US) challenging the constitutionality of the Affordable Care Act, otherwise known as the ACA or Obamacare. On Friday, the judge in the case decided to issue a “declaratory ruling” that the ACA is unconstitutional.

The most important thing to understand is that all provisions of the Affordable Care Act remain in effect. Your coverage and the protections it offers you remain in place while the case makes its way out of the Texas court, to the appeals court and possibly to the Supreme Court. This could take months or even years.  A high-ranking official in the Trump administration issued an important statement clarifying that the decision had “no impact to current coverage or coverage in a 2019 plan.”

  

How did this happen?  

The case, which was originally filed by several state Attorneys General, argues that the entire ACA should be found unconstitutional because the 2017 Congress acted to zero out the penalty for not having insurance. Since the penalty for not having insurance was reduced to $0, the plaintiffs claimed that it could no longer be considered a tax, and if the penalty could not be considered a tax then Congress did not have the authority to legislate the mandate. In other words, the ACA is unconstitutional because the penalty for not buying insurance will be zero beginning in 2019. The U.S. Supreme Court confirmed in 2012 that the ACA is constitutional if the penalty is more than zero.

The plaintiffs also argued that the mandate is a central part of the ACA and without it, the remainder of the law cannot stand. The judge agreed with the plaintiffs’ arguments on all of these counts.

As already mentioned, it will be some time before we know how the case will come out. Please be assured that your 2019 coverage and your tax credits are in place, and we strongly encourage you to continue to take advantage of the financial protection your health insurance offers you. 

CMS Details Additional Process for Providing Relief for Consumers from Individual Mandate

09/12/18

CMS Details Additional Process for Providing Relief for Consumers from Individual Mandate

Today, the Centers for Medicare & Medicaid Services (CMS) announced a new, more streamlined way for consumers to claim a hardship exemption from the tax penalty imposed for not maintaining health coverage for 2018 on their federal income tax returns, making it easier for taxpayers across the nation to claim their exemption. Of the $3 billion the Internal Revenue Service (IRS) collected from taxpayers in individual mandate penalties in 2015, over 5 million households, or nearly 80 percent, earned $50,000 a year or less.[1] The individual mandate penalty is yet another example of how the ACA hurts low and middle income Americans the most, and today’s action reflects our commitment to minimize the impact of Obamacare’s failures.

For 2018, the Patient Protection and Affordable Care Act (PPACA) requires that all Americans get health coverage that qualifies as minimum essential coverage (MEC) or pay a penalty, commonly known as the “individual mandate.”  Individuals that do not maintain enrollment in MEC or qualify for an exemption must pay a penalty. An individual may be eligible for a hardship exemption if they experience certain circumstances that prevent them from obtaining coverage, such as homelessness or experience a fire, flood, or other natural disaster.

This new option to claim a hardship exemption through the federal tax filing process responds to President Trump’s first Executive Order, where he directed agencies to minimize the unwarranted economic and regulatory burdens of the PPACA.  The President’s Executive Order directs agencies to exercise all authority and discretion available to them to grant exemptions from PPACA requirements that would impose a financial burden on individuals and families. Today’s announcement also follows the 2017 Tax Cuts and Jobs Act, which reduced the individual mandate penalty to $0 for months beginning on or after January 1, 2019. 

“Today’s announcement shows how President Trump’s Administration is working to ease the burden of Obamacare.” said CMS Administrator Seema Verma. “Although the tax cuts signed by the President earlier this year eliminate the mandate penalty starting in 2019, Americans are still under threat of the penalty for this tax year of 2018. This guidance will simplify how consumers claim the hardship exemption from the individual mandate directly on their tax return.”

Specifically through today’s guidance, CMS is announcing additional details on how the Agency is making it easier for taxpayers to claim a hardship exemption on a federal income tax return without presenting the documentary evidence or written explanation generally required for hardship exemptions.  Consumers should, of course, keep with their other tax records any documentation that demonstrates qualification for the hardship exemption. Consumers can still apply for these exemptions through the Exchange using the existing application process.

To see the guidance issued today, please go to: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Authority-to-Grant-HS-Exemptions-2018-Final-91218.pdf

Administration Announces Final Short Term Rule

08/15/18

Affordable longer-term plans coming soon!

On August 3, 2018, the Departments of Health and Human Services, Labor and the Treasury published a Final Rule in response to the Administration's October 2017 Executive Order. This Final Rule addresses plan term length and includes language for a required notice that must appear on Short Term Limited Duration Insurance (STLDI) application materials and contracts. These changes can be applied to STLDI plans, starting with an effective date of October 2, 2018. 

Summary of the Final Rule: 
• Up to 364-day STLDI plan length duration allowed
• Allows 36-month maximum duration
• New consumer disclosure notice must be prominently displayed on the application materials and contract 
• New regulations apply to STLDI plans sold with an October 2, 2018 effective date and after 

New Medicare Cards & ID Numbers shipping soon!

03/07/18

Important information for Medicare Advantage clients

The Centers for Medicare & Medicaid Services (CMS) will begin sending new Medicare cards that include a new Medicare Beneficiary Identifier (MBI) instead of the HICN that has been used previously in April 2018.

Timeline

  • April 2018 – April 2019: CMS will mail new Medicare ID cards to Medicare beneficiaries using the MBI.

  • April 2018 – December 2019: CMS will accept both the HICN and the MBI on most transactions submitted. When CMS receives a transaction containing an HICN, CMS will send the beneficiary’s MBI so the plan can update its source system(s) to reflect the individual’s MBI.

  • January 2020: CMS will no longer accept an individual’s HICN; all transactions must include an MBI.

Member information

  • Once a member receives the new Medicare ID card with the MBI, they should securely destroy the old Medicare card.

  • Important! UnitedHealthcare members should continue to use their UnitedHealthcare cards to receive coverage. They should not use the new Medicare card.

Changes to Short-Term Medical Plans

02/21/18

Up to 364 day length terms will be available later this year

The Departments of Health & Human Services (HHS), Labor, and Treasury have issued a proposed rule that would change the maximum duration of short-term, limited-duration health insurance coverage. 

 

Short-term, limited-duration coverage is designed to provide temporary coverage for individuals transitioning between health care policies, such as an individual who is between jobs or a student taking a semester off from school. 

 

The proposed definition would change the maximum duration of short-term, limited-duration insurance to less than 12 months, as opposed to the current maximum duration of less than 3 months. 

 

Additionally, the proposed rule would revise the notice that issuers are required to provide to a consumer to point out the limited nature of the benefits in the policy. For policies with a coverage start date before January 1, 2019, the notices would continue to state that the insurance is not minimum essential coverage (MEC).     

TAX REFORM BILL of 2018

12/20/17

REPEAL OF INDIVIDUAL MANDATE

On Dec. 20, Congress passed the Tax Cuts and Jobs Act, which makes significant changes to individual and corporate provisions of the U.S. tax code, including a reduction in the corporate tax rate to 21%, down from 35%, beginning in 2018. The bill includes permanent effective repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019. For 2018, most individuals are still required to maintain coverage or pay a penalty when they file their 2018 federal income tax return.

The bill was negotiated by a conference committee comprised of representatives from both the Senate and House after each chamber passed their own versions of tax reform. The final bill was passed 51-48 by the Senate and 224-201 by the House before being sent to the President. President Trump is expected to sign the bill into law soon.

The bill also changes how certain tax thresholds will be indexed for inflation. Affected provisions, including the ACA “Cadillac” Tax (scheduled to take effect in 2020), will now be indexed to the Chained Consumer Price Index (CPI) instead of the regular CPI (the previous metric). That change makes it likely that more employer-sponsored plans would trigger the Cadillac tax sooner.

Judicial challenge: Expanded exemption for covering contraceptive services 

As we shared in our Oct. 13 alert, the Administration expanded the ACA contraceptive coverage exemption through the Interim Final Rules (IFRs) released by the Department of Health and Human Services on Oct. 6. On Dec. 15, a Pennsylvania federal court temporarily blocked the IFRs, ruling that the language of the ACA does not allow for such exemptions.

Since the preliminary injunction was issued by a federal court, the new IFRs cannot be enforced in any state unless or until it is removed. The injunction maintains the status quo. It does not impact exemptions or accommodations to the contraceptive coverage requirement granted prior to Oct. 6, 2017. Employers who may have been newly eligible for an exemption under the IFRs can only seek the exemption if they qualify under the previous contraceptive coverage mandate rules and follow the accommodation process. The Administration is expected to appeal this decision.

 

Staying informed

To stay up to date on the evolving state of health care reform, visit www.InformedonReform.com, including the new Repeal and Replace Update webpage.

Brought to you by Cigna Health Care Reform Consulting and Communications (HCRCC).

Executive Action on Health Care

10/12/17

12:00 PM

On Oct. 12, 2017, President Trump signed an Executive Order (EO) directing various departments to consider easing some health insurance rules related to small businesses, short-term health insurance policies and Health Reimbursement Accounts (HRAs). Through the EO, the Administration aims to provide Americans with more affordable choices and allow greater control over their health care decisions. This EO, along with the Oct. 12 White House announcement that it will stop making Cost-Sharing Reduction (CSR) payments and Interim Final Rules issued by the tri-agencies (Departments of Health and Human Services [HHS], Treasury, and Labor) last week on contraceptive coverage, are part of the Administration’s ongoing efforts to modify or eliminate certain parts of the Affordable Care Act (ACA).

The EO provides guidance to various agencies, but does not make any immediate changes. Any details about potential changes will only be available once new or updated rules and guidance are released in response to the EO.

Executive Order
Association health plans
Under the EO, the Administration is directing the Department of Labor to consider proposing regulations or revising guidance to expand access to Association Health Plans (AHPs) that will allow small businesses to purchase insurance collectively across state lines. The Administration believes a “broader consumer-friendly interpretation” of ERISA could allow for AHP expansions. By joining an AHP, small employers within the same line of business could purchase plans collectively that would follow large group ACA mandates. Such health plans would not fall under small group market rules. 

AHPs, as currently defined, cannot exclude any employee from participating, cannot determine premium prices based on health status, and must follow community rating rules. AHPs must also comply with other ACA patient protections, such as offering coverage to dependent children up to the age of 26, prohibiting annual or lifetime limits, and having zero cost-share for preventive services. These limitations could change as a result of the EO.

 

Short-term health plans
The tri-agencies are being asked to consider updating rules on short-term limited duration insurance to allow plans to last as long as 12 months and be renewable. These policies are not required to follow several of the ACA mandates, including covering Essential Health Benefits (EHBs), prohibiting annual limits, offering coverage for pre-existing conditions or ensuring Medical Loss Ratios (MLRs) are met. Currently, these policies can only be sold for periods of three months or less and cannot be renewed after a total of three months.

Health Reimbursement Accounts (HRAs)
The tri-agencies are also directed to consider ways to expand the flexibility of HRAs. The Administration specifically focused on three HRA rules it wants the agencies to consider modifying: making employer HRA contributions tax deductible, allowing HRA funds to be used for premium reimbursement, and allowing HRAs to be used in conjunction with non-group coverage.

 

Cost-Sharing Reduction (CSR) payments discontinued 
Also on Oct. 12, 2017, the White House announced it would discontinue CSR payments to insurers immediately. The ACA requires insurers to reduce cost-sharing for eligible, low-income individuals enrolled in silver plans through their local Marketplaces. This financial assistance is in addition to the Advance Premium Tax Credit. The Administration said because Congress has not appropriated funds for the CSRs, “the government cannot lawfully make the [CSR] payment.” This decision primarily affects insurers who will no longer be reimbursed for the CSRs but are required by law to offer them to eligible customers. As a result, customers who have reduced cost-sharing through the Marketplace should not see an immediate impact.

 

Expanded exemption for covering contraceptive services
Interim final rules (IFRs) issued Oct. 6, 2017 expanded the current exemption for employers to not cover contraceptive services under their sponsored group health plans. Effective immediately, employers may exclude coverage for contraceptive services based on moral or religious objections. This is in addition to the exemptions already outlined under the ACA for “closely-held” for-profit corporations, religious non-profit organizations and religious employers (e.g., churches).

In addition, employers with religious or moral objections are no longer required to submit a self-certification of their objections to their insurance carrier or file a notice with the HHS – a process that enabled cost-sharing responsibility to be passed to the plan’s issuer or third-party administrator (TPA). Because this accommodation is now optional, it is possible that costs for contraceptive services may not be covered, passing the full financial responsibility of contraceptive services to the customer. Employers who choose to exercise the accommodation process will pass responsibility for covering contraceptive services to the carrier or TPA, alleviating the financial responsibility from their employees and their dependents.

 

Compliance reminder
Ongoing compliance with the ACA is required unless and until official guidance to the contrary is issued. The CSR payment discontinuation and IFRs on contraceptive coverage are effective immediately. It is important to note, however, that the EO does not immediately affect any current ACA rules and regulations, but directs the tri-agencies to begin modifying or creating new rules.

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