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ACA Individual Market Stabilization: Final Regulations

 April 27 2017     Diane Cross

Recently, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services (CMS) issued its final rule to help increase stability in the individual health insurance market for 2018. The final regulations, effective June 19, 2017, are intended to provide immediate relief by helping to stabilize the Health Insurance Marketplace, providing more flexibility to states and insurers, and increasing coverage options for individual health plan consumers.

The final rules introduce several policy changes to further stabilize and improve the market. The change most employers may want to be aware of on behalf of terminating employees is the elimination of certain Marketplace special enrollment rights. For example, individuals will not be eligible for Marketplace special enrollment if they are eligible for or enrolled in COBRA and were not appropriately informed of their coverage options. Other changes include:

Condensed Open Enrollment Period: The annual open enrollment period for 2018 is adjusted to better align with the private market and Medicare (beginning November 1, 2017 and running through December 15, 2017). This is designed to encourage enrollment prior to the beginning of the year. 

Increased Oversight: The final regulations require individuals to provide supporting documentation for special enrollment periods and ensures that only those who are eligible can enroll. In addition, individuals will be encouraged to maintain enrollment all year to reduce gaps in coverage. The intended impact is to result in fewer individual mandate penalties and help lower premiums.

Encouraged Continuous Coverage: Issuers will be allowed to require individuals to pay any past due premiums before enrolling into a plan with the same issuer the subsequent year. The goal is to create a positive impact on the risk pool.

Increased Choices for Consumers: Beginning for the 2018 plan year, issuers are given additional actuarial value flexibility to continue offering existing plans while developing more choices with lower premium options.

Reduced Inefficiencies and State Empowerment The final regulations return oversight of network adequacy to states to best evaluate the same, reducing waste of taxpayer dollars by eliminating duplicative review by the federal government.

We will have to “wait and see” whether the final rule can achieve its goal of increasing individual market stabilization. While CMS acknowledges that the provisions’ impact on enrollment, premiums and total premium tax credit payments is uncertain, the agency concluded that these regulations are urgently needed to stabilize markets, incentivize issuers to enter or remain in the market, and ensure premium stability and consumer choice.

You may view the final rule for additional information or contact your HORAN representative with questions.