5/16/14 CMS Final Rule-Almost 500 Pages

[russelltw]

So, you have 2 choices Russell.

1. let them go to medicaid, be rejected, and be without coverage until you get the answer that you know is going to come. Then, you may find their is no SEP, as no insurance was lost if it goes past 60 days.

2. Call up HC.gov with client, change the income by $10 up or down, and get a new determination, and fix the problem.

Then the 2nd game will begin, and that's banking on the fed to send the file with all people on the app, effective date, payment, APTC being sent, and agent info included. Ain't happenin' with my recent clients.

We are stuck on option 1 now. I spent 2 hours on the phone with a supervisor in the "life change" department (whatever it's called) trying to make sense of what was happening. After repeating the situation at least 3 times, she finally realized it was not working. All said, she was not very helpful. She basically said "I have no idea why it's doing what it's doing, but we need to wait for the denial from Medicaid and we can add the child." Marketplace said they would add the child back to date of birth once denied. We will see.

We tried option 2 three times. The first two income increases were the same result (two adults, two youngest sent to Medicaid; 10 yr old and 8 yr old received no subsidy). The third attempt, which put the income just over 250% FPL, resulted in no subsidy for anyone and the premium was $1300+ per month. It's like we have gone back to mid November with how the site is working.

 

[somarco]

I won't say I didn't see any of this coming. This is why I have tiptoed around Obamacare and completely avoided subsidized apps. Not casting stones, just saying this. When the IRS was made the police dog I knew there were a lot of tentacles involved in making sure people adhere to the letter of the law.

I didn't want any part of that tango.

I refuse to complete an app for someone requesting a subsidy for exactly that reason - if they do it themselves, I have no responsibility.

I think you are off base a bit. You submit a medically underwritten app (pre-2014) and the applicant lied about something material. Doesn't matter who filled in the blanks, when you signed the app you are essentially attesting that the information is correct.

If the carrier later investigates a claim and finds there is a discrepancy on the app misrepresenting the actual health status, you will be included in the investigation. Doesn't mean you will be charged with anything unless you were complicit and they can prove it, but you will be quizzed.

Most of this thread deals with mis-stating income to game a subsidy, but there are also implications for misinterpreting (intentional or otherwise) employer coverage, etc.

So many ways big brother can decide a fraudulent app has been submitted.

I wonder how much E&O prices will go up because of this? Will there be a special class for agents that handle subsidy apps? Something similar to agents that deal in ERISA plans or securities.

 

[russelltw]

I have several agents I know tell customers that they did not qualify for subsidy based on access to group coverage through spouse. One customer comes back to an agent a week later and says she was told by another agent that she did not need to include spouse's access to group or his income. She was proud she got a $500+ subsidy...
Agent just shook his head and moved on, happy that he did the right thing.

There are so many "half" trained agents out there doing serious damage. In a couple of years this will get regulated like MAs are now.
R

 

[somarco]

In a couple of years this will get regulated like MAs are now.

A couple of years is here already.

Time flies.

 

[Happy Texan]

Two provisions stand out for me:
1. "For 2015 and in later years an employer may be liable for an Employer Shared Responsibility Payment only if one or more of its full-time employees enrolls in coverage and receives a premium tax credit. Whether or not one or more of its full-time employees' dependents receives a premium tax credit does not affect an employer's liability."
Question 48 on Q&As on Employer Shared Responsibility Provisions Under the ACA
irs.gov/uac/Newsroom

2. Employer Health Care Arrangements
Q1. What are the consequences to the employer if it does not establish a health insurance plan , but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the Marketplace or outside the Marketplace)?
"Under IRS Notice 2013-54, such arrangements are described as employer payment plans. These plans are group health plans subject to the market reforms. Such arrangements
cannot be integrated with individual policies to satisfy the market reforms. Such an arrangement fails to satisfy the market reforms and may be subject to a $100day excise tax per applicable employee under 4980D of the Internal Revenue Code."
Does this provision make private exchanges a risky endeavor for employers - a potential $36,500 excise tax per year, per employee?
Employer Health Care Arrangements
Don Levit

 

[RayNY]

Don,

2. Looks scary. I've read all the guidance (ruling, notice, and even 4980D) and can't confirm what situation it applies to.

Does this apply to all employers paying for individual employees coverage? Or does it only come into effect if the individual plan doesn't include "prohibition on annual limits for EHB's and no-cost preventative care"?

 

[Happy Texan]

Good question.
It looks like individual policies are out.
The question that comes to mind is "Would the plans on the private exchanges be group plans, because it is my understanding they are "experience rated." If "true group" plans, and not individual policies, is this provision relevant?
I sent this information to the ERISA attorney helping us with our filing as an insurer at the Texas Dept. of Insurance.
I will get back to you as soon as he replies.
Don Levit

 

[RayNY]

Thanks, I'm sure we all appreciate you sharing your findings.

I have seem quite a few small employers drop coverage and reimburse employees (one way or another) for the expense of their individual coverage. If they're potentially facing $36,500 of fines every year per employee, I'm sure they want to know.

 

[Yagents]

The only clean way is to pay it as additional income to employees

 

[AllenChicago]

The indemnity portion is damning to that industry. What are considered fixed indemnity? Lots of other things going on in this new regulation


HHS sets complicated fixed indemnity rules | LifeHealthPro

But HHS said it would let an insurer sell a fixed indemnity policy only to consumers who have MEC -- enough major medical coverage to get the consumers out of having to pay the penalty PPACA is supposed to impose on taxpayers who lack a minimum amount of coverage. In the new final regulations, HHS has decided that consumers who buy fixed indemnity coverage must have MEC. But insurers need not verify whether or not the buyers actually have MEC. Insurers simply must have the buyers state that they have MEC, CMS officials write in a preamble to the regulations. HHS has decided to let insurers sell fixed indemnity products to any consumer who has MEC, whether the MEC plan covers the essential health benefits or not.

When do these Fixed-Indemnity restrictions go into effect? Immediately? No word on this subject from any of the affected insurers yet. Perhaps they're still figuring it all out and examining how to modify their health applications for compliance.
ac