Participation Requirements

[stuy119]

I thought we had discussed this at one point (or at least opened up the questioning about it), but it appears that HHS has deemed that there are no participation requirements allowed for small group plan sales from 2014 moving forward. At least that's the case according to a GA email I just read.

The only safeguard is open enrollment dates and special enrollment dates. OE is planned from 11/15-12/15 on those group plans.

 

[Ann H]

I thought we had discussed this at one point (or at least opened up the questioning about it), but it appears that HHS has deemed that there are no participation requirements allowed for small group plan sales from 2014 moving forward. At least that's the case according to a GA email I just read.

The only safeguard is open enrollment dates and special enrollment dates. OE is planned from 11/15-12/15 on those group plans.

Pretty close. Actually HHS said that plans which DON'T meet participation cannot be refused coverage by the carrier, but instead they are subject to restricted special open enrollment that other groups are not subject to. Starting on page 42 of the 145 page final rule from HHS about EHB's, it says:

Comment: We received a few comments about the proposal that issuers would be allowed to decline to offer coverage to small employers for failure to satisfy minimum contribution or group participation requirements under state law or the SHOP standards. Several commenters expressed support for the policy and recommended extending it to the large group market. One commenter emphasized that minimum participation and contribution standards must be reasonable and not burdensome to the point that small employers are discouraged from offering coverage.

Response: Upon further consideration of this issue, we have determined that small employers cannot be denied guaranteed availability of coverage for failure to satisfy minimum participation or contribution requirements. As in the case of the bona fide association exception discussed above, while Congress left in place an exception for failure to meet contribution or participation requirements under the guaranteed renewability requirement in section 2703(b), it provided no such exception from the guaranteed availability requirement in section 2702. To the contrary, language in the guaranteed availability provision for group health plans that was in place before the Affordable Care Act was not included in section 2702. Accordingly, the proposed approach would conflict with the guaranteed availability provisions in section 2702 of the PHS Act. Moreover, permitting issuers to deny coverage altogether to a small employer with between 50 and 100 employees based on a failure to meet minimum participation or contribution requirements could subject such employer to a shared responsibility payment under section 4980H of the Code for a failure to offer coverage to its employees.

While section 2702 contains no exception to guaranteed availability based on a failure to meet contribution or minimum participation requirements, section 2702(b)(1) permits an issuer to limit enrollment in coverage to open and special enrollment periods. Under our authority in section 2702(b)(3) to define "open enrollment periods," we are providing in this final rule that, in the case of a small employer that fails to meet contribution or minimum participation requirements, an issuer may limit its offering of coverage to an annual open enrollment period, which we set forth in this final rule as the period beginning November 15 and extending through December 15 of each year. As such, the group market will have continuous open enrollment, except for small employers that fail to meet contribution or minimum participation requirements, for which the enrollment period may be limited to the annual enrollment period described above, from November 15 through December 15. This approach addresses concerns about adverse selection in a manner that is consistent with the statutory provisions. We do not extend this provision to the large group market because large employers generally do not present the same adverse selection risk as small employers.​

http://ofr.gov/OFRUpload/OFRData/2013-04335_PI.pdf