In proposed regulations published on February 17, 2017, the U.S. Department of Health and Human Services (HHS) has suggested several adjustments designed to help stabilize the individual health insurance market – particularly for coverage offered through the health insurance exchanges, often referred to as "Marketplaces."
While the proposed regulations do not directly impact most employer-sponsored benefit plans, they do shed light on the Department's efforts to incentivize individuals to maintain continuous insurance coverage without retaining the Affordable Care Act's individual mandate.
In addition to the stabilization proposals listed in the regulations, HHS expresses interest in implementing rules similar to the pre-Affordable Care Act rules that allowed plans to deny coverage for pre-existing conditions if the covered individual experienced a gap in creditable coverage:
HHS is also interested in whether policies are needed for the individual market similar to those that existed under [HIPAA], which required maintenance of continuous, creditable coverage without a 63-day break in the group market if individuals wished to avoid the pre-existing condition exclusions, and allowed waiting periods to be imposed under certain circumstances. Although the HIPAA rules did not require that individuals maintain coverage, the rules were designed to provide an important incentive for individuals to enroll in coverage year-round, not just when in need of health care services; reduce adverse selection; and help prevent premiums from climbing to levels that would keep most healthy individuals from purchasing coverage. 82 Fed. Reg. 10988.
The regulations also propose adjustments to the enrollment procedures for individual market coverage available through the Marketplace, including changes to the annual enrollment period for individual coverage.
Employers should note that one of the proposals will impose stricter verification procedures on individuals attempting to enroll in Marketplace coverage during a midyear "special enrollment period." These proposals build on HHS's existing efforts to ramp up the verification procedures for individuals claiming common special enrollment period eligibility (such as the loss of minimum essential coverage). Beginning in mid-2017, HHS will institute pre-enrollment verification of all special enrollment events. Accordingly, employers should be cognizant of the fact that they may be called upon to provide timely, written verification of an individual's loss of employer-sponsored group health coverage. This new verification initiative will apply to the federal Marketplace and all state Marketplaces using the healthcare.gov platform.
Comments on the proposed regulations are due on March 7, 2017.
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