Earlier this year, the Department of Health and Human Services (HHS) released proposed regulations regarding the benefit and payment parameters for 2020. It also issued a few other insurance industry and Health Insurance Marketplace ("exchange") proposed rules. The collection of proposals is largely aimed at insurers and state regulators, but some provisions may be of interest to employers and their advisors. Here are some highlighted areas:
Annual cost-sharing limits. The HHS has proposed increasing the maximum annual limitation on cost-sharing for 2020 to $8,200 for self-only coverage and $16,400 for other than self-only coverage (compared to $7,900 and $15,800 for 2019). The proposal reflects a changed methodology — considering premium increases in the individual insurance market and employer-sponsored insurance — that would also affect indexing of employer shared-responsibility penalties and affordability of employer-sponsored coverage.
Generic drugs. The proposal would create an exception to the prohibition on midyear coverage modifications. It would permit insurers to adopt specified midyear prescription drug formulary changes when generic equivalents to brand-name drugs become available. In some circumstances, the brand-name drug wouldn't be considered an essential health benefit. This would allow insurers to exclude a portion of the brand-name drug's cost from the annual cost-sharing limit and to impose lifetime or annual dollar limits on some brand-name drug coverage.
Small Business Health Options Program (SHOP) functionality. Following the rollback of the federally facilitated SHOP (FF-SHOP) for 2019, employers currently purchase and enroll their employees in this coverage through insurers or registered agents and brokers rather than through an online FF-SHOP platform. The HHS retained call centers to answer SHOP-related questions for 2019, but now proposes to scale them back because call center volume has been extremely low.
Health Insurance Marketplace enrollment. The HHS continues to focus on enhancing direct enrollment, which allows individuals to enroll in Health Insurance Marketplace coverage through the website of an insurer or Web broker (direct enrollment entity) rather than HealthCare.gov. Significant changes are now proposed to streamline and consolidate the requirements applicable to insurers and Web brokers, which were initially implemented for 2019.
Silver loading. The preamble discusses the administration's support for legislation that would appropriate funds for cost-sharing reduction payments and, thereby, end "silver loading." This is a state practice that allows insurers to increase premiums on silver-level Health Insurance Marketplace plans to compensate for the lack of federal reimbursement of cost-sharing reductions. Higher premium tax credits may insulate lower-income consumers in silver-level plans from the increased premiums. The preamble also requests comments on how the HHS (in the absence of congressional action) could address its concerns about silver loading in future rulemaking.
These proposed HHS regulations address a broad range of rules related to Health Insurance Marketplaces and the private insurance sector but, notably, they don't cover as much ground as previous years' proposals. Nonetheless, insurers — as well as employers and their advisors — should eagerly review the proposed changes, which have been released later than usual.
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