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Trump’s Executive Order on ACA and The Employer

As has been widely reported, President Trump issued an Executive Order addressing the Affordable Care Act (the “ACA”)—but many of our clients are wondering what impact it has on them and the group health plans that they sponsor for their employees, because the language of the Executive Order only speaks to minimizing the economic burden of the ACA on individuals, families, healthcare providers, health insurers, and health insurance purchasers.
By its terms, the Executive Order does not specifically address employers. Further, implementation of the Executive Order involves several practical challenges, including the fact that the heads of the agencies overseeing the ACA have not been confirmed and that the Order is to be implemented consistent with applicable law—meaning that the agencies are not supposed to disregard the ACA while repeal or replacement legislative efforts are being undertaken.
So, what’s an employer to do?

What to read more?

 

Fixing the ACA Law. Political Challenges Loom.

Fixing Health Insurance Reform: The Only Way Republicans Can Lower Costs is to Provide Less Coverage?

 Anna Wilde Mathews and Louise Radnofsky have a well-done story in yesterday’s Wall Street Journal. They point out that a relatively few sicker people account for most of the cost of care:

Congress has begun the work of replacing the Affordable Care Act, and that means lawmakers will soon face the thorny dilemma that confronts every effort to overhaul health insurance: Sick people are expensive to cover, and someone has to pay.

That is right.

But, this statement would seem to infer, as I have observed the general discussion about fixing Obamacare has often inferred, that there is a certain cost to health insurance and that Republicans can rearrange the deck chairs any way they want but the cost will be the same.

Wrong!

What I think this story, and the general discussion about how to cover people in the future is missing, is that Obamacare is so flawed that by itself it is manufacturing plan premium levels that are at least 30% to 40% higher than they need to be.

Obamacare insurance exchanges cover only about 40% of those that are subsidy eligible, when the longstanding insurance industry underwriting rule calls for 75% of an eligible group to be covered in order to have enough healthy people enrolled to pay the costs of the sick. But again it is this critical point that is being missed.

What would happen if the plans were more attractive––if people saw value in them? And, if we had 75% of the eligible group signing up as a result, what impact would that have on current premiums?

I have asked a number of health plan actuaries that hypothetical question. Hypothetical because the health plans don’t have the flexibility to rearrange the product pieces so as to make the insurance plans more attractive.

Their answer has consistently been that prices could come down at least 30% to 40% from 2018 prices. Said another way, the anti-selection load the current Obamacare exchange plans are carrying is worth at least 30% to 40%. And, that makes sense. When Obamacare launched for 2014, the carriers conservatively priced for an acceptable claim level. The reality was much higher––2018 prices are now about 30% to 40% higher after adjusting for baseline trend.

Read more click here!

How To Control American Drug Costs

Q: Many newer (as well as many older) drugs are of great value in treating many diseases. But the prices charged seem very high and rising, causing serious concern for many. Is there anything the United States can do to control these costs?
 A: We can do a lot to control drug costs, but success will take the cooperation of Congress and the legislatures, which are fundamentally in the drug industry’s pocket.

The industry lavishes money on Congress to buy that favor. Open Secrets data show that the pharmaceutical/health products sector, the most politically influential industry, gave Congress $3.3 billion in campaign contributions between 1997-2015. That largess averages out to $183 million annually over that 18-year period, or a stunning $343,000 per legislator per year. Within these dynamics, every relevant law and rule is spun to favor the interests of the drug industry over those of the American people.

In an excellent recent JAMA article on the sources of US drug pricing, Kesselheim et al. point out that influence over policy has translated into two core problems: “granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits.”

Consider Congress’ prohibition against Medicare negotiating drug prices. Millions of patients’ medications are subsidized by Medicare, which pays whatever price is demanded. It’s hard to imagine a better deal than the purchaser allowing the manufacturer to set any price, with the guarantee that the bill will be paid.

Read the full article here.

IRS Delays Employers’ Deadline to Distribute ACA Reporting Form 1095 to Employees

In a move that caught many in the benefits community by surprise, the IRS issued Notice 2016-70 on Nov. 18, giving employers subject to the Affordable Care Act’s (ACA’s) 2016 information-reporting requirements up to an additional 30 days to deliver these forms to employees.

The notice affects upcoming deadlines for ACA information reporting as follows:

  • The IRS extended the deadline to deliver ACA reporting forms to employees from Jan. 31, 2017 to March 2. The extended deadline applies to furnishing to individuals the 2016 Form 1095-C (Employer-Provided Health Insurance Offer and Coverage) and Form 1095-B (Health Coverage).

    The Treasury Department and the IRS determined that a substantial number of employers and other insurance providers needed additional time “to gather and analyze the information [necessary to] prepare the 2016 Forms 1095-C and 1095-B to be furnished to individuals,” Notice 2016-70 states.

  • This extension applies for tax year 2016 only, and does not require the submission of any request or other documentation to the IRS.
  • The IRS did not change the deadline for filing Forms 1094 and 1095 with the agency. This means there is likely to be no automatic extension to file the 2016 Form 1094-B (Transmittal of Health Coverage Information Returns) along with copies of Form 1095-B, and Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) along with copies of Form 1095-C.

    Employers filing these forms by mail will still need to do so by Feb. 28, 2017. Employers filing electronically (as those submitting 250 or more forms are required to do) must do so by March 31. While the date for filing with the IRS was not extended, employers can obtain a 30-day extension by submitting Form 8809 (Application for Extension of Time to File Information Returns) by the due date for the ACA information returns.

Read the full article here.

Concerned About Losing Your Marketplace Plan? ACA Repeal May Take Awhile

President-elect Donald Trump has promised that he’ll ask Congress to repeal the Affordable Care Act on Day One of his administration. If you’re shopping for coverage on the health insurance marketplace, should you even bother signing up? If everything’s going to change shortly after your new coverage starts in January anyway, what’s the point?

While it’s impossible to know exactly what changes are coming to the individual market and how soon they’ll arrive, one thing is virtually certain: Nothing will happen immediately. Here are answers to questions you may have.

Q. How soon after Trump takes office could my marketplace coverage change?

It’s unlikely that much, if anything, will change in 2017.

“It’s a complex process to alter a law as complicated as the ACA,” said Sara Rosenbaum, a professor of health law and policy at George Washington University. It seems unlikely that congressional Republicans could force through a repeal of the law since Democrats have enough votes to sustain a filibuster blocking that move. So Congress might opt to use a budget procedure, called “reconciliation,” that allows revenue-related changes, such as eliminating the premium tax credits,  with simple majority votes. Yet even that process could take months.

And it wouldn’t address the other parts of the health law that reformed the insurance market, such as the prohibition on denying people coverage if they’re sick. How some of those provisions of the law will be affected is still quite unclear.

“It will likely be January 2019 before any new program would be completely in place,” said Robert Laszewski, a health care industry consultant and long-time critic of the law.

Read the full article here.