The Congressional Research Service (CRS) has issued a report summarizing significant actions the Obama Administration has taken to delay, extend, or otherwise modify implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Although not all-inclusive, the report lists decisions that have affected the ACA’s core insurance expansion provisions, highlighting the most controversial. Specifically, it mentions the delay of the employer mandate, the decision to allow the renewal of noncompliant insurance policies, and the implementation of special enrollment periods. The document provides background for each provision and a detailed history of administrative actions.
Employer Mandate Delay
The ACA requires employers with 50 or more employees to make a shared responsibility payment in the following two scenarios: (1) the employer does not offer coverage to at least 95 percent of full-time employees and dependents and at least one full-time employee receives a premium tax credit for an insurance policy purchased on a Health Insurance Exchange or (2) the employer offers coverage to 95 percent of full-time employees, but at least one full-time employee receives a premium tax credit for a policy purchased on an Exchange because the employer did not offer coverage to that employee, coverage was unaffordable, or coverage did not provide minimum value.
Although the provision became effective January 1, 2014, the IRS decided to delay enforcement of the requirement until 2015, along with a requirement that employers and insurers report certain information to the Internal Revenue Service (IRS). The agency then further delayed enforcement with respect to employers with 50 to 99 employees until 2016 and announced that employers of 100 or more workers would only be required to offer coverage to 70 percent of full-time employees in 2015 to avoid enforcement actions. The IRS explained that it could not enforce the requirements until a related requirement that employers report offered coverage had been implemented. It contended that the relief it offered is part of a practice of providing relief to taxpayers struggling to comply with a new law. Critics argue that it is an unconstitutional failure to enforce the law.
Renewal of Noncompliant Plans
When many insurers began to cancel individual and small business health plans that did not meet the ACA’s standards for health insurance coverage, CMS urged, but did not require, state regulators to allow insurers who issued or planned to issue policies in the individual and small group markets to renew the policies at any time through October 1, 2016. Critics argue that, in doing so, the Administration ignored ACA requirements that had become “politically inconvenient.” However, CMS is still considering an additional one-year extension of this policy. Consumers whose policies were cancelled are eligible for a hardship exemption where available options are unaffordable and may purchase a catastrophic plan to meet individual mandate requirements if available.
The CRS report also detailed a number of delays related to open enrollment. Individuals without employer-sponsored coverage have the option of enrolling in a qualified health plan (QHP) through a Health Insurance Exchange to avoid paying a tax for failure to carry insurance. Because consumers who enroll after the fifteenth day of a given month will not be covered by a policy until the first day of the second month following enrollment, those who enrolled after February 15, 2014 would not have been covered until April 1, 2014. They would thus have been uncovered for a full three month period and would have been required to pay a fine. However, CMS exempted individuals who enrolled after the February 15th from paying the penalty. It also issued guidance allowing state Exchanges to retroactively make advance payments of premium tax credits and apply cost-sharing reductions to individuals who were unable to enroll in a QHP on an Exchange because information technology issues prevented timely eligibility determinations.
In perhaps the most controversial of these open enrollment extensions, the Administration announced on March 26, 2014 that certain persons unable to enroll in a QHP by March 31, 2014 would be permitted to enroll in a special enrollment period. Qualifying circumstances included, but were not limited to, natural disasters, untimely transfers of data regarding applicants ineligible for Medicaid and CHIP from state agencies to Marketplaces, and technical problems with HealthCare.gov. In addition to the changes affecting open enrollment for 2014, CMS delayed the beginning of open enrollment for 2015 to November 14, 2014, extending the period to run through February 15, 2015.
The report described a number of other changes in detail, including those affecting Small Business Health Option Program (SHOP) Exchanges, annual limits on cost-sharing and deductibles, and basic health plan (BHP) options.