Healthcare: Affordable Care Act Updates

Gov. Malloy declined President’s Obama’s proposed fix for health insurance plans cancelled due to the Affordable Care Act (ACA).

The president permitted each state to decide whether it would allow cancelled plans to continue for another year, even though they did not meet the requirements under the ACA.

Last month, Gov. Malloy announced his decision to forego the extension on cancelled plans saying that insurers in the state were not planning to continue the cancelled plans even if given the option.

Malloy also cited cost and the relative impact on Connecticut’s residents to support his decision.

Connecticut joined a number of other states in declining the president’s offer, including New York, Vermont, Massachusetts and Rhode Island.

Other states, however, including Maine, New Hampshire, Pennsylvania, and New Jersey, have decided to grant extensions to plans that would otherwise be cancelled. 

ACA Fee:  $63 per Person

A number of new fees and taxes are included within the Affordable Care Act (ACA), one of which is the Reinsurance Fee.

The Reinsurance Fee is levied on all health plans including self-insured plans and is intended to help insurers pay for the unknown and possibly high-risk pool that is likely to enter the market under the ACA. In 2014, this fee will equal $63 per person, resulting in higher premiums. 

There have been proposals to modify the Reinsurance Fee to exempt certain groups, and recently proposed federal regulations would decrease the amount of the fee in 2015 and 2016. 

Notable among these proposals is an effort to exempt self-funded, self-administered plans.

It was widely reported that this proposal is designed to favor labor unions while leaving employers that self-fund, but not self-administer, left footing the bill. 

Attempts to exempt specific groups, such as unions, from these high fees  is unfair and seemingly without justification.

CBIA will submit comments the Department of Health and Human Services on the Reinsurance Fee proposals to emphasize their significant cost impact as well as the problem of exempting specific segments of the market without explanation.