The ACA and Legal Practices (#9) / Exchange reenrollment challenges

August 6, 2014

health-care-lawThis is installment #9 in a series of blog postings on the Affordable Care Act (ACA) and legal practices.

The Department of Health and Human Services (HHS) is working hard to set up regulations that will expedite Year 2 enrollments by the ACA Health Benefit Exchanges.

Particular attention is being directed toward the requirements for reenrollment, for those who have already purchased Qualified Health Plans (QHPs).

If those presently enrolled are able to reenroll in a simpler way, without going through the entire application process again, less demand will be placed of the Exchanges—and individuals—during Year 2.

Proposed rule changes to this end were published in the Federal Register (on July 1, 2014, pp. 37262-37269), with the comment period to end July 28, 2014.

However, the revised process involves substantial new software burdens on the Exchanges—which are still dealing with extensive software problems from last year.

A major aspect of the reenrollment procedure arises with respect to those individuals who previously authorized an Exchange to obtain updated tax information from the Internal Revenue Service (IRS), and to prepare annual redeterminations of eligibility.

Under the proposed rules, individuals will also have to report any changes that would affect eligibility within 30 days of such changes.

In such situations, the Exchange is to produce a notice of projected eligibility for Year 2.

If an individual remains eligible for a QHP, reenrollment will be automatic unless the individual requests a change.

Reenrollment priority will be to first enroll an individual in the same QHP.

Then, the next option will be enrollment at the same “metal” level (bronze, silver, gold or platinum).

This retains the same average percentage of total health care costs that will be covered by the Plan. Premiums may increase and subsidies may change, based on income.

If the same Plan is not available, enrollment is then for a policy that is one metal level higher or lower.

If all of these options fail, any other eligible plan is selected.

The clear intent is to make maximum use of an expedited enrollment process.

Insurance companies are also required to provide certain information on renewal notices, about expected premium and subsidy amounts.

These rules will provide new operational challenges to all organizations involved.

Many individuals may need legal support to understand what is happening and decide whether they should go with “auto renewal” or make other changes.

This renewal “churning” will be taking place at the same time many individuals will be choosing to sign up for the first time. It is yet far from clear whether the Exchanges will be able to handle the combined processing load.

More information about the Health Care Exchanges and the ACA may be found in recent books on the ACA and on the health care system, other postings to this blog, and on the ACA Blog, also written by the author of this series.