The Centers for Medicare & Medicaid Services released their proposed updates for the 2018 marketplace on August 29th. Their proposal - accompanied by a fact sheet - brings an abundance of suggested updates to the healthcare marketplace. The main points of the HHS Notice of Benefit and Payment Parameters for 2018 include:
- New Benefit Limits – CMS proposed new annual cost-sharing limits for non-grandfathered group health plans. The limit would increase to $7,350 for individuals and $14,700 for families. This is a 2.8% increase over 2017, which capped out-of-pocket costs for in-network covered essential health benefits at $7,150 for self-only and $14,300 for families.
- Risk Adjustment Model Recalibration – One of the main concerns of the ruling was to adjust how risk is calculated in the marketplace. The rule would implement partial year adjustment factors, provide for annual recalibration of the risk adjustment model, and better validate the data used to calibrate the model.
- Payments – The user fee rate of 3.5% of the premium will remain the same. However, the ruling proposes to charge issuers operating in a state-based marketplace on the federal platform a user fee of 3% of the premium. The Premium Adjustment Percentage has also been adjusted, increasing 2.6% to 16.7%.
- Eligibility and Enrollment – The ruling aims to limit abuse of special enrollment periods by clarifying the law and codifying those periods. In addition, the ruling provides for more consumer protections regarding direct enrollments, where web-brokers and issuers enroll consumers directly.
- Other Market Reforms – In order to continue to update the marketplace, the ruling proposes to implement several additional reforms. These reforms change how the child age rating works by adding additional age bands to provide a more gradual transition, reassess the previous 5-year ban on reentry into the market after withdrawing, and expanding the Medical Loss Ratio provision.
How does this affect benefits?
This proposal is mostly applicable to the insurance marketplace. If you provide health insurance to your employees and they don’t participate in the ACA marketplace, then you may be tempted to write these proposed updates off as unrelated to your business.
Note; however, that the IRS uses the same premium adjustment percentage to determine the increase in employer shared responsibility assessments. With the 2.6% proposed increase, the play-or-pay assessment for not offering coverage increases to $2,320. The assessment for offering unaffordable coverage or coverage that lacks minimum value would increase to $3,480.
All of these changes are due to the Affordable Care Act. If you’re having trouble with your ACA strategy, let us handle it for you.