Proposal Rolls Back Rules for New Short Term, Association Health Plans

Proposal Rolls Back Rules for New Short Term, Association Health Plans

Regulators announced plans Monday to expand federal subsidies to the recently revised “short term” and “association health” plans that do not necessarily have to include all the “essential health benefits” and coverages as would otherwise be required under certain Affordable Care Act (ACA) individual and small group market reforms.

The rollback by the current Administration to allow leaner plans would possibly be granted on a state-by-state basis beginning in 2020 if a state had been approved for an ACA Section 1332 waiver. As background, Section 1332 allows states to apply for “innovation waivers” that exempt them from certain ACA requirements, as long as certain guardrails are satisfied that protect access to affordable, quality coverage. The few states that have pursued these waivers have largely focused on establishing reinsurance pools, but this latest guidance released by CMS is intended to encourage more states to pursue these waivers by further loosening the guardrails that would normally be required. For example, states could pursue waivers that allow their residents to receive premium tax subsidies towards short-term individual plans.

It is essential that employers realize this possibility is a long time away if it develops at all and in the meantime, the ACA employer mandate is still in full force and employers still need to file the appropriate reports.

The new guidance does not alter the ACA’s requirements that people with pre-existing conditions be given access to coverage but would open the door for the less expensive plans with fewer benefits to be sold.

Read a comprehensive narrative about the new CMS Guidance here:

Marketplace Subsidies May Be Option In 2020 For Plans That Skirt Obamacare

Read the CMS News Release about the latest Guidance here:

Trump Administration announces State Relief and Empowerment Waivers to give states the flexibility to lower premiums and increase choices for their health insurance markets

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