Health Insurance Regulatory Outlook for 2018

Health Insurance Regulatory Outlook for 2018

Last year there was a lot of uncertainty concerning health insurance coverage since the repeal of the Patient Protection and Affordable Care Act (ACA) seemed imminent, and no one knew for sure how federal action on health reform would impact markets, consumers, and costs.  While predicting the political future is still impossible, it seems much less likely that Congress will make comprehensive changes to the ACA in the year ahead.  What seems more certain is health coverage regulatory action from the Trump Administration.  Here’s a sneak peek of topics to watch in the year ahead.

Preventive Care – In October of 2017 the Trump Administration released two Interim Final Rules allowing employers with religious or moral objections to the ACA’s preventive care requirements concerning contraceptive to claim an exemption to providing such coverage.  Two federal judges have issued temporary injunctions halting the implementation of these rules by employers, which will remain in effect until all arguments are heard in the cases challenging the legality of the new exemptions.  Since the basis for one of the injunctions is that the interim final rules took effect without public comment, it is possible that the Trump administration will make revisions to its regulations and expose them for public comment shortly as part of the litigation effort.

Short-Term Policies – As part of his October 12, 2017, Executive Order on health coverage issues, President Trump asked federal agencies to review current regulations concerning the sale of short-term medical benefit plans.  As a result, a new proposed rule addressing the duration of short-term coverage and the renewability of those policies is expected in early 2018.

Association Health Plans – President Trump’s October 12th Executive Order called for the Department of Labor (DOL) to consider regulatory changes to make it easier for small businesses to group together to self-insure or purchase large group health insurance through association health plans (AHPs). In response, earlier in January the DOL issued a proposed regulation to potentially modify the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA) to make AHP formation easier.  This proposal is not final, and the Trump Administration is accepting public comments on it through March 6, 2018.  After public comments are received and reviewed, then the administration will announce its next steps.  Kistler Tiffany Benefits will keep our clients informed about potential new options for small employers that could result once any regulatory changes are finalized.

Health Reimbursement Arrangements (HRAs) – The final piece of the October 12th Executive Order concerned HRAs and asked the Treasury Department to consider proposing regulations or revising guidance to increase the usability of HRAs, expand employer and employee access and allow the use of HRAs in conjunction with non-group coverage.  The Treasury Department already issued new guidance about implementing Qualified Small Employer HRAs (QSEHRAs), and they have announced that employers should expect more HRA guidance in 2018.

Individual Market and Health Insurance Exchanges – The Trump Administration will finalize its 2019 Notice of Benefits and Payment Parameters regulation in early 2018.  This regulation is a catchall document from the federal Department of Health and Human Services (HHS) that includes a wide range of policy changes related to individual health insurance coverage, fully-insured group policies, and the federal health insurance marketplaces.  This year, we can expect that the final rule will specify a more significant role for states concerning network adequacy regulation and rate review procedures.  It also will take steps to reduce the SHOP exchange option for small employers and make changes to essential health benefits related to state benchmark plan options.  Changes to medical loss ratio requirements for fully-insured health plans are also likely.

Essential Health Benefits Requirements (EHBs)– The Trump Administration has proposed making significant changes to the way states select their benchmark plans that individual and small-group health insurers use to base coverage standards in each state.  The EHB benchmark plans also have an impact on large employers, because any large group plan that includes coverage of an EHB cannot subject it to annual or lifetime coverage limits.  If the Trump Administration wants to implement EHB changes for 2019, they will need to issue new regulations and guidance in the next few months.

Excise or “Cadillac” Tax – While there is a concerted effort to repeal or at least delay the onset of the federal excise tax on health insurance benefits (Cadillac tax), it is still slated to go into effect for all group benefit plans nationally on January 1, 2020.  The Treasury Department knows that employers with non-calendar year plans will need to make plan design decisions in 2018, so they have on their priority agenda to start the rule-making process for the Cadillac tax in the year ahead.  Issues that will be considered include what health benefits will count towards the tax thresholds, how the tax reporting, calculations, and payments will work, and what the coverage cost threshold adjustments will be for employers in high-cost areas and workers of different ages and more.

Wellness Programs – Due to a federal court decision in 2017, controversial wellness program rules issued by the Equal Employment Opportunity Commission (EEOC) concerning participation incentives and how they relate to the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) will no longer be in effect as of January 1, 2019.  Employers still need to abide by these rules during 2018.   As a result of this court action, the EEOC is expected to revise their regulations this year. New proposed rules are tentatively scheduled for public release and comment in August of 2018.  Once changes are finalized, Kistler Tiffany Benefits will make sure our clients are informed of any changes that could impact their wellness programs.

Form 5500 Revisions – The Obama Administration proposed significant changes to Form 5500 reporting, including virtually eliminating the current small employer exemption so that group health plans with two or more participants would have to report.  They also proposed expanding the amount of health plan data that would need to be reported, through the creation of a new proposed Schedule J.  The Obama Administration never finalized its proposal, though, and the Trump Administration hasn’t acted on it either.  It is possible that the DOL could rescind this proposed rule in 2018, or move on it either by finalizing it as is or more likely, in a very altered form.

Mental Health Parity – Federal regulators are expected to soon finalize a model form for group health plan members to request information so they can determine whether their plan’s non- quantitative treatment limitations (NQTLs) meet federal Mental Health Parity and Addiction Equity Act requirements.  New compliance guidelines for employers could accompany the release of the final form.

Definition of a Church Plan – Last year’s changes to rules concerning religious and moral exemptions to the ACA’s preventive care mandates have brought a murky issue into the spotlight—exactly what type of plans qualify for the “church plan” exemption under ERISA.  How closely an organization needs to be tied to a church to qualify for the exemption has always been unclear, so the Department of Treasury has placed the creation of a clarifying regulation on its 2018 agenda.

By Jessica Waltman, Special Contributor

Jessica Waltman is a health reform strategist, with more than 20 years of experience in health insurance markets and health policy. She is the former Senior Vice President, Government Affairs, for the National Association of Health Underwriters.