Federal government liberalizes ACA definition of QHP to boost enrollment in troubled state exchanges
The U.S. Department of Health and Human Services’ Center for Consumer Information & Insurance Oversight issued guidance (.pdf) this week aimed at boosting enrollments in six state health benefit exchange marketplaces hobbled by glitches in their online enrollment web portals. The guidance issued February 27, 2014 allows the marketplaces to deem individuals eligible for retroactive coverage back to January 1, 2014 if they meet eligibility requirements but were unable to enroll in a plan by the upcoming March 31 plan year 2014 enrollment deadline due to the technical problems with the portals – described as an “exceptional circumstance” in the guidance.
The federal guidance uses the exceptional circumstance declaration to get around the definition of a qualified health plan (QHP) at Section 1301 of the Patient Protection and Affordable Care Act as one certified by an exchange exclusively for sale on the exchange marketplace. The guidance does so by including those who enrolled in non-QHPs – plans sold outside the exchange marketplace. Those enrollees would then be potentially eligible for subsidies in the form of advance premium tax credits and cost sharing reductions that would not otherwise be available to them. According to The New York Times, Oregon Gov. John Kitzhaber requested the federal government to allow the premium tax credits for people buying insurance outside that state’s troubled exchange.
This limited relief from the March 31 deadline for plan year 2014 enrollment and the extension of premium tax credit and cost sharing subsidies to non-QHPs will take pressure off the six troubled state exchange marketplaces that due to enrollment shortfalls may be unable to support themselves financially starting in 2015 when federal establishment grant assistance ceases as required by the Affordable Care Act. For more on this, click here.
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