Posts Tagged ‘ACA Section 1334’

Measures would allow individuals to purchase small group plans sold by DC health benefit exchange and federal employee plan to fill gaps in state individual markets

June 5th, 2017 Comments off

Two measures were recently introduced in Congress to address gaps in the non-group medical insurance market by allowing individuals and their family members to buy into small group plans sold through the District of Columbia’s health benefit exchange’s Small Business Health Options Program (SHOP) if their state health benefit exchange offers no plans where they live.

The Health Care Options for All Act (S.1201, McCaskill) would require the Office of Personnel Management (OPM) to establish a mechanism for their enrollment. A companion measure to S.1201, H.R. 2770 (Loebsack) was introduced in the House June 2; text for the bill is not yet available. The DC SHOP currently offers coverage to members of Congress and their staffs as required by the Patient Protection and Affordable Care Act. The District of Columbia health benefit exchange, DC Health Link, is reportedly opposed fearing the proposal if enacted would turn the DC exchange into a de facto national high risk pool.

Section 1334 of the ACA authorizes OPM to contract with health insurance issuers or a group of affiliated plan issuers to offer plans in all states as of this 2017. While the intent is to ensure exchanges can offer plans in all areas, the “multistate plans” authorized by Section 1334 are available in less than half of the states.

The bills could raise objections from health plan issuers since they broadly organize their product lines as employer group or non-group (individual) coverage and risk rate, price and establish provider networks separately for each. In addition, the Affordable Care Act segregates small group and individual coverage into separate statewide risk pools. However, states may merge their individual and small group markets under Section 1312(c)(3) of the law “if the State determines appropriate.” ACA Section 1311(b)(2) also affords states the option to merge their individual and SHOP exchanges.

Another measure introduced in early May, (H.R. 2400, Issa) also disregards the distinction between the group and non-group market segments by allowing individuals who are not federal employees to enroll in the Federal Employees Health Benefits Program.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

Multi-state plans fall short of nationwide availability

November 2nd, 2016 2 comments

President Obama and Democratic presidential candidate Hillary Clinton have called for a publicly operated health plan to offer individual coverage. The intent is to bolster coverage options that have dwindled in some states as health plan issuers rethink their individual market participation as well as to bring to bear market pressure on participating plan issuers to hold down premium rates.

One existing provision of the Patient Protection and Affordable Care Act designed to do just that is at Section 1334 of law. It creates federally chartered health plans overseen by the Office of Personnel Management (OPM) and authorizes OPM to contract with health insurance issuers (or a group of health insurance issuers affiliated either by common ownership and control or by the common use of a nationally licensed service mark) to offer plans in multiple states.

Under Section 1334, such plans are to be available in all states starting in 2017. Turns out that isn’t going to happen. According to this page at the OPM website, just 22 state exchanges will have multi-state plans for sale next year. That contradicts Section 1334(e), which mandates OPM contract only with multistate plan issuers offering plans in all states in 2017.

OPM issued guidance earlier this year explaining why the requirement cannot be met:

While section 1334(e) of the ACA authorizes OPM to contract with issuers that offer nationwide expansion of coverage over a four-year schedule, the law does not preclude OPM from contracting with issuers that offer fewer than the scheduled number of states in any given year. The statute establishes general authority for OPM to contract for at least two plans in each state, but does not mandate firm parameters for attaining nationwide coverage. It remains the goal of the MSP Program to provide nationwide availability of MSP options by an issuer or group of issuers.

However, the experience of the first three years of the program has demonstrated that providing nationwide coverage for any issuer or group of issuers is difficult to achieve. Moreover, the statute does not give the Director of OPM authority to compel any issuer to provide nationwide coverage or to participate in the MSP Program. Therefore, OPM will exercise administrative discretion in deciding whether to contract with an issuer or group of issuers who would like to participate in the MSP Program but who cannot commit to offering coverage in all 51 jurisdictions by the fourth year of their participation in the program.

In sum, OPM is saying Section 1334(e)’s requirement notwithstanding, if health plan issuers don’t want to play in all states, it cannot force them to given the Affordable Care Act’s recognition of health insurance markets as voluntary. Also, the realities of the individual market in 2017 substantially reduced the likelihood of plan issuers offering multi-state plans nationwide as they reassess their participation in the state individual health insurance markets and the exchanges 2017 and post.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

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