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Federal Health Coverage Law - Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act (PPACA or ACA) made wide-ranging changes in the financing and delivery of health coverage in the United States.  HR 3590 was signed by the President on Tuesday, March 23, 2010.  A reconciliation bill, HR 4872, was signed by the President on Tuesday, March 30, 2010. Read the full text of the law here.  The legislation made changes to Medicare, Medicaid, private coverage (both insured and self-funded), research funding, medical financing, and health information systems, among other things.  The Department of Banking and Insurance has dealt primarily with the private coverage provisions of the ACA, and the information that follows focuses on the insurance issues.

Many of the provisions of the ACA that address private insurance are similar to requirements already in place in New Jersey’s individual and small employer markets, including guaranteed availability of coverage to every small employer and individual, guaranteed renewability, modified community rating, a minimum medical loss ratio of 80% in the individual and small employer markets, a requirement to extend coverage for young adults on their parent’s group plan, and a process to help consumers compare plan and rate information.  But there are differences between the ACA and New Jersey law.  For example, the ACA has rating requirements for the large group market, including a minimum medical loss ratio requirement of 85%, but New Jersey law does not.  Also, many of the ACA’s provisions apply to self-funded plans, while New Jersey insurance laws do not.  And federal law provides subsidies to help individuals better afford health coverage, if individuals meet the eligibility standards established by the federal law.

The ACA did not become effective all at once, and both federal and state implementation of the ACA is a work in progress.  Some of the ACA’s provisions were effective in 2010, but many were not effective until 2014, and some even later.  Enforcement of some provisions have been delayed, and some will not be implemented due to challenges of the law in court.  There are also certain aspects of the ACA that were effective early on, but were intended to be temporary; these have been implemented and the projects completed. 

For example, the Secretary of the U.S. Department of Health and Human Services (HHS) was authorized to establish a temporary high-risk health insurance program, starting in 2010, to provide coverage to individuals with pre-existing conditions who had been without coverage for at least 6 months.  The law provided $5 billion to fund the pools through 2013 either directly or through contracts with the states and nonprofit entities. New Jersey believed its existing Individual Health Coverage (IHC) program could qualify for this funding (NJ High Risk Pool Letter of Intent), and indeed, was awarded funding to operate what became known as NJ Protect.  NJ Protect – with the cooperation of AmeriHealth Insurance Company and Horizon Healthcare – operated from late 2010 through 2013.  In 2014, when the state and federal Health Insurance Exchanges (often referred to as Marketplaces) became operational, the high-risk health insurance programs ended, including NJ Protect.

Yet, the ACA established a small business tax credit that started in 2010 and continues today.  From 2010 through 2013, small employers could receive a credit of up to 35% of the premium payments made for a group health plan, so long as the employer paid at least 50% of the total premium.  Additional requirements applied, and the credit varied based on whether the employer was private or non-profit.  In 2014, the credit increased to 50%.  For more information about the small employer tax credit, see https://www.irs.gov/affordable-care-act/employers/small-business-health-care-tax-credit-and-the-shop-marketplace.  For additional information about the impact of implementation of the ACA on the Small Employer Health (SEH) Benefits Program and the small employer market, go to http://www.nj.gov/dobi/division_insurance/ihcseh/seh_ppaca.html, as well as http://www.nj.gov/dobi/division_insurance/ihcseh/index.html.  

Multiple federal agencies have had to adopt many regulations and other forms of guidance to implement the ACA.  CCIIO (part of the Centers for Medicare and Medicaid (CMS), housed within HHS), maintains general regulatory information online at https://www.cms.gov/CCIIO.   The United State Department of Labor provides online information focused on group coverage starting at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/affordable-care-act.  The IRS provides information for many constituencies, starting at https://www.irs.gov/affordable-care-act/affordable-care-act-tax-provisions.

New Jersey has had to make numerous changes to its own regulations and guidance to comply with the federal standards.  For example, the ACA defines employer and employee so that owners, partners, and family members do not count as employees, which is different from New Jersey law (for purposes of establishing a small group health plan).  In this instance, New Jersey needed to change its definition to assure that employers and employees would be able to comply with and make most use of federal tax laws, and to avoid mingling of the individual and small employer risk pools.  New Jersey has made many other changes, including selection of a benchmark plan to assure provision of Essential Health Benefits, elimination of New Jersey Basic & Essential plans, establishment of a clearly defined open enrollment period (rather than a continuous open enrollment period), amendment of the definition of child, removal of preexisting condition limitation periods, and amendment of rules regarding consumer appeals, among many other issues.

In addition, New Jersey studied the option of establishing its own Health Insurance Exchange (Marketplace) under the auspices of its existing IHC and Small Employer Health Benefits (SEH) Programs, but eventually decided to use the Federally Facilitated Marketplace (FFM or Marketplace) instead.  The Marketplace is the “system” through which certain plans of health insurance can be purchased, including those for which subsidies are available.  Because New Jersey is an FFM state, individuals seeking help with the costs of individual health coverage need to apply through www.Healthcare.gov for a determination of subsidy eligibility, Medicaid/NJFamilyCare eligibility, or a hardship exemption from the requirement to have health coverage. Most people can apply for coverage through the FFM whether they are eligible for a subsidy or not.  The FFM is a convenient way of comparing some plans that are available in New Jersey to individuals and small employers; however, not all plans offered in New Jersey are offered through the FFM. 

There continues to be a non-FFM individual and small employer health insurance market, which includes a wider array of plan options than what is available through the FFM.  Carriers that offer qualified health plans through the Marketplace must offer the same plans outside of the FFM; however, carriers can (and do) offer qualified health plans outside of the Marketplace that they do not offer through the Marketplace.  And some carriers only offer qualified health plans outside of the FFM.  So, individuals who are not eligible for subsidies, or who are not eligible to purchase through the Marketplace, as well as people who simply don’t want to use the federal Marketplace, still have a choice of health insurance plans to purchase outside of the Marketplace. To shop for individual coverage, go to the IHC Board’s shopping page.  To shop for small employer plans, go to the SEH Board’s shopping page.  The Boards’ websites show all individual and small employer plans offered in New Jersey, as well as rate charts and rate calculators for all plans.  However, unlike the FFM, the Boards’ information does not take into consideration any subsidies for which an individual might be eligible.  

The federal government classifies New Jersey as an Effective Rate Review State, so carriers must file their rates with New Jersey for approval, subject to very specific requirements, regardless of whether the carrier is offering plans through or outside of the FFM. More information regarding the rate filings is available at Health Insurance Education: Rate Review Process.  New Jersey also retains primary responsibility for plan review, including network analysis for all plans offered in New Jersey through or outside of the FFM.

The IHC Board and the Department of Banking and Insurance co-regulate individual health insurance.  Likewise, the SEH Board and the Department of Banking and Insurance co-regulate health insurance offered to small employers.  The regulatory activities of each Board are set forth on their respective webpages (IHC Board and SEH Board).  Below is guidance (bulletins) issued by the Department of Banking and Insurance to address the impact of the ACA on some aspect of health benefits plans subject to the Department’s oversight, as well as some additional information.  (For Department of Banking and Insurance rulemaking, see Legislative and Regulatory Affairs.)

 

Health Care Implementation - New Jersey High Risk Pool Letter of Intent

Bulletin 10-09: Health Reform Insurance Scams

Bulletin 10-21: Provisions Effective September 23, 2010

Bulletin 11-25: Amendments to the HINT Forms

Bulletin 13-04: Alternative health Care Financing and Delivery Models

Bulletin 13-14: Amendments to the IHC and SEH Rating Rules Under the Patient Protection and Affordable care Act

Bulletin 13-17: Amendments to the HINT Forms

Bulletin 14-06: Amendments to the HINT Non-group Enrollment/Change Request Form

Bulletin 14-07: Extended Transition for certain Health Insurance Policies including for Groups with up to 100 Employees

Bulletin 14-09: Federal Guidance on Compliance with mandated Infertility Benefits (P.L. 2001, c. 236)

Bulletin 14-12: Application of Plan Option Withdrawal Requirements as affected by final Federal Rules governing Uniform Modifications of Coverage

Bulletin 15-04: Amendment to Minimum Standards for Health Benefits Plans to facilitate “Bronze” Plan Designs consistent with Federal Requirements

Bulletin 16-03: Extended Transition for certain Health Insurance Policies

Bulletin 17-02: Extended Transition for certain Health Insurance Policies

Bulletin 17-05: Implementation of P.L. 2017, c. 28, which requires certain Coverage for Treatment of Substance Use Disorders and which places certain Restrictions on Opioid and other Prescription Drugs

Bulletin 17-08: Amendments to HINT Non-group Enrollment/Change Request Form

 

For more information, visit

Healthcare.gov


 

 

Commissioner's Corner

"Essential Health Benefits Bulletin"
January 2012, Letter to U.S. Department of Health and Human Services

"Rate Increase Disclosure and Review Comments"
February 2011, Letter to U.S. Department of Health and Human Services

"Interim Final Regulations on Health Insurance Issuers Implementing Medical Loss Ratio (MLR) Requirements under the Patient Protection and Affordable Care Act"
January 2011, Letter to U.S. Department of Health and Human Services

"Grandfathered Health Plans Under PPACA"
July 2010, Letter to Department of Health and Human Services

"Medical Loss Ratios Under Section 2718 of the Public Health Services Act"
May 2010, Letter to National Association of Insurance Commissioners

 

Other Resources

Small Employers and the Federal Affordable Care Act (DOBI webpage)

Healthcare.gov (CMS/HHS webpage for people who want to buy health coverage, learn about subsidies, or exemptions for the requirement to have health coverage)

The Center for Consumer Information and Insurance Oversight (CMS/HHS’ general regulatory webpages)

Health Care Reform Glossary (NAIC)

U.S. Department of Labor – ACA pages (mix of educational and regulatory information)

Internal Revenue Service – ACA pages (mix of educational and regulatory information)

Qualified Health Plans (CMS/HHS webpage for carriers seeking certification to participate in the FFM)

Health Insurance Marketplace (CMS/HHS webpage for outreach partners, including navigators, agents, brokers and other assisters)

Summary of Benefits and Coverages templates/instructions, and Uniform Glossary (USDOL’s website)

 

Related Information

Beware of Health Insurance Scams

Health Coverage of Young Adults in New Jersey Up to Age 31

Health Benefits: COBRA and New Jersey Continuation

 
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