President Trump Ends ACA Cost Sharing Reductions

October 13, 2017

President Trump Ends ACA Cost Sharing Reductions

On the evening of October 12, 2017, President Trump announced that cost sharing reductions for low income Americans in relation to the Patient Protection and Affordable Care Act (ACA) would be stopped. The Department of Health and Human Services (HHS) has confirmed that payments will be stopped immediately. It is anticipated at least some state attorneys general will file lawsuits to block the ending of the subsidy payments, with California Attorney General Xavier Becerra stating he is prepared to file a lawsuit to protect the subsidies.


Individuals with household modified adjusted gross incomes (AGI) in excess of 100 percent but not exceeding 400 percent of the federal poverty level (FPL) may be eligible for cost-sharing reductions for coverage purchased through health insurance exchanges if they meet a variety of criteria. Cost-sharing reductions are limited to coverage months for which the individual is allowed a premium tax credit. Eligibility for cost-sharing reductions is based on the tax year for which advanced eligibility determinations are made by HHS, rather than the tax year for which premium credits are allowed. In 2015, cost-sharing subsides reduced out-of-pocket (OOP) limits:

  • Less than 100 percent but not exceeding 200 percent of FPL: OOP limits reduced by two-thirds
  • Greater than 200 percent but not exceeding 300 percent of FPL: OOP limits reduced by one-half
  • Greater than 300 percent but not exceeding 400 percent of FPL: OOP limits reduced by one-third

After 2015, the base percentages were shifted based on a percentage of average per capita health insurance premium increases. The cost-sharing reduction is paid directly to the insurer, and is automatically applied when eligible individuals enroll in a silver plan on the Marketplace or Exchange.

The cost-sharing reduction is not the same as the “advance premium tax credit” which is also available to individuals with household modified AGIs of at least 100 percent and not exceeding 400 percent of the FPL.

Impact on Employers

There is no direct impact to employers at this time, however employers with fully insured health plans might see group health plan rate increases in future years as insurance companies work to make up for the loss of revenue.


October 2017 Executive Order on Healthcare

October 13, 2017

October 2017 Executive Order on Healthcare

On October 12, 2017, the White House released an Executive Order, signed by President Trump, titled “Promoting Healthcare Choice and Competition Across the United States.”

It is important to note that the Executive Order (EO) does not implement any new laws or regulations, but instead directs various federal agencies to explore options relating to association health plans, short term limited-duration coverage (STLDI), and health reimbursement arrangements (HRAs), within the next 60 to 120 days.

The Department of Labor is ordered to explore expansion of association health plans (AHPs) by broadening the scope of ERISA to allow employers within the same line of business across the country to join together in a group health plan. The EO notes employers will not be permitted to exclude employees from an AHP or develop premiums based on health conditions. The Secretary of Labor has 60 days to consider proposing regulations or revising guidance.

Practically speaking, this type of expansion would require considerable effort with all state departments of insurance and key stakeholders across the industry. Employers should not wait to make group health plan decisions based on the EO, as it will take time for even proposed regulations to be developed.

The Department of the Treasury, Department of Labor, and Department of Health and Human Services (the agencies) are directed to consider expanding coverage options from STLDI, which are often much less expensive than Marketplace plans or employer plans. These plans are popular with individuals who are in and outside of the country or who are between jobs. The Secretaries of these agencies have 60 days to consider proposing regulations or revising guidance.

Finally, the EO directs the same three agencies to review and consider changing regulations for HRAs so employers have more flexibility when implementing them for employees. This could lead to an expanded use of HRA dollars for employees, such as for premiums. However, employers should not make any changes to existing HRAs until regulations are issued at a later date. The Secretaries have 120 days to consider proposing regulations or revising guidance.



Ready for sticker shock? Obamacare prices revealed

October 25, 2016

By  – Crain’s Chicago

Prepare for sticker shock. Window shopping for the Obamacare health insurance exchange is officially open.

While the online marketplace at doesn’t debut for its fourth year until Nov. 1, consumers and small businesses can now catch a glimpse of what they might pay in monthly premiums, deductibles and other components of health insurance.

In many cases, expect a hit to your wallet. Illinois is among the states where premium rate hikes are “significant,” the state insurance department cautioned two months ago.

In Cook County, for example, individuals can choose from 38 plans with varying degrees of coverage. For a 40-year-old, the cheapest monthly premium is $260.07 for a health plan from Cigna, which is new to the Illinois exchange this year, according to a Crain’s analysis. The most expensive? A $592.11 premium for a plan from Chicago-based giant Blue Cross & Blue Shield of Illinois, which has dominated the exchange since its debut.

Deductibles range from $1,000 to $7,150.

Full Article


July 17, 2015

Big businesses and unions, traditionally foes at the bargaining table, have both voiced disdain for the health care reform law’s “Cadillac” tax on generous health plans. Now, they plan on turning up the heat to repeal it.

A coalition of large employers, business groups and unions — including the American Benefits Council, the Blue Cross and Blue Shield Association, Cigna Corp., Pfizer and Laborers International Union of North America — registered last week as a lobbying group. The group, called the Alliance to Fight the Forty, has the explicit goal of repealing the 40% excise tax.

But the lobbying organization’s members are tiptoeing around the popular Cadillac name attached to the tax. “We don’t call it the Cadillac tax anymore,” said Kathryn Spangler, senior vice president of health policy for the American Benefits Council and a top lobbyist for the group. “The way it’s structured, it’ll ultimately hit bicycles.”

President Barack Obama has criticized health plans with little cost-sharing and premium contributions as “fancy plans” that contribute to overconsumption of healthcare services. Many economists support the Cadillac tax as a way to manage the effects of the tax exemption for employer health insurance, which disproportionately benefits higher-income workers.

But business and labor groups have slammed such a tax as costly, burdensome and unfair to employee benefits.

Starting Jan. 1, 2018, all employer-based health plans with annual benefit values more than $10,200 for individuals and $27,500 for families will be subject to a 40% tax for every dollar above those thresholds. Those limits will be tied to inflation after 2018. The average individual health plan costs about $6,000 in 2014, while the average family policy costs $16,800, according to the Kaiser Family Foundation — both well below the Cadillac tax’s upper limits.

While the regulation is more than two years from going into effect, employers are ramping up pressure because they typically decide health benefits packages 18 months in advance, Ms. Spangler said.

Many prominent companies and organizations have recently upped copayments and deductibles for their employees in anticipation of the Cadillac tax. The tax is also becoming a factor in some unions’ upcoming collective bargaining talks. The United Auto Workers, for example, is getting ready to negotiate health benefits with Detroit’s three large automakers. Last month, UAW President Dennis Williams called the excise tax “unfair.”

“Employers have been making changes to their plans in anticipation of that tax for a couple years now,” Ms. Spangler said. “That’s only going to grow the closer we get to 2018.”

In addition, with King v. Burwell now a historical footnote and the ACA mostly cemented as the law of the land, stakeholders are looking to make more calculated adjustments where they can.

Similar to the medical-device tax, congressional support is swelling against the Cadillac tax. Two bills in the House have been introduced this year to repeal it — H.R. 879 and H.R. 2050. The latter, introduced in April, already has 120 co-sponsors from both sides of the aisle.

What’s unclear is how Congress would pay for the lost revenue that the Cadillac tax would bring in. The tax is expected to generate $87 billion from 2016 through 2025, according to the Congressional Budget Office. Only about a quarter of that money would come from employers that have coverage above the thresholds. A higher amount of taxes from employee wages would comprise the remaining three-quarters, the CBO said.

Ms. Spangler said paying for an alternative would be difficult, but she mentioned how this year’s Medicare doc-fix moved forward without a full offset.

The Alliance to Fight the Forty will officially launch this month and will be active during Congress’ August recess, Ms. Spangler said.

Bob Herman writes for Modern Healthcare, a sister publication of Business Insurance.


Final Rule Issues Standards for Insurers and Marketplaces in 2016

March 24, 2015

By Linda Rowings, Mar 24, 2015 12:00:00 PM

Recently, the Centers for Medicare and Medicaid Services and the Department of Health and Human Services issued a Final Rule with standards for insurers and Marketplaces in 2016, covering topics such as transparency in health insurance rate increases, formulary drug lists, drug mail order opt out provisions, determination of minimum value, and benefits discrimination. Open enrollment for the 2016 benefit year will begin on November 1, 2015, and end on January 31, 2016.

Full Article

House approves bill defining full-time employees as those working 40 hours

September 22, 2014

For the second time this year, the House of Representatives approved legislation to ease the health care reform law’s definition of a full-time employee by changing it to those working an average of at least 40 hours per week, shielding more employers from a stiff financial penalty imposed by the law.

Under the Patient Protection and Affordable Care Act, employers with at least 100 employees are required, effective in 2015, to offer qualified coverage to full-time employees — defined as those working an average of 30 hours per week — or be liable for an annual $2,000 penalty per employee.

The same requirement applies, effective in 2016, to employers with between 50 and 99 employees.

The provision, included in a broader measure, H.R. 4., introduced by Ways and Means Committee Chairman Dave Camp, R-Mich., and approved Thursday by the House on a 253-163 vote, would change the act’s definition of full-time employees to those working an average of 40 hours per week.

“Returning to the industry standard of 40 hours would benefit employers and employees alike and lessen the burden Obamacare places on businesses and the economy,” Neil Trautwein, vice president of health care policy at the National Retail Federation in Washington, said in a statement

A similar measure, H.R. 2575, was passed earlier by the House, but the Senate has not acted on it.

The White House, which says the proposed change would reduce the number of people receiving employment-based coverage by about 1 million, says President Barack Obama would veto such a proposal if approved by Congress.

EEOC Files Suit Over Wellness Program

September 9, 2014

The Equal Employment Opportunity Commission (EEOC) has sued an employer because the penalty it applied for not participating in its wellness program was, in the eyes of the EEOC, so high that participation was not, as a practical matter, “voluntary.” Under EEOC rules, an employer may conduct medical examinations, which includes obtaining medical histories and blood draws, only in limited situations. One of those permitted situations is a voluntary wellness program. Because the program did not qualify as “voluntary,” the questions employees were asked about their health on a health risk assessment, a blood draw, and a range of motion assessment violated the Americans with Disabilities Act (ADA), according to the EEOC’s Complaint.

This is the first lawsuit brought by the EEOC challenging the incentives of an employer’s wellness program. The situation that created the complaint is a bit unusual, because the employee was terminated shortly after complaining about the wellness program. However, the EEOC also seems disturbed by the terms of the program itself.

Full Article

Overcoming Employee Disengagement

August 28, 2014

By Peter Freska, CEBS, Advisor
The LBL Group
A United Benefit Advisors Partner Firm

I have sat with hundreds of employers that want to make a difference. They want to make a difference in how their teams work, how productive the employees are, and better yet…in how they, as an employer, can attract, retain and engage the best and brightest people for long-term sustainable (profitable) growth of the organization. But many companies fall short. And, while most employees are 100% engaged when they start a new job, a recent Dale Carnegie Training study indicated that only 29% are fully engaged. In another article entitled “Overcoming Employee Disengagement,” the author mentions that the “2013 RAND Health Study found that less than half of employees (46%) participate in health risk assessment (HRA) or clinical screenings, and out of those identified as needing a wellness program, less than one fifth chose to participate.” (August 2014, Benefits Magazine) The point of the article was simple, that people create their own barriers to success.

Full Article

The Affordable Care Act: Affordable… or just an Act?

August 25, 2014

No matter who you are, no matter where, the Affordable Care Act, one of the largest pieces of legislation in recent history, will affect you…and not always in ways you can foresee, and not always in ways that give creaence to what the ACA is meant to do. 

First, it is about access and not affordability – individual applicants will be able to get coverage without concern about existing medical conditions, nor waiting periods once they are covered.

Second, it is about insurance and not medical care – many of the rules imposed on carriers have changed, but not the rules on how health care will be provided.

Third, there is an act – played out in various scenarios and requiring action on everyone’s part: individuals who are required to have coverage, large employers who must provide coverage, carriers and the health care industry who pay new taxes, and taxes on the rich, taxes on the middle class, and the payment of higher costs in nearly all cases.

Full Article 


Courts Issue Opposite Rulings in PPACA Subsidies Cases

July 24, 2014

On July 22, 2014 two Courts of Appeals issued decisions that address whether only people who live in states that have state-run Marketplaces (which are also called exchanges) are eligible to receive premium tax credits or subsidies under the Patient Protection and Affordable Care Act (PPACA). One court held that the subsidy should only be available to people covered by state-run Marketplaces, and the other ruled that people should be eligible for subsidies regardless what type of Marketplace their state has.

The IRS is responsible for implementing and interpreting the premium subsidies part of the law. It has ruled that all eligible individuals are entitled to a subsidy regardless whether they live in a state that has a state-run Marketplace or a federally-run Marketplace. The basic issue in these cases is whether the IRS is bound by one sentence in PPACA, which says that a taxpayer “enrolled through an exchange established by a State” is subsidy-eligible, so that only a person enrolled in a state-run Marketplace is eligible for a premium subsidy, or whether the IRS had the authority to look at PPACA as a whole and conclude that it would not make sense to limit subsidies to people in state-run Marketplaces, and therefore interpret the law to mean a person enrolled in any Marketplace is subsidy-eligible. 

Full Article