In case you missed last week’s PAHU Webinar – AHPs and STLD Plans with PA Insurance Commissioner Jessica Altman…
Below are the highlights from a webinar held on October 24, 2018 hosted by PA Insurance Commissioner, Jessica Altman, her chief of staff, Alison Bean, and her counsel, Sandy Yakima. The webinar was moderated by Jessica Waltman, PAHU Legislative Chair. The Insurance Commissioner was pulled from the webinar at the last minute due to an emergent issue, but her staff explained the State’s position on the issues of association health plans and short-term, limited duration plans. This was an exclusive event for GPAHU and PAHU members. If you missed the webinar, access the recorded session here
Association Health Plans
On June 19, 2018, the Department of Labor (DOL) issued the Final Rule on association health plans (AHPs), following a prior Executive Order, and proposed regulations.
Although the Final Rule appears to lessen requirements for association groups to establish and operate an AHP in a compliant manner, the AHP must comply with a collection of laws including ERISA, the Internal Revenue Code, the Affordable Care Act (ACA), and state laws. The Final Rule specifically affirms that the state regulatory structures overseeing AHPs would continue.
Comments from the PA Insurance Department
Insurance Commissioner Jessica Altman and her staff made it clear in this webinar that existing PA laws will continue to be enforced. The webinar presenters outlined the points made in a letter to the US Department of Labor (DOL) on August 2, 2018. Insurance Commissioner Comments and full letter here
Below is a summary of those points:
- An association must be properly formed and in active existence for at least two years before providing health care coverage for its members in PA;
- The health care coverage must be fully-insured;
- A health plan formed by an association is a multiple employer welfare arrangement and is illegal in PA unless it is licensed and has authority in PA;
- The health care coverage an association issues to its members in PA will be subject to all PA legal requirements for health insurance;
- A sole proprietor continues to be a part of the individual market and is not an “employer” for purposes of health insurance coverage in PA;
- An association insured health plan must provide policy forms and rates compliant with PA law and the ACA, and must be consistent with the market in which each employer member is a part (individual, small group or large group); and
- An AHP organized in another jurisdiction, may not market its plan, whether insured or self-funded, in PA without compliance with all applicable PA laws and regulations.
The PA Insurance Department (PID) participates in ongoing discussions with other state regulators and the DOL to continue the dialog about AHPs. The PID is also in the process of drafting an iterative FAQ document to increase consumer awareness.
The Attorney General of the Commonwealth of Pennsylvania has filed a lawsuit along with several other states to challenge the provision of the Final Rule that exempts AHPs from complying with many of the ACA’s major reforms.
Short-Term Limited Duration Plans
On August 3, 2018, the Departments of Labor, Health and Human Services (HHS) and the Treasury (Departments) published final regulations amending the definition of short-term, limited-duration insurance (STLDI) for purposes of the ACA.
These plans are meant to serve as a temporary alternative for a consumer with a gap in coverage. They were previously strictly limited to discourage consumers from choosing a short-term plan for major medical coverage because these types of plans do not offer comprehensive coverage. This final rule relaxes those limits and may lead consumers to consider a short-term plan as a low-cost alternative to ACA coverage.
Comments from the PA Insurance Department
The webinar presenters explained the strict guidelines that STLDI plans must meet in order to be approved by the PID. A new PID policy takes a two-pronged approach. All existing STLDI plans (those with a duration of less than three months) were required to refile to show that they comply with the new federal notice requirements. The PID has implemented an expedited process for refiled plans. Approved plans are listed on the PID website. Note that not all existing plans may have refiled so brokers are encouraged to check the website for the listing of approved STLDI plans.
The second prong for all other STLDI plans, including new plans, is a longer track with a more extensive review process. None of these plans have been approved at this time. If and when they are approved, they will be listed on the PID website. The presenters reiterated that all STLDI plans must certify compliance with the federal disclosure language that informs consumers that these plans are not ACA compliant and do not provide minimum essential coverage.
The PID is moving on enforcement actions for misrepresentation of STLDI plans and encourages PAHU members to pass along any enforcement concerns. These are especially worthwhile for areas near bordering states where plans may be illegitimately marketed to PA residents. Although there is no clear plan for new legislation relating to STLDI plans, there have been discussions about how to tighten up regulations on disclosure, duration and renewability.
Although this webinar was very helpful in clarifying the position of the PA Insurance Department, it is useful to keep in mind that these positions may be impacted by future legislation and the results of the mid-term elections.
Questions? Please contact GPAHU Legislative Chair Vicky Cagliola, at firstname.lastname@example.org. For the latest information on how health care reform may be impacted by the mid-term election results, plan to attend our Member-Only 2018 Post-Election Breakdown on November 15, 2018. Register here.