The Fact of the Month
Here’s something to talk about when discussing plan design options and employer contribution strategy with group clients in the New Year.
Even though over 90% of United States residents have some form of health insurance, medical debt remains a persistent problem. Approximately 9% of adults – or roughly 23 million people – owe more than $250 due to health costs. About half of those reporting significant medical debt owe more than $2,000. A small share (representing about 1 percent of all adults) owes more than $10,000, and the group accounts for the majority of the total medical debt owed by people in the United States.
Source Matthew Rae, Gary Claxton, Krutika Amin, Emma Wager, Jared Ortaliza, and Cynthia Cox, “The Burden of Medical Debt in the United States,” The Kaiser Family Foundation, March 10, 2022,https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/
The Big Three
Each month GPAHU identifies three top public policy or legal developments that could impact our members and clients. Here are this month’s big three!
Biden Administration Proposes End To “Family Glitch”
The Biden Administration recently issued a proposed rule to change the eligibility rules for individual market exchange-based premium tax credits and to eliminate the Affordable Care Act’s (ACA) “family glitch.” Right now, if an employer offers a person group coverage that meets the ACA’s “affordability” and “minimum value” tests, then that person is not eligible to get subsidized individual coverage through an ACA health insurance exchange. However, the ACA “affordability test” relies on the cost of coverage for a single employee, regardless of what kind of employer coverage the person elects. The “glitch” is that many employees are paying far more for family coverage than the ACA’s affordability threshold 9.5 percent of their household income (adjusted for inflation), but their dependents cannot obtain subsidized individual health insurance exchange marketplace coverage instead. The proposed rule would change that, effective January 1, 2023. If a person could show that they pay more than the affordability standard for dependent coverage, then their dependents could be eligible for exchange-based subsidies.
It is very important to note that the proposed regulatory change would not affect the coverage affordability requirements for applicable large employers (ALEs) subject to the ACA’s employer shared responsibility provisions (employer mandate). The rule is clear that ALEs must offer “affordable” coverage to full-time employees to avoid employer mandate liabilities. For employers, the affordability standard will still be based on the cost of coverage for a single employee.
While the proposed rule would not directly change the employer mandate, there is a strong possibility that, if finalized without changes, it could significantly impact employer reporting requirements for the 2023 coverage year on forward. To administer the eligibility rule changes, the IRS will need to verify data about the cost of family coverage employers offer to employees. To get the information they will need, the IRS will presumably needs to make significant revisions to IRS Forms 1094-C and 1095-C and related reporting guidance before the 2023 reporting is due in 2024.
NAHU is monitoring this policy development very closely on the federal level. The Biden Administration is accepting comments on the proposed changes, and NAHU will be sending formal comments to the Administration on the proposed rule by the June 6, 2022, deadline. If the proposal is finalized, you should expect to get much more information and guidance from both GPAHU and the national organization.
New Pennsylvania State Policy Will Allow Health Insurers to Ask Race and Gender Questions on Applications to Promote Equity Initiatives
Acting Pennsylvania Insurance Commissioner Michael Humphreys recently announced a new policy of non-enforcement on a Commonwealth prohibition against health insurers asking applicants to voluntarily answer questions about race and gender. The purpose of allowing the insurers to ask these questions is to collect data to promote health equity initiatives.
According to the Acting Commissioner, “Health insurers can play a critical role in helping the Commonwealth identify better practices and pathways to healthcare equity. The collection of race and ethnicity data are especially important to understand how healthcare services are being utilized, who is more likely to use them, and the effects the treatments and related insurer consumer-centric programs have on the patient’s quality of life.”
Since Pennsylvania law clearly prohibits health insurance discrimination, including discrimination related to race and gender specifically, the new policy makes it clear that such voluntary questions are only permissible for health equity purposes. Any form of unfair discrimination is still prohibited, and the Department will continue to take enforcement action in discrimination cases.
Philadelphia Extends COVID-19 Paid Leave Through the End of 2024
Philadelphia Mayor Jim Kenney recently extended the city’s Public Health Emergency Leave Law through the end of 2023. Accordingly, Philadelphia employers with 25 or more employees must provide up to 40 hours of additional COVID-19 paid sick leave to eligible employees for the next year and a half. Affected employers must also provide notice of the extended availability of COVID-19 leave to employees as soon as possible.
The leave law applies to eligible employees who are unable to work for the following reasons:
- To care for self or a family member showing symptoms of COVID-19;
- To care for self or a family member exposed to COVID-19;
- To self-isolate;
- Childcare or school closures;
- To obtain a COVID-19 test or vaccine; or
- To recover from an injury, disability or illness related to a COVID-19 vaccination.
Employees working 40 hours or more per week may take up to 40 hours of paid COVID-19 leave. Employees working less than 40 hours in a week must receive an amount of leave “equal to the amount of time the employee is otherwise scheduled to work or actually works on average in a 7-day period, whichever is greater.”
The law does not just apply to employees who are Philadelphia residents or those who work in Philadelphia all the time. An “employee” is defined as an individual “(i) working for [an applicable employer] within Philadelphia after March 9, 2022, (ii) who normally works for that employer within the City of Philadelphia but is currently teleworking from any other location as a result of COVID-19, or (iii) works for that employer from multiple locations or from mobile locations, provided that 51% or more of such employee’s time is present within the City of Philadelphia.”
The COVID-19 leave is additional paid leave beyond all other leave benefits offered by affected employers. An employer may not reduce other paid leave an employee has received to compensate for the COVID-19 leave. Employers also cannot require an employee to use other forms of paid leave available to them first, unless that is required by state or federal law.
There are a few ways an employer can be exempt from the requirement, but they require the employer to already offer comparable paid leave benefits. Employers that provide affected employees 120 hours or more of paid leave, that can be used for the same purposes and under the same conditions as COVID-19 leave, do not need to change their leave policies. Also, an employer does not have to conform with the new legal requirements for employees who do the majority of their work remotely via telework, if they already give such employees at least 80 hours of paid leave that can be used for the same purposes and under the same conditions as COVID-19 leave.
Check This Out!
If you want to expand your health policy knowledge beyond this newsletter, here is a resource to check out!
Muhlenberg College Public Health Program annually polls Pennsylvanians on their views on all kinds of public health issues. This year’s survey results cover topics like the COVID-19 outbreak and the performance of President Biden and Governor Wolf’s handling of the pandemic, heroin addiction, immunizations and marijuana legalization.