CMS Proposed Rule to Provide Greater Access to ACA Coverage
The Biden administration is yet again making strides to bolster the Affordable Care Act. This time, it’s through a proposed rule that aims to strengthen the ACA’s federal and state health exchanges.
Included in the proposed rule issued by the Treasury Department and Centers for Medicare and Medicaid Services (CMS) are conditions to extend the ACA’s annual open enrollment period by 30 days. If the proposed rule is signed into law, the extended open enrollment period would apply to the 2022 tax year and all years thereafter. Currently, the annual ACA enrollment period only runs for a period of roughly six weeks during November and December.
In addition to lengthening the annual open enrollment, the proposed rule would provide health exchanges with the option to provide monthly special enrollment periods to certain low-income individuals. These unique special enrollment periods would allow consumers with a household income of under 150% of the Federal Poverty Level (FPL) the ability to obtain healthcare coverage for $0 monthly premiums or “very low-cost.”
Special enrollment periods have proven to be an effective way of increasing health exchange participation. The federal special enrollment period passed by Biden earlier this year has already netted 2 million additional enrollees. The federal special enrollment period is currently slated to run through August 15.
According to the Kaiser Family Foundation (KFF), roughly 1.3 million uninsured Americans qualify for “free platinum-like marketplace plans.” The special enrollment periods included in CMS’s proposed rule would further increase health exchange participation.
A press release issued by CMS states that the proposed rule also includes provisions that allow the agency to “collect and dedicate additional revenue to fund consumer outreach and education through modest increases in user fee rates for issuers in Federally-facilitated Exchange states and State-based Exchanges on the Federal platform.” This provides additional funding to “Federally-facilitated Exchange Navigators,” who provide assistance to the uninsured in choosing their health insurance options.
CMS’ proposed rule aligns with Biden’s goal to provide greater access to ACA coverage to Americans. CMS Administrator Chiquita Brooks-LaSure said, “The success of the special enrollment period opportunity clearly shows the demand for quality, affordable coverage. These latest steps aim to better fund outreach efforts and eliminate barriers to coverage. We’re making high-quality, low-cost coverage more accessible than ever.”
Employers should note that also included in the CMS proposed rule are additional duties for Navigators. Among the new responsibilities is helping individuals understand “information about reconciliation of premium tax credits.” As a reminder, the issuance of Premium Tax Credits (PTCs) to individuals is the trigger for the IRS assessing Letter 226J penalty notices to employers identified as having failed to comply with the Employer Shared Responsibility Provisions (ESRP).
It is possible for the proposed rule to trigger more ACA penalties as consumers are further educated on applying for and obtaining PTCs through state and federal health exchanges. And with the IRS stepping up enforcement of the ACA — employers should be prepared to demonstrate compliance with the healthcare law’s Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) are employers with 50 or more full-time employees and full-time equivalent employees. ALEs are required to:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV)
- Ensure that the coverage is deemed affordable based on one of the IRS-approved methods for calculating affordability
Failure to adhere to these two requirements could subject your organization to Internal Revenue Code (IRC) Section 4980H penalties.
If your organization needs assistance complying with the ACA’s Employer Mandate, download the 2021 ACA Essential Guide for Employers to learn what is expected of you. Unsure of how your current ACA compliance processes are holding up? Contact us to get your free ACA compliance score.
For information on ACA penalty amounts, affordability percentages, important filing deadlines, steps for responding to penalty notices, and best practices for minimizing IRS penalty risk, download the ACA 101 Toolkit.
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