Benefits Buzz

The Idaho Test: In Defiance of ACA Compliance

Posted on February 6th, 2018

The state of Idaho is looking to do something no other state has done – allow for the sale of health insurance plans which don’t comply with the Affordable Care Act (ACA). The primary purpose is to allow for lower premiums plans to be available.  
Under Idaho’s proposal, insurance companies would be able to sell plans that don’t include all the ACA-required essential health benefits. Additionally, coverage could be denied or subject to a rate increase based on a person’s pre-existing conditions, unless the person had continuous prior coverage in place. Insurance companies could offer these plans only if they offered plans that also comply with the ACA.
The interesting part – the state of Idaho has not sought approval from the federal government. This will be a true test to see how the Trump administration will respond. Will they look the other way? Or will they enforce federal penalties which generally prohibit the sale of health insurance plans which don’t comply with the ACA. Furthermore, it will be interesting to see if any insurance companies will offer these types of plans since they may be at risk of penalties too. 
Idaho’s insurance commissioner, Dean Cameron, has acknowledged this move walks a fine line in terms of its legality. However, Cameron likens this to a move by the Obama administration that has allowed some people to keep in place plans that don’t comply with the ACA. These are sometimes referred to as transitional or “grandmothered” plans. He also points out that starting in 2019 there is no more Individual Mandate penalty. 
This will be an interesting story to follow. It could set precedent to the types of plans that can be sold without scrutiny, or it could be something that gets shot down in the court of law. Only time will tell. 

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