The Idaho Test – Last Thursday, the Centers for Medicare and Medicaid Services (CMS) shot down the state of Idaho’s plan to allow for the sale of health insurance plans which don’t comply with the Affordable Care Act (ACA). Idaho officials wanted less expensive plans to be available for purchase in their state, but these plans could use medical underwriting and wouldn’t have to cover all ten of the essential health benefits. CMS Administrator Seema Verma indicated that any insurers who offered these plans could receive a cease-and-desist order and face monetary penalties of $100 per person, per day. 

 

STM Plans Not So Short Anymore – Last month, new regulations were proposed which would reverse an Obama-era regulation. The Obama administration limited the maximum duration of a short-term medical plan (STM plan) to 90 days. The recently proposed rules would allow the duration of STM plans to last almost an entire year. States are now weighing in to determine if any action is needed at the state level. While the recently proposed rules were issued at the federal level, it is possible some states may issue regulations or laws that keep the duration of STM plans to lesser time periods, or they could even ban the sale of STM plans altogether. 

 

STM plans can use medical underwriting and don’t cover all ten essential health benefits, and there is a belief that younger, healthier people will purchase these plans because they are less expensive than ACA-regulated plans. Some states are worried that the individual market in their state will become destabilized by allowing “long-term, short-term plans.”

 

Individual Mandate Repealed…Well Kind Of, Sort Of – The penalty for not having health insurance will become $0 starting with tax year 2019. At least ten states are considering the implementation of a state-based mandate as a result. This includes California, Connecticut, Hawaii, Maryland, Minnesota, New Jersey, Rhode Island, Vermont, Washington and Washington D.C. Officials in these states worry that market destabilization may occur without an adequate incentive or penalty to enroll in coverage. 

 

Chained CPI – This is probably old news by now, but the Tax Cuts and Jobs Act that was passed in December of 2017 changed the inflation measure that is tied to contribution limits for various employee benefit programs. This change took effect in 2018 for most benefit programs. This resulted in a reduction to the annual maximum contribution limit to Health Savings Accounts (HSAs) for families. The limit was adjusted downward from $6,900 to $6,850. No changes were made to the individual contribution limit or the catch-up contribution limit. In addition, no changes were made to contribution limits for Flexible Spending Accounts (FSAs) or Commuter Plans.  

 

HSAs: An Example of When State and Federal Rules Collide – The Internal Revenue Service (IRS) has confirmed that health plans which cover male sterilization procedures without any deductible or cost sharing requirements will eliminate HSA-eligibility. However, the IRS is providing transition relief until 2020 considering the situation. Anyone covered by a health plan which covers male sterilization procedures with no cost sharing requirement will remain HSA-eligible until 2020.