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Chiquita Brooks-LaSure (Photo: CMS)

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HealthCare.gov Notices New Class of Individual Employer Policies

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What You Need to Know

  • The individual coverage health reimbursement arrangement program gives employers a way to let workers buy their own coverage.
  • An ICHRA reporting requirement is set to become mandatory in 2025.
  • CMS also held HealthCare.gov user fees steady and kept HealthCare.gov out of the ancillary benefits markets.

HealthCare.gov managers are signaling that they think individual coverage health reimbursement arrangements matter.

The regulators in charge of the federal Affordable Care Act public exchange system today gave ICHRAs official attention, by adding an ICHRA use reporting requirements for the insurers that sell coverage through HealthCare.gov.

The Centers for Medicare and Medicaid Services  — the arm of the U.S. Department of Health and Human Services that oversees HealthCare.gov — put the ICHRA requirement in the HHS Notice of Benefit and Payment Parameters for 2023.

The parameters document shows how federal ACA programs and rules will work in 2023 and later years.

CMS added the ICHRA reporting requirement along with requirements that health insurers selling coverage through HealthCare.gov report the race and ethnicity of enrollees.

Reporting would be voluntary in 2023 and 2024 and mandatory in 2025.

The 660-page parameters document also includes many other provisions, including new requirements for how web brokers that plug into HealthCare.gov signup systems.

What It Means

The biggest U.S. health insurance distributor will have a stream of data that health insurance marketers could use to analyze ICHRA sales on a county-by-county, or even ZIP-code-by-ZIP-code, basis.

The data could also be of interest to life, annuity and retirement professionals. ICHRA holders could not invest HRA value the way health savings account holders invest HSA value. But, like HSA holders, ICHRA holders will have experience with managing their own benefits accounts, and they may emerge with a higher-than-average level of interest in other individual insurance, investment and income planning products.

A Health Insurance Distribution Giant

HealthCare.gov provides ACA services for the 33 states that do not operate their own locally run public exchange program.

Consumers in those 33 states can use HealthCare.gov to shop for individual and family major medical coverage, sign up for coverage and get premium tax credit subsidies from the IRS.

HealthCare.gov helped about 10 million Americans sign up for individual and family major medical coverage for 2022

Participating insurers will generate about $60 billion in premium revenue from covering HealthCare.gov users this year and pay HealthCare.gov more than $100 million in user fees.

The 2023 parameters document CMS issued today is the first document of its kind developed fully under the administration of President Joe Biden, with oversight from Chiquita Brooks-LaSure, the CMS administrator.

The Senate confirmed Brooks-LaSure in May 2021.

The History

Consumers, employers and health insurance brokers hunted for years for a good way to let employers provide cash that workers could use to buy their own individual health coverage.

In most states, before 2014, the main obstacle was that insurers put applicants for individual major medical coverage through a medical underwriting process.

That underwriting process meant that, if an employer sent workers to buy their own coverage, workers with obesity, diabetes, cancer or health conditions would have no way to use the cash to buy coverage.

Starting in 2014, the ACA prohibited health insurers from considering applicants’ health problems when reviewing applications for individual major medical coverage.

After 2014, the main obstacle to letting workers have cash to buy their own coverage was the concern that letting employers send workers in the individual market could destabilize the individual market, the group market or the entire market.

ICHRAs

Regulators shrugged off those concerns in 2019 and completed final regulations for the individual coverage health reimbursement arrangement.

Insurers and benefits brokers were ramping up efforts to market ICHRAs in 2020, around the same time that the COVID-19 pandemic rolled in, absorbed employers’ attention and blocked efforts to hold the kinds of in-person meetings needed to explain new health benefits program.

This year, brokers and employers appear to be poised to give ICHRAs more attention.

Other ACA Provisions

CMS also:

Scaled back special enrollment period verification requirements.

HealthCare.gov and other exchanges try to spur younger, healthier people to sign up for coverage by making it easy to sign up only during an annual open enrollment period.

The idea is that limits on when people can sign up will encourage young people to buy coverage and pay premiums when they can, to avoid breaking a bone or getting into a car accident at a time when buying health coverage is impossible.

Instead, CMS says, it found that the people who made the effort to show that they qualified for special enrollment periods during the ACA off season were sicker than the average applicant, and that tough verification requirements hurt the overall quality of off-season enrollees.

CMS says it will continue to require people who say they are eligible for off-season enrollments because of loss of other coverage to verify that they have actually lost their previous coverage

A majority of off-season enrollees cite loss of coverage as the reason they are applying through special enrollment period provisions, CMS says.

Kept HealthCare.gov out of the market for benefits other than major medical insurance and stand-alone dental plans. The state- run exchanges in some states have experimented with selling products such as ICHRAs and vision insurance, and running ads from for-profit companies on their websites.

CMS noted, in a letter to 2023 issuers that came out with the parameters document, that HealthCare.gov will not display information life insurance policies, disability insurance policies, stand-alone vision plans or other products.

Held plan user fees steady. Insurers in states where HealthCare.gov provides comprehensive services will pay a rate equal to 2.75% of premiums per year.

Chiquita Brooks-LaSure (Photo: CMS)