Wednesday, February 6, 2013
February 1st was another busy day for administrative action at HHS regarding ACA. HHS issued the NPRM on religious exemptions and the mandate to provide preventive contraceptive services. Less publicized was another NPRM on miscellaneous minimum essential coverage provisions.
The first NPRM is an effort to reconcile the commitment to access to contraception services with the beliefs of religious organizations. As widely reported, it clarifies that exempt religious organizations do not lose their status if they engage in activities other than those designed to inculcate religious beliefs, employ persons who are not members of the faith, or serve clients who are not of the faith. It suffices to be a non-profit entity under § 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code. Thus a church would not lose the exemption because it ran a soup kitchen for the area poor.
More controversially, the NPRM proposes that non-profit organizations holding themselves out as religious organizations and opposing contraceptive coverage—church-owned hospitals, universities (and their student health plans), or charities—be permitted accommodations for the contraception mandate. Organizations wishing accommodations would self-certify, maintaining their own records and filing them with their health insurer, and thus avoid any government entanglement in the certification process. Insurers would be required to offer free contraception coverage to employees; HHS believes (with good evidentiary support) that the costs saved through improved women’s health would offset costs of the coverage. For plans that self-insure, the third party administrator would arrange for the coverage; the entity providing the coverage would receive a rebate on federally-facilitated exchange fees, paying the administrator to offset administrative costs. HHS seeks comments on the details of structuring such arrangements. The NPRM does not consider the case of a self-insured plan not using a third-party administrator, judging that no self-insured plans are structured this way. Another possibility, not mentioned in the NPRM, is a third party administrator that is also a religious organization. For-profit entities are excluded from the accommodation, such as the craft store chain Hobby Lobby which has brought suit against the mandate and delayed the start date of its plan year to avoid fines. The comment period should be lively: HHs received over 200,000 comments in response to its ANPRM.
The NPRM about miscellaneous minimum essential coverage requirements establishes standards and processes for Exchanges to determine individual eligibility for exemptions from the requirement to maintain minimum coverage. Individuals may apply for exemptions on multiple grounds. State-based exchanges (or federal substitutes) may make exemption determinations in 5 of the 9 specified categories;
Membership in a religious organization objecting to health insurance as specified by Treasury rule. This exemption, once granted, continues until the individual applying for it informs the exchange of changed circumstances. Children with exemptions must reapply on turning 18; exchanges are to provide them notice of the need to reapply.
Membership in a health care sharing ministry. This exemption requires annual reapplication and is only to be granted retrospectively.
Incarceration. This exemption is granted retrospectively and applies only to the months of actual incarceration.
Membership in an Indian tribe. This exemption is granted on a continuing basis until the individual gives notice that s/he is no longer eligible.
Hardship. Individuals qualify if they have significantly changed circumstances or if the purchase of health insurance would cause serious deprivation of food, shelter, clothing or other necessities; this is described in broad language and will be augmented by guidance. They also qualify if they meet projected income standards specified by the Treasury. The hardship exemption is also extended to individuals who do not qualify for Medicaid because their state has not adopted the Medicaid expansion provisions of ACA. The hardship exemption also applies if the total household cost of employer-offered self-only coverage for all employed household members exceeds 8% of household income.
Four of the exemptions will be handled through tax filings: the hardship exemption based on reported income; not being lawfully present; short coverage gaps; and inability to afford coverage (other than the limited hardship exemption proposed for exchanges to grant).
This NPRM also addresses some types of coverage that may be considered to meet the essential minimum requirement but that are not included in ACA. These are: self-funded student health insurance, foreign health coverage, federally-funded refugee assistance, Medicare Advantage plans, the AmeriCorps plan, and state high risk pools. HHS seeks comments on when high risk pools should be re-evaluated as meeting minimum coverage requirements. HHS also seeks comments on developing a process for applications from other coverage types to qualify as meeting essential minimum standards.