Below are some highlights of the conversation about the group health insurance market between John Kelly, Principal, John W. Kelly Management Consulting, Chris Condeluci, Principal, CC Law and Policy PLLC, and Jonathan Rickert, SVP Insurer Business, GetInsured.

Latest update on where policy changes are headed and the impact to group and commercial coverage going forward.
There are two ways to repeal the Affordable Care Act — through the legislation process which requires 60 votes, or via the reconciliation process, which requires only 51 votes. What we’ve seen is a move to repeal certain aspects under the reconciliation process, under which changes must be limited to tax and spending provisions. So, what does that mean?
All ACA taxes can be repealed:

  • The employer mandate penalty tax will be repealed, and one draft has this repeal being retroactive to 2016. This would mean that employers will no longer have to do the measurement period for full-time employees and they won’t have to offer a minimum value plan to avoid penalties. However, current reporting requirements will not be repealed under reconciliation because it helps IRS determine subsidy eligibility and subsidies will be sticking around for a while.
  • The Cadillac Tax, which is currently delayed until 2020, will be repealed in reconciliation. The question that remains is whether Republicans will replace it with a new cap. If a new cap replaces the Cadillac Tax, employers will want to ensure their coverage falls below the cap to avoid a tax.

Republicans also want to expand health savings accounts (HSAs). Proposals include doubling contribution limit, allowing spouses to make catch-up contributions, and allowing funds in HSAs to be used for medical expenses that occurred up to 60 days prior to HSA establishment.

There are some things that cannot be changed via the reconciliation process, specifically insurance market reforms under the ACA. Provisions such as adult children remaining on their parents’ plans, lifetime limits, and guarantee of coverage won’t be affected. These would need to be changed through regulations directly from HHS.

What are the likely dates for change to occur?
Effective dates are a moving target, but here’s what we are seeing:

  • Any Medicaid changes will have a 2-3 year transition period
  • Current subsidies will be available through coverage year 2019
  • Whenever the employer mandate repeal occurs, it will be retroactive to the 2016 plan year
  • The Cadillac Tax is not effective until 2020, so a direct cap replacement would be targeted to take place January 1, 2020

How do you see technology changing to support group insurance marketplace?
Insurers are looking for ways to automate enrollment and provide decision support to make the enrollment process less cumbersome. Employees are looking for more self-service that would give them the ability to update qualifying life events online. Insurers that have implemented such changes have found that features like these create stickiness with their plans, and employers find that it cuts down on employee education costs.

There is also a movement in the market towards more robust analytics that go beyond claims data, to help insurers and employers identify trends and begin to use predictive analytics to improve coverage and consumer education.

Longer term, how will insurers use technology to innovate?
After the ACA, we saw a rapid change in the market; individuals were willing to enroll in individual coverage online. Prior to 2013, consumers had largely enrolled in plans through agents and brokers. Post-ACA, elderly consumers are also much more willing to enroll online for direct enrollment. So what we’ve seen is a move in the health insurance market where enrollment functions more like a consumer product — the “” of the market.

Employers are beginning to think about ways to help employees interact with their benefits in a more constructive way and to increase engagement. They want to make sure employees are using benefits wisely so that they see the value of the benefits package that’s being provided.

Another area of focused innovation is getting providers to interact with patients and benefit design to optimize patient care.

How will the Small Business Healthcare Relief Act (SBHRA) impact the small group market?
Provisions under the SHBRA are only available to employers with 50 employees or less (these employers are also not subject to the employer mandate). Under the new law, small employers are allowed to make tax-free contributions into a health reimbursement account (HRA) for their employees to purchase plans on the individual marketplace. There are, however, some constraints:

  • The contribution cannot exceed the set annual caps of  $4,950 for individuals/$10,000 for families
  • The HRA contribution has to be offered to everyone in the organization
  • If the employer is sponsoring a group plan, they cannot offer HRA reimbursement

If the contribution the employer is providing the employee is not enough to make the plan affordable, as defined under the ACA, the employee can still access subsidies, though the subsidy is reduced dollar for dollar by the employer contribution.

What would the effect be of selling insurance across state lines?
Some arguments say that there won’t be much of a difference because it’s difficult to build the interstate networks and execute. Leadership in Washington tends to be more states-rights focused so selling across state lines doesn’t necessarily align with their ideology. Overall, there are a lot of issues that would make this a slow-moving issue.

There is potential in states where there are naturally occurring regional markets for sale of plans across state lines; this would be up to the affected states. However, a full 50-state interstate commerce situation is unlikely to occur.