Last evening we learned that the latest plans to replace or amend the Affordable Care Act (ACA) are, at the very least, on hold indefinitely. As a result the ACA will likely remain in place and unchanged for at least the coming months.
Any attempt to repeal the ACA at this juncture does not seem to have the support needed to pass, so for now assume that approach is not likely to succeed. As such, insurance carriers will begin finalizing their plans for the 2018 renewal season on the assumption that there will be few, if any, changes to the ACA that would directly impact plan designs and associated premiums.
What does this mean for your business?
- Given many of the proposed changes to the ACA would have had the greatest impact on the individual coverage market (and minimal impact on employer-provided insurance), not much in the way of change is expected related to plan design or carrier options, and ACA filing requirements are expected to remain intact (1094/1095).
- Speculation is that the Trump Administration will advise / request that enforcement of the individual mandate (which requires all to be insured or face a fine) be eased or set aside.
- Those individuals who have been reluctant to secure insurance under the ACA mandate are seen as mostly healthy and therefore do not see the need for coverage. They also do not see the expense vs. the coverage they receive making financial sense, which is also why they have often chosen not to participate.
- Their participation in the ACA would help offset the expense incurred by those with the greatest health issues and greatest need for coverage. If carriers see participation in the individual market mostly by heavy users of medical care, then they are likely to continue to pull out. They also will look to offset their losses on these exchanges by raising premiums elsewhere…in the employer market in particular.
- Analysts and experts in the medical insurance space have speculated that 2018 medical premiums for employer plans will increase by 10% or more, with some employers seeing 20%+ increases based on a wide range of market factors.
Given these and other factors, we are advising our clients as follows:
- Plan for premiums to rise significantly for 2018, possibly paired with higher co-pays and higher deductibles, all for the same level of coverage.
- Assume a level of uncertainty and confusion will be out there for the foreseeable future.
- While there may be requests made to ease enforcement on ACA provisions (including the distribution and filing of 1094/1095 forms), we strongly recommend all firms comply with the law and not assume that such requests will be supported by the IRS.
As always, please feel free to reach out to your OperationsInc consultant for additional guidance
For further guidance or assistance, please contact your OperationsInc consultant directly, or you can reach another member of our team at info@OperationsInc.com.