Smart Benefits: Start 2015 by Planning for Health Reform Changes in 2016

Monday, December 29, 2014

Amy Gallagher, GoLocalWorcester Business/Health Expert

The recent Department of Health and Human Services (HHS) Notice of Benefit and Payment Parameters for 2016 includes payment parameters and key policies affecting eligibility, enrollment and benefits applicable to the 2016 benefit year.

Key provisions in the proposed rule include:

Annual Open Enrollment Period: The proposed open enrollment period for non-grandfathered policies in the individual market, inside and outside the exchanges, for all benefit years beginning on or after January 1, 2016, would run from October 1 through December 15 of the year prior to the benefit year.

Revised Essential Health Benefits Benchmark Selection: The rule proposes that states select new benchmark plans for 2017, based on plans available in 2014. The current benchmark plans would remain in effect for 2016.

Default Re-Enrollment: Under current rules, consumers who don’t take action during open enrollment are re-enrolled in the same plan they were in the previous year, even if that plan experienced significant premium increases. The notice indicates that states may be able to pursue alternative options for re-enrollment, under which consumers who take no action might be defaulted into a lower cost plan rather than their current plan.

Prescription Drug Coverage: A proposed new drug coverage policy would be based on a pharmacy and therapeutic (P&T) committee system, under which issuers would design their formularies using scientific evidence that would include consideration of safety and efficacy, cover a range of drugs in a broad distribution of therapeutic categories and classes and provide access to drugs that are included in broadly accepted treatment guidelines. As an alternative to, or in combination with, the P&T committee proposal, comments are being accepted on whether another drug count standard based on the American Hospital Formulary Service should be used, or the current USP drug count should be retained.

Cost-Sharing Restrictions: The proposed rule includes several requirements applicable to cost-sharing, including that non-calendar year plans must adhere to the cost-sharing limits effective for the year in which the plan begins and can’t reset cost sharing requirements at the end of the calendar year.

2016 User Fees: The user fee collected from participating issuers to fund federally-facilitated exchange operations was set at 3.5 percent of the monthly premium charged by the issuer for 2014 and 2015. Based on enrollment and premium projections, the proposed user rate fee for 2016 would remain the same.

Maximum Annual Limitation on Cost Sharing: For 2016, the proposed maximum annual limitation on cost sharing would be $6,850 for self-only coverage, and $13,700 for other than self-only coverage.

The proposed rule is available here.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.

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