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CMS releases draft application for ACA exemptions

Posted on October 16, 2013 | No Comments

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The Centers for Medicare and Medicaid Services (CMS) issued a draft application and a corresponding data collection comment request concerning exemptions from the individual mandate.  Under the Affordable Care Act (ACA), certain groups of individuals, such as those experiencing financial hardships or those that belong to a religious organization that opposes the use of insurance, are deemed exempt from the individual mandate and are therefore not required to pay the $95 penalty in 2014.  This specific draft application, which is for individuals requesting a hardship exemption, is 6 pages in length and requires applicants to provide the type of hardship they are experiencing and their tax information.  CMS anticipates that more than 12 million individuals will apply for the individual mandate exemption.  The data collection comment request outlines options for states to rely on the Department of Health and Human Services (HHS) to determine eligibility exemptions, and asks the Office of Management and Budget (OMB) to approve the annual information collection requirements associated with the application.

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Below are three tables that describe the exemptions and SEPs in the ACA. The first table enumerates the exemptions and the method by which an individual may claim them. The second table focuses specifically on one type of exemption pathway- hardships. This table lists several specific events that will qualify as a hardship exemption and how to claim them. The third table describes the SEPs, including the rationale behind them and who is affected.
The Congressional Research Service (CRS) issued a report on February 1 outlining the requirements taxpayers must meet in order to qualify for premium tax credits under the Affordable Care Act (ACA). The CRS report, entitled Health Insurance Exchanges Under the Patient Protection and Affordable Care Act (ACA), reviews exchange functioning at the state level and explains how to determine consumer eligibility for the tax credit and cost-sharing subsidies. According to the report, because the premium tax credits are advanceable, it is necessary to determine eligibility for credits at the time of application. Exchanges may determine applicant eligibility directly or may choose to implement a determination of eligibility made by the U.S. Department of Health and Human Services (HHS). The report also outlines how the exchanges interact with the individual mandate, employer requirements, and Medicaid.
The US Department of Health and Human Services (HHS) has permitted individuals whose insurance plans were canceled under the Affordable Care Act (ACA) to qualify for a hardship exemption and not be subject to the individual mandate for 2014. Hardship exemptions were created for individuals that experienced "financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan," and the new decision by HHS places individuals with canceled health plans under this classification. The policy change, announced both in a letter to several senators and through official guidance from the Centers for Medicare and Medicaid Services (CMS), requires individuals with canceled plans to submit a hardship exemption form and proof of plan cancellation. Individuals choosing to claim a hardship exemption may forgo insurance for 2014 without a penalty or choose to enroll into catastrophic plans, which are bare-bones plans typically reserved for individuals under the age of 30.
Yesterday, the Centers for Medicare and Medicaid Services (CMS) issued a Request for Comment (RFC) concerning new exemptions to the individual mandate under the Affordable Care Act (ACA). This particular RFC asks for additional information on the burden experienced by health care sharing ministries, and if such burden would qualify for an exemption from the individual mandate.
To ensure success of insurance market reform, the Affordable Care Act (ACA) promulgates that nonexempt individuals must maintain minimum essential coverage or be subject to the shared responsibility payment. Exempted individuals, such as those with recognized religious conflicts, must receive a certification of exemption from the Exchange to be relieved of the shared responsibility payment. Today, the US Department of Health and Human Services (HHS) released a final rule implementing important components of the ACA concerning this idea. Several of the statutory functions addressed in the rule include:
  • Eligibility determination and granting of certificates of exemption. This rule implements provisions of the ACA associated with eligibility determination, while still leaving states ample discretion in creating their Exchanges. The rule standardizes tenets of eligibility determination that are explicitly stated in the law and are necessary for efficiency and consumer protection. The rule also states that individuals that would be eligible for Medicaid had their state chosen to expand will not be subject to the individual mandate penalty.
  • Designation of benefits as minimal essential coverage. This rule provides guidance for determining whether certain types of coverage, particular those not explicitly defined in the statue, can be considered minimum essential coverage. If this these other types of coverage are certified as compliant with Title I of the ACA, then consumers possessing this coverage will be considered to have met the minimum essential coverage requirements.
  • Premium tax credit eligibility and shared responsibility exemption. Guidance released by the Internal Revenue Service (IRS) expanded upon eligibility criteria for minimum essential coverage of individuals on government-sponsored health programs, student health programs, or state high risk pools. Additional IRS guidance purports that an individual may be relieved of shared responsibility payments if he or she is transitioning to an employer-sponsored plan during a non-calendar year.
The Internal Revenue Service (IRS) and the Centers for Medicare and Medicaid Services (CMS) have released 2 new proposed rules related to the individual requirement to purchase health insurance (mandate). The IRS rule clarifies the requirement that nonexempt individuals maintain minimum essential coverage or make a shared responsibility payment (penalty). The CMS rule lays out specific exemptions to minimum coverage requirement, most notably that any person otherwise eligible for Medicaid under the new ACA eligibility expansion, but who resides in a state that has chosen not to expand, will not be subject to the shared responsibility payment. Stay tuned to HealthReformGPS for a detailed analysis of these rules in the future.
On July 1, 2013, HHS issued final implementing regulations that specify which individuals may be eligible for exemptions from the Shared Responsibility penalty payment, a special tax established under the Affordable Care Act (ACA) that applies to non-exempt individuals who have access to affordable insurance but fail to purchase it. The final rule also explains the role of Exchanges in granting “certificates of exemption” from the penalty payments, and identifies the range of health benefits that the government will consider as satisfying the Act’s “minimum essential coverage” rule. The final rule shows some, but not a lot, of changes from its original proposed form.
The Department of Health and Human Services (HHS), Center for Medicare and Medicaid Services (CMS) has issued a final rule[1] addressing two previous proposed rules: “Establishment of Exchanges and Qualified Health Plans”[2] and “Exchange Functions in the Individual Market: Eligibility Determinations and Exchange Standards for Employers.”[3] The final rule addresses 1) minimum federal standards that States must meet to establish and operate exchanges, 2) the minimum standards that health insurance issuers must meet as Qualified Health Plans (QHPs), and 3) basic standards employers must meet to participate in the Small Business Health Options Program (SHOP) Exchange. CMS indicates that certain portions of the rule will be considered interim final, and the agency will accept comments on certain sections.[4] CMS also indicates in the Preamble that additional details will be made available in future guidance and rulemaking, where appropriate. For information on the proposed rules, click here. This Update describes major changes made by CMS in the final rule.