Attention: RFI CMS-9928-NC; Reducing Regulatory Burdens
U.S. Department of Health and Human Services
P.O. Box 8016
Baltimore, MD 21244-8016
RE: Reducing Regulatory Burdens Under the Affordable Care Act
To Whom It May Concern:
The ERISA Industry Committee (“ERIC”) is pleased to comment on the request for information by the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) on June 8, 2017, concerning regulatory actions within HHS jurisdiction that could be taken to reduce the burdens of the ACA.
ERIC’S INTEREST IN ACA REGULATORY RELIEF
The ERISA Industry Committee (ERIC) is the only national trade association that advocates exclusively on behalf of large employers on health, retirement and compensation public policies on the federal, state, and local levels.
ERIC supports the ability of its large employer members to tailor retirement, health, and compensation benefits to meet the unique needs of their workforce, providing benefits to millions of workers, retirees, and their families.
ERIC’s member companies offered comprehensive group health benefits to their employees long before the passage and implementation of the Affordable Care Act (ACA), and over the past six years have spent considerable time, effort, and resources to ensure compliance with the law, as well as to maintain compliance with the myriad other federal requirements placed upon group health plans subject to the Employee Retirement Income Security Act (ERISA). As such, ERIC members are keenly aware of the burdens associated with ACA requirements, and wish to propose numerous changes that could provide relief to plan sponsors, lower costs for plan beneficiaries, and reduce government red-tape and unnecessary expenditures of taxpayer funds.
I. REGULATORY CHANGES TO BRING IMMEDIATE RELIEF AND LOWER EMPLOYEE HEALTH COSTS
There are a number of changes that HHS could undertake to provide immediate relief, lowering premiums for employees in the coming plan year and reducing wasteful spending by employers. Some of these changes will require HHS to engage with the Department of Labor (DOL) and the Internal Revenue Service (IRS), as the underlying ACA regulations were developed jointly by HHS and those agencies. However, it is clearly within HHS’ purview to reopen, reexamine, modernize, and improve those regulations which the Department had a hand in creating. The following is a list of changes that HHS should consider in order to reduce costs both in the individual market exchanges, and also for the 178 million people that obtain health insurance through an employer-sponsored plan.
- Stop the ACA at the U.S. borders. Many U.S. employers offer expatriate health insurance plans to employees who are stationed overseas for various amounts of time. The ACA created a vast amount of rules and requirements on health plans offered in the U.S. but did not specify that these rules would have to apply to expat plans. Unfortunately, the prior Administration chose to expand these requirements to expat plans, which now causes plan sponsors to spend time and money on various unnecessary reporting, notices, calculations, and benefit requirements. HHS should, to the greatest extent allowable under the law, end ACA’s application to expat plans.
- Reduce the burdens of nondiscrimination compliance. Under the ACA’s §1557 nondiscrimination rule, plan sponsors are required to furnish a great deal of unnecessary information to plan participants. To be clear, large employers have no interest in discriminating against plan participants. However, we are wasting time and money sending out “taglines” in 15 different languages with every “significant” communication, and are worried about mission creep related to the previous Administration’s effort to apply a requirement to ERISA plans through our third party administrators (TPAs), which infringes on our freedom to contract. As such, HHS should clarify that the nondiscrimination rule only applies to plans directly connected to federal funds (and not through their TPA’s participation in ACA exchanges), only require the nondiscrimination notice to be furnished to participants once a year (electronically, during open or special enrollment), and replace the tagline requirement with a simple visual that can direct individuals to language assistance.
- Roll back restrictions on excepted benefits. As part of a regulatory exercise in 2016, the former Administration sought to impose new limits on disease-specific benefits, limited-duration plans, hospital indemnity coverage, and other supplemental benefits that are not comprehensive health insurance plans. HHS should eliminate the new limits which were placed on limited-duration benefits, clarify that excepted benefits will never jeopardize a beneficiary’s eligibility to contribute to a Health Savings Account (HSA), and discontinue all efforts to restrict patients’ access to other excepted benefits.
- Correct the maximum out-of-pocket (MOOP) limit to align with the statute. The ACA created a specific MOOP that would apply to plan beneficiaries, but subsequent guidance by the Obama Administration instead required “embedding” this limit to apply to individuals within family policy. This results in more of an individual’s costs being borne by all plan participants, contrary to the ACA’s intent, and raising premiums for everyone. HHS should end this embedded MOOP requirement, and instead allow plans the flexibility to choose whether to embed or not.
- Increase flexibility in preventative services. Under the ACA, all plans must offer 1-dollar coverage of preventative services labeled “A” or “B” by the U.S. Preventative Services Task Force. However, the Task Force does not currently consider cost-effectiveness in creating these mandated coverages, and the frequency with which the Task Force requires plans to change causes increased costs and consternation. HHS should require the Task Force recommendations to include cost-effectiveness considerations, as well as limit required changes to plans to once per year, at the beginning of the following plan year.
- Improve high-deductible health plans (HDHPs) paired with HSAs. Under current rules, only a specific set of medical services and prescriptions are eligible for 1st-dollar coverage in order for an HDHP to be HSA-qualified; if the plan’s coverage is more generous or deviates from this requirement, the plan participants are no longer eligible to contribute to their HSAs. Unfortunately, this prevents plans from innovating to improve health in many ways, such as subsidizing chronic care management or maintenance medications. HHS should work with IRS to modernize the definition of preventative care in order to facilitate innovation and health management and improvement within HSA-qualified HDHPs.
- Create certainty by affirmatively cancelling the Health Plan Identifier (HPID). Employer-sponsored plans have built a uniform process, through consensus, that implemented a standardized national payer identifier based on rules created by the National Association of Insurance Commissioners, which ensures compliance with transaction rules under the Health Insurance Portability and Accountability Act (HIPAA). However, the previous Administration sought to move forward with a competing, confusing, ill-fitting replacing called the HPID. The proposal would be costly for employers, causing them to reduce expenditures on benefits and instead reroute funds to compliance costs for the employer and the TPA. HHS should affirm that HPIDs will not move forward, and employers can continue HIPAA compliance as usual.
- Prevent improper steerage of plan beneficiary risks. HHS last year engaged in an effort to prevent certain healthcare providers from steering bad risk into individual market plans (from Medicare or Medicaid). Those efforts were important because plans should be chosen for the best benefit of the participant, not for the maximum reimbursement of the provider. Unfortunately, the HHS rule did not prevent another problematic practice, in which third parties pay plan beneficiaries’ COBRA premiums, in order to keep individuals in employer-sponsored plans (which maximizes provider reimbursement). HHS also did not address improper steerage in which out-of-network providers waive participants’ out-of- pocket costs, thus making care for that individual appear to be “free,” while actually drastically increasing costs to the plan (and thus raising all participants’ premiums). HHS should expand their anti-steerage efforts to also address improper steerage to COBRA benefits or to out-of-network facilities and providers.
- Actually allow people to keep plans they like. One of the central promises of the ACA was that individuals who liked their health insurance plans, could keep their plans. This promise rested upon a short, vague provision in the legislation that allowed plans to be “grandfathered” and to continue to be offered after the ACA market reforms were enacted. However, the former Administration chose to implement extremely burdensome requirements that a plan must meet in order to stay grandfathered, such that those plans had (and have) almost no flexibility to evolve with the times, keep costs in balance, or engage in innovation. HHS should redefine grandfathering rules to allow grandfathered plans the ability to keep costs in balance, evolve in the normal course that they would have prior to the ACA, and engage in innovation to improve health and reduce costs.
- Ease the burden of claims denial appeals on self-insured employers. The ACA created a requirement for a stringent third-party claims denial appeals process, designed to protect those in the individual market from unfair claims denials. Unfortunately, the prior Administration chose to apply this process to all claims, including those for individuals enrolled in large-group health plans, who already had claims appeals processes in place. This results in increased costs for those with employer-sponsored plans, due to money wasted on compliance and the labyrinthine process required by the last Administration. HHS should reduce the burden of this process by allowing self-insured plan sponsors to design their own claims appeals processes, as they did prior to the ACA regulations.
- Allow electronic delivery of all required notices. Plan sponsors are required to provide plan beneficiaries (and eligible participants) with a wide range of documents, notices, and other information – sometimes during open enrollment, sometimes at other various intervals. Vast amounts of time and money could be saved if all of these materials could provided electronically. In this day and age, the assumption should be that an individual does have access to a computer or smart phone, and that those who do not are the exception to the rule. As such, HHS should immediately allow electronic reporting of all notices, except in the case of individuals who opt-out due to lack of access.
- Provide flexibility on Summary of Benefits and Coverage (SBC). The ACA requires plans and plan sponsors to provide documentation to plan beneficiaries every year that is overly prescriptive, not used or appreciated by plan participants, and a waste of time considering the other, better information that employers offer plan beneficiaries (such as the Summary Plan Document (SPD) and other materials furnished during open enrollment). There may be a need for the SBC in the individual market, but in the large group market is wasteful and inefficient. HHS should provide a safe-harbor that allows employers who provide beneficiaries with an SPD (which is required under ERISA) and other materials that help beneficiaries understand their plan, to abstain from creating and distributing an SBC.
- Reduce wasteful spending on employer mandate reporting. The ACA required employers to report on every plan beneficiary, every month, what kind of coverage they had, how much it cost them, and more. This results in a flood of 1094 and 1095 forms, which are not used in a meaningful way by the IRS or the exchanges. It also costs employers millions of dollars every year, that could be better spent on health benefits that actually help plan beneficiaries. HHS should work with IRS to allow all of this reporting and the related notices to be done electronically, to end mismatch notices, wind down penalties for mistakes in reporting, and eventually vastly simplify the reporting and associated processes.
- Improve employee wellness programs by expanding flexibility. Under the ACA, the Secretary of HHS (in accordance with other agencies) could allow premium incentives for employees who participate in wellness programs that could save them as much as 50 percent off of their health insurance premiums. Unfortunately, the previous Administration opted to curtail these savings down to only 30 percent in most cases. To make matters worse, another agency (the Equal Employment Opportunity Commission) then issued different, conflicting rules that have caused confusion, further limited wellness program offerings, and reduced available savings for employees. HHS should immediately raise the premium incentive limit to 50 percent without qualifications regarding tobacco cessation or other limitations, and work with the EEOC to conform their rules to the Tri-Agency rule on wellness programs.
- Do not classify Health Reimbursement Arrangements (HRAs) as health insurance. Many employers offer HRAs to employees in order to engage and empower them in controlling more of their own health spending. Unfortunately, the previous Administration classified HRAs as health insurance plans, which means that they can only be offered when paired with an ACA-compliant health insurance plan. This makes little sense, considering that an HRA is essentially a bank account, not an insurance policy. As such, HHS should clarify that HRAs are not health insurance plans under the ACA, and can be offered as a standalone benefit without subjecting an employer to fines or penalties.
- Increase flexibility for the definition of an adult child. Under current regulations, plans are required to offer coverage to dependent children up to age 26, but this is defined very broadly. Currently the definition is not limited to actual tax dependents, and includes individuals who already have other offers of subsidized health insurance (such as their own employer-sponsored plan or a spouse’s plan), who are married or heads of household, who are already someone else’s dependent, or who are not domiciled (or even in the same state) as the primary insured. Plans and plan sponsors should be given some flexibility to ensure that only actual dependents are offered dependent coverage.
ERIC appreciates the opportunity to provide comments on this RFI. We believe that the changes laid out in this comment letter are within the statutory authority of HHS and its partner agencies, and would lead to immediate reductions in health care costs, health improvement, increased information and flexibility for plan beneficiaries and sponsors, and savings for the taxpayers. If you have questions concerning our comments, or if we can be of further assistance, please contact us at (202) 789-1400.
James P. Gelfand
Senior Vice President, Health Policy