The Department of Health and Human Services (“HHS”) released a final rule on June 26, 2013 addressing various aspects of the minimum essential coverage requirements imposed by the Affordable Care Act (“ACA”). Under the ACA, individuals must obtain and maintain health insurance that meets the definition of “minimum essential coverage” or face a tax penalty (“shared responsibility payment”). This final rule describes criteria for Exchanges to determine which individuals can apply for an exemption from this shared responsibility payment. Additionally, the rule identifies certain types of health insurance plans as constituting minimum essential coverage, and provides information on the process by which other kinds of plans can seek a minimum essential coverage designation.
The ACA exempts certain categories of individuals from the shared responsibility payment, including, among others, undocumented aliens, people who cannot afford coverage, and individuals that the Secretary of HHS determines have suffered a “hardship” that impacts their ability to obtain coverage as required by the ACA. The final rule provides greater detail on these categories, such as information on eligibility criteria and the duration applicable to each type of exemption. Notably, under the “hardship” category, HHS exempted individuals ineligible for Medicaid due to a state’s decision not to expand the Medicaid program from having to pay the shared responsibility payment; therefore, individuals with incomes up to 133% of the federal poverty line will qualify for a hardship exemption in these non-expansion states. In a guidance document released simultaneously with the final rule, HHS provides further details on hardship exemptions, as well as special enrollment periods that will allow individuals who lose eligibility for an exemption in the middle of a plan year to enroll in a qualified health plan. Finally, the rule also describes the process that Exchanges must use when issuing certificates of exemption from the shared responsibility payment for qualifying individuals.
The final rule also addresses the authority of the Secretary of HHS to designate certain types of health insurance coverage as constituting “minimum essential coverage.” While the ACA itself designates certain enumerated forms of health insurance coverage as “minimum essential coverage” (e.g., employer-sponsored coverage), it also grants the Secretary of HHS and the Secretary of the Treasury the authority to so designate other types of plans. Under the final rule, self-funded student health coverage; Refugee Medical Assistance supported by the Administration for Children and Families; Medicare Advantage Plans; and State High-Risk Pool Plans are designated as “minimum essential coverage” (although self-funded student health coverage and state high-risk pool plans will no longer automatically be considered minimum essential coverage after plan year 2014). The final rule also provides a process by which plans not automatically designated as “minimum essential coverage” can apply to receive this designation. Finally, the final rule provides the Secretary of HHS the authority to audit plans designated as minimum essential coverage to ensure continued compliance with the requirements of the designation, and to revoke the designation of any non-compliant plan.
The Department of the Treasury is expected to release its final rule addressing the minimum essential coverage provision at a later date.