Early in 2013, HHS released a 21-page Exchange draft coverage application. This form was complex and confusing and employers were eager to submit comments regarding the release. In response to all submitted comments, HHS issued a shorter, more streamlined FINAL application that individuals enrolling in medical coverage in a public health exchange will use; the federal government refers to this application as the Health Insurance Marketplace. There are three versions: the Individual Short Form, the Individual Form with no Financial Assistance, and the Family Exchange Form.
On one of the forms, employers are required to complete a section requiring information on various elements of the employer-offered health plans, including eligibility, waiting periods, premiums for the lowest-cost, self-only plan option, wellness program incentives, whether the plan meets minimum value standards and what plan changes are contemplated for the new plan year.
These revised forms will be used by HHS not only for coverage in the Health Insurance Marketplace, but also to determine eligibility for Medicaid and CHIP coverage. This information will be used to determine eligibility for federal premium tax credits or other federal subsidies. This form, as developed by the HHS, will be used by states deferring to the federal government for Exchange coverage, and it looks now that most states that are operating their own Exchanges will also use these applications, yet they do have the option to create Exchange-specific forms.
As stated above, the HHS package has three versions:
- Application for Health Coverage & Help Paying Costs (Short Form): Unmarried adults who are not offered coverage from their employer, who do not have dependents, who cannot be claimed as a dependent on someone else’s tax return, and who do not have items that can be deducted from their taxable income other than student loan interest use this 5-page form.
- Application for Health Coverage & Help Paying Costs: Single individuals and those with a family who are offered health coverage from an employer use this 12-page application.
- Application for Health Coverage: Anyone who wishes to enroll in a health plan offered in the Marketplace, but who is not eligible for premium tax credits, cost-sharing subsidies, Medicaid, or CHIP coverage fills out this 5-page application. Those individuals unsure about their eligibility can also complete this version of the application and will receive assistance regarding eligibility and enrolling in coverage.
The 12-page version of the application includes an “Employer Coverage Tool.” Instructions guide applicants to “take the Employer Coverage Tool on the next page to the employer that offers coverage to help you answer these questions.” The interesting part of this section is that this tool is NOT to be included when the application is submitted; but instead, the applicant uses the information provided by the employer in the Tool to respond to similar questions asked in the Health Coverage From Jobs section of the application.
This section is relevant is determining whether the applicant is eligible for federal premium tax credits and subsidies and thereby determining if an employer is liable for penalties under the play-or-pay requirements.
The application and the Employer Coverage Tool request the applicant to fill in very specific and important information that, if reported erroneously, may determine employer liability. Information required includes the following:
- 1. Applicant’s before-tax wages and frequency of payment – determining affordability.2. Average number of hours worked each week by the applicant – determining eligibility.3. If income of the applicant changes from month to month, the applicant is required to identify his or her “total income this year” and “total income next year (if you think it will be different)” – this year being the year the application is submitted. So, if submitted in October 2013, “this year” refers to 2013, “next year” refers to 2014.
4. The applicant’s eligibility for coverage including whether any waiting period applies.
5. If the employer offers a health plan that meets minimum value standards.
6. Employee premium requirement for self-only coverage under the lowest-cost plan offered by the employer. If the employer maintains wellness incentives, applicant is asked to provide the premium that the applicant would pay if he or she received the maximum discount for any tobacco-cessation program and did not receive any other discounts based on wellness programs.
7. What plan changes will be made to the group health plan for the new plan year (if known), including the potential that the employer will not continue to offer coverage, or that the premium for the lowest cost plan will be changed or if the employer will start offering coverage.
As of now, the Employer Coverage Tool is expected to be completed manually by each employer for each employee who files an application for coverage in the Marketplace. A daunting task for current benefit staff levels in organizations of all sizes.
Automated solutions to the manual, cumbersome, and time-consuming process facing all employers are possible. Health E(fx) has all the data necessary for the Employer Coverage Tool already developed in the system. Should the Exchanges allow the pre-filled forms to be submitted (rather than having the employee fill out all the pertinent information themselves), there would be significant reduction in redundant, manual processes allowing for improved communication and less burden on both employers and employees.
Ultimately, to automate a solution between the employer and the Exchanges, there will need to be an electronic, regular feed to a National Exchange Database, where an employer can submit all the necessary information, by employee, so the Exchange can validate the Employer Coverage. This would allow for an effective and efficient means of employer plan validation at the Exchange. It would also allow for Qualified Health Plan (QHP) affordability and eligibility determination for the applicant to be assessed BEFORE subsidies are granted that may be erroneous and drive significant downstream reconciliation problems.