The Department of Health and Human Services (HHS) released final regulations (the Regulations) on April 13 aimed at stabilizing the individual and small group markets. Effective June 19, 2017, the Regulations represent President Trump’s first major change to the Affordable Care Act in an effort to provide insurers with more flexibility – and reasons to stay in the marketplace. The Regulations implement the following:

  • Shortened Open Enrollment Period – Beginning with 2018 open enrollment, the period of time during which individuals can sign up for coverage will run from November 1, 2017 through December 15, 2017. This new open enrollment period is shorter by half than the original period, which ran from November 15 through January 31.
  • Stricter Special Enrollment Periods – Individuals can sign up for coverage outside of the open enrollment period only upon experiencing a qualifying life event, such as marriage or the birth of a child. Under the new Regulations, individuals will be required to show documentation of the qualifying event before signing up for coverage, which is a stricter standard than the previous requirement that the individual simply attest to the occurrence of the event.
  • Narrow Networks – Insurers will be able to include fewer providers in their networks, allowing carriers to keep costs low by offering narrow network plans. Additionally, oversight of network adequacy will fall to individual states as opposed to the Centers for Medicare and Medicaid Services (CMS).
  • Lower Cost Plan Options – Insurers will have more leeway with the level of coverage offered within each of the four metal tiers due to changes to actuarial value limits. As a result, consumers should have access to lower cost plans within each tier.
  • Continuous Coverage Incentive – Under the Regulations, an individual whose coverage was canceled due to nonpayment of premium can be forced to repay those premiums before an insurer will re-enroll him/her the following year. Though the decision to collect payment lies with the insurer, individuals will presumably be less inclined to allow coverage to drop from year to year due to nonpayment.

While the Regulations offer welcome guidance to insurers for 2018 planning, one critical uncertainty remains: the fate of cost-sharing subsidies. The amount of the subsidies – or whether to offer them at all – has been a sticking point in the healthcare debate and could significantly impact the costs of plans offered to consumers.