Healthcare Reform Update - October 16, 2017

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Trump Administration Terminates Cost-Sharing Reduction Payments

Late last week, the Trump Administration announced that it will immediately terminate the cost-sharing reduction (“CSR”) payments to insurance companies. The CSR payments were introduced by the Patient Protection and Affordable Care Act (“PPACA”) and required insurers to offer plans with reduced deductibles, copayments, and other means of cost-sharing to some people who purchase plans through the public Marketplaces. This financial assistance is in addition to the advance premium tax credits available to low-income individuals. In turn, insurers received CSR payments arranged by the Secretary of Health and Human Services to cover the costs they incur because of that requirement. The Administration said because Congress has not appropriated funds for the CSR payments, the government cannot lawfully make them. Insurers were projected to receive $10 billion in subsidies in 2018; however, whether CSR payments were properly appropriated by Congress has been the subject of litigation since 2014.

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Tri-Agencies Release Additional Contraceptive Mandate Guidance

On October 6, the Departments of Health and Human Services, Labor, and Treasury (the “Tri-Agencies”) released guidance in the form of two interim final rules addressing the contraceptive mandate under the Patient Protection and Affordable Care Act (“PPACA”). One set of rules provides for expanded exemptions and accommodations to the contraceptive mandate based upon sincerely held religious beliefs, and the other set provides for a new exemption and accommodation process based upon moral conviction. Highlights of the new rules, effective on October 6, are set forth in the article.

 

Executive Order Will Expand Access to Association Health Plans and Increase Flexibility of HRAs

On October 12th, President Trump signed an executive order intended to allow individuals and small businesses to buy health insurance across state lines and to increase access to association health plans. The order, which could have far-reaching implications, also directs the Departments of Treasury, Labor, and Health and Human Services to consider rules that would expand coverage through short-term limited duration insurance, and consider regulatory changes to expand the availability and permitted uses of Health Reimbursement Arrangements.

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