In recent weeks, the Trump Administration has been considering allowing health insurance to be purchased across state lines and expanding access to “Association Health Plans” (AHPs) that could take economic advantage of cross-border purchasing. President Trump is expected to issue an executive order this week to make that happen without legislation.

This post addresses the key issue of whether the administration has the authority under existing law to act on its own initiative, and in doing so, it will address the seminal legal issues affecting AHPs under federal and state law.  As explained below, we conclude that the administration has some—and perhaps even ample—authority to act without Congress, and that any legal constraints will depend on how the AHPs are structured.

Continue Reading Association Health Plans—Can The Trump Administration Expand Access Without Congress?

At this writing, the prospects for success of the latest Republican effort to replace the Affordable Care Act appear bleak—but the Graham-Cassidy bill on which the GOP has pinned its last-ditch hopes highlights a major political and policy flashpoint in the fight to repeal, replace, or repair the law: the degree to which states should be free to innovate and experiment by adopting non-standard health insurance product designs in their individual and small group markets. Under current law, there is little flexibility. Proposals abound to change this, but to do so invites consequences with which lawmakers must be prepared to deal—involving complex economic and actuarial issues and fundamental questions regarding the role of the federal government and the states in health care.

This post addresses these issues.

Continue Reading Fractal Geometry, Actuarial Risk, and §1332 Waivers—The Role of the States in Reforming Health Care

On August 1, Massachusetts Governor Charlie Baker signed into law H. 3822, “An Act Further Regulating Employer Contributions to Health Care” (the “Act”). The purpose of the Act is to shore up the finances of the Commonwealth’s Medicaid program and its Children’s Health Insurance Program (CHIP), which in Massachusetts are combined into a single program called MassHealth. MassHealth covers about 1.9 million low income, minor and disabled Massachusetts residents, and it costs about $15.6 billion annually.

Continue Reading Massachusetts Employers Face $200 Million Increase in Health Care Costs under MassHealth Amendments

With its “employer mandate”—i.e., the requirement that applicable large employers make an offer of group health coverage to substantially all full-time employees or face the prospect of a penalty—the Affordable Care Act (ACA) opened a fault line in the previously monolithic market for group health insurance. There is large cohort of American workers who, before the ACA, were not offered major medical coverage under an employer-sponsored group health plan. These employees are sometimes referred to as the “contingent” workforce. They include part-time, seasonal and temporary employees, as well as employees whose work schedules are generally irregular or intermittent. Found predominantly though not exclusively in industries such as staffing, restaurants, media and advertising, transportation and hospitality, among others, these workers tend to be on the lower end of the pay scale. They also often have significant “deferred” health issues (a euphemism for undiagnosed conditions owing to lack of previous access to health care). The ACA provided “applicable large employers” (those with 50 or more full-time and full-time equivalent employees) with an incentive to cover these workers.

Continue Reading The Rise of the Group Health Insurance Captive

Senate Majority Leader Mitch McConnell recently gave a candid assessment of the chances of getting an Affordable Care Act (ACA) replacement bill through the Senate, saying “I don’t know how we get to 50 (votes) at the moment.” That succinctly captures the political dilemma. There has long been broad bipartisan agreement that the nation’s health care system was in need of repair. Something had to be done to contain rapidly rising health care costs, increase the quality of medical outcomes, and to expand coverage. But there was little or no bipartisan agreement on how to do it. Indeed, no major health care initiative since Medicare was enacted in 1965 has enjoyed true bipartisan support.

Continue Reading Can Congress Get to “Yes” on Replacing the Affordable Care Act?

The 21st Century Cures Act (Cures Act), enacted on December 13, 2016, provides a new opportunity for small employers to help employees pay for health insurance: the “qualified small employer health reimbursement arrangement” (QSEHRA). Under  QSEHRA, certain small employers can give their employees pre-tax dollars to pay for premiums and other medical expenses, so long as the QSEHRA meets certain standards.

Continue Reading QSEHRA – The 21st Century Cures Act Creates a New Health Care Plan Option for Small Employers

The stunning failure of the U.S. House of Representatives to pass the American Health Care Act (AHCA) (which we previously reported on here) has political and policy implications that we cannot forecast. Nor is it clear to us whether or when the Trump administration and Congress will make another effort to repeal and replace, or whether Republicans will seek Democratic support in an effort to “repair,” the Affordable Care Act (ACA). And we are similarly unable to predict whether and to what extent the AHCA’s provisions can be achieved through executive rulemaking or policy guidance. The purpose of this post is not to assess why the AHCA failed, or to speculate on the outcome of any future legislative efforts to repeal and replace the ACA, but rather to offer some thoughts about how the AHCA’s failure will impact employers in the near term. As our title suggests, the news may not be all that bad.

Continue Reading The Future of the Affordable Care Act Week 8: An Employer’s Guide to the Collapse of the American Health Care Act (Spoiler Alert—the News is Not all Bad)

Friendly reminder to our readers that on April 6, 2017, Mintz Levin will be hosting its Third Annual Employment Law Summit at the Princeton Club in New York City.  This half-day seminar will feature as its keynote speaker Liz Vladeck, the Deputy Commissioner for the Office of Labor Policy and Standards at the NYC Department of Consumer Affairs.  Deputy Commissioner Vladeck will discuss NYC’s new Office of Labor Policy and Standards, its initiatives, and enforcement of the expanding universe of NYC employment laws (i.e. Freelance Workers act).  The seminar will also offer various segments on the most important workplace issues of the day, including how the new Trump Administration will impact workplace law, cybersecurity issues in the workplace, equal pay, wage and hour, employee relations, employee benefits, and more – it’s a program that you will not want to miss.  Registration is still open, so if you would like to attend click here.

This event is intended for HR professionals, in-house counsel, and senior executives.

On March 6, 2017, after years of promising, GOP lawmakers in the House of Representatives introduced the “American Health Care Act” (AHCA), the first concrete legislative proposal detailing the initial provisions designed to repeal and replace the Affordable Care Act. The bill is a joint effort of the House Energy and Commerce and Ways and Means Committees, and it closely hews to the “Better Way” proposal previously outlined by House Speaker Paul Ryan (which we discussed here.)

The bill currently is the subject of widespread media scrutiny and intense criticism, not only from Democrats, but from Republicans who argue that the bill either goes too far or not far enough. Assuming a bill ultimately passes and is signed into law, it almost certainly will contain significant changes—for example, relating to the timing of the repeal of Medicaid expansion. Nonetheless, we believe the broad contours of any final legislation are likely in place and thus we offer this analysis of the major provisions.

Continue Reading The Future of the Affordable Care Act Week 7: The American Health Care Act