On Oct. 24, 2018, HHS and the IRS jointly released guidance on the use of innovation waivers under the ACA which replaces previous guidance issued on Dec. 16, 2015 (80 FR 78131).
As background, the ACA allows states to apply for an “innovation waiver” from the employer mandate penalty tax and certain other requirements for plan years beginning on or after Jan. 1, 2017. The waivers give states the flexibility to pursue their own strategies to provide their residents with access to health insurance that’s affordable and provides MEC.
The new guidance revises 2015 guidance with the intent of providing more flexibility to states, as the previous guidance imposed significant restrictions on states beyond what was required by the ACA. For example, the 2015 guidance focused on the number of individuals estimated to receive comprehensive and affordable coverage. In contrast, this guidance concentrates on access to comprehensive and affordable coverage, thereby allowing states to offer access to more options that are less comprehensive but potentially more affordable.
In addition, the guidance expands the definition of coverage that must be provided to a comparable number of residents to include access to all forms of private coverage (including short-term, limited-duration insurance; association health plans; and employer-sponsored coverage) and public coverage (like Medicaid). To allow states greater flexibility in pursuing a waiver despite timing limitations (as when a state legislative calendar results in infrequent legislative sessions), the guidance clarifies that even though states are required to enact a law providing for implementation of the waiver, in certain circumstances, existing state legislation combined with a duly enacted state regulation or executive order may satisfy the requirement.
HHS intends to release additional guidance in the future, including examples of how states can take advantage of the increased flexibility in obtaining a waiver. In the meantime, this guidance makes it clear that waivers could potentially allow states to implement expanded options for association health plans. Thus, employers and citizens in certain states may potentially have greater coverage options in the future.
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