July 25, 2017
On July 7, 2017, HHS approved Alaska’s application for a state innovation waiver under Section 1332 of the ACA. As background, the ACA allows states to apply for a waiver from certain ACA requirements, so long as the state meets certain requirements (including the state showing that their own innovative ideas and strategies will result in more individuals receiving coverage). Alaska’s application sought to implement the Alaska Reinsurance Program (ARP) for 2018 and beyond. The ARP is a state-operated reinsurance program that covers claims in the individual market for individuals with one or more of 33 identified high-cost conditions. The ARP is meant to stabilize premiums and increase coverage in the individual market. Because the ARP will lower premiums, the second-lowest-cost silver plan premium is reduced, which means the federal government will spend less on premium tax credits (PTCs) for individuals in Alaska. As a result, Alaska will receive pass-through funding based on the amount of PTCs that would have been provided to individuals absent the waiver. This does not mean the individual mandate is no longer applicable in Alaska, or that individuals cannot continue to receive PTCs in Alaska. Rather, the federal government will send additional funds to Alaska to help fund the ARP.
The HHS approval is effective for Jan. 1, 2018, through Dec. 31, 2022. HHS also released a fact sheet with additional information on the Alaska waiver approval.
The HHS approval contains no new employer obligations. But employers may have heard the news about a waiver, so understanding the approval and its consequences in the individual market is helpful.
HHS Approval »
Fact Sheet »