October 31, 2017
On Oct. 19, 2017, HHS and Treasury approved Oregon’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, as long as the state meets certain requirements (including the requirement to show that the state’s own innovative concepts and strategies will result in more individuals receiving coverage).
Oregon’s application sought to implement the Oregon Reinsurance Program (ORP) for 2018 and beyond. Its purpose is to stabilize premiums and increase coverage in the individual market. The ORP is a state-operated reinsurance program that will reimburse insurers for a percentage of an individual’s claims up to an attachment point and a cap. Because the ORP 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 Oregon. As a result, Oregon 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 This does not mean the individual mandate is no longer applicable in Oregon, or that individuals cannot continue to receive PTCs in Oregon. Rather, the federal government will send additional funds to Oregon to help fund the ORP.
The HHS approval is effective for Jan. 1, 2018, through Dec. 31, 2022. The HHS approval contains no new employer obligations, but employers should understand its impact on the individual market.
HHS Approval Letter »