Insights

CMS Letter Questions Idaho's Authorization of Non-ACA-Compliant Individual Policies


On March 8, 2018, CMS issued a letter to Idaho Gov. Otter and Insurance Director Cameron that states that health insurance products sold under the state insurance department's Bulletin No. 18-01 don't comply with several provisions required under the ACA. As such, CMS acknowledged its duty, somewhat reluctantly, to take over enforcement responsibility if it determines that a state fails to substantially enforce the requirements.

As background, Idaho Bulletin No. 18-01 was released in January 2018 in response to Gov. Otter's executive order directing the Idaho Department of Insurance to pursue creative options that encourage carriers to offer lower-cost health plans, including options that don't meet ACA requirements. Generally, the bulletin requires that insurers follow some ACA mandates, but it substantially relaxes others. For example, the bulletin allows carriers to impose preexisting condition exclusions when an individual experiences a break in coverage, omits certain essential health benefits, permits premium increases for individuals who report having particular health conditions and authorizes annual benefit dollar limits.

CMS's letter identifies eight categories in which the bulletin authorizes provisions that fail to meet ACA requirements. It also gives the state 30 days to respond, spells out the process of determining whether the state is properly enforcing the ACA, and mentions the consequences if CMS has to assume enforcement authority, including potential civil penalties levied against noncompliant insurers. However, the letter suggests that the Idaho plans could possibly be offered under the proposed exception for short-term, limited-duration plans.

While these plans don't directly affect the employer-sponsored insurance market, it may be helpful for employers to understand these developments in order to assist with employee inquiries.

Idaho Bulletin No. 18-01 »
CMS Letter »