Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
In the wake of a political firestorm brewing around cancelations of individual health insurance policies, last week President Obama announced a rule change that would potentially allow some individuals to remain on their current health insurance policy for an additional year. The White House “fix” announced last Thursday would permit insurance companies to continue to offer such policies to individuals for another year, even though the policies do not meet the minimum standards required by the Affordable Care Act (ACA). The announcement came amidst sharp criticism of the President’s pledge that people would keep their existing coverage if they liked it and the day before the House voted on a broader measure.
The “Keep Your Health Care Plan Act of 2013” (H.R. 3350), sponsored by Rep. Fred Upton (R-MI), would, unlike the Administration proposal, allow insurance companies to enroll new as well as existing customers in plans that do not meet ACA requirements for another year. The bill passed by a margin of 261-157. The President’s announcement and the subsequent House vote reflect the political impact of the troubled ACA roll-out. The fact that a number of House Democrats in potentially vulnerable seats crossed party lines to vote for the Republican bill confirms the precarious political landscape of the ACA. The Senate has yet to take up legislation to counter the health policy cancelations, although Senator Mary Landrieu (D-LA) has introduced the “Keeping the Affordable Care Act Promise Act” (S. 1642) According to Senator Landrieu's press release, the legislation
will allow individuals to keep their current health plan at their choice as long as policyholders stay up-to-date with their payments. It will also provide policyholders information from their insurance company as to which parts of the policy do not meet minimum coverage standards made available in new plans, such as hospitalization, laboratory services and prenatal care.
Although the White House rule change may help stem some of the political fallout surrounding the ACA implementation, it remains to be seen how far it will go in stemming the cancelations or creating other consequences. For example, the fix allowing non-ACA compliant plans to continue outside of the new ACA Exchanges may undermine the viability and affordability of plans offered through the Exchanges. While the concerns surrounding the policy cancellations and heathcare.gov website are largely limited to the individual and small group markets, their ultimate resolution could have broader implications for employers looking ahead to their ACA requirements and decisions.