Delays and the ACA

February 24, 2014

Employers with 50 to 99 employees breathed a sigh of relief a couple of weeks ago when President Obama announced a second extension to the employer mandate deadline. Employers now have until 2016 before the mandate kicks in to provide health plans for their full-time employees that meet ACA standards.

The President’s announcement marked the latest in a series of delays to the start of some provisions of the ACA. While some point to these delays as evidence of the demise of the ACA, we don’t agree.

But what exactly has been delayed, how far have things been pushed back and what can we expect going forward?

Of the remaining state exchanges struggling with technical issues, Massachusetts received the longest reprieve. The exchange was recently granted a three month extension beyond the March 31st deadline marking the end of the enrollment period for 2014. The Center for Medicare and Medicaid Services granted the extension, giving the beleaguered exchange time to fix glitches that have left state residents anxious about their enrollment status as the deadline approaches.

Meanwhile, on the federal exchange, the Department of Health and Human Services (HHS) extended coverage for people in the “high risk pool” to March 31st before they lose Preexisting Condition Insurance Plan (PCIP) coverage. Those who fall into this category must select a new plan by March 15th to avoid a gap in coverage.

A provision of the ACA that prohibited employers from offering higher quality or more subsidized health plans to higher tier employees has been postponed for this year. When the provision does go into effect, employers will be forbidden to favor “highly compensated individuals” when it comes to eligibility or benefits. The issue seems to be determining who qualifies as “highly compensated” and how to enforce the rule — whether by penalty or tax. The delay allows time to draft specific guidelines and regulations for employers.

One of the most commented-on portions of the ACA was the individual mandate, the penalty assessed on individuals who do not have coverage after March 31st. People with plans poised to be cancelled in 2014 have been offered a reprieve from the penalty. The so-called “hardship exemption” would exclude those with cancelled plans from having to pay penalties in 2014 or allow them to purchase inexpensive catastrophic coverage in the meantime.

Even though the current enrollment period is still open, the next one (for coverage starting in 2015) has already been pushed back a month, from starting October 15th to November 15th. It was also extended a week and will now end January 15th instead of December 7th.

The reasoning behind this, according to White House spokesman Jay Carney, is to give insurance companies more time to accurately account for their customer base, following a delayed and rocky rollout — and to set rates accordingly.

Citing one reason for the various delays has been a challenge as has anticipating delays going forward; most delays have been reactions to unforeseen obstacles plaguing the exchanges.

A prime example is what happened on February 17th, the ill-fated “National Youth Enrollment Day. This unluckily coincided with a regularly scheduled site maintenance day for the website — a conflict that somehow no one associated with the exchange noticed.

This meant that outreach efforts were unable to enroll people from 3 pm EST on the 16th until 5 am EST on the 17th. The deadline for coverage to kick in March 1st was pushed back to the 18th, given that the site was down for maintenance for much of the 16th.

Our prediction for the outcome of the delays — a relatively safe one since it has already started to play out — is that the delays will mean higher numbers of insured in the end.

Just how many more will remain a mystery — just like whether or when we’ll see yet another delay in an ACA regulation. Stay tuned.

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