ERIC advises government to keep exchange eligibility process simple

Anyone who has had the pleasure of reading substantial portions of the Patient Protections and Affordable Care Act (ACA) and its implementing provisions can attest to the fact that much of it is likely to be confusing to just about everyone, including employers, employees, and healthcare professionals. Anything that could simplify upcoming new processes, procedures, and requirements should probably be welcome. The ERISA Industry Committee (ERIC) has submitted a comment letter to the Department of Health and Human Services (HHS) on proposed HHS regulations relative to the ACA that were published in the Federal Register on August 17, 2011. The proposed regs describe ways state exchanges will be able to determine eligibility for the purchase of health coverage through a state health insurance exchange, as well as eligibility for the receipt of premium tax credits or cost-sharing reductions. ERIC has included, in its comment letter, ways it contends will simplify this process.

Premium cost-sharing assistance and tax credits will be available to employees who purchase insurance coverage through a state exchange if they are not eligible for health insurance coverage through their employer, or if their employer-sponsored coverage is considered to be unaffordable.

Two methods appear to be under consideration for the purpose of determining employees' eligibility for this assistance. Under one method, employees and employers would complete a template, given to them by their state exchanges, and the information on those templates would enable the exchanges to determine what premium assistance or tax credits an individual might or might not be eligible for. Under the second method, exchanges would be required to establish a central database, to which employers could submit the appropriate information. ERIC is recommending that both methods be made available to employers, and that each employer be given a choice with regard to which it will use.

ERIC points out that some employers, such as those with high turnover rates, would find it cost-effective to submit information to a database, whereas other employers would find it more affordable to complete an exchange-provided template.

According to ERIC President Mark Ugoretz, "large employers are particularly concerned that a mechanism be found to avoid excessive requests from the exchanges for information and data with respect to employees who may be eligible to purchase coverage through an exchange."

ERIC also points out that new Code Sec. 6056, added by the ACA, requires much of the same information that the exchange database and templates would, including whether or not employer-provided health insurance is affordable and provides minimum value. Therefore, ERIC has suggested that employers be allowed to use a mechanism for submitting information to the exchanges that is compatible with the reporting requirements of Code Sec. 6056.