Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Senate Appropriators Approve FY 2014 Labor/HHS/Education Spending Bill

On Thursday the Senate Appropriations Committee approved the related Labor/Health and Human Services/Education Subcommittee’s fiscal year (FY) 2014 appropriations bill on a 16-14 party-line vote. The bill would generally fund nearly all Department of Health and Human Services (HHS) health programs at slightly higher levels than in FY 2013 with the Centers for Medicare and Medicaid Services (CMS) being allotted about $5.2 billion and the National Institutes of Health (NIH) about $32 billion. In addition, the bill would fully fund the Administration’s request of $5.2 billion to implement the Patient Protection and Affordable Care Act (PPACA). The Prevention and Public Health Fund would continue to be allotted $1 billion. The bill served as a platform for senate Republicans to force votes on the PPACA in light of the Administration’s announced delay of the employer mandate until 2015. Committee Democrats rejected amendments that would: delay the implementation of both the employer and individual mandate under the PPACA; defund the Independent Payment Advisory Board (IPAB); and stop the full implementation of the health insurance exchanges if further problems are found to hinder enrollment efforts scheduled to begin October 1st.

Quick Reactions to Delay of PPACA Employer Mandate

The Internal Revenue Service (IRS) provided notice to plan sponsors (Notice 2013-45) of the framework of the transitional relief from the Administration’s delay until 2015 of the employer mandate under the PPACA. The IRS said the one-year delay of the information reporting requirements under Internal Revenue Code (IRC) Sections 6055 and 6056 and from the employer shared responsibility provisions under IRC Section 4980H will allow for more time to simply the reporting rules and allow employers the ability to better conform their plans to the coverage and reporting requirements under the PPACA. The IRS said that employees still would be eligible for premium tax credits under exchanges when their employer plan does not provide minimum essential coverage and they are otherwise meet the income requirements. However, in a final rule published by CMS (see more below), the Administration said it will roll back requirements for state and federal health insurance exchanges to verify the income and insurance status of people applying for coverage until 2015. Congressional Republicans charged that this will open the door to potential fraud by individuals who may underreport their income in order to obtain federal health insurance subsidies. House Speaker John Boehner (R-OH) and other Republican leaders sent a letter to the President stating that “We agree with you that many of the provisions in the law cannot be implemented within the current time frame; but we strongly disagree with you that time will ever remedy these predictable consequences of the law….” They also requested information by this Tuesday on: changes in the number of individuals receiving subsidies on the exchanges during 2014; changes in the number of employers that provide health care coverage; changes to federal outlays and revenue; and the impact of the employer mandate on increasing the number of individuals working part time and businesses reducing the number of hours employees work to less than 30 hours. Republican leaders have also asked the Congressional Budget Office (CBO) to update their cost analysis of the delay. Building on the Administration’s admission, and congressional Democrat support, that the delay is necessary for the proper implementation of the law, House Republican leaders said the treatment of the employer mandate should be extended to the individual mandate as well. At a House Ways and Means Health Subcommittee hearing, Chairman Kevin Brady (R-TX) said a conforming delay of the individual mandate would be a matter of “fairness”. In this connection, the House Majority Leader announced that the House will take up legislation this Wednesday to delay both the employer and the individual mandates. H.R. 2667, the Authority for Mandate Delay Act, would delay until 2015 the enforcement of requirements that large employers offer their full-time employees the opportunity to enroll in minimum essential coverage as well as the effective date of related reporting requirements. H.R. 2668, the Fairness for American Families Act, would delay until 2015 the requirement that individuals maintain minimal essential health care coverage. Also, the House Ways and Means Health Subcommittee will hold another hearing on the delay this Wednesday and the House Energy and Commerce Oversight and Investigations Subcommittee will follow suit the next day. In an effort to enhance the Administration’s efforts to implement the PPACA, the White House announced that Chris Jennings, a former Clinton Administration health advisor, will assume these duties for President Obama. As to the effect of the delay on pending lawsuits contesting the employer mandate, the Department of Justice filed motions in several cases arguing they are “unripe” and should be dismissed. Nonetheless, the 4th U.S. Circuit Court of Appeals ruled in Liberty University Inc. v. Lew that the mandate is “simply an example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce.” As to whether the Administration has the authority to delay the employer mandate, a Congressional Research Service (CRS) analysis requested by Rep. Phil Roe (R-TN) said that while the executive branch does not have “unfettered ability” to delay the implementation of any of the law’s provisions, a court could, in theory, issue an injunction halting the delay of the employer mandate if it found that the executive branch lacks the authority to put off its enforcement, but that it may be difficult to find an identifiable plaintiff with legal standing to challenge the delay in federal court.

Final Rules for Navigators, Exchanges, Medicaid and CHIP

CMS issued a final rule for exchanges, Medicaid and the Children’s Health Insurance Program (CHIP) which includes a requirement that employers fill out a 12-page “Application for Health Coverage & Help Paying Costs” form when requested to do so by employees who apply for advance premium tax credits to buy health insurance in the health insurance marketplaces. However, the failure of employers to offer affordable minimum health coverage will not trigger employer responsibility penalties in 2014. Employees should be able to determine if their employer coverage meets minimum value requirements in the information contained under the summary plan descriptions as required to be updated under the PPACA. CMS also released a final rule for “navigators” and “certified application counselors” under federally facilitated exchanges and state partnership exchanges and optionally for “non-navigator assistance personnel” under state based exchanges. The rules include provisions to avoid conflicts-of-interest (e.g. non-insurance-industry associations) and training and certification standards relating to Small Business Health Options Program (SHOP), Medicaid, CHIP and premium tax credits. In related news, HHS announced the granting of $150 million in awards to community health centers in every state for outreach efforts to help the uninsured obtain health coverage under the PPACA.

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