Exchanges Gear Up for 2015 Open Enrollment Period

As fall approaches, both state and federal Exchanges created by the Affordable Care Act (ACA) are preparing for potential opportunities and challenges they may face during the 2015 open enrollment period. The start date for the Exchange open enrollment has been delayed by a month, beginning on November 15, 2014, and will run through February 15, 2015.  Those desiring coverage beginning January 1, 2015 must enroll by December 15, 2014.

 

This delay will help to ease some enrollment pressure points, but does not address some of the challenges associated with a new automatic renewal policy. Specifically, the Obama Administration and the Department of Health and Human Services (HHS) just announced a proposed rule to automatically renew existing Exchange health plans and premium subsidies for 2015 that individuals obtained in 2014.   

 

Automatic Renewal Concerns

A key feature of the 2015 open enrollment period is implementation of the automatic renewal system. Consumers who do not return to the www.healthcare.gov website and change their plan or eligibility information will be automatically re-enrolled in their current  plan from the previous enrollment period for the 2015 plan year. The overall goal is to relieve pressure on the Exchange website while allowing for roughly 95% of consumers to re-enroll in health plans. However, automatic re-enrollment raises issues with the subsidy programs operated by the Exchanges. 

 

Beginning in 2015, the automatic re-enrollment function is likely to cause issues with consumers that have a different income levels than the previous year. With the automatic re-enrollment feature, most consumers may not report changes in their income, thus creating discrepancies in subsidy distributions. For instance, if someone experiences a decrease in income from the previous year, but the change is not reported due to the automatic re-enrollment, the consumer may not receive subsidies that he/she is eligible for, and vice versa if the consumer’s income increases. With roughly 87% of consumers enrolled in an Exchange plan receiving subsidy tax credits, resolving this issue will be key to the success of the upcoming enrollment period.  

 

In addition, reports continue to surface that the IRS has not been able to document the reported income for several million Americans who enrolled an Exchange plan for the 2014 plan year.  Therefore, hundreds of thousands of individuals may end up receiving subsidies for two different plan years, which they might not qualify for resulting in an unexpected tax burden, interest and penalties. 

 

Open Enrollment Period Delayed

Despite the issues plaguing the Exchanges, a recent change in the date of the 2015 open-enrollment period may help alleviate some of the future website and enrollment strains. This spring, the Obama Administration announced a month-long extension of the 2015 open enrollment period until February 15, 2015.   An initial delay was announced last fall that pushed back the start date from October 15 to November 15, 2014.  As a result of these changes, insurance companies will benefit from the delay, consumers will have more time to enroll in an Exchange plan, and websites hope to have fewer technical and administrative hiccups.  However, some have expressed concerns that the White House continues to make up the rules as they go along which violates normal regulatory protocols associated with a statutory-based initiatives like the ACA.  

 

While the Exchanges prepare for the new open enrollment season, some problems from the previous open enrollment likely remain unresolved. As widely reported earlier, both www.healthcare.gov and its state-level Exchanges experienced a slew of technical issues and glitches in the 2014 open enrollment that hampered enrollment and significantly increased the wait time for enrollment activation for many.  

 

Verifying Income Levels

Other technical issues have hampered enrollment, such as the lack of oversight in filling out applications on the Exchange websites. The delay in www.healthcare.gov’s verification requirement has led to chaos in the federal Exchange, as well as in states that use the federal Exchange, by implementing an “honor system” where individuals self-report their income without having to provide proof. As a result, HHS and the IRS must verify the incomes of a backlog of roughly 2 million individuals for federal subsidy eligibility.  

 

AAG  will continue tracking and reporting on key health care reform changes that will affect employers and individuals alike.