Components of ACA Delayed/Altered

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Repeal >> Components of ACA Delayed/Altered (last updated 12.13.17)

Topic Outline

1 Overview
- 1.1 Congressional Research Service
- 1.2 Other Compilations
2 Legal Authority for Administrative Delays
3 Specific Provisions by Date
4 Specific Provisions Affecting Employers (13)
5 Specific Provisions Affecting Health Care Sector (8)
6 Specific Provisions Affecting Vulnerable Populations (8)
7 Specific Provisions Affecting Exchange Plan Members (10)
8 Specific Provisions Affecting Members of Non-Group Plans Outside ACA Exchanges (4)
9 Specific Provisions Affecting Military or VA Health (3)
10 Specific Provisions Affecting Other Identifiable Groups (8)
11 Specific Provisions Affecting Individuals and Families (3)
12 Pending Delay Initiatives
- 12.1 Extension for Non-compliant Health Plans
13 Failed Delay Initiatives
- 13.1 Individual Mandate

Overview

Congressional Research Service

Missed Deadlines.
- First CRS Report. On October 4, 2010, Senator Coburn’s office released a report from the Congressional Research Service showing the number of deadlines mandated by the Patient Protection and Affordable Care Act (PPACA) that the U.S. Department of Health and Human Services (HHS) had missed. The analysis by the nonpartisan CRS found that HHS failed to fulfill its requirements in 7 of 22 deadlines before September 23, 2010, which was the six-month mark of the law being enacted.
- Second CRS Report. On November 1, 2011, in a second report to former Senator Tom Coburn, the non-partisan Congressional Research Service compiled a list of deadlines mandated in the new health care law, that the Department of Health & Human Services has failed to meet. Out of the 30 deadlines included in the report that passed since the prior report, HHS gets a “late” or “incomplete” on 18 (i.e., more than half) of these deadlines under the law.
Legislative Actions to Repeal, Defund, or Delay the Affordable Care Act. CRS has issued a series of reports on actions taken by Congress to delay the ACA.
- Legislative Actions to Repeal, Defund, or Delay the Affordable Care Act. November 4, 2015 – R43289. This latest report summarizes legislative and other actions taken to repeal, defund, delay, or otherwise amend the ACA since the law’s enactment. The report includes 3 detailed tables:
  - Table 1. Enacted Legislation That Modified, or Extended or Rescinded Funding for, Programs Established by the ACA
  - Table 2. ACA Provisions in Bills Approved by the House in the 112th, 113th, and 114th Congresses
- Earlier reports in this series are listed here.
Implementing the Affordable Care Act: Delays, Extensions, and Other Actions Taken by the Administration. March 3, 2015-R43474.
- Table 1. Selected Administrative Delays and Other Actions Regarding ACA Implementation. Summarizes the more significant actions taken to date, which target implementation of the ACA’s complex set of interconnected provisions to expand private insurance coverage for the medically uninsured and underinsured. These actions are not the result of a single policy decision. Instead, they represent many separate decisions taken by the Administration to address a variety of factors affecting the implementation of specific provisions of the law.
- In compiling the table, CRS made decisions about which administrative actions to include, and which ones to leave out. Generally, CRS included the more significant actions that have been the subject of debate among health policy analysts and, in many instances, the target of criticism by opponents of the ACA. It is important to keep in mind that the table is not—nor is it intended to be—a comprehensive list of ACA-related administrative actions.

Other Compilations

IJReview. Obamacare Delays, Changes and Repeals (graphic).
Galen Institute. Grace-Marie Turner. Seventy Changes to ObamaCare…So Far (1.25.16). The Galen Institute also has issued 20 reports on various changes, starting 11.14.13. Its most recent report calculates that as of January 25, 2016, 70 significant changes had been made to the ACA, including 43 made by the president unilaterally, 24 enacted by Congress and signed into law and 3 by the Supreme Court.
- The Galen Institute list includes 5 items repealed by Congress and signed into law (see Components of ACA Repealed):
- The Galen Institute list includes 7 items defunded by Congress and signed into law (IRS and IPAB fundings cuts are counted as a single change, but these are counted separately at Components of ACA Defunded):
- Thus, the list below only encompasses 58 changes from the Galen list.

Legal Authority for Administrative Delays

Arguments for ACA-Related Administrative Actions

According to CRS, “The Administration counters that its actions are not a refusal to implement and enforce the ACA as written. Instead, they represent temporary corrections necessary to ensure the effective implementation of a very large and complex law. Agency officials point to a number of factors that have made it difficult to meet various ACA deadlines over the past three years. Those factors include a lack of appropriations to help fund implementation activities, technological problems including the poorly managed launch of the websites for the federally facilitated exchanges and some state-run exchanges, and the need to phase in the various interconnected parts of the law so as to avoid unnecessary disruption of employment and insurance markets.”

Nicholas Bagley. The Legality of Delaying Key Elements of the ACA. New England Journal of Medicine, April 2, 2014.
Timothy Stoltzfus Jost and Simon Lazarus. Obama’s ACA Delays – Breaking the Law or Making it Work? New England Journal of Medicine, April 2, 2014.

Arguments Against ACA-Related Administrative Actions

According to CRS, “Opponents of the ACA, who believe that the law is fundamentally flawed, argue that some of the Administration’s actions effectively rewrite the ACA in an effort to make it work and add to the public’s confusion about the law. The ACA’s critics assert that the actions taken by the Administration to delay enforcement of the employer mandate are illegal and raise concerns that the President is not upholding his constitutional duty to faithfully execute federal law.”

Simon Lazarus. Delaying Parts of Obamacare: ‘Blatantly Illegal’ or Routine Adjustment? The Atlantic, July 17, 2013.

Legal Precedents

Constitution. Walter Olson reports: “Georgetown law professor and Cato fellow Nicholas Quinn Rosenkranz noted that the Constitution’s Take Care Clause directs the President to take care that the laws are faithfully executed, and descends directly from centuries of struggle against the “dispensing power” claimed by pre-modern English kings — that is, the power to dispense with enacted legislation entirely where the royal will is better served that way, a claim of power that goes beyond simple prosecutorial discretion or the pardon power.”
Case Law. In 1998, the U.S. Supreme Court in Clinton v. City of New York asserted, “There is no provision in the Constitution that authorizes the president to enact, to amend, or to repeal statutes.”
Standing to Sue. Many of the unilateral changes may not be subject to formal legal challenge since in many cases, no one may have standing to sue. Senator Mike Lee (R-Utah) notes that to establish standing to sue “You’ve got to show three things: you’ve got to show that the plaintiff has suffered an injury in fact–a concrete, particularized harm that’s fairly traceable to the conduct of the defendant, and it is capable of being redressed or remedied by the court.” Conversely, while taxpayers might be harmed, Senator Lee asserts “there is a longstanding jurisprudential rule that one cannot establish standing merely by virtue of one’s status as a taxpayer, absent certain rare circumstances.”

Specific Provisions by Date

Overview

These are listed in chronological order of the date a delay or modification was officially announced. These have been tagged by whether the changes predominantly affected

The foregoing 12 links provide more detailed explanations of the nature of the each change made, the legal authority claimed for making it and the impact.

Changes by Administrative Action

Changes by Congress, Signed by President Obama

Changes made by the Supreme Court

Potential delays

Extension for non-compliant health plans NC
Individual mandate F

Specific Provisions Affecting Employers (13)

There have been 13 changes primarily affecting employers: 10 through unilateral administrative action, and 3 through statutory changes signed into law. These are listed by groups affected: a) all employers; b) medium and large employers (50 or more employees); and c) small employers (under 50 employees).

Provisions Affecting All Employers (4)

There have been 4 changes primarily affecting all employers providing health benefits, 3 through unilateral administrative action and 1 through statutory change signed into law. These are listed in chronological order.

Delaying Reporting Health Costs on W-2 Forms (10.12.10: 1 Year Delay)

Administrative Action. On October 12, 2010, the administration announced a one-year delay of the requirement that employers must report to their employees on their W-2 forms the full cost of their employer-provided health insurance. The reporting requirement was made optional for tax year 2011, and required for the 2012 tax year (i.e., applicable to W-2s that are provided to employee in 2013).
Legal Authority. The guidance states: ‘The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement” (p. 576). However, Section 6051(a)(14) provides generally that the aggregate cost of applicable employer sponsored coverage must be included in the information reported on Form W-2 effective for taxable years beginning on or after January 1, 2011. Thus, the delay appears contrary to this statutory deadline although the situation is somewhat ambiguous since the IRS issued guidance in time for employers to report this information voluntarily for tax year 2011.

Delaying Equal Employer Coverage (12.22.10/1.18.14: 5+ Year Delay)

Background. The ACA requires non-grandfathered fully insured plans to follow many of the same nondiscrimination rules that currently apply to self-funded plans. Specifically, non-grandfathered fully insured plans will have to satisfy rules similar to those of Internal Revenue Code section 105(h)(2)—adopted more than 30 years ago–which prohibits discrimination in favor of highly compensated individuals. The earlier rule specified that all health benefits provided to highly compensated individuals — with the possible exception of certain executive physicals — are supposed to be provided to rank-and-file employees. The new law extends that policy to employers that buy insurance from commercial carriers like Aetna, Cigna, Humana and WellPoint, or from local Blue Cross and Blue Shield plans. Details of eligibility and benefits tests used to determine discrimination under section 105(h), along with a definition of who is included in “highly compensated individuals” are contained here.
Administrative Action. The ACA’s nondiscrimination requirement for non-grandfathered fully insured plans was originally scheduled to take effect for plan years beginning on or after Sept. 23, 2010. On 12.22.10, the IRS released Notice 2011-1, which delays the effective date until after the IRS issues regulations. According to the New York Times (1.18.14), “tax officials said they would not enforce the provision this year because they had yet to issue regulations for employers to follow.” According to ABD Insights (3.23.15), “In informal, nonbinding remarks, a DOL official recently stated that developing these insured plan nondiscrimination rules is not a high priority, and that they are unlikely to be issued in 2015.”
Legal Authority. The IRS recognizes that it would be difficult for employers with fully insured plans to comply with the nondiscrimination requirements without IRS guidance. In order to give employers time to implement any required changes, the guidance is expected to apply to plan years beginning a certain amount of time after the guidance is issued. According to the New York Times (1.18.14), “officials at the Internal Revenue Service said they were wrestling with complicated questions like how to measure the value of employee health benefits, how to define “highly compensated” and what exactly constitutes discrimination… One reason for the delay in enforcement is that officials have decided to review the existing nondiscrimination rules for self-insured companies, even as they try to write new rules for employers that buy commercial health insurance.”
Impact. Any employer offering a fully insured health plan that discriminates in favor of high-paid executives would face a steep penalty: the ACA imposes an excise tax of $100 a day for each individual affected negatively. Thus, a 1,015-person firm that provided better health benefits for 15 executives would face a fine of $100,000 a day or more than $3.6 million a year. According to the New York Times, “The existing restrictions on self-insured health plans are “outdated, inadequate and unworkable,” said Kathryn Wilber, a lawyer at the American Benefits Council, which represents many Fortune 500 companies… employers say they may have legitimate reasons for wanting to offer different benefits to different workers. “Employers should be permitted to provide lower-cost coverage to employees who may not be able to afford the comprehensive coverage being provided to other employee groups,” Ms. Wilber said. Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commerce, said the existing nondiscrimination rules were so convoluted that employers often complied just with the spirit of the law, “rather than with the precise requirements of the regulations.”

Changing Annual Limits on Employee Out-of-pocket Costs (2.27.15)

Administrative Action. HHS issued a rule changing annual limits on employee cost-sharing as defined in the ACA (Galen Institute).
Legal Authority. The administration failed to cite a single statute providing HHS the authority to make the change (Galen Institute).
Impact. This change forced many employers to increase premiums to accommodate the requirements (Galen Institute).

Delay of the Excise Tax on Comprehensive Insurance Plans (Cadillac Tax) (12.18.15: 2 Year Delay)

Statute. The Consolidated Appropriations Act, 2016 passed by Congress and signed into law on December 18, 2015, delayed the tax enforcement date from 2018 to 2020. It also makes the tax deductible against other income. The bill also requires a study of the appropriateness of the age and gender adjustments under the excise tax (Timothy Jost provides a detailed explanation of why this was necessary).
Impact.
- Because the tax will eventually capture all employers plans, delay is expected to initially benefit employers by slowing the premium growth rate. However, since the costs of the excise tax are ultimately borne by workers through higher premiums or rising cost-sharing, delay will also impact workers.
- The Joint Committee on Taxation reports that the delay will save taxpayers $20 billion over the next decade.
- According to The Huffington Post (12.8.15), “for proponents of these taxes, the big danger of delay is that it could be a prelude to demise. Once Congress postpones a tax for the first time, it has a habit of doing the same thing over and over again, so that the tax never takes effect. Still, postponing these taxes rather than fully repealing them at least preserves the possibility that future lawmakers could find some alternative way of accomplishing what the taxes are supposed to do — at least in part.”
Research and Analysis. See Excise Tax on Comprehensive Health Insurance Plans (Cadillac Tax) for a discussion of efforts to repeal this tax and assessments of the impact of repeal.

Provisions Affecting Medium and Large Employers (6)

There have been 6 changes primarily affecting medium and large employers, all through unilateral administrative action. These are listed in chronological order.

Delaying Auto-enrollment for Certain Large Employers (2.9.12: 2+ Year Delay)

Background. Under the ACA, employers with more than 200 full-time employees that offer health insurance coverage to at least one employee must automatically enroll new full-time employees in one of the health insurance plans offered by the employer. Additionally, such employers must automatically continue enrollment of current employees in a health insurance plan offered by the employer. This requirement was originally scheduled to take effect in 2014. According to DOL, “on December 22, 2010, the Departments issued frequently asked questions (FAQ) on section 18A of the FLSA, which noted that the statute provides that employer compliance with the automatic enrollment provisions of section 18A shall be carried out “[i]n accordance with regulations promulgated by the Secretary [of Labor].”(1) That FAQ also stated that it is the view of the Department of Labor that, until such regulations are issued, employers are not required to comply with section 18A. Finally, the FAQ indicated that the Department of Labor intends to complete this rulemaking by 2014.”
Administrative Action. However, to date the rule is not being enforced. The Department of Labor announced on 2.9.12 that employers would not be required to comply with requirements to automatically enroll employees until it issues implementing regulations. CBO reported (10.20.15) that the regulations still have not been issued; consequently, CBO and JCT expect that the requirements will not be enforced during 2016 (p. 7). Note that this provision was finally repealed by statute on 11.2.15.
Legal Authority. According to DOL, “The Department of Labor has been working with stakeholders to ensure that it has the necessary information and data to develop regulations relating to automatic enrollment, and is sensitive to stakeholder concerns regarding the need for adequate time to comply with any regulations that are ultimately issued. In addition, the Department of Labor is aware of the need to coordinate the work it will be undertaking to develop guidance relating to automatic enrollment with the guidance being developed regarding other related Affordable Care Act provisions, including the employer shared responsibility provision and the 90-day limitation on waiting periods, described above. In view of the need for coordinated guidance and a smooth implementation process, including an applicability date that gives employers sufficient time to comply, the Department of Labor has concluded that its automatic enrollment guidance will not be ready to take effect by 2014. It remains the Department of Labor’s view that, until final regulations under FLSA section 18A are issued and become applicable, employers are not required to comply with FLSA section 18A.”
Impact.
- Number of People Affected. CBO/JCT project that about 750,000 people will be enrolled in employment-based health insurance in most years after 2018 because of the automatic enrollment requirements. Of those people who would be enrolled in employment-based coverage, CBO and JCT estimate that about 90% would otherwise be uninsured because they would not take action to enroll in insurance in the absence of the automatic enrollment requirements for their employer. The remainder would have enrolled in Medicaid or, to a lesser extent, in nongroup coverage offered through an exchange established under the ACA (p. 7).
- Federal Budget Impact. If this provision were repealed, CBO and JCT estimate this would result in net budgetary savings to the federal government of $7.9 billion over the 2016-2025 period. That projected decrease in federal deficits over the 10-year period consists of a $12.2 billion increase in revenues, partially offset by a $4.3 billion increase in direct spending (p. 7).

Extension of Tax Credits to People Receiving Employer-sponsored Coverage (5.23.12)

Background. Section 1511 of the ACA instructs the Labor Department to issue regulations requiring businesses with more than 200 employees to automatically enroll their employees in any health benefits plan offered by the employer. Section 36B correspondingly denies credits to employees covered by an employer plan.

Administrative Action. IRS regulations contradict the statutory language and allow credits to taxpayers when they are automatically enrolled in employer minimum essential coverage.

Legal Authority. Treasury implicitly acknowledges there is no statutory authority for its regulatory change (Galen Institute).

Delaying Employer Reporting Requirements (7.2.13: 1 Year Delay/12.28.15: 2 Month Delay)

Background. Section 6056 requires annual information reporting by applicable large employers relating to the health insurance that the employer offers (or does not offer) to its full-time employees.
Administrative Actions.
- On July 2, 2013 the administration announced via a Treasury Department blog post that reporting requirements for employers with 50 or more workers would be delayed for one year until January 1, 2015 (formal notification by the IRS came on 7.9.13; see IRS. Transition Relief for 2014 Under §§ 6055 (Information Reporting), 6056 (Information Reporting) and 4980H (Employer Shared Responsibility Provisions). Notice 2013-45, July 9, 2013.
- On 12.28.15, the Treasury said in a statement that employers will have two more months past Feb. 1 to give individuals forms for reporting on offers of health coverage and the coverage provided. The deadlines to report this information to the IRS are extended by three months past the previous Feb. 29 due date for paper filings and the March 31 date for electronic returns, Monday.

Delaying Employer Mandate (7.2.13: 1 Year Delay)

Background. The ACA requires employers with 50 or more full-time equivalent employees (FTEs) to offer their full-time workers health coverage that meets certain standards of affordability and minimum value. Those employers who do not provide such coverage risk having to pay a penalty if one or more of their employees obtain subsidized coverage through an exchange. The employer mandate is provided for under Section 1513 of the ACA which specifically states: “The amendments made by this section shall apply to months beginning after December 31, 2013.”
Administrative Action. On July 2, 2013 the administration announced via a Treasury Department blog post that the shared-responsibility payments required by large employers would postponed for one year in light of the delay in employer reporting requirements (see above). Formal notification by the IRS came on 7.9.13; see IRS. Transition Relief for 2014 Under §§ 6055 (Information Reporting), 6056 (Information Reporting) and 4980H (Employer Shared Responsibility Provisions). Notice 2013-45, July 9, 2013.
Legal Authority.
- Administration Position. In a July 9, 2013 letter sent to Representative Fred Upton (R., Mich.) by Treasury Department official Mark Mazur, Mazur cited “the Treasury Department’s longstanding authority to grant transition relief when implementing new legislation like the ACA. Administrative authority is granted by section 7805(a) of the Internal Revenue Code.” The president dismissed criticisms of the action, asserting: “Where Congress is unwilling to act, I will take whatever administrative steps that I can in order to do right by the American people.” Yet the president also threatened to veto legislation passed overwhelmingly by the House of Representatives (264 to 161,including 35 Democrats who voted yes) on July 17 to enshrine the employer-mandate delay into law, claiming it was “unnecessary.”
- CRS Analysis. CRS Legal Sidebar, Obama Administration Delays Implementation of ACA’s Employer Responsibility Requirements: A Brief Legal Overview, posted July 8, 2013.
- Supporting Views. University of Michigan law professor Nicholas Bagley has outlined arguments for the legality of the delay on grounds that it was justified by a delay in reporting requirements whose timing was discretionary.
- Opposing Views.
  - Others who have questioned whether the administration has the legal authority to unilaterally suspend this provision include various GOP leaders and Michael Cannon.
  - Critics have argued that the specific historical instances used by Mazur in the main text of his letter to buttress this argument provide weak support for using that authority in the case of the ACA; ACA supporters have countered that this critique did not address 8 additional historical examples cited in footnote 2.
  - Former Tenth Circuit Appeals Court judge Michael McConnell argues that according to a 1990 memo by the Justice Department’s Office of Legal Counsel, the president “does not have the right to refuse to enforce a statute he opposes for policy reasons,”
  - Constitutional law professor Jonathan Turley has stated: “You have a president who is claiming the right to basically rewrite or ignore or negate federal laws. That is a dangerous thing. It has nothing to do with the policies; it has to do with politics… a system in which a single individual is allowed to rewrite legislation or ignore legislation is a system that borders on authoritarianism.”
  - This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015.
Legal Challenges.
- House of Representatives Suit Fails. In U.S. House of Representatives v. Burwell, a district court judge dismissed a challenge to the employer-mandate delay, on grounds that she had no jurisdiction over a routine disagreement between Congress and the President over the interpretation of a law.
- Physicians Lack Standing to Sue. In Association of American Physicians and Surgeons (AAPS) and Robert T. McQueeney, M.D. v. Koskinen, plaintiffs argued that the delay of the employer mandate could hurt doctors financially. The lawsuit was dismissed at the district court level for lack of standing. On September 19, a unanimous 3-judge panel from the Court of Appeals for the Seventh Circuit (all Republican appointees) likewise ruled that the plaintiffs don’t have standing to sue . The court noted: “The [Supreme] Court has rejected efforts by one person to litigate about the amount of someone else’s taxes (or someone else’s subsidies, which are taxes in reverse).” As well, the court concluded: “In a market economy everything is connected to everything else through the price system. To allow a long, intermediated chain of effects to establish standing is to abolish the standing requirement as a practical matter . . .”
- Employers Likely Lack Standing to Sue. Avik Roy has noted that as a practical matter, even if the administration has no legal authority to unilaterally alter a statutory deadline, it’s unclear anyone except left-wing activists would have the motivation to mount a legal challenge to this delay. Employers being given relief from a burdensome requirement would not be in a position to argue they were being injured by a delay. However, in Kawa Orthodontics v. Lew, an employer has challenged the mandae delay on grounds that he wasted money on lawyers’ fees and other expenses in preparation for compliance with the mandate. The case was rejected by both a district court and (divided) appeals court, so plaintiff has requested Supreme Court review.
- Employees May Have Standing to Sue. Following an appeals court rejection of a challenge to the delay (AAPS v. Koskinen), Politico.com labeled the appeals court decision as having been made at “breakneck speed.” However, the reporter also noted that “the judge did hint at how someone could achieve standing to successfully file the lawsuit.” Only persons seeking to advance the interests” of the employer mandate would have a “plausible” right to sue, Easterbrook wrote. “Someone else would be a much more appropriate champion of the contention that the IRS has not done what it should to accomplish the statute’s goal of universal coverage.” Andrew Schlafly, the attorney who represented AAPS, said the House’s lawyers should heed a lesson in Easterbrook’s opinion. If there was “a large company that was not [observing] the employer mandate — because Obama waived that for 2014 and for a lot of companies for 2015— one of those employees might have a plausible claim.”

Delaying Employer Mandate for Medium-Size Employers (2.10.14: 1 Year Delay)

Administrative Action. On February 10, 2014, the administration announced that the employer mandate would be delayed until 2016 for employers with between 50 to 99 employees. Employers who want to take advantage of this particular exemption will need to certify with the federal government that they are not cutting back on positions just to fall below the threshold.
Legal Authority.
- Administration Position. New York Times reports that “J. Mark Iwry, deputy assistant Treasury secretary for health policy, said the administration had broad “authority to grant transition relief” under a section of the Internal Revenue Code that directs the Treasury secretary to “prescribe all needful rules and regulations for the enforcement” of tax obligations. This authority has often been used to postpone the application of new laws that would cause “unreasonable administrative burdens or costs” to taxpayers, Mr. Iwry said.”
- Opposing Views. Michael Tanner, Yuval Levin, and Avik Roy have all argued that the statutory text of the ACA doesn’t appear to allow for rolling, ad hoc delays. This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015.
Impact. The Small Business Administration estimates there are 7.8 million workers in firms with 50 to 99 employees.

Additional Transition Relief for Large Employers (2.10.14: 1 Year)

Administrative Action. On February 10, 2014, the administration announced that employers with 100 or more workers will only have to offer coverage to 70% rather than 95% of their employees to be counted as fulfilling the employer mandate in 2015. Such firms must cover 95% of employees by 2016, which is the threshold established in the earlier rule.
Legal Authority. Since this action merely changes a prior administrative rule clarifying conditions that employers would have to meet to avoid the employer mandate penalty, it does not appear to raise the same sort of legal questions posed by the employer mandate delay.
Impact. The Small Business Administration estimates there are 113 million workers in firms with 100 or more workers.

Further Delay in Employer Mandate Reporting Requirements (12.28.15)

Administrative Action. On 12.28.15, the IRS further delayed some ACA reporting requirements for employers about health coverage offered to employees. Employers will have two more months past Feb. 1 to give individuals forms for reporting on offers of health coverage and the coverage provided. The deadlines to report this information to the IRS are extended by three months past the previous Feb. 29 due date for paper filings and the March 31 date for electronic returns.
Legal Authority. This delay was contrary to statutory language (Galen Institute).

Specific Provisions Affecting Small Employers (4)

There have been 4 changes primarily affecting small employers (under 50 employees): 2 through unilateral administrative action, and 2 through a statutory change signed into law. These are listed in chronological order.

Delaying Plan Choice in Most Small Business Exchanges (3.11.13: 1 Year Delay)

Background. The Small Business Health Options Program (SHOP) was designed to give small employers several different plans from which to choose.
Administrative Actions. On March 11, 2013, a rule was issued to delay SHOP for one year until 2015. Specifically, SHOP will still be open in 2014, but for the 36 states in which the Federal Government runs the exchange, SHOP will offer only one insurance choice. States running their own exchanges have the option to delay having their SHOP open in 2014. A few states running their own exchanges, including California and Connecticut, said they planned to offer an employee choice option next year, though it was not required by the federal government. Thus, SHOPs will be not be fully operational in all states as intended until January 1, 2015.
Legal Authority. The New York Times reported (4.1.13): “The administration cited “operational challenges” as a reason for the delay.” The rule itself cited comments made in response to the proposed rule (issued 12.7.12) had offered the following reasons to offer only 1 plan initially: “Whether issuers could meet the deadlines for submission of small group market QHPs given the new small group market rating rules; whether issuers could complete enrollment and accounting system changes required to interact with the SHOP enrollment and premium aggregation systems required by employee choice; and whether there would be adequate time to educate employers, employees, and brokers about the employer and employee choices available in the SHOP.”
Impact. Some observers speculated the “delay is part of a bigger plan to remove employers from the health insurance market.” However, progressive blogger Joe Klein characterized the failure to set up such plans despite having three years to do so as “Obamacare incompetence.”

Delaying On-line Enrollment in Small Business Exchanges (9.26.13/11.27.13: 1 Year Delay)

Background. On-line enrollment in SHOPs was originally planned for October 2013 in order for people to secure coverage effective January 1, 2014.
Administrative Actions. Online enrollment on SHOP exchanges has been delayed twice:
- On September 26, 2013, the administration announced that the SHOPs run by the federal government (36 states) would not open for online enrollment until November. But applicants could still enroll by phone, mail or fax beginning Oct. 1.
- On November 27, 2013, in the aftermath of widespread glitches in enrollments on the non-group Exchanges, the administration announced that SHOP exchanges run by the federal government will not offer online enrollment until November 2014, a one-year delay. Small firms will still have the option to purchase SHOP plans through a broker or agent, who will assist the employer with filing a paper application.
Legal Authority. According to the Washington Post (11.27.13), “Administration officials characterized the decision as one made necessary as they prioritized fixes to the individual health exchange, which the White House has promised will “work smoothly for the vast majority of users” by Dec. 1.” The ACA imposes no statutory deadline for the availability of online enrollment and the delay does not preclude SHOP enrollment for calendar year 2014 given that the paper enrollment process remains in place. That said, enrollment on the small-business exchange is available year-round, so it is unclear why a full one-year delay was necessary given that glitches in the non-group Exchanges were expected to be resolved within a matter of weeks or months. Some have cynically noted that the delay will place the start date beyond the 2014 election, although it is unclear how that would benefit the administration since SHOP gives small employers greater flexibility/more choice.
Impact. The delay will inconvenience all employers with fewer than 25 employees wanting to the small employer tax credits (available only through the SHOP exchanges) since they will need to purchase one of the plans certified by the SHOP marketplace through an agent, broker or an insurance company.

Eliminating Caps on Deductibles for Small Group Plans (4.1.14)

Statute. Congress eliminated the cap on deductibles for small group plans as part of the SGR “doc fix” signed into law 4.1.14.
Impact. This change gives small businesses the freedom to offer high deductible plans that may be paired with a Health Savings Account (Galen Institute).

Protecting Small Businesses (10.7.15)

Statute. Congress passed and the president signed (10.7.15) the Protecting Affordable Coverage for Employees (PACE) Act.
Impact. This law will protect businesses with 51-100 employees from ACA rules that would have led to premium increases of 18%, impacting 150,000 businesses and 3 million workers (Galen Institute).

Specific Provisions Affecting Health Care Sector (8)

There have been 8 changes affecting various part of the health care sector: 4 through unilateral administrative actions, and 4 through statutory changes signed into law. These are listed in chronological order.

Drug-Price Clarification (8.10.10)

Background. Under the ACA, the definition of average manufacturer price (AMP) changed. It became the average price paid to the manufacturer for the drug in the United States by wholesalers for drugs distributed to retail community pharmacies and by retail community pharmacies that purchase drugs directly from the manufacturer.
Statutory Change. On August 10, 2010, Congress modified the definition of average manufacturer price (AMP) to include inhalation, infusion, implanted, or injectable drugs that are not generally dispensed through a retail pharmacy (Galen Institute).

Doc-fix Tax (12.15.10)

Statutory Change. Congress modified the amount of premium tax credits that individuals would have to repay if they are over-allotted.
Impact. This action was designed to help offset the costs of the postponement of cuts in Medicare physician payments called for in the ACA (Galen Institute).

More Funds for Insurer Bailout (5.16.14)

Administrative Action. The administration said it will supplement risk corridor payments to health insurance plans with “other sources of funding” if the higher risk profile of enrollees means the plans would lose money (Galen Institute).

Allowing Risk Corridor Payments without Appropriation (9.30.14)

Administrative Action. The Obama administration plans to illegally distribute risk corridor payments to insurers,
Legal Authority. Studies by both the Congressional Research Service and the GAO state that a congressional appropriation is required before federal agencies can make the payments (Galen Institute).

Delaying Reporting Requirements for Transparency of Coverage (10.20.14)

Administrative Action. CMS delays statutory requirements on insurance companies to disclose data on the number of people enrolled, disenrollment, number of claims denied, costs to consumers of certain services, etc. (Galen Institute).
Legal Authority. This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015.

Delaying Medical Device Tax (12.18.15: 2 Year Delay)

Statute. The Consolidated Appropriations Act, 2016 passed by Congress and signed into law on December 18, 2015, gave a temporary reprieve from enforcement of the medical tax in 2016 and 2017.
Impact.
- Lawmakers in both parties have lamented that the tax hurts medical innovation and raises costs for patients. According to Timothy Jost, “the moratorium will reduce federal revenues by about $2 billion a year for two years.”
- According to The Huffington Post (12.8.15), “for proponents of these taxes, the big danger of delay is that it could be a prelude to demise. Once Congress postpones a tax for the first time, it has a habit of doing the same thing over and over again, so that the tax never takes effect. Still, postponing these taxes rather than fully repealing them at least preserves the possibility that future lawmakers could find some alternative way of accomplishing what the taxes are supposed to do — at least in part.”
Research and Analysis. See Medical Device Tax for a discussion of other repeal efforts and assessments of the impact of repeal.

Delaying Health Insurance Tax (HIT) (12.18.15: 1 Year Delay)

Statute. The Consolidated Appropriations Act, 2016 passed by Congress and signed into law on December 18, 2015, established a one year moratorium on the HIT.
Impact. Although the tax is initially assessed against insurers, it is largely passed through to consumers in the form of higher premiums, raising them between 2.0 and 2.5 percent. According to Timothy Jost, “the moratorium will result in a loss in revenue to the federal government of about $12 billion. Health insurers claim that the tax increases premiums by $170 per individual and $530 per family. If state regulators or competitive conditions compel insurers to reduce their rates for 2017 by these amounts, this provision could be a real gain for consumers. It is possible, however, that this provision will simply increase insurer profits as it decreases federal government revenues.”

Allowing Biosimilar Drugs to be Reimbursed in Same Manner as Generics (10.30.15)

Administrative Action. CMS finalized a rule to pay for complex-molecule biosimilar drugs as though they were generics (Galen Institute).
Legal Authority. This action was in direct contradiction of congressional intent to require unique payment codes for the drugs (Galen Institute).

Specific Provisions Affecting Vulnerable Populations (8)

There have been 8 changes primarily affecting various vulnerable populations: 6 through unilateral administrative action, 1 through a statutory change signed into law and 1 through a Supreme Court decision. These are listed by group: a) Medicare and/or Medicaid Beneficiaries; b) low-income Basic Health Plan members; c) patients with pre-existing conditions; and d) repealing CLASS Act (which arguably might have affected all three preceding groups among others. Note there are other changes related to the Exchanges that also will exclusively or disproportionately affect low income individuals or families, but these are all included under Specific Provisions Affecting Exchange Plan Members.

Specific Provisions Affecting Medicare and/or Medicaid Beneficiaries (4)

There have been 6 changes primarily affecting Medicare and/or Medicaid Beneficiaries: 2 through unilateral administrative action, 1 through a statutory change signed into law and 1 through a Supreme Court decision. These are listed in chronological order.

Delaying Medicare Advantage Cuts (11.11.10: 3 Year Delay)

Background. The ACA originally included $136 billion in cuts to Medicare Advantage plans, which were initially scheduled to be phased in starting in 2012.
Administrative Action. In November 2010, shortly after the election (which saw heavy losses for Democrats in the House and Senate), the administration announced that it would conduct a nationwide demonstration from 2012 through 2014 to test an alternative method for calculating and awarding bonuses to Medicare Advantage plans. Spending $8.3 billion on a “demonstration project” meant postponing the impact of the cuts for at least a year, turning cuts scheduled to begin in 2012 into a slight increase. In 2015, the cuts called for in the health care law will kick in again.
Legal Authority. To make this policy change, the administration relied on a 1967 statute giving the HHS secretary authority to spend money without specific approval by Congress on “experiments” directly aimed at “increasing the efficiency and economy of health services.” However, in a July 2011 letter to Health and Human Services (HHS) Secretary Kathleen Sebelius, the Government Accountability Office (GAO) said HHS failed to show that it had the legal authority for this quality bonus demonstration program.
- On March 21, 2012, the nonpartisan GAO raised concerns about the highly political nature of the study–which the GAO’s health director pointed out would be more expensive than “all other Medicare demonstrations conducted since 1995 combined.” Moreover, the agency questioned whether the bonus program could achieve its goal of finding better incentives to promote quality since most of the money would go to plans rated merely average. The GAO recommended that the cuts proceed without delay. This recommendation was ignored.
- The Medicare Payment Advisory Commission also criticized the change saying it amounts to “a mechanism to increase payments” and its design “sends the wrong message about what is important to the program and how improved quality can best be achieved.”

Impact. In July 2012, Senator Orrin Hatch argued that the proposed demonstrations illustrate how the administration had “tried to use a technicality to side step Congress and write itself a blank check to spend more money for political purposes leading into this year’s elections.” Under federal “open-enrollment” rules, seniors must pick their Medicare coverage program for the following calendar year by the end of the preceding year; the open enrollment period opened on October 15, leading to concerns that the cuts would have caused many seniors to lose their preferred health-care plans right before an important election (the Medicare actuary had predicted that by 2017, Medicare Advantage enrollment in 2017 would be half as much as it would have been in PPACA’s absence).

Canceling Medicare Advantage Cuts (4.7.14)

Background. The ACA calls for $200 billion in cuts to Medicare Advantage over 10 years.
Administrative Action. The administration canceled further scheduled cuts to Medicare Advantage (Galen Institute).

No Medicaid for Well-to-do Seniors (11.21.11)

Statute. Congress changed how the eligibility for certain programs is calculated under Obamacare.
Impact. Without the change, a couple earning as much as much as $64,000 a year would have been able to qualify for Medicaid. This change saved taxpayers $13 billion (Galen Institute).

Medicaid Expansion Made Voluntary (6.28.12)

Background. The ACA would have denied all federal Medicaid funding to any state that failed to expand Medicaid eligibility to people with incomes up to 138% of poverty.
Supreme Court Ruling. The court ruled in NFIB v. Sebelius that denying existing Medicaid funding to states that elected not to expand their Medicaid programs was unconstitutionally coercive. Rather than strike down this provision, the court made Medicaid expansion voluntary.

Specific Provisions Affecting Low-income Basic Health Plan Members (2)

There have been 2 changes primarily affecting low-income members of the Basic Health Plan, both through unilateral administrative action. These are listed in chronological order.

Delaying Low-income Basic Health Plan (2.7.13: 1 Year Delay)

Background. The Federal Basic Health Plan Option (FBHPO) was a managed care option designed to make coverage more affordable. It gives states the option of using ACA subsidies to help cover certain low-income individuals whose income is too high to qualify for Medicaid.
Administrative Action. On February 7, 2013, HHS announced that implementation of the Basic Health Program (BHP) would be delayed by one year until 2015. A letter (4.12.13) from Secretary Sebelius to Senator Maria Cantwell provides the new timeline for FBHPO rollout.

Subsidies for Lawfully Present Immigrants through Basic Care Plan (3.12.14)

Background. ACA §1331 creates the “Basic Health Program,” an optional program that states may adopt to make subsidized care available, separate from the ACA exchanges. More generous than Medicaid, the program provides federal subsidies to the state equal to 95 percent of the subsidy the enrolled individuals would have gotten on an exchange.
The ACA permits BHP subsidies for U.S. citizens with incomes from 133-200% of Federal poverty line, and legal aliens with incomes from 0 to 133% of FPL. Specifically, the PPACA itself specifies BHP enrollment for aliens “lawfully present” shall be limited to “…in the case of an alien lawfully present in the United States, whose income is not greater than 133 percent of the poverty line…” —PPACA, §1331(e) (42 U.S.C. 18051(e)(1)(B)).
S.744, the comprehensive amnesty bill passed by the Senate, does not prevent currently illegal aliens who obtain lawful status from receiving BHP benefits since S.744′s language blocks insurance premium tax credits paid via the IRS. But that isn’t how BHP’s subsidies are paid. Under the Basic Health Program, the ACA pays subsidies from HHS directly to the states (42 USC §18051(d)), which then pay premium assistance (IRC §36B) and cost-sharing subsidies (PPACA §1402) directly to insurers, thus avoiding the IRS payment mechanism altogether.

Administrative Actions.
- Even though the language of the statute does not permit this, the HHS’ final rule issued March 12, 2014 extends BHP payments to “aliens lawfully present” with incomes that are greater than 133 percent of FPL (“whose household income is between zero and 200 percent of the FPL” —42 CFR 600.305).
- Also, the ACA provides that “only people who meet these requirements” will be eligible for the BHP. However, the HHS rule uses the language “people who meet these requirements are eligible.” The Obamacare Truth Squad argues that “this slippery substitution opens the possibility that HHS may deem additional people eligible at some future date, even if they don’t meet the law’s requirements.”
Legal Authority. The administration has not advertised this change in policy or defended its legality, so it is unclear whether it is deliberate or inadvertent.
Impact. This discrepancy between the law and the rule would have significance only if non-citizens granted any sort of “legal status” by an immigration deal or Executive Order. The BHP subsidies for non-citizens amount to 95% of what citizens would receive on an exchange. However, BHP plans must charge premiums that are less than the 2nd lowest silver plan, and also must offer the platinum-level “cost-sharing” subsidies required by the ACA (or gold-level, depending on the alien’s income). Consequently, if non-citizens ever were granted any sort of “legal status” they would immediately become eligible for taxpayer subsidized, ACA-compliant private insurance plans (even though such individuals would not be eligible for coverage on the ACA Exchanges).

Specific Provisions Affecting Patients with Pre-existing Conditions (2)

There have been 2 changes primarily affecting patients with pre-existing conditions, both through unilateral administrative action. These are listed in chronological order.

Closing the High-Risk Pool (2.15.13)

Administrative Action. The administration decided to prematurely halt enrollment in transitional federal high-risk pools created by the law
Legal Authority. The administration cited a lack of funds. In fact, it had money from a fund under HHS Secretary Sebelius’s control to extend the pools, but instead used the money to pay for advertising for Obamacare enrollment and other purposes (Galen Institute).
Impact. This change blocked coverage for an estimated 40,000 new applicants (Galen Institute).

Delaying Termination of Preexisting Condition Insurance Plan (12.12.13; 1.14.14: 10 Week Delay)

Administrative Action. The administration extended the federal high risk pool until January 31, 2014 and again until March 15, 2014 to prevent a coverage gap for the most vulnerable. The plans were scheduled to expire on December 31, but were extended because it was impossible for some to sign up for new coverage on healthcare.gov. (Galen Institute).

Specific Provisions Affecting Exchange Plan Members (10)

There have been 10 changes affecting those obtaining coverage on the ACA health Exchanges, 9 through unilateral administrative actions and 1 through a Supreme Court ruling. Note that there are 2 changes affecting the small business Exchanges but since these affect only small businesses, they are included in the discussion of Specific Provisions Affecting Small Employers (4). These are listed in chronological order.

Tax Credits for Unlawful Immigrants (8.17.11)

Background. According to Andy Grewal (3.30.15), Section 36B of the ACA grants credits to some non-citizens with low-incomes only if they are themselves lawfully present in the U.S. and cannot obtain Medicaid coverage. Under Section 36B(c)(1)(D), dependents can’t take the premium tax credit on their own. Any credits for dependents must latch on to an “applicable taxpayer.”
Administrative Action. IRS regulations (8.17.11) contradict the statute. According to Andy Grewal, “The statute demands that the taxpayer herself be lawfully present in the United States and be ineligible for Medicaid by reason of her immigration status. The regulations, however, extend the special statutory rule whenever “the taxpayer or a member of the taxpayer’s family is lawfully present in the United States,” and “the lawfully present taxpayer or family member is not eligible for the Medicaid program” The regulation thus casts a net wider than the statute. The taxpayer herself might not satisfy the Section 36B(c)(1)(B) requirements, but she will receive tax credits if, for example, one of her dependent family members satisfies those requirements.”
Impact. According to Andy Grewal, “under Section 4980H(a), a business can face severe penalties if it fails to offer health insurance coverage and even one of its employees receives a premium tax credit. Thus, the invalid extension of the tax credit, even when made to a sympathetic individual, can trigger adverse consequences.” It is unclear how many individuals or employers would be affected by this rule change.

Allowing Tax Subsidies on Federal Exchanges (5.23.12)

Administrative Action. The IRS issued a rule that allows premium assistance tax credits to be available in federal exchanges although the law specified that they only would be available through an “Exchange established by the State” (Galen Institute).

Allowing Tax Credit Subsidies for Some People Below Poverty (5.23.12)

Background. Section 36B of the ACA plainly provides refundable premium tax credits to citizens only when their household incomes are within a specified range (100% to 400% of the poverty line).
Administrative Action. IRS regulations disregard the statutory limitation and grant credits to potentially several million persons below the 100% statutory floor. The Treasury regulation effectively provides the largest tax credits to persons who don’t satisfy the statutory criteria for eligibility (Galen Institute).

Delaying Income and Coverage Verification in State-Run Exchanges (7.15.13: 1 Year Delay)

Administrative Action. The state-run exchanges in 16 states and the District of Columbia were given a one-year delay in needing to obtain verification of income and employer coverage from individuals purchasing Exchange coverage; in the interim, they are permitted to rely on self-attestation of income and employer coverage.
- Income Verification. The Centers for Medicare and Medicaid Services originally issued a proposed rule requiring exchanges to request further income verification data from anyone who reported an income that was 10 percent lower than what federal data indicated they earned in the previous year. However, the July 5, 2013 final rule modified this to require an audit of only of a statistically significant sample of such cases. For everyone else, “for income verification, for the first year of operations, we are providing Exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.” Critics have noted that in principle, “since IRS knows your income, it could claw back these excess subsidies afterwards, if it chooses to. But the IRS’ record of impartiality is, shall we say, contested. And people who don’t file tax returns—such as those with incomes below the poverty line—would probably not be subject to that enforcement mechanism.” Moreover, Congress has set limits on the amount that the IRS can “claw back” (ranging from $600 to $3,500 for families and half those amounts for individuals). Note that families below poverty who commit fraud to get subsidized coverage through their state health exchange will be eligible for more than $18,000 in subsidies. In such circumstances, the IRS would be able to claw back less than one-fifth of any fraudulently obtained subsidy.
- Employer Coverage Verification. Because reporting requirements for large employers were delayed 1 year, the state-run exchanges in 16 states and the District of Columbia are being given until 2015 to verify whether exchange applicants are eligible to receive subsidized coverage (i.e., have not received an affordable offer of health insurance from their employer). According to a final rule issued July 5, 2013–on grounds that “the proposed rule is not feasible for implementation for the first year of operations”– ”the exchange may accept the applicant’s attestation regarding enrollment in an eligible employer-sponsored plan…without further verification.” Consequently, at least some who received subsidized coverage will not be eligible for it. However, there are “serious consequences for applicants who misrepresent their employer-coverage. The exchange must still notify employers every time one of their employees receives premium tax credits. The IRS will do so as well. Applicants who receive tax credits for which they are ineligible will have to pay them back when they file their taxes, and the exchange will inform applicants of this fact if it provides the applicant with tax credits pending verification of information provided by the applicant. Negligent misrepresentation of eligibility information can result in a $25,000 fine, while knowing and willful violations are punishable by a $250,000 penalty.” The issue is whether employers not subject to fines will even bother trying to ascertain whether their employees are receiving subsidized coverage inappropriately in 2014.

Delaying Electronic Notices for Medicaid and Exchange Subsidies (7.5.13: 1 Year Delay)

Administrative Action. Due to concerns that technology will not yet be in place, the CMS also delayed for one year the requirement that states provide applicants with electronic notification of eligibility for Medicaid and exchange subsidies. These would include notices of what tax subsidy, for example, an individual applicant is eligible to receive.

Reducing Out-of-pocket Maximum Payments (3.11.14)

Background. The ACA calls for out-of-pocket maximums to be lowered for enrollees with incomes between 100-400% FPL (Sec. 1402), but the provision proved unworkable for those 250-400% of FPL in combination with prescribed actuarial value requirements (Galen Institute).
Administrative Action. The law was changed through regulation to apply to only those 100-250% of poverty (Galen Institute).

Delaying the Exchange Sign-up Deadline (3.26.14: 2 Week Delay)

Administrative Action. The administration delayed until mid-April the March 31 deadline to sign up for insurance without penalty. Applicants simply need to check a box on their application to qualify for this extended sign-up period (Galen Institute).

Tax Penalty Exemption (2.24.15)

Administrative Action. Taxpayers who filed returns based upon inaccurate subsidy data they received from the federal government will not have to repay the government if they received too large of a subsidy, the IRS ruled (Galen Institute).

Allowing Use of Exchange Grants For Outreach and Education (6.8.15)

Administrative Action. CMS issued guidance saying that states operating their own exchanges can use money from federal exchange grants to do outreach and education to increase enrollment, even though the ACA stipulates the grants are to be used only to set up exchanges (Galen Institute).

Tax Credits Permanently Allowed on Federal Exchanges (6.25.15)

Supreme Court Ruling. In King v. Burwell, the Supreme Court overruled the plain meaning of the ACA limiting tax credits to people living in states that created their own exchanges – cited seven times in the law – and instead allowed tax credits for insurance purchased through federally-facilitated exchanges as well state-run exchanges (Galen Institute).

Specific Provisions Affecting Members of Non-Group Plans Outside ACA Exchanges (4)

There have been 4 changes primarily affecting those enrolled in non-group plans outside the ACA Exchanges, all through unilateral administrative actions. These are listed in chronological order.

One-Year Extension of Noncompliant Health Plans (11.14.13)

Background. Under the ACA, health plans that consumers had at the time the law was enacted in 2010 were “grandfathered” in and have existed largely unchanged since the law’s enactment. Grandfathered plans do not have to adopt many of the ACA’s new requirements for health insurance, including coverage of essential health benefits and other consumer protections that took effect at the beginning of 2014. However, new (i.e., non-grandfathered) plans purchased since the law’s enactment were required to meet all the ACA requirements, effective 1.1.14 (CRS-7).
Administrative Action.
- On November 14, 2013 President Barack Obama asked health insurance companies to allow individuals whose current plans have been canceled due to the ACA to renew them for a year. This policy change was codified in a letter sent by CMS to the State Insurance Commissioners outlining a transitional policy for non-grandfathered coverage in the small group and individual health insurance markets. It encouraged state officials to permit insurers to renew noncompliant policies in the individual and small-group market for policy years starting between January 1, 2014, and October 1, 2014.
  - Under the policy, health insurance companies will be permitted to extend current policies, even though they don’t comply with ACA standards for benefits and financial protections, for their customers into next year. However, insurers won’t be allowed to enroll new customers into these extended policies.
  - According to the Huffington Post, insurers will be required to disclose to customers that these new plans won’t include the new consumer protections in the law and explain that alternatives are available on Obamacare’s health insurance exchanges, and that tax credits to cut the cost of private insurance are only available on the exchanges. Insurance companies will also have to tell consumers that they may qualify for Medicaid, the federal-state health program for low-income people. State health insurance regulators are being asked to permit the administration’s new policy.
Congressional Actions.
- House Action. On November 15, 2013, the U.S. House approved (261-157), a proposal introduced by Rep. Upton (R-MI) to allow insurers to continue offering health care plans to new and existing customers through next year, even if the plans do not meet new federal requirements. The bill also would allow new customers to purchase those older plans. 39 Democrats voted in favor of the measure.
- Senate Action. Senator Landrieu (D-LA) sponsored a bill to allow people who like their plans, to keep their plans by grandfathering in any plan in which people were enrolled in on or before Dec. 31, 2013, regardless of whether that plan complies with the ACA. Co-sponsors include Senators Feinstein, Manchin, Merkley (R-OR), Kay Hagan (D-NC), and Mark Pryor (D-AR). Unlike the Upton bill, which made participation voluntary, the Landrieu bill would compel insurers to keep offering the old plans and would also require insurers to inform customers in writing of other plans available to them. According to USA Today, “Senate Democratic leaders so far say that the administration’s fix is enough and that a vote in the Senate is unnecessary.”
State Response. According to a Commonwealth Fund report, as of January 8, 2014:
- 21 States Reject Proposed Extension. “States such as Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Indiana, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New York, Oklahoma, Oregon, Rhode Island, Vermont, Virginia, Washington, and West Virginia, as well as Washington, D.C., have publicly announced that they will not implement the transitional policy fix. Although some of these states are allowing insurers to reinstate canceled policies until December 31, 2013, insurers in these states will not be permitted to renew policies that do not comply with the Affordable Care Act after January 1, 2014” (state map included). Many states also passed their own laws applying some or all of the Affordable Care Act’s market reforms to coverage issued or renewed in their state on or after January 1, 2014. These market reforms include the coverage of a minimum set of essential health benefits and the ban on preexisting condition exclusions. Officials in California, Maryland, and Nevada cited such laws as explanations for why they had to reject the proposed extensions.
- 29 States Allowed Plans to Extend Deadline. According to Commonwealth Fund’s map, as of January 8, 2014, all remaining states except Mississippi will allow carriers to renew non-compliant ACA coverage for a policy year starting between January 1, 2014 and October 1, 2014.
Insurance Company Actions. Jonathan Cohn has detailed five reasons that many insurers might elect not to renew their plans.
Legal Authority. For a legal analysis of the Administration’s decision to permit insurers to renew noncompliant policies for individuals and small businesses, see CRS Legal Sidebar, Obama Administration’s “Fix” for Insurance Cancellations: A Legal Overview, posted November 18, 2013.
Impact.
- According to the Washington Post, “The insurers aren’t happy. ‘This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,’ says Karen Ignani, head of the trade group America’s Health Insurance Plans. They worry the White House is underestimating the number of people whose plans have been canceled and who will opt to either remain uninsured or buy catastrophic insurance rather than more comprehensive coverage.”
- The RAND Corporation conducted a comparative analysis of three proposals to remedy the situation: one by the White House, another by Senator Mary Landrieu (D-LA), and a third by Representative Fred Upton (R-MI). The authors concluded that the White House plan would reduce enrollment in ACA compliant plans by 500,000 (4%), decrease the number of uninsured by 260,000 and increase premiums in that market by 1%; it would not cause a death spiral. Some of the congressional plans would have had a considerably larger impact.

Expanding Catastrophic Hardship Waiver to Canceled Plan Members (12.19.13/3.5.14)

Background. On November 14, 2013, the Administration had established a transition policy—which it encouraged state insurance commissioners to adopt—in response to insurers sending cancellation notices to individuals and small businesses with grandfathered health plans in the individual and small group markets that did not meet the ACA’s new standards for health insurance coverage (CRS-7). However, many states had rejected this extension (and not all insurers in states that permitted such extensions were willing to grant them). Consequently, the administration elected to provide some relief to individuals adversely affected by such cancellations.
Administrative Actions.
- On 12.19.13, the administration expanded the hardship waiver – which exempts people from the individual mandate and allows some to purchase catastrophic health insurance – to people who have had their plans canceled because of ACA regulations. If a plan is cancelled outside the open enrollment period, affected individuals get a special enrollment period if they wish to enroll in an exchange plan. Those who can’t afford an exchange plan and apply for a hardship exemption on that basis can buy a catastrophic health plan (CRS-7).
- On 3.5.14, CMS also extended the hardship exemption established for consumers with cancelled policies until 10.1.16 (CRS-7).
Legal Authority. Case Western law professor Jonathan Adler states that the offering of a hardship exemption to enforcement of the individual mandate is “perfectly legal.”

Extending Subsidies to Non-Exchange Plans (2.27.14)

Background. Individuals must receive an eligibility determination in order to enroll in a QHP offered through an exchange and receive the premium tax credit and cost-sharing reductions
authorized by the ACA (CRS-7). However, the administration found in February 2014 that some exchanges were having difficulty determining people’s eligibility. Owing to this “exceptional circumstance:” 1) Exchanges were permitted to grant retroactive coverage based on the application date rather than on the date of acceptance; 2) those enrolled in plans outside the Exchanges who were then determined to be eligible for coverage could receive the subsidies granted to those in an Exchange plan.
Administrative Action.
- Retroactive Coverage and Subsidies. On 2.27.14, CMS issued guidance (clarified on 3.14.14) allowing state-based exchanges to provide advance payments of the premium tax credit and cost-sharing reductions on a retroactive basis for eligible individuals who were unable to enroll in a QHP through the exchange because IT problems prevented timely eligibility determinations. Once a successful eligibility determination is obtained and the individual enrolls in the QHP through the exchange, the exchange may deem the coverage to have started on the date the individual originally submitted an application and encountered the IT problems. This would allow the individual to get the premium tax credit and cost sharing reductions retroactively if they qualify based on income (CRS-7).
- Subsidies to Non-Exchange Plans. Additionally, if an individual covered under this exceptional circumstance has enrolled in the QHP outside of the exchange, then once that individual receives an eligibility determination for exchange coverage, the exchange may deem the individual to have been enrolled in the QHP through the exchange retroactive to the date the individual enrolled outside of the exchange (CRS-7).
Legal Authority.
- Administration Position. CMS considered this situation an “exceptional circumstance” under 45 C.F.R. 155.420 (CRS-7).
- Opposing Views. This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015.

Two-Year Extension of Noncompliant Health Plans to 2016 (3.5.14)

Background. The administration previously had given a one-year extension to non-compliant health plans.
Administrative Action. On March 5, 2014, CMS announced it “will extend our transitional policy for two years – to policy years beginning on or before October 1, 2016.” Thus, at the option of state regulators, insurers who issued (or plan to issue) a policy in the individual or small group market under the November 14, 2013, transition policy may renew such policies at any time through October 1, 2016 (CRS-7).
State Response. According to the Wall Street Journal (3.5.14), “any effort to create a longer reprieve could face obstacles. State insurance commissioners would likely have to agree again to allow insurance companies to continue selling policies that don’t meet the law’s standards, and the companies themselves would need to be willing to continue to offer them.” Some state insurance commissioners “remained worried that allowing consumers to keep skimpy policies—often held by people who are in good health—would leave a riskier population to be covered in the main insurance market, which in turn would drive up rates.”
- May 2014. AHIP has a map of states’ decisions regarding extending the coverage of current policies. As of May 6, 2014:
  - 19 states had granted 3-year extensions.
  - 3 states granted 2-year extensions.
  - 12 states granted 1-year extensions.
  - 14 states + DC refused to grant extensions
  - 2 states were still undecided.
- September 2015. Healthinsurance.org summarized state policies as of 9.16.15:
  - 35 states have said that they will allow grandmothered plans to be renewed again this year and remain in force in 2016 (site has links to each state’s regulations/announcement on this matter).
  - Fifteen states and the District of Columbia are not permitting renewals of non-ACA-compliant plans. In most cases, this was effective as of 2014, although Oregon and Colorado allowed grandmothered plans to remain in force through the end of 2015.

Specific Provisions Affecting Military or VA Health (3)

There have been 3 changes primarily affecting military or VA health, all through statutory changes signed into law. These are listed in chronological order.

Exempt Military Health Benefits from ACA Requirements (4.26.10)

Statute. Congress clarified that plans provided by TRICARE, the military’s health-insurance program, constitutes minimal essential health-care coverage as required by the ACA; its benefits and plans wouldn’t normally meet ACA requirements (Galen Institute).

Exempt VA Health Benefits from ACA Requirements (5.27.10)

Statute. Congress also clarified that health care provided by the Department of Veterans Affairs constitutes minimum essential health-care coverage as required by the ACA (Galen Institute).

Expand TRICARE to Adult Children Up to Age 26 (1.7.11)

Statute. Congress extended TRICARE coverage to dependent adult children up to age 26 when it had previously only covered those up to the age of 21 — though beneficiaries still have to pay premiums for them (Galen Institute).

Specific Provisions Affecting Other Identifiable Groups (8)

There have been 8 changes affecting other identifiable groups–as opposed to individuals and families in general–7 through unilateral administrative actions and 1 through a statutory change signed into law. These are listed in chronological order.

Extending the Adoption Tax Credit (12.17.10)

Statute. Congress extended the nonrefundable adoption tax credit, which happened to be included in the ACA, through tax year 2012 (Galen Institute).

Delaying Conscience Mandate Safe Harbor (2.10.12; 1.1.14: 17 Month Delay)

Administrative Actions. In February 2011, a final rule was issued requiring non-exempt private health insurance plans to provide coverage for all FDA-approved contraception methods, sterilization, and counseling and education, effect August 2012. Only churches were given a conscience exemption to this mandate–the narrowest definition of religious employer ever used in federal law–leaving the mandate in place for religious charities, hospitals, colleges, nursing homes, and universities.
- In response to a firestorm of protest, the administration issued temporary guidance on February 10, 2012, stating it would not enforce the new rule on specified employers until after August 1, 2013.
- In an update to this guidance issued June 28, 2013, this date was extended to January 1, 2014.
Legal Authority. As of late June 2013, there were more than 200 plaintiffs in over 60 cases challenging this rule; of the 28 cases that have had rulings touching on the merits, 21 have received temporary halts to the mandate’s enforcement while their cases proceed.

Congressional Opt-out (9.30.13)

Administrative Actions. The administration decided to offer employer contributions to Members of Congress and their staffs when they purchase insurance on the exchanges created by the ACA, a subsidy the law doesn’t provide (Galen Institute). Federal law would not allow members and staff to keep receiving a taxpayer contribution of up to $12,000 toward their premiums if they enrolled in an individual-market exchange, so Congress bypassed enrollment in the D.C. individual exchange by claiming it was a small business eligible for the SHOP exchange. The 435-member House and 100-member Senate each “filed a false declaration with the DC Health Benefit Exchange Authority claiming to have less than 50 employees – an indefensible fact that was never publicly disclosed.”

Exempting Unions from Reinsurance Fee (12.2.13)

Administrative Action. The administration gave unions an exemption from the reinsurance fee. To make up for this exemption, non-exempt plans will have to pay a higher fee, which will likely be passed onto consumers in the form of higher premiums and deductibles (Galen Institute).

Allowing Temporary Medicaid Enrollment in Massachusetts (12.30.13/3.31.14/7.30.14/10.30.14)

Background. According to Josh Archambault (10.23.14), “despite hundreds of millions in Obamacare-related funding, Massachusetts built a spectacularly-flawed exchange website. State officials, obsessed with building “the absolute Rolls-Royce of any health exchange,” failed to deliver even minimal website functionality. With no backup plan to manually process applications, hundreds of thousands of MA residents faced loss of coverage beginning January 1, 2014.” Governor Deval Patrick sought a Medicaid waiver to address the situation.
Administrative Actions.
- “Temporary” Medicaid Enrollment. According to Josh Archambault (10.23.14), “In just 13 days, Gov. Patrick engineered a backroom deal… to create a new ‘temporary’ Medicaid coverage never before seen in the history of the program, which effectively eliminated any initial eligibility determination… Anyone that answered ‘yes’ to the question: ‘Do you want help paying for health insurance?’ could enroll.” (The original request was made 12.17.13 and approved by CMS on 12.30.13).
- Waiver Extended through 6.30.14. On 3.31.14, the waiver was extended to June 30, 2014.
- Waiver Extended through 8.31.14. On 7.30.14, the waiver was extended to August 31, 2014.
- Waiver Extended through 2.28.15. After a series of subsequent temporary extensions (available here), on 10.30.14, the waiver was extended one last time to February 28, 2015.
Legal Authority.
- This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015.
- According to Josh Archambault, “The deal was struck with no public disclosure or opportunity for public comment, as required by the Centers for Medicare and Medicaid Services’ (CMS) own guidelines… the waiver authority CMS granted was unprecedented. CMS essentially waived any requirement that Massachusetts make an initial eligibility determination, knowingly disregarded Massachusetts’ statutory obligation to transition Temporary Medicaid enrollees to traditional Medicaid or exchange plans ‘as quickly as possible,’ and did not require Massachusetts to resolve subsidy application data inconsistencies in 180 days—all of which represent a misuse of CMS’s authority.”
- This action prompted U.S. Rep. Fred Upton, the chairman of the House Committee on Energy and Commerce, and U.S. Sen. Orrin Hatch, the ranking member of the Senate Finance Committee, to send a letter (10.9.14) to the Centers for Medicare and Medicaid Services questioning this authority.”
Impact. According to Healthinsurance.org, a total of 325,000 enrolled temporarily in MassHealth in 2014. According to the Boston Herald (6.12.15), the cost to Massachusetts of the temporary coverage was $658 million, exclusive of federal spending.

Exempting U.S. Territories (7.18.14)

Administrative Action. HHS waived six major requirements – such as guaranteed issue, community rating, and essential benefit mandates (Galen Institute).
Legal Authority. The administration had earlier claimed that “HHS is not authorized to choose which provisions [of the ACA] might apply to the territories” (Galen Institute).
Impact. These provisions were causing serious disruption to health insurance markets covering 4.5 million residents of U.S. territories (Galen Institute).

Failure to Enforce Abortion Restrictions (9.16.14)

Administrative Action. A GAO report found that many exchange insurance plans don’t separate charges for abortion services as required by the ACA, showing the administration is not enforcing the law. In 2014, abortions were being financed with taxpayer funds in more than 1,000 exchange plans (Galen Institute).

Imposing Health Insurance Tax on States (March 2015)

Background. The Affordable Care Act imposed a health-insurance providers’ fee on insurance companies, for the purpose of taxing the windfall they were expected to receive from increased enrollment.
Administrative Action. In March 2015, states were notified that they too would be assessed this fee, because they use managed-care organizations to provide Medicaid services. Nothing in the ACA allows the federal government to force states to pay the fee, so the administration left it to the “private” Actuarial Standards Board to determine what makes a state’s payments to managed-care organizations “actuarially sound,” as required by law. The board then interpreted that “actuarially sound” standard to require states to pay the taxes assessed on their managed-care organizations.
Legal Authority. This action was included in Ilya Shapiro’s list of President Obama’s top ten constitutional violations of 2015: “This assessment raises serious coercion issues, as the states have no choice but to pay the tax or lose their federal Medicaid funds.” Texas, joined by Kansas and Louisiana, sued the government in October on grounds that the tax is unconstitutionally coercive (see case discussion here).

Specific Provisions Affecting Individuals and Families (3)

There have been 3 changes primarily affecting individuals and families in general: 2 through unilateral administrative action and 1 through a Supreme Court decision. Note there is a small amount of overlap in that some changes have affected families generally as well as specific groups cited above. These are listed in chronological order.

Individual Mandate Made a Tax (6.28.12)

Supreme Court Ruling. The court determined that violating the mandate that Americans must purchase government-approved health insurance would only result in individuals’ paying a “tax,” making it, legally speaking, optional for people to comply (Galen Institute).

Delaying Out-of-Pocket Spending Caps (2.20.13: 1 Year Delay)

Administrative Action. “According to the law, the limits on out-of-pocket costs for 2014 were $6,350 for individual policies and $12,700 for family ones. But in February [2013], the Department of Labor published a little-noticed rule delaying the cap until 2015. The delay was described by Robert Pear in the New York Times, who reported: “The grace period has been outlined on the Labor Department’s Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language — which appeared as an answer to one of 137 ‘frequently asked questions about Affordable Care Act implementation’ — department officials confirmed the policy.'”
Legal Authority. According to New York Times, “Federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.”
Impact. Allowing plans to apply separate patient cost-sharing limits to different services, such as doctor/hospital and prescription drugs, permits maximum out-of-pocket costs to be twice as high as the law intended (Galen Institute).

Delaying the Individual Mandate (10.23.13: 6 Week Delay)

Administrative Action. The administration changed the deadline for the individual mandate by declaring that customers who purchased health insurance by March 31, 2014, would avoid the tax penalty. The law says they would have had to purchase a plan by mid-February to avoid penalties (Galen Institute).

Pending Delay Initiatives

Extension for Non-compliant Health Plans

Administrative Action. When CMS announced (3.5.14) the extension of its transitional policy for two years – to policy years beginning on or before October 1, 2016, it further asserted: “We will consider the impact of the two-year extension of the transitional policy in assessing whether an additional one-year extension is appropriate.” According to the Wall Street Journal (3.5.14), “administration officials have told insurers in recent weeks they are strongly considering allowing these grandfathered plans to be extended for up to three years beyond the one year already granted, said a health-insurance executive.”

Delayed Taxes

Congressional Action. On 12.11.17, House Republicans unveiled a package of bills to delay a range of ObamaCare taxes, which could be acted on later in December. House Ways and Means Chairman Kevin Brady (R-Texas) led the announcement for the bills to delay ObamaCare’s tax on medical devices for five years, on health insurance for two years, and the “Cadillac tax” on high-cost health plans for one year. The package would also eliminate penalties for employers who do not offer health insurance to their workers, under the employer mandate, through 2018.

Failed Delay Initiatives

Note there is a separate section on Components of ACA Proposed for Repeal.

Individual Mandate

Background. Some argued that the delay of both employer and insurer reporting requirements means that de facto, the individual mandate was delayed a year, since there is no practical way to enforce it. Delaying the mandate by just one year would reduce the federal deficit by over $35 billion, according to the Congressional Budget Office. Note that delaying only the individual mandate without delaying other insurance reforms such as guaranteed issue (the requirement to take all comers, even those with pre-existing conditions) and modified community rating (prohibiting those with pre-existing conditions from being charged higher rates) might considerably increase the adverse selection problem facing insurers since it likely will increase the number of healthy young people who simply opt to go without coverage.
Congressional Actions. There have been several efforts by Congress to delay the individual mandate:
- On July 17, 2013 the House voted to delay the individual mandate by one year (251 to 174, including 22 Democrats voting yes).
- On September 30, 2013 the House voted 228-212 to pass a continuing resolution that included a one-year delay of the individual mandate. 9 Democrats voted in favor and 12 Republicans voted against the resolution.
- On November 13, 2013 Democratic New Hampshire Sen. Jeanne Shaheen introduced a bill co-sponsored by Sens. Mary Landrieu, Mark Udall (D-CO), Jeff Merkley (R-OR), and Dianne Feinstein (D-CA) to delay the individual mandate for at least two months, giving people extra time to sign up for health coverage.
- West Virginia Democratic Sen. Joe Manchin proposed a one-year delay for the individual mandate.
- Florida Republican Sen. Marco Rubio sponsored a bill that would delay it until six months after the website was fully functional.
- Sen. Al Franken (D-Minn.) on 11.22.13 said he would be open to a brief delay in the individual mandate if the problems with HealthCare.gov aren’t fixed by the end of the month, according to Minnesota Public Radio.
- Even DNC chair Debbie Wasserman Schultz was on record as being open to a delay in the individual mandate, or at least an extension of the open-enrollment period.
- There also have been proposals/efforts to repeal the individual mandate entirely (see Components of ACA Proposed for Repeal).

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