Blue Cross and Blue Shield of Illinois

 

June 28, 2013

Legislative Update
Federal Government Releases Final Rule, Guidance on Minimum Essential Coverage

On June 26, the U.S. Department of Health & Human Services (HHS) filed a final rule, and the Internal Revenue Service (IRS) released two notices covering minimum essential coverage under the Affordable Care Act (ACA).

Beginning on Jan. 1, 2014, most U.S. citizens and legal residents will be required to have health insurance that meets federal minimum essential coverage standards or face financial penalties. Under ACA, minimum essential coverage includes: employer-sponsored coverage (including COBRA coverage and retiree coverage); coverage purchased in the individual market; public programs such as Medicare Part A (including Medicare Advantage), most Medicaid coverage, and Children’s Health Insurance Program (CHIP); and certain veterans’ health coverage administered by the Veterans Administration and TRICARE.

ACA provides authority to the secretary of HHS to work in coordination with the secretary of the Treasury to designate other health coverage as minimum essential coverage through regulation.

The final rule issued by HHS:

  • Covers eligibility exemptions from the individual responsibility payment (including hardship and religious conscience exemptions), including the eligibility process for issuing certificates of exemption and appeals from exchange determinations.
  • Cross-references the IRS regulation for the definition of minimum essential coverage. The final rule designates self-funded health insurance plans, foreign health coverage, Refugee Medical Assistance supported by the Administration for Children and Families, Medicare Advantage plans, AmeriCorps coverage, and state high-risk pools as minimum essential coverage.
  • In a change from the proposed rule, the final rule states that self-funded student health and state high-risk pools are not automatically considered minimum essential coverage after 2014. In 2015, such plans may apply to HHS under a process outlined in the final rule to be designated as minimum essential coverage by the HHS secretary.

In two notices released on June 26, the IRS provided additional guidance on minimum essential coverage and transition relief related to the individual shared responsibility provisions of ACA.

  • Notice 2013-41 provides more detail about whether someone has minimum essential coverage for purposes of premium tax credit eligibility under the Children’s Health Insurance Program, Medicare Part A, TRICARE, state high-risk pools and student health plans.
  • Notice 2013-42 provides individuals transition relief from the penalty for not having minimum essential coverage if they are eligible to enroll in employer-sponsored coverage with a non-calendar plan year that begins in 2013 and ends in 2014.

Both notices will be published on July 15. Comments on Notice 2013-41 may be submitted in writing on or before Aug. 26.

We are currently reviewing the final rule and notices, and will provide more information as it becomes available.

 

 
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A Division of Health Care Service Corporation, a Mutual Legal Reserve Company,
an Independent Licensee of the Blue Cross and Blue Shield Association.