Industry urges CMS to continue ACA wraparound coverage option
Health benefit managers are encouraging the Trump administration to continue a little-known ACA coverage option for supplemental insurance, which is slated to end this year.
Under the CMS' wraparound coverage policy, employers can provide limited benefits that supplement individual health insurance policies, such as access to non-formulary drugs or out-of-network providers.
The Affordable Care Act created two versions of this coverage, one that's available to part-time employees or retirees too young for Medicare who enrolled in individual health insurance policies and another that can be used to supplement multi-state plans offered through the public marketplace.
The provision will expire on Dec. 31, 2018, and no new offerings can start after that date. Prior wraparound coverage plans launched between 2015 and the end of the year will expire three years after the date they were first offered.
But retiree benefit managers want the coverage to continue, responding to a CMS request for comment asking if the limited wraparound coverage offering should sunset, or whether it should be made permanent. Comments were due Feb. 13.
"The limited wraparound pilot program promotes and encourages the sustainability and viability of plan sponsor resources while offering members access to quality comprehensive healthcare coverage at affordable costs to the member," Mary Person, president and CEO of HealthScope Benefits, said in a comment letter. HealthScope is a national third-party administrator of self-funded group health plans serving more than 650,000 members across the country.
The coverage has been a godsend to retirees who are not yet eligible for Medicare coverage and have limited finances, Person said.
One of its clients, the School Employees Retirement System of Ohio, has been offering wraparound coverage since January 2017.
The benefits organization said it has seen retirees gain access to high quality, specialized providers for serious health conditions, and that care may have remained financially out of reach without wraparound coverage, Person said.
Other education system benefit managers echoed that sentiment, but some have questioned whether the coverage option has provided much for beneficiaries.
HHS said it would need to conduct research to determine how many have actually taken advantage of wraparound coverage.
"I have heard absolutely nothing about anyone using this provision since it was announced," said Timothy Jost, a Washington & Lee University law professor and authority on the ACA.
The initial rulemaking was so time-constrained that virtually no group health plan sponsors were able or willing to implement a program because of the pilot sunset date, according to Jillian Froment, director of the Ohio Department of Insurance.
Wraparound rules were effective May 2015 and required offerings to be operational by the end of 2018.
"Group health plans typically require significant lead time to plan new programs, considerably longer than what was provided," Froment said.
Several commenters suggested extending the wraparound provision for a decade or more to allow insurance providers and providers to determine if the coverage is needed and potentially launch new offerings.
A long-term or permanent extension could also support a more robust evaluation of the program, according to Shaun O'Brien, assistant policy director for health and retirement at the AFL-CIO, a federation of 55 national and international labor unions that represent 12.5 million workers across the country.
"Such a change would increase the number of sponsors offering programs, providing a more diverse sample of sponsors, benefit designs and workforce settings to evaluate each of the limited wraparound options," O'Brien said in a comment.
For retirement systems that have offered wraparound coverage, an extension would be important so that they can continue to do so, according to Cheshire Gilbert, director of retiree healthcare at the Teachers' Retirement System of Kentucky.
"For systems with viable limited wraparound programs, the stability of permanent regulatory authority would provide them with the ability to maintain these limited programs with certainty," Gilbert said in a comment letter.
An edited version of this story can also be found in Modern Healthcare's Feb. 26 print edition.
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