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According to research by the Kaiser Family Foundation (KFF), there will be an average of 4.5 insurers per state this year, up from 4.0 in 2019 and 3.5 in 2018. “This year, 18 states are seeing a total of 26 new entrants and an additional 54 insurers are expanding their service areas within states.”
Despite the increase, the majority of insurers are not offering coverage statewide, which is consistent with previous years. The KFF study states, “On average, metro-area counties have 2.6 insurers participating in 2020 (up from 2.3 in 2019), compared to 2.0 insurers in non-metro counties (up from 1.8 in 2019). In 2019, 87% of enrollees lived in metro counties.
In addition to insurer expansion, the premiums on average decreased this year. KFF cites a 2-3% decrease in premiums. Experts speculate that one of the reasons for the decline in premiums across certain states is because of the recently implemented state-wide Individual Mandates. With more state residents participating in the marketplace place, the cost of premiums will likely decrease.
Other key players of the ACA marketplace, including individual states, are also making efforts to help stabilize the health ecosystem. In addition to the states that have enacted their own statewide Individual Mandate, Colorado, Delaware, Montana, North Dakota, and Rhode Island have received approval from the Centers for Medicare and Medicaid Services (CMS) on launching reinsurance programs.
KFF describes the reinsurance program as a means for preventing premium increases in the individual market by offsetting the expenses of high-cost individuals. Both Democrats and Republicans, regardless of their position on the ACA, have found reinsurance programs to be of high value as they are projected to lower the cost of premiums for future health plan years.
States that have implemented reinsurance programs have already seen positive results from the program. Colorado, for instance, saw a drop in premiums across the state of over 20% on average, according to a post by CPR News.
All of this is happening despite the ACA’s federal Individual Mandate penalty being zeroed out and the law being called unconstitutional for a second time. The message here is clear and the law is becoming further ingrained into the U.S. healthcare system.
With the ACA remaining law of the land, employers need to continue to comply with the healthcare law’s Employer Mandate.
As a reminder to employers in conjunction with the Employer Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
The IRS Is currently issuing Letter 226J penalty notices to employers identified as having failed to comply with the ACA for the 2017 tax year. These penalty assessments are in the millions of dollars.
If your organization is wary of your ACA accuracy, you should undergo a cost-free ACA Penalty Risk Assessment to identify any potential penalty exposure.