ACA Marketplace Continues to Stabilize in 2020
2 minute read:
The 2020 open enrollment results for individuals enrolling through the Healthcare.gov platform are in, and the results indicate a strong and stabilizing health care system.
A report by the Centers for Medicare & Medicaid Services (CMS) shows that 8.3 million people selected a new plan or auto-enrolled into a healthcare plan through the Healthcare.gov platform. These numbers are slightly down from 2019’s 8.4 million but the consistency demonstrates the marketplace’s stability.
A possible reason for the dip could be states transitioning from the federal marketplace to their own statewide health exchange. In 2020, 13 states will fully administer a statewide health exchange through their own platform.
CMS Administrator Seema Verma stated in a tweet, “These numbers represent remarkably stable enrollment especially in light of the ongoing growth of the Trump economy, improving employment conditions, and rising wages that could otherwise reduce the demand for subsidized coverage on the exchange.”
Interestingly enough, the number of new consumers enrolling in coverage through the federal health exchange was up from 2019. Over 2 million new individuals signed up for coverage through the federal health exchange.
Final figures for 2020, including individual state enrollment data, will be reported in March, including enrollment from state exchanges not using the Healthcare.gov platform.
Another sign of the overall health of the ACA health care system can be found in the number of insurers participating in ACA marketplaces. For the second consecutive year, the number of insurers is increasing. According to the Kaiser Family Foundation, “there will be an average of 4.5 insurers per state in 2020, up from 4.0 in 2019 and 3.5 in 2018.”
The growth in the number of insurers participating indicates they are getting more comfortable with the marketplace challenges posed by the ACA and the Trump administration’s continued tinkering with the law.
Employers who thought the ACA was going away should reconsider their position. Evidence shows that the health care law, including its Employer Mandate, is becoming more ingrained in our healthcare ecosystem. And with the recent Fifth Circuit court ruling regarding the constitutionality of the ACA, it is very possible the law remains for good.
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 assessments for the 2017 tax year and is expected to continue doing so through May. After which they will move onto 2018. It is speculated that IRS enforcement of the ACA will become more severe this year as well.
Employers should undergo an ACA Penalty Risk Assessment to learn their penalty exposure. If you haven’t received a penalty yet, it doesn’t mean you won’t receive one.
To learn more about ACA compliance in 2021, click here.
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