ACA open enrollment for the 2023 plan year is just over a month away, and this time, individuals may have more options and a better experience than years prior. We discuss why that is below.
Health insurers are expanding
Healthcare providers like Cigna are expanding offerings through ACA health exchanges next year. Interestingly enough, the healthcare provider will be offering new ACA marketplace plans in Texas, Indiana, and South Carolina. These historically conservative states will see a wealth of new enrollment options later this fall.
Cigna said in an official statement that the expansion could result in nearly 730,000 new enrollees across the new regions. In total, the healthcare provider’s plan options will span 363 counties across 16 states.
Other insurers, such as United Healthcare are re-entering the ACA marketplace after several years of withdrawal. The nation’s largest healthcare provider plans to expand coverage offerings and plans to four new states next year.
For the last five years, United Healthcare saw a decline in participation in ACA health exchanges. The massive healthcare provider went from ACA health plans in 33 states in 2016 to five in 2017, and only two in 2018. Since then, United Healthcare has slowly re-entered the ACA marketplace, with this upcoming year being the greatest yet.
CVS’ Aetna experienced a similar retreat and growth to that of United Healthcare. The joint provider plans to expand individual coverage options on ACA health exchanges in four new states this fall, including select counties in California – a first for the organization.
Smaller, more focused healthcare providers like Alignment Healthcare are also expanding for the upcoming open enrollment. The Medicare insurance organization will offer new plans in Florida, Texas, Arizona, Nevada, and North Carolina, reaching over a million new seniors.
Why are healthcare providers expanding?
The expansion of healthcare options can largely be attributed to significant investments made by the Biden administration over the last 18 months.
The March 2021 enactment of the American Rescue Plan, for example, expanded access to affordable, quality coverage. The major healthcare reform initiative made it so that individuals below and above the Federal Poverty Level could obtain health insurance for no more than 8.5% of their household income.
These subsidies, which originally were set to expire in December this year, were extended through 2025 by the recent Inflation Reduction Act.
The result of these efforts led to a record-breaking ACA open enrollment last year. Over 14.5 million individuals signed up for coverage through state and federal health exchanges. With ACA marketplace participation steadily improving, health insurers have essentially been given the green light to expand offerings in a variety of new locations across the country.
Additional ACA expansion
Health insurance carriers aren’t the only ones expanding for the 2023 open enrollment period. ACA navigators will see significant growth as well. The Biden administration recently announced the largest investment ever for ACA navigators.
A total of 59 ACA navigator organizations will receive $98.9 million in new funding for the upcoming open enrollment period. The new funding builds off last year’s $80 million for navigator support.
ACA navigators are responsible for helping individuals obtain health subsidies like Premium Tax Credits (PTCs) when obtaining coverage through a state or federal health exchange. These navigators also assist with education and outreach regarding the healthcare options available via the ACA marketplace.
Health and Human Services Secretary, Xavier Becerra said in a CMS press release, “Last year, our investments helped result in the lowest uninsured rate in our nation’s history. This year, we’re doubling down on our efforts to ensure people get the insurance they need. Navigators critically help us reach people where they are, educating them on their health insurance options that can be lifesaving.”
Open enrollment for the 2023 plan year will begin November 1, 2022, and run through January 15, 2023.
The increased plan options and additional navigators bode well for ACA participation this coming open enrollment. With more choices, low-cost premiums, and additional resources for obtaining PTCs, individuals are likely to take advantage of government-sponsored health coverage, leaving employer options on the table.
This could prove challenging for organizations looking to meet their Employer Mandate requirements, as more employees obtaining subsidized care through state and federal health exchanges will no doubt lead to more IRS penalty assessments.
PTCs issued to eligible or non-eligible individuals indicate to the IRS that the employer may not have extended health coverage to the employee and thus failed to meet the requirements of the Employer Mandate.
Once an individual obtains a PTC, the IRS then cross-references the exchange request with the employer’s 1095-C submissions to identify other employees who should have received an offer and didn’t. The agency then issues a Letter 226J penalty notice to the employer for non-compliance with the Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers, or employers with 50 or more full-time employees and full-time equivalent employees must:
- Offer Minimum Essential Coverage to at least 95% of their full-time employees (and their dependents) whereby such coverage meets the Minimum Value
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability
And so, although the advancements to the ACA are great for individuals, they may pose additional challenges for employers. Best practices for alleviating potential IRS risk include understanding exactly what’s expected of your organization so that there are no surprises come filing season. And the best way to understand what’s expected of your organization is to partner with a leader in ACA compliance, like Trusaic.
Trusaic’s full-service ACA Complete solution handles every aspect of ACA compliance for you, from monthly tracking and offers of coverage, to IRS audit defense and year-end filling.
To learn more about complying with the ACA’s Employer Mandate, download the 2022 ACA Essential Guide for Employers below.
For information on ACA penalty amounts, affordability percentages, important filing deadlines, steps for responding to penalty notices, and best practices for minimizing IRS penalty risk, download the ACA 101 Toolkit.