August 2013 Newsletter

On Friday, just before Congress adjourned for August recess Representatives Tom Reed (R-NY-23) and Mike Thompson (D-CA-5) introduced H.R. 2995, a bipartisan bill that repeals the $2,000 deductible limit on small group health insurance plans under the Patient Protection and Affordable Care Act (PPACA). The $2,000 deductible limit for small group plans was an amendment offered and accepted by the Senate Finance Committee for largely political considerations at the time but does not harmonize well with other provisions of the bill. Because the Congress did not conference the legislation, it is now law. The administration has acknowledged the difficulty for employers as well as health plans to create and offer a viable plan with the deducible limit when paired with a high deductible plan. HHS in their regulation recognizes this problem to meet the actuarial requirement for a Bronze level plan for example, by offering plans an undefined waiver at plan request.

Employers need more certainty as do the plans. Employers rely on these high deductible plan designs to reduce their premium outlays and often buy down some of the deductible through a health savings account (HSA) arrangement. Plans development and design takes time and resources so they would also benefit from the certainty that their plan will be approved and meet the requirements of the law. It is believed that the repeal could be a cost saver according to some outside actuarial and economic analysis.