ERIC Says ACA "Clarification" Broadsided Employers

The ERISA Industry Committee (ERIC) sent a letter to three federal agencies calling for the immediate withdrawal of a newly proposed Affordable Care Act (ACA) cost-sharing rule.

In a letter to the Health and Human Services, Labor and Treasury Departments, ERIC urged that a new out-of-pocket limit, proposed in what the Department of Labor (DOL) called a “clarification”, for large group plans be stricken as it has no basis in law and, in addition, broadsided employers with no real advance warning. 

ERIC’s principal objection is that the ACA clearly envisions two out-of-pocket limits for coverage in the 2016 plan year: one for self-only coverage ($6,850) and one for family coverage ($13,700). But in the new rule, the agencies imagine a third limit, which will apply limits for individuals in family coverage.

“Instead of promulgating the rule in sunlight under the usual comment period required by the Administrative Procedures Act, the agencies made a significant policy change just months before companies’ fall open enrollment periods begin, and as part of a largely unrelated rule,” ERIC says, noting that the proposal was made only in the preamble to the Health and Human Services Notice of Benefit and Payment Parameters for 2016.

ERIC president and CEO Annette Guarisco Fildes says in the letter that the impact of the proposed rule would be “far-reaching,” as plan sponsors, insurance carriers and third-party administrators would not have sufficient time to prepare their employees for such “a significant and unjustified departure from the current rules.”

ERIC members by a wide margin—70%—said they would be moderately or significantly affected by this rule change. At this point in the year, companies “have already settled on at least a preliminary pricing structure, including employee contributions, for 2016,” the letter states.

There’s much to dislike in the newly proposed rule, Fildes says. “It suddenly burdens large employers with cost-sharing responsibilities that will cause significant upheaval in their benefit designs for next year, and instead of proposing the changes in broad daylight, the agencies snuck the changes into the language of an unrelated rule,” she says.

The full text of ERIC’s letter is on its website.