04-14-2021 Council Packet - Laserfiche WebLink

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9 the individual mandate tax penalty. The court also held that because the individual mandate is “essential” to the ACA and inseverable from the rest of the law, the entire ACA is unconstitutional. The case was appealed to the U.S. Court of Appeals for the Fifth Circuit and on December 18, 2019, that court affirmed the district court’s decision but remanded the case to the district court for further consideration of the severability issue and to provide additional analysis of current provisions of the ACA. On March 2, 2020, the Supreme Court agreed to hear two consolidated cases, filed by the State of California and the United States House of Representatives, asking the Supreme Court to review the ruling by the U.S. Court of Appeals for the Fifth Circuit holding the ACA’s individual mandate unconstitutional and to review whether, if the mandate is unconstitutional, it can be separated from the rest of the ACA. Oral arguments were held on November 10, 2020, and a ruling is not expected until later this year (2021). The ACA will remain law while the case proceeds through the appeals process; however, the case creates additional uncertainty as to whether any or all of the ACA could be struck down, which creates operational risk for the health care industry. It remains unclear what portions of that legislation may remain, or what any replacement or alternative programs may be created by future legislation. Federal payor healthcare programs are a significant portion of the federal budget so may be a target for deficit reductions. The related reforms could result in decreased reimbursement for services offered by the Corporation. Accordingly, there can be no assurance that the adoption of any future federal or state healthcare reform legislation will not have a negative financial impact on the Corporation, including its ability to compete with alternative healthcare services, or to receive payment for the its services. In addition to legislative repeal or replacement efforts, ACA implementation and the ACA insurance exchange markets could be significantly impacted by executive branch actions. Former President Trump issued three executive actions directly aimed at the ACA: (i) one requiring federal agencies with authorities and responsibilities under the ACA to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that place “unwarranted economic and regulatory burdens” on states, individuals or health care providers, (ii) a second instructing federal agencies to make new rules allowing the proliferation of “association health plans” and short-term health insurance, which plans have fewer benefit requirements than those sold through ACA insurance exchanges, and (iii) a third ordering the federal government to withhold ACA cost-sharing subsidies currently paid to insurance companies in order to reduce deductibles and co-pays for many low-income people. Additional executive branch actions include: (i) the issuance of a final rule in June 2018 by the Department of Labor to enable the formation of health plans that would be exempt from certain ACA essential health benefits requirements; (ii) the issuance of a final rule in August 2018 by the Departments of Labor, Treasury, and Health and Human Services to expand the availability of short-term, limited duration health insurance; (iii) eliminating cost-sharing reduction payments to insurers that would otherwise offset deductibles and other out-of-pocket expenses for health plan enrollees at or below 250 percent of the federal poverty level, (iv) relaxing requirements for state innovation waivers that could reduce enrollment in the individual and small group markets and lead to additional enrollment in short-term, limited duration insurance and association health plans; and (v) the issuance of a final rule by the Departments of Labor, Treasury, and Health and Human Services that would incentivize the use of health reimbursement arrangements by employers to permit employees to purchase health insurance in the individual market. The uncertainty resulting from these executive branch policies led to reduced exchange enrollment in 2019 and 2020 and is expected to further worsen the individual and small group market risk pools in future years. In a potential effort to combat these prior measures, President Biden issued an executive order on January 28, 2021 to “open a Special Enrollment Period for Americans to sign up for health coverage and roll back attacks on the ACA, Medicaid, and access to reproductive health care.” On June 21, 2018, the U.S. Department of Labor published a final rule, amending the definition of “employer” under section 3(5) of the Employee Retirement Income Security Act (“ERISA”) to allow for the establishment of group or association health plans (“AHPs”) that broadens the criteria under ERISA for determining when and how employers may form associations to offer group health plans to multiple employers and self-employed individuals. The final rule is intended to expand access to group health coverage by permitting businesses, sole proprietors and self-employed to form associations to sponsor AHPs based on common geography, industry or trade, if certain criteria are met; however, the final rule also eliminates certain requirements for a health plan under the ACA. In March 2019, a Federal District Court judge invalidated and remanded the final rule to the U.S. Department of Labor. The government appealed this decision and the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in November 2019. It is unclear how the increased federal oversight of state health care or the development of AHPs may affect future state oversight or affect the Project. The health insurance exchanges may have a positive impact on providers by increasing the availability of health insurance to individuals who were previously uninsured. Conversely,