The following questions have been received by the Idaho Department of Insurance
regarding the Idaho Health Insurance Exchange and SHOP (Idaho Exchange), the filing process, Qualified
Health Plan standards, and other related topics. The answers are intended to offer guidance on current
issues based on the DOI’s current understanding of applicable federal and state law requirements. If you
have any concerns regarding the accuracy of any of the guidance, please contact
Wes Trexler at the DOI by phone at 208-334-4315 or email. The
DOI will continue to release additional information and revise these responses as needed.
Can a spouse (or other family member) be counted as an employee in a small employer health plan?
(1/27/2016) Yes, provided that:
• The spouse or other family member meets the minimum requirements of an eligible employee at Idaho Code 41-4703(13), and
• Counting the spouse or other family member as an eligible employee, the employer meets the definition of a small employer at Idaho Code 41-4703(28).
Idaho Code 41-4703 defines an eligible employee as one who works 30 or more hours during a normal work week (unless, by agreement between the employer and the carrier, employees who work between 20 and 30 hours per week are included). The definition includes a sole proprietor, a partner of a partnership, and an independent contractor if such individuals are offered health coverage.
It is the Department’s view that the application of Idaho’s broader definition of an employee is more inclusive of Idaho employers and employees than the narrower employee definition provided by federal guidance; therefore, Idaho’s definition is not preempted. The Department concludes that if spouses or other family members qualify as employees under IRS rules, State Tax Commission provisions and Department of Labor standards, and meet the other criteria, they qualify as employees for small employer coverage.
Note that, as explained in the Carrier Frequently Asked Questions in 2015, FAQ #16, for purposes of SHOP enrollment and the Small Business Tax Credit, group size is determined using the federal full-time equivalent (FTE) method of counting employees. Under the FTE method, sole proprietors and their spouses or other family members under current interpretation are not counted as employees. Therefore, although a small employer consisting of only a business owner and spouse who is an employee or business partner are eligible to enroll in a small group plan, the group may not be able to enroll through the SHOP or qualify for the Small Business Tax Credit.
With the final market stabilization rule being released so late, will there be any changes to the 2018 QHP filing timeline?
(4/21/2017) Yes, the date “QHP forms filings due in SERFF” was originally communicated as May 5. The DOI is moving that back one week, to May 12. No other dates are currently expected to change.
There is uncertainty at the federal level about the funding of the cost sharing reductions (CSRs). Should insurers file rates assuming the CSRs are funded for 2018 or not funded?
(4/21/2017; revised 5/12/2017) DOI is requesting all companies file initially assuming the federal government will not make the CSR payments for 2018 enrollments. If at any point the payments are funded or sufficient assurances are given by the federal government, DOI will request carriers adjust their rate filing. In developing the rates for each plan under the assumption of no CSR payments, carriers must account for the full cost of the CSRs as a explicitly stated and justified factor in their actuarial memorandum, applied to all Silver plans as part of the “Actuarial value and cost-sharing design of the plan” factor of each Plan Adjusted Index Rate. DOI recommends the following enrollment weighting for Silver plan variants without CSR payments: Silver Std: 2%, Silver 73 CSR: 5%, Silver 87 CSR: 36%, Silver 94 CSR: 57%. When carriers are demonstrating compliance with the DOI’s Index Rate Ratio testing (see page 5 and Appendix C of the Idaho 2018 HBP Standards) in their rate filing, carriers should remove the CSR cost factor from the Plan Adjusted Index Rates.
DOI is requesting all companies file initially assuming the CSRs are funded. We will allow rate adjustments if there is a decision to not fund CSRs.
The IRS has communicated that tax filings without an indication of health insurance coverage won’t be “systemically rejected by the IRS at the time of filing.” Should insurers file rates assuming IRS will continue that practice in 2018?
(4/21/2017) Yes, DOI accepts that insurers may need to account for this IRS change in practice in their 2018 rate filings.
There was 2017 Idaho legislation to modify the Idaho Individual High Risk Pool, but there are not yet parameters around how the change may impact ACA-compliant plans. How should insurers include the impact of the change in their 2018 rate filings?
(4/21/2017) At this time, the DOI recommends carriers assume no Idaho-specific reinsurance or high risk pool will apply to ACA-compliant plans in 2018. If the Pool Board finalizes its plan of operation before the final date to modify 2018 rate filings (July 28), insurers would be permitted to modify their filing.
There have been national insurers reducing or eliminating agent commissions in certain cases which can have the effect of discouraging the offering of certain insurance coverage to certain individuals. What is Idaho DOI’s position on this?
(5/12/2017) The DOI finds that such a practice is likely an unfair method of competition, as well as being unlawfully discriminatory towards consumers. Examples of these prohibited practices include:
• Reducing or eliminating commissions outside of the annual open enrollment period
• Changing the amount of producer commission from that which was taken into account at rate filings
• Varying producer commissions based on whether a plan is sold through Your Health Idaho, or based on metal level of the plan
• Structuring producer commissions in such a way as to encourage or discourage enrollment based on an applicant’s health status.
The DOI recommends carriers include in their justification of their administrative costs assumption of their rates by including the details of their commission structure in the actuarial memorandum of the rate filing. Filings without that information may be determined incomplete or unjustified.
CMS has provided related guidance at https://www.cms.gov/cciio/resources/fact-sheets-and-faqs/downloads/agent-broker-compensation-and-discriminatory-marketing-practices.pdf.
What is the Department’s position on small employer group “carve-outs,” in which eligible employees are classified into different groups (for example, hourly versus salaried) and are offered different benefits?
(6/5/2017) Idaho insurance code requires that all eligible employees of a small employer have access to the same health insurance benefits; therefore any health plan offered to some employees of a small employer must be offered to all eligible employees of that employer. This includes the option of covering the employee’s dependents. Please see section 41-4708(3)(f)(i), Idaho Code.
What is the definition of "Idaho resident" for the purpose of determining eligibility to enroll in a health insurance plan?
(6/5/2017)The eligibility criteria for ACA-compliant health plans requires that residency not be limited to individuals who have been present in Idaho for a certain amount of time. The DOI will accept a definition for Idaho Resident that is not more restrictive than “An individual is an Idaho Resident if the individual is able to provide satisfactory proof of currently residing in Idaho, including without a fixed address, and does not have residency status in any other state. For purposes of this definition, an individual who intends to reside in Idaho may submit an application for insurance, but the individual would not be eligible to begin coverage prior to the individual physically residing in Idaho.“
If your question is not answered above, please submit your question directly to the DOI.