Last week when I wrote about associations and insurers challenging the Washington Insurance Commissioner’s (OIC) disapproval of rates for bona fide association plans, Premera was conspicuously absent. That left the Washington Counties Insurance Fund (WCIF) at risk of not even getting a hearing. Why? Because Premera had not challenged the WCIF rate disapproval. The administrative law judge might rule that allowing Premera customers to challenge OIC disapprovals could turn into a litigious train wreck. [see BHT article]
Now, Premera has challenged the Commissioner‘s authority to require what amounts to a “community rate” for associations and to impose remedies on association plan trusts. So why did Premera wait so long?
In its demand for a hearing challenging disapproval of its 2014 association plan rates, Premera writes the following:
“On March 24, 2015, in a telephone conversation between Premera and the OIC, the OIC for the first time threatened possible sanctions for any AHPs that did not comply with the OIC’s interpretation of the regulatory requirements for plans filed for 2015, including retroactive sanctions for Premera’s 2014 AHPs.” [Emphasis added]
That would get your attention. That’s the kind of threat that focusses the mind.
Along with Premera’s challenge, more associations joined the fray last week. The Washington Farm Bureau, Washington Clean Technology Alliance Health Trust, and Washington Biotechnology and Biomedical Association Health Trust demanded hearings to challenge the OIC’s disapproval of rates by Regence and Premera. As with Premera’s motivation, the Washington Farm Bureau noted,
“Specifically, the OIC states: “As a result of this disapproval, it is necessary for all current enrollees to be transitioned to a compliant plan as soon as possible.” Compliance with such a remedy issued after the end of the applicable plan year is impossible. Not all members have remained in the Trust’s plan and, for those that have, there may be significant cost shifting on a retroactive basis with harmful effects.”
In an interesting twist, attorneys for the Washington Biotechnology Trust argue:
“I[T]he Hearing Examiner should be aware that this hearing request is for an OIC denial based on a 2014 contract filing. There is no one covered under the 2014 policy and the policy is no longer being sold. Therefore, there is no current case or controversy with respect to the 2014 policy. For this reason, the hearing on the 2014 policy should be stayed until the OIC makes a determination on the 2015 policy, and through the subsequent 90 day period to request a hearing.”
In other words, let’s wait even longer. Maybe next year when the OIC disapproves the 2015 filings, we can decide the AHP issues because we do need more time and justice delayed is well…more sales to trusting employers.
I honestly don’t understand the argument by the Biotechnology lawyers. Best case scenario, the OIC might cite to the association’s observation when OIC makes a motion to dismiss all of the association challenges for the 2014 plans as “without case or controversy.” The consequences for the association is the cost of returning 2014 premiums and other charges not justified under an amended, retroactive premium. [Do insurance producers have to refund commissions?] The Biotechnology Association goes on to argue:
“Premera has been told to discontinue policies and to transition employees. Thus, the insurance coverage of the approximately 3,427 employee and dependent participants will be disrupted. As a result of this disruption, the Trust’s 119 member employers and/or their employees will likely face increased costs for any new coverage that may be obtained in the small group or individual market.”
Two observations – the ongoing dispute between the insurance industry and the Insurance Commissioner plays like a game of motor vehicle chicken with the employers strapped to the front of the cars. How do small employers benefit from exacerbating the delay in answering the question of whether these plans qualify for tax deduction?
Second, the Insurance Commissioner’s justification for his association plan rating rules is the association’s draining of moderate to good health risks from the public small group community rated insurance “pool.” How is an admission that rates are lower for these associations a plus? Won’t some of the employers get better rates in the public market? If not, why are there no rates in the small group market better than those available in the association?
Here is a plain, straightforward argument by the Master Builder’s Trust:
The OIC’s disapproval of Regence’s 2014 Filings after the end of the 2014 coverage period cannot logically require transfer of current enrollees (who are enrolled in 2015 plans) to new plans or require any action with respect to prior enrollees (who are not enrolled in 2015 plans). [MBA Demand]
In other words, it’s a little late for the OIC to be making demands about transition of employers from plans that are so last year. Maybe that should have happened last year. More clever, the employers aren’t covered under the same 2014 plans, we filed “new” plans for 2015.
Finally, let it never be said that competing attorneys cannot cooperate to save their clients time and money. Consider this often repeated argument found in the demand letters for various parties:
The OIC’s rejection of the Filings is without any foundation in state or federal law; is contrary to the long-established practice condoned by the OIC; and, if the OIC’s illogical remedy were imposed, would unfairly prejudice thousands of Washington citizens in direct contravention of the primary purpose of the Affordable Care Act: to provide individuals with access to affordable health care. For the above reasons, Cambia hereby formally demands a hearing before an ALJ. [Cambia by Stoel Rives, LLP]
The OIC’s rejection of the Filings lacks foundation in state or federal law; is contrary to the long-established AHP rating practices condoned by the OIC and sanctioned by state law; and would unfairly prejudice NMTA Trust and its Washington citizen Members in direct contravention of the primary purpose of the Affordable Care Act: to provide individuals with access to affordable health care. For the above reasons, NMTA Trust formally demands a hearing before an ALJ. [NW Marine Trade by Kutscher Hereford Bertram Burkart, PLLC]
The OIC’s rejection of the Filings lacks foundation in state or federal law; is contrary to the long-established AHP rating practices condoned by the OIC and sanctioned by state law; and unfairly prejudices BIAW Trust and its tens of thousands of Washington citizen Members in direct contravention of the primary purpose of the Affordable Care Act: to provide individuals with access to affordable health care. For the above reasons, BIAW Trust formally demands a hearing before an ALJ. [BIAW by Perkins Coie]
I know, right?…conservation of resources and lower costs.
Despite the popularity of the often repeated argument, let’s remember another “primary purpose” of the ACA, to take money from those in good health and spend it on people in poor health so people in poor health can afford insurance.
If Congress, federal regulators, and state legislators wanted to change the method in which bona fide associations rated their members, they do know how to write laws. Nothing in the ACA empowers the OIC to ignore state law or state court decisions, to twist or ignore federal regulations, or to drag out association plan filing reviews to achieve objectives the ACA failed to address.
The ends do not justify the means. We still believe in the rule of law, don’t we?