ACA Ineligibles

As a benefits manager I am by default also a fiduciary to our health plan under ERISA.  One of the duties of a fiduciary is to ensure that the rules of the plan are followed and that the health plan is only paying for claims that it needs to be paying.  That is why many companies conduct claims and dependent eligibility audits.  A company doesn’t want to pay claims that it shouldn’t be paying.

With that in mind you can understand why I was shocked when I read an article in the WSJ this week about 115,000 people who have not yet proved their legal residency and are at risk of losing their health insurance coverage that they bought through healthcare.gov.  Most of these members have been covered under a health plan since the beginning of the year, receiving tax funded subsidies to help pay their premiums.  

I understand that there was a mad rush to sign people up and that not everyone had the proper paperwork.   Perhaps people moved and documents got lost or they just didn’t understand the requirements.  Maybe the website's technical glitches prevented them from submitting proof of legal residency.  I get that.  These things happen.  

What I don’t get is that the article stated that their coverage was going to end as of September 30.  

Huh?  

If people had nine months to send in proof of residency and still have not done so you can probably bet they are not legal residents and should not be entitled to insurance and subsides.  So why is the termination date as of the end of September?  The insurers should terminate them retroactively to January and attempt to recoup any claims paid out for those members throughout the year.

At my company I pride myself in keeping our eligibility as accurate as possible.  We once did a dependent eligibility audit and out of 2700 dependents less than five were no good.  But on the rare occasion when for whatever reasons an ineligible sneaks through and is active on our plan, we will terminate coverage as far back as we need to and attempt to claw back any claims that were paid during that time period.  As a fiduciary I have to try to recoup the money that was spent not in accordance with the plan.

My guess is that the order came from the White House.  It doesn't want to deal with the negative publicity right before open enrollment of retroactively terming all those people and chasing them down to repay claims. 

That I understand.  Nobody wants more trouble before open enrollment.  Even among the private sector.