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Automatic Renewal in 2015 Proposed for Users of Health Law Website

By Rebecca Adams, CQ HealthBeat Associate Editor

July 26, 2014 -- About 95 percent of people who signed up in a health plan through the federal website will be notified that their insurance will automatically renew and keep them enrolled in 2015 under a proposed rule and guidance memos released Thursday.

The auto-renewal will apply to people whose income fell below 500 percent of the federal poverty line in 2013. The health care law (PL 111-148, PL 111-152) provides subsidies for people with income between 100 percent and 400 percent of the poverty line, which is $11,670 for a single person in 2014.

People who want to switch plans or have seen their incomes and subsidies change will need to take the step of notifying federal officials and their insurers. The consumers will get a renewal notice from the marketplace advising that they should contact federal officials if they are not getting the correct amount of subsidy.

If officials determine from the most recent tax returns that a consumer's income has risen above 500 percent of the poverty line, the marketplace will stop providing subsidies at the end of 2014 and renew the person's coverage. Consumers who believe that they still qualify for subsidies will have to send documentation to the marketplace.

Republican lawmakers have raised questions about the accuracy of subsidies. They worry that consumers will not remember or take seriously the need to alert federal officials and insurers about changes in their income. If a taxpayer gets higher subsidies than he or she should, the consumer will have to pay back the additional subsidies with their taxes.

About 100,000 people out of the more than 5 million people who bought coverage through will have to reapply for subsidies, according to a Centers for Medicare and Medicaid Services (CMS) official. That group opted out of a process that allows federal officials to check updated tax return information to see if recipients appear to continue to qualify for subsidies. Those individuals will get a notice telling them that their federal subsidies will end on Dec. 31, 2014, and their coverage will be renewed without any subsidies unless they prove eligibility.

The CMS documents spell out the information that insurers will have to include to let their customers know if their plans are being discontinued or renewed. Health plans will have to send consumers information, in addition to a notice from CMS. The companies will notify consumers of their expected premiums and the amount they are eligible to save on their monthly bill.

"As we plan for open enrollment in year two and continue to build a sustainable long-term system, we are committed to simplifying the experience for consumers by allowing auto-enrollment," said Sylvia Mathews Burwell, Secretary of Health and Human Services (HHS). "We are working to streamline the process for consumers wishing to remain in their current plan."

CMS officials said that about 88 percent of federal workers that get insurance through the Federal Employee Health Benefits Program don't choose to change plans and are auto-enrolled in their current plan with updated premiums and benefits.

The federal marketplace will not inform customers what their new premiums will be. Instead, officials are requiring insurers to do that.

Insurance industry officials did not express any concerns.

"While we're still reviewing the details, we appreciate that HHS is taking steps toward simplicity and stability for consumers," said Clare Krusing, a spokeswoman for the trade association America's Health Insurance Plans.

The proposed rule is open to public comment for 30 days.

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