• Who Can Pay ACA Premiums?

    Over the last eight months the Department of Health and Human Services has advised insurers not to accept third party premium payments, to accept third party premium payments from government programs, to be wary of provider and commercial premium assistance programs, and to accept premium payments from certain private foundations. Confused yet? In late 2013 HHS sent a letter to Rep. Jim McDermott (D-WA) noting that qualified health plans sold through the exchanges weren't subject to the anti-kick back laws. It was then assumed that third parties were allowed to pay an individual's premiums when they signed up for a QHP under the ACA. HHS was concerned that providers and industry would pay several thousand dollars annually in premiums for a patient but then bill the insurer hundreds of thousands of dollars in services and drug costs. Therefore, HHS quickly warned insurers to be wary of accepting third party premium payments.

    Several insurers were listening and they stopped accepting payments from the Ryan White premium assistance program for AIDS patients. HHS however, issued an interim final rule clarifying that insurers should accept third party premium payments from government entities and programs.

    In a May letter HHS further clarified that premium payments from not-for-profit charitable foundations should be accepted if the patient satisfies a defined income criteria, health status is not considered, and the payments cover an entire policy year. We were unable to determine how HHS is defining "not-for-profit foundations" and if it included what we traditionally think of as public charities like The Leukemia & Lymphoma Society which provide premium support for patients. HHS's warnings have focused on providers and commercial entities, however foundations have a particular IRS definition that does not include all charities. We hope an organization defined as a public charity by the IRS which pays premiums for some QHP enrollees asks HHS for further clarification or has submitted comments to HHS's interim final rule addressing 3rd party premium assistance by all charities.