(Part 9 of ?): 2016 Exemption Hearing

Brief Intro. Way back in Part 4, I discussed the fact that our situation for 2016 was unresolved despite the fact that a good portion of the year was over. In November of 2015, I applied for a second year of exemption under the cancelled non‑ACA plan criteria. I did this after researching Department of Health and Human Services (DHHS) policy documents that clearly show that the agency has extended the “transitional policy” related to cancelled health plans through September of 2016 (consistent with other allowances implemented to address pre‑ACA plan cancellation). I submitted the application in November assuming the issue would be resolved prior to the close of the 2016 open enrollment period. On March 3, 2016 — after receiving notice that my exemption request was being denied — I requested a hearing so that I could determine the rationale for the denial and state my case in an open exchange setting. In late July, I finally received notice that a hearing was scheduled for August 19, 2016. What follows is a summary of that hearing.

Hearing Format. These Marketplace Appeals hearings are conducted via telephone and are presided over by a Federal Hearing Officer. You are allowed to have a representative assist you, I elected to represent myself. You are also allowed to request a copy of the case file so that you have an opportunity to review the materials therein prior to the hearing. I requested and obtained the file information only to find that it essentially consisted of only the materials that were formally exchanged between myself and DHHS. There was not one single note or supporting document indicating what consideration or basis for determination was associated with the DHHS exemption denial. The most frustrating aspect of the hearing, by far, is the fact that no one from the “other side” (i.e., those making the exemption decision) are even present at the hearing to present their rationale or respond to queries. The hearing consisted of a conversation between myself and a Hearing Officer. She was very nice and quite polite, but the entire process was very unfulfilling given the continuing inability to hearing anything from the other side. In effect, I learned no more from the hearing than I knew beforehand. I just kicked the can a little further down the road. To give a little flavor of the strangeness this situation engenders, the Hearing Officer requested that I send her the notification of exemption denial that I had received from the DHHS as the agency had not included that information in the package of materials they provided to her. So anyway, what transpired was me making a short statement summarizing the situation as I saw it, followed by the Hearing Officer asking a few factual-type questions (names of affected parties, application submittal dates, etc.). That was it. The situation is now in her hands and as far as I can tell, her decision is final. I will never know what those that reviewed and considered my request were thinking, or why.

Hearing Materials. What follows are the materials I put together to be prepared for the hearing. These consist of a chronology of hearing-related events, the hearing statement that I delivered, and a synopsis of DHHS materials that support my exemption claim. I reproduce them here as they provide a pretty thorough description of the exemption process.

Hearing Chronology

June 26, 2014. Notified by my pre-ACA insurer that my health plan would be terminated effective December 31, 2014.

January 24, 2015. After reviewing prices of inferior plans available for 2015 through the Maryland ACA marketplace, submitted an exemption application with appropriate documentation (for the same three individuals associated with this hearing).

February 2, 2015. Exemption for 2015 was approved. Information provided with the approval indicated that reapplication would have to be made annually to extend the exemption to subsequent insurance years.

November 21, 2015. After reviewing prices of inferior plans available for 2016 through the Maryland ACA marketplace, submitted an exemption application with appropriate documentation (the denial decision related to this application is the subject of this hearing). This application was intentionally submitted well before the close of the 2016 enrollment period to allow time for alternative consideration should such be necessary.

January 11, 2016. After hearing no response on the exemption request and with the open enrollment period for 2016 closing within a few weeks, I called the federal marketplace (which processes exemption requests even for states with their own ACA markets) to determine the status of the exemption application. Telephone representative had no associated information, but submitted the question for internal escalation.

Shortly After January 11, 2016 (as used here and hereafter, “shortly after” indicates that I cannot state the date of receipt precisely due to the uncertainty of mail delivery dates, but can place the event in it proper chronology due to its relationship with other events). By letter dated January 8, 2016, receive notification that the exemption application was denied for two of the three individuals (Peggy and Bryce) associated with this hearing. The stated reason: “Your documents show that you’re not eligible for the exemption you requested.” Note that the documents included the exact same materials upon which the approved 2015 exemption was based. The only documentation difference between the two submittals was that this 2016 application included additional materials indicating that DHHS viewed the subject exemption as being applicable through 2016.

Note also that this notice of denial explicitly states that “if you requested an exemption for other family members and they are not listed in the table above, the status of their request will come in a separate letter.” As of this date (August 19, 2016), I have never received any formal notice on the application with regard to myself and have simply proceeded along the appeal path as if that application was “silently” denied to avoid any future necessity to “restart” the appeal process.

January 26, 2016. Submitted Appeal Request form. Included associated DHHS guidance materials demonstrating applicability of exemption through the 2016 insurance year.

Shortly After January 26, 2016. I received a notice dated January 22, 2016 indicating that my 2015 exemption request was approved. This is essentially a restatement of the notice transmitted previously on February 2, 2015. All three exemption numbers are identical and the applicability timeframe is listed as January through December 2015. I can only assume that this notice was the result of a confused interpretation of the January 11, 2016 escalation request, but that is only a presumption. Whether this notice is or is not related to the 2016 exemption request is unknown.

Shortly After February 4, 2016. Received notice that the appeal request was received.

Shortly After February 19, 2016. Received notice that the appeal was accepted and was under review.

March 3, 2016. Received notice of informal resolution (dated February 29, 2016), upholding the exemption denial. The stated reason was that “the document or documents you provided were insufficient to prove you experienced a qualifying hardship.” The documents submitted were exactly the same as those submitted to support a 2015 exemption which was granted. It is unclear what additional documentation the marketplace requires.

March 3, 2016. Called the Marketplace Appeals Center to request a hearing.

July 22, 2016. Received notice of hearing (dated July 20, 2016) for August 19, 2016.

July 22, 2016. Called the Marketplace Appeals Center to request a copy of the hearing case file.

July 27, 2016. Received notice of request for appeal record (dated July 25, 2016) that included a Request for Appeal Record form that had to be submitted to obtain the requested case file information. The form was immediately completed and faxed to the Marketplace Appeals Center. Why this form is not included in the notice of hearing mailing is unclear as subsequent transmission unnecessarily adds another week to the process.

August 16, 2016. Received hearing case file materials (with cover letter dated August 12, 2016). With the exception of the following, there is nothing in the file other than materials included in my exemption application and appeal request:

• Cover letter that provides no additional information.
• Three pages with the title “Page Numbers Missing.” One page includes the number 1 and two include the number 5. It is entirely unclear what these pages signify, but they provide no additional information.
• Three pages of communication logs, which are entirely consistent with the information in the preceding discussion, but provide no new information.

The package includes not a single additional note or related information with regard to the rationale for the exemption denial.

August 19, 2016. Hearing conducted via telephone.

Hearing Statement

I applied for and received an ACA exemption for the 2015 insurance year due to pre-ACA policy cancellation at the end of 2014. Based on DHHS guidance materials, I applied at the end of 2015 for the same exemption for the 2016 insurance year. Documentation in the form of a letter from the cancelled insurance provider was included with both exemption requests. Information on the 2015 exemption was also included with 2016 application. For 2015, the documentation was sufficient and exemptions were granted for the exact same individuals included in the 2016 request. For 2016, the exemption request was denied (for two of the subject individuals, no communications for the third individual have yet been received). The denial states that the provided documents show that we are not eligible for the exemption, but there is no discussion of how the documents are deficient or what specifically leads to the non eligibility determination. This is really no different than simply stating “not eligible.” We are left to guess as to what information or lack of information forms the basis of the reviewer’s decision. My assumption was that the hearing file would provide some insight into the reviewer’s rationale, but there is not a single bit of information in this regard in the file provided by DHHS.

DHHS policy guidance makes it clear that the same exemption available for 2015 is also available for 2016. It is, therefore, impossible to understand the conclusions reached by the exemption reviewer(s). It is my continuing belief that we satisfy the exemption criteria and have submitted all documentation necessary to prove so (including substantial DHHS policy guidance material demonstrating the same).

Additionally, the inequitable nature of DHHS deadlines and communications need to be reassessed by the Agency. DHHS imposes both short and preclusionary deadlines on consumers (e.g., submit notice of appeal within 90 days, notice of hearing request within 15 days, etc., or all appeal rights are forfeited), yet seems to have no internal deadlines that affect their decision making. Nearly two months passed before any notice of exemption request denial was received. In fact, it has been nearly nine months and no exemption request response has been received for one of the three applicants. Nearly five months passed between the request for a hearing and notice that the hearing would occur. We are now eight months into the insurance year and there is absolutely no opportunity to do anything other than let the year lapse. Moreover, consumers are held to deadlines that they can satisfy on the basis of externally undocumented telephone calls. Given the time between these calls and DHHS responses, the consumer has no way of knowing whether the calls were accurately recorded and processed or whether something has fallen through the cracks. It would be very helpful if DHHS instituted an e mail (or other) verification system allowing consumers to retain a record of their communications, as might be critical for demonstrating compliance with DHHS deadlines as well as to ensure that action is ongoing.

Supporting Department of Health and Human Services (DHHS) Documents

December 19, 2013 guidance memo on options available for consumers with cancelled policies. This memo makes it clear that individuals with cancelled health plans are eligible for both catastrophic coverage and a hardship exemption.

March 5, 2014 guidance memo on the extension of the DHHS transitional policy. Allows states to continue allowing non-grandfathered plans through October 1, 2016. With regard to this hardship application, that memo also states that, consistent with allowing the continuation of non grandfathered plans, that the December 19, 2013 DHHS guidance allowing individuals whose non grandfathered plans were nevertheless cancelled would be correspondingly extended through October 1, 2016 and that such individuals continue to qualify for the associated hardship exemption through any insurance year beginning prior to that date. In fact, this extension had to have been used to grant my 2015 exemption since that insurance year started after the October 1, 2014 cutoff of the original December 19, 2013 exemption guidance. I am simply asking that these same criteria be applied to the 2016 insurance year.

The March 15, 2014 guidance is reiterated in an online DHHS resource entitled Hardship Exemptions, Age Offs, and Renewal of Catastrophic Coverage.

Current Situation. I await the Hearing Officer’s decision. We currently sit in the same position as we did in 2015, uninsured. Now in the ninth month of 2016, I still have no idea whether we will or will not be facing an ACA fine at the end of the year. In the interim, we continue to divert the money we would be spending on ACA plan premiums into a dedicated bank account that we access to provide for our own medical expenses. At this point, this approach continues to be the most cost effective option for us. As I have stated before, this is not a viable long term strategy or one that I would recommend for others. It’s risky and not a day goes by that I am not strategizing over what to do to resolve this issue once and for all. However, as the inequities of the ACA are worsening at an alarming rate, it looks like there may be no way out of this box. We will continue responding to the situation that others have created as best we can.

Sometime in the near future, I expect that the Maryland Insurance Administration will issue their decision on the 2017 individual market rate requests and that the Federal Hearing Officer will issue a decision on our 2016 exemption request. When the time comes, I will address one or both of those decisions in a Part 10 post.

Posted September 1, 2016Questions or comments can be sent to aca@meszler.com