Statutes - Federal - Health Care Claims Disputes - LibGuides at Ave Maria School of Law

Affordable Care Act - Impact on Preemption

The Patient Protection and Affordable Care Act states that it “shall not be construed to supersede any provision of State law which establishes, implements, or continues in effect any standard or requirement solely relating to health insurance issuers in connection with individual or group health insurance coverage except to the extent that such standard or requirement prevents the application of a requirement of this part." However, the Act specifically states that nothing in the Act “shall be construed to affect or modify the provisions of section 1144 of Title 29 [ERISA] with respect to group health plans."

17 Fla. Prac., Insurance Law § 13:11 (2012-2013 ed.)

Affordable Care Act - Statutes

The Affordable Care Act is codified mainly in two sections of USC.

The "taxing" aspect is implemented within the Internal Revenue Code beginning with the "Requirement to maintain minimum essential coverage." at 26 U.S.C.A. § 5000A (West).

And, the healthcare aspects of the program are codified in The Public Health and Welfare Code beginning § 18091 with the "Requirement to maintain minimum essential coverage; findings" at 42 U.S.C.A. § 18091 (West).

Affordable Care Act - Primary Regulations

State Health Insurance Exchanges

The regulation of individual state Health Insurance Exchanges begins with 45 C.F.R. § 155.100, Establishment of a State Exchange, which provides that states "may elect to establish an Exchange that facilitates the purchase of health insurance coverage." 45 C.F.R. § 155.100.

Premium Subsidy

26 C.F.R. § 1.36B–2, Treas. Reg. § 1.36B–2 provides "Eligibility for premium tax credit" for those making up to 400% of the poverty level who are not Medicaid eligible. 26 C.F.R. § 1.36B–2.

Existing Group Health Plans May Continue

29 C.F.R. § 2590.715–1251 preserves the right to maintain existing coverage consistent with a business's decision to provide coverage.

Regulation of Insurance Reserved to States

The regulation of health insurance as well as other insurance products was reserved to the states by McCarran-Ferguson Act of 1945. The statute states "Congress hereby declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States."

15 U.S.C.A. § 1011 (West)

This became significant when ERISA was implemented and required some finesse to separate the administration of group health insurance programs from the construction of those insurance policies. A second important distinction also came with the advent of employer, self-funded health coverage. Absent a clear determination that these employer plans were not insurance, the states would have been permitted to regulate them and effectively preempt ERISA. Instead, the reservation of insurance regulation by the states was sharply narrowed to only those acts and actions governing insurance products themselves and not the benefits included under them nor the administration of contracted insurance benefits.

This same distinction is being drawn for Medicare Advantage.

The real questions at hand will be (1) the handling of expanded Medicaid benefits and (2) the handling of actions arising from the state insurance exchanges created by the Affordable Care Act. The Medicaid question will result from states accepting 100% federal funds for the insured. The individual insurance question will result from the federal government establishing the insurance exchange programs and from the federal funds expended for qualifying individuals and families up the to 400% of poverty line.

ERISA Statute

The detailed provisions of § 502(a) (29 U.S.C.S. § 1132(a)) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.S. § 1001 et seq., set forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. The six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.

29 USCS § 1001

Medicare Advantage

Medicare Advantage preempts state laws relative to benefits determination with procedures for administration of this described in the CFR. 42 U.S.C.A. § 1395w-26.

42 C.F.R. § 422.402 implements this portion of the statute: "The standards established under this part supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to the MA plans that are offered by MA organizations."

42 C.F.R. § 422.402.

An excellent discussion of preemption, the fact specific questions as they relate to MA plan induced damages can be found in the attached paper. If the mistakes of the MA plan can be remedied by a restoration of benefits, Medicare administrative review procedures must be used. Where the damages are cannot be remedied through a restoration of benefits the injured party may not be so confined anto the prescribed grievance process ad may be able to sue the Medicare Advantage plan in state or federal court.

John K. DiMugno, The Evolving Law on Federal Preemption of Extracontractual Claims Against Medicare Advantage Plans, Experience, 2013.

Medicare - Statutory and Regulatory links

The Medicare Program is enacted via Title XVIII of the Social Security Act at 42 USC § 1395 et seq.

The implementation of the Medicare Program via the Center for Medicare and Medicaid Services (CMS) is at 42 CFR 400.200 et seq.

TRICARE - Statutory and Regulatory links

The TriCare Program is enacted via 10 U.S.C.A. Subt. A, Pt. II, Ch. 55 beginning at § 1076d.

The TriCare Program which is established for the purpose of implementing a comprehensive managed health care program for the delivery and financing of health care services in the Military Health System is implemented at 32 C.F.R. § 199.17.

Health Maintenance Organizations - HMO

CFR Implementation of 42 USC 300e
Title 42. Public Health
Chapter IV. Centers for Medicare & Medicaid Services, Department of Health and Human Services
Subchapter B. Medicare Program
Part 417. Health Maintenance Organizations, Competitive Medical Plans, and Health Care Prepayment Plans

C.F.R. T. 42, Ch. IV, Subch. B, Pt. 417, Refs & Annos

42 U.S.C.A. § 300e et seq authorizes the federal standards for Health Maintenance Organizations and defines an HMO as "a public or private entity which is organized under the laws of any State and which (1) provides basic and supplemental health services to its members in the manner prescribed by subsection (b) of this section, and (2) is organized and operated in the manner prescribed by subsection (c) of this section." 42 U.S.C.A. § 300e (West)

Health Care Claims Disputes: Statutes - Federal