CHA News Article

AHA Updates Legal Advisory on Third-Party Premium Payments in Marketplaces
Provides a legal analysis of latest developments on subsidies

The American Hospital Association (AHA) has issued an update to its April 8 Legal Advisory regarding U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius’ confirmation that payments from private, not-for-profit foundations to qualified health plans (QHPs) on behalf of individuals who enroll in coverage via the health insurance marketplaces are not prohibited. The advisory analyzes the implications of the latest developments.

“As a general matter, such payments are not prohibited by HHS’s rules to the extent they are provided in a manner consistent with the February 7, 2014 FAQ,” Sebelius wrote in a letter to AHA and the Catholic Health Association of the United States. The clarification was in response to a request from AHA and the Catholic Health Association that Secretary Sebelius confirm HHS was not discouraging hospital-affiliated or other charitable foundations from subsidizing premiums or cost-sharing expenses. A recent rule related to third-party payments had created uncertainty about the favorable view expressed in the Feb. 7 FAQ regarding foundation subsidies. Hospitals should seek the advice of counsel to ensure the foundation is properly established and that the appropriate guidelines are followed.