CHA News Article

HHS Announces it Will Not Prohibit Foundation Payments to QHPs

The U.S. Department of Health and Human Services (HHS) released information yesterday in response to a request for clarity from the American Hospital Association and the Catholic Health Association of the U.S. regarding qualified health plan issuers accepting premium and cost-sharing payments from third-party payers. HHS Secretary Kathleen Sebelius wrote that, “as a general matter, such payments are not prohibited by HHS’ rules to the extent they are provided in a manner consistent with the February 7, 2014 FAQ.”

While that FAQ stated that the department did not discourage such subsidies, a March 19 interim final rule regarding third-party subsidies created uncertainty regarding HHS’ official position because it did not include the Feb. 7 FAQ statement regarding premium and cost-sharing payment from charitable foundations. According to HHS, payments must be made on behalf of recipients who “satisfy defined criteria that are based on financial status and do not consider enrollees’ health status,” and should cover the entire policy year. Hospitals should seek the advice of counsel to ensure the foundation is properly established and that the appropriate guidelines are followed.