- Open enrollment for 2021 health plans ended on December 15, 2020. The open enrollment period for 2022 coverage will run from November 1 through December 15, 2021.
- Twelve insurers will offer plans in Virginia’s exchange for 2022, including three newcomers (12 is a record high for insurer participation in Virginia’s exchange).
- For 2022, six of the nine current insurers have proposed rate decreases, and the overall average proposed rate change is a decrease of 4.8% (third consecutive year of decreasing rates).
- State legislation calls for a fully state-run exchange by 2023; federal approval granted for transition to state-run exchange using federal enrollment platform as of fall 2020.
- Short-term health plans can be sold in Virginia with initial plan terms of up to three months (this took effect in July 2021, due to legislation that was enacted in 2020; prior to that, short-term plans were allowed to have terms of up to 364 days in Virginia).
- Medicaid expansion took effect in January 2019; more than 571,000 people have gained coverage as a result.
- Governor Northam vetoed expansion of short-term plans, AHPs, catastrophic plans
- Under a law that took effect in 2018, sole proprietors without employees can buy group plans as long as they have a self-employed tax return from the previous year.
- Enrollment in private exchange plans dropped to about 262,000 as of 2021, but enrollment in the state’s expanded Medicaid has continued to grow.
Virginia exchange overview
The exchange/marketplace in Virginia is more robust than in most states, with nine participating insurers in 2021, and three additional insurers joining for 2022 (coverage areas are localized; different insurers offer plans in different areas of the state). Virginia Premier joined the exchange for 2019, Oscar joined for 2020, and Optimum Choice joined for 2021, although Virginia Premier left the marketplace at the end of 2020. For 2022, Aetna, Innovation Health Plan, and an additional unnamed insurers will join the exchange. Six insurers in Virginia’s marketplace have proposed premium reductions for 2022, after overall average rates also declined in 2020 and 2021.
As of the fall of 2020, Virginia has a state-run exchange that uses the federally run enrollment platform. This means the state oversees the exchange, but applicants enroll via HealthCare.gov (prior to the 2021 plan year, Virginia relied fully on the federally-run exchange but was one of seven federally run exchange states that conducted its own plan management, taking an active role in overseeing the plans sold in the exchange).
From a consumer’s standpoint, nothing changed in the fall of 2020 — enrollments are still conducted through HealthCare.gov, just as they have been since the fall of 2013. But Virginia joined four other states (Arkansas, Kentucky, Oregon, New Mexico, and Maine) that have an SBE-FP model. Maine’s SBE-FP was also new for 2021, and two additional states — Pennsylvania and New Jersey — that had SBE-FP models in 2020 transitioned to fully state-run exchanges in the fall of 2020. In the fall of 2021, Kentucky, New Mexico, and Maine will all transition to fully running their own exchanges.
Virginia’s plan is to transition to a fully state-run exchange by 2023, as authorized by legislation that was enacted in April 2020.
When can I enroll in health insurance in Virginia?
Open enrollment for 2021 health plans in Virginia has ended. But you may still be able to enroll in coverage for 2021 if you experience a qualifying life event.
Open enrollment for 2022 health plans will begin November 1, 2021, and is expected to continue until January 15, 2022. Coverage will take effect January 1, 2022, as long as you enroll by December 15, 2021.
Learn more in our comprehensive guide to open enrollment.
What insurers offer health plans in Virginia's exchange?
As of 2021, there are nine insurers that offer health plans in Virginia’s exchange. For 2022, three additional insurers plan to participate, bringing the total to 12. When the enrollment window for 2022 coverage begins on November 1, 2021, health plans will be available in Virginia’s exchange from the following insurers:
- Aetna Life (new)
- Group Hospitalization and Medical Services, Inc.
- Health Keepers (Anthem)
- Innovation Health Plan (new)
- Kaiser Foundation Health Plan of the Mid-Atlantic
- Piedmont Community Healthcare (and Piedmont HMO)
- Oscar Health
- Optimum Choice
- Addition insurer that has not yet been named by state regulators
Reinsurance legislation passed, expected to take effect as of 2023
In March 2021, Virginia enacted legislation to create a reinsurance program. Virginia H.B.2332 calls for the state to submit a 1332 waiver proposal to the federal government by January 1, 2022, seeking federal pass-through funding for the reinsurance program (reinsurance reduces overall premiums, and thus lowers premium subsidies as well; a 1332 waiver allows the state to recoup the savings and use it to fund the reinsurance program, as opposed to just letting the federal government keep the savings).
Virginia’s State Corporation Commission and Bureau of Insurance have been working on the specifics for the reinsurance program, and will have a draft available for public comments by October. The final proposal will be submitted to the federal government in December 2021. That will give the federal government time to review and approve the waiver before insurers file proposed rates for 2023 coverage in the spring of 2022.
Reinsurance is primarily important as a tool to reduce premiums for people who do not qualify for premium subsidies in the marketplace. That isn’t as important in 2021 and 2022, due to the American Rescue Plan‘s expansion of premium subsidies (specifically, the elimination of the “subsidy cliff”), but subsidy availability for 2023 and future years is still up in the air. If the ARP’s subsidy enhancements are not made permanent, reinsurance will once again be an important tool that states can use to make coverage more affordable for people with income above 400% of the poverty level.
Insurers propose average rate decrease of 4.8% for 2022; plus three additional insurers for 2022
Average premiums in Virginia’s individual/family market declined in 2020 and 2021, and insurers have proposed another overall average rate decrease for 2022. The proposed average rate change is a decrease of 4.8%.
Virginia’s exchange will also have three additional insurers offering plans for 2022. Aetna, Innovation Health Plan, and a third carrier that has not yet been named (details for that carrier aren’t available in SERFF or Virginia’s rate proposal presentation), but the state did indicate that an additional carrier plans to participate in the exchange, bringing the total number of exchange insurers to 12 — the highest it’s ever been.
In the first several years of ACA implementation, rate proposals for the coming year were typically made available in May, as the state has one of the earliest rate filing deadlines in the country. That’s still the case — rate filings for 2022 plans were due on May 21, 2021 in Virginia — but the state now suppresses the data in SERFF (the filing system) until July 30, when the details are publicized by the federal government (public access to SERFF was restored as of August 11, 2021, giving consumers access to the data on both SERFF and the federal ratereview.healthcare.gov site).
In August 2021, the Virginia Bureau of Insurance published a summary of the rate changes that insurers had filed for 2021. Additional details are available in SERFF and on the federal government’s rate review page. The insurers that offer individual market coverage through Virginia’s exchange have proposed the following average rate changes for 2022:
- CareFirst: 7.7% decrease
- Cigna: 3% increase
- Group Hospitalization and Medical Services, Inc.: 7.7% increase
- Health Keepers (Anthem): 2.8% decrease
- Kaiser Foundation Health Plan of the Mid-Atlantic: 13% decrease (second consecutive year with a 13% decrease)
- Optima: 3.8% decrease
- Piedmont Community Healthcare (and Piedmont HMO): 11.1% decrease
- Oscar Health: 6.3% decrease
- Optimum Choice: 11.8% decrease
- Aetna: New for 2022
- Innovation Health Plan: New for 2022
- Unnamed additional insurer: New for 2022
So across the nine returning insurers, six have proposed rate decreases — including Health Keepers, which has nearly half of the market share. The overall average proposed rate change is a decrease.
(Details about rate changes in prior years are available further down this page.)
New law calls for the creation of a state-run exchange in Virginia by 2023; first step was a transition to a state-run exchange using federal enrollment platform in the fall of 2020
With Democrats gaining control of both chambers of Virginia’s legislature in the 2019 election, Governor Northam began outlining his future plans, noting “this is a blue state.” Among those plans is a state-run health insurance exchange, and lawmakers wasted no time in drafting several bills that would create a state-run exchange.
Virginia HB1428, which was signed into law in April 2020, calls for Virginia to create a state-run health insurance exchange that would make plans for individuals and small businesses available for purchase by 2023. And SB732, which was also enacted n April 2020, calls for the creation of a state-run exchange and will also add a line to the Virginia tax return asking filers whether they were insured during the year. For those who were uninsured, the tax form will ask if they consent to have the information from their tax return shared with the Virginia Department of Medical Assistance Services to be used to determine whether the household might be eligible for Medicaid.
In August 2020, Northam announced that CMS had approved Virginia’s plan to transition to a state-run exchange using the federal enrollment platform (ie, HealthCare.gov) in the fall of 2020. So while enrollments is still done through HealthCare.gov for 2021 and 2022 health insurance plans in Virginia, and HealthCare.gov’s call center is used by enrollees, the state is now overseeing the rest of the exchange operations. Virginia and Maine joined Arkansas, Kentucky, Oregon, and New Mexico, all of which already had state-run exchanges that use HealthCare.gov for enrollment (Pennsylvania and New Jersey also used that same model in 2020, but transitioned to fully state-run exchanges in the fall of 2020; Maine, Kentucky, and New Mexico will all transition to fully state-run exchanges in the fall of 2021).
Virginia’s plan is to transition to a fully state-run exchange by 2023, so this will continue to be a work in progress. SB732 calls for the state to establish a state-run exchange by 2023, overseen by the Virginia Bureau of Insurance. The exchange would be funded with an assessment on insurers that wouldn’t exceed 3 percent of premiums (for plans sold both on- and off-exchange). The current fee for HealthCare.gov is also set at 3 percent of premiums, although it’s only 2.5 percent for state-run exchanges that use the federal enrollment platform. Since Virginia has transitioned to this model for the 2021 plan year, the cost to use HealthCare.gov is lower than it would otherwise have been.
Medicaid expansion took effect in January 2019; more than 571,000 have gained coverage
After years of debate on the issue, and more than a hundred thousand low-income Virginia residents having no realistic access to health coverage, Virginia lawmakers passed a budget in 2018 that called for Medicaid expansion, and Governor Northam signed it into law in June 2018. Roughly 400,000 Virginia residents were initially expected to be eligible for Medicaid under the new rules, but that was pre-COVID (the pandemic has driven Medicaid enrollment sharply higher nationwide, as people have become eligible due to widespread job/income losses).
Enrollment in Virginia’s expanded Medicaid began in November 2018, with coverage effective as of January 2019. By February 2020, more than 382,000 people were covered under Virginia’s expanded Medicaid. That number had grown to more than 452,000 by August 2020, and to 571,034 by August 2021.
As is the case in other states that have expanded Medicaid, the federal government will always pay the majority of the cost of covering the newly eligible population, but Virginia is responsible for paying 10 percent of the cost.
The legislation also called for the state to seek federal approval to implement a work requirement for able-bodied Medicaid expansion enrollees, and to charge premiums of up to 2 percent of income for enrollees with income above the poverty level (under Medicaid expansion, people with income up to 138 percent of the poverty level are eligible for coverage). The state submitted the work requirement proposal to the federal government for review, but after Democrats took control of the Virginia legislature in the 2019 election, Gov. Northam announced that the state was pausing the work requirement negotiations. Several months later, in mid-2020, Northam officially withdrew the work requirement proposal, after lawmakers in the state had eliminated the work requirement provisions from Virginia law. So Medicaid in Virginia has been expanded under the terms of the ACA, with no strings attached.
An estimated 89,000 people who had subsidized individual market coverage through Virginia’s exchange in 2018 were expected to become eligible for Medicaid instead, as of January 2019. Since lower incomes are correlated with poorer health, this was expected to improve the overall health of the private market risk pool, and insurers in Virginia filed revised 2019 rates after the Medicaid expansion legislation was signed.
At ACA Signups, Charles Gaba calculated that the revised average rate increase was 11.34 percent, as opposed to 13.4 percent in the initial filings. And once rates were approved, the average increase ended up even lower, at 9.6 percent.
As expected, enrollment in private plans in Virginia’s exchange was much lower for 2019 than it was for 2018, with about 72,000 fewer people enrolled for 2019. Enrollment dropped nationwide in states that use HealthCare.gov (due in large part to the elimination of the individual mandate penalty and the reduced federal funding for marketing and enrollment assistance). But Virginia’s enrollment reduction was much larger than most states’ and is due in large part to the expansion of Medicaid.
Enrollment in Virginia’s exchange: 2014-2021
Like most states that use HealthCare.gov, enrollment in Virginia’s exchange peaked in 2016 and began to decline after that. The decline was particularly significant in 2019, when Medicaid expansion took effect in Virginia. Prior to 2019, people with income between 100 and 138 percent of the poverty level were eligible for premium subsidies to purchase private plans in the exchange, whereas they became eligible for Medicaid instead as of 2019.
And although nationwide enrollment increased slightly in 2021, it declined again in Virginia, by more than 3 percent. That could be attributed to the still fairly new expansion of Medicaid, combined with the effects of the COVID pandemic and people transitioning onto Medicaid due to job/income losses. As noted above, enrollment in Virginia’s fairly new Medicaid expansion coverage has increased sharply during the pandemic, with more than 571,000 people enrolled as of August 2021.
Here’s a summary of enrollment in private individual market plans in Virginia’s exchange each year (these numbers represent the number of people who bought plans during open enrollment; the number fluctuates throughout the year as people drop their coverage and others enroll via special enrollment periods).
- 2014: 216,356 people enrolled
- 2015: 385,154 people enrolled
- 2016: 421,897 people enrolled
- 2017: 410,726 people enrolled
- 2018: 400,015 people enrolled
- 2019: 328,020 people enrolled
- 2020: 269,474 people enrolled
- 2021: 261,943 people enrolled
Rate changes in prior years
Although average premiums decreased in Virginia for 2020 and 2021, that had certainly not been the case in previous years. Here’s a summary of how rates have changed over the years in Virginia’s individual market (note that all rate changes apply to full-price premiums; after subsidies are applied, the rate changes can be much different).
2015: Average rate increase of 10.2%
For all 14 carriers in the individual market in Virginia (including off-exchange plans), PricewaterhouseCooper data indicated a weighted average finalized premium increase of 10.2 percent for 2015.
But for people who had the benchmark Silver plan, price increases were more muted, mostly averaging 3 percent to 6 percent in much of the state, especially for enrollees willing to shop around in order to make sure they still had the second-lowest-cost Silver plan in 2015. The Virginia Association of Health Plans called the price increases “relatively modest” for people who were enrolled in an exchange plan in 2014 and then renewed their coverage or switched to another exchange plan for 2015.
The Commonwealth Fund conducted an analysis of rate changes across all plans and metal levels in the exchange, and found a breathtaking average rate decrease of 56 percent. But their report explained that this was because Optima Health, which had previously offered a silver plan that cost $2,000 a month (seven times the average rate), stopped offering that plan for 2015, which brought the average cost way down even though the change would have been much more muted without taking into consideration the very high-priced Optima plan (which probably wasn’t purchased by many shoppers in 2014).
2016: Average rate increase of 8.5%
Regulators in Virginia announced approved rate changes for 2016 in early October 2015. For carriers that offer individual plans in the Virginia exchange, rate changes for 2016 ranged from a 3.34 percent decrease (Innovation Health Insurance Co.) to a 19.1 percent increase (Group Hospitalization and Medical Services). For the entire individual market—which includes five carriers that only offer plans off-exchange (two of which had increases in excess of 14 percent)—the overall weighted average rate increase in Virginia was 8.5 percent for 2016.
2017: Average rate increase of 18.4%
There were ten insurers offering plans in the Virginia exchange for 2017. The weighted average rate increase across all of them was just over 18 percent. The average benchmark plan (second-lowest-cost silver plan) premium in Virginia was 10 percent more expensive in 2017 than it was in 2016 (that’s less than half the 22 percent average increase nationwide).
Aetna offered all new plans for 2017, replacing Coventry’s 2016 plans. But Aetna subsequently exited the Virginia market altogether at the end of 2017.
CareFirst Blue Choice and GHMSI terminated all of their bronze plans at the end of 2016, and mapped bronze enrollees to silver plans instead.
For an analysis of the rate review process that took place in Virginia during the summer of 2016, ACAsignups has a comprehensive review of the initial rate filings in Virginia for 2017, an updated version that provides additional clarity, and a revised version with revisions as of August 2016.
2018: Average rate increase of 57.7%
When rates for 2018 were being set in the spring of 2017, insurers in Virginia initially assumed, for the most part, that funding for cost-sharing reductions (CSR) would continue in 2018. But they revised the rate filings later in the summer to reflect the new assumption that CSR funding would not continue, adding the cost of CSR to silver plan rates. Ultimately, the Trump Administration announced in mid-October that CSR funding would end immediately, so it was wise planning on the part of insurers to have added the cost of CSR to their premiums for 2018 (insurers are still required to provide CSR benefits to all eligible enrollees, regardless of whether the insurer is being reimbursed for the costs).
The seven insurers that offered coverage in the Virginia exchange in 2018 increased their average premiums between 34 and 81 percent for 2018, with an average increase of 57.7 percent. Silver plans generally had the most significant rate increases, since the cost of CSR was added to their premiums.
According to a Kaiser Family Foundation analysis of premium changes from 2017 to 2018 for a 40-year-old, the Charlottesville, Virginia area had the highest percentage increase in pre-subsidy premiums in the whole country, at all metal levels. For a 40-year-old, the lowest-priced bronze plan in the Charlottesville area was 247 percent more expensive than it was in 2017. For silver, it was 234 percent more, and for gold, it was 195 percent more. (All of these increases are based on a person whose income is above 400 percent of the FPL (Federal Poverty Level), making them ineligible for premium subsidies.)
It’s noteworthy that the Charlottesville area only had plans available from Optima in 2018, whereas plans were available from Aetna and Health Keepers in 2017. Optima had the largest percentage increase of any of the insurers in Virginia for 2018, and in areas where they offered coverage along with one or more other insurers for 2017, Optima’s rates tended to be on the higher end of the spectrum in 2017 as well.
But although Optima’s average percentage rate increase was the largest in the state, their 2018 rates vary from one area of the state to another. By and large, their rates are lower in the areas where they already offered coverage in 2017, mid-range in Halifax and Mecklenburg counties (where they expanded for 2018), and highest in the Charlottesville area (where they also expanded for 2018, and where they were the only insurer offering plans for 2018). It’s noteworthy that that Optima’s rates were so high that their medical loss ratio dropped to just 49 percent for 2018, resulting in huge refunds for consumers in 2019.
For people who get premium subsidies, the subsidies are much larger for 2018 than they were in 2017, to offset the enormous rate increase (the unsubsidized cost of the lowest-priced silver plan for a 40-year-old went from $303/month to $1012/month in the Charlottesville area), keeping the after-subsidy cost of the benchmark plan roughly equivalent to what it was in 2017 (slightly lower, actually, but roughly equivalent). But for people who don’t get premium subsidies, the rate increase in the Charlottesville area was the most substantial in the country.
2019: Average rate increase of 9.6%
The Virginia Bureau of Insurance posted a summary of average rate increases for 2019, with data as of August 22, 2018. The BOI also put together a very informative overview of the projected 2019 market and how it compared with previous years.
At ACA Signups, Charles Gaba calculated a weighted average rate increase of just under 10 percent in Virginia’s individual market for 2019. Premium changes for 2019 varied considerably from one insurer to another: There were some decreases, but GHMSI increased average premiums by 45 percent.
The insurers attributed a significant portion of the proposed 2019 rate increases to continued federal uncertainty and regulations that will destabilize the individual markets, including the expansion of short-term plans and association health plans, and the elimination of the individual mandate penalty after the end of 2018.
As was the case for 2018, Optima’s rate filing ended up being newsworthy for 2019. Optima’s initial rate filing, submitted in May 2018, called for an average rate decrease of 1.9 percent. They filed revised rates on August 9 (SERFF filing number OPHL-131486283) that called for an average rate decrease of 7.2 percent (this is what was ultimately approved by regulators and implemented). The deadline to revise rate filings was August 10, and Anthem’s revised filing on that date included plans to expand back into some of the areas where they had exited the year before, ending Optima’s monopoly in some areas. In response, Optima filed yet another set of revised rates on August 16, proposing an average rate decrease of 16.6 percent (see the revised filings under the same SERFF tracking number that applied to the first revised filings).
But the Virginia BOI rejected this additional filing, as it came after the August 10 deadline. Optima submitted a petition to the State Corporation Commission, asking that their post-deadline rate revision be considered. But a few days later, BOI responded, clarifying that Optima’s most recent filing (submitted after the August 10 deadline) was not a response to any objections BOI had to their earlier filings, but was instead a revised filing based on a smaller projected profit margin for 2019, and filed only after Optima realized that they would no longer have a monopoly in 2019 (due to Anthem’s last-minute coverage area expansion). BOI’s response makes it clear that they had offered Optima an opportunity to lower their projected profit margin earlier in August, but the insurer chose not to do so when they believed that they would still have a monopoly in the Charlottesville area. Optima’s petition indicated that they were aware that without a monopoly, their proposed rates (a 7.2 percent average decrease, as opposed to the 16.6 percent decrease) would result in a significant reduction in enrollment and a loss of revenue. But BOI’s response essentially indicated that Optima must lie in the bed they made. In mid-September, the State Corporation Commission agreed with BOI, stating that “the decision not to submit its most competitive rates by the August 10th filing date was Optima’s, and Optima’s alone. Only after seeing a more competitive (and timely submitted) rate filing did Optima attempt to submit lower or more competitive rates after the filing date.”
Virginia Premier joined the exchange in the Richmond area (rating area 7) for 2019. Virginia Premier’s filing indicated that they expected about 4,000 people to purchase their plans for 2019, almost entirely via the exchange (Virginia Premier offered plans in the exchange in 2020 as well, but left at the end of that year).
2020: Average rate decrease of 5%
Oscar Health entered the markets in six states for 2020, including Virginia (Oscar also expanded its existing coverage area in nine other states). Oscar’s plans became available in the Richmond area for 2020 — the same area where Virginia Premier entered the market in 2019. Five of the nine insurers in Virginia’s marketplace decreased their average premiums for 2020, and the overall average rate change across all the insurers amounted to a decrease of 5%.
Health Keepers and Cigna were projected to have roughly two-thirds of the state’s total market share in 2020. Optima Health Plan and Kaiser had another quarter. The other insurers together made up the remaining 7.5 percent of the market. So of the four insurers that hold nearly all of the market share, three reduced their premiums for 2020 (in Optima’s case, the reduction was more than 20 percent), and one implemented a very slight increase.
Optima Health Insurance Company is a separate entity that only offers plans (PPOs) outside the exchange in Virginia. The rates for those plans decreased by an average of 19.6% for 2020.
2021: Average rate decrease of 3.7%.
Virginia continued to have nine insurers offering individual market coverage in the exchange in 2021, but the specifics changed a bit: Optimum Choice entered Virginia’s marketplace for 2021, with plans available in the Washington, Arlington, Alexandria, and Winchester areas. And Virginia Premier, which offered plans in Virginia’s exchange in 2020, no longer offers any individual market plans (Virginia Premier has continued to offer Medicare and Medicaid plans).
In August 2020, the Virginia Bureau of Insurance published a summary of the rate changes that insurers had filed for 2021. Additional details are available in SERFF and on the federal government’s rate review page, which indicates that the rate filings the BOI published in August were ultimately approved by state and federal regulators.
Overall, the average rate change for 2021 amounted to a decrease of 3.7%.
Governor has vetoed bills that would have expanded access to short-term plans, association health plans, and catastrophic plans
Virginia lawmakers passed legislation in 2018 to allow short-term plans to have durations up to 364 days (S.B.844), to expand access to association health plans (S.B.934 and S.B.935) and to direct the state to seek permission from the federal government to allow anyone to purchase a catastrophic plan in the individual market (S.B.964).
But Governor Northam vetoed all four bills, based on concerns that they would “put Virginians at risk of being underinsured, result in rapidly increasing Marketplace premiums, and undermine key protections in the Affordable Care Act.”
Virginia has somewhat convoluted rules for short-term plans. Federal regulations finalized by the Trump administration in 2018 allow short-term plans to have terms of up to 364 days (and total duration, including renewals, of up to three years), and there are short-term plans available in Virginia (from out-of-state association group plans) with 364-day terms. But the legislation that Northam vetoed would have relaxed the rules across the board in Virginia. (Note that Virginia lawmakers subsequently enacted legislation in 2020 that restricts short-term health plans to terms of no more than three months; this took effect in July 2021).
Under ACA rules, catastrophic plans are only available to people who are under the age of 30 or eligible for a hardship exemption from the ACA’s individual mandate. If S.B.964 had been enacted, Virginia would have sought permission to relax these rules and allow anyone to purchase a catastrophic plan.
Catastrophic plans are compliant with the ACA, in that they cover all of the essential health benefits, have the same out-of-pocket maximums as other plans, cover pre-existing conditions, and cannot impose lifetime or annual benefit limits. But they are in separate risk adjustment pools, which means that premiums collected from people on catastrophic plans (who tend to be healthier than average) are not being used to provide risk adjustment funding for metal level plans (particularly on the higher end of the metal scale, these plans tend to have enrollees who are sicker than average).
Group coverage for the self-employed
As noted above, the Charlottesville, Virginia area made headlines in the fall of 2017, when it became apparent that 2018 individual market rate hikes in that area would be roughly triple what they had been in 2017 for people who didn’t qualify for premium subsidies (for those who did qualify for premium subsidies, the subsidies grew substantially in 2018 to keep the after-subsidy premiums affordable).
The small group market, however, is much more stable than the individual market, as is the case in most states. In an effort to address the situation and provide access to affordable coverage for some people impacted by the subsidy cliff, Governor Northam signed S.B.672 into law in April 2018; it took effect in July 2018. The legislation, sponsored by Senator Creigh Deeds (D, 25th District), allows self-employed people, including a sole member of an LLC or a sole shareholder of a corporation, to be considered “small employers” and thus purchase coverage in the small group market, as of July 2018. From the text of the legislation:
“Small employer” means in connection with a group health plan or health insurance coverage with respect to a calendar year and a plan year, an employer who employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year. In determining whether a corporation or limited liability company employed an average of at least one individual during the preceding calendar year and employed at least one employee on the first day of the plan year, an individual who performed any service for remuneration under a contract of hire, written or oral, express or implied, for a (i) corporation of which the individual is its sole shareholder or an immediate family member of such sole shareholder or (ii) a limited liability company of which the individual is its sole member or an immediate family member of such sole member, shall be deemed to be an employee of the corporation or the limited liability company, respectively. “Small employer” includes a self-employed individual. (emphasis added).
Self-employed individual” means an individual who derives a substantial portion of his income from a trade or business (i) operated by the individual as a sole proprietor, (ii) through which the individual has attempted to earn taxable income, and (iii) for which he has filed the appropriate Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable year. (all emphasis added to clarify the requirements of the bill).
That appears to conflict with the ACA, which requires a small business to have at least one employee in addition to the owner (and not a spouse of the owner) in order to enroll in a plan in the small group market. Indeed, the impact statement for S.B.672 notes that the legislation “may conflict with the federal Patient Protection and Affordable Care Act.”
The Virginia Bureau of Insurance confirmed that the statute “is interpreted as meaning a small group plan will be an option for an entity with 1-50 employees,” and clarified that self-employed people — without any additional employees — would be able to purchase coverage in the small group market, year-round, under the terms of the legislation.
The Virginia Bureau of Insurance clarifies several questions about the new law in an administrative letter published in June 2018. The BOI noted that “federal law shall not be construed to preempt any state law that does not “prevent the application” of the ACA. This provision grants states the flexibility to enact laws and regulations that broaden the protections in the ACA, but that do not inhibit them. SB 672 does not prevent the application of the ACA in the sense that it broadens the definition of “small employer,” and does not limit it further than contemplated by the ACA.”
In other words, because the state is making ACA-compliant coverage more available (ie, allowing sole proprietors to buy ACA-compliant coverage in the small group market) rather than less available, the state is taking the position that the new law is not in conflict with federal rules. The federal government hasn’t commented on Virginia’s new law.
Allowing a self-employed person without any employees to purchase a small group plans is very different from the concept of allowing self-employed people to join associations and thus gain access to large group plans (which is what the Trump Administration allowed; that regulation has been blocked by a federal judge).
It’s noteworthy that a similar law was vetoed in Iowa in 2018, with the governor ostensibly basing the veto on concerns about destabilizing the insurance market and on the fact that the law would conflict with federal rules. But Iowa’s governor had previously signed legislation to allow non-ACA-compliant Farm Bureau plans to be sold in the state, which will have the obvious result of destabilizing the ACA-compliant market.
The small group market and individual market are subject to nearly identical regulations under the ACA. Age rating restrictions (no more than three times as much for older people versus a 21-year-old), guaranteed-issue coverage, coverage for the essential health benefits, plans that fit into the metal level categories — all of these regulations apply to both the individual and small group markets.
But one key difference is the availability of coverage. Small group plans are available year-round, as long as the employer meets the insurer’s minimum participation requirements (for employers that don’t meet the minimum participation requirements, coverage is available for purchase between November 15 and December 15 each year, but a self-employed person without any employees would have 100 percent participation, since he or she would be the only eligible employee). In the individual market, however, coverage is only available during open enrollment (November 1 to December 15) or during limited special enrollment periods, many of which require that the person already had coverage before the qualifying event that triggered the special enrollment period.
Virginia regulators are interpreting S.B.672 as allowing a self-employed person (without employees) unrestricted access to the small group market as an alternative to the individual market. It’s easy to see how that might incentivize people who are self-employed to skip coverage in the individual market, and then enroll in a small-group plan mid-year, if and when they end up needing health care.
It’s worth noting, however, that the language of the bill (in bold and underlined above) prevents a person from becoming “self-employed” in order to immediately obtain health insurance. The legislation requires that the person had already filed a self-employment tax return for the previous year. So although the law took effect in July 2018, the only self-employed people who were able to take advantage of it in 2018 were those who filed a 2017 tax return indicating that they were self-employed. That provision remains in force going forward, so self-employed people (without any employees) can only enroll in small group coverage for 2020 if they can provide a self-employed tax return from 2019.
The advocacy group Charlottesville for Reasonable Health Insurance has created a tool that self-employed Virginia residents can use to see how much a small group plan would cost. Healthcare.gov has a rate browsing tool that people can use to see how much individual market coverage would be, but small group coverage generally isn’t available for instant online quoting. So the new tool makes it easy for people to see how much they could potentially save by purchasing a small group plan instead of an individual market plan.
Direct primary care arrangements exempt from insurance oversight
In a direct primary care agreement, a patient pays a doctor a set fee each month, in return for unlimited access to a predetermined range of primary care treatments. Such arrangements are not considered minimum essential coverage under the ACA, but questions remain at the state level in terms of whether direct primary care arrangements should be subject to insurance regulations and oversight from the state insurance department. Virginia has decided that the answer is no. During the 2017 legislative session, lawmakers passed H.B.2053 (and the companion senate bill, S.B.800) and Governor Terry McAuliffe signed the legislation into law.
Virginia’s law specifies that direct primary care arrangements are not insurance, which means they are not subject to Virginia’s insurance laws and regulatory oversight. The legislation includes specific details that must be communicated to direct primary care enrollees, including the fact that the arrangement is not insurance, provides only limited benefits, and does not meet the ACA’s coverage requirements.
[The year before, during the 2016 legislative session, lawmakers had passed HB685, a similar bill that would have exempted direct primary care plans from Virginia’s insurance laws and regulations. Governor McAuliffe vetoed HB685 in May 2016, but he signed H.B.2053 into law the following year, allowing direct primary care plans to be exempt from Virginia’s insurance regulations.]
Grandmothered plans allowed to remain in force, but only Golden Rule kept them active
Grandmothered plans are pre-2014 health insurance that was purchased after the ACA was signed into law (ie, they’re not grandfathered under the ACA). In the fall of 2013, and then in subsequent years through 2019, the Obama Administration and then the Trump Administration have announced transitional fixes to allow existing health plans to continue to renew until as late as October 2020, with coverage continuing until the end of December 2020 (this may well be extended again in the future).
Virginia was initially one of 15 states that did not accept the HHS proposal to allow grandmothered (transitional) health plans to remain in force past the end of 2014, and some reports indicated that as many as 250,000 people were going to need to transition to new coverage at the end of 2014.
But in November 2014, Virginia lawmakers passed House Bill 5011 and Senate Bill 5014, which allowed policies slated for cancellation to renew again under the terms allowed by HHS. Carriers were not required to renew plans at the end of 2014, but were given the option to do so. Ultimately, most of the carriers in the Virginia market determined that they were already too far along in the process of switching to ACA-compliant plans, and only Golden Rule and Freedom Life opted to allow transitional plans to renew at the end of 2014. Virginia is allowing insurers to continue grandmothered plans as allowed by the federal government, leaving renewal decisions up to Golden Rule and Freedom Life.
History of the Virginia exchange
Former Virginia Gov. Bob McDonnell, a Republican, opposed the Affordable Care Act. But along with the Republican-controlled General Assembly, he was conflicted as how best to resist the law’s implementation in the state.
In a 2011 letter to state legislative leaders, McDonnell wrote of extreme difficulty in determining whether “ceding control of an exchange to the federal government or creating our own is in the Commonwealth’s best interest.” The governor’s and General Assembly’s actions over the next few years reflected their shared reluctance to implement either option.
In August 2010, McDonnell appointed the Health Reform Initiative Advisory Council. The council issued a report in December 2010 and recommended that Virginia implement a state-based exchange.
The Virginia General Assembly passed legislation in 2010 to invalidate the individual mandate of the Affordable Care Act, and the state attorney general filed a lawsuit against Kathleen Sebelius, the secretary of the U.S. Department of Health and Human Services at that point, based on the new law. After a series of legal actions, the state law was ultimately ruled invalid.
In 2011, the General Assembly passed legislation that was supportive of a state-based exchange, and McDonnell signed the bill into law. However, throughout the 2012 session the General Assembly failed to pass additional legislation necessary to move ahead with exchange implementation.
In January 2014, Governor Terry McAuliffe was inaugurated in Virginia, and unlike McDonnell, McAuliffe was very supportive of the ACA and of Medicaid expansion in Virginia. His successor, Ralph Northam, is also a supporter of the ACA and was successful in expanding Medicaid in Virginia as of 2019.
HHS-run exchange, but some state oversight
Finally, after President Obama’s re-election in 2012, McDonnell notified HHS that Virginia would not proceed with a state-based exchange nor Medicaid expansion. While the norm for the federally operated exchange leaves no role for the state, McDonnell did lobby for oversight of the health plans that operate on the exchange within the state; Virginia is one of seven states with a marketplace plan management exchange.
HHS approved McDonnell’s request in March 2013, and the federally-run exchange opened for business in October 2013, with health plans overseen by the state Division of Insurance.
Although Virginia’s exchange is run by HHS, the state has a website — Cover Virginia — that provides information about Medicaid and FAMIS, along with eligibility for premium and cost-sharing subsidies in the exchange.
As of 2021, Virginia has a state-based marketplace, but still uses HealthCare.gov’s call center and enrollment platform. By 2023, however, Virginia plans to be operating its own exchange platform, and no longer using HealthCare.gov.
Virginia health insurance exchange links
Virginia Consumer Assistance Program
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care.
(877) 310-6560 / firstname.lastname@example.org
State Exchange Profile: Virginia
The Henry J. Kaiser Family Foundation overview of Virginia’s progress toward creating a state health insurance exchange.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.