Understanding Ohio's State Innovation Waiver
Ohio’s 2018-2019 operating budget (House Bill 49), required the Director of the Ohio Department of Insurance (ODI) to submit an application for a 1332 innovation waiver on behalf of the state of Ohio to the United States Department of Health and Human Services (HHS) and required the application to waive both the individual and the employer mandates.
Under the Affordable Care Act (ACA), most Americans are required to either have health insurance or pay a tax penalty. This is often called the “Individual Mandate” or “Individual Shared Responsibility Fee.” In addition, most large employers are required to offer health insurance coverage to their employees or pay a fine which is known as the “employer mandate.
Ohio's 1332 Waiver Request
After the passage of the operating budget, the department began working with actuarial firm Oliver Wyman to model different scenarios that could be submitted under 1332 waiver requirements while also following the requirements laid out in HB 49. Before modeling could begin, however, Oliver Wyman gathered data from a variety of sources to construct a baseline understanding of Ohio’s current health insurance market.
Using the baseline information, Oliver Wyman has been working on different options the state could pursue as part of waiving the individual and employers mandates. The direction of that work changed, however, at the end of 2017.
On December 22, 2017, Congress passed sweeping tax reform legislation that included changes to the individual mandate. The legislation “zeroed out” the penalty that is associated with the individual mandate meaning there is no longer a fine for not having insurance. However, it did not eliminate the mandate itself.
Waiving the Individual Mandate
Because the federal tax reform legislation did not eliminate the actual requirement to have health insurance and because HB 49 requires ODI to purse a waiver eliminating this individual mandate requirement, ODI submitted an application to HHS requesting to waive the individual mandate in Ohio.
The application includes a completed checklist that states must fill out when seeking a waiver, a summary of comments and testimony received regarding Ohio’s application, and Oliver Wyman’s analysis that projects the impacts of the waiver request on Ohio’s insurance market.
Sections 8 and 9 of the waiver application checklist have been updated and submitted to HHS. Those updates are included in this version of the checklist.