During a House Ways and Means Health Subcommittee hearing held on Wednesday, several witnesses emphasized the need for final regulations on a number of Affordable Care Act (ACA) provisions and programs, including those related to the future insurance exchanges (“Exchanges”). While the U.S. Department of Health and Human Services (HHS) has issued a number of bulletins and other guidance on the ACA, these documents lack finality and the force of law that employers and health insurance providers need to implement the ACA’s many benefits changes, panelists said. As outlined in the hearing advisory, final regulations governing mandated benefit packages, new insurance regulatory mandates, expected enrollee costs, and the future Exchanges have yet to be issued.

This lack of guidance regarding the implementation of the Exchanges “could result in severe market disruption,” according to the Pennsylvania Insurance Commissioner.

Speaking on behalf of the National Retail Federation, E. Neil Trautwein, Vice President of the Employee Benefits Policy Counsel, recognized that agencies are balancing competing concerns, but said that “the fate of health insurance exchanges will be a significant indicator for the success or failure of the ACA itself.” He noted that the “clock is ticking,” and that employers in the retail industry typically need 6-9 months to prepare for coverage in an average benefits year, and that 2014 “will not be normal.” Therefore, “employers will be hard pressed to make intelligent choices regarding their options in 2014 without key details” such as what constitutes an essential health benefits (“EHB”) package.

Trautwein testified that although the HHS has been fairly cooperative and solicitous of the retail industry and has issued guidance that has helped accommodate workforce concerns, employers do not want to revisit these concerns each year. Although the guidance is helpful, he claimed, it lacks the finality employers need.

Daniel T. Durham, Executive Vice President, Policy and Regulatory Affairs, America’s Health Insurance Plans, outlined a number of areas in which he claimed there is an “urgent” need for regulatory clarity. Like Trautwein, Durham testified that there is insufficient information on what constitutes an EHB package that must be offered in all qualified health plans (QHPs) as of 2014. The EHB bulletin the HHS issued in December 2011 is not enough, he said.

Durham noted also that the HHS needs to make available an actuarial calculator which health plans can use to compute and report the plan’s actuarial value, as the law requires that coverage sold through the Exchanges must be at one of four actuarial value levels: 60% (bronze); 70% (silver); 80% (gold); and 90% (platinum). Durham stated that “as a result of these provisions, millions of people may be forced to purchase health insurance that is more comprehensive – and more expensive – than they currently have.” He stated further that “health plans must have clear guidance on how to accurately calculate the actuarial value of the plans they intend to offer in the individual and small group markets both inside and outside the exchange.”

Similarly, insurers need final regulations governing certification standards for qualified health plans. “Health plans must know all the requirements necessary to be certified as a QHP to develop products appropriately.”

Heather Howard, Director of the State Health Reform Assistance Network and lecturer at Princeton University, testified that despite the lack of final regulations, many states are “actively” on track to implement their Exchanges, and that the law’s flexibility has allowed them to choose an EHB plan based on what works in their state. Rep. Jim McDermott (D-WA) agreed with Howard’s position, claiming that his state’s Exchange “is ready to go.”

On a separate but related issue, James F. Blumstein, University Professor of Constitutional Law and Health Law & Policy at Vanderbilt Law School, claimed that although the IRS has taken the position that both state- and federally-run Exchanges can provide tax subsidies to certain income-qualifying individuals, the statute itself authorizes only state-run exchanges to do so. This is an important issue for large employers who will be required to pay a per-employee penalty if even one employee receives a subsidy to purchase health insurance through the Exchanges. According to Blumstein, this issue will likely face a future legal challenge.

A complete list of panelists and links to their written testimony can be found here.