Forest Service
Rural Utilities Service
Census Bureau
Foreign-Trade Zones Board
International Trade Administration
National Institute of Standards and Technology
National Oceanic and Atmospheric Administration
National Technical Information Service
National Telecommunications and Information Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
National Institutes of Health
U.S. Citizenship and Immigration Services
U.S. Immigration and Customs Enforcement
Land Management Bureau
National Park Service
Federal Council on the Arts and the Humanities
Federal Highway Administration
Federal Motor Carrier Safety Administration
National Highway Traffic Safety Administration
Pipeline and Hazardous Materials Safety Administration
Comptroller of the Currency
Internal Revenue Service
Office of Investment Security
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Office of the Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development (HUD).
Correcting amendment.
The Department of the Housing and Urban Development (HUD) is correcting a final rule entitled, “Indexing Methodology for Title 1 Manufactured Home Loan Limits” that published in the
Effective April 15, 2024.
With respect to this technical correction, contact Aaron Santa Anna, Associate General Counsel for Legislation and Regulations, Department of Housing and Urban Development, 451 7th Street SW, Room 10238, Washington, DC 20410; telephone number 202-708-1793 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit
On February 28, 2024 (89 FR 14582) (FR Doc. 2024-04138), HUD published a final rule that amends the maximum loan limits for manufactured home loans insured under Title I of the National Housing Act and required regulations to implement future indexing of the loan limit amounts for manufactured homes originated under the Manufactured Home Loan program.
In reviewing the February 28, 2024, final rule, HUD identified inadvertent errors in amendatory instruction 3. This document corrects this error.
Claims, Health facilities, Historic preservation, Home improvement, Loan programs—housing and community development, Manufactured homes, Mortgage insurance, Reporting and recordkeeping requirements.
Accordingly, 24 CFR part 201 is corrected by making the following correcting amendments:
12 U.S.C. 1703; 15 U.S.C. 1639c; 42 U.S.C. 3535(d).
(d) * * *
(1) * * *
(i) 130 percent of the sum of the wholesale (base) prices of the home and any itemized options and the charge for freight, as detailed in the manufacturer's invoice;
(ii) The charge for any sales taxes to be paid by the dealer, as detailed in the manufacturer's invoice;
(iii) The actual dealer's cost of transportation to the homesite, set-up and anchoring, including the rental of wheels and axles (if not included in the freight charge);
(iv) The actual dealer's cost of purchasing and installing a central air conditioning system or heat pump, if not installed by the manufacturer;
(v) The appraised value of the developed manufactured home lot (as determined by a HUD-approved appraisal, including on-site water and utility connections, sanitary facilities, site improvements and landscaping) or the purchase price, whichever is less;
(vi) The actual dealer's cost of appurtenances to the home such as a permanent foundation, garage, carport or patio; and
(vii) Any applicable charges authorized at § 201.25(b).
(2) * * *
(i) 95 percent of the total appraised value of the home, the lot, and any appurtenances (as determined by a HUD-approved appraisal), plus 95 percent of any applicable charges authorized at § 201.25(b); or
(ii) 95 percent of the purchase price of the home, the lot, and any appurtenances.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice of proposed rulemaking (NPR); Extension of comment period.
This action extends the comment period for the NPR titled “Business Combinations under the Bank Merger Act” that was published on February 14, 2024. In that document, the OCC proposed to increase the transparency of the standards that apply to the agency's review of business combinations involving national banks and Federal savings associations. The OCC is extending the comment period closing date to allow interested persons additional time to analyze the proposal and prepare their comments.
The comment period for the NPR published on February 14, 2024, (89 FR 10010) is extended. Comments must be received on or before June 15, 2024.
Commenters are encouraged to submit comments through the Federal eRulemaking Portal. Please use the title “Business Combinations under the Bank Merger Act” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:
•
Go to
•
•
You may review comments and other related materials that pertain to this action by any of the following methods:
•
Go to
The docket may be viewed after the close of the comment period in the same manner as during the comment period.
Valerie Song, Acting Associate Chief Counsel, Christopher Crawford, Special Counsel, Elizabeth Small, Counsel, Chief Counsel's Office 202-649-5490; or Yoo Jin Na, Director for Licensing Activities 202-649-6260, Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
The NPR titled “Business Combinations under the Bank Merger Act” was published in the
Office of Investment Security, Department of the Treasury.
Proposed rule.
This proposed rule would modify certain provisions in the regulations of the Committee on Foreign Investment in the United States (CFIUS) pertaining to penalties for violations of statutory or regulatory provisions or agreements, conditions, or orders issued pursuant thereto; negotiation of mitigation agreements; requests for information by CFIUS; and certain other procedures.
Written comments must be received by May 15, 2024.
Written comments may be submitted through one of two methods:
•
Electronic submission of comments allows the commenter maximum time to prepare and submit a comment, ensures timely receipt, and enables the Treasury Department to make the comments available to the public.
•
We encourage comments to be submitted via
Meena R. Sharma, Director, Office of Investment Security Policy and International Relations at U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220; telephone: (202) 622-3425; email:
The regulations at parts 800 and 802 to title 31 of the Code of Federal Regulations (part 800 and part 802, respectively) implement the provisions of section 721 of the Defense Production Act of 1950, as amended, which is codified at 50 U.S.C. 4565 (section 721) and which establishes the authorities of the Committee on Foreign Investment in the United States (CFIUS or the Committee). Section 721 authorizes the President or his designee (
Among other things, the regulations at parts 800 and 802 include provisions that govern CFIUS's requests for information from transaction parties and other persons and their responses to those requests. For example, where CFIUS is aware of a transaction that the parties have not notified or declared to CFIUS, the Committee may request information to determine whether the transaction is a covered transaction. To help CFIUS mitigate risks to U.S. national security and ensure compliance with section 721 and its implementing regulations, this proposed rule sets forth amendments that would expand the categories of information the Committee may request from transaction parties and others. The proposed rule would also enhance the Committee's ability to communicate with parties in other contexts to include requirements to provide information for monitoring compliance with applicable obligations and determining whether a violation of such obligations has occurred.
The proposed rule also includes provisions pertaining to the negotiation of agreements to mitigate national security risk. Section 721(
A final subject addressed in this proposed rule is the maximum penalty amount that CFIUS may impose on a party for violating section 721 or the implementing regulations, including agreements entered into and conditions and orders imposed pursuant thereto, and the availability of such penalties outside the context of a declaration or notice. The regulations provide for penalties to be imposed in the following situations: (a) submitting a declaration or notice with a material misstatement or omission, or making a false certification; (b) failing to submit a timely declaration in the certain circumstances in which submission is mandatory; and (c) violating a material provision of a mitigation agreement, material condition imposed, or order issued. In each case, the amount of the penalty imposed is based on the nature of the violation. Currently, violations can result in a civil monetary penalty not to exceed $250,000 per violation, or, in certain instances, the greater of
Section 721(b)(1)(H) directs the Committee to establish a process to identify covered transactions for which no notice or declaration has been submitted to the Committee (each such transaction referred to hereafter as a “non-notified transaction”). A different provision of the Defense Production Act of 1950 (section 705), which applies to the Defense Production Act in its entirety, entitles the President “by regulation, subpoena, or otherwise, to obtain such information from . . . any person as may be necessary or appropriate, in his discretion, to the enforcement or administration of [the Defense Production Act of 1950] and the regulations or orders issued thereunder.” Section 705 further requires the President to “issue regulations insuring [sic] that the authority of [subsection (a) of section 705] will be utilized only after the scope and purpose of the investigation, inspection, or inquiry to be made have been defined by competent authority, and it is assured that no adequate and authoritative data are available from any Federal or other responsible agency.”
In furtherance of the direction in section 721(b)(1)(H) and in accordance with the authority in section 705, the regulations at sections 800.501(b) and 802.501(b) provide that the Staff Chairperson, acting on the recommendation of the Committee, may request the parties to a non-notified transaction to provide to the Committee information necessary to determine whether the transaction is a “covered transaction” or a “covered real estate transaction.” Sections 800.801(a) and 802.801(a) of the regulations address parties' obligations to respond to such requests as well as certain other requests for information.
While the foregoing provisions contemplate requests related to a transaction's potential status as “covered” (
Gathering information of the kind contemplated by the proposed amendments would allow the Committee to prioritize transactions that parties were required to submit under section 800.401 or that, in its view, otherwise warrant formal review. When the Committee is able to engage in preliminary fact-finding relevant to potential national security considerations prior to receiving a formal notice, the information it receives can inform the decision of whether and when to request the submission of a notice. In the event the Committee does request that the transaction parties file a notice, the Committee encourages the parties to submit the notice promptly so that the Committee can undertake its national security review. In the absence of a filing, CFIUS will consider all available options to protect national security, including initiating a review based on an agency notice as provided for in section 800.501(c). For the avoidance of doubt, the Committee does not intend to use its authority to obtain information related to risk as a substitute for a review or an investigation, but rather for the purpose of preventing unnecessary filings and increasing efficiency in connection with filings for transactions that may present an extant risk, benefitting both the transaction parties and national security. A similar efficiency would be gained by being able to request and require the submission of information that would enable the Committee to determine whether a non-notified transaction was one that should have been notified pursuant to the provision on mandatory declarations in section 800.401 of the regulations.
The proposed rule would further amend sections 800.801(a) and 802.801(a) to require parties to provide information to the Committee upon request in two other circumstances: (1) when the Committee seeks information to monitor compliance with or enforce the terms of a mitigation agreement, order, or condition, and (2) when it seeks information to determine whether the transaction parties had made a material misstatement or omitted material information during the course of a previously concluded review or investigation (including a review or investigation that ended with rejection of the parties' notice). The Committee currently requests information in both circumstances, but the regulations do not expressly obligate parties to respond. Under the proposed amendments, parties would be obligated to respond to such requests, failing which the Committee may seek to compel responses through issuance of a subpoena, as provided for in section 705.
Finally, the last sentence of sections 800.801(a) and 802.801(a) of the regulations states that “[i]f deemed
In order for the Committee to complete an investigation of a transaction within the time prescribed by statute (
The Committee anticipates that parties will seek extensions in certain instances including but not limited to initial mitigation proposals and in instances where the proposed risk mitigation is complex and additional time is needed to consult with the transaction parties. The Staff Chairperson may grant reasonable extension requests on a case-by-case basis, as appropriate and taking into account views of the Committee and factors such as the statutory time remaining for the case and whether the transaction has been filed before closing. The proposed rule would further provide that if the parties fail to respond within the time frame specified, the Committee, acting through the Staff Chairperson, may reject the notice, which mirrors the current practice for missed deadlines in responding to requests for follow-up information for a case in review or investigation.
Sections 800.901(a) and 802.901(a) of the regulations set the penalty amount for the submission of a declaration or notice with a material misstatement or omission or the making of a false certification at a maximum of $250,000 per violation. Section 800.901(b) sets the penalty for failure to comply with the requirements in section 800.401 pertaining to “mandatory declarations” at a maximum of $250,000 or the value of the transaction, whichever is greater, per violation. (There is no counterpart to the mandatory declaration provision in part 802, pertaining to real estate transactions.) Sections 800.901(c) and 802.901(b) set the penalty for violations of material provisions of mitigation agreements, material conditions imposed by the Committee, or orders issued by the Committee at a maximum of $250,000 or the value of the transaction, whichever is greater, per violation. The current maximum penalty amounts provided for in sections 800.901 and 802.901 are not specified in statute and were developed over 15 years ago. This proposed rule would increase the
The Committee assesses that the current penalty maximum of $250,000 (or the greater of $250,000 or the value of the transaction) may not sufficiently deter or penalize certain violations. For context, from 2013 to 2022, the median value of covered transactions filed with CFIUS pursuant to a joint voluntary notice was $170 million, with numerous transactions valued in the billions. For covered transaction declarations filed from 2018 (when declarations became an available format for submission) to 2022, the median value was over $38 million. Furthermore, under the definition of “transaction” in sections 800.249 and 802.237, covered transactions involving businesses with valuations in the billions of dollars or with substantial liquidity might still be purported to be valued at zero dollars. This circumstance is due in part to the various forms a “transaction” may take under sections 800.249 and 802.237, which include an acquisition, or takeover including the acquisition of an ownership interest, the acquisition of a voting interest, a merger consolidation, or the formation of a joint venture; a long-term lease or concession arrangement; an investment; or the conversion of contingent equity interest. If a transaction has a low value (or a valuation of zero dollars), then the value of the transaction becomes irrelevant for penalty purposes, and the maximum penalty becomes $250,000 per violation, which the Committee has determined may be an insufficient deterrent or penalty. A higher maximum penalty stated as an absolute dollar amount is therefore needed. As is the case under the current regulations, the maximum would not necessarily be imposed, but may be appropriate depending on the facts and circumstances including any aggravating or mitigating factors as described in the Committee's Enforcement and Penalty Guidelines (
In the case of sections 800.901(c) and 802.901(b) (pertaining to violations of mitigation agreements or conditions),
Separately, the proposed rule would expand the list of circumstances in which a penalty may be imposed under sections 800.901(a) and 802.901(a) respectively. Currently, the provision applies to material misstatements or omissions in a declaration or notice or false certifications. Under the proposed amendment, CFIUS penalties also would apply to material misstatements or omissions in contexts outside of declarations and notices—in particular, responses to the Committee's requests for information related to non-notified transactions, certain responses to the Committee's requests for information related to monitoring or enforcing compliance, and other responses to the Committee's requests for information, such as for agency notices, as described in sections 800.901(a)(2) and 802.901(a)(2). Penalties of this nature are not intended to apply to every material misstatement or omission in a communication between parties and the Committee related to monitoring compliance with an agreement, condition, or order entered into pursuant to section 721 and these regulations. (In any event, there are criminal penalties for making false statements to the government under 18 U.S.C. 1001.) Pursuant to sections 800.901(a)(2) and 802.901(a)(2), the Committee will notify parties in writing when parties' response to a particular communication may be subject to a penalty under section 721 and these regulations due to a material misstatement or omission. The Committee anticipates such communications to include those relevant to requests for information related to non-notified transactions, failure to file a mandatory declaration, and compliance with, or enforcement, modification, or termination of a mitigation agreement, condition, or order imposed. The majority of the Committee's communications with transaction parties subject to a mitigation agreement or condition will not be subject to section 800.901(a)(2) or 802.901(a)(2).
For the avoidance of doubt, while the amendments provided for in the proposed rule pertain to the
Under current regulations, upon receiving notice of a penalty to be imposed, the subject person may submit a petition within 15 business days of receipt of such notice, subject to an extension through written agreement with the Committee. Similarly, the Committee has 15 business days to assess the petition and issue a final penalty determination. The proposed rule would extend both time frames to 20 business days. The Committee routinely grants extensions for penalty petitions, and the Committee's experience is that extending both time frames will facilitate the review of the penalty to be imposed. Consistent with the current regulations, persons subject to a penalty may continue to request extensions for submitting a petition for reconsideration. The Staff Chairperson may also extend the time frames due to compelling circumstances.
This rule is not subject to the general requirements of Executive Order 12866, as amended, which covers review of regulations by the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB), because it relates to a foreign affairs function of the United States, pursuant to section 3(d)(2) of that order. In addition, this rule is not subject to review under section 6(b) of Executive Order 12866 pursuant to section 1(d) of the June 9, 2023, Memorandum of Agreement between the Treasury Department and OMB, which states that CFIUS regulations are not subject to OMB's standard centralized review process under Executive Order 12866.
The collection of information contained in this rule has been previously submitted to the Office of Management and Budget (OMB) for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), and approved under OMB Control Number 1505-0121. An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid OMB Control Number.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
The proposed rule makes amendments to the regulations implementing section 721 of the Defense Production Act of 1950. Section 709(a) of the Defense Production Act of 1950 provides that the regulations issued under it are not subject to the rulemaking requirements of the APA. Section 709(b)(1) instead provides that any regulation issued under the Defense Production Act of 1950 be published in the
Notwithstanding the foregoing, available data do not suggest that the proposed rule, if implemented, would have a significant economic impact on a substantial number of small entities. The proposed rule would modify certain provisions pertaining to penalties for violations, negotiation of mitigation agreements, requests for information by CFIUS, and certain other procedures. The proposed rule would not impose any new filing requirements on U.S. businesses, including small businesses, that receive foreign investment subject to CFIUS's jurisdiction.
The proposed rule expands the categories of information the Committee may request from transaction parties and others in connection with transactions that have not been notified or declared to include whether a transaction meets the criteria for a mandatory declaration and information that would enable the Committee to determine whether a transaction may raise national security considerations. This proposed change would not have a significant economic impact on a substantial number of small entities for two reasons. First, the instances in which the Committee requests this information are limited and, on average, occur less than one hundred times in a year. Additionally, the volume of overall non-notified transactions put forward to the Committee for consideration may decrease as CFIUS works through its consideration of transactions that pre-date the Committee's current, increased level of resources. Second, even if some of these transactions may involve U.S. businesses that qualify as small entities, the Department of the Treasury does not anticipate that expanding information requests for non-notified transactions will have a significant impact on the burden hours for a party response. In instances of mandatory filing requirements, transaction parties should be conducting this analysis regardless of whether the Department of the Treasury reaches out.
With regard to information requests for the purposes of monitoring compliance, the proposed rule would not create any new reporting requirements. Rather, the rule would clarify that parties are obligated under the regulations to provide information pertaining to the monitoring of a mitigation agreement, condition, or order and may be penalized for a material misstatement or omission in specified circumstances. Under the current regulations, CFIUS can penalize parties for submitting a declaration or notice with a material misstatement or omission. The amendment put forth is consistent with penalties already authorized under the current regulations.
As discussed above, the proposed rule would include a provision ordinarily requiring transaction parties to respond to national security risk mitigation proposals within three business days. The Committee anticipates that parties would seek extensions in certain instances and the Committee may grant reasonable extension requests on a case-by-case basis, as appropriate. In recent years, the volume of transactions before the Committee has been below 500 annually; only a portion of these are subject to mitigation, and of those, many do not involve small entities. Thus, this change will not have a significant economic impact on a substantial number of small entities.
The proposed rule would increase the civil monetary penalty maximum from $250,000 to $5,000,000 for certain violations and would expand the scope of circumstances in which a penalty may be imposed. The maximum penalty for a violation of material provisions of mitigation agreements, material conditions imposed by the Committee, or orders issued by the Committee would be the greatest, per violation, of (i) $5,000,000, (ii) the value of the violating party's interest in the U.S. business (or covered real estate) at the time of the transaction, (iii) the value of the violating party's interest in the U.S. business (or covered real estate) at the time of the violation, or (iv) the value of the transaction. In assessing the penalty amount, as noted above, the Committee has discretion to determine the appropriate penalty in individual cases which in many instances may be lower than the maximum allowed. In exercising this discretion, the Committee will continue to take into account the specific facts and circumstances of the violation including relevant aggravating and mitigating factors. Given the approach to determining the monetary penalty and the limited number of enforcement actions as compared to the number of transactions reviewed by the Committee each year, this proposed change will not have a significant economic impact on a substantial number of small entities.
While the Department of the Treasury believes that the proposed rule likely would not have a “significant economic impact on a substantial number of small entities” (5 U.S.C. 605(b)), the Department of the Treasury invites comments on the potential impacts of this rule on small entities.
Foreign investments in the U.S., Investment companies, Investments, Penalties, Reporting and recordkeeping requirements.
Foreign investments in the U.S., Investment companies, Investments, Land sales, National defense, Penalties, Public lands, Real property acquisition, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Department of the Treasury proposes to amend 31 CFR parts 800 and 802 as follows:
50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.
(b)(1) If the Committee determines that a transaction for which no voluntary notice or declaration has been submitted under this part, and with
(2) If the Committee determines that a transaction referred to under paragraph (b)(1) of this section is a covered transaction and may raise national security considerations, the Staff Chairperson, acting on the recommendation of the Committee, may request the parties to file a notice of such covered transaction under paragraph (a) of this section.
The addition reads as follows:
(a) * * *
(6) Reject any voluntary notice at any time after the notice has been accepted, and so inform the parties promptly in writing, if the Committee has proposed risk mitigation terms, including revisions to such terms, to the party or parties that submitted the notice and the party or parties have failed to substantively respond to such terms within three business days of the proposal, or within a longer time frame if the parties so request in writing and the Staff Chairperson grants that request in writing.
(a) This paragraph (a) sets forth requirements for parties to a transaction or other persons to provide information to the Staff Chairperson or requesting lead agency in the circumstances specified in paragraphs (a)(1) through (6) of this section.
(1) Parties to a transaction that is notified or declared under subpart D or E of this part shall provide information to the Staff Chairperson that will enable the Committee to conduct a full assessment, review, and/or investigation of the transaction.
(2) For a transaction for which no voluntary notice or declaration has been submitted and for which the Staff Chairperson has requested information as provided for in § 800.501(b), parties to the transaction or other persons shall provide information to the Staff Chairperson that will enable the Committee to determine:
(i) Whether the transaction is a covered transaction;
(ii) Whether the transaction may raise national security considerations; or
(iii) As appropriate, whether the transaction is a transaction for which a submission is or was required under § 800.401.
(3) Independent of any obligations under an agreement, condition, or order authorized under section 721(
(4) Any person that has submitted information to the Committee shall respond to requests from the Staff Chairperson for information to enable the Committee to determine whether the person made any material misstatement or omitted material information from any such submission.
(5) Parties to a transaction that have filed information with the Committee shall promptly advise the Staff Chairperson of any material changes to such information.
(6) If deemed appropriate by the Committee, the Staff Chairperson may obtain information from parties to a transaction or other persons through subpoena or otherwise, under the Defense Production Act, as amended (50 U.S.C. 4555(a)).
The revisions read as follows:
(a)(1) Any person who submits a declaration or notice with a material misstatement or omission or makes a false certification under § 800.404, § 800.405, or § 800.502 may be liable to the United States for a civil penalty not to exceed $5,000,000 per violation.
(2) Any person who, in response to a request from the Staff Chairperson or a lead agency, submits to the Committee any information pursuant to § 800.801(a)(2), (3), or (4) or (c) with a material misstatement or omission may be liable to the United States for a civil penalty not to exceed $5,000,000 per violation. This paragraph (a)(2) shall apply only with respect to responses to requests that were made in writing, specified a time frame for response, and indicated the applicability of this paragraph (a).
(3) The amount of the penalty imposed for a violation as provided for in this paragraph (a) shall be based on the nature of the violation.
(c)(1) Any person who, after December 22, 2008, violates, intentionally or through gross negligence, a material provision of a mitigation agreement entered into before October 11, 2018, with, a material condition imposed before October 11, 2018, by, or an order issued before October 11, 2018, by, the United States under section 721(
(2) Any person who violates a material provision of a mitigation agreement entered into on or after October 11, 2018, and before [EFFECTIVE DATE OF FINAL RULE], with, a material condition imposed on or after October 11, 2018, and before [EFFECTIVE DATE OF FINAL RULE], by, or an order issued on or after October 11, 2018, and before [EFFECTIVE DATE OF FINAL RULE], by, the United States under section 721(
(3)(i) Any person who violates a material provision of a mitigation agreement entered into on or after
(A) $5,000,000;
(B) The value of the person's interest in the U.S. business (or, as applicable, the parent of the U.S. business) at the time of the transaction;
(C) The value of the person's interest in the U.S. business (or, as applicable, the parent of the U.S. business) at the time of the violation in question or the most proximate time to the violation for which assessing such value is practicable; or
(D) The value of the transaction filed with the Committee.
(ii) For clarification, under paragraphs (c)(3)(i)(A) through (D) of this section, whichever penalty amount is greatest may be imposed per violation, and the amount of the penalty imposed for a violation shall be based on the nature of the violation.
(f) Upon receiving notice of a penalty to be imposed under paragraphs (a) through (c) of this section, the subject person may, within 20 business days of receipt of such notice, submit a petition for reconsideration to the Staff Chairperson, including a defense, justification, or explanation for the conduct to be penalized. The Committee will review the petition and issue any final penalty determination within 20 business days of receipt of the petition. The Staff Chairperson and the subject person may extend either such period through written agreement or, where there is a compelling circumstance and it is deemed appropriate by the Committee, the Staff Chairperson may extend either period by notifying the subject person in writing of the extended time frame. The Committee and the subject person may reach an agreement on an appropriate remedy at any time before the Committee issues any final penalty determination.
50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.
(b)(1) If the Committee determines that a transaction for which no voluntary notice or declaration has been submitted under this part, and with respect to which the Committee has not informed the parties in writing that the Committee has concluded all action under section 721, may be a covered real estate transaction and may raise national security considerations, the Staff Chairperson, acting on the recommendation of the Committee, may request the parties to the transaction or other persons to provide to the Committee information necessary to determine whether the transaction is a covered real estate transaction or whether the transaction may raise national security considerations.
(2) If the Committee determines that a transaction referred to under paragraph (b)(1) of this section is a covered real estate transaction and may raise national security considerations, the Staff Chairperson, acting on the recommendation of the Committee, may request the parties to file a notice of such covered real estate transaction under paragraph (a) of this section.
The addition reads as follows:
(a) * * *
(6) Reject any voluntary notice at any time after the notice has been accepted, and so inform the parties promptly in writing, if the Committee has proposed risk mitigation terms, including revisions to such terms, to the party or parties that submitted the notice and the party or parties have failed to substantively respond to such terms within three business days of the proposal, or within a longer time frame if the parties so request in writing and the Staff Chairperson grants that request in writing.
(a) This paragraph (a) sets forth requirements for parties to a transaction or other persons to provide information to the Staff Chairperson or requesting lead agency in the circumstances specified in paragraphs (a)(1) through (6) of this section.
(1) Parties to a transaction that is notified or declared under subpart D or E of this part shall provide information to the Staff Chairperson that will enable the Committee to conduct a full assessment, review, and/or investigation of the transaction.
(2) For a transaction for which no voluntary notice or declaration has been submitted and for which the Staff Chairperson has requested information as provided for in § 802.501(b), parties to the transaction or other persons shall provide information to the Staff Chairperson that will enable the Committee to determine whether the transaction is a covered real estate transaction or whether the transaction may raise national security considerations.
(3) Independent of any obligations under an agreement, condition, or order authorized under section 721(
(4) Any person that has submitted information to the Committee shall respond to requests from the Staff Chairperson for information to enable the Committee to determine whether the party made any material misstatement or omitted material information from any such submission.
(5) Parties to a transaction that have filed information with the Committee shall promptly advise the Staff Chairperson of any material changes to such information.
(6) If deemed appropriate by the Committee, the Staff Chairperson may obtain information from parties to a transaction or other persons through subpoena or otherwise, under the Defense Production Act, as amended (50 U.S.C. 4555(a)).
(a)(1) Any person who submits a declaration or notice with a material misstatement or omission or makes a
(2) Any person who, in response to a request from the Staff Chairperson or a lead agency, submits to the Committee any information pursuant to § 802.801(a)(2), (3), or (4) or (c), with a material misstatement or omission may be liable to the United States for a civil penalty not to exceed $5,000,000 per violation. This paragraph (a)(2) shall apply only with respect to responses to requests that were made in writing, specified a time frame for response, and indicated the applicability of this paragraph (a).
(3) The amount of the penalty imposed for a violation as provided for in this paragraph (a) shall be based on the nature of the violation.
(b)(1) Any person who violates a material provision of a mitigation agreement entered into on or after February 13, 2020, and before [EFFECTIVE DATE OF FINAL RULE], with, a material condition imposed on or after February 13, 2020, and before [EFFECTIVE DATE OF FINAL RULE], by, or an order issued on or after February 13, 2020, and before [EFFECTIVE DATE OF FINAL RULE], by, the United States under section 721(
(2)(i) Any person who violates a material provision of a mitigation agreement entered into on or after [EFFECTIVE DATE OF FINAL RULE], with, a material condition imposed on or after [EFFECTIVE DATE OF FINAL RULE], by, or an order issued on or after [EFFECTIVE DATE OF FINAL RULE], by, the United States under section 721(
(A) $5,000,000;
(B) The value of the person's interest in the covered real estate (or, as applicable, the owner of the covered real estate) at the time of the transaction;
(C) The value of the person's interest in the covered real estate (or, as applicable, the owner of the covered real estate) at the time of the violation in question or the most proximate time to the violation for which assessing such value is practicable; or
(D) The value of the transaction filed with the Committee.
(ii) For clarification, under paragraphs (b)(2)(i)(A) through (D) of this section, whichever penalty amount is greatest may be imposed per violation, and the amount of the penalty imposed for a violation shall be based on the nature of the violation.
(e) Upon receiving notice of a penalty to be imposed under paragraphs (a) through (c) of this section, the subject person may, within 20 business days of receipt of such notice, submit a petition for reconsideration to the Staff Chairperson, including a defense, justification, or explanation for the conduct to be penalized. The Committee will review the petition and issue any final penalty determination within 20 business days of receipt of the petition. The Staff Chairperson and the subject person may extend either such period through written agreement or, where there is a compelling circumstance and if it is deemed appropriate by the Committee, the Staff Chairperson may extend either period by notifying the subject person in writing of the extended time frame. The Committee and the subject person may reach an agreement on an appropriate remedy at any time before the Committee issues any final penalty determination.
Environmental Protection Agency (EPA).
Notification of public hearing.
The Environmental Protection Agency (EPA) is announcing that a virtual public hearing will be held for the proposed action titled, “Review of the Secondary National Ambient Air Quality Standards for Oxides of Nitrogen, Oxides of Sulfur, and Particulate Matter” which is published elsewhere in this
The EPA will hold a virtual public hearing on May 8, 2024. (Please refer to the
For information or questions about the public hearing, please contact the public hearing team at
I.
The EPA will begin registering speakers for the hearing upon publication of this document in the
If you require the services of a translator or special accommodations such as audio description, please pre-register for the hearing with the public hearing team and describe your needs by April 22, 2024. The EPA may not be able to arrange accommodations without advance notice.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve assorted revisions to Ohio's particulate matter rules that the state requested EPA approve into the Ohio State Implementation Plan (SIP) under the Clean Air Act (CAA). The updates to Ohio's particulate matter rules include revisions to remove provisions for facilities or emissions units that have permanently shut down, update facility names and addresses, and make nonsubstantive revisions to the language of the rules.
Comments must be received on or before May 15, 2024.
Submit your comments, identified by Docket ID No. EPA-R05-OAR-2024-0034 at
Emily Crispell, Control Strategies Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 353-8512,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.
The Ohio Environmental Protection Agency (Ohio EPA
As a result of its review, Ohio EPA concluded that rule revisions were needed to remove provisions that are no longer necessary because the affected
Previous revisions to the rules in OAC 3745-17 included providing a category of power plants operating continuous opacity monitoring systems the option to demonstrate compliance with an alternate set of opacity limits. Ohio EPA requested approval of those revisions on June 4, 2003, but EPA proposed to disapprove those revisions on June 27, 2005, at 70 FR 36901. Subsequently, on September 5, 2014, Ohio EPA withdrew its submittal of these revisions. On June 1, 2018, Ohio EPA submitted revisions to OAC 3745-17 and requested that EPA not act on the alternate set of opacity limits. On February 21, 2024, Ohio EPA clarified that the state was not requesting EPA action on these provisions in its January 18, 2024, submittal.
As summarized above, Ohio EPA's revisions to OAC 3745-17 include the removal of provisions that pertain to facilities that have permanently shut down, renumbering of emissions units for facilities that have combined operations, and modification of wording for phrases that Ohio EPA wishes to rephrase. Chapter 3745-17 includes 11 rules, extending from 3745-17-01 to 3745-17-14 but not including the adopted but now rescinded rules numbered 3745-17-02, 3745-17-05, or 3745-17-06. Ohio EPA revised all 11 of these remaining rules. The following discussion reviews each rule revision individually.
The primary revisions to OAC 3745-17-01 include the addition of a section to the introduction explaining that the definitions in 3745-15-01 “General Provisions on Air Pollution Control” apply to the rules in chapter 3745-17, the renumbering of the referenced materials section to paragraph AA, the alphabetical reordering of definitions throughout the rule, and updates to publication dates and website URLs of referenced materials. No terms or definitions were added or removed from this section.
The primary revisions in this rule are editorial, for example the revision of references to terms defined in 3745-17-01 to reflect the new location of those terms that were reordered, the revision of the introduction paragraph to show the Referenced Materials section is located under paragraph (AA), cleaning up sections 3745-17-03(B)(3), 3745-17-03(B)(4), 3745-17-03(B)(9) and 3745-17-03(B)(10) to renumber or remove references to rules that had been removed in previous rulemakings, and the removal of provisions that apply to facilities or emissions units that have permanently shut down. Additional editorial changes include removal of the use of “shall” in some instances, removing pronouns such as “his/her” and in instead referring to “the observer”. EPA finds that these editorial revisions yield an equally acceptable regulation. While Ohio EPA requested approval of most of OAC 3745-17-03, Ohio EPA expressly excluded two elements of OAC 3745-17-03 from this request. One of these elements, in OAC 3745-17-03(B)(1)(b), offers an alternate opacity limit (in brief, authorizing 1.1 percent of nonexempt 6-minute opacity values to exceed 20 percent opacity) for power plants operating continuous opacity monitoring systems. The second, associated element is the phrase in OAC 3745-17-03(B)(1)(a) stating “Except as provided in paragraph (B)(1)(b) of this rule”. These are provisions that Ohio EPA submitted on June 4, 2003, that EPA proposed to disapprove on June 27, 2005, and that Ohio EPA withdrew from consideration on September 5, 2014. Accordingly, EPA is proposing to act on most of OAC 3745-17-03 but EPA is proposing not to act on subparagraph 3745-17-03(B)(1)(b) and the specified phrase in 3745-17-03(B)(1)(a).
The primary revisions in this rule are the removal of provisions that apply to facilities or emissions units that have permanently shut down and the removal of references to paragraphs that were removed in previous rulemakings. EPA finds that these revisions are approvable.
The primary revisions in this rule include modifications to the introduction paragraph to show the information for referenced materials are located under paragraph (AA), and the removal of references to 3745-17-07(B)(9) and 3745-17-07(B)(10) as those paragraphs were removed in previous rulemakings. EPA finds that these revisions result in an equally protective set of rules and are approvable.
The primary revisions in this rule are modifications to the terms defined in 3745-17-01 to reflect the new location of those terms that were reordered, changes to the introduction paragraph to show the information for referenced materials is located under paragraph (AA), the removal of references to 3745-17-08(E) and 3745-17-08(F) as those paragraphs had been removed in previous rulemakings, and revising the facility name and address associated with Ohio EPA premise number 0641090010 in 3745-17-08(A)(3)(e) to reflect the facility name change from “Mingo Junction Steel Works LLC” to “JSW Steel USA Ohio” and the removal of the address for the north plant that has permanently shut down. EPA finds that these revisions are approvable.
The primary revisions in this rule are minor and editorial, for example changing the language from “shall apply” to “applies”. EPA finds that these revisions are approvable.
Ohio EPA removed provisions that are moot due to the permanent shut down of an affected facility, and Ohio EPA made editorial revisions to remove references to paragraphs that were removed in previous rulemakings. EPA finds that these revisions are approvable.
The primary revisions in this rule are changes to terms defined in 3745-17-01 to reflect the new location of those terms that were reordered, removal of the use of “shall” in some instances, and the revision of the facility name associated with Ohio EPA premise number 1318001613 in 3745-17-11(B)(6) to reflect the facility name change from “ArcelorMittal Cleveland LLC” to “Cleveland-Cliffs Cleveland Works LLC”. EPA finds that these revisions are approvable.
Most of the revisions to this rule are to remove provisions that are moot due to the permanent shut down of the affected source. Ohio EPA also updated the names of companies and emissions units in applicable cases. Additional editorial changes include the revision of the introduction paragraph to show the information for referenced materials is located under paragraph (AA). EPA finds that these revisions have no substantive effect on the requirements of the rule and are approvable.
As with OAC 3745-17-12, the revisions to OAC 3745-17-13 remove the provisions that apply to sources that have permanently shut down and update the names of affected companies where appropriate. EPA finds that these revisions have no substantive effect on the requirements of the rule and are approvable.
The primary revisions to this rule are to remove the provisions that apply to sources that have permanently shut down. Ohio EPA also made editorial revisions similar to those discussed above. EPA finds that these revisions are approvable.
EPA is proposing to approve the revisions to OAC 3745-17 that Ohio EPA submitted on January 18, 2024, with the exception of selected sections of OAC 3745-17-03 as clarified by Ohio EPA on February 21, 2024.
In this rulemaking, EPA is proposing to include, in a final EPA rule, regulatory text that includes incorporation by reference. In accordance with requirements set forth in 1 CFR 51.5, EPA is proposing to incorporate by reference Ohio EPA rules 3745-17-01, 3745-17-03 [with the exception of the phrase in 3745-17-03(B)(1)(a) reading “Except as provided in paragraph (B)(1)(b) of this rule” and 3745-17-03(B)(1)(b)], 3745-17-04, 3745-17-07, 3745-17-08, 3745-17-09, 3745-17-10, 3745-17-11, 3745-17-12, 3745-17-13,and 3745-17-14, effective August 25, 2023, discussed in section II of this preamble. EPA has made, and will continue to make, these documents generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993), and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a state program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001); and
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA.
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian Tribe has demonstrated that a Tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The Ohio EPA did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT).
Notice of advisory committee meeting; extension of comment period.
On February 20, 2024, PHMSA published a
The comment period for the proposed rule published February 2024, at 89 FR 12798, is extended. Comments should be received on or before August 27, 2024, for comments on GPAC proceedings related to the Class Location NPRM. The closing date for filing comments is April 29, 2024, for comments on GPAC proceedings related to the LDAR NPRM. Consistent with 49 CFR 190.323, the agency will consider late-filed comments to the extent practicable.
You may submit comments identified by the docket number PHMSA-2024-0005 by any of the following methods:
Comments are posted without changes or edits to
Tewabe Asebe, Office of Pipeline Safety, by phone at 202-366-5523 or by email at
On February 20, 2024, PHMSA published a
Following the conclusion of the meeting, PHMSA received a joint comment extension request from the Interstate Natural Gas Association of America, American Fuel and Petrochemical Manufacturers, American Gas Association, American Petroleum Institute, American Public Gas Association, and the GPA Midstream Association (the Associations). The Associations requested an additional 60 days to provide comment on the GPAC proceedings pertaining to the LDAR NPRM, which would change the comment deadline to June 28, 2024. The Associations also requested an additional 120 days to provide comment on the GPAC proceedings pertaining to the Class Location NPRM, changing the comment deadline to August 27, 2024.
PHMSA received comments from public interest and environmental groups opposing the extension of the comment period for GPAC proceedings pertaining to the “Gas Pipeline Leak Detection and Repair” NPRM. Noting that the rule is urgently needed to improve safety and reduce methane emissions across the millions of miles of pipelines in the Unites States, and that the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020 directed PHMSA to finalize advanced leak detection and repair standards by December 2021;
PHMSA will extend the comment submission deadline from April 29, 2024, to August 27, 2024, for comments on the GPAC proceedings pertaining to the Class Location NPRM. For comments on the GPAC proceedings pertaining to the Leak Detection and Repair NPRM, the comment submission deadline will remain April 29, 2024. Consistent with 49 CFR 190.323, PHMSA will consider late-filed comments to the extent practicable.
U.S. Agency for International Development.
Request for information; extension of comment period.
On March 13, 2024, the United States Agency for International Development (USAID) published a request for information (RFI) seeking comment on a Global AI Research Agenda being developed on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. The RFI established a April 10, 2024, deadline for the submission of written comments. DOE is extending the comment period to April 24, 2024.
The comment period for the RFI published on March 13, 2024 (89 FR 18590) (
Comments may be submitted by any of the following methods:
Sent as an attachment to
Written comments may be submitted by mail to: USAID, IPI/ITR/T, Rm. 2.12-213, RRB, 1300 Pennsylvania Avenue NW, Washington, DC 20004.
For questions about this RFI contact: Craig Jolley,
On March 13, 2024, the U.S. Agency for International Development (USAID) published a request for information (RFI) in the
Forest Service, Agriculture (USDA).
Solicitation of nominations for membership.
The United States Department of Agriculture (Department) is seeking nominations for the Southern Region Recreation Resource Advisory Committee (Southern Region Recreation RAC) pursuant to the authority of the Federal Lands Recreation Enhancement Act and the Federal Advisory Committee Act (FACA), as amended. The Southern Region Recreation RAC will provide recommendations to the Secretary of Agriculture on recreation fees on lands and waters managed by the Forest Service and the Department of the Interior's Bureau of Land Management in the regions covered by each committee. The Southern Region Recreation RAC will be governed by the provisions of FACA. Duration of the Southern Region Recreation RAC is for two years unless renewed by the Secretary.
Nominations must be submitted via email or postmarked by May 31, 2024.
Nominations and resumes may be submitted to the Secretary of Agriculture through the Forest Service via Caroline Mitchell, Southern Region Recreation RAC Coordinator, Ouachita National Forest, P.O. Box 1270, Hot Springs, AR 71902 or via email to
Inquiries may be sent to Tiffany Williams, Regional Recreation Fees, Southern Region, USDA Forest Service, 1720 Peachtree Street NW, Atlanta, GA 30309, by phone (404) 576-1024 or via email
Pursuant to Federal Lands Recreation Enhancement Act (Pub. L. 108-447) and the Federal Advisory Committee Act (5 U.S.C. 10), notice is hereby given the Secretary of Agriculture's intent to solicit members. Additional information on the Southern Region Recreation RAC can be found by visiting the committee website at
The Southern Region Recreation RAC will be comprised of 11 members approved by the Secretary of Agriculture where each will serve a two- or three-year term. Memberships shall include representation from the following interest areas:
1. Five persons who represent:
a. Winter motorized such as snowmobiling;
b. Winter non-motorized such cross-country skiing and snowshoeing;
c. Summer motorized recreation such as motorcycling, boating, and off-highway vehicle driving;
d. Summer nonmotorized recreation such as hiking, horseback riding, mountain biking, canoeing, and rafting; and
e. Hunting and fishing.
2. Three persons who represent:
a. Motorized outfitters and guides;
b. Non-motorized outfitters and guides; and
c. Local environmental groups.
3. Three persons who represent:
a. State tourism official representing the State;
b. A representative of affected Indian tribes; and
c. A representative of affected local government interests.
The appointment of members to the Southern Region Recreation RAC will be made by the Secretary of Agriculture, or their designee. Any interested person or organization may nominate qualified individuals for membership. Interested candidates may nominate themselves. Individuals who wish to be considered for membership on the committee must submit a nomination with information, including a background disclosure form (Form AD-755;
1. If nominating an individual, a brief summary, no more than two pages, explaining the nominee's qualifications to serve on the committee and addressing the membership composition and criteria described above.
2. A resume providing the nominee's background, experience, and educational qualifications.
3. A completed background disclosure form (Form AD-755) signed by the nominee.
4. Letters of endorsement are optional.
Persons with disabilities who require alternative means of communication for program information (Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English.
USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Equal opportunity practices in accordance with USDA's policies will be followed in all appointments to the committee. To ensure that the recommendations of the committee have taken in account the needs of the diverse groups served by USDA, membership shall include to the extent possible, individuals with demonstrated ability to represent minorities, women, and person with disabilities. USDA is an equal opportunity provider, employer, and lender.
Rural Utilities Service, USDA.
Notice; request for comments.
In accordance with the Paperwork Reduction Act of 1995, the United States Department of Agriculture (USDA) Rural Utilities Service (RUS or Agency) announces its intention to request a revision of a currently approved information collection and invites comments on this information collection.
Comments on this notice must be received by June 14, 2024 to be assured of consideration.
Comments may be submitted electronically by the Federal eRulemaking Portal,
Information on using
All comments will be available for public inspection online at the Federal eRulemaking Portal (
Lisa Day, Rural Development Innovation Center—Regulations Management Division, USDA, 1400 Independence Avenue SW, Room 4227, South Building, Washington, DC 20250-1522. Telephone: (971) 313-4750. Email
The Office of Management and Budget's (OMB) regulation (5 CFR part 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d)). This notice identifies the following information collection that RUS is submitting to OMB as an extension to an existing collection with Agency adjustment.
Grantees will be expected to provide the Agency with a detailed report to include the area to be served, the issues with the present method of wastewater discharge, the alternatives and innovative solutions to the wastewater issue, the long-term cost and effect of the solution, the affordability including possible funding sources, potential treatment, staff training needs, and lifecycle cost analysis.
Comments are invited on:
(a) whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility.
(b) the accuracy of the Agency's estimate of the burden of the proposed collection of information including the validity of the methodology and assumptions used.
(c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. All responses to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record.
Copies of this information collection can be obtained from Lisa Day, Innovation Center—Regulations Management Division, at (971) 313.4750. Email:
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
United States Commission on Civil Rights.
Notice of Commission public business meeting.
Friday, February 23, 2024, 10 a.m. EST.
Meeting to take place virtually and is open to the public via livestream on the Commission's YouTube page:
Angelia Rorison: 202-376-8371;
In accordance with the Government in Sunshine Act (5 U.S.C. 552b), the Commission on Civil Rights is holding a meeting to discuss the Commission's business for the month. This business meeting is open to the public. Computer assisted real-time transcription (CART) will be provided. The web link to access CART (in English) on Friday, February 23, 2024, is
Census Bureau, Department of Commerce.
Notice of public virtual meeting.
The Census Bureau is giving notice of a virtual meeting of the National Advisory Committee on Racial, Ethnic and Other Populations (NAC). The Committee will address policy, research, and technical issues relating to a full range of Census Bureau programs and activities, including the decennial census, demographic and economic statistical programs, field operations, and information technology. Last minute changes to the schedule are possible, which could prevent giving advance public notice of schedule adjustments.
The virtual meeting will be held on:
• Thursday, May 2, 2024, from 10:30 a.m. to 5:30 p.m. ET.
Please visit the Census Advisory Committee website at
Shana Banks, Advisory Committee Branch Chief, Office of Program, Performance and Stakeholder Integration (PPSI),
The NAC provides technical expertise to address Census Bureau program needs and objectives. The members of the NAC are appointed by the Director of the Census Bureau. The NAC has been established in accordance with the Federal Advisory Committee Act (5 U.S.C. 1001 et seq).
All meetings are open to the public. Public comments will be accepted in written form via email to
Robert L. Santos, Director, Census Bureau, approved the publication of this notice in the
Census Bureau, Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act (PRA) of 1995, invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment on the proposed reinstatement without change of the Current Population Survey Voting and Registration Supplement as required by the Paperwork Reduction Act of 1995, prior to the submission of the information collection request (ICR) to OMB for approval.
To ensure consideration, written comments must be submitted on or before June 14, 2024.
Interested persons are invited to submit written comments by email to Kyra Linse, Survey Director, Current Population Surveys via the internet at
Requests for additional information or specific questions related to collection activities should be directed to Kyra Linse, Survey Director, Current Population Surveys via the internet at
The Census Bureau plans to request clearance from the Office of Management and Budget (OMB) for the collection of data concerning the Voting and Registration Supplement to be conducted in conjunction with the November 2024 CPS. The Census Bureau sponsors the supplement questions, which have been previously collected in November biennially since 1964. The current clearance expired July 31, 2023.
This survey has provided statistical information for tracking historical trends of voter and nonvoter characteristics in each Presidential or Congressional election since 1964. The data collected from the November supplement relates demographic characteristics (age, sex, race, education, occupation, and income) to voting and nonvoting behavior. The November CPS supplement is the only federal survey that provides a comprehensive set of voter and nonvoter characteristics. Federal, state, and local election officials use these data to formulate policies relating to the voting and registration process. Academic researchers, political party committees, think tanks, and other private organizations also use the voting and registration data.
The voting and registration information will be collected by both personal visit and telephone interviews in conjunction with the November CPS interviewing. All interviews are conducted using computer-assisted interviewing.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include, or summarize, each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Census Bureau, U.S. Department of Commerce.
Renewal of the Census Bureau National Advisory Committee on Racial, Ethnic, and Other Populations.
The Census Bureau is publishing this notice to announce the renewal of the Census Bureau National Advisory Committee on Racial, Ethnic, and Other Populations (NAC or Committee). The purpose of the Committee is to provide advice to the Director of the Census Bureau on the full range of economic, housing, demographic, socioeconomic, linguistic, technological, methodological, geographic, behavioral, and operational variables affecting the cost, accuracy, and implementation of Census Bureau programs and surveys, including the decennial census. This includes the identification of new strategies for improved census operations and survey and data collection methods, including cost efficient ways to increase census participation. Additional information concerning the Committee can be found by visiting the Committee's website at:
Shana J. Banks, Advisory Committee Branch Chief, Office of Program, Performance and Stakeholder Integration (PPSI),
In accordance with the Federal Advisory Committee Act (FACA), the Secretary of the Department of Commerce (Secretary) renews the NAC. The Secretary has determined that the work of the Committee is in the public interest and relevant to the duties of the Census Bureau. The NAC will operate under the provisions of FACA and will report to the Director of the Census Bureau. The Census Bureau National Advisory Committee on Racial, Ethnic, and Other Populations will advise the Director of the Census Bureau on the full range of Census Bureau programs and activities.
1. The Committee will provide advice and recommendations to the Director of the Census Bureau (Director) on the full range of economic, housing, demographic, socioeconomic, linguistic, technological, methodological, geographic, behavioral, and operational variables affecting the cost, accuracy, and implementation of Census Bureau programs and surveys, including the decennial census.
2. The Committee will provide advice and recommendations on the identification of new strategies for improved census operations, and survey and data collection methods, including cost efficient ways to increase census participation.
3. The Committee will advise on census policies, research and methodology, tests, operations, communications/messaging, and other activities to ascertain needs and best practices to improve Census Bureau programs and surveys.
4. The Committee will provide formal recommendations on working papers, reports, and other documents related to the design and implementation of census programs and surveys.
5. The Committee will provide expertise on the full spectrum of Census Bureau surveys and program and will examine such areas as hidden households, language barriers, students and youth, aging populations, American Indian and Alaska Native tribal consideration, new immigrant populations, populations affected by natural disasters, highly mobile and migrant populations, disabled populations, complex households, poverty, race/ethnicity distribution, privacy and confidentiality, rural populations and businesses, individuals and households with limited access to information and communication technologies, the dynamic nature of new businesses, minority ownership of businesses, as well as other concerns impacting Census Bureau survey design and implemtation.
6. The Committee functions solely as an advisory body under the FACA.
1. The Committee consists of up to 32 members who will be appointed by and serve at the discretion of the Director.
2. The Committee aims to have a balanced representation among its members, considering such factors as geography, technical expertise, community involvement, and knowledge of census programs and/or activities.
3. The Committee aims to include members from diverse backgrounds, including state, local and tribal governments; academia; research organizations; national and community-based organizations; and the private sector; and, where possible the Census Bureau will also consider the ethnic, racial, and gender diversity and various abilities of the United States population. Individuals will be selected based on their expertise in specific areas as needed by the Census Bureau.
4. Members will serve as Special Government Employees (SGEs) as defined in title 18 of the U.S. Code, section 202. SGEs are appointed for their individual expertise and experience and are subject to conflict of interest laws and regulations, including (but not limited to) the obligation to annually file a New Entrant Confidential Financial Disclosure Report (OGE Form 450) and complete ethics training. Members will be individually advised of the capacity in which they will serve through their appointment letters.
5. Membership is open to persons who are not seated on other Census Bureau stakeholder entities (
6. Members generally will serve an initial three-year term. All members will be evaluated at the conclusion of their initial term with the prospect of renewal, pending Committee needs. Active attendance and participation in meetings and activities (
7. Members will be selected on a standardized basis, in accordance with applicable Department of Commerce guidance.
1. Members of the Committee serve without compensation but will, upon request, be allowed travel and per diem expenses as authorized by 5 U.S.C. 5703.
2. The Census Bureau will convene approximately two NAC meetings per year, budget and environmental conditions permitting. Committee meetings are open to the public in accordance with FACA.
3. Members must be able to actively participate in the tasks of the Committee, including, but not limited to, regular meeting attendance, Committee meeting discussant responsibilities, review of materials, as well as participation in conference calls, webinars, working groups, and/or special committee activities.
4. The Department of Commerce is committed to equal opportunity in its advisory committee and seeks diverse Committee membership.
Robert L. Santos, Director, Census Bureau, approved the publication of this notice in the
Jubilant HollisterStier, LLC, submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Spokane, Washington within FTZ 224. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on April 9, 2024.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished product is cetuximab finished drug product (duty free).
The proposed foreign-status materials/components include cetuximab monoclonal antibody active pharmaceutical ingredient (API) in mixed and unmixed forms (duty free).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Diane Finver at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; Correction.
The U.S. Department of Commerce (Commerce) published in the
Thomas Martin, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3936.
On April 1, 2024, Commerce published in the
In the
This notice of initiation is being published in accordance with section 751(c) of the Tariff Act of 1930, as amended, and 19 CFR 351.218(c).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction.
The U.S. Department of Commerce (Commerce) published notice in the
Ajay Menon, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0208.
On April 8, 2024, Commerce published in the
In the
This notice is issued and published in accordance with sections 703(f) and 777(i)(1) of the Tariff Act of 1930, as amended.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Based upon the timely withdrawal of all review requests, the Department of Commerce (Commerce) is rescinding the administrative reviews covering the periods of review and the antidumping duty (AD) and countervailing duty (CVD) orders identified in the table below.
Applicable April 15, 2024.
Brenda E. Brown, AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-4735.
Based upon timely requests for review, Commerce initiated administrative reviews of certain companies for the periods of review and the AD and CVD orders listed in the table below, pursuant to 19 CFR 351.221(c)(1)(i).
Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if the parties that requested the review withdraw their review requests within 90 days of the date of publication of the notice of initiation for the requested review. All parties withdrew their requests for the reviews listed in the table below within the 90-day deadline. No other parties requested administrative reviews of these AD/CVD orders for the periods noted in the table. Therefore, in accordance with 19 CFR 351.213(d)(1), Commerce is rescinding, in their entirety, the administrative reviews listed in the table below.
Commerce will instruct U.S. Customs and Border Protection (CBP) to assess antidumping and/or countervailing duties on all appropriate entries during the periods of review noted above for each of the listed administrative reviews at rates equal to the cash deposit of estimated antidumping or countervailing duties, as applicable, required at the time of entry, or withdrawal of merchandise from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of this recission notice in the
This notice serves as the only reminder to importers of merchandise subject to AD orders of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties and/or countervailing duties prior to liquidation of the relevant entries during the review period. Failure to comply with this requirement could result in the presumption that reimbursement of antidumping duties and/or countervailing duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as the only reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in these segments of these proceedings. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that ITC Limited made sales of subject merchandise in the United States at prices below normal value (NV), and Navneet Education Ltd. (Navneet) did not, during the period of review (POR) September 1, 2021, through August 31, 2022.
Applicable April 15, 2024.
Samuel Brummitt or Katherine Sliney, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-7851 or (202) 482-2437, respectively.
On October 5, 2023, Commerce published the
The products covered by this
As noted in the
Information on the record regarding U.S. Custom and Border Protection (CBP) entry data showed that Dinakar had suspended entries into the United States.
Following the
Following the publication of the
For the rate for non-selected respondents in an administrative review, generally, Commerce looks to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in a market economy investigation. Under section 735(c)(5)(A) of the Act, the all-others rate is normally “an amount equal to the weighted average of the estimated weighted average dumping margins established for exporters and producers individually investigated, excluding any zero or
In this segment of the proceeding, because the rate calculated for Navneet is zero, we have assigned a dumping margin to the companies not selected for individual review based on the weighted-average dumping margin calculated for ITC Limited.
All issues raised by parties in the case and rebuttal briefs are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is included in the appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
We made no changes to the
As a result of this administrative review, Commerce determines that the following estimated weighted-average dumping margins exist for the period, September 1, 2021, through August 31, 2022:
Normally, Commerce will disclose to interested parties the calculations performed in connection with the final results of review withing five days of any public announcement or, if there is no public announcement, within five days of the date of publication of this notice in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b), Commerce will determine, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. Pursuant to 19 CFR 351.212(b)(1), for ITC Limited and Navneet Education Ltd., we calculated importer-specific antidumping duty assessment rates by aggregating the total amount of dumping calculated for the examined sales of each importer and dividing each of these amounts by the total entered value associated with those sales. Where either the respondent's weighted-average dumping margin is zero or
Commerce's “automatic assessment” will apply to entries of subject merchandise during the POR for which the examined companies did not know that the merchandise they sold to an intermediary (
Further, the assessment rate for antidumping duties for each of the companies not selected for individual examination will be equal to the weighted-average dumping margin identified above in the “Final Results of the Review.” Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the final results of this review in the
The following cash deposit requirements for estimated antidumping duties will be effective for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rates for the companies identified above in the “Final Results of the Review” section will be equal to the company-specific weighted-average dumping margin established in the final results of this administrative review; (2) for merchandise exported by a company not covered in this administrative review but covered in a completed prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review or completed prior segment of this proceeding but the producer is, the cash deposit rate will be the company-specific rate established in the completed segment for the most recent
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Commerce's presumption that reimbursement of antidumping and/or countervailing duties has occurred and the subsequent assessment of double antidumping duties and/or an increase in the amount of antidumping duties by the amount of the countervailing duties.
This notice also serves as a final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5) and 19 CFR 351.213(h)(1).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the U.S. Department of Commerce (Commerce) and the U.S. International Trade Commission (ITC) that revocation of the antidumping duty (AD) order on xanthan gum from the People's Republic of China (China) would likely lead to the continuation or recurrence of dumping and material injury to an industry in the United States, Commerce is publishing a notice of continuation of this AD order.
Applicable April 5, 2024.
Luke Caruso, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2081.
On July 19, 2013, Commerce published in the
On April 5, 2024, the ITC published its determination, pursuant to sections 751(c) and 752(a) of the Act, that revocation of the
The scope of this order covers dry xanthan gum, whether or not coated or blended with other products. Further, xanthan gum is included in this order regardless of physical form, including, but not limited to, solutions, slurries, dry powders of any particle size, or unground fiber.
Xanthan gum that has been blended with other product(s) is included in this scope when the resulting mix contains 15 percent or more of xanthan gum by dry weight. Other products with which xanthan gum may be blended include, but are not limited to, sugars, minerals, and salts.
Xanthan gum is a polysaccharide produced by aerobic fermentation of Xanthomonas campestris. The chemical structure of the repeating pentasaccharide monomer unit consists of a backbone of two P-1,4-D-Glucose monosaccharide units, the second with a trisaccharide side chain consisting of P-D-Mannose-(1,4)-P-DGlucuronic acid-(1,2)-a-D-Mannose monosaccharide units. The terminal mannose may be pyruvylated and the internal mannose unit may be acetylated.
Merchandise covered by the scope of this order is classified in the Harmonized Tariff Schedule (“HTS”) of the United States at subheadings 3913.90.20, 3913.90.2015, and 3824.99.4900. This tariff classification is provided for convenience and customs purposes; however, the written description of the scope is dispositive.
As a result of the determinations by Commerce and the ITC that revocation of the
The effective date of the continuation of the
This notice also serves as a final reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This five-year (sunset) review and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act and published in accordance with section 777(i) of the Act, and 19 CFR 351.218(f)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) is amending the final results of the administrative review of the antidumping duty order on passenger vehicle and light truck tires from the People's Republic of China (China) to correct a ministerial error. The period of review (POR) is August 1, 2021, through July 31, 2022.
Applicable April 15, 2024.
Caroline Carroll, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4948.
On March 12, 2024, Commerce published the
Section 751(h) of the Tariff Act of 1930, as amended (the Act), defines a “ministerial error” as including “errors in addition, subtraction, or other arithmetic function, clerical errors resulting from inaccurate copying, duplication, or the like, and any other unintentional error which the administering authority considers ministerial.”
In the
We agree with Giti that we made a ministerial error in the
Pursuant to 19 CFR 351.224(e), we are amending the
For a complete discussion of the ministerial error allegation, as well as Commerce's analysis,
As a result of correcting the ministerial error described above, we determine the following estimated weighted-average dumping margins for the period August 1, 2021, through July 31, 2022:
We intend
Pursuant to section 751(a)(2)(C) of the Act, and 19 CFR 351.212(b)(1), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the amended final results of this review. Commerce intends to issue assessment instructions to CBP no earlier than 35 days after the date of publication of the amended final results of this review in the
For Giti and Sumitomo, we calculated importer-specific assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for each importer's examined sales and the total entered value of the sales, in accordance with 19 CFR 351.212(b)(1).
Pursuant to Commerce's assessment practice,
For the respondents not selected for individual examination in this administrative review that qualified for a separate rate, the assessment rate will be equal to the simple average of the margin calculated for Giti in these amended final results and Sumitomo in the
The following amended cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after March 12, 2024, the publication date of the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice serves as the final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing these amended final results of review in accordance with sections 751(h) and 777(i) of the Act, and 19 CFR 351.224(e).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice; correction and retraction.
The U.S. Department of Commerce (Commerce) published two notices in the
Christopher Williams, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5166.
On March 15, 2024, Commerce published in the
In the
From the
This notice is issued and published in accordance with section 703(f) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.205(c).
National Institute of Standards and Technology (NIST).
Notice of open meeting.
The Internet of Things (IoT) Advisory Board will meet Tuesday, May 14 and Wednesday, May 15, 2024 from 11:00 a.m. until 5:00 p.m., eastern time. Both sessions will be open to the public.
The Internet of Things (IoT) Advisory Board will meet Tuesday, May 14 and Wednesday, May 15, 2024 from 11:00 a.m. until 5:00 p.m., eastern time.
The meeting will be virtual via Webex webcast hosted by the National Cybersecurity Center of Excellence (NCCoE) at NIST. Please note registration instructions under the
Barbara Cuthill, Information Technology Laboratory, National Institute of Standards and Technology, Telephone: (301) 975-3273, Email address:
Pursuant to the Federal Advisory Committee Act, as amended, 5 U.S.C. 1001
The agenda for the May 14-15, 2024 meeting is expected to focus on finalizing the IoT Advisory Board's report for the IoT Federal Working Group and the recommendations and findings in that report.
The recommendations, findings and discussions are expected to focus on the specific focus areas for the report cited in the legislation and the charter:
• Smart traffic and transit technologies,
• Augmented logistics and supply chains,
• Sustainable infrastructure,
• Precision agriculture,
• Environmental monitoring,
• Public safety, and
• Health care.
In addition, the IoT Advisory Board may discuss other elements that the legislation called for in the report:
• whether adequate spectrum is available to support the growing Internet of Things and what legal or regulatory barriers may exist to providing any spectrum needed in the future;
• policies, programs, or multi-stakeholder activities that—
○ promote or are related to the privacy of individuals who use or are affected by the Internet of Things;
○ may enhance the security of the Internet of Things, including the security of critical infrastructure;
○ may protect users of the Internet of Things; and
○ may encourage coordination among Federal agencies with jurisdiction over the Internet of Things.
Note that agenda items may change without notice. The final agendas will be posted on the IoT Advisory Board web page:
Each IoT Advisory Board meeting agenda will include a period, not to exceed sixty minutes, for oral presentation of comments from the public. Oral presentation of comments from the public during this sixty-minute period will be accommodated on a first-come, first-served basis and limited to five minutes per person for oral presentation if requested by the commenter.
Members of the public who wish to expand upon their submitted comments, those who had wished to present comments orally but could not be accommodated on the agenda, and those who were unable to attend the meeting via webinar, are invited to submit written statements. In addition, written statements are invited and may be submitted to the IoT Advisory Board at any time. All written statements should be directed to the IoT Advisory Board Secretariat, Information Technology Laboratory by email to:
Office of Oceanic and Atmospheric Research (OAR), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Notice of public meeting.
This notice sets forth the schedule and proposed agenda for a meeting of the Ocean Exploration Advisory Board (OEAB). OEAB members will discuss and provide advice on the Federal ocean exploration program, with a particular emphasis on the topics identified in the section on Matters to Be Considered.
The announced meeting is scheduled for Tuesday, May 14 through Wednesday, May 15, 2024 from 9:00 a.m.-5:00 p.m. (EDT).
This will be an in-person meeting held in Silver Spring, MD. Information about how to observe virtually will be posted to the OEAB website at
Mr. David Turner, Designated Federal Officer, Ocean Exploration Advisory Board, National Oceanic and Atmospheric Administration,
NOAA established the OEAB under the Federal Advisory Committee Act (FACA) and legislation that gives the agency statutory authority to operate an ocean exploration program and to coordinate a national program of ocean exploration. The OEAB advises NOAA leadership on strategic planning, exploration priorities, competitive ocean exploration grant programs, and other matters as the NOAA Administrator requests.
OEAB members represent government agencies, the private sector, academic institutions, and not-for-profit institutions involved in all facets of ocean exploration—from advanced technology to citizen exploration.
In addition to advising NOAA leadership, NOAA expects the OEAB to help to define and develop a national program of ocean exploration—a network of stakeholders and partnerships advancing national priorities for ocean exploration.
The OEAB expects that public statements at its meetings will not be repetitive of previously submitted verbal or written statements. In general, each individual or group making a verbal presentation will be limited to three minutes. The Designated Federal Officer must receive written comments by May 6, 2024, to provide sufficient time for OEAB review. Written comments received after May 6, 2024, will be distributed to the OEAB but may not be reviewed prior to the meeting date. Comments should be submitted to Designated Federal Officer
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
The purpose of this information collection is to obtain human dimensions information from residents in the seven United States (U.S.) jurisdictions containing coral reefs: Florida, U.S. Virgin Islands (USVI), Puerto Rico, Hawai‘i, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands (CNMI). Specifically, NOAA is seeking information on the behaviors and activities related to coral reefs, as well as information on perceptions of coral reef conditions and attitudes toward specific reef conservation activities. Each survey has a core set of questions that are asked across all jurisdictions to allow for information to be tracked over time and across jurisdictions. To account for geographical, cultural and linguistic differences between jurisdictions, the survey questions include items that are specific to the local context and developed based on jurisdictional partner feedback.
We intend to use the information collected through this instrument for research purposes, as well as for measuring and improving the results of our reef protection programs. Because many of our efforts to protect reefs rely on education and changing attitudes toward reef protection, the information collected will allow CRCP to ensure that programs are designed appropriately at the start, future program evaluation efforts are as successful as possible, and outreach efforts are targeting the intended recipients with useful information.
No survey question concept or theory has changed since the first hybrid-generic clearance of this information collect request in 2021. However, NOAA sought feedback from survey administration teams and jurisdictional partners in American Samoa (2021), Puerto Rico (2022), and Guam (2023), as well as during preparation for survey administration in the CNMI (2024) and the USVI (2025). Responses came primarily from state and local natural resource management agencies, fisheries management councils and NGOs. In addition, NOAA adjusted each of the jurisdictional surveys based on respondents' feedback to the instrument. This feedback resulted in non-substantive survey instrument revisions that reduce question complexity, reduce respondent burden, simplify terminology for translation into other languages, improve clarity, and maintain consistent formatting.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
The Department of Commerce will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. We invite the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Public comments were previously requested via the
In addition, determinations must be made on the sustainability of population stocks, on the impact of fisheries and other human activities on marine mammals and endangered species, and on the health of marine mammals and related environmental considerations. NOAA's National Marine Fisheries Service (NMFS) has the responsibility to carry out these mandates.
Section 402(b) of the MMPA (16 U.S.C. 1421a) requires the Secretary to collect and update information on strandings. It further provides that the Secretary shall compile and analyze, by region, the species, numbers, conditions, and causes of illnesses and deaths in stranded marine mammals. Section 404 (a) of the MMPA (16 U.S.C. 1421c) mandates that the Secretary respond to unusual marine mammal mortality events. Without a historical baseline provided by marine mammal information collected from strandings, detection of such events could be difficult and the investigation could be impeded. Section 401(b) of the MMPA (16 U.S.C. 1421) requires NMFS to facilitate the collection and dissemination of reference data on the health of marine mammal populations in the wild and to correlate health with physical, chemical, and biological environmental parameters. In order to perform this function, NMFS must standardize data collection protocols for health and correlations. Data and samples collected from stranded animals are a critical part of the implementation of this mandate of the MMPA.
Specifically, the data from the Marine Mammal Stranding Report (MMSR) forms provide NMFS with information on the morphology, life history, biology, general health, health and stranding trends, causes of mortality, and distribution of marine mammal species. These data provide information which may help in making assessments on the status of population stocks. Recording data on gross mortalities may serve as an indicator that a particular population is impacted, threatened or at increased risk, and when provided in a timely manner, aid in dynamic management practices. Stranding data also provide an important baseline for detecting and monitoring the impacts of environmental phenomena, such as El Niño and Harmful Algal Blooms (HABs). Minor edits to the current version of the form are proposed, including beginning to collect live, entangled large whale data in this data collection and streamlining the confidence codes.
The Marine Mammal Rehabilitation Disposition Report (MMRDR) provides NMFS with information on the disposition of animals brought in for rehabilitation, the success of medical treatment, and the number of animals released. This information will assist the Agency in tracking marine mammals that move into captive display and in the monitoring of rehabilitation and release. The data will also be used to assess the burden on stranding network centers. This form will be filled out only in the case of live-stranded marine mammals. The form will be required from rehabilitation centers in all five NMFS Regions. Each of the NMFS regions approves and issues a Letter of Agreement (LOA) or other form of agreement to marine mammal rehabilitation centers under § 112(c) of the MMPA, which allows the Secretary to enter into agreements in order to fulfill the general purposes of the Act, and under § 403 of the MMPA, which provides specific authority to enter into such stranding response agreements. These data will be monitored as part of the Rehabilitation Facilities Inspection (RFI) program. No changes are proposed to this form.
The Human Interaction Data Sheet will provide NMFS with consistent and detailed information on signs of human interaction in stranded marine mammals. This form also includes a subjective section that allows the examiner to evaluate the likelihood that human interaction contributed to the stranding of the animal. This information will assist the Agency in tracking resource conflicts and will provide a solid scientific foundation for conservation and management of marine mammals. With a better understanding of interactions, appropriate measures can be taken to resolve conflicts and stranding data are the best source of information regarding the occurrence of different types of human interaction. No changes are proposed for this form.
This information collection request may be viewed at
Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
National Technical Information Service.
Notice of open meeting.
This notice announces the next meeting of the National Technical Information Service (NTIS) Advisory Board (the Advisory Board).
The Advisory Board will meet on Monday, June 24, 2024, from 12:30 p.m. to approximately 4:30 p.m., eastern time.
This will be a virtual meeting with registration access requirements for attendance. Please note admittance instructions under the
Elizabeth Shaw, (703) 605-6136,
The Advisory Board is established by section 3704b(c) of title 15 of the United States Code. The charter has been filed in accordance with the requirements of the Federal Advisory Committee Act, as
The meeting is expected to include an update on key national efforts, including the U.S. General Service Administration's Open Government Secretariat's effort to develop the Sixth U.S. Open Government National Action Plan and the key role that Federal agencies, including NTIS, will play; followed by updates on the Agency's operations and activities. A final agenda and summary of the proceedings will be posted on the NTIS website as soon as they are available. (
The
Speakers who wish to expand upon their oral statements, those who had wished to speak but could not be accommodated on the agenda, and those who were unable to attend are invited to submit written statements by emailing Elizabeth Shaw or Steven Holland at the email address provided in the
Wednesday, April 17, 2024—10:00 a.m.
Room 420, Bethesda Towers, 4330 East-West Highway, Bethesda, MD.
Commission Meeting—Closed to the Public.
Alberta E. Mills, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East-West Highway, Bethesda, MD 20814, 301-504-7479 (Office) or 240-863-8938 (Cell).
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful
This is a supplemental notice in the above-referenced proceeding of Switched On, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street, NE, Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is April 29, 2024.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically may mail similar pleadings to the Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426. Hand delivered submissions in docketed proceedings should be delivered to Health and Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852.
In addition to publishing the full text of this document in the
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as having made a prohibited off-the-record communication shall serve the document on all parties listed on the official service list for the applicable proceeding in accordance with Rule 2010, 18 CFR 385.2010.
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e)(1)(v).
The following is a list of off-the-record communications recently received by the Secretary of the Commission. This filing may be viewed on the Commission's website at
Federal Energy Regulatory Commission.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the currently approved information collection FERC-725HH (RF Reliability Standards).
Comments on the collection of information are due May 15, 2024.
Send written comments on FERC-725HH to OMB through
Please submit copies of your comments to the Commission. You may submit copies of your comments (identified by Docket No. IC24-5-000) by one of the following methods:
Electronic filing through
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• For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery.
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Jean Sonneman may be reached by email at
Reliability Standards that the ERO proposes to the Commission may include Reliability Standards that are proposed to the ERO by a Regional Entity.
RF promotes bulk electric system reliability in the Eastern Interconnection. RF is the Regional Entity responsible for compliance monitoring and enforcement in the RF region. In addition, RF provides an environment for the development of Reliability Standards and the coordination of the operating and planning activities of its members as set forth in the RF bylaws.
There is one regional Reliability Standard in the RF region. The Commission requests renewal of OMB clearance for that regional Reliability Standard, known as BAL-502-RF-03 (Planning Resource Adequacy Analysis, Assessment and Documentation).
Take notice that on April 1, 2024, Eastern Gas Transmission and Storage, Inc. (EGTS), 10700 Energy Way, Glen Allen, Virginia 23060, filed in the above referenced docket, a prior notice request pursuant to sections 157.205 and 157.210 of the Commission's regulations under the Natural Gas Act (NGA) and EGTS' blanket certificate issued in Docket No. CP82-537-000 for authorization to install certain facilities in Greene County, Pennsylvania; Marshall County, West Virginia; and Monroe County, Ohio (Heartland Extension Project). EGTS proposes to install a 7,700 horsepower gas-fired, turbine-driven compressor unit at its Crayne Compressor Station and install additional upgrades at its Mullett, Burch Ridge, and Mockingbird Hill Compressor Stations. The Heartland Extension Project is fully subscribed and will deliver 60,000 dekatherms per day of firm transportation service to an existing interconnection with Rockies Express Pipeline LLC in Clarington, Ohio. EGTS estimates the cost of the project to be $34,380,000, all as more fully set forth in the request which is on file with the Commission and open to public inspection.
In addition to publishing the full text of this document in the
User assistance is available for eLibrary and the Commission's website during normal business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
Any questions concerning this request should be directed to James Scribner, Regulatory Analyst, Eastern Gas Transmission and Storage, Inc., 10700 Energy Way, Glen Allen, Virginia 23060, by phone at (804) 397-5113 or by email at
There are three ways to become involved in the Commission's review of this project: you can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on June 10, 2024. How to file protests, motions to intervene, and comments is explained below.
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Pursuant to section 157.205 of the Commission's regulations under the NGA,
Protests must comply with the requirements specified in section 157.205(e) of the Commission's regulations,
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before June 10, 2024. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP24-113-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission by mailing it to the address below. Your submission must reference the Project docket number CP24-113-000.
The Commission encourages electronic filing of submissions (option 1 above) and has eFiling staff available to assist you at (202) 502-8258 or
Protests and motions to intervene must be served on the applicant either by mail or email (with a link to the document) at: James Scribner, Regulatory Analyst, Eastern Gas Transmission and Storage, Inc., 10700 Energy Way, Glen Allen, Virginia 23060 or by email at
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Environmental Protection Agency.
Notice of adoption of categorical exclusion.
The Environmental Protection Agency (EPA) is adopting a Fish and Wildlife Service's (FWS) categorical exclusion (CE) for restoration activities of wetland, riparian, instream, and native habitats under the National Environmental Policy Act (NEPA) to use in certain EPA water grants and loan programs administered by EPA. This notice describes the categories of proposed actions for which EPA intends to use FWS's CE and describes the consultation between the agencies.
This action is effective upon publication.
Julia Thorp, Community Grants Program, by phone at 202-565-2238, or by email at
The National Environmental Policy Act, as amended at, 42 U.S.C. 4321-4347 (NEPA), requires all Federal agencies to assess the environmental impact of their actions. Congress enacted NEPA in order to encourage productive and enjoyable harmony between humans and the environment, recognizing the profound impact of human activity and the critical importance of restoring and maintaining environmental quality to the overall welfare of humankind. 42 U.S.C. 4321, 4331. NEPA's twin aims are to ensure agencies consider the environmental effects of their proposed actions in their decision-making processes and inform and involve the public in that process. 42 U.S.C. 4331. NEPA created the Council on Environmental Quality (CEQ), which promulgated NEPA implementing regulations, 40 CFR parts 1500 through 1508 (CEQ regulations).
To comply with NEPA, agencies determine the appropriate level of review—an environmental impact statement (EIS), environmental assessment (EA), or CE. 42 U.S.C. 4336. If a proposed action is likely to have significant environmental effects, the agency must prepare an EIS and document its decision in a record of decision. 42 U.S.C. 4336. If the proposed action is not likely to have significant environmental effects or the effects are unknown, the agency may instead prepare an EA, which involves a more concise analysis and process than an EIS. 42 U.S.C. 4336. Following the EA, the agency may conclude the process with a finding of no significant impact if the analysis shows that the action will have no significant effects. If the analysis in the EA finds that the action is likely to have significant effects, however, then an EIS is required.
Under NEPA and the CEQ regulations, a Federal agency also can establish CEs—categories of actions that the agency has determined normally do not significantly affect the quality of the human environment—in their agency NEPA procedures. 42 U.S.C. 4336(e)(1); 40 CFR 1501.4, 1507.3(e)(2)(ii), 1508.1(d). If an agency determines that a CE covers a proposed action, it then evaluates the proposed action for extraordinary circumstances in which a normally excluded action may have a significant effect. 40 CFR 1501.4(b). If no extraordinary circumstances are present or if further analysis determines that the extraordinary circumstances do not involve the potential for significant environmental effects, the agency may apply the CE to the proposed action without preparing an EA or EIS. 42 U.S.C. 4336(a)(2), 40 CFR 1501.4. If the extraordinary circumstances have the potential to result in significant effects, the agency is required to prepare an EA or EIS.
Section 109 of NEPA, enacted as part of the Fiscal Responsibility Act of 2023, allows a Federal agency to “adopt” and use another agency's CEs for a category of proposed agency actions. 42 U.S.C. 4336(c). To use another agency's CEs under section 109, the adopting agency must identify the relevant CEs listed in another agency's (“establishing agency”) NEPA procedures that cover the adopting agency's category of proposed actions or related actions; consult with the establishing agency to ensure that the proposed adoption of the CE to a category of actions is appropriate; identify to the public the CE that the adopting agency plans to use for its proposed actions; and document adoption of the CE.
EPA intends to use the FWS's CE for its restoration activities under two programs, the Community Grants Program and the Water Infrastructure Finance and Innovation Act (WIFIA) Program. EPA's Community Grants Program funds projects for drinking water, wastewater, stormwater infrastructure, and water quality protection projects, which may include restoration projects of wetland, riparian, instream, or native habitats. For the Community Grants Program, Congress appropriates resources for specifically named water infrastructure projects identified as Congressionally Directed Spending and Community Project Funding items in Appropriations Acts.
EPA's WIFIA Program provides credit assistance (also referred to as direct loans or loan guarantees) for a range of drinking water and wastewater infrastructure projects. Eligible activities include habitat protection and restoration projects, such as shoreline activities, instream activities, water quality improvements, control of invasive vegetative and aquatic species, and fish and wildlife habitat conservation efforts.
Both Community Grants and WIFIA Program activities may involve the construction of new or upgrades to existing small structures or improvements, such as water control structures, berms, and dikes, for the restoration of wetland, riparian, instream, or native habitats, and may include revegetation actions, such as the planting of native species. These types of restoration activities typically result
EPA is adopting the FWS CE for restoration activities of wetland, riparian, instream, and native habitats. EPA has identified the following FWS CE listed in the Department of the Interior's (DOI) Departmental Manual (516 DM 8.5(B)(3)).
B. Resource Management.
(3) The construction of new, or the addition of, small structures or improvements, including structures and improvements for the restoration of wetland, riparian, instream, or native habitats, which result in no or only minor changes in the use of the affected local area. The following are examples of activities that may be included.
(a) The installation of fences.
(b) The construction of small water control structures.
(c) The planting of seeds or seedlings and other minor revegetation actions.
(d) The construction of small berms or dikes.
(e) The development of limited access for routine maintenance and management purposes.
EPA intends to apply this categorical exclusion to restoration projects administered by the EPA Community Grants Program and WIFIA Program. EPA will consider each proposal for restoration activities to ensure that the proposal is within the scope of the CE. In addition, EPA will coordinate with affected Federal agencies, states, Tribal, and local governments prior to carrying out restoration activities, as appropriate.
EPA consulted with FWS on the appropriateness of EPA's adoption of the CE in November 2023. EPA and FWS's consultation included a review of FWS's experience developing and applying the CE, as well as the types of actions for which EPA plans to utilize the CE. The EPA actions under the Community Grants and WIFIA Programs are very similar to the type of projects for which FWS has applied the CE and therefore the effects of EPA projects will be very similar to the effects of FWS projects, which are not significant, absent extraordinary circumstances. Therefore, EPA has determined that its proposed use of FWS's CE as described in this notice is appropriate.
When applying this CE, EPA will evaluate whether the proposed action has the potential to result in significant effects by reviewing both DOI's extraordinary circumstances list found at 43 CFR 46.215 and EPA's list of extraordinary circumstances found at 40 CFR 6.204(b).
This notice serves to identify to the public and document EPA's adoption of FWS's CE (516 DM 8.5(B)(3)) for restoration activities. This notice identifies the types of actions to which EPA will apply the CE, as well as the considerations that EPA will use in determining whether an action is within the scope of the CE for restoration activities.
Environmental Protection Agency (EPA).
Notice.
EPA is required under the Toxic Substances Control Act (TSCA), as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act, to make information publicly available and to publish information in the
Comments identified by the specific case number provided in this document must be received on or before May 15, 2024.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPPT-2024-0057, through the
This document provides the receipt and status reports for the period from 3/01/2024 to 3/31/2024. The Agency is providing notice of receipt of PMNs, SNUNs, and MCANs (including amended notices and test information); an exemption application under 40 CFR part 725 (Biotech exemption); TMEs, both pending and/or concluded; NOCs to manufacture a new chemical substance; and a periodic status report on new chemical substances that are currently under EPA review or have recently concluded review.
EPA is also providing information on its website about cases reviewed under the amended TSCA, including the section 5 PMN/SNUN/MCAN and exemption notices received, the date of receipt, the final EPA determination on the notice, and the effective date of EPA's determination for PMN/SNUN/MCAN notices on its website at:
Under the Toxic Substances Control Act (TSCA), 15 U.S.C. 2601
Any person who intends to manufacture (including import) a new chemical substance for a non-exempt commercial purpose, or to manufacture or process a chemical substance in a non-exempt manner for a use that EPA has determined is a significant new use, is required by TSCA section 5 to provide EPA with a PMN, MCAN, or SNUN, as appropriate, before initiating the activity. EPA will review the notice, make a risk determination on the chemical substance or significant new use, and take appropriate action as described in TSCA section 5(a)(3).
TSCA section 5(h)(1) authorizes EPA to allow persons, upon application and under appropriate restrictions, to manufacture or process a new chemical substance, or a chemical substance subject to a significant new use rule (SNUR) issued under TSCA section 5(a)(2), for “test marketing” purposes, upon a showing that the manufacture, processing, distribution in commerce, use, and disposal of the chemical will not present an unreasonable risk of injury to health or the environment. This is referred to as a test marketing exemption, or TME. For more information about the requirements applicable to a new chemical go to:
Under TSCA sections 5 and 8 and EPA regulations, EPA is required to publish in the
This action provides information that is directed to the public in general.
No.
1.
2.
In the past, EPA has published individual notices reflecting the status of TSCA section 5 filings received, pending, or concluded. In 1995, the Agency modified its approach and streamlined the information published in the
For the PMN/SNUN/MCANs that have passed an initial screening by EPA during this period, Table I provides the following information (to the extent that such information is not subject to a CBI claim) on the notices screened by EPA during this period: The EPA case number assigned to the notice that indicates whether the submission is an initial submission, or an amendment, a notation of which version was received, the date the notice was received by EPA, the submitting manufacturer (
As used in each of the tables in this unit, (S) indicates that the information in the table is the specific information provided by the submitter, and (G) indicates that this information in the table is generic information because the specific information provided by the submitter was claimed as CBI. Submissions which are initial submissions will not have a letter following the case number. Submissions which are amendments to previous submissions will have a case number followed by the letter “A” (
In Table II of this unit, EPA provides the following information (to the extent that such information is not claimed as CBI) on the NOCs that have passed an initial screening by EPA during this period: The EPA case number assigned to the NOC including whether the submission was an initial or amended submission, the date the NOC was received by EPA, the date of commencement provided by the submitter in the NOC, a notation of the type of amendment (
In Table III of this unit, EPA provides the following information (to the extent such information is not subject to a CBI claim) on the test information that has been received during this time period: The EPA case number assigned to the test information; the date the test information was received by EPA, the type of t est information submitted, and chemical substance identity.
If you are interested in information that is not included in these tables, you may contact EPA's technical information contact or general information contact as described under
Authority: 15 U.S.C. 2601
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s). Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control
Written comments should be submitted on or before June 14, 2024. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.” The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments and recommendations for the proposed information collection should be submitted on or before May 15, 2024.
Comments should be sent to
For additional information or copies of the information collection, contact Nicole Ongele at (202) 418-2991. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act of 1995 (PRA), the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection(s). Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written comments should be submitted on or before June 14, 2024. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
The information collection requirements contained in section 73.1690(e) of the Commission's rules requires AM, FM and TV station licensees to prepare an informal statement or diagram describing any electrical and mechanical modification to authorized transmitting equipment that can be made without prior Commission approval provided that equipment performance measurements are made to ensure compliance with FCC rules. This informal statement or diagram must be retained at the transmitter site as long as the equipment is in use.
Thursday, April 18, 2024, at 10 a.m.
Hybrid meeting: 1050 First Street, NE Washington, DC (12th floor) and virtual.
This meeting will be open to the public, subject to the above-referenced guidance regarding the COVID-19 hospital admission level and corresponding health and safety procedures. To access the meeting virtually, go to the commission's website
Draft Advisory Opinion 2024-03:
REG 2019-01 (Valuable Information)—Draft Notice of Disposition.
REG 2015-03 (Contributions from Corporations and Other Organizations)—Draft Notice of Disposition.
REG 2024-02 (Implementation of FOIA Improvement Act)—Draft Interim Final Rule.
Management and Administrative Matters.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
Individuals who plan to attend in person and who require special assistance, such as sign language interpretation or other reasonable accommodations, should contact Laura E. Sinram, Secretary and Clerk, at (202) 694-1040 or
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, and the Office of Management and Budget (OMB) regulations, DoD, GSA, and NASA invite the public to comment on an extension concerning construction wage rate requirements—price
DoD, GSA, and NASA will consider all comments received by June 14, 2024.
DoD, GSA, and NASA invite interested persons to submit comments on this collection through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
9000-0154, Construction Wage Rate Requirements—Price Adjustment (Actual Method).
This clearance covers the information that contractors must submit to comply with the following Federal Acquisition Regulation (FAR) requirement:
Contracting officers use the information to establish the contract's construction requirements price adjustment to reflect the contractor's actual increase or decrease in wages and fringe benefits.
Office of Government-wide Policy; General Services Administration, (GSA).
Notice; request for public comment.
This notice informs the public of the opportunity to provide input on the self-assessment report created in support of the United States' participation in the Open Government Partnership (OGP). This input will be considered as GSA Office of Government-wide Policy finalizes the self-assessment prior to submission to the OGP. The United States has been a committed member of the Open Government Partnership since its inception, actively participating in the global effort to promote transparent, participative, and accountable governance. As part of this ongoing commitment, the United States is in the process of implementing its 5th Open Government National Action Plan (NAP 5), which outlines 36 commitments to further advance open government principles domestically and internationally. In accordance with OGP recommendations, the U.S. is conducting a mid-term self-assessment of the current NAP 5. This assessment serves as an essential tool for both self-reflection and planning, enabling the identification of achievements, challenges, and areas for improvement.
Responses to this request for comment should be received by Monday, June 10, 2024.
Submit comments in response to Notice “Docket 2024-0002” by
Daniel York, GSA Open Government Secretariat, Office of Government-wide Policy, by email at
The mid-term self-assessment report is a critical component of the OGP's iterative process, designed to foster continuous learning and development within member countries. To ensure a comprehensive and inclusive review of the work done on NAP 5 to date, GSA invites public feedback on the mid-term self-assessment.
GSA seeks to collect feedback from the public on the following aspects of
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•
•
•
Open Government Partnership (OGP) Independent Review Mechanism (IRM) Self-Assessment Guidance at
Pursuant to 5 U.S.C. 1009(d), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended, and the Determination of the Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, CDC, pursuant to Public Law 92-463. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC), within the Department of Health and Human Services (HHS), is seeking nominations for membership on the Healthcare Infection Control Practices Advisory Committee (HICPAC). HICPAC consists of 14 experts in fields including, but not limited to, infectious diseases, infection prevention, healthcare epidemiology, nursing, clinical and environmental microbiology, surgery, hospitalist medicine, internal medicine, epidemiology, health policy, health services research, public health, and related fields.
Nominations for membership on HICPAC must be received no later than September 30, 2024. Packages received after this time will not be considered for the current membership cycle.
All nominations should be emailed to
Sydnee Byrd, M.P.A., Healthcare Infection Control Practices Advisory Committee, Division of Healthcare Quality Promotion, National Center for Emerging and Zoonotic Infectious Diseases, Centers for Disease Control and Prevention, l600 Clifton Road NE, Mailstop H16-3, Atlanta, Georgia 30329-4027. Telephone: (404) 718-8039; email:
Nominations are sought for individuals who have the expertise and qualifications necessary to contribute to the accomplishment of the objectives of the Healthcare Infection Control Practices Advisory Committee (HICPAC). Nominees will be selected based on expertise in the fields of infectious diseases, infection prevention, healthcare epidemiology, nursing, clinical and environmental microbiology, surgery, internal medicine, occupational health, and public health. Federal employees will not be considered for membership. Members may be invited to serve for up to four-year terms. Selection of members is based on candidates' qualifications to contribute to the accomplishment of HICPAC objectives (
Department of Health and Human Services (HHS) policy stipulates that committee membership be balanced in terms of points of view represented, and the committee's function. Appointments shall be made without discrimination on the basis of age, race, ethnicity, gender, sexual orientation, gender identity, HIV status, disability, and cultural, religious, or socioeconomic status. Nominees must be U.S. citizens and cannot be full-time employees of the U.S. Government. Current participation on Federal workgroups or prior experience serving on a Federal advisory committee does not disqualify a candidate; however, HHS policy is to avoid excessive individual service on advisory committees and multiple
Candidates should submit the following items:
Current curriculum vitae, including complete contact information (telephone numbers, mailing address, email address)
At least one letter of recommendation from person(s) not employed by HHS. Candidates may submit letter(s) from current HHS employees if they wish, but at least one letter must be submitted by a person not employed by an HHS agency (
Nominations may be submitted by the candidate or by the person/organization recommending the candidate.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC) announces the following meeting of the Advisory Board on Radiation and Worker Health (ABRWH or the Advisory Board). This meeting is open to the public, but without a public comment period. The public is welcome to submit written comments in advance of the meeting, to the contact person below. Written comments received in advance of the meeting will be included in the official record of the meeting. The public is also welcomed to listen to the meeting by joining the teleconference (information below). The audio conference line has 150 ports for callers.
The meeting will be held on June 26, 2024, from 11 a.m. to 1 p.m., EDT. Written comments must be received on or before June 19, 2024.
You may submit comments by mail to: Rashaun Roberts, National Institute for Occupational Safety and Health, 1090 Tusculum Avenue, MS C-24, Cincinnati, Ohio 45226.
Rashaun Roberts, Ph.D., Designated Federal Officer, National Institute for Occupational Safety & Health, Centers for Disease Control and Prevention, 1090 Tusculum Avenue, Mailstop C-24, Cincinnati, Ohio 45226, telephone (513) 533-6800, toll free 1(800) 232-4636, email
The charter was issued on August 3, 2001, renewed at appropriate intervals, and rechartered under Executive Order 14109 on March 22, 2024. Unless continued by the President the Board will terminate on September 30, 2025, consistent with E.O. 14109 of September 29, 2023.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC) announces the following meeting for the Subcommittee for Dose Reconstruction Review of the Advisory Board on Radiation and Worker Health (ABRWH or the Advisory Board). This meeting is open to the public, but without a public comment period. The public is welcome to submit written comments in advance of the meeting, to the contact person below.
The meeting will be held on June 4, 2024, from 11 a.m. to 4 p.m., EDT.
Written comments must be received on or before May 27, 2024.
You may submit comments by mail to: Rashaun Roberts, National Institute for Occupational Safety and Health, 1090 Tusculum Avenue, MS C-24, Cincinnati, Ohio 45226.
Written comments received in advance of the meeting will be included in the official record of the meeting. The public is also welcomed to listen to the meeting by joining the audio conference (information below). The audio conference line has 150 ports for callers.
Rashaun Roberts, Ph.D., Designated Federal Officer, National Institute for Occupational Safety & Health, Centers for Disease Control and Prevention, 1090 Tusculum Avenue, Mailstop C-24, Cincinnati, Ohio 45226, telephone: (513) 533-6800, toll free 1(800) 232-4636, email:
The charter was issued on August 3, 2001, renewed at appropriate intervals, and rechartered under Executive Order 14109 on March 22, 2024. Unless continued by the President the Board will terminate on September 30, 2025, consistent with E.O. 14109 of September 29, 2023.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC), within the Department of Health and Human Services (HHS), is seeking nominations for membership on the Advisory Council for the Elimination of Tuberculosis (ACET). ACET consists of 10 experts including the Chair in fields associated with public health, epidemiology, immunology, infectious diseases, pulmonary disease, pediatrics,
Nominations for membership on ACET must be received no later than September 30, 2024. Packages received after this time will not be considered for the current membership cycle.
All nominations should be emailed to
Marah Condit, M.S., Committee Management Lead, Office of Policy, Planning, and Partnerships, National Center for HIV, Viral Hepatitis, STD, and TB Prevention, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop US8-6, Atlanta, Georgia 30329-4027. Telephone: (404) 639-3423; email:
The Advisory Council for the Elimination of Tuberculosis (ACET) provides advice and recommendations regarding the elimination of tuberculosis (TB) to the Secretary, Department of Health and Human Services (HHS); the Assistant Secretary for Health, HHS; and the Director, Centers for Disease Control and Prevention (CDC). ACET (a) makes recommendations on policies, strategies, objectives, and priorities; (b) addresses development and application of new technologies; (c) provides guidance and review of CDC's TB prevention research portfolio and program priorities; and (d) reviews the extent to which progress has been made toward eliminating TB.
Nominations are sought for persons who have expertise and qualifications necessary to contribute to the accomplishment of the objectives of ACET. Nominees will be selected on the basis of their expertise in public health, epidemiology, immunology, infectious diseases, pulmonary disease, pediatrics, tuberculosis, microbiology, or preventive health care delivery. Federal employees will not be considered for membership. Members may be invited to serve for up to four-year terms. Selection of members is based on candidates' qualifications to contribute to the accomplishment of ACET objectives.
HHS policy stipulates that committee membership be balanced in terms of points of view represented and the committee's function. Appointments shall be made without discrimination on the basis of age, race, ethnicity, gender, sexual orientation, gender identity, HIV status, disability, and cultural, religious, or socioeconomic status. Nominees must be U.S. citizens and cannot be full-time employees of the U.S. Government. Current participation on Federal workgroups or prior experience serving on a Federal advisory committee does not disqualify a candidate; however, HHS policy is to avoid excessive individual service on advisory committees and multiple committee memberships. Committee members are Special Government Employees, requiring the filing of financial disclosure reports at the beginning of and annually during their terms. CDC reviews potential candidates for ACET membership each year and provides a slate of nominees for consideration to the Secretary of HHS for final selection. HHS notifies selected candidates of their appointment near the start of the term in July 2025, or as soon as the HHS selection process is completed. Note that the need for different expertise varies from year to year and a candidate who is not selected in one year may be reconsidered in a subsequent year.
Candidates should submit the following items:
Current curriculum vitae, including complete contact information (telephone numbers, mailing address, and email address)
At least one letter of recommendation from person(s) not employed by HHS. Candidates may submit letter(s) from current HHS employees if they wish, but at least one letter must be submitted by a person not employed by an HHS agency (
Nominations may be submitted by the candidate or by the person/organization recommending the candidate. CDC will collect and retain nominations received for up to two years to create a pool of potential ACET nominees. When a vacancy occurs, CDC will review nominations and may contact nominees at that time.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Medicare & Medicaid Services (CMS), Health and Human Services (HHS).
Final Notice.
This final notice announces our decision to approve the Accreditation Commission for Health Care (ACHC) for continued recognition as a national accrediting organization that accredits suppliers of home infusion therapy (HIT) services that wish to participate in the Medicare or Medicaid programs.
The approval announced in this final notice is effective April 23, 2024, through April 23, 2030.
Shannon Freeland, (410) 786-4348,
Home infusion therapy (HIT) is a treatment option for Medicare beneficiaries with a wide range of acute and chronic conditions. Section 5012 of the 21st Century Cures Act (Pub. L. 114-255, enacted December 13, 2016) added section 1861(iii) to the Social Security Act (the Act), establishing a new Medicare benefit for HIT services. Section 1861(iii)(1) of the Act defines “home infusion therapy” as professional services, including nursing services; training and education not otherwise covered under the Durable Medical Equipment (DME) benefit; remote monitoring; and other monitoring services. Home infusion therapy must be furnished by a qualified HIT supplier and furnished in the individual's home. Sections 1861(iii)(A) and (B) of the Act require that the individual (patient) must:
• Be under the care of an applicable provider (that is, physician, nurse practitioner, or physician assistant); and
• Have a plan of care established and periodically reviewed by a physician in coordination with the furnishing of home infusion drugs under Part B, which prescribes the type, amount, and duration of infusion therapy services that are to be furnished.
Section 1861(iii)(3)(D)(i)(III) of the Act requires that a qualified HIT supplier be accredited by an accrediting organization (AO) designated by the Secretary in accordance with section 1834(u)(5) of the Act.
Section 1834(u)(5)(A) of the Act identifies factors for designating HIT AOs and in reviewing and modifying the list of designated HIT AOs. These statutory factors are as follows:
• The ability of the accrediting organization to conduct timely reviews of HIT accreditation applications.
• The ability of the accrediting organization to take into account the capacities of HIT suppliers located in a rural area (as defined in section 1886(d)(2)(D) of the Act).
• Whether the accrediting organization has established reasonable fees to be charged to HIT suppliers applying for accreditation.
• Such other factors as the Secretary determines appropriate.
Section 1834(u)(5)(B) of the Act requires the Secretary to designate AOs to accredit HIT suppliers furnishing HIT no later than January 1, 2021. Section 1861(iii)(3)(D)(i)(III) of the Act requires a “qualified home infusion therapy supplier” to be accredited by a CMS-approved AO, in accordance with section 1834(u)(5) of the Act.
The current term of approval for the Accreditation Commission for Health Care (ACHC) Home Infusion Therapy accreditation program expires April 23, 2024.
Section 1834(u)(5) of the Act and regulations at 42 CFR 488.1010 require that our findings concerning review and approval of a national accrediting organization's requirements consider, among other factors, the applying accrediting organization's requirements for accreditation; survey procedures; resources for conducting required surveys; capacity to furnish information for use in enforcement activities; monitoring procedures for provider entities found not in compliance with the conditions or requirements; and ability to provide CMS with the necessary data.
Our rules at 42 CFR 488.1020(a) require that we publish, after receipt of an organization's complete application, a notice identifying the national accrediting body making the request, describing the nature of the request, and providing at least a 30-day public comment period. In accordance with our rules at 42 CFR 488.1010(d), we have 210 days from the receipt of a complete application to publish notice of approval or denial of the application.
In the November 24, 2023
• An administrative review of ACHC's:
++ Corporate policies;
++ Financial and human resources available to accomplish the proposed surveys;
++ Procedures for training, monitoring, and evaluation of its HIT surveyors;
++ Ability to investigate and respond appropriately to complaints against accredited HITs; and
++ Survey review and decision-making process for accreditation.
• The equivalency of ACHC's standards for HIT as compared with CMS' HIT conditions for participation.
• ACHC's survey process to determine the following:
++ The composition of the survey team, surveyor qualifications, and the ability of the organization to provide continuing surveyor training;
++ The comparability of ACHC's to CMS' standards and processes, including survey frequency, and the ability to investigate and respond appropriately to complaints against accredited facilities;
++ ACHC's processes and procedures for monitoring a HIT supplier found out of compliance with ACHC's program requirements;
++ ACHC's capacity to report deficiencies to the surveyed HIT facilities and respond to the facility's evidence of standards compliance in a timely manner;
++ ACHC's capacity to provide CMS with electronic data and reports necessary for effective assessment and interpretation of the organization's survey process;
++ ACHC's capacity to adequately fund required surveys;
++ ACHC's policies with respect to whether surveys are announced or unannounced, to ensure that surveys are unannounced; and
++ ACHC's agreement to provide CMS with a copy of the most current accreditation survey together with any other information related to the survey as CMS may require (including corrective action plans or ACHC's evidence of standards compliance.)
• The adequacy of ACHC's staff and other resources, and its financial viability.
• ACHC's agreement or policies for voluntary and involuntary termination of suppliers.
• ACHC's agreement or policies for voluntary and involuntary termination of the HIT AO program.
• ACHC's policies and procedures to avoid conflicts of interest, including the appearance of conflicts of interest, involving individuals who conduct surveys or participate in accreditation decisions.
In accordance with section 1834(u)(5) of the Act, the November 24, 2023, proposed notice also solicited public comments regarding whether ACHC's requirements met or exceeded the Medicare conditions for participation for HIT. No comments were received in response to our proposed notice.
We compared ACHC's HIT accreditation requirements and survey process with the Medicare Conditions for Coverage of 42 CFR part 486, and the survey and certification process requirements of part 488. Our review and evaluation of ACHC's HIT application, which were conducted as described in section III. of this final notice, yielded the following areas where, as of the date of this notice, ACHC has completed revising its standards and certification processes to meet the conditions at §§ 486.500 to 486.525.
• Section 486.520(a), to address the requirement of all patients must be under the care of an applicable provider.
• Section 486.520(b), to address the requirement that the plan of care must be established by a physician prescribing the type, amount, and duration for HIT.
• Section 486.520(c), to address the requirement that the plan of care must be periodically reviewed by the physician.
• Section 486.525(a), to address the requirement that the HIT suppliers to be available 7 days a week, 24 hours a day
• Section 486.525(a)(1), to provide professional services, including nursing services.
• Section 486.525(a)(2), to address the requirement for patient education and training to be available for patients on a 7 day a week, 24 hour a day basis in accordance with the plan of care.
• Section 486.525(a)(3), to address the requirement of remote monitoring for the provision of HIT and home infusion drugs.
Based on the review and observations described in section III. of this final notice, we have determined that ACHC's requirements for HITs meet or exceed our requirements. Therefore, we approve ACHC as a national accreditation organization for HITs that request participation in the Medicare program, effective April 23, 2024 through April 23, 2030.
This document does not impose information collection requirements, that is, reporting, recordkeeping, or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).
The Administrator of the Centers for Medicare & Medicaid Services (CMS), Chiquita Brooks-LaSure, having reviewed and approved this document, authorizes Trenesha Fultz-Mimms, who is the Federal Register Liaison, to electronically sign this document for purposes of publication in the
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
U.S. Immigration and Customs Enforcement; Department of Homeland Security.
Notice.
The Department of Homeland Security (DHS) is suspending certain regulatory requirements for certain Palestinian F-1 nonimmigrant students who are experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories. The Secretary is providing relief to these students who are in lawful F-1 nonimmigrant status, so the students may request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain their F-1 nonimmigrant status.
This action for certain Palestinian F-1 nonimmigrant students covered by this notice began on February 14, 2024, and ends on August 13, 2025.
Sharon Snyder, Unit Chief, Policy and Response Unit, Student and Exchange Visitor Program, MS 5600, U.S. Immigration and Customs Enforcement (ICE), 500 12th Street SW, Washington, DC 20536-5600; email:
For the purposes of this Notice, ICE intends to cover non-U.S. citizens of any nationality, or without nationality, who are Palestinian. F-1 nonimmigrant students who possesses any of the following authentic documents,
• a Palestinian Authority Passport;
• a Palestinian Authority Identification Card;
• a Birth Certificate or Birth Extract verified or issued by a recognized governmental authority identifying the holder as having been born in the Palestinian Territories;
• an identification document issued by a third country, the United Nations, its specialized agencies and related organizations, or the International Committee of the Red Cross, indicating the holder is a Palestinian; or
• a travel document issued by a third country, the United Nations, its
The Secretary is exercising the authority under 8 CFR 214.2(f)(9) to temporarily suspend the applicability of certain requirements governing on-campus and off-campus employment for certain F-1 nonimmigrant students who are Palestinian, who were lawfully present in the United States in F-1 nonimmigrant student status as of February 14, 2024, and who are experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories. Effective with this publication, suspension of the employment limitations is available through August 13, 2025, for those who were in lawful F-1 nonimmigrant status on February 14, 2024. DHS will deem an F-1 nonimmigrant student granted employment authorization through this notice to be engaged in a “full course of study” for the duration of the employment authorization, if the student satisfies the minimum course load set forth in this notice.
This notice applies exclusively to F-1 nonimmigrant students who meet all of the following conditions:
(1) Possesses any authentic document described in the Supplementary Information section of this Notice;
(2) Were lawfully present in the United States on February 14, 2024, in F-1 nonimmigrant status under section 101(a)(15)(F)(i) of the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is Student and Exchange Visitor Program (SEVP)-certified for enrollment for F-1 nonimmigrant students;
(4) Are currently maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories.
This notice applies to F-1 nonimmigrant students in an approved private school in kindergarten through grade 12, public school grades 9 through 12, and undergraduate and graduate education. An F-1 nonimmigrant student covered by this notice who transfers to another SEVP-certified academic institution remains eligible for the relief provided by means of this notice.
DHS is taking action to provide relief to certain Palestinian F-1 nonimmigrant students experiencing severe economic hardship due to the current humanitarian crisis in the Palestinian Territories. Based on its review of the conditions in the Palestinian Territories and input received from the U.S. Department of State (DOS), DHS is taking action to allow certain eligible Palestinian F-1 nonimmigrant students to request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant student status.
On February 14, 2024, President Joseph Biden issued a memorandum to the Secretary of State and the Secretary of DHS to defer for 18 months the removal of certain Palestinians present in the United States by implementing Deferred Enforced Departure (DED) for those eligible individuals.
Undergraduate F-1 nonimmigrant students who receive on-campus or off-campus employment authorization under this notice must remain registered for a minimum of six semester or quarter hours of instruction per academic term. Undergraduate F-1 nonimmigrant students enrolled in a term of different duration must register for at least one half of the credit hours normally required under a “full course of study.”
In addition, an F-1 nonimmigrant student (either undergraduate or graduate) granted on-campus or off-campus employment authorization under this notice may count up to the equivalent of one class or three credits per session, term, semester, trimester, or quarter of online or distance education toward satisfying this minimum course load requirement, unless their course of study is in an English language study program.
Yes. An F-1 nonimmigrant student who is Palestinian, who already has on-campus or off-campus employment authorization and is otherwise eligible may benefit under this notice, which suspends certain regulatory requirements relating to the minimum course load requirement under 8 CFR 214.2(f)(6)(i) and certain employment eligibility requirements under 8 CFR 214.2(f)(9). Such an eligible F-1 nonimmigrant student may benefit without having to apply for a new Form I-766, Employment Authorization Document (EAD). To benefit from this notice, the F-1 nonimmigrant student must request that their designated school official (DSO) enter the following statement in the remarks field of the
Approved for more than 20 hours per week of [DSO must insert “on-campus” or “off-campus,” depending upon the type of employment authorization the student already has] employment authorization and reduced course load under the Special Student Relief authorization from [DSO must insert the beginning date of the notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert either the student's program end date, the current EAD expiration date (if the student is currently authorized for off-campus employment), or the end date of this notice, whichever date comes first].
No. DHS will deem an F-1 nonimmigrant student who receives and comports with the employment authorization permitted under this notice to be engaged in a “full course of study”
No. An F-2 spouse or minor child of an F-1 nonimmigrant student is not authorized to work in the United States and, therefore, may not accept employment while in F-2 nonimmigrant status.
No. The suspension of the applicability of the standard regulatory requirements only applies to certain F-1 nonimmigrant students who meet the following conditions:
(1) Possesses any authentic document described in the
(2) Were lawfully present in the United States on February 14, 2024, in F-1 nonimmigrant status under section 101(a)(15)(F)(i) of the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is Student and Exchange Visitor Program (SEVP)-certified for enrollment for F-1 nonimmigrant students;
(4) Are currently maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories.
An F-1 nonimmigrant student who does not meet all these requirements is ineligible for the suspension of the applicability of the standard regulatory requirements (even if experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories).
Yes. This notice applies to such an F-1 nonimmigrant student, but only if the DSO has properly notated the student's SEVIS record, which will then appear on the student's Form I-20. The normal rules for visa issuance remain applicable to a nonimmigrant who needs to apply for a new F-1 visa to continue an educational program in the United States.
Yes. However, this notice does not by itself reduce the required course load for Palestinian F-1 nonimmigrant students enrolled in kindergarten through grade 12 at a private school, or grades 9 through 12 at a public high school. Such students must maintain the minimum number of hours of class attendance per week prescribed by the academic institution for normal progress toward graduation, as required under 8 CFR 214.2(f)(6)(i)(E). The suspension of certain regulatory requirements related to employment through this notice is applicable to all eligible F-1 nonimmigrant students regardless of educational level. Eligible Palestinian F-1 nonimmigrant students enrolled in an elementary school, middle school, or high school do benefit from the suspension of the requirement in 8 CFR 214.2(f)(9)(i) that limits on-campus employment to 20 hours per week while school is in session.
Yes. For an F-1 nonimmigrant student covered in this notice, the Secretary is suspending the applicability of the requirement in 8 CFR 214.2(f)(9)(i) that limits an F-1 nonimmigrant student's on-campus employment to 20 hours per week while school is in session. An eligible F-1 nonimmigrant student has authorization to work more than 20 hours per week while school is in session if the DSO has entered the following statement in the remarks field of the student's SEVIS record, which will be reflected on the student's Form I-20:
Approved for more than 20 hours per week of on-campus employment and reduced course load, under the Special Student Relief authorization from [DSO must insert the beginning date of this notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert the student's program end date or the end date of this notice, whichever date comes first].
To obtain on-campus employment authorization, the F-1 nonimmigrant student must demonstrate to the DSO that the employment is necessary to avoid severe economic hardship directly resulting from the current humanitarian crisis in the Palestinian Territories. An F-1 nonimmigrant student authorized by the DSO to engage in on-campus employment by means of this notice does not need to file any applications with U.S. Citizenship and Immigration Services (USCIS). The standard rules permitting full-time employment on-campus when school is not in session or during school vacations apply, as described in 8 CFR 214.2(f)(9)(i).
Yes. DHS will deem an F-1 nonimmigrant student who receives on-campus employment authorization under this notice to be engaged in a “full course of study”
For an F-1 student covered by this notice, as provided under 8 CFR 214.2(f)(9)(ii)(A), the Secretary is suspending the following regulatory requirements relating to off-campus employment:
(a) The requirement that a student must have been in F-1 nonimmigrant student status for one full academic year to be eligible for off-campus employment;
(b) The requirement that an F-1 nonimmigrant student must demonstrate that acceptance of employment will not interfere with the student's carrying a full course of study;
(c) The requirement that limits an F-1 nonimmigrant student's employment authorization to no more than 20 hours per week of off-campus employment while the school is in session; and
(d) The requirement that the student demonstrate that employment under 8 CFR 214.2(f)(9)(i) is unavailable or otherwise insufficient to meet the needs that have arisen as a result of the unforeseen circumstances.
Yes. DHS will deem an F-1 nonimmigrant student who receives off-campus employment authorization by means of this notice to be engaged in a “full course of study”
An F-1 nonimmigrant student must file a Form I-765, Application for Employment Authorization, with USCIS to apply for off-campus employment authorization based on severe economic hardship directly resulting from the current humanitarian crisis in the Palestinian Territories.
(1) This employment is necessary to avoid severe economic hardship; and
(2) The hardship is a direct result of the current humanitarian crisis in the Palestinian Territories.
If the DSO agrees that the F-1 nonimmigrant student is entitled to receive such employment authorization, the DSO must recommend application approval to USCIS by entering the following statement in the remarks field of the student's SEVIS record, which will then appear on that student's Form I-20:
Recommended for off-campus employment authorization in excess of 20 hours per week and reduced course load under the Special Student Relief authorization from the date of the USCIS authorization noted on Form I-766 until [DSO must insert the program end date or the end date of this notice, whichever date comes first].
The F-1 nonimmigrant student must then file the properly endorsed Form I-20 and Form I-765 according to the instructions for the Form I-765. The F-1 nonimmigrant student may begin working off-campus only upon receipt of the EAD from USCIS.
(a) The F-1 nonimmigrant student is in good academic standing and is
(b) The F-1 nonimmigrant student is a Palestinian, and is experiencing severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories, as documented on the Form I-20;
(c) The F-1 nonimmigrant student has confirmed that the student will comply with the reduced course load requirements of this notice and register for the duration of the authorized employment for a minimum of six semester or quarter hours of instruction per academic term if at the undergraduate level, or for a minimum of three semester or quarter hours of instruction per academic term if at the graduate level;
(d) The off-campus employment is necessary to alleviate severe economic hardship to the individual as a direct result of the current humanitarian crisis in the Palestinian Territories.
(a) Ensure that the application package includes all of the following documents:
(1) A completed Form I-765 with all applicable supporting evidence;
(2) The required fee or properly documented fee waiver request as defined in 8 CFR 106.2 and 106.3; and
(3) A signed and dated copy of the student's Form I-20 with the appropriate DSO recommendation, as previously described in this notice; and
(b) Send the application in an envelope which is clearly marked on the front of the envelope, bottom right-hand side, with the phrase “SPECIAL STUDENT RELIEF.”
If USCIS approves the student's Form I-765, USCIS will send the student a Form I-766 EAD as evidence of employment authorization. The EAD will contain an expiration date that does not exceed the end of the granted temporary relief.
Yes. Although they are not required to apply for a DED-related EAD, if an eligible F-1 nonimmigrant student wants to obtain such an EAD, the student must file Form I-765 and pay the related fee (or request a fee waiver). The F-1 student may also apply for Special Student Relief under this notice by requesting that the DSO notate on their Form I-20 in SEVIS that the student has been authorized to carry a reduced course load and is permitted to work an increased number of hours under Special Student Relief while school is in session. The DSO should also notate on the Form I-20 that the student is working pursuant to a DED-related EAD. As long as the F-1 nonimmigrant student maintains the minimum course load described in this notice, does not otherwise violate the student's nonimmigrant status, including as provided under 8 CFR 214.1(g), and remains covered under DED, then the student maintains F-1 nonimmigrant status and DED concurrently.
The F-1 nonimmigrant student must maintain normal course load requirements for a “full course of study”
There is no further application process with USCIS if a student has been approved for a DED-related EAD. However, the F-1 nonimmigrant student must demonstrate and provide documentation to the DSO of severe economic hardship as a direct result of the current humanitarian crisis in the Palestinian Territories. The DSO will then verify and update the student's SEVIS record to enable the F-1 nonimmigrant student with DED to reduce their course load without any further action or application. No other EAD needs to be issued for the F-1 nonimmigrant student to have employment authorization.
Yes. Current regulations permit certain students who fall out of F-1 nonimmigrant student status to apply for reinstatement.
This notice grants temporary relief through August 13, 2025,
An F-1 nonimmigrant student seeking off-campus employment authorization due to severe economic hardship resulting from the current humanitarian crisis in the Palestinian Territories must demonstrate to the DSO that this employment is necessary to avoid severe economic hardship. A DSO who agrees that a nonimmigrant student should receive such employment authorization must recommend an application approval to USCIS by entering information in the remarks field of the student's SEVIS record. The authority to collect this information is in the SEVIS collection of information currently approved by the Office of Management and Budget (OMB) under OMB Control Number 1653-0038.
This notice also allows an eligible F-1 nonimmigrant student to request employment authorization, work an increased number of hours while the academic institution is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant student status.
To apply for employment authorization, certain F-1 nonimmigrant students must complete and submit a currently approved Form I-765 according to the instructions on the form. OMB has previously approved the collection of information contained on the current Form I-765, consistent with the PRA (OMB Control No. 1615-0040). Although there will be a slight increase in the number of Form I-765 filings because of this notice, the number of filings currently contained in the OMB annual inventory for Form I-765 is sufficient to cover the additional filings. Accordingly, there is no further action required under the PRA.
U.S. Immigration and Customs Enforcement; Department of Homeland Security.
Notice.
The Department of Homeland Security is suspending certain regulatory requirements for F-1 nonimmigrant students from Ethiopia who are experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia. The Secretary is providing relief to these students who are in lawful F-1 nonimmigrant status, so the students may request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain their F-1 nonimmigrant status.
This action is effective June 13, 2024, through December 12, 2025.
Sharon Snyder, Unit Chief, Policy and Response Unit, Student and Exchange Visitor Program, MS 5600, U.S. Immigration and Customs Enforcement, 500 12th Street SW, Washington, DC 20536-5600; email:
The Secretary is exercising authority under 8 CFR 214.2(f)(9) to temporarily suspend the applicability of certain requirements governing on-campus and off-campus employment for F-1 nonimmigrant students whose country of citizenship is Ethiopia regardless of country of birth (or individuals having no nationality who last habitually resided in Ethiopia), who are present in the United States in lawful F-1 nonimmigrant student status on the date of publication of this notice, and who are experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia. The original notice, which applied to F-1 nonimmigrant students who met certain criteria, including having been lawfully present in the United States in F-1 nonimmigrant status on December 12, 2022, was effective from December 12, 2022, through June 12, 2024.
This notice applies exclusively to F-1 nonimmigrant students who meet all of the following conditions:
(1) Are a citizen of Ethiopia regardless of country of birth (or an individual having no nationality who last habitually resided in Ethiopia);
(2) Were lawfully present in the United States on the date of publication of this notice in F-1 nonimmigrant status under section 101(a)(15)(F)(i) of the Immigration and Nationality Act (INA), 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is Student and Exchange Visitor Program (SEVP)-certified for enrollment for F-1 nonimmigrant students;
(4) Are currently maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia.
This notice applies to F-1 nonimmigrant students in an approved private school in kindergarten through grade 12, public school grades 9 through 12, and undergraduate and graduate education. An F-1 nonimmigrant student covered by this notice who
DHS is taking action to provide relief to Ethiopian F-1 nonimmigrant students experiencing severe economic hardship due to the current armed conflict and the current humanitarian crisis in Ethiopia. Based on its review of country conditions in Ethiopia and input received from the U.S. Department of State (DOS), DHS is taking action to allow eligible F-1 nonimmigrant students from Ethiopia to request employment authorization, work an increased number of hours while school is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant student status.
In November 2020, fighting between the Ethiopian National Defense Forces (ENDF)
Despite the COHA and improvements in the northern Tigray region, violence has continued, or escalated, in other parts of the country.
Though the COHA was signed in November 2022, Northern Ethiopia has faced increasing demands for humanitarian and protection services.
In November 2023, the United Nations High Commissioner for Refugees (UNHCR) assessed that “children are increasingly resorting to harmful activities to cope with the situation, including school drop-out, child marriage, sexual exploitation, begging, child labor and theft.”
In 2023, food insecurity continued to be a major concern in Ethiopia due to multiple challenges, including high malnutrition rates, and recent reports of drought-like conditions.
The UNHCR reported in January 2024, that, “Access for humanitarian actors remains restricted in locations affected by violence (especially in Amhara, Oromia, parts of Benishangul Gumuz), while the safety and security of the civilian population, including IDPs, is deteriorating.
In March 2023, U.S. Secretary of State Antony Blinken stated the following regarding atrocities committed in Tigray, “members of [ENDF], Eritrean Defense Forces (EDF), [TPLF] forces, and Amhara forces committed war crimes during the conflict in northern Ethiopia. Members of ENDF, EDF, and Amhara forces also committed crimes against humanity, including murder, rape and other forms of sexual violence, and persecution.”
In 2022, Ethiopia's real GDP growth fell to 5.3 percent from 5.6 percent in 2021.
As of March 19, 2024, 3,620 F-1 nonimmigrant students from Ethiopia are enrolled at SEVP-certified academic institutions in the United States. Given the extent of the current armed conflict and the current humanitarian crisis in Ethiopia, affected students whose primary means of financial support comes from Ethiopia may need to be exempt from the normal student employment requirements to continue their studies in the United States. The current armed conflict and the current humanitarian crisis has made it unfeasible for many students to safely return to Ethiopia for the foreseeable future. Without employment authorization, these students may lack the means to meet basic living expenses.
Undergraduate F-1 nonimmigrant students who receive on-campus or off-campus employment authorization under this notice must remain registered for a minimum of six semester or quarter hours of instruction per academic term. Undergraduate F-1 nonimmigrant students enrolled in a term of different duration must register for at least one half of the credit hours normally required under a “full course of study.”
In addition, an F-1 nonimmigrant student (either undergraduate or graduate) granted on-campus or off-campus employment authorization under this notice may count up to the equivalent of one class or three credits per session, term, semester, trimester, or quarter of online or distance education toward satisfying this minimum course load requirement, unless their course of study is in an English language study program.
Yes. An F-1 nonimmigrant student who is an Ethiopian citizen, regardless of country of birth (or an individual having no nationality who last habitually resided in Ethiopia), who already has on-campus or off-campus employment authorization and is otherwise eligible may benefit under this notice, which suspends certain regulatory requirements relating to the minimum course load requirement under 8 CFR 214.2(f)(6)(i) and certain employment eligibility requirements under 8 CFR 214.2(f)(9). Such an eligible F-1 nonimmigrant student may benefit without having to apply for a new Form I-766, Employment
Approved for more than 20 hours per week of [DSO must insert “on-campus” or “off-campus,” depending upon the type of employment authorization the student already has] employment authorization and reduced course load under the Special Student Relief authorization from [DSO must insert the beginning date of the notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert either the student's program end date, the current EAD expiration date (if the student is currently authorized for off-campus employment), or the end date of this notice, whichever date comes first].
No. DHS will deem an F-1 nonimmigrant student who receives and comports with the employment authorization permitted under this notice to be engaged in a “full course of study”
No. An F-2 spouse or minor child of an F-1 nonimmigrant student is not authorized to work in the United States and, therefore, may not accept employment under the F-2 nonimmigrant status, consistent with 8 CFR 214.2(f)(15)(i).
No. The suspension of the applicability of the standard regulatory requirements only applies to certain F-1 nonimmigrant students who meet the following conditions:
(1) Are a citizen of Ethiopia regardless of country of birth (or an individual having no nationality who last habitually resided in Ethiopia);
(2) Were lawfully present in the United States on the date of publication of this notice in F-1 nonimmigrant status, under section 101(a)(15)(F)(i) of the INA, 8 U.S.C. 1101(a)(15)(F)(i);
(3) Are enrolled in an academic institution that is SEVP-certified for enrollment of F-1 nonimmigrant students;
(4) Are maintaining F-1 nonimmigrant status; and
(5) Are experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia.
An F-1 nonimmigrant student who does not meet all these requirements is ineligible for the suspension of the applicability of the standard regulatory requirements (even if experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia).
Yes. This notice applies to such an F-1 nonimmigrant student, but only if the DSO has properly notated the student's SEVIS record, which will then appear on the student's Form I-20. The normal rules for visa issuance remain applicable to a nonimmigrant who needs to apply for a new F-1 visa to continue an educational program in the United States.
Yes. However, this notice does not by itself reduce the required course load for F-1 nonimmigrant students from Ethiopia enrolled in kindergarten through grade 12 at a private school, or grades 9 through 12 at a public high school. Such students must maintain the minimum number of hours of class attendance per week prescribed by the academic institution for normal progress toward graduation, as required under 8CFR214.2(f)(6)(i)(E). The suspension of certain regulatory requirements related to employment through this notice is applicable to all eligible F-1 nonimmigrant students regardless of educational level. Eligible F-1 nonimmigrant students from Ethiopia enrolled in an elementary school, middle school, or high school may benefit from the suspension of the requirement in 8 CFR 214.2(f)(9)(i) that limits on-campus employment to 20 hours per week while school is in session.
Yes. For an F-1 nonimmigrant student covered in this notice, the Secretary is suspending the applicability of the requirement in 8 CFR 214.2(f)(9)(i) that limits an F-1 nonimmigrant student's on-campus employment to 20 hours per week while school is in session. An eligible F-1 nonimmigrant student has authorization to work more than 20 hours per week while school is in session if the DSO has entered the following statement in the remarks field of the student's SEVIS record, which will be reflected on the student's Form I-20:
Approved for more than 20 hours per week of on-campus employment and reduced course load, under the Special Student Relief authorization from [DSO must insert the beginning date of this notice or the beginning date of the student's employment, whichever date is later] until [DSO must insert the student's program end date or the end date of this notice, whichever date comes first].
To obtain on-campus employment authorization, the F-1 nonimmigrant student must demonstrate to the DSO that the employment is necessary to avoid severe economic hardship directly resulting from the current armed conflict and the current humanitarian
Yes. DHS will deem an F-1 nonimmigrant student who receives on-campus employment authorization under this notice to be engaged in a “full course of study”
For an F-1 nonimmigrant student covered by this notice, as provided under 8 CFR 214.2(f)(9)(ii)(A), the Secretary is suspending the following regulatory requirements relating to off-campus employment:
(a) The requirement that a student must have been in F-1 nonimmigrant student status for one full academic year to be eligible for off-campus employment;
(b) The requirement that an F-1 nonimmigrant student must demonstrate that acceptance of employment will not interfere with the student's carrying a full course of study;
(c) The requirement that limits an F-1 nonimmigrant student's employment authorization to no more than 20 hours per week of off-campus employment while the school is in session; and
(d) The requirement that the student demonstrate that employment under 8 CFR 214.2(f)(9)(i) is unavailable or otherwise insufficient to meet the needs that have arisen as a result of the unforeseen circumstances.
Yes. DHS will deem an F-1 nonimmigrant student who receives off-campus employment authorization by means of this notice to be engaged in a “full course of study”
An F-1 nonimmigrant student must file a Form I-765, Application for Employment Authorization, with USCIS to apply for off-campus employment authorization based on severe economic hardship directly resulting from the current armed conflict and the current humanitarian crisis in Ethiopia.
(1) This employment is necessary to avoid severe economic hardship; and
(2) The hardship is a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia.
If the DSO agrees that the F-1 nonimmigrant student is entitled to receive such employment authorization, the DSO must recommend application approval to USCIS by entering the following statement in the remarks field of the student's SEVIS record, which will then appear on that student's Form I-20:
Recommended for off-campus employment authorization in excess of 20 hours per week and reduced course load under the Special Student Relief authorization from the date of the USCIS authorization noted on Form I-766 until [DSO must insert the program end date or the end date of this notice, whichever date comes first].
The F-1 nonimmigrant student must then file the properly endorsed Form I-20 and Form I-765 according to the instructions for the Form I-765. The F-1 nonimmigrant student may begin working off campus only upon receipt of the EAD from USCIS.
(a) The F-1 nonimmigrant student is in good academic standing and is carrying a “full course of study”
(b) The F-1 nonimmigrant student is a citizen of Ethiopia, regardless of country of birth (or an individual having no nationality who last habitually resided in Ethiopia), and is experiencing severe economic hardship as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia, as documented on the Form I-20;
(c) The F-1 nonimmigrant student has confirmed that the student will comply with the reduced course load requirements of this notice and register for the duration of the authorized employment for a minimum of six semester or quarter hours of instruction per academic term if at the
(d) The off-campus employment is necessary to alleviate severe economic hardship to the individual as a direct result of the current armed conflict and the current humanitarian crisis in Ethiopia.
(a) Ensure that the application package includes the following documents:
(1) A completed Form I-765 with all applicable supporting evidence;
(2) The required fee or properly documented fee waiver request as defined in 8 CFR 106.2 and 106.3; and
(3) A signed and dated copy of the student's Form I-20 with the appropriate DSO recommendation, as previously described in this notice; and
(b) Send the application in an envelope which is clearly marked on the front of the envelope, bottom right-hand side, with the phrase “SPECIAL STUDENT RELIEF.”
If USCIS approves the student's Form I-765, USCIS will send the student a Form I-766 EAD as evidence of employment authorization. The EAD will contain an expiration date that does not exceed the end of the granted temporary relief.
Yes. An F-1 nonimmigrant student who has not yet applied for TPS or for other relief that reduces the student's course load per term and permits an increased number of work hours per week, such as Special Student Relief,
Under the first option, the F-1 nonimmigrant student may apply for TPS according to the instructions in the USCIS notice designating Ethiopia for TPS elsewhere in this issue of the
Under the second option, the F-1 nonimmigrant student may apply for an EAD under Special Student Relief by filing Form I-765 with the location specified in the filing instructions. At the same time, the F-1 nonimmigrant student may file a separate TPS application but must submit the Form I-821 according to the instructions provided in the
The F-1 nonimmigrant student must maintain normal course load requirements for a “full course of study”
There is no further application process with USCIS if a student has been approved for a TPS-related EAD. The F-1 nonimmigrant student must demonstrate and provide documentation to the DSO of the direct economic hardship resulting from the current armed conflict and the current humanitarian crisis in Ethiopia. The DSO will then verify and update the student's record in SEVIS to enable the F-1 nonimmigrant student with TPS to reduce the course load without any further action or application. No other EAD needs to be issued for the F-1 nonimmigrant student to have employment authorization.
Yes. Regulations permit certain students who fall out of F-1 nonimmigrant student status to apply for reinstatement.
This notice grants temporary relief until December 12, 2025,
An F-1 nonimmigrant student seeking off-campus employment authorization due to severe economic hardship resulting from the current armed conflict and the current humanitarian crisis in Ethiopia must demonstrate to the DSO that this employment is necessary to avoid severe economic hardship. A DSO who agrees that a nonimmigrant student should receive such employment authorization must recommend an application approval to USCIS by entering information in the remarks field of the student's SEVIS record. The authority to collect this information is in the SEVIS collection of information currently approved by the Office of Management and Budget (OMB) under OMB Control Number 1653-0038.
This notice also allows an eligible F-1 nonimmigrant student to request employment authorization, work an increased number of hours while the academic institution is in session, and reduce their course load while continuing to maintain F-1 nonimmigrant student status.
To apply for employment authorization, certain F-1 nonimmigrant students must complete and submit a currently approved Form I-765 according to the instructions on the form. OMB has previously approved the collection of information contained on the current Form I-765, consistent with the PRA (OMB Control Number 1615-0040). Although there will be a slight increase in the number of Form I-765 filings because of this notice, the number of filings currently contained in the OMB annual inventory for Form I-765 is sufficient to cover the additional filings. Accordingly, there is no further action required under the PRA.
U.S. Citizenship and Immigration Services (USCIS), Department of Homeland Security (DHS).
Notice of employment authorization for individuals covered by Deferred Enforced Departure (DED).
On February 14, 2024, President Joseph Biden issued a memorandum to the Secretary of State and the Secretary of Homeland Security (Secretary) determining that it was in the foreign policy interest of the United States to defer for 18 months, the removal of certain Palestinians present in the United States and to provide them with employment authorization documentation. The memorandum directed the Secretary to make provision for immediate allowance of employment authorization for such individuals. This notice provides information about Deferred Enforced Departure (DED) for Palestinians and provides information on how eligible individuals may apply for DED-based Employment Authorization Documents (EADs) with USCIS, as well as for travel authorization.
DED for eligible Palestinian noncitizens covered by this notice began on February 14, 2024, and ends on August 13, 2025.
• You may contact Rená Cutlip-Mason, Chief, Humanitarian Affairs Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, by mail at 5900 Capital Gateway Drive, Camp Springs, MD 20746, or by phone at 240-721-3000.
• For further information on DED, including additional information on eligibility, please visit the USCIS DED web page at
• If you have additional questions about DED, please visit
• Applicants seeking information about the status of their individual I-765, EAD Application for Employment Authorization, or I-131, Application for Travel Document, cases may check Case Status Online, available on the USCIS website at
• Further information will also be available at local USCIS offices upon publication of this Notice.
For the purposes of this notice, USCIS intends to cover non-U.S. citizens of any nationality, or without nationality, who are Palestinian. USCIS will evaluate claims for DED employment authorization and advance travel authorization based on authentic documents,
• a Palestinian Authority Passport;
• a Palestinian Authority Identification Card;
• a Birth Certificate or Birth Extract verified or issued by a recognized governmental authority identifying the holder as having been born in the Palestinian Territories;
• an identification document issued by a third country, the United Nations, its specialized agencies and related organizations, or the International Committee of the Red Cross, indicating the holder is a Palestinian; or
• a travel document issued by a third country, the United Nations, its specialized agencies and related organizations, or the International Committee of the Red Cross, identifying the holder as a Palestinian.
Pursuant to the President's constitutional authority to conduct the foreign relations of the United States, President Biden has determined that it is in the foreign policy interest of the United States to defer through August 13, 2025, the removal of certain Palestinians who have resided in the United States since February 14, 2024.
• DED is an administrative deferral of removal ordered by the President. The authority to extend DED arises from the President's constitutional authority to conduct the foreign relations of the United States. DED has been authorized in situations where certain groups of noncitizens may face danger if required to return to countries or any part of such foreign countries experiencing political instability, conflict, or other unsafe conditions, or when there are other foreign policy reasons for allowing a designated group of noncitizens to remain in the United States temporarily.
• Although DED is not a specific immigration status and does not require an application to be filed with USCIS, individuals covered by DED are not subject to removal from the United States, usually for a designated period. Furthermore, the President may direct that the Secretary of Homeland Security provide that certain benefits that are authorized under the immigration laws, such as employment authorization, be made available to the noncitizens covered by the DED directive during the designated period.
• USCIS publishes a
• The eligibility requirements for individuals who are covered by DED are based on the terms of the President's directive regarding DED and any relevant implementing requirements established by DHS. Since DED is a directive to defer removal of an individual, rather than a specific immigration status like Temporary Protected Status, there is no DED application form required for an individual to be covered by DED. If an individual covered by DED wants to apply for an EAD, they must file Form I-765, Application for Employment Authorization. Similarly, should an individual covered by DED want to apply for advance travel authorization, they must file Form I-131, Application for Travel Document.
Consistent with the President's February 14, 2024, DED memorandum,
• Who have voluntarily returned to the Palestinian Territories after February 14, 2024;
• Who have not continuously resided in the United States since February 14, 2024;
• Who are inadmissible under 212(a)(3) of the Immigration and Nationality Act (INA) (8 U.S.C. 1182(a)(3)) or deportable under section 237(a)(4) of the INA (8 U.S.C. 1227(a)(4));
• Who have been convicted of any felony or two or more misdemeanors committed in the United States, or who meet any of the criteria set forth in section 208(b)(2)(A) of the INA (8 U.S.C. 1158(b)(2)(A));
• Who are subject to extradition;
• Whose presence in the United States the Secretary of Homeland Security has determined is not in the interest of the United States or presents a danger to public safety; or
• Whose presence in the United States the Secretary of State has reasonable grounds to believe would have potentially serious adverse foreign policy consequences for the United States.
If you are a Palestinian covered by DED and want a DED-based EAD, you must file Form I-765. Please carefully follow the Form I-765 instructions when completing the application for an EAD. When filing the Form I-765, you must:
• Indicate that you are eligible for DED by entering “(a)(11)” in response to Question 27 on the Form I-765; and
• Submit the fee for the Form I-765 (or request a fee waiver, which you may submit on Form I-912, Request for Fee
The filing instructions on Form I-765 list all the documents needed to apply. You may also find information on the initial required documents on the USCIS website at
If biometrics are required to produce your EAD, you will receive a biometrics services appointment notice with the time and location of your appointment. You can prepare for your biometrics appointment by visiting the
You can find filing fees by visiting Form G-1055, Fee Schedule
For a DED-based EAD, mail your completed Form I-765 and supporting documentation to the proper address in Table 1.
You may file Form I-765 and Form I-131, Application for Travel Document, together or separately. If you are filing multiple applications, petitions, or requests, USCIS recommends sending separate payments for each application, otherwise if one payment is submitted and one of the applications, petitions, or requests is rejected, all others will be rejected as well. More information on filing a Form I-131 appears below.
No. Electronic filing is not available when filing a DED-based Form I-765.
This DED authorization is set to end on August 13, 2025. After that date, employers can no longer accept EADs with the notation A-11 under Category and a Card Expires date of August 13, 2025. Employees will need to present other evidence of continued work authorization.
Palestinians covered by DED may also apply for and be granted travel authorization as a matter of discretion. You must file for travel authorization if you wish to travel outside of the United States and be eligible to seek re-entry to the United States. If USCIS grants travel authorization, it generally gives you permission to leave the United States and return during a specific period. To request travel authorization, you must file Form I-131, available at
• Select Item Number 1.d. in Part 2 on the Form I-131; and
• Submit the fee for the Form I-131.
If you leave the United States without first receiving travel authorization, you may no longer be eligible for DED and may not be permitted to reenter the United States. Please also be advised that if you return to the Palestinian Territories, even with advance travel authorization, you may not be permitted to resume DED in the United States since the presidential memorandum providing for DED for Palestinians excludes individuals who have voluntarily returned to the Palestinian Territories after the date of the memorandum.
Mail your completed Form I-131 to the proper address provided in Table 1.
The filing instructions for Form I-131 list all the documents you need to include with your application. You may also find information on the acceptable documentation and DED eligibility on the USCIS website at
To get case status information about your DED-based EAD request, you can check Case Status Online at
You can find the Lists of Acceptable Documents on Form I-9, Employment Eligibility Verification, as well as the Acceptable Documents web page at
You may present any documentation from List A (which provides evidence of both identity and employment authorization) or documentation from List B (which provides evidence of your identity) together with documentation from List C (which provides evidence of employment authorization), or you may
Yes, if you are covered by DED, you can obtain a new DED-based EAD, even if you already have an EAD or employment authorization based on another immigration status. If you want to obtain a DED-based EAD valid through August 13, 2025, you must file Form I-765 and pay the associated fee (unless USCIS grants your fee waiver request).
No. When completing Form I-9, employers must accept any unexpired documentation that appears on the Form I-9 Lists of Acceptable Documents that reasonably appears to be genuine and that relates to you, or an acceptable List A, List B, or List C receipt. Employers may not request proof of Palestinian identity when completing Form I-9 for new hires or reverifying the employment authorization of current employees. Refer to the “Note to Employees” section of this
Employers are reminded that the laws requiring proper employment eligibility verification and prohibiting unfair immigration-related employment practices remain in full force. This
For general questions about the employment eligibility verification process, employees may call USCIS at 888-897-7781 (TTY 877-875-6028) or email USCIS at
To comply with the law, employers must accept any document or combination of documents from the Lists of Acceptable Documents if the documentation reasonably appears to be genuine and to relate to the employee, or an acceptable List A, List B, or List C receipt as described in the Form I-9 instructions. Employers may not require extra or additional documentation beyond what is required for Form I-9 completion. Further, employers participating in E-Verify who receive an E-Verify case result of “Tentative Non-confirmation” (mismatch) must promptly inform employees of the mismatch and give such employees an opportunity to take action to resolve the mismatch. A mismatch means that the information entered into E-Verify from Form I-9 differs from records available to DHS.
Employers may not terminate, suspend, delay training, withhold or lower pay, or take any adverse action against an employee because of a mismatch while the case is still pending with E-Verify. A Final Non-confirmation (FNC) case result occurs if E-Verify cannot confirm an employee's employment eligibility. An employer may terminate employment based on a case result of FNC. Work-authorized employees who receive a FNC may call USCIS for assistance at 888-897-7781 (TTY 877-875-6028). For more information about E-Verify-related discrimination or to report an employer for discrimination in the E-Verify process based on citizenship, immigration status, or national origin, contact IER's Worker Hotline at 800-255-7688 (TTY 800-237-2515). Additional information about proper nondiscriminatory Form I-9 and E-Verify procedures is available on the IER website at
Whether you are applying for a Federal, state, or local government benefit, you may need to provide the government agency with documents that show you are covered under DED and/or authorized to work based on DED. Check with the government agency requesting documentation about which documents the agency will accept.
Some government agencies use SAVE to confirm the current immigration status of applicants for public benefits and licenses. SAVE can verify that an individual is covered by DED based on an EAD with category A-11 and/or Form I-797, Notice of Action, reflecting approval of your Form I-765 for an EAD with a DED category code of A-11. In most cases, SAVE provides an automated electronic response to benefit-granting agencies within seconds, but occasionally verification can be delayed.
You can check the status of your SAVE verification by using CaseCheck at
U.S. Citizenship and Immigration Services, Department of Homeland Security.
30-Day notice.
The Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) invites the public and other Federal agencies to comment upon this proposed extension of a currently approved collection of information. In accordance with the Paperwork Reduction Act (PRA) of 1995, the information collection notice is published in the
Comments are encouraged and will be accepted for 30 days until May 15, 2024.
Written comments and/or suggestions regarding the item(s) contained in this notice, especially regarding the estimated public burden and associated response time, must be submitted via the Federal eRulemaking Portal website at
USCIS, Office of Policy and Strategy, Regulatory Coordination Division, Samantha Deshommes, Chief, telephone number (240) 721-3000 (This is not a toll-free number. Comments are not accepted via telephone message). Please note contact information provided here is solely for questions regarding this notice. It is not for individual case status inquiries. Applicants seeking information about the status of their individual cases can check Case Status Online, available at the USCIS website at
The information collection notice was previously published in the
You may access the information collection instrument with instructions or additional information by visiting the Federal eRulemaking Portal site at:
Written comments and suggestions from the public and affected agencies should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(1)
(2)
(3)
(4)
(5)
(6)
(7)
U.S. Citizenship and Immigration Services (USCIS), Department of Homeland Security (DHS).
Notice of Temporary Protected Status (TPS) extension and redesignation.
Through this notice, the Department of Homeland Security (DHS) announces that the Secretary of Homeland Security (Secretary) is extending the designation of Ethiopia for Temporary Protected Status (TPS) for 18 months, beginning on June 13, 2024, and ending on December 12, 2025. This extension allows existing TPS beneficiaries to retain TPS through December 12, 2025, if they otherwise continue to meet the eligibility requirements for TPS. Existing TPS beneficiaries who wish to extend their status through December 12, 2025, must re-register during the 60-day re-registration period described in this notice. The Secretary is also redesignating Ethiopia for TPS. The redesignation of Ethiopia allows additional Ethiopian nationals (and individuals having no nationality who last habitually resided in Ethiopia) who have been continuously residing in the United States since April 11, 2024, to apply for TPS for the first time during the initial registration period described under the redesignation information in this notice. In addition to demonstrating continuous residence in the United States since April 11, 2024, and meeting other eligibility criteria, initial applicants for TPS under this designation must demonstrate that they have been continuously physically present in the United States since June 13, 2024, the effective date of this redesignation of Ethiopia for TPS.
• You may contact Rená Cutlip-Mason, Chief, Humanitarian Affairs Division, Office of Policy and Strategy, U.S. Citizenship and Immigration Services, Department of Homeland Security, by mail at 5900 Capital Gateway Drive, Camp Springs, MD 20746, or by phone at 240-721-3000.
• For more information on TPS, including guidance on the registration process and additional information on eligibility, please visit the USCIS TPS web page at
• If you have additional questions about TPS, please visit
• Applicants seeking information about the status of their individual cases may check Case Status Online, available on the USCIS website at
• You can also find more information at local USCIS offices after this notice is published.
Through this notice, DHS sets forth procedures necessary for nationals of Ethiopia (or individuals having no nationality who last habitually resided in Ethiopia) to (1) re-register for TPS and apply to renew their EAD with USCIS or (2) submit an initial registration application under the redesignation and apply for an EAD.
Re-registration is limited to individuals who have previously registered for TPS under the prior designation of Ethiopia and whose applications have been granted. If you do not re-register properly within the 60-day re-registration period, USCIS may withdraw your TPS following appropriate procedures.
For individuals who have already been granted TPS under Ethiopia's designation, the 60-day re-registration period runs from April 15, 2024, through June 14, 2024. USCIS will issue new EADs with a December 12, 2025, expiration date to eligible Ethiopian
Individuals who have an Application for Temporary Protected Status (Form I-821) or Application for Employment Authorization (Form I-765) that was still pending as of April 15, 2024, do not need to file either application again. If USCIS approves an individual's pending Form I-821, USCIS will grant the individual TPS through December 12, 2025. Similarly, if USCIS approves a pending TPS-related Form I-765, USCIS will issue the individual a new EAD that will be valid through the same date.
Under the redesignation, individuals who currently do not have TPS may submit an initial application during the initial registration period that runs from April 15, 2024, through the full length of the redesignation period ending December 12, 2025. In addition to demonstrating continuous residence in the United States since April 11, 2024, and meeting other eligibility criteria, initial applicants for TPS under this redesignation must demonstrate that they have been continuously physically present in the United States since June 13, 2024,
• TPS is a temporary immigration status granted to eligible nationals of a foreign state designated for TPS under the INA, or to eligible individuals without nationality who last habitually resided in the designated foreign state, regardless of their country of birth.
• During the TPS designation period, TPS beneficiaries are eligible to remain in the United States, may not be removed, and are authorized to obtain EADs if they continue to meet the requirements of TPS.
• TPS beneficiaries may also apply for and be granted travel authorization as a matter of DHS discretion.
• To qualify for TPS, beneficiaries must meet the eligibility standards at INA section 244(c)(1)-(2), 8 U.S.C. 1254a(c)(1)-(2).
• When the Secretary terminates a foreign state's TPS designation, beneficiaries return to one of the following:
○ The same immigration status or category that they maintained before TPS, if any (unless that status or category has since expired or terminated); or
○ Any other lawfully obtained immigration status or category they received while registered for TPS, if it is still valid beyond the date their TPS terminates.
Ethiopia was initially designated on December 12, 2022, on the basis of ongoing armed conflict and extraordinary and temporary conditions in Ethiopia that prevented nationals of Ethiopia from returning in safety.
Section 244(b)(1) of the INA, 8 U.S.C. 1254a(b)(1), authorizes the Secretary, after consultation with appropriate agencies of the U.S. Government, to designate a foreign state (or part thereof) for TPS if the Secretary determines that certain country conditions exist.
At least 60 days before the expiration of a foreign state's TPS designation or extension, the Secretary, after consultation with appropriate U.S. Government agencies, must review the conditions in the foreign state designated for TPS to determine whether they continue to meet the conditions for the TPS designation.
In addition to extending an existing TPS designation, the Secretary, after consultation with appropriate Government agencies, may redesignate a country (or part thereof) for TPS.
When the Secretary designates or redesignates a country for TPS, the Secretary also has the discretion to establish the date from which TPS applicants must demonstrate that they have been “continuously resid[ing]” in the United States.
DHS has reviewed country conditions in Ethiopia. Based on the review, including input received from Department of State (DoS) and other U.S. Government agencies, the Secretary has determined that an 18-month TPS extension is warranted because ongoing armed conflict and extraordinary and temporary conditions supporting Ethiopia's TPS designation remain. The Secretary has further determined that redesignating Ethiopia for TPS under INA section 244(b)(3)(C), 8 U.S.C. 1254a(b)(3)(C) is warranted and is changing the continuous residence and continuous physical presence dates that applicants must meet to be eligible for TPS.
Ethiopia continues to face internal armed conflict in Amhara and violence in multiple other regions of the country.
There is an ongoing armed conflict in Amhara between the Ethiopian National Defense Force (ENDF) and the Fano militia, a non-state militia in Amhara.
Violent clashes between the Ethiopian federal government and the Oromo Liberation Front-Shane (also known as the Oromo Liberation Army) increased in May 2023 in Oromia following failed peace talks, rivaling the levels of violence in 2022.
In Tigray, conditions remain fragile even after the Ethiopian federal government and the Tigray People's Liberation Front (TPLF) signed the Cessation of Hostilities Agreement (COHA) in November 2022.
Severe drought, which began in late 2020, expanded in 2023, mainly due to
Flooding has also caused significant harm to the lives of many Ethiopians. Between October and November 2023, flooding and mudslides from heavy rainfall and river overflows affected an estimated 1.5 million people, mainly in the Somali, Oromia, Afar, South Ethiopia, and Gambella regions of the country.
Ethiopia continues to face massive displacement of persons for numerous reasons, including violence and climate events.
Throughout 2023, food insecurity continued to be a major concern in Ethiopia due to multiple challenges, including ongoing conflict, drought-like conditions, and a pause in international food assistance due to food aid diversion and corruption.
Ethiopia faced four outbreaks of communicable diseases in 2023: cholera, measles, malaria, and dengue.
The current cholera outbreak has been ongoing since August 2022 when the first case of cholera was reported, making this among the longest outbreaks ever in Ethiopia.
A measles outbreak, which began in August 2021, is active in 71 districts.
Mosquito-borne diseases are also affecting several regions in Ethiopia. In 2023, 4.1 million malaria cases were reported throughout Ethiopia.
Based on this review and after consultation with appropriate U.S. Government agencies, the Secretary has determined that:
• The conditions supporting Ethiopia's designation for TPS continue to be met.
• There continues to be an ongoing armed conflict in Ethiopia and, due to such conflict, requiring the return to Ethiopia of Ethiopian nationals (or individuals having no nationality who last habitually resided in Ethiopia) would pose a serious threat to their personal safety.
• There continue to be extraordinary and temporary conditions in Ethiopia that prevent Ethiopian nationals (or individuals having no nationality who last habitually resided in Ethiopia) from returning to Ethiopia in safety, and it is not contrary to the national interest of the United States to permit Ethiopian TPS beneficiaries to remain in the United States temporarily.
• The designation of Ethiopia for TPS should be extended for an 18-month period, beginning on June 13, 2024, and ending on December 12, 2025.
• Due to the conditions described above, Ethiopia should be simultaneously extended and redesignated for TPS beginning on June 13, 2024, and ending on December 12, 2025.
• For the redesignation, the Secretary has determined that TPS applicants must demonstrate that they have continuously resided in the United States since April 11, 2024.
• Initial TPS applicants under the redesignation must demonstrate that they have been continuously physically present in the United States since June 13, 2024, the effective date of the redesignation of Ethiopia for TPS.
• There are currently approximately 2,300 beneficiaries under Ethiopia's TPS designation who are eligible to re-register for TPS under the extension.
• It is estimated that approximately 12,800 additional individuals may be eligible for TPS under the redesignation of Ethiopia. This population includes Ethiopian nationals in the United States in nonimmigrant status or without immigration status.
By the authority vested in me as Secretary under INA section 244, 8 U.S.C. 1254a, I have determined, after consultation with the appropriate U.S. Government agencies, the statutory conditions supporting Ethiopia's designation for TPS on the basis of ongoing armed conflict and extraordinary and temporary conditions are met, and it is not contrary to the national interest of the United States to allow Ethiopian TPS beneficiaries to remain in the United States temporarily.
To register or re-register for TPS based on the designation of Ethiopia, you must submit a Form I-821. If you are submitting an initial TPS application, you must pay the application fee for Form I-821 (or request a fee waiver, which you may submit on Form I-912, Request for Fee Waiver). If you are filing an application to re-register for TPS, you do not need to pay the application fee. Whether you are registering as an initial applicant or re-registering, you are required to pay the biometric services fee. If you cannot pay the biometric services fee, you may ask USCIS to waive the fee. Please see additional information under the “Biometric Services Fee” section of this notice.
TPS beneficiaries are eligible for an Employment Authorization Document (EAD), which proves their authorization to work in the United States. You are not required to submit Form I-765 or have an EAD to be granted TPS, but see below for more information if you want an EAD to use as proof that you can work in the United States.
Individuals who have an Ethiopia TPS application (Form I-821) that was still pending as of April 15, 2024, do not need to file the application again. If USCIS approves an individual's Form I-821, USCIS will grant the individual TPS through December 12, 2025.
For more information on the application forms and fees for TPS, please visit the USCIS TPS web page at
Everyone must provide their employer with documentation showing that they have the legal right to work in the United States. TPS beneficiaries are eligible to obtain an EAD, which proves their legal right to work. If you want to obtain an EAD, you must file Form I-765 and pay the Form I-765 fee (or request a fee waiver, which you may submit on Form I-912). TPS applicants may file this form with their TPS application, or separately later, if their TPS application is still pending or has been approved.
Beneficiaries with an Ethiopia TPS-related Form I-765 that was still pending as of April 15, 2024 do not need to file the application again. If USCIS approves a pending TPS-related Form I-765, USCIS will issue the individual a new EAD that will be valid through December 12, 2025.
If USCIS denies your fee waiver request, you can resubmit your TPS application. The fee waiver denial notice will contain specific instructions about resubmitting your application.
USCIS offers the option to applicants for TPS under Ethiopia's designation to file Form I-821 and related requests for EADs online or by mail. However, if you request a fee waiver, you must submit your application by mail. When filing a TPS application, you may request an EAD by submitting a completed Form I-765 with your Form I-821.
If you were granted TPS by an immigration judge (IJ) or the Board of Immigration Appeals (BIA) and you wish to request an EAD, please file online or mail your Form I-765 to the appropriate address in Table 1. If you file online, please include the fee. If you file by mail, please include the fee or fee waiver request. When you request an EAD based on an IJ or BIA grant of TPS, please include with your application a copy of the order from the IJ or BIA granting you TPS. This will help us verify your grant of TPS and process your application.
The filing instructions for Form I-821 list all the documents you need to establish eligibility for TPS. You may also find information on the acceptable documentation and other requirements for applying (also called registering) for TPS on the USCIS website at
TPS beneficiaries may also apply for and be granted travel authorization as a matter of discretion. You must file for travel authorization if you wish to travel outside of the United States. If USCIS grants travel authorization, it gives you permission to leave the United States and return during a specific period. To request travel authorization, you must file Form I-131, Application for Travel Document, available at
• Select Item Number 1.d. in Part 2 on the Form I-131; and
• Submit the fee for Form I-131, or request a fee waiver, which you may submit on Form I-912.
If you are filing Form I-131 together with Form I-821, send your forms to the address listed in Table 1. If you are filing Form I-131 separately based on a pending or approved Form I-821, send your form to the address listed in Table 2 and include a copy of Form I-797 for your approved or pending Form I-821.
Biometrics (such as fingerprints) are required for all applicants, in addition to a biometric services fee. As previously stated, if you cannot pay the biometric services fee, you may request a fee waiver, which you may submit on Form I-912. For more information on the application forms and fees for TPS, please visit the USCIS TPS web page at
To get case status information about your TPS application, as well as the status of your TPS-based EAD request, you can check Case Status Online at
Yes. Regardless of your country of birth, if you currently have an Ethiopia TPS-based EAD with the notation A-12 or C-19 under Category and a “Card Expires” date of June 12, 2024, this
You can find the Lists of Acceptable Documents on Form I-9, Employment Eligibility Verification, as well as the Acceptable Documents web page at
You may present any document from List A (which provides evidence of both identity and employment authorization) or one document from List B (which provides evidence of your identity) together with one document from List C (which provides evidence of employment authorization), or you may present an acceptable receipt as described in these lists. Employers may not reject a document based on a future expiration date. You can find additional information about Form I-9 on the I-9 Central web page at
Even though we have automatically extended your EAD, your employer is required by law to ask you about your continued employment authorization. Your employer may need to re-examine your automatically extended EAD to check the “Card Expires” date and Category code if your employer did not keep a copy of your EAD when you initially presented it. Once your employer has reviewed the “Card Expires” date and Category code, they should update the EAD expiration date in Section 2 of Form I-9. See the section “What updates should my current employer make to Form I-9 if my EAD has been automatically extended?” of this
Your employer may not specify which List A or List C document you must present and cannot reject an acceptable receipt.
Yes, if you are eligible for TPS, you can obtain a new TPS-based EAD, even if you already have an EAD or work authorization based on another immigration status. If you want to obtain a new TPS-based EAD valid through December 12, 2025, you must file Form I-765 and pay the associated fee (unless USCIS grants your fee waiver request).
No. When completing Form I-9, employers must accept any documentation you choose to present from the Form I-9 Lists of Acceptable Documents that reasonably appears to be genuine and that relates to you, or an acceptable List A, List B, or List C receipt. Employers may not request other documentation, such as proof of Ethiopian citizenship or proof of registration for TPS when completing Form I-9 for new hires or reverifying the employment authorization of current employees. If you present an EAD that USCIS has automatically extended, employers should accept it as a valid List A document if the EAD reasonably appears to be genuine and to relate to you. Refer to the “Note to Employees” section of this
When using an automatically extended EAD to complete Form I-9 for a new job before June 13, 2025:
1. For Section 1, you should:
a. Check “A noncitizen authorized to work until” and enter June 12, 2025, as the “expiration date”; and
b. Enter your USCIS number or A-Number where indicated. (Your EAD or other document from DHS will have your USCIS number or A-Number printed on it; the USCIS number is the same as your A-Number without the A prefix.)
2. For Section 2, employers should:
a. Determine whether the EAD is auto-extended by ensuring it is in category A-12 or C-19 and has a “Card Expires” date of June 12, 2024;
b. Write in the document title;
c. Enter the issuing authority;
d. Provide the document number; and
e. Write June 12, 2025, as the expiration date.
Before the start of work on June 13, 2025, employers must reverify the
If you presented a TPS-related EAD that was valid when you first started your job and USCIS has now automatically extended your EAD, your employer may need to re-examine your current EAD if they do not have a copy of the EAD on file. Your employer should determine whether your EAD is automatically extended by ensuring that it contains Category A-12 or C-19 and has a “Card Expires” date of June 12, 2024. Your employer may not rely on the country of birth listed on the card to determine whether you are eligible for this extension.
If your employer determines that USCIS has automatically extended your EAD, your employer should update Section 2 of your previously completed Form I-9 as follows:
1. Write EAD EXT and June 12, 2025, as the last day of the automatic extension in the Additional Information field; and
2. Initial and date the correction.
This is not considered a reverification. Employers do not reverify the employee until either the automatic extension has ended, or the employee presents a new document to show continued employment authorization, whichever is sooner. By June 13, 2025, when the employee's automatically extended EAD has expired, employers are required by law to reverify the employee's employment authorization on Form I-9.
Employers may create a case in E-Verify for a new employee by entering the number from the Document Number field on Form I-9 into the document number field in E-Verify. Employers should enter June 12, 2025, as the expiration date for an EAD that has been extended under this
E-Verify automated the verification process for TPS-related EADs that are automatically extended. If you have employees who provided a TPS-related EAD when they first started working for you, you will receive a “Work Authorization Documents Expiring” case alert when the auto-extension period for this EAD is about to expire. Before this employee starts work on June 13, 2025, you must reverify their employment authorization on Form I-9. Employers may not use E-Verify for reverification.
Employers are reminded that the laws requiring proper employment eligibility verification and prohibiting unfair immigration-related employment practices remain in full force. This
For general questions about the employment eligibility verification process, employees may call USCIS at 888-897-7781 (TTY 877-875-6028) or email USCIS at
To comply with the law, employers must accept any document or combination of documents from the Lists of Acceptable Documents if the documentation reasonably appears to be genuine and to relate to the employee, or an acceptable List A, List B, or List C receipt as described in these lists. Employers may not require extra or additional documentation other than what is required to complete Form I-9. Further, employers participating in E-Verify who receive an E-Verify case result of “Tentative Nonconfirmation” (mismatch) must promptly inform employees of the mismatch and give these employees an opportunity to resolve the mismatch. A mismatch means that the information entered into E-Verify from Form I-9 differs from records available to DHS.
Employers may not terminate, suspend, delay training, withhold or lower pay, or take any adverse action against an employee because of a mismatch while the case is still pending with E-Verify. A Final Nonconfirmation (FNC) case result occurs if E-Verify cannot confirm an employee's employment eligibility. An employer may terminate employment based on a case result of FNC. Work-authorized employees who receive an FNC may call USCIS for assistance at 888-897-7781 (TTY 877-875-6028). For more information about E-Verify-related discrimination or to report an employer for discrimination in the E-Verify process based on citizenship, immigration status, or national origin, contact IER's Worker Hotline at 800-255-7688 (TTY 800-237-2515). Additional information about proper nondiscriminatory Form I-9 and E-Verify procedures is available on the IER website at
For Federal purposes, if you present an automatically extended EAD referenced in this
• Your current EAD with a TPS category code of A-12 or C-19, even if your country of birth noted on the EAD does not reflect the TPS-designated country of Ethiopia;
• Your Form I-94, Arrival/Departure Record;
• Your Form I-797, Notice of Action, reflecting approval of your Form I-765; or
• Form I-797 or Form I-797C, Notice of Action, reflecting approval or receipt of a past or current Form I-821, if you received one from USCIS.
Check with the government agency requesting documentation about which document(s) the agency will accept. Some state and local government agencies use SAVE to confirm the current immigration status of applicants for public benefits.
While SAVE can verify that an individual has TPS or a pending TPS application, each agency's procedures govern whether they will accept an unexpired EAD, Form I-797, Form I-797C, or Form I-94. If an agency accepts the type of TPS-related document you present, such as an EAD, the agency should accept your automatically extended EAD, regardless of the country of birth listed on the EAD. It may assist the agency if you:
a. Give the agency a copy of the relevant
b. Explain that SAVE will be able to verify the continuation of your TPS using this information; and
c. Ask the agency to initiate a SAVE query with your information and follow through with additional verification steps, if necessary, to get a final SAVE response verifying your TPS.
You can also ask the agency to look for SAVE notices or contact SAVE if they have any questions about your immigration status or automatic extension of TPS-related documentation. In most cases, SAVE provides an automated electronic response to benefit-granting agencies within seconds, but occasionally verification can be delayed.
You can check the status of your SAVE verification by using CaseCheck at
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 7th Street SW, Room 8210, Washington, DC 20410; email Colette Pollard at
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are t0 respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 3507.
Office of Administration, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal.
Written comments and recommendations for the proposed information collection can be sent within 60 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email Colette Pollard at
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. chapter 35.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, REE, Department of Housing and Urban Development, 7th Street SW, Room 8210, Washington, DC 20410; email Colette Pollard at
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507.
Bureau of Land Management, Interior.
Notice of information collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, the Bureau of Land Management (BLM) proposes to renew an information collection.
Interested persons are invited to submit comments on or before June 14, 2024.
Send your written comments on this information collection request (ICR) by mail to Darrin King, Information Collection Clearance Officer, U.S. Department of the Interior, Bureau of Land Management, Attention PRA Office, 440 W 200 S #500, Salt Lake City, UT 84101; or by email to
To request additional information about this ICR, contact Grace M. Wagstaff by email at
In accordance with the Paperwork Reduction Act of 1995 (PRA, 44 U.S.C. 3501
As part of our continuing effort to reduce paperwork and respondent burdens, we invite the public and other Federal agencies to comment on new, proposed, revised and continuing collections of information. This helps the BLM assess impacts of its information collection requirements and minimize the public's reporting burden. It also helps the public understand BLM information collection requirements and ensure requested data are provided in the desired format.
The BLM is especially interested in public comment addressing the following:
(1) whether collection of information is necessary for the proper performance of the functions of the agency, including if the information will have practical utility;
(2) determination of the accuracy of the BLM's estimate of the burden for collection of information, including validity of methodology and assumptions used;
(3) methods to enhance the quality, utility, and clarity of information to be collected; and
(4) how the agency can minimize the burden of information collection on those who respond, including use of appropriate automated, electronic, mechanical or other technological collection techniques or other forms of information technology.
Comments submitted in response to this notice are a matter of public record. The BLM will include or summarize each comment in its request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
An agency may not conduct or sponsor and, notwithstanding any other provision of law, a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Bureau of Land Management, Interior, USDA Forest Service, Agriculture.
Notice of intent.
In compliance with the National Environmental Policy Act of 1969, as amended (NEPA), the Federal Land Policy and Management Act of 1976, as amended (FLPMA), the National Forest Management Act of 1976 (NFMA), and the Mineral Leasing Act of 1920, as amended (MLA), the Bureau of Land Management (BLM) Price Field Office, and U.S. Department of Agriculture Forest Service (USDA Forest Service) Manti-La Sal National Forest, as co-lead agencies, intend to prepare an Environmental Impact Statement (EIS) in response to a Lease by Application (LBA) for the Little Eccles Federal Coal Lease Tract (UTU-92226) of 120 acres and a Lease Modification Application (LMA) to add 640 acres to the Flat Canyon Lease Tract (UTU-77114). This notice is announcing the beginning of the scoping process to solicit public comments and identify issues. The EIS will evaluate potential impacts of leasing and underground mining of Federal coal reserves contained in both lease tracts.
This notice initiates the public-scoping process for the EIS. The lead agencies request that the public submit comments concerning the scope of the analysis, potential alternatives, and identification of relevant information, and studies by May 30, 2024. To afford the lead agencies the opportunity to consider comments in the Draft EIS, please ensure your comments are received prior to the close of the 45-day scoping period or 15 days after the last public meeting, whichever is later.
You may submit comments related to the Skyline Mine Little Eccles LBA and Flat Canyon LMA by the following methods:
Documents pertinent to this proposal may be examined online at
Erika Tobin, BLM Green River District Mining Engineer, telephone 435-636-3605, address 125 South 600 West, Price, Utah 84501. Contact Ms. Tobin to have your name added to our mailing list. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services for contacting Ms. Tobin. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
Canyon Fuel Company, LLC (hereafter “the Applicant”), submitted two coal lease applications to the BLM Price Field Office on June 10, 2019. One is an LBA for the Little Eccles Federal Coal Lease Tract of 120 acres in T. 14 S., R. 6 E., SLM, Emery County, Utah sec. 10: SE
The purpose of the BLM and USDA Forest Service actions is to respond to: (1) the Applicant's LBA to competitively lease up to 120 acres and approximately 2.2 million tons of recoverable coal contained in the Little Eccles Federal Coal Lease Tract and (2) the Applicant's LMA for the existing Flat Canyon Federal Coal Lease Tract to increase the tract acreage by up to 640 acres and approximately 8.6 million tons of recoverable coal.
The need for the BLM action is established by the MLA sec. 2 and 3 (30 U.S.C. 201 and 203) and its implementing regulations (43 CFR 3432 and 3425), as amended by the Federal Coal Leasing Amendments Act of 1976, and the FLPMA sec. 102. (43 U.S.C. 1701).
The need for the USDA Forest Service action is to respond to requests for consent to coal leasing pursuant to the MLA, as amended.
Under the No Action alternative, the BLM would deny the LBA to lease the Little Eccles Federal Coal Lease Tract and LMA to modify the existing Flat Canyon Lease Tract. Under this alternative, none of the estimated 10.8 million tons of Federal coal would be leased and extraction of Federal coal within the lease tracts would not occur. There are an estimated 13.6 million tons of privately-owned coal contained in tracts abutting the Federal lease tracts. Under the No Action Alternative, it is reasonably foreseeable that approximately 8 million tons of privately-owned coal not subject to Federal decisions would be mined. However, the remaining 5.6 million tons of privately-owned coal would not be feasible to extract.
Under the Proposed Action alternative, the BLM would offer for competitive leasing the Little Eccles Federal Coal Lease Tract (UTU-92226; 120 acres) containing an estimated 2.2 million tons of recoverable coal and authorize the Applicant's requested non-competitive lease modification to add 640 acres and an estimated 8.6 million tons of recoverable coal to the Flat Canyon Lease Tract (UTU-77114). The USDA Forest Service, Manti-La Sal National Forest would consent to leasing both tracts of Federal coal. Leasing the Federal coal contained in the Little Eccles Federal Coal Lease Tract and the modified Flat Canyon Lease Tract would allow the Applicant to recover the full quantity of the estimated 13.6 million tons of privately-owned coal abutting the Federal lease tracts.
Under the Proposed Action the Federal coal leases would be subject to standard lease terms and conditions. In addition, as part of the NEPA process
Other alternatives to be considered in the EIS are expected to be variations of tract configuration based on resource issues identified through the scoping process. The lead agencies welcome comments on all preliminary alternatives as well as suggestions for additional alternatives.
The effects of leasing and anticipated development under the Proposed Action are expected to include mining-induced subsidence and seismicity and hydrological effects (surface water and groundwater). Greenhouse gas emissions and air pollutant emissions are also expected to occur, including indirect effects associated with transportation and combustion of mined coal.
The Applicant would need BLM approval of the LBA and/or LMA. In addition, should the LBA be approved, the Applicant would need a Resource Recovery Protection Plan for the Little Eccles Lease Tract prepared by the BLM which would establish the terms to achieve Maximum Economic Recovery (MER) as required by 43 CFR 3422.1. The Applicant would also need a mining permit and/or permit modification from Utah Division of Oil, Gas and Mining (UDOGM). Finally, a mining plan decision document prepared by the Office of Surface Mining Reclamation and Enforcement (OSMRE) would need approval from the Assistant Secretary for Land and Minerals Management before the Applicant could mine the LBA and/or LMA.
The lead agencies will provide additional opportunities for public participation consistent with the NEPA process, including a 45-day comment period on the Draft EIS. Comment meeting(s) on the Draft EIS will be held concurrently with the MER and Fair Market Value hearing. The Draft EIS is anticipated to be available for public review in the fall of 2024, and the Final EIS is anticipated to be released in the spring of 2025 with Records of Decision later in spring of 2025.
This notice of intent initiates the scoping period. The lead agencies will be holding one virtual scoping meeting and two in-person scoping meetings. The specific dates and locations of the scoping meeting will be announced in advance through the BLM ePlanning page (see
The BLM and USDA Forest Service are co-lead agencies. Based on special expertise and jurisdiction by law, OSMRE and the UDOGM are cooperating agencies. Based on special expertise on environmental impacts, the Environmental Protection Agency (EPA) is a cooperating agency.
The responsible official for the BLM is the BLM Utah State Director. The scope of the State Director's decision is limited to the LBA and the LMA. The responsible official for the USDA Forest Service is the Manti-La Sal National Forest Supervisor. The scope of the Forest Supervisor's decision is limited to consenting to lease.
The BLM will decide to lease or to forgo leasing of the coal reserves in the Little Eccles Federal Coal Lease Tract and Flat Canyon Federal Coal Lease Tract. The USDA Forest Service will decide to consent to or deny consent to the leasing of the subject Federal coal tracts.
The decision that the USDA Forest Service will make is subject to a pre-decisional administrative review process, also known as an objection process (36 CFR 218, subparts A and B). The objection process provides an opportunity for members of the public who have participated in the planning process for the action to have any unresolved concerns reviewed by the USDA Forest Service prior to a final decision by the responsible official. It is important that reviewers provide their comments at such times and in such manner that they are useful to the agency's preparation of the final EIS; therefore, comments should be provided prior to the close of the comment period and should clearly articulate the reviewer's concerns and contentions. Commenting during scoping and any other designated opportunity to comment provided by the responsible official as prescribed by the applicable regulations will also govern eligibility to object once the final EIS and draft Record of Decision has been published. Comments received in response to this solicitation, including names and addresses of those who comment, will be part of the public record for this proposed action. Comments submitted anonymously will be accepted and considered; however, they will not be used to establish eligibility for the objection process.
Objections will be accepted only from those who have previously submitted specific written comments regarding the proposed project during scoping or other designated opportunity for public comment in accordance with § 218.5(a). Issues raised in objections must be based on previously submitted timely, specific written comments regarding the proposed project unless based on new information arising after designated opportunities.
The lead agencies will identify, analyze, and consider mitigation to address the reasonably foreseeable impacts to resources from the proposed action and all analyzed reasonable alternatives and, in accordance with 40 CFR 1502.14(e), include appropriate mitigation measures not already included in the proposed action or alternatives. Mitigation may include avoidance, minimization, rectification, reduction or elimination over time, and compensation; and may be considered at multiple scales, including the landscape scale.
The lead agencies will utilize and coordinate the NEPA process to help support compliance with applicable procedural requirements under the Endangered Species Act (16 U.S.C. 1536) and section 106 of the National Historic Preservation Act (54 U.S.C. 306108) as provided in 36 CFR 800.2(d)(3), including public involvement requirements of section 106. The information about historic and cultural resources and threatened and endangered species within the area potentially affected by the proposed action will assist the lead agencies in identifying and evaluating impacts to such resources.
The lead agencies will consult with Indian Tribal Nations on a government-to-government basis in accordance with Executive Order 13175, Forest Service Handbook 1509.13, Forest Service Manual 1500, FS-1211 Strengthening Tribal Consultations and Nation-to-Nation Relationships. Presidential Memorandum on Tribal Consultation and Strengthening Nation-to-Nation Relationships, January 26, 2021, BLM Manual Section 1780, and other Departmental policies. Tribal concerns,
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management's (BLM) John Day-Snake Resource Advisory Council (RAC) will meet as follows.
The John Day-Snake Resource Advisory Council will meet Thursday, June 6 from 1 p.m. to 4:30 p.m. Pacific Time (PT) and participate in a field tour Friday, June 7, 2024, to the National Historic Oregon Trail Interpretive Center from 9 a.m. to noon PT. The meeting will be held, and the field tour will commence and conclude, at the BLM Baker Field Office, 3100 H St., Baker City, OR 97814. A virtual participation option for the June 6 meeting will also be available.
Thirty-minute public comment periods will be offered at 3 p.m. PT June 6; and at 9:05 a.m. PT June 7.
The final agenda and contact information regarding Zoom participation details will be published on the RAC's web page at least 10 days in advance at
Larisa Bogardus, Public Affairs Specialist, 3100 H. St., Baker City, OR 97814; telephone: 541-523-1407; email:
The 15-member RAC was chartered, and members appointed, by the Secretary of the Interior. Its diverse perspectives are represented in commodity, non-commodity, and local area interests. The RAC provides advice to BLM and, as needed, to U.S. Forest Service resource managers regarding management plans and proposed resource actions on public land in the John Day-Snake area. The meeting is open to the public in its entirety. Information to be distributed to the RAC must be provided to its members prior to the start of each meeting.
June 6 agenda items include management of energy and minerals, timber, rangeland and grazing, commercial and dispersed recreation, wildland fire and fuels, wild horses and burro management, and agency updates from the Vale and Prineville BLM Districts and the Wallowa-Whitman, Umatilla, Malheur, Ochoco, and Deschutes National Forests; and any other business that may reasonably come before the RAC. The Designated Federal Officer will attend the meeting, take minutes, and publish the minutes on the RAC's web page at
For sign language interpreter services, assistive listening devices, or other reasonable accommodations, please contact (
The public may send written comments to the RAC in response to material presented (see
Before including your address, phone number, email address, or other personal identifying information in your comments, please be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee we will be able to do so.
National Park Service, Interior.
Notice.
The National Park Service is soliciting electronic comments on the significance of properties nominated before April 6, 2024, for listing or related actions in the National Register of Historic Places.
Comments should be submitted electronically by April 30, 2024.
Comments are encouraged to be submitted electronically to
Sherry A. Frear, Chief, National Register of Historic Places/National Historic Landmarks Program, 1849 C Street NW, MS 7228, Washington, DC 20240,
The properties listed in this notice are being considered for listing or related actions in the National Register of Historic Places. Nominations for their consideration were received by the National Park Service before April 6, 2024. Pursuant to section 60.13 of 36 CFR part 60, comments are being accepted concerning the significance of the nominated properties under the National Register criteria for evaluation.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Nominations submitted by State or Tribal Historic Preservation Officers
An owner objection received for the following resource(s):
A request for removal has been made for the following resource(s):
An additional documentation has been received for the following resource(s):
Nomination(s) submitted by Federal Preservation Officers:
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of a full reviews pursuant to the Tariff Act of 1930 (“the Act”) to determine whether revocation of the antidumping duty orders countervailing duty orders on steel concrete reinforcing bar (rebar) from Belarus, China, Indonesia, Latvia, Moldova, Poland, and Ukraine would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. The Commission has determined to exercise its authority to extend the review period by up to 90 days.
April 9, 2024.
Nitin Joshi (202-(202) 708-1669), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of these reviews and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
Please note the Secretary's Office will accept only electronic filings during this time. Filings must be made through the Commission's Electronic Document Information System (EDIS,
A nonparty who has testimony that may aid the Commission's deliberations may request permission to present a short statement at the hearing. All parties and nonparties desiring to appear at the hearing and make oral presentations should attend a prehearing conference, if deemed necessary, to be held at 9:30 a.m. on Tuesday, October 1, 2024. Parties shall file and serve written testimony and presentation slides in connection with their presentation at the hearing by no later than 4:00 p.m. on October 2, 2024. Oral testimony and written materials to be submitted at the public hearing are governed by sections 201.6(b)(2), 201.13(f), and 207.24 of the Commission's rules. Parties must submit any request to present a portion of their hearing testimony
Additional written submissions to the Commission, including requests pursuant to section 201.12 of the Commission's rules, shall not be accepted unless good cause is shown for accepting such submissions, or unless the submission is pursuant to a specific request by a Commissioner or Commission staff.
In accordance with sections 201.16(c) and 207.3 of the Commission's rules, each document filed by a party to the review must be served on all other parties to these reviews (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
The Commission has determined that these reviews are extraordinarily complicated and therefore has determined to exercise its authority to extend the review period by up to 90 days pursuant to 19 U.S.C.1675(c)(5)(B).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission (“Commission”) has determined to institute a rescission proceeding, issue an order rescinding the remedial orders directed to iFIT Inc., f/k/a ICON Health & Fitness, Inc. of Logan, Utah; FreeMotion Fitness, Inc. of Logan, Utah; and NordicTrack Inc. of Logan, Utah (together with iFIT Inc. and FreeMotion Fitness, Inc., “iFit”), and then terminate the rescission proceeding.
Ronald A. Traud, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-3427. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On May 19, 2021, the Commission instituted the underlying investigation based on a complaint filed on behalf of complainants DISH DBS Corporation of Englewood, Colorado; DISH Technologies L.L.C. of Englewood, Colorado; and Sling TV L.L.C. of Englewood, Colorado (collectively, “DISH”). 86 FR 27106, 27106-07 (May 19, 2021). The complaint alleged
On March 8, 2023, the Commission issued its final determination, finding respondents Peloton and iFit in violation of section 337 as to the asserted claims of the '156, '554, and '555 patents, but not as to the asserted claims of the '564 patent.
On May 5, 2023, the Commission modified the remedial orders in certain respects,
On March 8, 2024, DISH filed a petition requesting that the Commission rescind the remedial orders issued against iFit based on a settlement agreement between DISH and iFit. DISH also filed confidential and public supplements to the petition that included confidential and public versions of the settlement agreement. The petition asserts that rescission is warranted based on changed conditions of fact and law stemming from DISH and iFit reaching a settlement agreement that fully resolves the dispute between DISH and iFit concerning the subject matter of the underlying investigation.
On March 19, 2024, OUII filed a response supporting DISH's petition. No other responses were received in response to the petition.
In consideration of the petition and the response thereto, the Commission has determined to institute a rescission proceeding in this investigation. Consistent with an order issued concurrently herewith, the Commission has determined to rescind the remaining modified remedial orders issued in this investigation. The settlement agreement fully resolves the dispute between DISH and iFit concerning the subject matter of this investigation, the settlement agreement constitutes changed circumstances warranting rescission, and the petition complies with the procedural requirements of Commission Rule 210.76 (19 CFR 210.76). The Commission has further determined to terminate this rescission proceeding.
The Commission vote for these determinations took place on April 9, 2024.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-Day notice.
The Department of Justice (DOJ), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the
Comments are encouraged and will be accepted for 30 days until May 15, 2024.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact: Michael O'Lena, Explosives Industry Programs Branch by email at
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Written comments and recommendations for this information collection should be submitted within 30 days of the publication of this notice on the following website
DOJ seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOJ notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
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If additional information is required, contact: Darwin Arceo, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 4W-218, Washington, DC 20530.
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Heliophysics Advisory Committee (HPAC). This Committee functions in an advisory capacity to the Director, Heliophysics Division, in the NASA Science Mission Directorate. The meeting will be held for the purpose of soliciting, from the science community and other persons, scientific and technical information relevant to program planning.
Monday, June 17, 2024, 10 a.m. to 5 p.m. and Tuesday, June 18, 2024, 9:30 a.m. to 5 p.m., eastern time.
NASA Headquarters, Room 3H42, 300 E Street, SW, Washington, DC 20546.
Ms. KarShelia Kinard, Science Mission Directorate, NASA Headquarters, Washington, DC 20546, (202) 358-2355 or
This meeting will be open to the public up to the capacity of the room. The meeting will be available telephonically and via WebEx. Any interested person must use a touch-tone phone to participate in this meeting. To join by telephone, the numbers are: 1-929-251-9612 USA Toll (New York City) or 1-415-527-5035 USA Toll, for each day.
The WebEx link is
The agenda for the meeting includes the following topics:
All attendees are required to register in NASA's Enterprise Visitor Access Management System prior to visit. You will be requested to comply with NASA Headquarters security requirements, including the presentation of a valid picture ID to Security before access to NASA Headquarters in addition to Foreign nationals attending this meeting will be required to provide a copy of their passport and visa in addition to providing the following information no less than 10 days prior to the meeting: full name; gender; date/place of birth; citizenship; passport information (number, country, telephone); visa information (number, type, expiration date); employer/affiliation information (name of institution, address, country, telephone); title/position of attendee. To expedite admittance, attendees with U.S. citizens and Permanent Residents (green card holders) may provide full name, citizenship and email address no less than 3 working days in advance by contacting Ms. KarShelia Kinard via email at
It is imperative that the meeting be held on this date to accommodate the scheduling priorities of the key participants.
Federal Council on the Arts and the Humanities; National Foundation on the Arts and the Humanities.
Notice of meeting.
Pursuant to the Federal Advisory Committee Act, notice is hereby given that the Federal Council on the Arts and the Humanities will hold a meeting of the Arts and Artifacts International Indemnity Panel.
The meeting will be held on Thursday, May 16, 2024, from 12:00 p.m. until adjourned.
The meeting will be held by videoconference originating at the
Elizabeth Voyatzis, Committee Management Officer, 400 7th Street SW, Room 4060, Washington, DC 20506, (202) 606-8322;
The purpose of the meeting is for panel review, discussion, evaluation, and recommendation on applications for Certificates of Indemnity submitted to the Federal Council on the Arts and the Humanities, for exhibitions beginning on or after July 1, 2024. Because the meeting will consider proprietary financial and commercial data provided in confidence by indemnity applicants, and material that is likely to disclose trade secrets or other privileged or confidential information, and because it is important to keep the values of objects to be indemnified and the methods of transportation and security measures confidential, I have determined that that the meeting will be closed to the public pursuant to subsection (c)(4) of section 552b of Title 5, United States Code. I have made this determination under the authority granted me by the Chairman's Delegation of Authority to Close Advisory Committee Meetings, dated April 15, 2016.
Weeks of April 15, 22, 29, and May 6, 13, 20, 2024. The schedule for Commission meetings is subject to change on short notice. The NRC Commission Meeting Schedule can be found on the internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings or need this meeting notice or the transcript or other information from the public meetings in another format (
Public. Members of the public may request to receive the information in these notices electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555, at 301-415-1969, or by email at
There are no meetings scheduled for the week of April 15, 2024.
9:00 a.m. Strategic ProgrammaticOverview of the Fuel FacilitiesandtheSpent Fuel Storage and TransportationBusiness Lines (Public Meeting) (Contact: Haile Lindsay: 301-415-0616)
There are no meetings scheduled for the week of April 29, 2024.
There are no meetings scheduled for the week of May 6, 2024.
There are no meetings scheduled for the week of May 13, 2024.
There are no meetings scheduled for the week of May 20, 2024.
For more information or to verify the status of meetings, contact Wesley Held at 301-287-3591 or via email at
The NRC is holding the meetings under the authority of the Government in the Sunshine Act, 5 U.S.C. 552b.
For the Nuclear Regulatory Commission.
In accordance with the purposes of Sections 29 and 182b of the Atomic Energy Act (42 U.S.C. 2039, 2232(b)), the Advisory Committee on Reactor Safeguards (ACRS) will hold meetings on April 30-May 3, 2024. The Committee will be conducting meetings that will include some Members being physically present at the U.S. Nuclear Regulatory Commission (NRC) headquarters office while other Members participate remotely. Interested members of the public are encouraged to participate remotely in any open sessions via Microsoft (MS) Teams or via phone at 301-576-2978, passcode 119337805#. A more detailed agenda including the MS Teams link may be found at the ACRS public website at
8:30 a.m.-8:35 a.m.: Opening Remarks by the ACRS Chair (Open)—The ACRS Chair will make opening remarks regarding the conduct of the meeting.
8:35 a.m.-11:30 a.m.: Monticello Subsequent License Renewal Application (Open)—The Committee will have presentations and discussion with the licensee representatives and NRC staff regarding the subject topic.
11:30 a.m.-2:00 p.m.: Committee Deliberation on the Monticello Subsequent License Renewal Application (Open)—The Committee will deliberate with the NRC staff regarding the subject topic.
2:00 p.m.-5:00 p.m.: Comanche Peak License Renewal Application (Open)—The Committee will have presentations and discussion with the licensee representatives and NRC staff regarding the subject topic.
5:00 p.m.-6:00 p.m.: Committee Deliberation on the Comanche Peak License Renewal Application (Open)—The Committee will deliberate with the NRC staff regarding the subject topic.
8:30 a.m.-11:00 a.m.: Westinghouse Topical Report on Incremental High Burnup Extension (Open/Closed)—The Committee will have presentations and discussion with Westinghouse
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11:00 a.m.-2:00 p.m.: Committee Deliberation on the Westinghouse Topical Report on Incrementation High Burnup Extension (Open/Closed)—The Committee will deliberate with the NRC staff regarding the subject topic.
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2:00 p.m.-6:00 p.m.: Committee Deliberation on Research Topic—Non-Light Water Reactor Code Development (Open)—The Committee will deliberate and may meet with the NRC staff regarding the subject topic.
8:30 a.m.-6:00 p.m.: Planning and Procedures Session/Future ACRS Activities/Reconciliation of ACRS Comments and Recommendations/Preparation of Reports (Open/Closed)—The Committee will hear discussion of the recommendations of the Planning and Procedures Subcommittee regarding items proposed for consideration by the Full Committee during future ACRS meetings, and/or proceed to preparation of reports as determined by the Chair.
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8:30 a.m.-6:00 p.m.: Committee Deliberation/Preparation of Reports/Commission Meeting Preparations (Open/Closed).
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Procedures for the conduct of and participation in ACRS meetings were published in the
An electronic copy of each presentation should be emailed to the cognizant ACRS staff at least one day before the meeting.
In accordance with Subsection 10(d) of Public Law 92-463 and 5 U.S.C. 552b(c), certain portions of this meeting may be closed, as specifically noted above. Use of still, motion picture, and television cameras during the meeting may be limited to selected portions of the meeting as determined by the Chair. Electronic recordings will be permitted only during the open portions of the meeting.
ACRS meeting agendas, meeting transcripts, and letter reports are available through the NRC Public Document Room (PDR) at
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the Market Dominant or the Competitive product list, or the modification of an existing product currently appearing on the Market Dominant or the Competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern Market Dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern Competitive product(s), applicable
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Securities and Exchange Commission (“Commission” or “SEC”).
Notice.
Notice of an application under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of the Act for an exemption from rule 23c-3 under the Act, and for an order pursuant to section 17(d) of the Act and rule 17d-1 under the Act.
The Commission:
Trace W. Rakestraw, Senior Special Counsel, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: For Applicants' representations, legal analysis, and conditions, please refer to Applicants' application, dated March 27, 2024, which may be obtained via the Commission's website by searching for the file number at the top of this document, or for an Applicant using the Company name search field on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
For the Commission, by the Division of Investment Management, under delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 12g3-2 (17 CFR 240.12g3-2) under the Securities Exchange Act of 1934 (the “Exchange Act”) provides an exemption from Section 12(g) of the Exchange Act (15 U.S.C. 78l(g)) for foreign private issuers. Rule 12g3-2 is designed to provide investors in foreign securities with information about such securities and the foreign issuer. The information filed under Rule 12g3-2 must be filed with the Commission and is publicly available. We estimate that it takes 8.95 hours per response to prepare and is filed by approximately 1,386 respondents. Each respondent files an estimated 12 times submissions pursuant to Rule 12g3-2 per year for a total of 16,632 respondents. We estimate that 25% of 8.95 hours per response (2.237 hours per response) to provide the information required under Rule 12g3-2 for a total annual reporting burden of 37,206 hours (2.237 hours per response × 16,632 responses).
Written comments are invited on: (a) whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication by June 14, 2024.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
Please direct your written comment to David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to:
Pursuant to the provisions of section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to: (i) amend subparagraph (b)(2) of Exchange Rule 531, Reports and Market Data Products, to adjust the timeframe for the Liquidity Taker Event Report—Complex Orders; and (ii) make a non-substantive, clarifying change to a footnote in prior rule filings submitted to the U.S. Securities and Exchange Commission (“Commission”) for immediate effectiveness pursuant to section 19(b)(3)(A) of the Act
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange offers three versions of the Liquidity Taker Event Report: (1) Liquidity Taker Event Report—Simple Orders (referred to herein as the “Simple Order Report”); (2) Liquidity Taker Event Report—Complex Orders (referred to herein as the “Complex Order Report”); and (3) Liquidity Taker Event Report—Resting Simple Orders (referred to herein as the “Resting Simple Order Report”).
In general, each Liquidity Taker Event Report is a daily report that provides a Member (“Recipient Member”) with its liquidity response time details for executions and contra-side responses of an order (or Complex Order,
The Exchange now proposes to: (i) amend the subparagraph (b)(2) of Exchange Rule 531 to adjust the timeframe from 200 microseconds to 400 microseconds for the Complex
The Exchange proposes to amend the subparagraph (b)(2) of Exchange Rule 531 to adjust the timeframe for the Complex Order Report. Currently, subparagraph (b)(2) provides that the Complex Order Report will include data set forth under Exchange Rule 531(b)(1)
(2) Timeframe. The Liquidity Taker Event Report-Complex Orders will include data listed in paragraph (b)(1) of this Rule 531(b) for executions and contra-side responses that occurred within 400 microseconds of the time the resting order was received by the Exchange.
At the time the Exchange adopted the Complex Order Report, the Exchange believed that 200 microseconds was the appropriate timeframe as it was in line with the previously adopted timeframe for the Simple Order Report. In the Exchange's experience, 200 microseconds has not provided a sufficient amount of time for the System
The Exchange proposes to make a clarifying change to one of the footnotes in each of the filings to adopt each Liquidity Taker Event Report. Each of the filings to adopt each Liquidity Taker Event Report contains a section that describes information in each report that corresponds to the Recipient Member. Each of the prior filings states that the “following information would be included in the [Simple Order Report, Complex Order Report, or Resting Simple Order Report] regarding response(s) [Complex Orders]
For purposes of calculating this duration of time, the Exchange will use the time the resting order and the Recipient Member's response(s) is received by the Exchange's network, both of which would be before the order and response(s) would be received by the System. This time difference would be provided in nanoseconds.
The Exchange proposes to clarify the above footnote. Specifically, the Exchange proposes to replace “the resting order” with “the first response that executes against the resting order.” Accordingly, with the proposed change, the referenced footnotes in each of the filings to adopt the Reports would read as follows:
For purposes of calculating this duration of time, the Exchange will use the time the first response that executes against the resting order and the Recipient Member's response(s) is received by the Exchange's network, both of which would be before the order and response(s) would be received by the System. This time difference would be provided in nanoseconds.
The purpose of the proposed change is to correct a non-substantive error in a footnote of each rule filing to adopt the Reports. The Exchange notes that the rule text in Exchange Rule 531 that describes each of the Reports was correctly adopted and does not require any change; only the footnote described above needs to be clarified. This change does not impact or alter the information provided to any Recipient Member.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposal to expand the timeframe for the Complex Order Report would remove impediments to and perfect the mechanism of a free and open market and a national market system because it should provide enough time to the ensure that the Complex Order Report captures all intended activity due to the time it takes for the System to create new Complex Strategies. The Exchange believes that this proposal facilitates transactions in securities because it would ensure the Complex Order Report includes the information the Complex Order Report was meant to capture. The Exchange designed the Complex Order Report for Members that are interested in gaining insight into latency in connection with Complex Orders that failed to execute against an order resting on the Exchange's Strategy Book by providing those Members data to analyze by how much time their Complex Order may have missed an execution against a contra-side order resting on the Strategy Book.
The Exchange believes that the proposed change to each of the footnotes described above for each Liquidity Taker Event Report protects investors and the public interest, as well as removes impediments to and perfects the mechanism of a free and open market and a national market system because the change is designed solely to correct non-substantive errors in prior filings, and none which have any impact on the Exchange's actual rule text for each of the Reports. This proposed change does not impact or alter the operation of Exchange Rule 531 regarding the Reports.
The Exchange does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, as amended.
The Exchange believes that the proposed change to the timeframe for the Complex Order Report in the subparagraph (b)(2) of Exchange Rule 531 will not impose any burden on intra-market competition because it will ensure that the Complex Order Report captures all intended activity due to the time it takes for the System to create new Complex Strategies. The Exchange believes that this does not impose any burden on intra-market competition as it simply ensures that Recipient Members gain insight into latency in connection with Complex Orders that failed to execute against an order resting on the Exchange's Strategy Book by providing those Members the full scope of data that was intended to be captured by the Complex Order Report to analyze by how much time their Complex Order may have missed an execution against a contra-side order resting on the Strategy Book. The Exchange believes this does not impose any burden on intra-market competition as the adjusted timeframe should ensure all related activity that is intended to be included for each Recipient Member of the Complex Order Report is actually included. The Exchange notes that the proposed change would not result in any impact on the Exchange's System.
The Exchange believes the proposed rule change to adjust the timeframe for the Complex Order Report will not impose any burden on inter-market competition as the proposed change is not designed to address any competitive issue but rather is designed to ensure that the Complex Order Report captures all intended activity due to the time it takes for the System to create new Complex Strategies.
The non-substantive corrections to the footnotes in prior filings to adopt each Liquidity Taker Event Report would not impact competition because such changes would not enhance or alter the Exchange's ability to compete, but rather, clarify a prior error which would reduce the potential for inadvertent investor confusion.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that pursuant, to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Exchange Act Forms 3 is filed by insiders of public companies that have a class of securities registered under Section 12 of the Exchange Act. Form 3 is an initial statement beneficial ownership of securities. Approximately 16,520 insiders file Form 3 annually and it takes approximately 0.50 hours to prepare for a total of 8,260 annual burden hours (0.50 hours per response × 16,520 responses).
Written comments are invited on: (a) whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication by June 14, 2024.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
Please direct your written comment to David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to:
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Form 15 (17 CFR 249.323) is a certification of termination of a class of security under Section 12(g) or notice of suspension of duty to file reports pursuant to Sections 13 and 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78a
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number.
Please direct your written comment to David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an email to:
Pursuant to the provisions of section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to: (i) amend subparagraph (b)(2) of Exchange Rule 531, Reports, Market Data Products and Services, to adjust the timeframe for the Liquidity Taker Event Report—Complex Orders; and (ii) make a non-substantive, clarifying change to a footnote in prior rule filings submitted to the U.S. Securities and Exchange Commission (“Commission”) for approval pursuant to section 19(b)(2) of the Act
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange offers three versions of the Liquidity Taker Event Report: (1) Liquidity Taker Event Report—Simple Orders (referred to herein as the “Simple Order Report”); (2) Liquidity Taker Event Report—Complex Orders (referred to herein as the “Complex Order Report”); and (3) Liquidity Taker Event Report—Resting Simple Orders (referred to herein as the “Resting Simple Order Report”).
In general, each Liquidity Taker Event Report is a daily report that provides a Member (“Recipient Member”) with its liquidity response time details for executions and contra-side responses of an order (or Complex Order,
The Exchange now proposes to: (i) amend the subparagraph (b)(2) of Exchange Rule 531 to adjust the timeframe from 200 microseconds to 400 microseconds for the Complex Order Report; and (ii) make a clarifying change to one of the footnotes in the prior filings that adopted the Simple Order Report, Complex Order Report, and Resting Simple Order Report.
The Exchange proposes to amend the subparagraph (b)(2) of Exchange Rule 531 to adjust the timeframe for the Complex Order Report. Currently, subparagraph (b)(2) provides that the Complex Order Report will include data set forth under Exchange Rule 531(b)(1)
(2) Timeframe. The Liquidity Taker Event Report-Complex Orders will include data listed in paragraph (b)(1) of this Rule 531(b) for executions and contra-side responses that occurred within 400 microseconds of the time the resting order was received by the Exchange.
At the time the Exchange adopted the Complex Order Report, the Exchange believed that 200 microseconds was the appropriate timeframe as it was in line with the previously adopted timeframe for the Simple Order Report. In the Exchange's experience, 200 microseconds has not provided a sufficient amount of time for the System
The Exchange proposes to make a clarifying change to one of the footnotes in each of the filings to adopt each Liquidity Taker Event Report. Each of the filings to adopt each Liquidity Taker Event Report contains a section that describes information in each report that corresponds to the Recipient Member. Each of the prior filings states that the “following information would be included in the [Simple Order Report, Complex Order Report, or Resting Simple Order Report] regarding response(s) [Complex Orders]
For purposes of calculating this duration of time, the Exchange will use the time the resting order and the Recipient Member's response(s) is received by the Exchange's network, both of which would be before the order and response(s) would be received by the System. This time difference would be provided in nanoseconds.
The Exchange proposes to clarify the above footnote. Specifically, the Exchange proposes to replace “the resting order” with “the first response that executes against the resting order.” Accordingly, with the proposed change, the referenced footnotes in each of the filings to adopt the Reports would read as follows:
For purposes of calculating this duration of time, the Exchange will use the time the first response that executes against the resting order and the Recipient Member's response(s) is received by the Exchange's network, both of which would be before the order and response(s) would be received by the System. This time difference would be provided in nanoseconds.
The purpose of the proposed change is to correct a non-substantive error in a footnote of each rule filing to adopt the Reports. The Exchange notes that the rule text in Exchange Rule 531 that describes each of the Reports was correctly adopted and does not require any change; only the footnote described above needs to be clarified. This change does not impact or alter the information provided to any Recipient Member.
The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,
The Exchange believes that the proposal to expand the timeframe for the Complex Order Report would remove impediments to and perfect the mechanism of a free and open market and a national market system because it should provide enough time to the ensure that the Complex Order Report
The Exchange believes that the proposed change to each of the footnotes described above for each Liquidity Taker Event Report protects investors and the public interest, as well as removes impediments to and perfects the mechanism of a free and open market and a national market system because the change is designed solely to correct non-substantive errors in prior filings, and none which have any impact on the Exchange's actual rule text for each of the Reports. This proposed change does not impact or alter the operation of Exchange Rule 531 regarding the Reports.
The Exchange does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, as amended.
The Exchange believes that the proposed change to the timeframe for the Complex Order Report in the subparagraph (b)(2) of Exchange Rule 531 will not impose any burden on intra-market competition because it will ensure that the Complex Order Report captures all intended activity due to the time it takes for the System to create new Complex Strategies. The Exchange believes that this does not impose any burden on intra-market competition as it simply ensures that Recipient Members gain insight into latency in connection with Complex Orders that failed to execute against an order resting on the Exchange's Strategy Book by providing those Members the full scope of data that was intended to be captured by the Complex Order Report to analyze by how much time their Complex Order may have missed an execution against a contra-side order resting on the Strategy Book. The Exchange believes this does not impose any burden on intra-market competition as the adjusted timeframe should ensure all related activity that is intended to be included for each Recipient Member of the Complex Order Report is actually included. The Exchange notes that the proposed change would not result in any impact on the Exchange's System.
The Exchange believes the proposed rule change to adjust the timeframe for the Complex Order Report will not impose any burden on inter-market competition as the proposed change is not designed to address any competitive issue but rather is designed to ensure that the Complex Order Report captures all intended activity due to the time it takes for the System to create new Complex Strategies.
The non-substantive corrections to the footnotes in prior filings to adopt each Liquidity Taker Event Report would not impact competition because such changes would not enhance or alter the Exchange's ability to compete, but rather, clarify a prior error which would reduce the potential for inadvertent investor confusion.
Written comments were neither solicited nor received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Correction.
This is a correction to the Presidential declaration of a major disaster for the State of Rhode Island (FEMA-4766-DR), dated 03/20/2024.
Issued on 04/04/2024.
Visit the MySBA Loan Portal at
Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
The notice of the President's major disaster declaration for the State of Rhode Island, dated 03/20/2024, published at 89 FR 21654, is hereby corrected to include Newport County, Rhode Island as a contiguous county as a result of the President's major disaster declaration on 03/20/2024. Applications for disaster loans may be submitted online using the MySBA Loan Portal
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 201986 and for economic injury is 201990.
U.S. Small Business Administration
60-Day notice and request for comments.
The Small Business Administration (SBA) intends to request approval from the Office of Management and Budget (OMB) for the collection of information described below. The Paperwork Reduction Act (PRA) of 1995, requires Federal agencies to publish a notice in the
Submit comments on or before June 14, 2024.
Email all comments to: Cynthia Smith, Office of Financial Program Operations, Small Business Administration, at
Cynthia Smith, Office of Financial Program Operations, Small Business Administration, at (703) 467-3620 or
This PRA submission is for SBA Form 770 (OMB Control No. 3245-0012), Financial Statement of Debtor. The primary purpose for collecting this information is to evaluate the debtor's financial capacity to repay the debt owed to the Agency and determine to what extent the Agency may compromise the debt, maximize recovery, and protect the interests of the Agency. Forms are to be completed and signed by the obligor and then submitted to the lender or Forms are to be completed and signed by the Borrower/Obligor and then submitted to the SBA Disaster Loan Servicing Center handling the account.
SBA is requesting a 3-year extension. NGPC address was updated. Servicing center CESC address, fax and email were added. This non-substantive change will not have a significant impact on the burden. As stated in the supporting statement, the certifications and information collected remain the same.
SBA is requesting comments on (i) Whether the collection of information is necessary for the agency to properly perform its functions; (ii) whether the burden estimates are accurate; (iii) whether there are ways to minimize the burden, including using automated techniques or other forms of information technology; and (iv) whether there are ways to enhance the quality, utility, and clarity of the information.
Federal Highway Administration (FHWA), Department of Transportation (USDOT).
Notice of intent to prepare an environmental impact statement (EIS).
FHWA, in coordination with the Minnesota Department of Transportation (MnDOT), is issuing this Notice of Intent (NOI) to solicit comment and advise the public, agencies, and stakeholders that an Environmental Impact Statement (EIS) will be prepared to study potential improvements to the Highway 252 (Hwy 252) corridor in Hennepin County from Highway 610 (Hwy 610) to the Hwy 252/Interstate 94 (I-94)/Interstate 694 (I-694) interchange, and the I-94 corridor from the Hwy 252/I-94/I-694 interchange to North Fourth Street and North Third Street in downtown Minneapolis. This notice also requests identification of potential alternatives, information, and analyses relevant to the proposed action. Persons or agencies who may be affected by the proposed Hwy 252/I-94 Project (Project) are encouraged to comment on the information in this NOI. All comments received in response to this NOI document will be considered and any information presented herein, including the preliminary alternatives and identified impacts, may be revised in consideration of the comments.
Comments must be received on or before May 15, 2024.
This NOI and Additional Project Information Documents are available in the docket referenced above at
All submissions should include the agency name and the docket number that appears in the heading of this notice. All comments received will be posted without change to
FHWA and MnDOT are committed to public involvement in the Project. All public comments received in response to this notice will be considered and potential revisions made to the information presented herein as appropriate. The environmental review of transportation improvement alternatives for the Hwy 252/I-94 study area will be conducted in accordance with the requirements of the National Environmental Policy Act (NEPA) of 1969, as amended (42 United States Code [U.S.C.] 4321,
Additional Project Information Documents prepared by MnDOT in coordination with FHWA are available in the docket and on the Project website include: Scoping Document/Draft Scoping Decision Document (SD/DSDD), Scoping Decision Document (SDD), Public Engagement Plan, Agency Coordination Plan and Evaluation Process Figure.
FHWA and MnDOT are exploring opportunities to improve safety and mobility for people walking, biking, using transit and driving on and/or across Hwy 252 and I-94 in the cities of Brooklyn Park, Brooklyn Center, and Minneapolis, Minnesota. The Project corridor is approximately 12 miles long, following the Hwy 252 corridor from Hwy 610 to the Hwy 252/I-94/I-694 system interchange, and the I-94 corridor from the Hwy 252/I-94/I-694 system interchange to North Fourth Street and North Third Street in downtown Minneapolis.
Since 2016, several transportation studies have identified and analyzed existing safety, congestion, and neighborhood connectivity issues along the Project corridor. In 2017, Metropolitan Council and MnDOT completed a
In 2021, the Project entered a scoping phase resulting in the development of a Project SD/DSDD and Project SDD which provides initial documentation of the proposed action and need for the Project and early decisions made in accordance with the Minnesota Environmental Policy Act (MEPA) and Minnesota Rules 4410. The Project SDD is intended to reduce the scope and bulk of the EIS by identifying a reasonable range of alternatives as well as substantive issues and level of detail to be studied in the EIS. Community and agency engagement in support of this process was robust and generated substantial feedback.
The purpose of the Project is to improve the safe and reliable movement of people and goods across multiple modes on and across Hwy 252 and I-94 between Hwy 610 in Brooklyn Park and North 4th Street in Minneapolis. The
The vehicle safety performance of Hwy 252 is considered deficient based on number of crashes, crash rates, and crash indices. Most Hwy 252 crashes occur at the 85th Avenue intersection in Brooklyn Park and at the 66th Avenue intersection in Brooklyn Center. Over the 4-year period from 2016 to 2019, a total of 1,512 crashes were reported on Hwy 252, of which 654 occurred at intersections. Eleven of the 1,512 crashes resulted in a fatality or severe injury. The crash rate at each of the 6 intersections along Hwy 252, as well as the non-intersection crash rate, was above the critical crash rate, which indicates that there is a vehicle safety concern.
I-94 also experiences a high number of crashes for this facility type. There were 914 reported crashes on I-94 between 2016 and 2019 including 5 fatal crashes and 5 serious injury crashes. The crash rate on I-94 during this time period was also above the critical crash rate, again indicating a vehicle safety concern.
The vehicle mobility performance of Hwy 252 is considered deficient based on operations and travel time reliability during peak periods. The congestion on Hwy 252 is expected to get worse in the future with the No Build Alternative. Northbound I-94 experiences congestion during the afternoon peak period because of operations at the I-94/I-694/Hwy 252 system interchange and traffic queues spilling back from I-694. The I-94 corridor within the Project limits has one of the highest express bus ridership numbers in the Twin Cities Metropolitan Area (based on 2019 ridership data). As congestion increases under the No Build Alternative, it will be important to maintain bus on-time performance on Hwy 252 and I-94 and potentially mitigate future sources of bus delay along the corridor.
Hwy 252 and I-94 create physical barriers to east-west travel for pedestrians and bicyclists in the Project area communities. Pedestrian and bicycling traffic crossing Hwy 252 is likely low due to perceptions of unsafe conditions for people crossing the corridor by foot or bike. Hwy 252 can be challenging and uncomfortable to cross for some pedestrians and bicyclists due to the number of lanes, crossing distances, and vehicle speeds. Multiple fatal crashes involving motor vehicles and vulnerable users have occurred in the Project area (
Pedestrians and bicyclists can also experience long delay times when waiting to cross Hwy 252. Once able to cross, the signal cycle time may not feel adequate for some users. The I-94 crossing experiences have varying degrees of pedestrian and bicycle levels of service at the various locations throughout the corridor.
The Purpose and Need statement explains why MnDOT is undertaking the proposed action and what its objectives are. The identified needs are transportation deficiencies or problems to be addressed. The “Purpose” is a broad statement of the primary intended transportation result and other related objectives to be achieved by a proposed transportation improvement. The Draft EIS will include the Purpose and Need statement and supporting documentation, including data and public input summary developed during the SD/DSDD phase. The agency may consider revisions to the Purpose and Need statement if new substantiating transportation data or information is learned through the comment period on this notice.
FHWA and MnDOT propose improvements to 12 miles along the Hwy 252 and I-94 corridor, including, but not limited to, converting Hwy 252 to a grade separated freeway with interchanges, adding managed lanes, and providing bicycle/pedestrian grade
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Using this Alternatives Evaluation Process, a wide range of potential corridor elements were identified for Hwy 252 and I-94 in the SD/DSDD. Hwy 252 and I-94 elements for corridor alternatives were evaluated independently from one another during the scoping process using evaluation criteria established for their respective impact areas and their respective performance. Based on the Step 2 evaluation of Hwy 252 and I-94 elements, many corridor alternatives were dismissed from further consideration based on performance measures used to evaluate their ability to address the transportation Purpose and Need.
Step 3 included qualitative and quantitative transportation and social, economic, and environmental (SEE) performance measures. The SD/DSDD includes a traffic analysis for corridor elements and corridor alternatives, including traffic modeling methodologies and travel demand forecasts. Additional information on the Range of Alternatives is also provided in the SD/DSDD and SDD.
Below are descriptions of the No Build Alternative and Corridor Elements recommended in Step 3 of the Alternative Evaluation to be studied further in the EIS in Step 4 as outlined in the Evaluation Process Figure in the docket.
Documentation of a No Build Alternative is required as part of the NEPA and MEPA processes to act as a baseline scenario in the alternatives screening and evaluation process. The No Build Alternative would maintain the current roadway geometry, lane configuration, and other existing conditions within the logical termini with no additional improvements to address needs in the Hwy 252/I-94 study area. The No Build Alternative presumes that there will be ongoing preventative maintenance work but does not provide either the scope of preventative maintenance or any environmental clearance. The No Build Alternative includes maintaining the existing number of lanes, intersections, overpass bridges, transit advantages, and pedestrian and bicycle facilities on Hwy 252 and I-94
MnDOT and FHWA will follow an iterative stepped process to select a preferred alternative. The Draft EIS will build upon and refine the alternatives that were developed and retained from the DSDD/SDD (Steps 1-3). The Draft EIS will assess whether the Hwy 252 corridor should go over or under the local crossroad at the potential interchange locations (Step 4—Phase 1A), as well as consider a variety of access combinations along Hwy 252 (Step 4—Phase 1B). Each alternative to be studied in the Draft EIS will cover the entire 12-mile Project corridor and include a combination of one of the Hwy 252 corridor elements retained from the SDD incorporating the recommendations from Step 4—Phases 1A and 1B with one of the I-94 corridor elements retained from the SDD (Step 4—Phase 2)
Additional details on the criteria used to refine Hwy 252 access combinations and corridor elements are provided in the SD/DSDD.
Step 4—Phase 1A of the Draft EIS: An evaluation of the SEE impacts of having Hwy 252 over or under the local road will be conducted to select a recommended vertical location of the Hwy 252 corridor at each interchange location.
Step 4—Phase 1B of the Draft EIS: Following the identification of the recommended over/under location selected, access combinations considered in the SDD will be evaluated to identify the level of access to be retained at 6 existing intersections along the Hwy 252 corridor. Each access combination is a permutation of full access, partial access, and closures, which will be studied in the Draft EIS:
• Access Combination 1—Full access interchanges on Hwy 252 at 85th Avenue, Brookdale Drive, and 66th Avenue. Pedestrian and bicycle access only at Humboldt Avenue, 73rd Avenue and 70th Avenue.
• Access Combination 2—Full access interchanges on Hwy 252 at 85th Avenue and 66th Avenue. Partial access interchanges at Brookdale Drive and 73rd Avenue. Pedestrian and bicycle access only at Humboldt Avenue and 70th Avenue.
• Access Combination 3—Full access interchange on Hwy 252 at 85th Avenue. Partial access interchanges at Brookdale Drive and 73rd Avenue. Pedestrian and bicycle access only at Humboldt Avenue, 70th Avenue and 66th Avenue.
• Access Combination 4—Full access interchanges on Hwy 252 at 85th Avenue, Brookdale Drive, and 70th Avenue. Pedestrian and bicycle access only at Humboldt Avenue, 73rd Avenue and 70th Avenue.
• Access Combination 5—Full access interchanges on Hwy 252 at 85th Avenue and 73rd Avenue. Pedestrian and bicycle access only at Humboldt Avenue, 70th Avenue and 66th Avenue.
Step 4—Phase 2 of the Draft EIS: FHWA and MnDOT are currently considering three corridor elements identified in the SDD on Hwy 252, using the recommended Hwy 252 vertical location and recommended access combination along Hwy 252 as determined in Step 4—Phases 1A and 1B. Three Hwy 252 corridor elements will be combined with applicable I-94 corridor elements to form up to ten whole corridor alternatives (see next section):
• Element 5—Convert Hwy 252 to 4-lane freeway with interchanges with bus-only shoulders.
• Element 6—Convert Hwy 252 to 6-lane freeway with interchanges with bus-only shoulders.
• Element 7—Convert Hwy 252 to 6-lane freeway with two managed lanes.
Additional details on the criteria used to refine I-94 corridor elements are provided in the SD/DSDD.
Step 4—Phase 2 of the Draft EIS: FHWA and MNDOT are considering 5 corridor elements on I-94 to be combined with the 3 Hwy 252 corridor elements (see previous section) to form up to 10 whole corridor alternatives:
• Element A—No change on I-94
• Element B—Convert one southbound I-94 lane from I-694 to North Fourth Street to a managed lane with a direct connection to downtown Minneapolis.
• Element D—Convert one southbound and one northbound I-94 Lane from I-694 to North Fourth Street to managed lanes with a direct connection to downtown Minneapolis.
• Element G—Build one southbound I-94 Lane from I-694 to Dowling Avenue as a managed lane, convert one southbound I-94 Lane from Dowling Avenue to North Fourth Street to a managed lane with a direct connection to downtown Minneapolis.
• Element J—Build one southbound and one northbound I-94 Lane from I-694 to Dowling Avenue as managed lanes, convert one southbound and one northbound I-94 Lane from Dowling Avenue to North Fourth Street to a managed lane with a direct connection to downtown Minneapolis.
In Step 4—Phase 1A, FHWA and MnDOT anticipate evaluating the separation of Hwy 252 over or under the local road at each of the potential interchange locations before proceeding to Step 4—Phase 1B, the evaluation of the 5 Hwy 252 access combinations elements. Incorporating the recommendations from Step 4—Phases 1A and 1B with the Hwy 252 corridor elements, FHWA and MnDOT will proceed to Step 4—Phase 2 and evaluate up to 10 Hwy 252/I-94 corridor alternatives. These 10 corridor alternatives are made up of the three Hwy 252 corridor elements combined with the 5 I-94 corridor elements as identified in Table 7.3 of the SDD. The 10 corridor alternatives are A.5, A.6, B.7, D.7, G.5, G.6, G.7, J.5, J.6 and J.7.
The following list summarizes Hwy 252/I-94 design considerations to be studied further in the Draft EIS. These will be integrated into the Hwy 252/I-94 corridor alternatives.
• Southbound Hwy 252/I-94 lane configuration moved to the right side of I-94 using a bridge south of the Hwy 252/I-94/I-694 system interchange.
• Hwy 252 grade separated overpasses at non-access locations. This will include dedicated pedestrian/bicycle overpass bridges for non-motorized uses (
• West River Road reconnection on the east side of Hwy 252 in Brooklyn Park.
• I-94 Pedestrian and bicycle overpass at 62nd Avenue, 61st Avenue and 34th Avenue.
The Draft EIS will further refine and evaluate the Alternatives based on how well they address the transportation problems that led to the initiation of the Project. The Draft EIS will then evaluate the potential SEE effects resulting from the implementation of these refined Alternatives and the No Build Alternative. The following are anticipated to be the most sensitive environmental, economic, and social concerns in the Project area and will be evaluated in detail by MnDOT and FHWA:
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In addition to the known resources above, the Draft EIS will also identify impacts to the following resources, as identified in SDD Chapter 9:
The level of review of the identified resources for the EIS will be commensurate with the anticipated effects to each resource from the proposed Project and will be governed by the statutory or regulatory requirements protecting those resources.
The analyses and evaluations conducted for the EIS will identify the potential for effects; avoidance measures; minimization measures; whether the anticipated effects would be adverse; and mitigation measures for adverse effects. Additional information on the expected impacts is provided in the Project SD/DSDD and SDD available for review on the Project website as noted in the
Agencies, stakeholders, and the public are invited to comment on the anticipated impacts. The environmental impact analysis will be developed once the Alternatives for Study in the Draft EIS and impact categories are refined based on substantive public comment on this notice. The identification of impacts may be amended due to the consideration of public comments. See the SD/SDD and SDD for a more detailed description of the issues requiring analysis in the EIS. The studies to identify the impacts, as well as the analyses of impacts from the retained alternatives, will be presented in the Draft EIS.
FHWA, in consultation with MnDOT and Cooperating and Participating Agencies, will develop a schedule, or Permitting Timetable, for the Project. The Permitting Timetable will identify actions and associated milestones for the environmental review process and subsequent agency authorizations. Resource agencies are currently reviewing the Permitting Timetable. The Draft EIS will include the Permitting Timetable. FHWA and MnDOT will coordinate with agencies throughout the project development process for Hwy 252/I-94 to make updates to the Permitting Timetable as appropriate. The SDD Chapter 11 provides additional information regarding the permits anticipated to be needed for the Project. A Section 404 permit with the USACE for impacts to wetlands is the one anticipated federal permit.
Per 23 U.S.C. 139(d)(10), the aforementioned permits and authorizations are typically anticipated to be completed by no later than 90 days after the issuance of the Record of Decision (ROD). However, for this Project, in accordance with 23 U.S.C. 139(d)(10)(C)(ii) FHWA has approved MnDOT's request that those permits and authorizations follow a different timeline because the construction start date is not expected until 2028 or later.
The following sections outline agency coordination and public engagement processes supporting the Project.
For the Hwy 252/I-94 EIS, MnDOT and FHWA are the joint lead agencies for the NEPA process and MnDOT is the lead agency for the MEPA process. MnDOT and FHWA will seek input and collaborate with partner agencies throughout the EIS process. Local agency coordination includes involvement with the Technical Advisory Committee (TAC) and Engagement Committee:
• The TAC includes staff from Hennepin County, City of Brooklyn Park, City of Brooklyn Center, City of Minneapolis, MnDOT, FHWA, Metropolitan Council, Metro Transit, and Project Consultants. The TAC meets approximately monthly to provide leadership and guidance for resolution of technical issues, to provide input on public engagement activities and materials, and to provide recommendations to the Policy Advisory Committee (PAC).
• The Engagement Committee is comprised of public engagement staff from MnDOT and partnering agencies. The Engagement Committee advises MnDOT and the Project consultants on engagement strategy, techniques, and key audiences. It reviews engagement materials and furthers the Project's messages across their platforms. The Engagement Committee meets approximately monthly and more often when preparing for and conducting engagement activities.
As part of the scoping phase, MnDOT and FHWA identified and invited agencies who would like to serve as Participating and Cooperating Agencies for the Project. Cooperating Agencies are those that have “jurisdiction by law or special expertise”—those that are anticipated to issue permits or approvals for the Project. Participating Agencies are all agencies “with an interest” in the Project—these may include Federal, State, or local agencies. MnDOT and FHWA have prepared an Agency Coordination Plan that will guide FHWA's and MnDOT's interactions with Cooperating and Participating Agencies for the Project. The Agency Coordination Plan describes agency roles and responsibilities, agency expectations, concurrence points, and Project milestones. The Agency Coordination Plan is a living document that is anticipated to evolve over the lifetime of the Hwy 252/I-94 environmental review process. Cooperating and Participating Agency roles are summarized in the SDD.
MnDOT and FHWA followed a merged scoping process to comply with MEPA and NEPA requirements as outlined in Figure 1.1 in the SD/DSDD. Ten Cooperating and Participating Agency meetings have been held to this point during the State and Federal scoping process. The focus of these meetings was to provide Project updates, review Project deliverables, and to collect input from agency representatives. Cooperating and Participating Agency meetings will be on-going through development of the Draft EIS and Final EIS/ROD.
The PAC includes elected and appointed officials from MnDOT, State of Minnesota, FHWA, Hennepin County, City of Brooklyn Park, City of Brooklyn Center, City of Minneapolis, and Metropolitan Council. The PAC meets approximately quarterly, and meetings are open to the public. The PAC is not a decision-making body. The roles of the PAC include:
• Guide policy and funding decisions pertaining to the Project.
• Review recommendations from the TAC and provide input on public engagement materials.
• Provide help in identifying important community issues.
• Provide help in communicating with neighboring constituents on Project decision points/major milestones and encourage public participation.
• Provide input as requested by MnDOT.
Beyond their role on the PAC, elected leaders from the cities of Brooklyn Park, Brooklyn Center, and Minneapolis; Hennepin County; and the State will be included in public engagement communications and events.
Hennepin County, MnDOT, and Project partners completed three rounds of public engagement in Summer 2018, Winter 2018, and Summer 2019. These rounds of engagement included community workshops, listening sessions, pop-up events, and online surveys. The outcome of the EA phase was a determination by MnDOT and FHWA that the complexity and magnitude of the proposed action for Hwy 252 and I-94 demonstrated prudence to transition to an EIS as the appropriate NEPA class of action.
MnDOT hosted 3 rounds of public engagement during the state and federal scoping process from Spring 2021 through Spring 2023. Public engagement activities included listening sessions, pop-up events, virtual public meetings and community conversations, and in-person open house meetings. More than 830 public comments were submitted during the scoping period.
Comments received reflected preferences for individual alternatives, identified potential Project impacts and expressed related concerns, or suggested variations (
MnDOT's Sustainability and Public Health Office and MnDOT Metro District conducted an Equity Health Assessment (EHA) of the Project. MnDOT initiated the Hwy 252/I-94 EHA in 2021 as enhanced engagement to pilot a new method for including equity and health information in the environmental review process. The EHA draws from principles and practices of Health Impact Assessment and Community Impact Assessment tools used by public agencies across the country to understand and address equity and health impacts on transportation projects.
During MEPA scoping, MnDOT facilitated the EHA process to help organize and bring forward the equity and health priorities of underserved and overburdened populations. The EHA input provided will be considered during the NEPA and MEPA processes the same as other public comment or feedback. Additional details on the outcomes of this assessment are provided in the Project SDD.
MnDOT and FHWA have prepared a Public Engagement Plan as well as an Agency Coordination Plan for the Project which is available on the Project website at
MnDOT, FHWA, and their partners will anticipate and respond to public, stakeholder, and agency engagement needs to facilitate two-way communications that effectively and efficiently navigates the environmental review process, building broad Project understanding along the way.
Following the issuance of this notice, FHWA and MnDOT will coordinate with the Participating and Cooperating Agencies to confirm study methodologies and analyze Project effects for inclusion in the Draft EIS.
This Project is subject to 23 U.S.C. 139(g)(1)(B)(iii) such that the schedule is consistent with an agency average of not more than two years for completion of the environmental review process, as measured from the date of the publication of the NOI to the ROD. The public engagement plan, agency coordination plan and schedule, developed with input from cooperating and participating agencies and the public, targets 2 years from the NOI to the ROD. In the event it becomes apparent to FHWA during Project development that the schedule from NOI to ROD would be more than 2 years, FHWA may seek a modification to lengthen the schedule in accordance with 23 U.S.C. 139(g)(1)(D).
• The target date for the Draft EIS is early 2026.
• A public hearing will be held during the Draft EIS 45-day public comment period.
• The target date for the combined Final EIS and ROD is April 2026.
• A Section 404 permit decision from the USACE is expected in 2028, dependent on the timing of final design and construction. See the SDD for additional schedule details.
To confirm that a full range of transportation issues related to the study will be addressed and potential issues are identified, FHWA invites comments and suggestions from all interested parties. The Project team requests comments and suggestions on the potential alternatives and associated impacts, and the identification of relevant information, studies, or analyses concerning impacts affecting the quality of the human environment not previously identified during the scoping phase. The purpose of this request is to bring additional relevant comments, information, and analyses to the agency's attention, to enable the agency to make maximum use of this additional information in the decision-making process. Comments may be submitted according to the instructions in the
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FMCSA announces its plan to submit the Information Collection Request (ICR) described below to the Office of Management and Budget (OMB) for review and approval. In order to work continuously to ensure that our programs are effective and meet our customers' needs, FMCSA requests approval to renew an ICR titled, “Generic Clearance of Customer Satisfaction Surveys.” This ICR allows
Comments on this notice must be received on or before May 15, 2024.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Ms. Roxane Oliver, FMCSA, Office of Analysis, DOT, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590, (202) 385-2324,
Executive Order (E.O.) 12862, Setting Customer Service Standards, requires the Federal government to provide the “highest quality service possible to the American people.” E.O. 13571, Streamlining Service Delivery and Improving Customer Service, requires the standard of quality for services provided to the public to be customer service equal to the best in business. In order to work continuously to ensure that our programs are effective and meet our customers' needs, FMCSA seeks to renew OMB's approval of a generic clearance to collect qualitative feedback from our customers on our service delivery. The surveys covered in this generic clearance provide a means for FMCSA to collect this data directly from our customers. By qualitative feedback, we mean information that provides useful insights on perceptions and opinions but are not generated from statistical surveys that yield quantitative results that can be generalized to the population of study. This feedback provides insights into customer or stakeholder perceptions, experiences, and expectations, provides an early warning of issues with service, or focuses attention on areas of communication, training, or changes in operations that might improve delivery of products or services. These collections allow for ongoing, collaborative, and actionable communications between the Agency and its customers and stakeholders. They also allow feedback to contribute directly to the improvement of program management.
The solicitation of feedback targets areas such as: timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses are assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.
The Agency will submit a planned collection for approval under this generic clearance only if it meets the conditions that such collections are:
• voluntary;
• low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden hours per respondent) and are low-cost for both the respondents and the Federal government;
• noncontroversial and do not raise issues of concern to other Federal Agencies;
• targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• only collecting personally identifiable information (PII) to the extent necessary and not retaining it;
• only collecting information intended to be used only internally for general service improvement and program management, and any release outside the Agency must indicate the qualitative nature of the information;
• not to be used for the purpose of substantially informing influential policy decisions; and
• intended to yield only qualitative information.
This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: the target population to which generalizations will be made; the sampling frame; the sample design (including stratification and clustering); the precision requirements or power calculations that justify the proposed sample size; the expected response rate; methods for assessing potential nonresponse bias; the protocols for data collection; and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other mechanisms that are designed to yield quantitative results. As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
Issued under the authority of 49 CFR 1.87.
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of application for exemption; request for comments.
The Federal Motor Carrier Safety Administration (FMCSA) requests public comment on an exemption application to allow K & L Trucking (K & L) to transport metal coils using a single two-ply nylon-Kevlar tie down strap to secure its metal coils for transport to a metal coil carrier affixed to the bed of its trucks/trailers as an alternative to the requirements in current regulations. K & L states that its method of securing steel coils is a safe alternative to the method required in the FMCSRs for the short distance that each load is transported. K & L believes the exemption would maintain a level of safety that is equivalent to, or greater than, the level of safety achieved without the exemption.
Comments must be received on or before May 15, 2024.
You may submit comments identified by docket number FMCSA-2024-0101 using any of the following methods:
•
•
•
•
Mr. David Sutula, Vehicle and Roadside Operations Division, Office of Carrier, Driver, and Vehicle Safety, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, (202) 366-5541,
If you submit a comment, please include the docket number for this notice (Docket No. FMCSA-2024-0101), indicate the specific section of this document to which your comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if it has questions regarding your submission.
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 8
FMCSA will consider all comments and material received during the comment period. Comments received after the comment closing date will be filed in the public docket and will be considered to the extent practicable.
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to the notice contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to the notice, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission that constitutes CBI as “PROPIN” to indicate it contains proprietary information. FMCSA will treat such marked submissions as confidential under the Freedom of Information Act, and they will not be placed in the public docket of the notice. Submissions containing CBI should be sent to Brian Dahlin, Chief, Regulatory Evaluation Division, Office of Policy, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 or via email at
To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its regulatory process. DOT posts these comments, including any personal information the commenter provides, to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315(b) to grant exemptions from the FMCSRs. FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted and determines whether granting the exemption would likely maintain a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (§ 381.305(a)). The Agency must publish its decision in the
On December 4, 2020, FMCSA granted a 5-year exemption from the coil securement rules in section 393.130(c) to allow K & L to use the alternative securement method described below to transport coils from North Star Blue Scope Steel to Fulton County Processing (85 FR 78406). K & L has now applied to expand the exemption to transportation to and from other points within a few miles of each other. The exemption would allow the use of a specialized metal coil carrier permanently attached to the flatbed trailer using sixteen
The exemption would apply to all K & L employees driving commercial motor vehicles utilizing this specialized cargo securement technique transporting metal coils less than 4 miles to and from North Star Blue Scope Steel, LLC, located at 6767 Co. Rd. 9 (and its scales located at Co. Rd. 10), Delta, OH 43515; Fulton County Processing, located at 7800 OH-109, Delta, OH 43515; Worthington Industries, located at 6303 Co. Rd. 10, Delta, OH 43515; Nova Tube and Steel located at 8641 Co. Rd. H, Delta, OH 43515; and BlueScope Recycling and Materials, located at 7300 OH-109, Delta, OH 43515. K & L Trucking believes that its steel coil cargo securement system, as described, would maintain a level of safety that is equivalent to, or greater than, the level of safety achieved without the exemption.
In accordance with 49 U.S.C. 31315(b)(6), FMCSA requests public comment from all interested persons on K & L's application for an exemption from 49 CFR 393.120(c). All comments received before the close of business on the comment closing date indicated at the beginning of this notice will be considered and will be available for examination in the docket at the location listed under the
Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).
Notice of application for exemption; request for comments.
FMCSA announces the Hawaii Department of Transportation's (HDOT) requests for an exemption on behalf of the Hawaii Department of Education's (DOE) Transportation Services Branch and independent schools statewide to allow Class A or B commercial driver's license (CDL) holders with a passenger (P) endorsement to operate a school bus without holding a school bus (S) endorsement, and to allow the use of motorcoaches and vans to transport students to/from a central location to school daily. HDOT states that except for the S endorsement training requirements, all other Federal and State training requirements will be completed before drivers start transporting students in motorcoaches. HDOT believes an exemption will provide a temporary resolution to its school bus driver shortage while drivers complete the S endorsement training. FMCSA requests public comment on the applicant's request for exemption.
Comments must be received on or before May 15, 2024.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2023-0272 by any of the following methods:
•
•
•
•
Each submission must include the Agency name and the docket number (FMCSA-2023-0272) for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards, FMCSA; (202) 366-2722;
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2023-0272), indicate the specific section of this document to which the comment applies, and provide a reason for your suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to the notice contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to the notice, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission that constitutes CBI as “PROPIN” to indicate it contains proprietary information. FMCSA will treat such marked submissions as confidential under the Freedom of Information Act, and they will not be placed in the public docket of the notice. Submissions containing CBI should be sent to Brian Dahlin, Chief, Regulatory Evaluation Division, Office of Policy, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 or via email at
FMCSA has authority under 49 U.S.C. 31136(e) and 31315(b) to grant exemptions from Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305(a)). The Agency must publish its decision in the
HDOT seeks relief from the commercial driver's license (CDL) and commercial learner's permit (CLP) regulations in 49 CFR part 383 for the following: to allow Class A or B CDL holders with a P endorsement to operate a school bus without holding an S endorsement CLP, and to allow the use of motorcoaches and vans to transport students to/from a central location to school on a daily basis.
HDOT is requesting relief, so that Class A and Class B drivers who have a P endorsement may operate traditional school buses in a school bus operation, without the required S endorsement. HDOT is also requesting the same relief for Class A and Class B drivers who operate motorcoaches or vans to transport students from a central location to school and from school to a central location on a daily basis. Hawaii currently has a severe shortage of school bus drivers, and as a result, the DOE had to reduce services to public school students who do not have transportation to/from school. This reduction of services statewide has impacted the number of students who can attend school in person, especially in rural areas. The shortage has forced a suspension or partial suspension on the islands of Oahu and Kauai, and the route suspensions and partial suspensions will last the entire 2023-2024 school year.
HDOT indicates that with the exception of the S endorsement, all other Federal and State training requirements will be completed prior to the drivers starting motorcoach service. Drivers will be in the process of completing their S endorsements, and therefore HDOT anticipates that the remaining requirement will be met within a reasonable time frame. The DOE will continue to accept responsibility for the initial screening and proficiency of all drivers allowed to provide bus service for students.
A copy of HDOT's application for exemption is available for review in the docket for this notice.
In accordance with 49 U.S.C. 31315(b), FMCSA requests public comment from all interested persons on HDOT's application for an exemption, so that a Class A or B CDL holder with a P endorsement may operate a school
National Highway Traffic Safety Administration, Department of Transportation (DOT).
Notice of public meeting.
This notice announces a meeting of the National Emergency Medical Services Advisory Council (NEMSAC).
This meeting will be held in-person and simultaneously transmitted via virtual interface. It will be held on May 1-2, 2024, from 12:00 p.m. to 5:00 p.m. ET. Pre-registration is required to attend this meeting. Once registered, a link permitting access to the meeting will be distributed to registrants by email. If you wish to speak during the meeting, you must submit a written copy of your remarks to DOT by April 17, 2024.
General information about the Council is available on the NEMSAC internet website at
Clary Mole, EMS Specialist, National Highway Traffic Safety Administration, U.S. Department of Transportation is available by phone at (202) 868-3275 or by email at
NEMSAC is authorized under section 31108 of the Moving Ahead for Progress in the 21st Century (MAP-21) Act of 2012, codified at 42 U.S.C. 300d-4 as a Federal Advisory Committee. The purpose of NEMSAC is to serve as a nationally recognized council of emergency medical services (EMS) representatives to provide advice and consult with:
a. The Federal Interagency Committee on Emergency Medical Services (FICEMS) on matters relating to EMS issues; and
b. The Secretary of Transportation on matters relating to EMS issues affecting DOT.
NEMSAC provides an important national forum for the non-Federal deliberation of national EMS issues and serves as a platform for advice on DOT's national EMS activities. NEMSAC also provides advice and recommendations to the FICEMS.
At the meeting, the agenda will cover the following topics:
This meeting will be open to the public. We are committed to providing equal access to this meeting for all participants. Persons with disabilities in need of an accommodation should send a request to the individual in the
A period of time will be allotted for comments from members of the public joining the meeting. Members of the public may present questions and comments to the Council using the live chat feature available during the meeting. Members of the public may also submit materials, questions, and comments in advance to the individual listed in the
Members of the public wishing to reserve time to speak directly to the Council during the meeting must submit a request. The request must include the name, contact information (address, phone number, and email address), and organizational affiliation of the individual wishing to address NEMSAC; it must also include a written copy of prepared remarks and must be forwarded to the individual listed in the
All advance submissions will be reviewed by the Council Chairperson and Designated Federal Officer. If approved, advance submissions shall be circulated to NEMSAC representatives for review prior to the meeting. All advance submissions will become part of the official record of the meeting.
Issued in Washington, DC.
Internal Revenue Service, Department of Treasury.
Notice of meeting.
The Internal Revenue Service Advisory Council will hold a public meeting.
The meeting will be held Wednesday, May 8, 2024.
The meeting will be held virtually.
Ms. Anna Millikan, Office of National Public Liaison, at 202-317-6564 or send an email to
Notice is hereby given pursuant to 5 U.S.C. 10(a)(2) of the Federal Advisory Committee Act, that a public meeting of the Internal Revenue Service Advisory Council (IRSAC) will be held on Wednesday, May 8, 2024, to discuss topics that may be recommended for inclusion in a future report of the Council. The virtual meeting will take place at 3:00 p.m. Eastern Time.
To confirm your attendance, members of the public may contact Anna Millikan at 202-317-6564 or send an email to
Should you wish the IRSAC to consider a written statement germane to the Council's work, please call 202-317-6564 or email
Notice is hereby given, pursuant to 5 U.S.C. App. 2, 10(a)(2), that a meeting will be held at the United States Treasury Department, 15th Street and Pennsylvania Avenue NW, Washington, DC on April 30, 2024, at 9:00 a.m., of the following debt management advisory committee: Treasury Borrowing Advisory Committee.
At this meeting, the Treasury is seeking advice from the Committee on topics related to the economy, financial markets, Treasury financing, and debt management. Following the working session, the Committee will present a written report of its recommendations. The meeting will be closed to the public, pursuant to 5 U.S.C. App. 2, 10(d) and Public Law 103-202, 202(c)(1)(B)(31 U.S.C. 3121 note).
This notice shall constitute my determination, pursuant to the authority placed in heads of agencies by 5 U.S.C. App. 2, 10(d) and vested in me by Treasury Department Order No. 101-05, that the meeting will consist of discussions and debates of the issues presented to the Committee by the Secretary of the Treasury and the making of recommendations of the Committee to the Secretary, pursuant to Public Law 103-202, 202(c)(1)(B).
Thus, this information is exempt from disclosure under that provision and 5 U.S.C. 552b(c)(3)(B). In addition, the meeting is concerned with information that is exempt from disclosure under 5 U.S.C. 552b(c)(9)(A). The public interest requires that such meetings be closed to the public because the Treasury Department requires frank and full advice from representatives of the financial community prior to making its final decisions on major financing operations. Historically, this advice has been offered by debt management advisory committees established by the several major segments of the financial community. When so utilized, such a committee is recognized to be an advisory committee under 5 U.S.C. App. 2, 3.
Although the Treasury's final announcement of financing plans may not reflect the recommendations provided in reports of the Committee, premature disclosure of the Committee's deliberations and reports would be likely to lead to significant financial speculation in the securities market. Thus, this meeting falls within the exemption covered by 5 U.S.C. 552b(c)(9)(A).
The Office of Debt Management is responsible for maintaining records of debt management advisory committee meetings and for providing annual reports setting forth a summary of Committee activities and such other matters as may be informative to the public consistent with the policy of 5 U.S.C. 552(b). The Designated Federal Officer or other responsible agency official who may be contacted for additional information is Fred Pietrangeli, Director for Office of Debt Management (202) 622-1876.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
This is a revision of a currently approved collection as the respondent burden has decreased.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20420, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS); Department of the Treasury.
Final rule.
This final rule includes payment parameters and provisions related to the HHS-operated risk adjustment program, as well as 2025 user fee rates for issuers offering qualified health plans (QHPs) through federally facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs). This final rule also includes requirements related to the auto re-enrollment hierarchy; essential health benefits; failure to file Federal income taxes to reconcile advance payments of the premium tax credit (APTC); non-standardized plan option limits in the FFEs and SBE-FPs and a related exceptions process; standardized plan options in the FFEs and SBE-FPs; special enrollment periods (SEPs); direct enrollment (DE) entities supporting Exchange applications and enrollments; the Insurance Affordability Program enrollment eligibility verification process; requirements for agents, brokers, web-brokers, and DE entities assisting Exchange consumers; network adequacy; public notice procedures for section 1332 waivers; prescription drug benefits; updates to the Consumer Operated and Oriented Plan (CO-OP) Program; and State flexibility on the effective date of coverage in the Basic Health Program (BHP).
These regulations are effective on June 4, 2024.
Jeff Wu, (301) 492-4305, Rogelyn McLean, (301) 492-4229, Grace Bristol, (410) 786-8437, for general information.
Debbie Noymer, (301) 448-3755, and John Barfield, (301) 492-4433 for matters related to HHS-operated risk adjustment.
John Barfield, (301) 492-4433, or Aaron Franz, (410) 786-8027, for matters related to user fees.
Brian Gubin, (410) 786-1659, for matters related to agent, broker, and web-broker guidelines.
Marisa Beatley, (301) 492-4307, for matters related to the verification process related to eligibility for insurance affordability programs and current sources of income.
Carolyn Kraemer, (301) 492-4197, for matters related to auto re-enrollment in the Exchanges.
Zarin Ahmed, (301) 492-4400, for matters related to enrollment of qualified individuals into QHPs and termination of Exchange enrollment or coverage for qualified individuals.
Claire Curtin, (301) 492-4400, for matters related to the monthly 150 percent Federal poverty level special enrollment period.
Alexandra Gribbin, (667) 290-9977, for matters related to dental coverage.
Nikolas Berkobien, (667) 290-9903, for matters related to standardized plan options and non-standardized plan option limits.
LeAnn Brodhead, (667) 290-8805, for matters related to the essential health benefits prescription drug benefit.
Carolyn Sabini, (667) 290-9750, for matters related to the essential health benefits benchmark plan policy.
Ken Buerger, (410) 786-1190, for matters related to mandates in addition to the essential health benefits.
Emily Martin, (301) 492-4423, Deborah Hunter, (443) 386-3651, or Emma Vasilak, (774) 551-6157, for matters related to establishment of Exchange network adequacy standards and ECPs.
Shilpa Gogna, (301) 492-4257, or Jenny Chen, (301) 492-5156, for matters related to approval of a State Exchange and State Exchange Blueprint requirements.
Joe Fitzpatrick, (410) 786-2761, for matters related to establishment of additional minimum standards for Exchange call center operations.
John Allison, (828) 513-1323, for matters related to Exchange operation of a centralized eligibility and enrollment platform.
Courtney De La Mater, (301) 492-4400, for matters related to the Failure to Reconcile process.
Robert Yates, (301) 492-5151, for matters related to State Exchange annual open enrollment periods.
Daniel Rosinsky-Larsson, (301) 492-4400, for matters related to SEP effective dates of coverage.
Lina Rashid, (443) 902-2823, or Kimberly Koch (202) 381-6934, for matters related to section 1332 waivers.
Jacquelyn Rudich, (301) 492-5211, for matters related to netting of payments.
Kevin Kendrick, (301) 509-6612, for matters related to the CO-OP program.
Carrie Grubert, (410) 786-8319, for matters related to the Basic Health Program (BHP) provision.
Gene Coffey, (410) 786-2234, for matters related to Medicaid eligibility.
Arshdeep Dhanoa, (301) 492-4400, for matters related to incarceration verification for QHP eligibility and periodic data matching for dual and deceased enrollees.
We are finalizing changes to the provisions and parameters implemented through prior rulemaking to implement the Patient Protection and Affordable Care Act (ACA).
Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new title XXVII to the Public Health Service (PHS) Act to establish various reforms to the group and individual health insurance markets.
These provisions of the PHS Act were later augmented by other laws, including the ACA. Subtitles A and C of title I of the ACA reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans.
Section 2702 of the PHS Act, as added by the ACA, establishes requirements for guaranteed availability of coverage in the group and individual markets.
Section 1301(a)(1)(B) of the ACA directs all issuers of qualified health plans (QHPs) to cover the essential health benefit (EHB) package described in section 1302(a) of the ACA, including coverage of the services described in section 1302(b) of the ACA, adherence to the cost-sharing limits described in section 1302(c) of the ACA, and meeting the Actuarial Value (AV) levels established in section 1302(d) of the ACA. Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health insurance coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in section 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB package that includes coverage of EHBs (as defined by the Secretary of HHS), cost-sharing limits, and AV requirements. The law directs that EHBs be equal in scope to the benefits provided under a typical employer plan, and that they cover at least the following 10 general categories: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care. Section 1302(d) of the ACA describes the various levels of coverage based on AV. Consistent with section 1302(d)(2)(A) of the ACA, AV is calculated based on the provision of EHB to a standard population. Section 1302(d)(3) of the ACA directs the Secretary of HHS to develop guidelines that allow for
Section 1311(c) of the ACA provides the Secretary the authority to issue regulations to establish criteria for the certification of QHPs. Section 1311(c)(1)(B) of the ACA requires, among the criteria for certification that the Secretary must establish by regulation, that QHPs ensure a sufficient choice of providers. Section 1311(e)(1) of the ACA grants the Exchange the authority to certify a health plan as a QHP if the health plan meets the Secretary's requirements for certification issued under section 1311(c) of the ACA, and the Exchange determines that making the plan available through the Exchange is in the interests of qualified individuals and qualified employers in the State. Section 1311(c)(6)(C) of the ACA directs the Secretary of HHS to require an Exchange to provide for special enrollment periods and section 1311(c)(6)(D) of the ACA directs the Secretary of HHS to require an Exchange to provide for a monthly enrollment period for Indians, as defined by section 4 of the Indian Health Care Improvement Act.
Section 1311(d)(3)(B) of the ACA permits a State, at its option, to require QHPs to cover benefits in addition to EHB. This section also requires a State to make payments, either to the individual enrollee or to the issuer on behalf of the enrollee, to defray the cost of these additional State-required benefits.
Section 1312(c) of the ACA generally requires a health insurance issuer to consider all enrollees in all health plans (except grandfathered health plans) offered by such issuer to be members of
Section 1312(e) of the ACA provides the Secretary with the authority to establish procedures under which a State may allow agents or brokers to (1) enroll qualified individuals and qualified employers in QHPs offered through Exchanges and (2) assist individuals in applying for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) for QHPs sold through an Exchange.
Section 1312(f)(1)(B) of the ACA provides that an individual shall not be treated as a qualified individual for enrollment in a QHP if, at the time of enrollment, the individual is incarcerated, other than incarceration pending the disposition of charges.
Sections 1313 and 1321 of the ACA provide the Secretary with the authority to oversee the financial integrity of State Exchanges, their compliance with HHS standards, and the efficient and non-discriminatory administration of State Exchange activities. Section 1313(a)(5)(A) of the ACA provides the Secretary with the authority to implement any measure or procedure that the Secretary determines is appropriate to reduce fraud and abuse in the administration of the Exchanges. Section 1321 of the ACA provides for State flexibility in the operation and enforcement of Exchanges and related requirements.
Section 1321(a) of the ACA provides broad authority for the Secretary to establish standards and regulations to implement the statutory requirements related to Exchanges, QHPs and other components of title I of the ACA, including such other requirements as the Secretary determines appropriate. When operating an FFE under section 1321(c)(1) of the ACA, HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of the ACA to collect and spend user fees. Office of Management and Budget (OMB) Circular A-25 Revised establishes Federal policy regarding user fees and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from Federal activities beyond those received by the public.
Section 1321(d) of the ACA provides that nothing in title I of the ACA must be construed to preempt any State law that does not prevent the application of title I of the ACA. Section 1311(k) of the ACA specifies that Exchanges may not establish rules that conflict with or prevent the application of regulations issued by the Secretary.
Section 1322 of the ACA establishes the Consumer Operated and Oriented Plan (CO-OP) program, which is a loan program that funds the establishment of private, non-profit, consumer-operated, consumer-oriented health plan issuers of QHPs. The ACA requires, among other requirements, that substantially all of a CO-OP's activities consist of issuing QHPs in the individual and small group markets, and that a CO-OP be governed by a board of directors where a majority is elected by members covered by policies issued by the CO-OP.
Section 1331 of the ACA provides States with the option to operate a Basic Health Program (BHP).
Section 1332 of the ACA provides the Secretary of HHS and the Secretary of the Treasury (collectively, the Secretaries) with the discretion to approve a State's proposal to waive specific provisions of the ACA, provided the State's section 1332 waiver plan meets certain requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries to issue regulations regarding procedures for the application and approval of section 1332 waivers.
Section 1343 of the ACA establishes a permanent risk adjustment program to provide payments to health insurance issuers that attract higher-than-average risk populations, such as those with chronic conditions, funded by charges collected from those issuers that attract lower-than-average risk populations, thereby reducing incentives for issuers to avoid higher-risk enrollees. Section 1343(b) of the ACA provides that the Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. Consistent with section 1321(c) of the ACA, the Secretary is responsible for operating the HHS risk adjustment program in any State that fails to do so.
Section 1401(a) of the ACA added section 36B to the Internal Revenue Code (the Code), which, among other things, requires that a taxpayer reconcile APTC for a year of coverage with the amount of the premium tax credit (PTC) the taxpayer is allowed for the year.
Section 1402 of the ACA provides for, among other things, reductions in cost sharing for EHB for qualified low- and moderate-income enrollees in silver level QHPs offered through the individual market Exchanges. This section also provides for reductions in cost sharing for Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain information provided by applicants under section 1411(b) of the ACA to other Federal officials for verification, including income and family size information to the Secretary of the Treasury. Section 1411(d) of the ACA provides that the Secretary must verify the accuracy of information provided by applicants under section 1411(b) of the ACA, for which section 1411(c) of the ACA does not prescribe a specific verification procedure, in such manner as the Secretary determines appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation with the Secretary of the Treasury and the Secretary of Homeland Security, and the Commissioner of Social Security, to establish procedures for hearing and making decisions governing appeals of Exchange eligibility determinations. Section 1411(f)(1)(B) of the ACA requires the Secretary to establish procedures to redetermine eligibility on a periodic basis, in appropriate circumstances, including eligibility to purchase a QHP through the Exchange and for APTC and CSRs.
Section 1411(g) of the ACA allows the use of applicant information only for the limited purpose of, and to the extent necessary for ensuring the efficient operation of the Exchange, including by verifying eligibility to enroll through the Exchange and for APTC and CSRs, and limits the disclosure of such information.
Section 1413 of the ACA directs the Secretary to establish, subject to minimum requirements, a streamlined enrollment process for enrollment in QHPs and all insurance affordability programs.
Section 5000A of the Code, as added by section 1501(b) of the ACA, requires individuals to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make an individual shared responsibility payment. Under the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, the individual shared responsibility payment is reduced to $0, effective for months beginning after December 31, 2018. Notwithstanding that reduction, certain exemptions are still relevant to determine whether individuals aged 30 and above qualify to enroll in catastrophic coverage under §§ 155.305(h) and 156.155(a)(5).
Section 1902(r)(2)(A) of the Social Security Act (the Act), which permits
The premium stabilization programs refer to the HHS risk adjustment, risk corridors, and reinsurance programs established by the ACA.
• In the March 23, 2012
• In the March 11, 2013
• In the October 30, 2013
• In the November 6, 2013
• In the March 11, 2014
• In the May 27, 2014
• In the February 27, 2015
• In the March 8, 2016
• In the December 22, 2016
• In the April 17, 2018
• In the May 11, 2018
• On July 27, 2018, consistent with 45 CFR 153.320(b)(1)(i), we updated the 2019 benefit year final HHS risk adjustment model coefficients to reflect an additional recalibration related to an update to the 2016 enrollee-level EDGE data set.
• In the July 30, 2018
• In the December 10, 2018
• In the April 25, 2019
• On May 12, 2020, consistent with § 153.320(b)(1)(i), we published the 2021 Benefit Year Final HHS Risk Adjustment Model Coefficients on the CCIIO website.
• In the May 14, 2020
• In the December 1, 2020
• In the September 2, 2020
• In the May 5, 2021
• On July 19, 2021, consistent with § 153.320(b)(1)(i), we released Updated 2022 Benefit Year Final HHS Risk Adjustment Model Coefficients on the CCIIO website, announcing some minor revisions to the 2022 benefit year final HHS risk adjustment adult model coefficients.
• In the May 6, 2022
• In the April 27, 2023
We have finalized program integrity standards related to the Exchanges and premium stabilization programs in two rules: the “first Program Integrity Rule” published in the August 30, 2013
In the April 27, 2023
For past rulemaking related to the market rules, we refer readers to the following rules:
• In the April 8, 1997
• In the May 27, 2014
• In the December 22, 2016
• In the April 18, 2017
• In the April 17, 2018
• In the June 19, 2020
• In part 2 of the 2022 Payment Notice, in the May 5, 2021
• In the September 27, 2021
• In the May 6, 2022
We published a request for comment relating to Exchanges in the August 3, 2010
In the August 17, 2011,
In the 2014 Payment Notice and the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule, published in the March 11, 2013
In the 2016 Payment Notice, we also set forth the ECP certification standard at § 156.235, with revisions in the 2017 Payment Notice in the March 8, 2016
In an interim final rule, published in the May 11, 2016
In the Market Stabilization final rule, published in the April 18, 2017
We published the final rule in the May 14, 2020
In the January 19, 2021
In the May 6, 2022
In the April 27, 2023
We established requirements relating to EHBs in the Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Final Rule, which was published in the February 25, 2013
In the March 14, 2011
In the February 27, 2012
In the October 24, 2018
In the November 6, 2020
In the December 4, 2020
In the January 19, 2021
In the September 27, 2021
In the December 13, 2011
In the March 12, 2014,
In the January 19, 1993
In the August 22, 1994
In the November 30, 2016
The regulations outlined in this final rule will be codified in 31 CFR part 33, 42 CFR part 600, and 45 CFR parts 153, 155, and 156.
This final rule amends section 1332 Waivers for State Innovation (referred to throughout this final rule as section 1332 waivers) implementing regulations regarding State public notice and comment procedures. The Departments are finalizing changes in 31 CFR part 33 and 45 CFR part 155 to allow States the flexibility to hold a State public hearing or post-award forum in a virtual format, or hybrid format, which would be considered as the equivalent of holding an in-person meeting. Specifically, the Departments are finalizing changes to 31 CFR 33.112(c) and 45 CFR 155.1312(c) and 31 CFR 33.120(c) and 45 CFR 155.1320(c). These changes are effective immediately upon publication of this final rule.
We are not finalizing the proposed amendment to 42 CFR 435.601(d) to remove paragraph (d)(4) at this time. The removal of this paragraph would have provided States with greater flexibility to adopt income and/or resource disregards in determining Medicaid financial eligibility for individuals excepted from the application of financial methodologies based on MAGI (“non-MAGI” methodologies). States are already permitted to expand eligibility for individuals who are subject to non-MAGI methodologies by disregarding income and resources that would otherwise be required to be considered in determining an individual's eligibility. However, under current rules, States must apply such income and resource disregards to all individuals within each Medicaid eligibility group. Removing paragraph (d)(4) would have allowed States, when considering expanding eligibility for non-MAGI individuals, to target disregards at discrete individuals within an eligibility group. As described more fully below, many commenters raised
We are finalizing the amendment, with modifications, to 42 CFR 600.320(c) to allow States a third option when choosing the effective date of eligibility for enrollment for BHP applicants. Under current rules, States have the option to choose between following: either the Medicaid rules at 42 CFR 435.915 or the Exchange rules at 45 CFR 155.420(b)(1). We are finalizing to add an option to the effective date of coverage rules that would allow States to start coverage on the first day of the month following the date of application. In addition, we are adding another option under 42 CFR 600.320(c) that, subject to HHS approval, a State may establish its own effective date of eligibility for enrollment policy.
In accordance with the OMB Report to Congress on the Joint Committee Reductions for Fiscal Year 2024, the HHS-operated risk adjustment program is subject to the fiscal year 2024 sequestration.
We are finalizing the recalibration of the 2025 benefit year HHS risk adjustment models using the 2019, 2020, and 2021 benefit year enrollee-level EDGE data. For the 2025 benefit year, we are finalizing the continued application of a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the HHS risk adjustment models (see, for example, 84 FR 17463 through 17466). We are finalizing a modification to the adjustment factors for the receipt of CSRs in the HHS risk adjustment models to improve predictive accuracy for the American Indian and Alaska Native (AI/AN) subpopulation who are enrolled in zero and limited cost-sharing plans and retaining the other CSR adjustment factors in HHS risk adjustment. We are also finalizing a risk adjustment user fee for the 2025 benefit year of $0.18 per member per month (PMPM). Additionally, we are finalizing that in certain cases, we may require a corrective action plan to address an observation identified in an HHS risk adjustment audit.
In part 155, we are finalizing the amendment to § 155.105(b) to require that a State seeking to operate a State Exchange must first operate an SBE-FP for at least one plan year, including its open enrollment period. We believe this requirement will give States sufficient time to create, staff, and structure a State Exchange that could transition to operating its own platform and establish relationships with interested parties critical to a State Exchange's success in operating a Navigator and consumer outreach program, assuming plan management responsibilities, and communicating effectively with consumers to support enrollment and avoid health care coverage gaps.
We are finalizing the revision to § 155.106(a)(2) as it pertains to Exchange Blueprint requirements for States transitioning to a State Exchange. Specifically, we are finalizing the addition that we may require that a State submitting a Blueprint application seeking to operate a State Exchange provide, upon request, supplemental documentation to HHS detailing the State's implementation of its State Exchange functionality, including information regarding the State's ability to implement and comply with Federal requirements for operating an Exchange, as laid out in the State Exchange Blueprint. This could include a State submitting detailed plans regarding its State Exchange consumer assistance programs and activities, such as information on its direct outreach plans. Further, we are finalizing a requirement that a State applying to transition to a State Exchange must provide the public with a notice and copy of its State Exchange Blueprint application, as well as conduct periodic public engagements whereby interested parties can learn about the status of a State's transition to a State Exchange and provide input on that transition.
We are finalizing the amendment to § 155.170(a)(2) to codify that benefits covered in a State's EHB benchmark plan will not be considered in addition to EHB, even if they had been required by State action taking place after December 31, 2011, other than for purposes of compliance with Federal requirements. Under this policy, there would be no obligation for the State to defray the cost of a State mandate enacted after December 31, 2011, that requires coverage of a benefit if that benefit is included in the State's EHB-benchmark plan. Benefits that are covered in a State's EHB-benchmark plan will not be considered in addition to EHB and will remain subject to the various rules applicable to the EHB, including the prohibition on discrimination in accordance with § 156.125, limitations on cost sharing in accordance with § 156.130, and restrictions on annual or lifetime dollar limits in accordance with § 147.126. We believe that this change would promote consumer protections and facilitate compliance with the defrayal requirement by making the identification of benefits in addition to EHB more intuitive.
At § 155.205(a), we are finalizing, with modifications, the establishment of additional minimum standards for Exchange call center operations. Specifically, we are finalizing the requirement that all Exchange call centers, other than those of SBE-FPs and Small Business Health Options Program (SHOP) Exchanges that do not provide for enrollment in SHOP coverage through an online SHOP enrollment platform, provide consumer access to a live call center representative during an Exchange's published hours of operation to assist with submitting their Exchange application. We believe speaking to a live representative will help troubleshoot consumer Exchange application issues, provide a real time opportunity for a live representative to explain Exchange application terminology to a consumer, ensure the consumer provides the most correct information for the Exchange application, alleviate unnecessary follow-up, and provide greater overall consumer satisfaction.
We are finalizing the amendment to § 155.205(b)(4) to require that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform) such that the Exchange allows for the submission of the single, streamlined application for enrollment in a QHP and insurance affordability programs through the Exchange's website and performs eligibility determinations for all consumers based on submissions of the single, streamlined application. Further, we are finalizing the amendment to § 155.302(a)(1) to clarify that the Exchange, through the centralized
We are also finalizing the amendment to § 155.205(b)(5) to require that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform) so that the Exchange (or, for an SBE-FP, the Federal eligibility and enrollment platform) meets the requirement under § 155.400(c) to maintain record of all effectuated enrollments in QHPs, including changes in effectuated QHP enrollments.
We are finalizing the amendment to § 155.220(h) specifying that the CMS Administrator, who is a principal officer, is the entity responsible for handling requests by agents, brokers, and web-brokers for reconsideration of HHS' decision to terminate their Exchange agreement(s) for cause. This amendment will improve transparency by specifying who would review reconsideration requests under § 155.220(h).
We are finalizing changes to §§ 155.220 and 155.221 to apply certain standards to web-brokers and Direct Enrollment (DE) entities assisting consumers and applicants across all Exchanges, including State Exchanges, for both the State Exchange's Individual Exchange and SHOP. We seek to ensure that certain current minimum HHS standards applicable in the FFEs and SBE-FPs, related to web-broker website display of standardized QHP comparative information, disclaimer language, information on eligibility for APTC/CSRs, operational readiness, and access by downstream agents and brokers, also apply to web-brokers in State Exchanges. Similarly, we are finalizing the extension of certain DE entity requirements applicable in the FFEs and SBE-FPs related to marketing and display of QHPs, providing consumers with correct information and refraining from certain conduct, marketing of non-QHPs, website disclaimer language, and operational readiness to DE entities across all Exchanges, to newly apply to DE entities in State Exchanges. These policies will help establish greater general uniformity with respect to these requirements for web-brokers and DE entities operating in the Exchanges and establish minimum Federal consumer protections in all States, regardless of the Exchange model.
We are finalizing updates to § 155.221(b) to require that
We are finalizing, in connection with the failure to file and reconcile process at § 155.305(f)(4), that Exchanges be required to send notices to tax filers for the first year in which they have been determined to have failed to reconcile APTC as an initial warning to inform and educate tax filers that they need to file and reconcile, or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive year. We clarify in the rule that an Exchange must either send a direct notice to a tax filer as described above or send a more general notice to an enrollee or their tax filer explaining that they are at risk of losing APTC. Currently, the regulation does not detail notification procedures for tax filers who have failed to reconcile for 1 year. We intend to provide implementation guidance and sample notices prior to the restart of FTR processes. We are finalizing the requirement that all Exchanges be required to send informative notices for the first year in which tax filers have been identified as failing to file and reconcile.
We are finalizing the amendment to § 155.315(e) to provide that all Exchanges can accept applicant incarceration status attestations without further verification, and Exchanges may verify applicant incarceration status using an HHS-approved verification data source. HHS would approve an alternative electronic data source for State Exchanges to use for incarceration verification if it provides data that are current and accurate, and if its use minimizes administrative costs and burdens.
We are finalizing the proposal to reinterpret State Exchange and State Medicaid and Children's Health Insurance Program (CHIP) agency use of the Federal Data Services Hub to access and use the income data provided by the Verify Current Income (VCI) Hub service as a State Exchange or a State Medicaid and CHIP agency function because these State entities use this optional service to implement eligibility verification requirements applicable to them. More specifically, State Exchanges and State Medicaid and CHIP agencies have the option to use this information to verify a tax household's annual income attestation for Exchange QHP eligibility and the Medicaid applicant's current household income as required to make insurance affordability program eligibility determinations. We are also finalizing that these State agencies must pay for their use of the VCI Hub Service, and HHS will invoice
We are finalizing the revision to § 155.330(d) to require Exchanges to conduct periodic checks for deceased enrollees twice yearly and subsequently end deceased enrollees' QHP coverage. Additionally, we are finalizing the revision to § 155.330(d)(3) to grant the Secretary the authority to temporarily suspend the periodic data matching (PDM) requirement during certain situations or circumstances that lead to the limited availability of data needed to conduct PDM or of documentation needed for an enrollee to notify the Exchange that the result of PDM is inaccurate, as described in § 155.330(e)(2)(i)(C). These policies will align § 155.330(d) with current Federal Exchange policy and operations, prevent overpayment of QHP premiums, and accurately capture household QHP eligibility based on household size.
We are finalizing, as proposed, the amendment to § 155.335(j)(1) and (2) to require Exchanges to re-enroll individuals who are enrolled in catastrophic coverage, as defined in section 1302(e) of the ACA, into a new QHP for the coming plan year, except that we are amending the new language that we proposed at § 155.335(j)(1)(v) and (j)(2)(iv) to incorporate the phrase, “to the extent permitted by applicable State law.” Incorporating these individuals enrolled in catastrophic coverage into the auto re-enrollment hierarchy rules at § 155.335(j) will help ensure continuity of coverage in cases where the issuer does not continue to offer a catastrophic plan for the new plan year, or these individuals are no longer eligible for enrollment in a catastrophic plan for the new year, and these individuals do not actively select a different QHP. We are also finalizing the addition of a new paragraph (j)(5) to § 155.335 to establish that an Exchange may not newly auto re-enroll into catastrophic coverage an enrollee who is currently enrolled in coverage of a metal level as defined in section 1302(d) of the ACA. This change reflects our current practice for Exchanges on the Federal platform.
We are finalizing the amendment to § 155.400(e)(2) to codify that the flexibility for issuers experiencing billing or enrollment problems due to high volume or technical errors is not limited to extensions of the binder payment.
We are finalizing, with modifications, the amendment to § 155.410(e)(4)(ii) to revise parameters around the adoption of an alternative open enrollment period by a State Exchange. Specifically, we are finalizing that for benefit years beginning on or after January 1, 2025, State Exchanges must adopt an open enrollment period that begins on November 1 of the calendar year preceding the benefit year and ends January 15 of the applicable benefit year or later. Additionally, as a modification, we are finalizing new paragraph (e)(4)(iii), which provides flexibility for any State Exchange that held an open enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the 2024 benefit year to continue to begin open enrollment before November 1 for consecutive future benefit years, so long as the open enrollment period continues uninterrupted for at least 11 weeks. If the State Exchange changes the dates of the annual open enrollment period after the effective date of this rule, it must comply with paragraphs (e)(4)(i) and (ii) for all future annual open enrollment periods. Finally, we have also finalized a modification to amend § 155.410(e)(4)(i) to reference new paragraph (e)(4)(iii). We believe these policies will give consumers ample time to enroll in coverage; provide Navigators, certified application counselors, and agents and brokers ample time to assist all interested applicants; balance consistency against providing State Exchanges with additional flexibility; reduce disruption to current Exchange operations; reduce consumer confusion; and improve access to health coverage.
At § 155.420(b), we are finalizing aligning the effective dates of coverage after selecting a plan during certain special enrollment periods across all Exchanges, including State Exchanges. We are requiring all State Exchanges to provide coverage that is effective on the first day of the month following plan selection, or an earlier date, if a consumer enrolls in a QHP during special enrollment periods that follow the regular effective dates of coverage in 45 CFR 155.420(b). This policy will prevent coverage gaps, particularly for consumers transitioning between different Exchanges or from other insurance coverage.
We are finalizing the amendment to paragraph § 155.420(d)(16) to revise the parameters around the availability of a special enrollment period for APTC-eligible qualified individuals with a projected annual household income no greater than 150 percent of the Federal Poverty Level (FPL). Specifically, we are finalizing to remove the limitation that this special enrollment period is only available to a consumer whose applicable taxpayer's applicable percentage, which is used to determine the amount of the consumer's premium not covered by APTC, is 0 percent, and to give Exchanges the option to permanently provide this special enrollment period. We believe this policy will provide affordable coverage to more uninsured people and additional enrollment opportunities to low-income consumers.
We are finalizing the addition of § 155.430(b)(1)(iv)(D) to permit an enrollee to retroactively terminate the enrollee's enrollment in a QHP through an Exchange on the Federal platform when the enrollee enrolls in Medicare Parts A or B (including enrollment in Parts A and B through a Medicare Advantage plan). The effective date of the retroactive termination must be no earlier than the later of (1) the day before the first day of coverage under Medicare Parts A or B or a Medicare Advantage plan, and (2) the day is 6 months before retroactive termination of QHP coverage is requested. Enrollees must request retroactive termination of coverage within 60 days of the date they retroactively enroll in Medicare (the date the enrollment occurs, not the Medicare coverage effective date). We are also finalizing that retroactive terminations are not permitted for stand-alone dental plans (SADPs). This policy will allow consumers to avoid overlapping coverage and paying unnecessary premiums. HHS has the option to elect whether to implement this provision for Exchanges on the Federal platform, and State Exchanges will have the option of implementing this policy.
Under § 155.1050(a)(2)(i)(A), we are finalizing that for plans years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230(a)(2)(i)(A). Additionally, we are finalizing that, for plans years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews prior to certifying any plan as a QHP, consistent
In part 156, after reviewing the public comments and revising our projections based on newly available data that impacted our enrollment projections, we are finalizing an FFE user fee rate of 1.5 percent of total monthly premiums and an SBE-FP user fee rate of 1.2 percent of total monthly premiums. On November 15, 2023, we issued the 2025 benefit year premium adjustment percentage index and related payment parameters in guidance, consistent with the policy finalized in part 2 of the 2022 Payment Notice.
For benefit years beginning on or after January 1, 2026, we are finalizing three revisions to the standards for State selection of EHB-benchmark plans at § 156.111. First, we are finalizing our proposal to consolidate the options for States to change EHB-benchmark plans at § 156.111(a) to reduce the burden on States to decide between three functionally identical choices. Second, we are finalizing revisions to the typicality standard at § 156.111(b)(2) so that, in demonstrating that a State's new EHB-benchmark plan provides a scope of benefits that is equal to the scope of benefits of a typical employer plan in the State, the scope of benefits of a typical employer plan in the State will be defined as any scope of benefits that is as or more generous than the scope of benefits in the State's least generous typical employer plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), and as or less generous than the scope of benefits in the State's most generous typical employer plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), among the typical employer plans currently defined at § 156.111(b)(2)(i)(A) and (B). We are also finalizing the removal of the generosity standard at § 156.111(b)(2)(ii) and a technical revision to the language regarding supplementation at § 156.111(b)(2)(i). Third, we are finalizing revisions to § 156.111(e)(3) to require States to submit a formulary drug list as part of their application to change EHB-benchmark plans only if the State is seeking to change its prescription drug EHB.
We are finalizing the removal of the regulatory prohibition at § 156.115(d) on issuers from including routine non-pediatric dental services as an EHB beginning with PY 2027, which would provide States the option to add routine adult dental services as an EHB by updating their EHB-benchmark plans pursuant to § 156.111.
We are finalizing the amendment to § 156.122 to codify that prescription drugs in excess of those covered by a State's EHB-benchmark plan are considered EHB. As a result, they would be subject to requirements including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the coverage of the drug is mandated by State action and is in addition to EHB pursuant to § 155.170, in which case the drug will not be considered EHB. In addition, for plan years beginning on or after January 1, 2026, we are finalizing the amendment to § 156.122 to provide that the Pharmacy & Therapeutics (P&T) committee must include a patient representative. We also sought and received comments on a possible future policy proposal to replace the United States Pharmacopeia (USP) Medicare Model Guidelines (MMG) with the USP Drug Classification system (DC) to classify the prescription drugs required to be covered as EHB under § 156.122(a)(1).
For PY 2025, we are finalizing the proposal to follow the approach finalized in the 2024 Payment Notice concerning standardized plan option metal levels, and to otherwise maintain continuity with our approach to standardized plan options finalized in the 2023 and 2024 Payment Notices.
We are finalizing an exceptions process at § 156.202 that will allow issuers in the FFEs and SBE-FPs to offer additional non-standardized plan options per product network type, metal level, inclusion of dental and vision benefit coverage, and service area for PY 2025 and subsequent plan years, if the issuer can demonstrate that these additional non-standardized plans have specific design features that will substantially benefit consumers with chronic and high-cost conditions and meet other requirements.
We are finalizing a new regulatory provision that would permit us to allow a CO-OP loan recipient to voluntarily terminate its loan agreement with us and cease to constitute a qualified non-profit health insurance issuer (QNHII), for the purpose of pursuing innovative business plans that are not otherwise consistent with the governance requirements and business standards applicable to a CO-OP borrower. Under the new regulatory provision, we will be able to consider a request by a CO-OP to voluntarily terminate its loan agreement for reasons other than financial viability, provided all outstanding CO-OP loans issued to the loan recipient are repaid in full prior to termination, and we believe granting the request would meaningfully enhance consumer access to quality, affordable, member-focused, non-profit health care options in affected markets.
We are finalizing conforming amendments to the payment and collections process set forth at
Section 1332 of the ACA permits States to apply for a section 1332 waiver to pursue innovative strategies for providing their residents with access to higher value, more affordable health insurance coverage. To allow for greater flexibility in communicating with the public, we are finalizing updates to the public hearing process requirements for section 1332 waivers.
Under section 1332(b) of the ACA, the Secretary of HHS and the Secretary of the Treasury (collectively, the Secretaries) may exercise their discretion to approve a request for a section 1332 waiver only if the Secretaries determine that the proposal for the section 1332 waiver meets the following four requirements, referred to as the statutory guardrails: (1) the proposal provides coverage that is at least as comprehensive as coverage defined in section 1302(b) of the ACA and offered through Exchanges established under title I of the ACA, as certified by the Office of the Actuary of CMS, based on sufficient data from the State and from comparable States about their experience with programs created by the ACA and the provisions of the ACA that would be waived; (2) the proposal provides coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable for the State's residents as would be provided under title I of the ACA; (3) the proposal provides coverage to at least a comparable number of the State's residents as would be provided under title I of the ACA; and (4) the proposal does not increase the Federal deficit. The Secretaries retain their discretionary authority to deny requested section 1332 waivers when appropriate given consideration of the application, as a whole, even if a proposal for a section 1332 waiver meets the four statutory guardrails.
The Departments are responsible for monitoring an approved section 1332 waiver's compliance with the statutory guardrails and for conducting evaluations to determine the impact of the section 1332 waiver. Specifically, section 1332(a)(4)(B)(v) of the ACA requires the Secretaries to promulgate regulations that provide for a process for the periodic evaluation of approved section 1332 waivers. The Secretaries must also promulgate regulations that provide for a process under which States with approved section 1332 waivers submit to the Secretaries periodic reports concerning the implementation of the State's waiver program.
Sections 1332(a)(4)(B)(i) and (iii) of the ACA provide that the Secretaries shall promulgate regulations that provide for a process for public notice and comment at the State level, including public hearings, and a process for providing public notice and comment at the Federal level after the section 1332 waiver application is received by the Secretaries, respectively, that are both sufficient to ensure a meaningful level of public input. Current regulations at 31 CFR 33.112 and 45 CFR 155.1312 specify State public notice and comment period and participation requirements for proposed section 1332 waiver requests, and 31 CFR 33.116(b) and 45 CFR 155.1316(b) specify the public notice and comment period and approval requirements under the accompanying Federal process.
In the November 2020 IFC (85 FR 71142), the Departments revised regulations to set forth flexibilities in the public notice requirements and post-award public participation requirements for section 1332 waivers during the COVID-19 PHE. In the September 2021 Final Rule (86 FR 53502), the Departments extended those changes beyond the COVID-19 PHE to allow similar flexibilities in the event of future natural disasters; PHEs; or other emergent situations that threaten consumers' access to health insurance coverage, consumers' access to health care, or human life. Currently, in such an event, States may submit a request to the Departments to modify, in part, the State public notice requirements specified in 31 CFR 33.112(a)(1), (b), (c), and (d) and 45 CFR 155.1312(a)(1), (b), (c), and (d), and the Federal public notice requirement specified in 31 CFR 33.116(b) and 45 CFR 155.1316(b), pursuant to 31 CFR 33.118(a) and 45 CFR 155.1318(a).
The criteria to request a modification from the normal public notice requirements during an emergent situation are set forth in 31 CFR 33.118(b)(1) through (5) and 45 CFR 155.1318(b)(1) through (5). Pursuant to 31 CFR 33.118(b)(3) and 45 CFR 155.1318(b)(3), the State's request to modify normal public notice procedures is required to include: the justification for the requested modification from the State public notice procedures as it relates to the emergent situation and the alternative public notice procedures, including public hearings, that it proposes to implement at the State level and that are designed to provide the greatest opportunity for and level of meaningful public input from impacted interested parties that is practicable given the emergent circumstances motivating the State's request for a modification.
Since the finalization of the flexibilities in 31 CFR 33.118(b)(1) through (5) and 45 CFR 155.1318(b)(1) through (5), almost all States with approved section 1332 waivers (“section 1332 waiver States”) submitted requests that were granted by the Departments to conduct their annual post-award forums virtually instead of in-person during the COVID-19 PHE to reduce the risk of transmission of COVID-19. Similarly, during the COVID-19 PHE, States submitting new section 1332 waiver applications, waiver extension requests, or waiver amendment requests also requested to host their State public hearings virtually and these requests were also granted by the Departments. However, with the recent expiration of the Federal COVID-19 PHE
Upon review and consideration of the lessons learned during the COVID-19 PHE, the Departments have determined that some current provisions regarding normal State public notice procedures are outdated given the increased accessibility that technology has provided for virtual and telephonic meetings. States have shared that their residents benefitted from the States' opportunity to host public hearings and post-award forums virtually, and that they would like to continue doing so to facilitate attendance. States have also reported to the Departments that hosting meetings virtually during the COVID-19 PHE did not decrease the amount or quality of meaningful input received. States' experiences during this time demonstrated that interested parties were able to virtually attend meetings and submit public comments verbally or in-writing, and States did not report any significant issues relating to virtual platforms that impeded public attendance or participation. States continued to share with the Departments summaries of their post-award forums, as well as all public comments received and actions taken in response to concerns or comments, in accordance with section 1332 waiver annual reporting requirements. In States' new waiver applications, waiver extension requests, and waiver amendment requests, States also shared with the Departments summaries of virtually conducted hearings from their State public comment periods and addressed public comments or concerns received.
Beyond mitigating the spread of COVID-19, information shared by section 1332 waiver States has demonstrated that the opportunity to host post-award forums and public hearings on virtual platforms facilitated comparable or higher levels of public attendance when compared to previously held in-person meetings. For example, at Maryland's annual post-award forums held in 2019 (in-person) and 2020-2022 (virtual), the State saw comparable participation across the years from interested parties. Minnesota also reported comparable attendance at its post-award forums across the years: 4 attendees in 2018 (in-person), 1 in 2019 (in-person), 4 in 2020 (virtual), 9 in 2021 (virtual),
States that began waiver implementation after the start of the COVID-19 PHE have also reported successfully hosting virtual post-award forums. For example, Colorado conducted its first post-award forum entirely virtually in 2020 and reported 79 attendees.
States submitting new waiver applications, waiver extension requests, or waiver amendment requests during the COVID-19 PHE also reported successfully conducting their public hearings on virtual platforms. For example, in January 2022, Alaska held a combined post-award forum and State public hearing for its waiver extension application both in-person and with a telephonic option, which 3 members of the public attended either in-person or virtually. In April 2022, Washington held two State public hearings virtually, in which 9 representatives from organizations attended and shared public comments.
There are other Federal programs and agencies that permitted a virtual option in place of in-person public hearings prior to the COVID-19 PHE or that have more recently amended their policies for public input to continue virtual and telephonic options that were first implemented during the COVID-19 PHE. For example, States that are applying for Medicaid section 1115 demonstrations are permitted to use telephonic and web-based conference capabilities for public meetings. In fact, per 42 CFR 431.408(a)(3), a State must use telephonic and/or web conference capabilities for at least one of the two required public hearings to ensure Statewide accessibility to the public hearing, unless it can document it has afforded the public throughout the State the opportunity to provide comment, such as holding the two public hearings in geographically distinct areas of the State.
As another example, during the COVID-19 PHE, the Internal Revenue Service (IRS) began holding public hearings on notices of proposed rulemaking telephonically instead of in-person. Following the end of the Federal COVID-19 PHE, the IRS recently announced that, for proposed regulations published in the
The Departments considered whether to propose requiring States to hold at least one of the required public hearings for waiver applications in-person. However, as explained above, States have successfully hosted post-award forums and public hearings for section 1332 waiver applications virtually to allow for meaningful public input over the last several years. Furthermore, by allowing States the ability to hold all of their meetings virtually, States may better allow for input across different geographies, communities, and populations. We also considered proposing the standard under section 1115 demonstrations where one hearing is required to be done virtually. However, given the successful hosting of virtual meetings with public participation by States for section 1332 waivers, it does not seem necessary to continue to require in-person meetings to solicit public input on section 1332 waivers.
The Departments believe that by allowing States the opportunity to hold post-award forums and public hearings virtually and through digital platforms, States would be able to continue
Therefore, in this final rule, the Departments are finalizing as proposed that a virtual (that is, one that uses telephonic, digital, and/or web-based platforms) or hybrid (that is, one that provides for both in-person and virtual attendance) public hearing or forum be considered as the equivalent of holding an in-person meeting. In the 2012 Final Rule (77 FR 11700), the Departments noted that as set forth in 31 CFR 33.112(c)(1) and (2) and 45 CFR 155.1312(c)(1) and (2), a State must hold at least two public hearings in distinct locations. Under this policy, States would still need to hold at least two public hearings in distinct locations. For example, the Departments clarify that under this final rule, a State would not be permitted to count a public hearing in which there is simultaneously an in-person location and virtual platform as two hearings (or two locations). Instead, one virtual or hybrid meeting would still count as one public hearing, and two virtual or hybrid meetings would count as two public hearings.
In this final rule, we are finalizing as proposed in the 2025 Payment Notice proposed rule (88 FR 82510, 82520), to amend 31 CFR 33.112(c) and 45 CFR 155.1312(c) and 31 CFR 33.120(c) and 45 CFR 155.1320(c). More specifically, the Departments are finalizing modifications to 31 CFR 33.112(c) and 45 CFR 155.1312(c) to permit States to conduct public hearings in a virtual or hybrid format in lieu of conducting an in-person meeting. The Departments also finalize as proposed amending 31 CFR 33.120(c) and 45 CFR 155.1320(c) to provide that for a State's annual post-award forum, the public forum shall be conducted in an in-person, virtual (that is, one that uses telephonic, digital, and/or web-based platforms), or hybrid (that is, one that provides for both in-person and virtual attendance) format. These changes will go into effect upon publication of this final rule.
This policy is limited to allowing flexibility to host required meetings virtually. States would still be required to continue to abide by all other public notice requirements, including public notice procedural requirements for waiver applications, waiver extension and waiver amendment requests, and post-award forums. For example, States would still be required to have a process to consult and collaborate with Federally-recognized tribes,
Finally, the Departments clarify that under this final rule, States shall have a process by which members of the public can request in-person meetings for the annual post-award forum or State public hearings on waiver applications, waiver extension requests, or waiver amendments requests, and that States shall accommodate those requests whenever possible. In addition, States with approved section 1332 waivers and States seeking approval for proposed waivers would continue to have flexibility to submit requests to the Departments during emergent situations to modify certain public participation requirements as set forth in 31 CFR 33.118(b)(1) through (5) and 45 CFR 155.1318(b)(1) through (5).
The Departments sought comment on these proposals and received 29 comments on the section 1332 waiver proposals from various interested parties, including States, health and disease advocacy organizations, general advocacy organizations, health care provider organizations, and research organizations. All comments generally expressed support for the proposed changes, though some raised additional considerations related to accessibility.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these provisions as proposed. We summarize and respond to public comments received on the proposed amendments to normal public notice requirements (31 CFR 33.112, 31 CFR 33.120, 45 CFR 155.1312, and 45 CFR 155.1320) below.
Several comments from States shared their own positive experiences with hosting public hearings and post-award forums virtually during the COVID-19 pandemic. They explained that public participation did not suffer because the meetings were held virtually. These States also noted that the ability to hold virtual public hearings and post-award forums without needing to request a modification from the normal public notice requirements due to an emergent situation (as they would have done under previous guidance) would reduce administrative hurdles. However, one State asserted that there is no benefit from requiring States to hold public forums in-person and that it is an inefficient use of State resources.
Finally, the Departments remind States that they must publish the date, time, and location of the public forum in a prominent location on the State's public website, at least 30 days prior to the date of the planned public forum. Consistent with Federal civil rights law, including section 1557 of the ACA, section 504 of the Rehabilitation Act of 1973, and Title II of the Americans with Disabilities Act, section 1332 waiver applications must be accessible to individuals with disabilities, including when such applications are posted online. To assist with ensuring website accessibility, States may look to national standards issued by the Architectural and Transportation Barriers Compliance Board (often referred to as “section 508 standards”),
In the proposed rule, we proposed to provide States with greater flexibility to adopt income and/or resource disregards in determining financial eligibility under section 1902(r)(2) of the Act for individuals excepted from application of modified adjusted gross income financial methodologies (“MAGI-based methodologies”).
Specifically, we proposed to remove the current 42 CFR 435.601(d)(4), which was first adopted in 1993. As explained in the preamble to the proposed rule, the current rule describes the eligibility groups to which States may apply less restrictive methodologies and requires that any less restrictive methodologies elected by a State be “comparable for all persons within each category of assistance within an eligibility group.” As further explained in 42 CFR 435.601(d)(4), for example, if the agency chooses to apply a less restrictive income or resource methodology to an eligibility group of aged individuals, it must apply that methodology to all aged individuals within the selected group.
In the preamble to the proposed rule, we noted that, upon further review, we recognize that section 1902(r)(2)(A) of the Act does not expressly impose a comparability mandate, and that we did not identify a specific legal rationale for the mandate when we originally proposed and finalized 42 CFR 435.601(d)(4), 54 FR 39421, 39433 (September 26, 1989); 58 FR 4908, 4919 (January 19, 1993). We thus concluded that the inclusion of the mandate was a policy choice. We further considered that section (3)(b) of the Sustaining Excellence in Medicaid Act of 2019, Public Law 116-39, permits States to target income and/or resource disregards to people who need home and community-based services (HCBS).
We explained that we believed that eliminating this provision would: increase State flexibility; provide States more options to extend eligibility to specific populations based on a State's circumstances; and enable States to achieve targeted expansions of coverage that best meet their needs, in contrast to the all-or-nothing approach for income and resource disregards that is effectively required by 42 CFR 435.601(d)(4). We acknowledged, however, that it was possible that eliminating the comparability requirement from 42 CFR 435.601(d)(4) might enable a State to narrow an existing disregard that is broadly available to an eligibility group at present to discrete members of the group instead. We indicated that we had not received inquiries from States on the permissibility of such an approach, and that we believed States would utilize the elimination of 42 CFR 435.601(d)(4) to expand eligibility. We invited comment on our proposal.
However, many commenters who expressed support for the proposal (and some who opposed it) emphasized that, as the proposal leaves open the possibility that States could use the offered flexibility to narrow existing disregards, CMS should impose “safeguards,” “guardrails,” or “no-harm” requirements that would effectively prohibit the States' use of the flexibility in this manner. Some of these commenters noted that the proposal should not be finalized without these requirements. A number of commenters suggested that States' exercise of the flexibility be closely monitored, with one recommending that the proposal, if finalized, should be reexamined if States use it in a manner that adversely affects beneficiaries. A few commenters suggested that we were underestimating the likelihood of States using the additional flexibility to reduce eligibility, and that, as an example, such a course of action might be attractive for States facing budget pressure.
Section 1331 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, enacted March 30, 2010), provides States with the option to operate a Basic Health Program (BHP). In the States that elect to operate a BHP, the State's BHP makes affordable health benefits coverage available for lawfully present individuals under age 65 with household incomes between 133 and 200 percent of the Federal poverty level (FPL) (or in the case of a lawfully present non-citizen, ineligible for Medicaid or the Children's Health Insurance Program (CHIP) due to immigration status, with household incomes between zero and 200 percent of the FPL) who are not eligible for Medicaid, CHIP, or other minimum essential coverage. As of the date of this final rule, only Minnesota is implementing a BHP. Oregon has submitted a Blueprint with a proposed BHP implementation date of July 1, 2024.
Under current 42 CFR 600.320(c), States must establish a uniform method of determining the effective date of eligibility for enrollment in a standard health plan followingeitherthe Medicaid process at42 CFR 435.915exclusive of42 CFR 435.915(a) or the Exchange standards at45 CFR 155.420(b)(1).
Although the current BHP regulation provides States with some flexibility in establishing an effective eligibility date for enrollment, it does not permit a State to select an effective date of coverage standard for eligible individuals as of the first day of the month following the month of application or eligibility determination regardless of when they apply or are found eligible to enroll in a standard health plan in the BHP. We believe eligible individuals should have access to coverage as soon as feasible.
While the Medicaid process at 42 CFR 435.915,exclusive of paragraph (a), allows for a State operating a BHP to have the earliest possible effective date for its enrollees, we understand that some States may have operational or regulatory constraints that do not allow them to follow the Medicaid process, but may be able to implement an effective date for all eligible applicants the first day of the month after the month in which the eligibility determination is made, regardless of which day of the month such determination occurs.
We are finalizing the proposed rule to revise § 600.320(c) to add a third option at paragraph (c)(3) that would allow a State operating a BHP to establish an effective date of eligibility for enrollment for all enrollees on the first day of the month following the month in which BHP eligibility is determined. Under § 600.320(c)(1), States would continue to have the option to follow the Exchange standards at 45 CFR 155.420(b)(1), and under 42 CFR 600.320(c)(2), a State may follow Medicaid standards at 42 CFR 435.915 exclusive of paragraph (a).
We sought comment on the proposed additional option for determining the effective date of eligibility for enrollment in a standard health plan as well as an alternative option of allowing a State to establish its own uniform effective date policy.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with the following modifications: we are adding § 600.320(c)(4) to specify that subject to HHS approval, a State may establish its own effective date of eligibility for enrollment policy as long as it is (1) no later than the first day of the second month following the date that an individual has been determined BHP-eligible; and (2) no more restrictive than § 600.320(c)(1) through (3). We summarize and respond to public comments received on the proposed BHP effective date policy below.
In subparts A, B, D, G, and H of part 153, we established standards for the administration of the risk adjustment program. The risk adjustment program is a permanent program created by section 1343 of the ACA that transfers funds from lower-than-average risk, risk adjustment covered plans to higher-than-average risk, risk adjustment covered plans in the individual, small group markets, or merged markets, inside and outside the Exchanges. In accordance with § 153.310(a), a State that is approved or conditionally approved by the Secretary to operate an Exchange may establish a risk adjustment program or have HHS do so on its behalf.
In accordance with the OMB Report to Congress on the Joint Committee Reductions for Fiscal Year 2024, the HHS-operated risk adjustment program is subject to the fiscal year 2024 sequestration.
HHS, in coordination with OMB, has determined that, under section 256(k)(6) of the Balanced Budget and Emergency Deficit Control Act of 1985,
Additionally, we note that the Infrastructure Investment and Jobs Act
After consideration of the comment and for the reasons outlined in the proposed rule, the HHS-operated risk adjustment program will sequester payments made from fiscal year 2024 resources at a rate of 5.7 percent. We summarize and respond to the public comment received on the fiscal year 2024 sequestration rate below.
The HHS risk adjustment models predict plan liability for an average enrollee based on that person's age, sex, and diagnoses (also referred to as hierarchical condition categories (HCCs)), producing a risk score. The HHS risk adjustment methodology utilizes separate models for adults, children, and infants to account for clinical and cost differences in each age group. In the adult and child models, the relative risk assigned to an individual's age, sex, and diagnoses are added together to produce an individual risk score. Additionally, to calculate enrollee risk scores in the adult models, we added enrollment duration factors beginning with the 2017 benefit year,
Infant risk scores are determined by inclusion in one of 25 mutually exclusive groups, based on the infant's maturity and the severity of diagnoses. If applicable, the risk score for adults, children, or infants is multiplied by a cost sharing reduction (CSR) adjustment factor. The enrollment-weighted average risk score of all enrollees in a particular risk adjustment covered plan (also referred to as the plan liability risk score (PLRS)) within a geographic rating area is one of the inputs into the State payment transfer formula,
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82527), we proposed to recalibrate the 2025 benefit year HHS risk adjustment models with the 2019, 2020, and 2021 enrollee-level EDGE data. In the proposed rule, we explained the history of recalibrating the risk adjustment models with enrollee-level EDGE data and why we use three years of blended data for recalibration.
We sought comment on the proposal to determine 2025 benefit year coefficients for the HHS risk adjustment models based on a blend of separately solved coefficients from the 2019, 2020, and 2021 enrollee-level EDGE data.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this approach as proposed. We summarize and respond to public comments received on the proposed enrollee-level EDGE data to be used for HHS risk adjustment model recalibration for the 2025 benefit year below.
We recognize that if a benefit year of enrollee-level EDGE data has significant changes that differentially impact certain conditions or populations relative to others or is sufficiently anomalous relative to expected future patterns of care, we should carefully consider what impact that benefit year of data could have if it is used in the annual model recalibration for the HHS-operated risk adjustment program.
• The total sample size in the recalibration data set was similar between the 2019, 2020, and 2021 benefit years, with the individual market at the national level seeing an increase in enrollment in the 2021 benefit year and the small group market at the national level seeing a slight decrease in enrollment in the 2021 benefit year.
• In the 2021 EDGE enrollee-level recalibration data set, PMPM spending increased substantially relative to the 2020 benefit year. The increased percentage was similar for institutional and professional services, preventive services, and drugs. While the year-over-year increase was larger than usual, the 2-year increase in spending between 2019 and 2021 was more consistent with historical trends. For both 2020 and 2021, year-over-year spending changes were consistent across enrollee risk factors and thus did not skew the relative factors used in the HHS risk adjustment models.
• Across all data submitted through issuer's EDGE servers between 2019 to 2020 benefit years for enrollees in our recalibration sample, there was a 3,681 percent increase in claims with telehealth services, whereas between the 2020 and 2021 benefit years, we observed a 1.25 percent increase in claims with telehealth services. Thus, use of telehealth services remained much higher in the 2021 benefit year than in the 2019 benefit year. While it is likely the continued higher use of telehealth services in 2021 was in part a response to the ongoing COVID pandemic in 2021, it is also at least in part due to changes in patterns of care that can be expected to continue into future benefit years. We therefore expect that the use of telehealth services may continue at a level somewhere between the higher levels observed in the 2020 and 2021 benefit years and the lower 2019 benefit year levels in the 2025 benefit year, as would be appropriately reflected by including all three data years in the 2025 EDGE data recalibration.
• The percentage of enrollees with one or more HCCs was similar between the 2019 and 2020 benefit year enrollee-level EDGE recalibration data. The percentage of enrollees with one or more HCC increased slightly between the 2020 and 2021 benefit year enrollee-level EDGE recalibration data sets in
• Individual HCC frequencies and costs generally remained stable between the 2019, 2020, and 2021 benefit year enrollee-level EDGE recalibration data sets, even for the HCCs related to the severe manifestations of COVID-19. One exception was a notable increase in frequency for HCC 127
• RXC frequencies and costs were generally stable between the 2019, 2020, and 2021 benefit year enrollee-level EDGE recalibration data sets, with the exception of RXC 10
• The coefficients for the 2021 benefit year enrollee-level EDGE recalibration data are similar to the 2019 and 2020 benefit year's coefficients and are consistent with typical changes in coefficients for new years of data. A major benefit of blending separately solved models across three benefit years of data (that is, 2019, 2020, and 2021) is that unique features specific to one benefit year are captured but not over-emphasized.
Thus, after analyzing our results, we concluded there were no significant anomalies in the 2021 benefit year enrollee-level EDGE data to warrant precluding its inclusion from the 2025 benefit year HHS risk adjustment model recalibration. This is consistent with how we ultimately concluded there were no significant anomalies in the 2020 benefit year enrollee-level EDGE data to warrant precluding its inclusion from risk adjustment model recalibration.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments above, we are finalizing the approach for recalibrating the HHS risk adjustment models for the 2025 benefit year as proposed. The model coefficients for the 2025 benefit year listed in Tables 1 through 6 of this final rule are based on a blend of equally-weighted, separately solved coefficients from the 2019, 2020, and 2021 benefit years of enrollee-level EDGE data for all coefficients.
For the 2025 benefit year, we proposed to continue applying a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the HHS risk adjustment models.
We sought comment on our proposal to apply a market pricing adjustment to the plan liability associated with Hepatitis C drugs for the 2025 benefit year.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this adjustment as proposed. We summarize and respond to public comments received on the proposed pricing adjustment for Hepatitis C drugs below.
Thus, we believe that the Hepatitis C pricing adjustment we are finalizing accurately captures the anticipated costs of Hepatitis C drugs for the 2025 benefit year using the most recently available enrollee-level EDGE data, balances the need to deter gaming practices with the need to ensure that issuers are adequately compensated, and does not undermine recent progress in the treatment of Hepatitis C. We intend to continue to reassess this pricing adjustment as part of future benefit years' model recalibrations using additional years of available enrollee-level EDGE data and plan to propose phasing out the market adjustment if and when appropriate.
The 2025 benefit year HHS risk adjustment model factors resulting from the equally weighted (averaged) blended factors from separately solved models using the 2019, 2020, and 2021 enrollee-level EDGE data are shown in Tables 1 through 6. The adult, child, and infant models have been adjusted to account for the high-cost risk pool payment parameters by removing 60 percent of costs above the $1 million threshold.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the 2025 benefit year risk adjustment model factors as proposed. We summarize and respond to public comments received on the proposed 2025 benefit year risk adjustment model factors below.
Another commenter recommended the creation of a new, separate RXC for pre-exposure prophylaxis (PrEP) and one commenter recommended mapping Tepezza (a new treatment for thyroid eye disease) to an RXC in the risk adjustment models due to its high costs. Several commenters also expressed concern about the decline in RXC 01 (Anti-HIV Agents) and RXC 01 x HCC001 (Additional Effects for enrollees with RXC 01 and HCC 01) coefficients since the 2023 benefit year HHS risk adjustment adult models were adopted in the 2023 Payment Notice. Another commenter suggested creating a new, separate high-cost reimbursement pool for ultra-high-cost drugs, including mostly cell and gene therapy drugs.
Considering the absence of adequate data at the time of development of the proposed 2025 benefit year risk adjustment models and coefficients for inclusion in the 2025 Payment Notice proposed rule, we did not propose and
We also did not propose and are not finalizing the addition of PrEP as an RXC in the 2025 benefit year adult risk adjustment models. As explained in the 2021 Payment Notice (85 FR 29164, 29187), we have not incorporated PrEP as an RXC because, as a general principle, RXCs are incorporated into the HHS risk adjustment adult models to impute a missing diagnosis or indicate severity of a diagnosis. Since the use of PrEP is currently recommended as a preventive service for persons who are not infected with HIV and are at high risk of HIV infection, the use of PrEP does not adequately represent risk due to an active condition and would be inconsistent with this principle (that RXCs are incorporated into HHS risk adjustment adult models to impute a missing diagnosis) to add it as an RXC at this time. However, like previous years, we reassessed the use and availability of the different types of PrEP in the market as we developed the 2025 benefit year risk adjustments models. Our most recent analysis affirmed our prior findings that the use of PrEP does not represent an active condition. In addition, as we have done in previous years, we incorporated 100 percent of the PrEP costs for enrollees without HIV diagnosis or treatment in the simulation of plan liability for purposes of recalibrating the adult and child models. We further note that enrollees in risk adjustment covered plans that use PrEP drugs in combination with another HIV treatment drug that map to RXC 01 (HIV/AIDS) will still receive credit for RXC 01 (HIV/AIDS) in the 2025 benefit year of risk adjustment. We intend to continue to explore the treatment of PrEP in the risk adjustment models to consider whether changes are needed in future benefit years, as appropriate.
We also did not propose and are not finalizing changes to add an RXC to the HHS risk adjustment model's treatment for Tepezza, which treats thyroid eye disease. Under the HHS risk adjustment models, thyroid eye disease (thyrotoxicosis) is currently captured within the non-payment HCC, HCC33 (Other Endocrine/Metabolic/Nutritional Disorders) and all RXCs in the HHS risk adjustment adult models are associated with a payment HCC. For this reason, HHS did not propose and is not finalizing any changes with respect to the treatment of Tepezza for thyroid eye disease in the 2025 benefit year risk adjustment models. However, HHS intends to continue analysis of thyrotoxicosis and the use of Tepezza as more data becomes available and consider its treatment in risk adjustment models for future benefit years.
Lastly, the change identified by some commenters in the RXC coefficients relative to the 2023 benefit year is due to decisions we made starting in the 2024 benefit year regarding the trending costs for traditional and specialty drugs, which have been trended separately from medical expenditures since the 2017 benefit year.
In our annual recalibration of the 2025 risk adjustment models, we continued the approach used for the 2024 benefit year, again reflecting the lower market-supported trend factors for specialty drugs rather than the historical, higher trend factors we used in benefit years prior to 2024. While there was a change to RXC 01 (HIV/AIDS) between the 2023 benefit year and the 2024 benefit year, the decrease between the final 2024 risk adjustment models and the 2025 risk adjustment models was much smaller in magnitude (from 4.669 to 4.345 for silver plans; a 6.9 percent decrease) and is consistent with normal year-to-year variation. For example, over the period between 2018 model recalibration (when RXCs were first introduced) and 2023 model recalibration (the last model recalibration before the change to the trending approach), the median year-to-year absolute change (that is, increase or decrease) across all silver RXC coefficients was 10.7 percent. The 6.9 percent decrease seen in RXC 01 (HIV/AIDS) between the 2024 and 2025 model recalibrations is therefore well within the range of changes that we normally see year-to-year.
For these reasons, we believe the trend factors we currently use for specialty drugs are appropriate and reflect the most recent trends we have seen in the market, and that the prior model trend factors were too high relative to the actual state of the current market. We believe the RXC coefficient values that we finalize in this rule reflect the appropriate amount of growth between the data years used to fit the models and the 2025 benefit year. As part of our annual model recalibration activities, we intend to continue to reassess the trend factors used to update the HHS risk adjustment models, including those specific to specialty drugs, in future benefit years.
As background, RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only) is a pharmacotherapeutic class of drugs, which contains a broad array of anti-diabetic medications that vary in cost. RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only) does not include all GLP-1 drugs currently on the market; drugs that carry an FDA indication for chronic weight management are excluded from RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only). The RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only) coefficient in the HHS risk adjustment adult models is meant to reflect the average enrollee cost for individuals being treated by any of the drugs in this class. To assess the current mapping of certain GLP-1 drugs to RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only) and whether any changes were warranted, we considered the positive predictive value (PPV) of these drugs. The PPV is a conditional proportion of patients who are diagnosed with the HCC and prescribed a drug (“drug” defined as a single RXCUI)
In addition, HHS did not propose and is not finalizing the application of a pricing adjustment for GLP-1 drugs in the risk adjustment models. As discussed above, the only such adjustment that HHS currently applies is the market pricing adjustment to the plan liability associated with Hepatitis C drugs in the HHS risk adjustment models for the narrow purpose of accounting for significant pricing changes between the data years used for recalibrating the models and the applicable benefit year of risk adjustment as a result of the introduction of new and generic Hepatitis C drugs. We do not expect similar significant pricing changes of GLP-1 drugs between the data years used to recalibrate the models and the applicable benefit year of risk adjustment to justify applying a similar pricing adjustment to GLP-1 drugs under RXC 07 (Anti Diabetic Agents, Except Insulin and Metformin Only) at this time. We understand GLP-1 drug utilization patterns are changing and HHS will continue to assess any new drugs and any change in costs as more enrollee-level EDGE data become available for potential targeted refinements to the HHS risk adjustment models, as appropriate.
Additionally, the observed decreases in coefficients can also be attributed to the revised interacted HCC counts model specification that was introduced beginning with the 2023 benefit year HHS risk adjustment adult and child models because this model specification shifts some of the predicted risk score away from the individual HCC coefficients and towards the severe interacted counts for the sickest enrollees. Specifically, in the 2023 Payment Notice (87 FR 27208, 27221 through 27230), HHS finalized major changes to add the interacted HCC counts model specifications to the adult and child models.
As part of our effort to strive for continual improvement of the precision of the HHS risk adjustment models, our intention is to monitor the impact of changes in the risk adjustment models over the years to consider whether additional changes or modifications are needed. To do this, we will continue to conduct analysis on the models and the models' predictions before considering whether changes are needed. Similarly, if we were to consider making changes to the models to restructure hierarchies (that would change whether certain HCCs could be additive) we would need to further assess the impact of those
Lastly, we note that beginning with the 2023 benefit year, we also made substantial model changes intended to address observed underprediction of healthy enrollees that included the inclusion of the interacted HCC counts model specification in the adult and child models and the HCC-contingent enrollment duration factor updates in the adult models. For example, since the 2023 benefit year risk adjustment models, all costs for partial year with no-HCC-or-RXC enrollees are recalibrated into the age-sex factors.
We also note that while HHS currently excludes enrollees with capitated claims for purposes of the risk adjustment model recalibration activities,
We proposed to recalibrate the CSR adjustment factors for AI/AN zero-cost sharing and limited cost sharing CSR plan variant enrollees for the 2025 benefit year, and to retain these proposed AI/AN CSR adjustment factors, if finalized, for all future benefit years unless changed through notice and comment rulemaking. We also proposed to maintain the current CSR adjustment factors for silver plan variant enrollees (70 percent, 73 percent, 87 percent, and 94 percent AV plan variants)
Lastly, separate from the policy pertaining to AI/AN CSR adjustment factors, we noted that for all plan liability risk score calculations under the State payment transfer formula, we use the CSR adjustment factor that aligns with the AV of the applicable plan for the enrollee. Thus, for unique State-specific plans, we apply the CSR adjustment factors that correspond to each plan's AV. However, this approach does not apply in the case of States whose State-specific plans take the form of Medicaid expansion plans offered on the Exchange (for example, Arkansas), because these plans are identical in all their parameters, including AV and degree of plan liability, to other plans offered on the Exchange in those States and are differentiated from their comparable plans only in eligibility criteria and sources of funding.
We sought comment on these proposals and policies. After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these provisions and policies as proposed. We summarize and respond to public comments received on the proposed CSR adjustment factors and related policies below.
One commenter, who did not oppose recalibrating the CSR adjustment factors for AI/AN zero-cost sharing and limited cost sharing plan variant enrollees, preferred to comprehensively reform how CSR variants are handled in HHS-operated risk adjustment program, such as creating CSR specific risk adjustment models and modifying the rating term
We did not propose and are not finalizing comprehensive changes to risk adjustment, such as changes to the rating term in the State payment transfer formula,
Since then, the Massachusetts Health Connector, Massachusetts' Exchange, has consistently supported continued use of the 1.12 factor for their wraparound plans
Each benefit year, to evaluate the HHS risk adjustment model performance, we examine each model's R-squared statistic and predictive ratios (PRs). The R-squared statistic measures the percentage of individual variation explained by the model. The PRs measure how accurate the model's predictions are for specific subpopulations. For a given population, the PR is defined as the ratio of the weighted mean predicted plan liability to the weighted mean actual plan liability.
A subpopulation that is predicted perfectly would have a PR of 1.0. For each of the current and proposed HHS risk adjustment models, the R-squared statistic and the PRs are in the range of published estimates for concurrent HHS risk adjustment models.
In part 2 of the 2022 Payment Notice (86 FR 24183 through 24186), we finalized the proposal to continue to use the State payment transfer formula finalized in the 2021 Payment Notice for the 2022 benefit year and beyond, unless changed through notice and comment rulemaking. We explained that under this approach, we will no longer republish these formulas in future annual HHS notice of benefit and payment parameter rules unless changes are being proposed. We did not propose any changes to the formula in this rule, and therefore will continue to apply the formula as finalized in the 2021 Payment Notice (85 FR 29191 through 29193
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the 2025 benefit year risk adjustment methodology as proposed. We summarize and respond to public comments received on the State payment transfer formula below.
We continue to believe that the State payment transfer formula is working as intended by more evenly spreading the financial risk carried by health insurance issuers that enroll higher-risk individuals in a particular State market risk pool, thereby protecting issuers against adverse selection and supporting them in offering products that serve all types of consumers.
• Nationwide, the absolute value of risk adjustment State transfers across all State market risk pools (excluding the high-cost risk pool) was about 10.4 percent of total premiums, as compared to the absolute value of 2021 benefit year State transfers, which was 8.7 percent of total premiums.
• In the 2021 benefit year, the absolute value of risk adjustment State transfers as a percent of premiums averaged 11.7 percent of premiums in the individual non-catastrophic risk pool, and 4.4 percent of premiums in the small group risk pool.
• In the 2022 benefit year, the absolute value of risk adjustment State transfers increased to 14.2 percent of premiums in the individual non-catastrophic risk pool and 4.5 percent of premiums in the small group risk pool.
We acknowledge that large risk adjustment charges can be unpredictable for small, new, or fast-growing issuers. We will continue to monitor risk adjustment implications and challenges for these issuers. HHS has regularly discussed with issuers and State regulators ways to encourage new participation in the health insurance markets and to mitigate any disruptive effects of substantial risk adjustment charges. We intend to continue these discussions and note that HHS remains committed to working with States and other interested parties to encourage new market participants, mitigate adverse selection, and promote stable insurance markets through strong risk adjustment programs. Finally, we note that to minimize the impact of issuers that fail to pay charges owed to the risk adjustment program, HHS will use all available debt collection tools to fully collect risk adjustment charges from issuers with plan failures that affected other issuers who are owed risk adjustment payments, which includes netting those charges against certain other payments owed to the issuer,
In the 2025 Payment Notice proposed rule (88 FR 82510, 82549), HHS proposed a risk adjustment user fee for the 2025 benefit year of $0.20 PMPM. Under § 153.310, if a State is not approved to operate, or chooses to forgo operating, its own risk adjustment program, HHS will operate risk adjustment on its behalf. For the 2025 benefit year, HHS will operate risk adjustment in every State and the District of Columbia. As described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of risk adjustment on behalf of States is funded through a risk adjustment user fee. 45 CFR 153.610(f)(2) provides that, where HHS operates a risk adjustment program on behalf of a State, an issuer of a risk adjustment covered plan must remit a user fee to HHS equal to the product of its monthly billable member enrollment in the plan and the PMPM risk adjustment user fee specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year.
OMB Circular No. A-25 established Federal policy regarding user fees, and specifies that a user charge will be assessed against each identifiable
To calculate the HHS risk adjustment user fee, we divided HHS' projected total costs for administering the HHS risk adjustment program on behalf of States by the expected number of billable member months (BMM) in risk adjustment covered plans in States where the HHS-operated risk adjustment program will apply in the 2025 benefit year. We estimated that the total cost for HHS to operate the risk adjustment program on behalf of States for the 2025 benefit year will be approximately $66 million, which is more than the approximately $60 million estimated for the 2024 benefit year. We projected increased costs due to increased contracting costs combined with increased labor costs.
We also projected higher enrollment than our prior estimates in the 2024 and 2025 benefit years based on the increased enrollment, as measured by BMM, between the 2021 and 2022 benefit years in the individual non-catastrophic market risk pool in most States, likely due to the increased PTC subsidies provided for in the American Rescue Plan Act of 2021 (ARP).
We sought comment on the proposed HHS risk adjustment user fee for the 2025 benefit year.
After reviewing public comments and revising our projections based on newly available data that impacted our enrollment projections, we are finalizing a risk adjustment user fee rate of $0.18 PMPM for the 2025 benefit year. We summarize and respond to public comments received on the proposed 2025 benefit year risk adjustment user fee rate below.
We proposed amending § 153.620(c)(4) to require issuers of risk adjustment covered plans to complete, implement, and provide to HHS written documentation of any corrective action plans when required by HHS if a high-cost risk pool audit results in the inclusion of certain observations
Under this policy, consistent with the existing framework in § 153.620(c)(4), HHS would require an issuer of a risk adjustment covered plan to provide, within 45 calendar days of the issuance of the final audit report, a written corrective action plan for any audit findings, as well as audit observations when there is evidence of non-compliance with applicable Federal requirements, to HHS for approval, implement that plan, and provide to HHS written documentation of the corrective actions taken to resolve the root cause of the non-compliance identified.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this amendment and the accompanying policies as proposed. We summarize and respond to public comments received on the proposed amendments to § 153.620(c)(4) to require a corrective action plan for audit observations under certain circumstances below.
Other commenters opposed the proposal stating concerns that the changes to the audit would be applied retrospectively to observations that do not have monetary impacts. Other commenters were concerned about a perceived lack of rights and processes available for issuers to appeal audit findings or observations that require completion of corrective action plans. These commenters were concerned that there is not enough information regarding how HHS uses data collected during the audit processes. Commenters were also concerned that the use of corrective action plans in this manner would require issuers to provide data they do not readily have available in order to take the necessary corrective actions and that this access and use of data goes beyond what is necessary for the HHS-operated risk adjustment program. Commenters were also concerned that the timing of the amendments would not give issuers sufficient time to prepare and implement new processes. One commenter also raised concerns that the proposal lacked details on the audit process and asked that interested parties receive more information about the risk adjustment, specifically high-cost risk pool, audits.
As stated in the proposed rule, since enrollee-level data that HHS extracts from issuers' EDGE servers is also used for HHS risk adjustment model recalibration, updates to the AV methodology and calculator, and other analyses for the commercial individual and small group (including merged) market, and Federal HHS related programs (for example, Medicaid expansion, QHP population, and non-Federal governmental plans),
We do not believe this change goes beyond the data uses and access necessary for the risk adjustment program, because the primary purpose of this policy is to strengthen the program integrity tools available to HHS when conducting risk adjustment audits to ensure the integrity of the data used for the HHS-operated risk adjustment program.
We also do not believe that issuers would need to provide data that is not readily available. The audit process validates the accuracy of the data submitted by issuers of risk adjustment covered plans to their respective EDGE servers.
We understand concerns regarding time to implement new processes to properly respond to corrective action plans. As stated in the proposed rule, we proposed to amend the established audit process to require corrective action plans for certain audit observations identified through HHS risk adjustment (including high-cost risk pool) audits (88 FR 82510) and the process would align with the existing framework detailed in § 155.620(c)(4).
We understand concerns regarding rights to address or remedy issues during the audit process. Current audit procedures provide issuers with ample opportunities to raise issues or concerns with findings and observations to HHS before the issuance of the final audit report. For example, prior to issuing a final report, HHS shares its preliminary audit findings with issuers,
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82551), we proposed to amend § 155.105(b) to require that, in addition to meeting all other approval standards under § 155.105(b), a State seeking to operate a State Exchange must first operate a State-based Exchange using the Federal platform (SBE-FP), meeting all requirements under § 155.200(f), for at least one plan year, including an open enrollment period. This proposal was intended to give States sufficient time to create, staff, and structure a State Exchange that could transition to operating its own platform and establish relationships with interested parties critical to a State Exchange's success in operating an Exchange, including standing up and operating a Navigator and consumer outreach program, assuming plan management responsibilities, and communicating effectively with consumers to support enrollment and avoid health care coverage gaps.
As stated in the proposed rule (88 FR 82511), over the past several years, we have observed the benefits of States first operating an SBE-FP for at least one plan year prior to transitioning fully from an FFE to a State Exchange. Operating an SBE-FP for at least one plan year, including its open enrollment period, prior to transitioning to a State Exchange gives States an opportunity to focus on investing time and resources needed to implement key Exchange functions that involve the establishment of critical and necessary relationships with consumers, consumer assisters, partners in the coordination of eligibility functions, issuers, and other interested parties. Operating an SBE-FP for at least one plan year prior to transitioning to a State Exchange also affords States time to implement eligibility and enrollment functions which require information technology platforms, call centers, and coordination with partners, such as State Medicaid agencies. In addition, operating an SBE-FP for at least one plan year prior to transitioning to a State Exchange gives States more time to engage with partners and interested parties to develop various consumer-facing content and consumer outreach strategies, all while establishing and gaining experience operating a consumer assistance program. Further, when States operate an SBE-FP for at least one plan year before operating a State Exchange, they are more likely to have the time and resources needed to coordinate with the State's Department of Insurance to establish policies and procedures associated with carrying out plan management functions, engage with the issuer community, and develop QHP certification requirements and processes. Finally, operating an SBE-FP for at least one plan year before transitioning to a State Exchange allows States time to familiarize consumers, consumer assisters, partners in the coordination of eligibility functions, issuers, and other interested parties with operations of the new State Exchange organization ahead of engaging with that Exchange, and it mitigates the risks and disruption associated with a transition to a State Exchange and simultaneous replacement of
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to require that a State seeking to operate a State Exchange must first operate an SBE-FP, meeting all requirements under § 155.200(f), for at least one plan year. We summarize and respond to public comments received on the proposed policy below.
Furthermore, based on our work with SBE-FPs that have transitioned to State Exchanges over the past several years, we have learned the importance of having an established consumer assistance and outreach program as an SBE-FP prior to the implementation of a State Exchange. State Exchanges that previously operated an SBE-FP have stated that this experience, as well as an SBE-FP's developed communication line with consumers, helps mitigate potential disruption to consumer enrollment when
Given these benefits, we believe that implementing a regulatory requirement that States must first operate an SBE-FP for at least one plan year prior to transitioning to a State Exchange will benefit both the State's implementation of a State Exchange, as well as the Exchange's long-term success.
Often, States that are transitioning from an FFE to operating a State Exchange draw on the work of contracted vendors and companies that have assisted with other States' Exchange transitions in developing that State's eligibility and enrollment platform or website. It is possible that a State might indicate that it would be technologically ready to transition directly to operating a State Exchange, without first operating an SBE-FP, due to its decision to contract with vendors and companies, who would apply the same or similar plans for development and implementation of its eligibility and enrollment platform. However, it is not possible for a State seeking to newly establish a State Exchange to identically apply development and implementation plans and other resources utilized for an eligibility platform in already-established State Exchanges, because in our experience those Exchanges may operate with partner State agencies and programs, such as Medicaid and CHIP, differently from the State that is seeking to newly establish a State Exchange. As Insurance Affordability Programs may require State-specific programming for an eligibility platform to make a correct eligibility determination, or for appropriate information to be displayed on consumer-facing resources, a State's readiness to operate an eligibility platform requires consideration and work on other elements than prior demonstrated capabilities in technology planning and Exchange management. Additionally, some States may pursue an integrated eligibility system between the State Exchange and the State Medicaid agency in which the State Exchange's eligibility system can determine eligibility for non-MAGI Medicaid, as well as other State programs, while other States may have different eligibility determination agreements between the State Exchange and the State Medicaid agency.
As a result, we believe that the experience gained from first operating an SBE-FP and providing additional time for interoperability with other State programs and establishing relationships with consumers and advocates makes it necessary to first operate an SBE-FP before operating a State Exchange.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82551), we proposed changes to the Exchange Blueprint (OMB control number: 0938-1172) requirements for States seeking to operate a State Exchange. We proposed to revise § 155.106(a)(2) to add a requirement that a State, as part of its activities for its establishment of a State Exchange, provide upon request, supplemental documentation to HHS detailing the State's implementation of its State Exchange functionality. Such supporting documentation would inform HHS's decision to approve or conditionally approve a State Exchange and could include, for example, materials demonstrating progress toward meeting State Exchange Blueprint requirements, documentation that details a State's plans to implement and meet the Exchange functional requirements as laid out in the State Exchange Blueprint, or plans to engage in consumer assistance programs and activities. In the proposed rule (88 FR 82552) we noted, we would provide guidance and direction to each State with our requests for supplementary information so that each State understands the purpose of the requests and how the requested information would help us determine whether the State meets the functional requirements for operating a State Exchange. Because the ability to request additional detail on a State's Exchange implementation plans is crucial for identifying risk areas for a State Exchange's operations, it is essential to determining that a State Exchange is ready to operate. The current State Exchange Blueprint application provides that we may require live demonstrations of Exchange functionality on the State Exchange's platform, as well as supporting documentation, as evidence of the State's progress toward meeting State Exchange Blueprint application requirements. In order to set clear expectations, we proposed to codify that as part of the State's submission of a State Exchange Blueprint application, HHS has the authority to request any evidence HHS determines necessary for the State to detail its implementation of the required State Exchange functionality. This could include HHS requiring a State to submit detailed plans regarding its State Exchange consumer assistance programs and activities, such as information on its direct outreach plans. In the proposed rule we noted, we would request supporting documentation from States with the goal of imposing minimal burden on a State's ability to meet its State Exchange Blueprint requirements, while maintaining the objective of gathering sufficient information to assess a State's readiness to operate a State Exchange and ensure that a State is sufficiently implementing and scaling policies, procedures, operations, technology, and administrative capacities to meet the needs of the State's consumers. We would use the information in a State's State Exchange Blueprint application, as well as any
We also proposed to add new § 155.106(a)(2)(i) and (ii) to require that when a State submits its State Exchange Blueprint application to HHS for approval, the State must provide the public with notice and a copy of its State Exchange Blueprint application along with certain other information. We stated that, to facilitate such public notice, HHS would post a State Exchange Blueprint application, submitted by a State to its public-facing website within 90 calendar days of receipt. Further, we proposed to require that at some point following a State's submission of its State Exchange Blueprint application to HHS and before HHS's approval or conditional approval of the State Exchange Blueprint application, a State must conduct at least one public engagement event (such as a townhall meeting or public hearing) in a timeline and manner (for instance, considering whether to conduct in-person and/or virtually) considered effective by the State, with concurrence from HHS, at which interested parties can learn about the State's intent to establish a State Exchange and the State's progress toward executing that transition. We also proposed to require that while a State is in the process of establishing a State Exchange and until HHS has approved or conditionally approved the State Exchange Blueprint application, a State must conduct periodic public engagements at which interested parties would continue to learn about the State's progress towards establishing a State Exchange, in a timeline and manner considered effective by the State with concurrence from HHS. We are finalizing these provisions as proposed. However, based on comments we received, we now plan to publicly post the State's Blueprint application within 30 days of receipt.
The Exchange Blueprint serves as a vehicle for a State to document its progress toward implementing its intended Exchange operational model. The submission and approval of Exchange Blueprints is an iterative process that generally takes place over the course of 15 months prior to a State's first open enrollment operating a State Exchange. Further, the establishment of a State Exchange involves significant collaboration between HHS and States to develop plans and document readiness for the State to transition from an Exchange that uses the Federal platform to one that operates its own eligibility and enrollment platform. State activities as part of this transition process include completing key milestones, meeting established deadlines, and implementing contingency measures. We believe that a mandatory process whereby States notify the public of their plans to establish State Exchanges and provide an opportunity to meet with interested parties to provide updates helps ensure that interested parties are aware these activities are occurring and can provide input on how States can successfully establish State Exchanges.
As stated in the proposed rule (88 FR 82553), a primary goal of these proposals is to strengthen the transparency requirements of the State Exchange Blueprint review and approval process. Based on our experience supporting and providing oversight to States in their establishment of State Exchanges, we believe that all States establishing Exchanges would benefit from having a more transparent process to facilitate input from interested parties, including consumers and issuers. A more transparent process would provide opportunities for consumers to learn more about a State's establishment process and plans, which can build consumer trust and help support a State's enrollment goals. States planning to establish State Exchanges could use public events like town halls or hearings to meet these transparency requirements.
We further note that compliance with these transparency requirements could help States that establish State Exchanges meet the consultation requirements with interested parties under § 155.130. Section 155.130 requires an Exchange to regularly consult on an ongoing basis with a list of eleven stakeholder groups, including educated health care consumers who are QHP enrollees and, if applicable, Federally recognized Tribes, as defined in the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. For example, during a State's establishment of its Exchange, the State and these interested parties could formalize a process under which they would continue to confer as required by § 155.130.
We sought comment on this proposal, including comments related to additional ways States seeking to establish State Exchanges could provide greater transparency to interested parties, including consumers, regarding the process for establishing State Exchanges. After consideration of the comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing as proposed the amendment to § 155.106(a)(2) to require as part of a State's activities for its establishment of a State Exchange, the State provide, upon request, supplemental documentation to HHS detailing the State's implementation of its State Exchange functionality. Such supplemental documentation may, for example, demonstrate progress toward meeting State Exchange Blueprint requirements, or detail a State's plans for how it intends to implement and meet the Exchange functional requirements as laid out in the State Exchange Blueprint.
We also finalize as proposed new paragraph § 155.106(a)(2)(i) which states that, upon submitting an Exchange Blueprint application to operate a State Exchange, the State shall issue a public notice of its Exchange Blueprint application submission through its website and include a copy of the Exchange Blueprint application, a description of the Plan Year for which the State seeks to transition to a State Exchange, language indicating that the State is seeking approval from HHS to transition to a State Exchange, and information about when and where the State will conduct public engagements regarding the State's Exchange Blueprint application. To facilitate public notice, HHS will post a State Exchange Blueprint application submitted by a State to its public-facing website within 90 calendar days of receipt.
Finally, we finalize as proposed new paragraph § 155.106(a)(2)(ii) to require that at some point following a State's submission of its State Exchange Blueprint application to HHS and before HHS approves or conditionally approves the State's Exchange Blueprint application, a State must conduct at least one public engagement event (such as a townhall meeting or public hearing) in a timeline and manner (for instance, considering whether to conduct in-person and/or virtually) considered effective by the State, with concurrence from HHS, at which interested parties can learn about the State's intent to establish a State Exchange and the State's progress toward executing that transition.
After consideration of the comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these requirements with a modification to clarify that the State must submit supplemental information to HHS, upon request, detailing the State's implementation of its State Exchange functionality, including information on the ability to implement and comply
These commenters generally believed that the proposals would help States better implement and operate a State Exchange, provide transparency to States' interested parties, and improve consumer protections. One commenter stated that the resulting transparency may help interested parties become better aware of a State's transition plans and may submit helpful feedback to States, which States could consider in their transition planning.
We believe any potential burden on States from conducting regular public engagement is outweighed by the benefit to interested parties, such as consumers and advocate groups, in having the opportunity to learn about, and provide input on, a State's Exchange implementation plans, which the State may utilize in developing its State Exchange implementation plans.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82553), we proposed to amend § 155.170(a)(2) to provide that a covered benefit in a State's EHB-benchmark plan would be considered an EHB. We are finalizing this policy as proposed, except for minor grammatical changes to improve clarity.
Under this policy, there will be no obligation for the State to defray the cost of a State mandate enacted after December 31, 2011, that requires coverage of a benefit covered in the State's EHB-benchmark plan. Benefits that are covered in a State's EHB-benchmark plan would not be considered in addition to EHB and would remain subject to the various rules applicable to the EHBs, including the prohibition on discrimination in accordance with § 156.125, limitations on cost sharing in accordance with § 156.130, and restrictions on annual or lifetime dollar limits in accordance with § 147.126.
Section 1311(d)(3)(B) of the ACA permits a State to require QHPs offered in the State to cover benefits in addition to EHB, but requires the State to make payments, either to the individual enrollee or to the issuer on behalf of the enrollee, to defray the cost of these additional State-required benefits.
Under longstanding policy, benefits mandated after December 31, 2011, other than for compliance with Federal requirements, are considered in addition to EHB (and thus not EHB) without regard as to whether the mandated benefits are embedded in the State's EHB-benchmark plan. Specifically, under § 155.170, a State mandate is considered `in addition to EHB' if it: is the result of State action taken after December 31, 2011;
In the years since we finalized § 155.170, we received feedback from States and other interested parties, including in comments submitted to the EHB RFI (87 FR 74097) that we issued in 2022, that we should reconsider this provision. This feedback indicated that States struggle to understand and operationalize § 155.170, and that States that seek to mandate coverage of benefits are unintentionally removing EHB protections from benefits already included in the State's EHB-benchmark plan.
We believe that finalizing the proposal will promote consumer protections and facilitate compliance with the defrayal requirement by making the identification of benefits in addition to EHB more intuitive.
Under the policy, if a State mandates coverage of a benefit that is in its EHB-benchmark plan, the benefit will continue to be considered EHB and the State will not have to defray the costs of that mandate. However, if at a future date the State updates its EHB-benchmark plan under § 156.111 and removes the mandated benefit from its EHB-benchmark plan, the State may have to defray the costs of the benefit
As stated in the proposed rule (88 FR 82553), we acknowledge that there are States that may have been defraying the costs of benefits under the current policy that will be able to stop defraying those costs since we are finalizing this policy. We proposed this change to be effective starting with plan years beginning on or after January 1, 2025, to allow for issuers to make necessary modifications to their plan designs and plan filings to reflect any possible changes in designation of benefits as EHB as a result of this policy. For example, under this policy, if a State ceases defraying the costs of a State-mandated benefit to issuers because it is covered in its EHB-benchmark plan, issuers will update their plan filings accordingly beginning in PY 2025 to reflect that the benefit is covered as an EHB and will be included in the percentage of premium attributable to coverage of EHB for the purpose of calculating APTC. We also noted that those States will not be able to recoup the cost of benefits they have already defrayed. In addition, we acknowledge that the start and end dates of State legislative sessions vary greatly by State, and that this policy may occur during State legislative sessions that are considering State actions that will be impacted by the change.
We noted that this policy may impact health plans that are not directly subject to the EHB requirements, such as self-insured group health plans and fully-insured group health plans in the large group market that are required to comply with the annual limitation on cost sharing and restrictions on annual or lifetime dollar limits in accordance with applicable regulations with respect to such EHBs.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed with minor grammatical changes to improve clarity. We summarize and respond to public comments received on the proposed defrayal policy below.
State regulators and advocacy groups stated that there has been confusion around operationalizing existing Federal requirements for the defrayal of State-mandated benefits. Commenters asserted that this policy change would alleviate an apparent inconsistency between §§ 155.170 and 156.111 under which a benefit could be “essential” for purposes of a State's EHB-benchmark plan selected by each State under § 156.111, but “not essential” for purposes of the defrayal requirement under § 155.170. Many commenters noted that the confusion related to defrayal under current policy was deterring States from addressing benefit coverage in their States through mandates.
A few commenters noted that, currently, it is a costly and time-intensive process for States to conduct mandate reviews to determine whether a new benefit would be subject to defrayal. They noted that because the proposal ultimately would make it easier to understand what benefits are EHB, it will help State regulators ensure that patients and consumers receive the protections that attach to EHB and facilitate decision-making by State policymakers seeking to ensure a robust benefit package for Exchange consumers. Many commenters supported the proposal to ensure that EHB maintain their protections, regardless of whether a State mandates it.
Many commenters noted the clarity from the proposed change will allow States to be more responsive to the needs of their States and specifically help advance health equity, mitigate health disparities, and improve access for those with disabilities and chronic conditions. A commenter noted that EHBs retaining protections, such as nondiscrimination rules, limitations on cost sharing, and restrictions on annual or lifetime dollar limits, is crucial for patients, particularly those with chronic conditions or complex health care needs, as it ensures access to essential health services with less financial burden.
A few commenters that opposed the proposal suggested that it would permit States to avoid defraying the cost of any additional benefit so long as they updated their EHB-benchmark plans, effectively nullifies the cost defrayal obligation, and cannot be squared with the statute's requirements. Those commenters asserted that Congress struck a careful balance in section 1311(d)(3)(B) of the ACA; it afforded States the authority to mandate additional benefits but required them to defray costs when doing so.
Commenters who supported the proposal noted that the proposal is more consistent with the plain language and intent of section 1311(d)(3)(B) of the ACA which requires States to defray the cost of benefits that are “in addition to the essential health benefits” than the existing requirements related to defrayal. One commenter noted the proposal will benefit consumers by ensuring that QHPs include the full range of benefits commonly included in typical employer plans in a State, consistent with the intent of the ACA's EHB provision. A few commenters noted that limiting EHB-benchmark benefits that do not require defrayal only to those enacted on or before December 31, 2011, was arbitrary and limits the ability of States to ensure plans meet the current needs of consumers. Another commenter noted that requiring a State to defray a mandate for coverage of a benefit for which coverage was already required under the State's EHB-benchmark plan makes little sense and it also does not comport with the language of the ACA. Several commenters noted that the proposal applied a commonsense approach and would make the identification of benefits in addition to EHB more intuitive and innate.
We further note that this proposal is not introducing a change regarding benefits in an EHB-benchmark plan generally being EHB. Under longstanding policy, EHB are defined by HHS with a State benchmark-based framework, such that an issuer subject to EHB requirements must provide benefits that are substantially equal to the benefits selected by the State in its EHB-benchmark plan. Furthermore, statutory guardrails on States expanding EHB in their States remain in place. As described in the preamble to § 156.111, the typicality standard functions as both a ceiling and floor to limit a State's EHB-benchmark plan selections. Benefits can be defined as EHB in a State through two avenues: (1) they were mandated by State action prior to December 31, 2011, and/or (2) they are included in a State's EHB-benchmark plan or otherwise required as EHB pursuant to § 156.115. The distinction of which avenue defines a benefit as an EHB is meaningless for all purposes except for the analysis of defrayal obligations arising from State mandates and for whether the benefit can be substituted under § 156.115(b). Under the prior policy, a benefit that was selected as an EHB in a State's EHB-benchmark plan could shift to being a
A commenter articulated a sequence of events this commenter believes could lead to States manipulating the EHB-benchmark plan update process to avoid defrayal. The commenter supposed that a State enacts a mandate applicable only to large group health plans (and not QHPs) which would not require defrayal. Afterwards, the State updates its-EHB-benchmark to cover that benefit, using the large group plans that were required to cover it as a reference point for a “typical” employer plan. Individual and small group plans would then be required to cover the benefit as an EHB, with no cost defrayal—even though the benefit was not included in any typical employer plan before the State mandated it. The commenter stated that CMS has provided no reasonable justification for opening the door to such manipulation, nor any alternative guardrails. A different commenter noted a similar concern that under the proposal, States could seamlessly switch from State action to benchmarking for mandates without incurring costs, and existing mandates could transition into EHBs through EHB-benchmark plan updates.
Another commenter remarked that changes to a State's EHB-benchmark plan take a long time (noting that if a State identifies a particular need in the summer of 2024, it would not be able to adopt a new EHB-benchmark plan that addressed that need until, at a minimum, plan year 2027). The
Further, we believe that the generosity standard is not necessary to ensure the State EHB-benchmark plan selections are not unbounded given that, as described in the preamble to section 156.111, the typicality standard functions as both a ceiling and floor to limit a State's EHB-benchmark plan selections. Specifically, the typicality standard alone limits the potential generosity of a State's EHB-benchmark plan to be no greater than the generosity provided by the most generous typical employer plan, because a State would be unable to demonstrate that a more generous plan was equal in scope to any of the typical employer plans defined at § 156.111(b)(2)(i).
The scenario the commenter was concerned about would allow for manipulation of the EHB-benchmark plan update process would not, in practice, present an opportunity for manipulation. States have been able to add individual benefits to their EHB-benchmark plans through the update process outlined at § 156.111 since the 2019 Payment Notice (83 FR 16930, 17009), which provided States with additional flexibility with respect to the benefits and coverage in the EHB-benchmark plans. In addition, we note that the EHB-benchmark plan update process is not instantaneous, and States incur costs to update their EHB-benchmark plans.
We believe there is a high likelihood that confusion related to the existing mandate defrayal policy has made it difficult for interested parties to discern whether States are complying with the defrayal requirements. With clearer standards, there will be less confusion about State defrayal obligations.
We agree that the policy subjecting a State to defrayal of a benefit even if the State subsequently adds coverage of that benefit to the State's EHB-benchmark plan is counterintuitive and does not advance the goals of the ACA.
We have also noticed State legislative bills that include clauses stating that the requirement to defray mandates is precluded if HHS fails to respond to the State's request for confirmation of whether new mandates require defrayal within a certain time. Under § 155.170, such provisions do not comply with § 155.170 as they inappropriately put the onus on HHS to decide whether the mandate is in addition to EHB rather than on the State. Failure by HHS to respond to State requests asking for a determination of whether new mandates require defrayal does not excuse States from defrayal requirements. Under § 155.170, it is the State's responsibility to identify which State required benefits require defrayal. While States are encouraged to reach out to us concerning State defrayal questions in advance of passing and implementing benefit mandates, HHS does not provide determination of whether a benefit mandate requires defrayal.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82554), we proposed at § 155.205(a) to establish additional minimum standards for Exchange call
Currently, § 155.205(a) requires that Exchanges provide for operation of a consumer-accessible, toll-free call center that addresses the needs of consumers requesting assistance. For a State requesting to establish a State Exchange, we review its plans to implement and meet call center requirements under § 155.205(a) as described in the State Exchange Blueprint application. Through the Blueprint process, we review and assess a State's call center operational plan for consistency with standards governing its hours of operation, staffing levels, and service level goals (including wait times and abandonment rates), as well as for consistency with best practices utilized by existing Exchanges, including the FFEs' call center. Once a State Exchange has been established and is operating, HHS monitors Exchange call center operations through the annual collection of performance monitoring data, as specified at § 155.1200(b)(3). The data collected includes call center volume, wait times, calls abandoned, and average call center handle time.
As stated in the proposed rule (88 FR 82554), we recognize the value in each Exchange being able to tailor customer service level expectations based on their experience in the areas they serve, including setting hours of operation that meet the needs of their consumers. As such, we did not propose to establish minimum standards for customer service staffing levels. We will continue to assess and monitor Exchanges' compliance with § 155.205(a) through the Blueprint process and annual collection of compliance reports, as specified at § 155.1200(b)(2). We also intend to utilize the finalized requirement that transitioning States submit documentation through their Blueprint application, which will strengthen our review of Exchange call center plans.
In this final rule, we are requiring that all Exchanges, other than SBE-FPs and SHOP Exchanges that do not provide for enrollment in SHOP coverage through an online SHOP enrollment platform, meet the following additional requirements: their call center must provide consumers with access to a live call center representative during the Exchanges' published hours of operation; and their live call center representatives must be able to assist consumers with their Exchange application, which includes providing consumers information on their APTC and CSR eligibility, facilitating a consumer's comparison of QHPs, and helping consumers submit their Exchange applications to the Exchange.
Sections 1311(d)(4)(B) and 1321 of the ACA require that Exchanges provide for the operation of a toll-free telephone hotline to respond to requests for assistance, and section 1413(b)(1)(A)(ii) of the ACA requires that a consumer's application for QHP coverage can be filed by telephone. We believe that our policy will support these statutory requirements by ensuring that consumers have access to live representatives with Exchange call centers, during a reliable window of time, who can assist consumers with their Exchange applications.
We believe that all State Exchange call centers already meet the minimum standards that were proposed, and we know that the call center for the Exchanges on the Federal platform are meeting them. As such, this policy seeks to standardize and strengthen Exchange consumer assistance capabilities without imposing additional burden on current Exchanges or hindering Exchanges' ability to be innovative in their call center functions. The changes finalized here will ensure that regardless of where a consumer is in the United States, the consumer will be able to speak to a live representative who can assist the consumer with the Exchange application process during the hours of operation for that State's call center. We also want to ensure that a State does not solely rely on an automated telephone system for Exchange application assistance because we believe speaking to a live representative will help troubleshoot consumer Exchange application issues, provide in real time an opportunity for a live representative to explain Exchange application terminology to a consumer, ensure the consumer provides the most correct information in the QHP application to alleviate unnecessary follow-up, and provide greater overall consumer satisfaction. We believe that call centers should have a basic level of customer service especially as they relate to hours and operations and staffing levels to limit wait times for Exchange application assistance. We also know based on our work with State Exchanges and the Exchanges on the Federal platform that the Exchanges have created and continue to maintain robust call centers.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with modifications to the proposed language at § 155.205(a) to clarify the role of a live call center representative during the Exchanges' published hours of operation is to assist consumers with submitting their Exchange application as required at § 155.405(c)(2)(ii).
We summarize and respond to public comments received on the proposed minimum standards for Exchange call center operations below.
We recognize the value in each Exchange being able to tailor customer service level expectations based on their experience in the areas they serve. Consequently, we did not propose to establish minimum standards for customer service staffing levels. We will continue to assess and monitor Exchanges' compliance with § 155.205(a) through the Blueprint process and annual collection of compliance reports, as specified at § 155.1200(b)(2). As such, we are finalizing this provision with some changes to clarify that the role of a live call center representative during the Exchanges' published hours of operation is to assist consumers with their Exchange application as required at § 155.405(c)(2)(ii).
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82554), we proposed to amend § 155.205(b)(4) to require that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform), such that the Exchange allows for the submission of the single, streamlined application for enrollment in a QHP and insurance affordability programs by consumers, in accordance with § 155.405, through the Exchange's website, and that the Exchange performs eligibility determinations for all consumers based on submissions of the single, streamlined application. Further, we proposed to amend § 155.302(a)(1) to clarify that the Exchange, through the centralized eligibility and enrollment platform operated on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform), is the entity responsible for making all determinations regarding the eligibility for QHP coverage and insurance affordability programs regardless of whether an individual files an application for enrollment in a QHP on the Exchange's website or on a non-Exchange website operated by an entity described under § 155.220, such as a web-broker defined at § 155.20, or a DE entity or QHP issuer described under § 155.221. As we believe the eligibility determination function is inherently a function that should only be performed by the Exchange, the amendment to § 155.302(a)(1) also clarifies that only the private vendors or State entities that an Exchange contracts with to operate its centralized eligibility and enrollment platform can perform this function on behalf of an Exchange, and prohibits an Exchange from solely relying on non-Exchange entities, including a web-broker (defined at § 155.20) or other entities under §§ 155.220 or 155.221, to make such eligibility determinations on behalf of an Exchange.
We also proposed to amend § 155.205(b)(5) to require that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website (or, for an SBE-FP, by relying on the Federal eligibility and enrollment platform) so that the Exchange (or, for an SBE-FP, the Federal eligibility and enrollment platform) meets the requirement under § 155.400(c) to maintain records of all effectuated enrollments in QHPs, including changes in effectuated QHP enrollments.
As background for these amendments, § 155.205(b) states that an Exchange must maintain an up-to-date website that allows consumers to receive eligibility determinations for QHPs and insurance affordability programs and provides standardized comparative information on each available QHP and a calculator to facilitate the comparison of available QHPs after the application of any APTC and any CSRs. Section 1413(c)(1) of the ACA also requires that Exchanges develop a secure electronic interface that allows consumers to apply for health insurance coverage online and electronically receive an eligibility determination and that Exchanges conduct verifications of eligibility through electronic data interfaces. However, currently, there is no explicit regulatory or statutory requirement that Exchanges operate a centralized eligibility and enrollment platform on their website for performing all eligibility determinations for QHPs and insurance affordability programs. Nonetheless, all Exchanges currently provide access to a centralized eligibility and enrollment platform and process for consumers that they serve, and all Exchanges also currently perform all eligibility determinations through the operation of a centralized eligibility and enrollment platform on their websites. In order to codify existing policy and practices and help set clear expectations for existing Exchanges and States that may seek to operate State Exchanges in the future, we proposed these amendments to require that Exchanges may not allow eligibility determinations to be made outside of the Exchanges' own centralized eligibility and enrollment platform by another entity for applications for QHP coverage nor for selections for enrollment in a QHP.
We also proposed to amend § 155.302(a) to codify the Exchange's obligation and role as the sole entity responsible for conducting eligibility determinations. For example, if an Exchange permits an eligible web-broker to operate a non-Exchange website that interfaces with an Exchange to assist consumers with DE in QHPs offered through the Exchange as described in §§ 155.220(c)(3) and 155.221, the Exchange must ensure that the Exchange continues to maintain responsibility for conducting all eligibility determinations for applications submitted for QHP coverage and related insurance affordability programs. While HHS has not delegated these functions to DE entities in FFE and SBE-FP States, currently, Exchanges may allow entities described in § 155.220, among others that meet applicable requirements, to be able to function as an eligible contracting entity under § 155.110(a) that can carry out determinations regarding QHP coverage eligibility and eligibility for related insurance affordability programs on behalf of the Exchange. This amendment to § 155.302(a) prohibits Exchanges from delegating the responsibility to conduct eligibility determinations to any non-Exchange entities, besides entities that the Exchanges have elected to contract with to operate the centralized eligibility and enrollment platform. Consistent with these amendments, we proposed to maintain the current requirement under § 155.302(a) that SBE-FPs rely on HHS, through the operation of the centralized
As we also stated in the proposed rule (88 FR 82555), this proposal ties together the disparate, but related, requirements that exist across 45 CFR part 155 that speak to the real-time and tightly integrated nature of the online eligibility functions that Exchanges are required to perform (specifically the tight integration needed between the Exchange-operated website, single streamlined application, and back-end automated eligibility verifications based on information provided by applicants to arrive at an eligibility determination), by clearly stating the principle that Exchanges are solely responsible for conducting eligibility determinations, and that Exchanges need to meet the required eligibility functions that exist across 45 CFR part 155 through operating a centralized eligibility and enrollment platform on their website, regardless of whether an application is submitted through the Exchanges' website or through eligible non-Exchange entities that are assisting an individual in enrolling in a QHP.
We believe the lack of a clear statement in the regulations at 45 CFR part 155 affirming the requirement that the Exchange must make all determinations regarding eligibility for QHP coverage and related insurance affordability programs through a centralized eligibility and enrollment platform on the Exchange's website are oversights, as other sections of the regulations implementing the ACA in title 45 of the CFR allude to a requirement or expectation that an Exchange operates in this way already, or the regulations are written in a way such that it would be difficult to fulfill
As an example of an implementing regulation of the ACA that would require an Exchange to operate in this manner, § 155.220 permits qualified individuals to be enrolled in a QHP through the Exchange with the assistance of a web-broker, while § 155.220(c)(3)(ii)(A), and by reference § 155.220(c)(3)(i)(F), require that if the non-Exchange website of a web-broker is used to complete an Exchange eligibility application, that web-broker's website must also provide consumers with the ability to withdraw from the process and use the Exchange's website described in § 155.205(b) instead at any time. If an Exchange did not provide an ability on its website for a consumer to complete an eligibility application, then it would not be possible to fulfill the requirements of §§ 155.220(c)(3)(ii)(A) and (i)(F).
To ensure that the requirements of §§ 155.220(c)(3)(ii)(A) and (i)(F), and 155.205(b) are fulfilled, we believe it is important that Exchanges allow a consumer to continue the application process through the centralized eligibility and enrollment platform operated on the Exchange's own website should the consumer chose to withdraw from the application process that was begun on a web-broker's non-Exchange website; or, if the Exchange is an SBE-FP, allow the consumer to continue the application process through the website of the Federal platform.
As another example, QHP issuers that assist consumers with enrollment in QHPs are currently required under § 156.265(b)(2) to either direct the consumer to the Exchange's website to file an eligibility application or ensure that the consumer's eligibility application is completed through the Exchange website or submitted through Exchange-approved web services in order for the Exchange to conduct an eligibility determination. To align with these requirements, we believe that it is important to finalize the amendment to § 155.302(a)(1) to provide that an Exchange must perform all eligibility determinations through operating a centralized eligibility and enrollment platform on the Exchange's website, and that only those entities that an Exchange chooses to enter into an agreement with to operate its centralized eligibility and enrollment platform, as allowed for under § 155.110(a), can carry out this function on behalf of the Exchange.
In addition to these examples of how current regulations may require an Exchange to operate according to the proposed amendments to §§ 155.205 and 155.302, we believe that consumers may be harmed without these policies in place. If an entity other than the Exchange conducted eligibility determinations, consumers might receive incorrect or inconsistent eligibility determinations, as entities other than the Exchange may not update their systems with the same eligibility determination rules or logic as the Exchange itself when Federal or State policies or regulations impacting eligibility for QHP coverage and insurance affordability programs come into effect or are updated, including the implementation and maintenance of State-specific eligibility rules and logic for Medicaid and CHIP programs. As a result, a non-centralized eligibility system model introduces increased program integrity risk as to the accuracy of eligibility determinations, which introduces increased risk of inaccurate APTC payments to QHP issuers and increased risk to consumers of potential tax liability when filing taxes and reconciling their APTC with the PTC allowed.
In addition, the websites and eligibility platforms provided by non-Exchange entities may not include the same informational content for consumers that an Exchange provides to consumers through the Exchange's website, such as information related to Medicaid and CHIP programs or the availability of special enrollment periods before or after the open enrollment period. As a result, some consumers might not provide information in their application in such a manner as to receive a correct eligibility determination and thus, enroll in the wrong coverage or not enroll in any coverage. Lastly, consumers may prefer to enroll directly through the eligibility and enrollment platform hosted and operated on an Exchange's website because they are more comfortable with sharing their personal information through a platform hosted by the Exchange.
In light of these considerations, we proposed to amend §§ 155.205(b)(4) and (5), and 155.302(a)(1) to address these gaps. Since all Exchanges currently provide access to a centralized eligibility and enrollment platform and process for consumers that they serve, and all Exchanges also currently perform all eligibility determinations through the operation of a centralized eligibility and enrollment platform on their websites, we believe the impact of these policies are minimal.
We sought comment on these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed. We summarize and respond to public comments received on the proposed requirement that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website below.
Based upon current State initiatives to transition from an FFE to a State Exchange, as well as ongoing interest in the State Exchange model from other FFE States, we do not believe that
Finally, we disagree that the proposal could limit States' ability to employ innovative or more suitable technical solutions. While the proposal obligates a State Exchange to operate a centralized eligibility and enrollment platform on the Exchange's website, it is not prescriptive concerning the technical infrastructure supporting the system, nor does it regulate the number and types of entities an Exchange may contract with to develop and operate a centralized eligibility and enrollment platform.
One commenter opposed to the proposal sought clarification regarding whether State Exchanges could leverage EDE entities to support eligibility and enrollment operations, and questioned whether a State Exchange can contract with multiple entities to fulfill the requirement for an Exchange to operate a centralized eligibility and enrollment platform on the Exchange's website. Relatedly, a few commenters opposed to the proposal observed that some State Exchanges' eligibility and enrollment platforms are provided by private entities that serve as web-brokers in other States; these commenters requested HHS clarify that this arrangement is allowable.
One commenter opposed this proposal noting it “conflicts with current regulations that allow web brokers to enroll people in QHPs `in a manner that constitutes enrollment through the Exchange.' ” The commenter asserted that through the regulation's use of the word “constitutes,” this regulation allows State Exchanges to establish enrollment pathways that qualify as enrollment through the Exchange, but do not actually enroll consumers through the Exchange.
It is necessary to elucidate the Exchange's obligation and role as the sole entity responsible for conducting eligibility determinations to ensure accountability for eligibility determinations, accuracy and uniformity in the eligibility determination process, and consistency with existing regulatory requirements under 45 CFR part 155.
In response to the comment seeking clarification regarding whether State Exchanges can contract with EDE entities for the centralized eligibility and enrollment platform on the Exchange's website, we point to the amendment at § 155.302(a)(1) that prohibits an Exchange from relying on an entity described under § 155.220, such as a web-broker defined at § 155.20, or a DE entity (which includes EDE entities) described under § 155.221, from making eligibility determinations on behalf of the Exchange. Therefore, this regulation precludes DE and EDE entities from entering into arrangements with an Exchange to operate its centralized eligibility and enrollment platform. However, §§ 155.220 and 155.221 detail the scope of the eligibility- and enrollment-related support functions DE and EDE entities can perform on behalf of an Exchange, through an agreement with the Exchange.
In response to the comment inquiring whether a State Exchange can contract with multiple entities to fulfill the requirement for an Exchange to operate a centralized eligibility and enrollment platform on the Exchange's website, we confirm that a State Exchange can enter into an agreement with one or more entities to operate its centralized eligibility and enrollment platform, as allowed for under § 155.110(a), and in accordance with the regulation at § 155.302(a)(1).
As we believe the eligibility determination function is inherently a function that should only be performed by the Exchange, the amendment to § 155.302(a)(1) clarifies that only the private vendors or State entities that an Exchange contracts with to operate its centralized eligibility and enrollment platform can perform this function on behalf of an Exchange, and prohibits an Exchange from solely relying on non-Exchange entities, including a web-broker (defined at § 155.20) or other entities under §§ 155.220 or 155.221, to make such eligibility determinations on behalf of an Exchange.
In response to the comments observing that some State Exchanges' eligibility and enrollment platforms are provided by private entities that serve as web-brokers in other States, we note that only those entities that an Exchange chooses to enter into an agreement with to operate its centralized eligibility and enrollment platform, as allowed for under §§ 155.110(a) and 155.302(a), can perform eligibility determinations on behalf of the Exchange. In turn, private entities that an Exchange has contractual relationships with outside of operating its centralized eligibility and enrollment platform, would not be allowed to perform eligibility determinations on behalf of the Exchange.
Finally, concerning the comment charging that this proposal conflicts with current regulations allowing web-brokers to enroll qualified individuals in QHPs in a manner that constitutes enrollment through the Exchange, we disagree that the requirement for an Exchange to operate a centralized eligibility and enrollment platform on the Exchange's website is inconsistent with web-brokers' ability to assist consumers with direct enrollment in QHPs, as described in § 155.220(a)(2). A web-broker's ability to assist consumers with their eligibility application submission and enrollment in QHPs is separate and distinct from the eligibility determination function reserved for the State Exchange's centralized eligibility and enrollment platform on the Exchange's website (which can be delivered by a private vendor or State entity under contract with the State Exchange). The requirement for an Exchange to operate a centralized eligibility and enrollment platform does not preclude web-brokers' ability to assist consumers with enrollment in QHPs in a manner that constitutes enrollment through the State Exchange.
While § 155.220(a)(2) allows web-brokers to enroll qualified individuals in a QHP in a manner that constitutes enrollment through the Exchange, the web-broker's non-Exchange website must interface with the State Exchange's centralized eligibility and enrollment platform to assist consumers with direct enrollment in QHPs. The State's centralized eligibility and enrollment platform serves as the system of record for all effectuated enrollments in QHPs, in accordance with § 155.400. Therefore, the amendments to §§ 155.205(b)(4) and 155.302(a)(1) requiring that an Exchange operate a centralized eligibility and
Further, with this proposal we are making clear that the Exchange, through the centralized eligibility and enrollment platform operated on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform), is the entity responsible for making all determinations regarding the eligibility for QHP coverage and—in coordination with State Medicaid and CHIP agencies—insurance affordability programs, regardless of whether an individual files an application for enrollment in a QHP on the Exchange's website or on a non-Exchange website operated by an entity described under § 155.220, such as a web-broker defined at § 155.20, or a DE entity or QHP issuer described under § 155.221.
As we believe the eligibility determination function is inherently a function that should only be performed by the Exchange, the policy also clarifies that only the private vendors or State entities that an Exchange contracts with to operate its centralized eligibility and enrollment platform can perform this function on behalf of an Exchange, and prohibits an Exchange from solely relying on non-Exchange entities, including a web-broker (defined at § 155.20) or other entities under §§ 155.220 or 155.221, to make such eligibility determinations on behalf of an Exchange.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82556 and 82557), we proposed to amend §§ 155.220(h)(2) and (3) by deleting the current references to “the HHS reconsideration entity” and replacing them with “the CMS Administrator” and by specifying that, instead of the HHS reconsideration entity, the CMS Administrator, who is a principal officer, would be the entity responsible for handling these reconsideration decisions. Agents, brokers, and web-brokers whose Exchange agreement(s) to participate in the FFEs or SBE-FPs have been terminated for cause would continue to have the ability to request a reconsideration of such action in the manner and form established by HHS by requesting a reconsideration within 30 calendar days of the date of the written termination notice from HHS. We proposed that the request for reconsideration would be made to the CMS Administrator. In the proposed rule, we stated this proposal would improve transparency by specifying who would review reconsideration requests under § 155.220(h).
Exchange agreement suspensions and terminations play a critical role in stopping potentially fraudulent enrollments or other fraudulent behavior in the FFEs and SBE-FPs. Currently, § 155.220(g) establishes the framework for suspension and termination of an agent's, broker's, or web-broker's Exchange agreement(s) for cause in four instances.
If an agent's, broker's, or web-broker's Exchange agreement(s) has been terminated for cause, under § 155.220(h)(1), the agent, broker, or web-broker can request reconsideration of such action in the manner and form established by HHS. The agent, broker, or web-broker must submit the reconsideration request to the HHS reconsideration entity within 30 calendar days of the date of the written termination notice from HHS.
The current framework in § 155.220(h) does not define or identify “the HHS reconsideration entity” responsible for making these decisions. As noted earlier in this final rule, we proposed revising §§ 155.220(h)(2) and (3) by deleting the existing references to “the HHS reconsideration entity” and replacing them with “the CMS Administrator.” This policy would ensure that authority to review requests for reconsideration of decisions to
We sought comments on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this proposal without modification. We summarize and respond to public comments we received on this proposal below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82557), we proposed to amend § 155.220 to apply certain existing HHS standards for Exchanges that use the Federal platform that apply to web-brokers
Section 1312(e) of the ACA provides that the HHS Secretary shall establish procedures under which a State may allow agents, brokers, and web-brokers to enroll individuals and small employers in QHPs offered through an Exchange and to assist individuals in applying for APTC/CSRs for QHPs sold through an Exchange. The Secretary also has authority under section 1321(a) of the ACA to promulgate regulations with respect to the establishment and operation of Exchanges, the offering of QHPs through such Exchanges, and such other requirements as the Secretary determines appropriate.
In new paragraph (n), we proposed to apply the web-broker standardized QHP comparative information and the accompanying Enrollment Support disclaimer requirements in § 155.220(c)(3)(i)(A) to web-brokers operating in State Exchanges, and consequently to these State Exchanges. Consistent with § 155.220(c)(3)(i)(A)(1) through (6), web-broker non-Exchange websites used to complete the QHP selection must disclose and display the standardized comparative QHP information provided by the Exchange or directly by QHP issuers, consistent with the requirements of § 155.205(c) for all QHPs, including Qualified Dental Plans (QDPs),
State Exchanges are also currently required to display the quality ratings assigned by HHS and the results of the enrollee satisfaction survey, in the form and manner specified by the Secretary.
This list of standardized QHP comparative information that web-brokers must disclose and display on their non-Exchange websites used to complete QHP selection in FFE and SBE-FP States mirrors the information that Exchanges are required to disclose and display on their respective websites.
“(Name of Company) does not support enrollment in this Qualified Health Plan at this time. To enroll in this Qualified Health Plan, visit the Health Insurance Marketplace®
To prominently display the disclaimer, it must be written in a font size no smaller than the majority of text on the website page and must be noticeable in the context of the website by (for example) using a font color that contrasts with the background of the website page.
For State flexibility, under this proposal, the HHS-provided disclaimer language must be used as a minimum starting point, but State Exchanges may add State-specific language to the Enrollment Support disclaimer, provided the additional language does not conflict with the HHS-provided standardized disclaimer. This would permit a State Exchange to replace references and links to the Health Insurance Marketplace® and
In addition, consistent with § 155.220(c)(3)(i)(G), when used to assist FFE consumers, the web-broker's non-Exchange website must also prominently display a standardized disclaimer
The General non-FFE disclaimer provided by HHS that must be prominently displayed by web-brokers participating in the FFEs and SBE-FPs reads:
“Attention: This website is operated by (Name of Company) and is not the Health Insurance Marketplace® website. In offering this website, (Name of Company) is required to comply with all applicable Federal law, including the standards established under 45 CFR 155.220(c) and (d) and standards established under 45 CFR 155.260 to protect the privacy and security of personally identifiable information. This website may not support enrollment in all Qualified Health Plans (QHPs) being offered in your State through the Health Insurance Marketplace® website. For enrollment support in all available QHP options in your State, go to the Health Insurance Marketplace® website at
Also, you should visit the Health Insurance Marketplace® website at
• You want to select a catastrophic health plan. (This only needs to be included if the web-broker does not offer catastrophic plans.)
• You want to enroll members of your household in separate QHPs. (This only needs to be included if the web-broker does not allow multiple enrollment groups for its Classic DE pathway; note that EDE Entities are required to support multiple enrollment groups.)
• You want to enroll members of your household in dental coverage. The plans offered here do not offer pediatric dental coverage and you want to choose a QHP offered by a different issuer that covers pediatric dental services or a separate dental plan with pediatric coverage. (This only needs to be included if the web-broker does not offer assistance with enrollment in adult coverage or pediatric dental coverage.)
(Name of web-broker's website) offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit
To prominently display this disclaimer, it must be written in a font size no smaller than the majority of text on the website page and must be noticeable in the context of the website by (for example) using a font color that contrasts with the background of the website page.
Consistent with the policy for the extension of the Enrollment Support disclaimer to State Exchanges and their web-brokers, under this proposal, the HHS-provided disclaimer language must be used as a minimum starting point, but State Exchanges may add State-specific language, provided the additional language does not conflict with the HHS-provided standardized disclaimer.
This would permit State Exchanges to replace references and links to the Health Insurance Marketplace® and
In new paragraph (n), we also proposed to extend the requirement in § 155.220(c)(3)(i)(I), which requires the prominent display by web-brokers of the information provided by HHS pertaining to a consumer's eligibility for APTC or CSRs on the web-broker's non-Exchange website, to web-brokers operating in State Exchanges and, consequently, to these State Exchanges. We established this requirement for web-brokers in FFE and SBE-FP States to increase the likelihood that consumers understand their potential eligibility for APTC and CSRs and potential liability for excess APTC repayment and can factor those determinations into their QHP selection and the amount of APTC they elect to take.
In the proposed rule (88 FR 82560 and 82561), we also proposed to add new § 155.220(c)(4)(iii) to extend certain downstream agent and broker requirements at § 155.220(c)(4)(i) that currently apply to web-brokers in FFE and SBE-FP States and govern the use of the web-broker's non-Exchange website by other agents or brokers assisting Exchange consumers to also apply to web-brokers, and their downstream agents and brokers, in States with State Exchanges, and consequently to these State Exchanges. Under the proposed new provision, web-brokers that permit other agents or brokers, through a contract or other arrangement, to use the web-broker's non-Exchange website to help an applicant or enrollee complete a QHP selection or complete the Exchange eligibility application would be required to meet the standards at § 155.220(c)(4)(i)(A), (B), (D), and (F) when assisting consumers in States with a State Exchange. To extend this framework to also apply in State Exchanges, we proposed to capture in new § 155.220(c)(4)(iii) that all references to “HHS” and “Federally-facilitated Exchange” in § 155.220(c)(4)(i)(A), (B), (D), and (F) would be understood to mean and be replaced with a reference to the applicable State Exchange.
The goal of the downstream agent and broker framework codified in § 155.220(c)(4)(i) is to ensure that agents or brokers who utilize a web-broker's non-Exchange website to help applicants complete a QHP selection or complete the Exchange eligibility application comply with necessary safeguards related to transparency, oversight, and consumer support. It ensures appropriate oversight by the web-broker and allows for closer monitoring by the applicable Exchange. In the proposed rule (88 FR 82561), we
As part of the State Exchanges' oversight of the use of web-broker non-Exchange websites, we also encouraged State Exchanges to adopt a temporary suspension framework similar to § 155.220(c)(4)(ii) that applies in FFE and SBE-FP States. This provision permits HHS to temporarily suspend the ability of a web-broker to make its non-Exchange website available to its downstream agents and brokers to transact information with HHS if HHS discovers a security or privacy incident or breach. The suspension extends for the period in which HHS begins to conduct an investigation and until the incident or breach is remedied to HHS' satisfaction. It is another important feature of HHS' oversight of the use of web-broker non-Exchange websites in FFE and SBE-FP States that protects consumers data and safeguards Exchange operations and systems. State Exchanges that choose to permit web-brokers to host non-Exchange websites to assist consumers with QHP selections and submission of Exchange eligibility applications should consider adoption of similar measures.
In the proposed rule (88 FR 82561 and 82562), we proposed to add new paragraph (n)(2) to extend web-broker operational readiness requirements to State Exchanges and their web-brokers. Under this proposal, web-brokers operating in State Exchanges would be required to demonstrate operational readiness to the applicable State Exchange prior to the web-broker's website being used to complete an Exchange eligibility application or a QHP selection. The standards under § 155.220(c)(6) applicable to operational readiness reviews performed by HHS of web-brokers' non-Exchange websites used to assist the FFEs' and SBE-FPs' consumers to apply and enroll in QHP coverage through the Exchange, with or without APTC and CSRs, is a critical part of the oversight framework for HHS' Direct Enrollment (DE) program (including both Classic DE and Enhanced Direct Enrollment (EDE)).
In the 2018 Payment Notice final rule, we adopted rules to capture operational readiness requirements applicable to web-brokers that host non-Exchange websites to complete QHP selection.
As part of the proposal to extend an operational readiness review requirement to State Exchanges and their web-brokers, we proposed in new paragraph (n)(2) to require these State Exchanges to establish the form and manner for their web-brokers to demonstrate operational readiness, which may include submission or completion of the same items addressed in § 155.220(c)(6)(i)-(v) to the State Exchanges, in the form and manner specified by the applicable State Exchanges. These standards, which apply in FFE and SBE-FP States, ensure operational readiness and compliance with all applicable requirements prior to the web-broker's non-Exchange website being used to complete Exchange eligibility application or a QHP selection. They make sure consumers and applicants are not able to enroll in Exchange coverage nor submit an Exchange application via a web-broker's non-Exchange website that is not operationally ready. Websites that have not been tested to see if they are operationally ready may not provide consumers and applicants with proper eligibility determinations or may have security flaws that could make a breach involving consumer PII more likely. Mandating that web-brokers participating in State Exchanges meet standards set by the applicable State Exchange to demonstrate operational readiness helps reduce this risk in all Exchanges. In the proposed rule (88 FR 82562), we encouraged State Exchanges to adopt operational readiness review standards consistent with the requirements captured in § 155.220(c)(6)(i)-(v) and to also consider leveraging the audits that web-brokers use to demonstrate compliance with the operational readiness review requirements applicable in FFE and SBE-FP States. Such an approach would promote standardization across Exchanges in terms of operational readiness requirements applicable for web-brokers while building in flexibility for State Exchanges. We explained that we recognize it is important to provide State Exchanges flexibility to tailor the operational readiness review process to best serve their operational and business needs. For example, State Exchanges may have the need to structure their operational readiness reviews to emphasize or prioritize different web-broker functionalities that meet State-specific needs and rules. Therefore, we proposed the requirement that State Exchanges must establish operational readiness requirements for their web-brokers to demonstrate compliance with applicable requirements and technological readiness prior to the web-broker's website being used to complete an Exchange eligibility application or a QHP selection, while providing these State Exchanges with flexibility to define the contours of those requirements. We proposed to capture at the end of the new paragraph (n) the accompanying proposed requirement that web-brokers in States with State Exchanges comply with the applicable State Exchanges' operational readiness standards under paragraph (n)(2).
Finally, in the proposed rule (88 FR 82562), we proposed in new paragraph (n)(1) to extend the current web-broker FFE standard of conduct established at § 155.220(j)(2)(i) to also apply to web-brokers assisting consumers in State Exchanges, and consequently to these State Exchanges. This FFE standard already extends to web-brokers assisting consumers in SBE-FP States.
We sought comment on these proposals, especially from States operating, or seeking to operate, State Exchanges. We also sought comment on which of the other current provisions at § 155.220 should or should not apply to State Exchanges and web-brokers that assist consumers in State Exchanges.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these proposals without modification. Below, we summarize and respond to public comments received on the proposals to require web-brokers operating in State Exchanges meet certain HHS standards applicable in the FFEs and SBE-FPs.
A few commenters stated that if State Exchanges leveraged, where appropriate, HHS operational readiness reviews conducted for FFE and SBE-FP web-brokers, this may both help to alleviate the compliance burden on web-brokers participating in State Exchanges and on those State Exchanges, which would help increase the likelihood of web-broker participation in State Exchanges. One commenter further expanded on this, stating that the proposals to encourage streamlined operational readiness and compliance activities across State Exchanges via States leveraging HHS operational readiness reviews and artifacts (that is, findings) for web-brokers will make it easier for a web-broker to participate in multiple State Exchanges.
A few commenters expressed appreciation that the proposals afford State Exchanges sufficient flexibility, such as the ability to implement State-specific operational readiness assessments or to incorporate State-specific information into the standardized disclaimers.
Finally, to the extent that a State Exchange permits web-brokers to assist its consumers, the State Exchange will remain the entity with primary responsibility for oversight and enforcement of applicable standards.
Additionally, under § 155.105, an existing State Exchange must notify HHS in writing before making a significant change to its approved Exchange Blueprint, and no significant change to an Exchange Blueprint may be effective until it is approved by HHS in writing or 60 days after HHS receipt of a completed request. Accordingly, for existing State Exchanges that seek to newly implement and operate an optional web-broker program, we would require the State to submit an updated Exchange Blueprint and participate in operational readiness reviews related to the implementation and ongoing operation of such a web-broker program because we would consider a State Exchange implementing a web-broker program to be a significant change. Once implemented, for a State Exchange operating a web-broker program, HHS would monitor the operations of a State Exchange through the annual reporting by State Exchanges related to compliance with Federal requirements, consistent with our oversight authority at § 155.1200(b)(2). Specifically, HHS would use this oversight authority to evaluate State Exchange compliance with the policies we are finalizing at § 155.220 for those State Exchanges that elect to operate a web-broker program, as HHS does with other aspects of State Exchange operations on an annual basis. If there is information suggesting a State Exchange or one of its web-brokers does not meet the requirements of the policies we are finalizing at § 155.220, we would notify the State Exchange and give them an opportunity to address the potential non-compliance. We will consider the development of new, additional tools to assist with oversight that could enhance transparency into compliance by State Exchanges, including their web-broker programs, with applicable Federal requirements. We may also consider use of other oversight tools and authority, including those under Part 155 of our regulations, as appropriate.
We do not believe that the requirement for web-brokers to display such disclaimers should hinder web-broker participation, particularly since all web-brokers participating in a particular State Exchange will need to display the same disclaimers and will need to display similar disclaimers across all Exchanges. As another example, while we are requiring that web-brokers in State Exchanges demonstrate operational readiness to the applicable State Exchange, we are also providing State Exchanges flexibility in how they establish their operational readiness requirements and assessment process, while at the same time encouraging State Exchanges to leverage HHS operational readiness activities for web-brokers participating in FFE and SBE-FPs where appropriate.
We believe that the application of these HHS minimum standards across all Exchanges will encourage web-broker participation, as State Exchanges implementing operational readiness requirements for web-brokers that align with the HHS framework would facilitate web-broker participation across multiple State Exchanges leveraging the same standards. While the HHS minimum standards we are finalizing as applicable to State Exchanges and their web-brokers provides a common set of baseline requirements, the framework adopted in this rule also provides State Exchanges flexibility to implement additional web-broker requirements based on the specific needs of their markets.
Additionally, we disagree that the HHS minimum standards we are extending to State Exchanges and their web-brokers will hinder creativity with respect to how web-brokers participating in State Exchanges display information on their non-Exchange websites. While these proposals represent a minimum set of standards for how information is presented on web-broker non-Exchange websites across all Exchanges, the standards are not prescriptive concerning how web-brokers can further customize their websites to better appeal to and serve consumers. For example, some web-brokers assisting consumers in the FFEs and SBE-FPs have implemented additional website functionalities that do not conflict with the minimum set of HHS standards concerning how information must be presented on web-broker websites, such as novel plan recommendation algorithms, affordability estimates, and plan filters.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82562), we proposed to revise § 155.221(b) to require that
The display requirements for DE entity non-Exchange websites are captured in §§ 155.220, 155.221, 156.265, and 156.1230. The website display requirements are often technical in nature and can require subsequent release of guidance to provide technical and operational details to support their implementation. When HHS makes changes to the
As stated in the proposed rule (88 FR 82563), this proposal codifies and expands this existing, HHS-initiated change request practice for EDE entities non-Exchange websites and supports consistency as to the timing of display changes across enrollment platforms, which will help ensure all Exchange consumers have timely access to accurate, clear information as they navigate the QHP selection and enrollment processes. Most DE partners in FFE and SBE-FP States participate in EDE and therefore are already familiar with and complying with this proposal because it is part of the existing requirements, as outlined in the Third-Party Auditor Guidelines. However, this will be new for some DE partners, such as those that only participate in Classic DE, because they are not currently subject to these requirements, which currently only apply to DE entities that participate in EDE in FFE and SBE-FP States. It is especially important that changes to the
We recognize that the technical details necessary to implement website display changes must be communicated to DE entities with sufficient notice for development prior to implementation. As such, we proposed that HHS would provide DE entities with advance notice to give them time to implement the changes on their non-Exchange websites. We explained that we intend for the duration of the advance notice period to correspond to the complexity of the change and the urgency with which the change must be reflected on the DE entity's non-Exchange website (that is, we intend to provide a longer advance notice period for implementation of changes requiring more complex website-development work, or for lower-urgency changes). We explained that we would categorize display changes as simpler versus more complex based on a combination of factors, including, but not limited to, consideration of the following: number of website pages affected; number of data fields affected; nature of the change (that is, text-based versus data-based); whether the change is static or dynamic based on user input; whether the change updates QHP data provided by us
We proposed to amend § 155.221 to add new paragraph (b)(6), which would require DE entities in FFE States to implement and prominently display website changes in a manner that is consistent with display changes made by HHS to
We are cognizant of, and support, DE entity non-Exchange websites' use of innovative decision-support tools and user interface design to help consumers shop for and select QHPs that best meet their needs. This proposal is not intended to prohibit or otherwise stand in the way of DE entities' development of such tools and consumer interfaces. Consistent with the existing approach for implementation of HHS-initiated changes described in the Third-Party Auditor Guidelines, we explained that we would implement this requirement with a focus on requiring DE entities in FFE and SBE-FP States to mirror any display changes made to
For example, in a scenario where
Additionally, we explained that we recognize that some DE entities may have system constraints that prevent them from precisely mirroring the
Under the proposed approach, the deviation request would have to be submitted and approved by HHS before DE entities would be permitted to implement any alternative website displays. Deviation requests would not toll the advance notice period. This deviation request process is separate and distinct from the flexibilities in user interface graphic design that we would allow without preapproval as long as the design and display otherwise meets the applicable standards defined and communicated by HHS for the display change. DE entities would only need to request a deviation from the requirements of the standards communicated by HHS if the DE entity seeks to deviate from those standards or specifications when it implements a display change to its Non-Exchange website that is required by HHS pursuant to this proposal.
We also proposed in new § 155.221(j)(3) to extend this new proposed DE entity non-Exchange website display requirement to require State Exchanges that choose to implement a DE program to require their DE entities to implement and prominently display website changes in a manner that is consistent with display changes made by State Exchanges to the State Exchanges' website on their non-Exchange websites. We believe it is necessary for consumers utilizing DE entities in States with State Exchanges to have access to the same vital information pertaining to their plan selection and enrollment process as they would have if they were enrolling via the State Exchanges' websites. Under this proposal, we would require State Exchanges to establish and communicate standards for required display changes and to set the time period within which display changes must be implemented on DE entities' non-Exchange websites. State Exchanges would also be required to review deviation requests submitted by DE entities and establish their own deviation request process should the State Exchange elect to permit deviation requests. DE entities are required to follow the process established by the State Exchange. We would provide flexibility for State Exchanges to develop their own process for
As part of this proposal to extend the requirement for DE entities to reflect Exchange website changes on their non-Exchange websites to State Exchanges and their DE entities, we would rely on State Exchanges that choose to implement a DE program to enforce compliance with these requirements and take enforcement action when their DE entities fail to comply and update their non-Exchange websites to mirror changes made to the State Exchange website. We would be available to provide technical assistance to support the State Exchanges' efforts to take appropriate enforcement action as needed to ensure compliance with applicable requirements. There may exist scenarios where the website display requirements may differ between the FFEs or SBE-FPs versus the State Exchanges (for example, in scenarios where a State Exchange uses the
With an increasing number of consumers utilizing the DE pathways to enroll in coverage through the Exchanges, we believe it is important to codify a requirement to mandate changes made to
We sought comment on all aspects of these proposals.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these proposals without modification but with technical changes to the regulatory text. These changes clarify that DE entities in States with State Exchanges must implement and prominently display website changes in a manner consistent with display changes made to the State Exchange website, unless the State Exchange approves a deviation from those standards under the deviation request process that the State Exchange is required to establish, should the State Exchange elect to permit deviation requests. We acknowledge that the language in the proposed rule, including its regulatory text, may have been confusing and subject to different interpretations, and accordingly, we clarify our intent and the regulatory text in this final rule. The approach, as clarified by these technical changes, is consistent with the proposal as discussed in the preamble to the proposed rule (88 FR 82565), which stated that the State Exchange would be required to establish a deviation request process and review deviation requests submitted by DE entities, should the State Exchange want to permit deviations. The commenters appear to have interpreted the proposed rule consistent with these technical changes, with one commenter specifically suggesting HHS encourage State Exchanges to consider deviation requests. For clarity, we also are making technical changes to the regulatory text at § 155.221(j)(3), which stated in the proposed rule (88 FR 82651) that State Exchanges must require their direct enrollment entities to implement and prominently display “changes adopted for display on the State Exchanges' websites.” The revised regulatory text now states that State Exchanges must require their DE entities to implement and prominently display “website changes in a manner that is consistent with the display changes made by State Exchanges to the State Exchanges' websites.” This technical change aligns the regulatory text of § 155.221(j)(3) with paragraph (b)(6) but does not represent a change in the policy discussed in the proposed rule (88 FR 82565).
We summarize and respond below to public comments received on the proposed requirement that
We agree this policy may limit consumer confusion or consumer action based on outdated eligibility or plan information insofar as this policy requires DE entities to reflect and prominently display changes that increase consumer understanding of eligibility for financial assistance or plan information on their non-Exchange websites (for example, making plan information—or a link to it—more conspicuous on a web page). We note that this policy does not impact existing requirements for web-broker websites used to complete QHP selection in FFE and SBE-FP States
We appreciate the emphasis on the need for HHS to provide technical and operational assistance and are committed to providing such assistance to ensure DE entities in the FFEs and SBE-FPs have the tools and information required to implement the required display changes accurately and efficiently. We encourage State Exchanges that choose to implement DE programs to provide similar support to their DE entities.
We acknowledge the comments requesting that web-brokers be required to exactly replicate the
We do not agree with the commenter that suggested these requirements diminish the value of DE or contradict the ability for DE entities to tailor their experience to best suit consumers. As discussed previously in this section of this final rule, these requirements support flexibility in the implementation of required changes by DE entities. They are not intended to impair DE entities' ability to tailor their user interface design. For example, DE entities are allowed to make changes to the font color, size, or graphic context of the information to ensure that it is noticeable in the context of its website. Rather, they establish a pathway for DE entities to innovate while ensuring that DE entity non-Exchange websites provide the same level of differentiation and clarification for consumers as is provided on
Although we appreciate the suggestion that deviation requests should be limited to demonstration of special need, we note that the commenter did not define what they meant by “special need” in this context. If the commenter means to suggest that deviation requests should only be granted when system constraints prevent DE entities from precisely mirroring the
We acknowledge the comment requesting we clarify that we may request additional documentation to periodically reassess whether the deviation remains justified. As described above and in the proposed rule (88 FR 82564), for DE entities assisting consumers in the FFEs and SBE-FPs, we will monitor DE entity implementation through existing periodic website review monitoring per § 155.220(c)(5) and as described in the Third-Party Auditor Guidelines. Our periodic reviews will include review of DE entities' implementation of approved deviations and may also include a review of the documentation submitted in connection with the deviation request. We may request updated documentation from DE entities if our review suggests that the deviation no longer remains justified. For example, if the initial approval was granted based on a factor which appears no longer relevant (for example, if approval was granted for the DE entity to implement an alternative display while the entity was in the process of switching to a new DE Technology Provider
If there is information that suggests a State Exchange or one of its DE entities does not meet the requirements of § 155.221(j) and in particular, (j)(3), we would notify the State Exchange and give them an opportunity to address the concerns. We intend to consider the development of new, additional tools to assist with oversight that could enhance transparency into compliance by State Exchanges, including their DE programs, with applicable HHS requirements including those relating to DE under § 155.221(j)(3). We may also consider use of other oversight tools and authority, including those under part 155 of our regulations, as appropriate.
As described in the responses to comments received on the proposals to require that DE entities and web-brokers operating in State Exchanges meet certain standards applicable in the FFEs and SBE-FPs (sections III.D.7 and III.D.9 of this final rule), pursuant to § 155.105, States that seek to operate a State
Accordingly, for existing State Exchanges that seek to newly implement and operate a DE program, HHS would require the State to submit an updated Exchange Blueprint and participate in operational readiness reviews related to the implementation and ongoing operation of such a DE program, as we would consider a State Exchange implementing a DE program a significant change. We would also use this information in the Blueprint Application from a State Exchange on how they intend to implement the DE entity non-Exchange website display update requirements to assess a State Exchange's compliance with § 155.221(j)(3), and we would generally look to the State Exchange to oversee implementation by DE entities of non-Exchange website display changes pursuant to § 155.221(j)(3) on an ongoing basis.
We acknowledge the commenter's suggestion that we encourage State Exchanges to solicit feedback from industry partners, provide ample advance notice, provide flexibility in website user interfaces, and permit deviations subject to the approval of the State Exchange. Although we also acknowledge the commenter's suggestion that we should grant the maximum amount of flexibility to State Exchanges in how they implement these requirements, we note the commenter did not provide further details or clarification on what additional flexibilities, if any, should be granted to State Exchanges. As a result, we are unsure what the commenter is referring to. However, we agree with several of the commenter's points. As we explained in the proposed rule (88 FR 82565), we encourage State Exchanges to develop their own processes that best meet their business needs. Consistent with the commenter's suggestion, we encourage State Exchanges to solicit feedback from industry partners, including web-brokers and DE entities, and provide an advance notice period whose length corresponds to the complexity of the required display change and the urgency with which the change must be reflected on the DE entity's non-Exchange website. Also consistent with the commenter's suggestion, our policy requires State Exchanges to establish a deviation request process while providing the State Exchange discretion to approve or reject deviation requests, should the State Exchange elect to permit deviation requests. If the State Exchange permits deviation requests, we encourage State Exchanges to consider granting deviation requests if the DE entity is unable to implement the standards defined by the State Exchange or has an idea for implementation that does not meet those standards but would effectively communicate the same information to consumers. We also agree that State Exchanges should permit DE entities flexibility in how they reflect and incorporate required display changes within the context of their user interface graphic design, provided their display meets the standards communicated by the Exchanges. We also encourage State Exchanges to adopt the same requirements and framework HHS will follow for DE entity non-Exchange website display updates for the FFEs and SBE-FPs, whenever possible.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82566), we proposed to amend § 155.221 to extend certain existing HHS standards applicable to DE entities assisting the FFEs' and SBE-FPs'
Notably, we stated in the proposed rule (88 FR 82566) that our regulations do not currently address whether and how DE entities may assist consumers and applicants with DE in QHPs and submission of applications for APTC/CSRs in a manner that constitutes enrollment through a State Exchange. We believe that current and future State
We recognize that, to date, no State Exchanges have implemented DE programs; however, as we stated in the proposed rule (88 FR 82566 and 82567), we anticipate that there may be growing interest in doing so. As such, we recognize a potential burden on State Exchanges that would newly be subject to the standards being proposed, if they choose to implement DE programs. This would include drafting new policies, updating standards, and potentially hiring additional staff to perform functions not currently being performed by the State Exchanges, including providing technical assistance during development and implementation of DE programs in the State Exchanges, creating the framework for and conducting operational readiness reviews, including developing and maintaining documentation needed to complete the operational readiness reviews, as well as conducting ongoing oversight and taking appropriate enforcement action in response to DE entity non-compliance with applicable requirements. This potential burden would also include requiring and overseeing web-development and the hosting of non-Exchange websites by DE entities participating in these State Exchanges to ensure compliance with the proposed minimum standards outlined in this rulemaking.
Similar to the agent, broker and web-broker requirements under § 155.220, currently, § 155.221 only applies to DE entities assisting consumers and applicants in the FFEs and SBE-FPs. Section 155.221(a) provides that the FFEs will permit the following entities to assist consumers with DE in QHPs offered through the Exchange in a manner that is considered to be through the Exchange, to the extent permitted by applicable State law: (1) QHP issuers that meet the applicable requirements in §§ 155.221 and 156.1230, and (2) web-brokers that meet the applicable requirements in §§ 155.220 and 155.221. These same entities are permitted to assist consumers with DE in QHPs offered through the Exchange in a manner that is considered to be through the Exchange, to the extent permitted by applicable State law, in SBE-FP States.
As detailed further below, we proposed to add paragraph (j) to § 155.221 to extend certain HHS minimum DE entity standards in § 155.221 to DE entities operating in State Exchanges and, consequently, to these State Exchanges that choose to implement DE programs in their States. Through this proposed approach, we seek to ensure that DE entities assisting these State Exchanges' consumers with DE in QHPs and applying for APTC/CSRs in a manner that constitutes enrollment through the Exchange meet HHS minimum standards governing DE entity marketing and display of QHPs, providing consumers with correct information and refraining from certain conduct, marketing of non-QHPs, website disclaimer language, and operational readiness. We explained that, under this proposed approach, we would encourage State Exchanges to require DE entities to engage a third-party auditor to perform the operational readiness review audits of their DE entities, consistent with the operational readiness framework adopted by HHS for the FFEs and SBE-FPs. As stated earlier, we recognize that there may be a growing interest from State Exchanges to operate DE programs, and we seek to establish a set of HHS minimum standards to ensure appropriate safeguards are in place, regardless of the Exchange model. Further, the proposed approach to establish a minimum set of HHS standards that would apply to DE entities across all Exchanges would support efficiency in DE entity operations across all Exchanges, including State Exchanges, while also providing flexibility for State Exchanges to tailor their DE program and establish their own standards with respect to operational readiness demonstrations by their DE entities, including whether to require third-party audits of DE entities and to impose additional requirements beyond the proposed HHS minimum standards as they determine may be appropriate based on their operational or business needs. As described above, if they choose to implement DE programs, the State Exchanges would be required to draft policies, update standards, and potentially hire additional staff to perform functions and activities not currently being performed by the State Exchanges in order to comply with these policies.
We proposed to update § 155.221(a), which identifies the entities permitted to be DE entities in FFE and SBE-FP States, to apply across all Exchanges, including State Exchanges. Under this proposal, State Exchanges that choose to implement a DE program may permit QHP issuers and web-brokers that meet applicable requirements to assist consumers with submitting applications for APTC/CSRs and DE in QHPs offered through the Exchange in a manner that is considered to be through the Exchange. Under the framework proposed in the proposed rule, the applicable requirements that would extend to web-broker DE entities in States with State Exchanges would include certain paragraphs of §§ 155.220(c) and (j) and 155.221(a), (b), (c), (d), and (j). We describe above the extension of certain HHS web-broker
Consistent with the cross-reference in § 155.221(a)(1), we proposed to extend the HHS requirements of § 156.1230(b) governing QHP issuer DE entities to also apply to QHP issuer DE entities assisting consumers with submitting applications for APTC/CSRs and DE in QHPs offered through the Exchange in States with State Exchanges. As reflected in new section § 155.221(a)(1)(i), for purposes of extending the HHS requirements of § 156.1230(b) to these States Exchanges and their QHP issuer DE entities, references in § 156.1230(b) to “Federally-facilitated Exchange,” “HHS,” and “
In addition, we proposed that all Exchanges, including State Exchanges that choose to implement DE programs, must require their DE entities, both web-broker and QHP issuer DE entities, to meet the HHS standards under § 155.221(b)(1) governing plan display and marketing for QHPs and any other products offered on the Exchange. These HHS standards governing plan display and marketing for QHPs and any other products offered on the Exchange currently apply today to approved web-broker and QHP issuer DE entities in FFE and SBE-FP States.
In new paragraph (j), we also proposed to extend the HHS marketing standard at § 155.221(b)(3) to DE entities participating in State Exchanges and, consequently, to State Exchanges that choose to implement a DE program, such that these DE entities would also be required to limit marketing of non-QHPs during the Exchange eligibility application and QHP selection process in a manner that minimizes the likelihood that consumers will be confused as to which products and plans are available through the Exchange and which products and plans are not, except as permitted under § 155.221(c)(1). Refer to the discussion above regarding the exception in § 155.221(c)(1) pertaining to DE entities assisting individuals who have communicated receipt of an offer of an individual coverage health reimbursement arrangement as described in § 146.123(c), as a standalone benefit or in addition to an offer of an arrangement under which the individual may pay the portion of the premium for individual health insurance coverage that is not covered by an individual coverage health reimbursement arrangement using a salary arrangement pursuant to a cafeteria plan under section 125 of the Internal Revenue Code.
As we explained in the proposed rule (88 FR 82568 and 82569), we believe requiring DE entities participating in all Exchanges to meet the plan display and marketing requirements in § 155.221(b)(1) and (3) adopted by HHS for FFE and SBE-FP States would provide necessary safeguards for consumers who may participate in DE programs across all Exchange models, including in State Exchanges. Requiring DE entities across all Exchanges to meet these HHS plan display and marketing requirements would protect consumers by minimizing their confusion regarding which products and plans are available through the Exchange, which products and plans are not, and which products and plans are eligible for APTC and CSRs. Further, the adoption of uniform requirements across Exchanges in this regard can also alleviate burden on DE entities from having to build different programs and comply with a unique set of requirements for each State Exchange that chooses to implement a DE program, as well as burden on a State Exchange from having to develop an entirely new set of requirements for DE entities that participate in their State Exchange. We recognize that elsewhere in this rulemaking, we have built in flexibility for State Exchanges to tailor certain aspects of their DE programs and associated oversight processes to best suit their State-specific needs and requirements (for instance, the operational readiness review requirements for web-brokers and DE entities participating in State Exchanges). In this case, however, we believe that the benefits to consumers of uniformly applying the plan display and marketing requirements in § 155.221(b)(1) and (3) to ensure they apply to all Exchanges as minimum standards outweigh the potential drawbacks of reducing discretion and flexibility to State Exchanges with respect to modifying these baseline requirements. We solicited comments on whether State Exchanges should instead be provided with broader discretion and flexibility to establish their own plan display and marketing requirements tailored to their consumers or local needs.
In new paragraph (j), we also proposed to extend the existing standardized disclaimer requirement in § 155.221(b)(2) to apply to DE entities participating in State Exchanges and, consequently, to these State Exchanges that choose to implement a DE program. Pursuant to § 155.221(b)(2) and (i), DE entities in FFE and SBE-FP States are required to prominently display a standardized disclaimer in the form and manner provided by HHS.
This proposal would require that the disclaimer be prominently displayed on the non-Exchange website of a DE entity assisting consumers in State Exchanges when a consumer navigates away from any website page that markets or displays QHPs offered through the Exchange (that is, on-Exchange QHPs) to any website page that markets or displays QHPs offered outside the Exchange (that is, off-Exchange QHPs) or non-QHPs. Each DE entity would be required to display this disclaimer on its own interstitial website page or on a pop-up window.
We proposed in paragraph (j)(1) to provide State Exchanges with flexibility regarding the standardized disclaimer language that would be required to be displayed by their DE entities, provided that the additional language does not conflict with the HHS-provided standardized disclaimer. This proposed flexibility is similar to the flexibility we are finalizing in section III.D.7 of this final rule for State Exchanges to modify the web-broker Enrollment Support and General non-FFE standardized disclaimers under § 155.220(c)(3)(i)(A) and (G), such that the HHS-provided language for the standardized disclaimer under § 155.221(b)(2) must be used as a minimum starting point but State Exchanges may add State-specific information to the disclaimers, provided the additional language does not conflict with the HHS-provided standardized disclaimer.
We believe establishing the HHS language as a minimum standard for the standardized disclaimer under § 155.221(b)(2) that DE entities must display across all Exchanges would provide a necessary baseline. We also believe that meeting these standards would ensure consumers and applicants are receiving sufficient information to help them distinguish between DE entity website pages displaying QHPs versus pages displaying non-QHPs and provide general uniformity among the different Exchange models when enrollment or enrollment information is provided outside of the Exchange through a DE entity's non-Exchange website.
Similar to the proposed requirement to extend operational readiness requirements to web-brokers in States with State Exchanges, we also proposed to extend operational readiness requirements to DE entities in State Exchanges and, consequently, to these State Exchanges. DE entities that participate in FFE and SBE-FP States are required, pursuant to § 155.221(b)(4) and (i), to demonstrate to HHS operational readiness and compliance with applicable requirements prior to the DE entity's non-Exchange website being used to complete an Exchange eligibility application or a QHP selection. In new paragraph (j)(2), we proposed to extend DE entity operational readiness requirements to State Exchanges. Under this policy, DE entities participating in State Exchanges would be required to demonstrate operational readiness and compliance with applicable requirements to the State Exchange prior to the DE entity's website being used to complete an Exchange eligibility application or a QHP selection. We also proposed in new paragraph (j)(2) to require these State Exchanges to establish the form and manner for their DE entities to demonstrate operational readiness and compliance with applicable requirements, which may include submission or completion of the same items business audit documentation or security and privacy audit documentation in § 155.221(b)(4)(i) and (ii) to the State Exchange, in the form and manner specified by the applicable State Exchange. Pursuant to § 155.221(b)(4)(i) and (ii), HHS may request a DE entity submit a number of documents to demonstrate compliance with applicable requirements, as well as the operational readiness of its non-Exchange website. The required documentation may include privacy questionnaires, privacy policy statements, and terms of services, business audit reports, interconnection security agreements, security and privacy controls assessment and plans, security, and privacy assessment reports, plans of action and milestones, privacy impact assessments, system security and privacy plans, incident response plans, and vulnerability scan results. We proposed to codify these documentation standards in new paragraphs (j)(2)(i) and (ii) as illustrative examples of the type of requirements that we encourage State Exchanges that choose to implement a DE program to adopt as part of their operational readiness and compliance reviews of DE entities non-Exchange websites.
This proposal would require DE entities participating in State Exchanges to meet operational readiness requirements established by the State Exchanges, and State Exchanges would have flexibility when establishing operational readiness requirements for their respective DE programs, potentially leveraging the items in § 155.220(b)(4)(i) and (ii) as the starting point for their operational readiness requirements and associated reviews. Similar to the web-broker operational readiness reviews under § 155.220(c)(6), the standards under § 155.221(b)(4) governing the HHS operational readiness reviews of DE entity non-Exchange websites are also a critical part of the oversight framework for HHS' DE program (both Classic DE and EDE) available in the FFEs and SBE-FPs. These standards as they apply to DE entities participating in FFE and SBE-FP States help ensure operational readiness and compliance with applicable requirements prior to the DE entity's non-Exchange website being used to complete Exchange eligibility application or a QHP selection and help ensure consumers would not be able to enroll via a DE entity's website that is not operationally ready. Websites that have not been tested to see if they are operationally ready may not provide consumers with proper eligibility determinations or may have security flaws that could make a breach involving consumer PII more likely. Mandating DE entities that participate in State Exchanges meet minimum standards set by the State Exchanges for operational readiness would help reduce this risk in all Exchanges.
We recognize that some State Exchanges that choose to implement a DE program may seek to utilize DE entities already participating in DE in the FFEs or SBE-FPs. As part of establishing its operational readiness requirements for participating DE entities, we specifically encourage those State Exchanges to adopt the same operational readiness requirements for DE entities established by HHS, including the third-party auditor framework adopted by HHS pursuant to § 155.221(f) and (g). We also encourage those State Exchanges to leverage HHS' review of those third-party audits and determinations made as to the DE entities' functionality and operational readiness to operate with the Federal platform (
Adopting HHS's operational readiness requirements for DE entities under § 155.221(b)(4), (f), and (g) and leveraging HHS's review of third-party audits and determinations made as to DE entities' functionality and operational readiness would support State Exchanges in having confidence in the ability of those DE entities to also participate in State Exchanges when HHS determined that those DE entities have already demonstrated operational readiness and compliance with applicable requirements to operate with the Federal platform (
We explained that we would also encourage State Exchanges that choose to implement a DE program to consider requiring their DE entities to engage a third-party auditor, consistent with standards adopted by HHS at § 155.221(f) and (g) that apply in FFE and SBE-FP States, to perform the operational readiness reviews, for example, to provide an unbiased confirmation that the DE entities are able to appropriately conduct eligibility determinations. However, we did not propose to mandate that State Exchanges require their DE entities to perform such third-party audits as we recognize that State Exchanges may want to establish their own State-specific requirements and mechanisms to confirm DE entity operational readiness and compliance with applicable requirements (both HHS and State-specific standards), and we want to ensure State Exchanges have the flexibility to establish operational readiness review requirements that are tailored to meet State-specific rules and requirements. For example, as noted above in this section of this final rule, if the State Exchange uses an alternative to the single streamlined application described in § 155.405, we would not recommend leveraging HHS' eligibility application audit under § 155.221(b)(4)(iii), as the HHS audit results may not be applicable to the State Exchange's alternative eligibility applications and associated State-developed eligibility systems. However, if the State Exchange uses the single streamlined application described in § 155.405 we would encourage the State Exchange to use the same third-party auditor framework and requirements that HHS adopted for FFE and SBE-FP States, as well as accept HHS' review of the third-party audits and determinations made as to the DE entity's operational readiness and compliance with the HHS minimum standards without conducting further review for DE entities that have already been approved to participate in the FFEs or SBE-FPs, unless there are other unique State-specific requirements that warrant further, targeted review.
As State Exchanges establish DE programs, we recognized that it may be in their interest to permit a DE entity to provide consumers with access to DE entity application assisters, as defined at § 155.20, to provide assistance with applying for a determination or redetermination of eligibility for individual market coverage through the Exchange and insurance affordability programs. As such, in new paragraph (j), we proposed to extend § 155.221(d) to State Exchanges and their DE entities to allow DE entity application assisters, when permitted by the applicable State Exchange and only to the extent permitted by applicable State law, to assist individuals in the individual market with applying for a determination or redetermination of eligibility for coverage through the Exchange and for insurance affordability programs, provided that such DE entities ensure that each of its DE entity application assisters meets the requirements in § 155.415(b). Section 155.415(b) establishes minimum standards for QHP issuer and DE entity application assisters regarding required training on QHP options and insurance affordability programs, eligibility, benefits rules and regulations, and compliance with the Exchange's privacy and security standards and applicable State laws related to the sale, solicitation and negotiation of insurance products, including any applicable State licensure laws and State laws related to confidentiality and conflict of interest.
Although § 155.415(b) is generally applicable to all Exchanges, paragraph (b)(1) establishes required training on QHP options and insurance affordability programs, eligibility, and benefits rules and regulations with respect to providing assistance in the FFEs or SBE-FPs. As proposed to be applied in State Exchanges, DE entities and their application assisters would be required under new paragraph (j) to complete appropriate State-required training and registration in a manner specified by the State Exchange consistent with § 155.415(b)(1). This State-required training and registration should similarly include training on QHP options and insurance affordability programs, eligibility, and benefits rules and regulations, as training on these topics would be necessary to ensure consumers are provided with vital information about these topics if DE entities and their application assisters were permitted to assist consumers with QHP shopping and DE in coverage offered through State Exchanges.
In addition, under this proposal, to meet the requirements of § 155.415(b)(2) and (3), DE entities that participate in a State Exchange and want to use DE entity application assisters would be required to coordinate with the State Exchange and appropriate State agencies to ensure they are meet the Exchange privacy and security standards at § 155.260 consistent with § 155.415(b)(2), as well as comply with State laws related to the sale, solicitation, and negotiations of health insurance products consistent with § 155.415(b)(3).
In the proposed rule (88 FR 82571), we also encouraged State Exchanges, as part of their establishment of DE programs, to adopt an immediate suspension framework, similar to § 155.221(e) that applies in FFE and SBE-FP States, that provides for the immediate suspension of a DE entity's ability to transact information with the State Exchange if the State Exchange discovers circumstances that pose unacceptable risk to the accuracy of the State Exchange's eligibility determinations, operations, or information-technology systems until the incident or breach is remedied or sufficiently mitigated to the State Exchange's satisfaction. This provision is an important feature of HHS' oversight of the use of DE entity non-Exchange websites in FFE and SBE-FP States that protects consumer data and safeguards Exchange operations and systems. State Exchanges that choose to establish a DE program and permit DE entities to use non-Exchange websites to assist consumers with QHP selection and submission of Exchange eligibility applications should consider adoption of similar measures.
Finally, under new proposed § 155.221(j)(3), we proposed to extend the new requirement that would be applicable in FFE and SBE-FP States under proposed § 155.221(b)(6) (the proposal discussed in section III.D.8 of this final rule to mandate that DE entities implement and prominently display website changes in a manner that is consistent with display changes
We sought comment on these proposals, especially from States operating, or seeking to operate, State Exchanges. We were particularly interested in comments regarding which of the other current HHS standards at § 155.221 should or should not apply to State Exchanges that choose to implement a DE program.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these provisions as proposed. Below, we summarize and respond to public comments received on our proposal to amend § 155.221 to extend certain existing HHS standards applicable to DE entities assisting the FFEs' and SBE-FPs' consumers and applicants with direct enrollment in QHPs and applying for APTC/CSRs to DE entities operating in State Exchanges, in both the Individual Market Exchanges and SHOPs.
A few commenters stated that if State Exchanges leveraged HHS's review of third-party audits and determinations made as to DE entities' operational readiness and compliance with applicable requirements, particularly with respect to security and privacy, that would help reduce duplication of efforts and alleviate the compliance burden of operational readiness activities on DE entities participating in State Exchanges and those State Exchanges, helping to increase the likelihood of DE entity participation in State Exchanges. Some of these commenters further expanded on this, stating that if State Exchanges leveraged HHS's review of third-party audits and determinations made as to DE entities' operational readiness and compliance with applicable requirements, that would help DE entities avoid having to comply with a unique set of operational readiness requirements for each State Exchange that chooses to implement a DE program. This could provide consistency, and it may facilitate DE entities' increased participation across Exchanges by potentially allowing them to leverage some of their operational readiness activities for FFE States in State Exchange States.
We also agree that with the commenters that if State Exchanges that choose to implement a DE program leveraged HHS's review of third-party audits and determinations made as to DE entities' operational readiness and compliance with applicable requirements, that would help alleviate the burden of operational readiness activities on DE entities in participating in State Exchanges and those State Exchanges. We further agree that the reduced burden may encourage DE entity participation in the State Exchanges. As we explained in the proposed rule (88 FR 82562), we generally encourage any State Exchange that elects to implement a DE program to leverage our operational readiness reviews conducted for DE entities in the FFEs and SBE-FPs, as appropriate.
We note that in establishing the standards for their DE programs, State Exchanges that elect to implement a DE program must develop criteria and a process for assessing the operational readiness and compliance of their DE entities with applicable rules, and these State Exchanges may develop operational readiness requirements that address or reflect State-specific needs and requirements. Notably, our policy provides State Exchanges with the flexibility to tailor their criteria and process to reflect such State-specific needs and requirements. For example, a State may develop standards and processes for testing the State-specific interfaces and associated functionality between their DE entity non-Exchange websites and the State Exchange's centralized eligibility and enrollment platform that go beyond what is required by the HHS standards under § 155.221(b)(4), to ensure that eligibility applications completed on DE entity non-Exchange websites result in accurate eligibility determinations based on State-specific rules for eligibility. Similarly, a State may decide to develop processes to confirm a DE entity is able to effectively carry out eligibility functions with the State Medicaid agency that go beyond what is required by the HHS standards under § 155.221(b)(4), to ensure that an eligibility application completed on a DE entity non-Exchange website results in accurate eligibility determinations based on State-specific rules for Medicaid eligibility.
In addition, pursuant to § 155.105, States that seek to operate a State Exchange must complete and submit an Exchange Blueprint application. The Exchange Blueprint application documents that an Exchange will meet the legal and operational readiness requirements required of a State Exchange. As part of a State's Blueprint submission, the State also agrees to demonstrate operational readiness to implement and execute the HHS requirements applicable to State Exchanges, which would include the new requirements under § 155.221(j) applicable to State Exchanges that choose to implement a DE program. As discussed in other sections of this rule, HHS is also codifying requirements related to the approval of a State Exchange whereby HHS will require a State seeking to establish a State Exchange to provide supplemental information in its Blueprint application to demonstrate its ability to implement and comply with the requirements for a State Exchange, which would include the provision of information from State Exchanges that choose to implement a DE program on how they intend to implement the new requirements in § 155.221(j) and oversee compliance going forward. Such supporting information would inform HHS's decision to approve or conditionally approve a State Exchange and would help facilitate HHS' oversight of compliance with HHS requirements applicable to State Exchanges that choose to implement a DE program. Additionally, under § 155.105, an existing State Exchange must notify HHS in writing before making a significant change to its approved Exchange Blueprint, and no significant change to an Exchange Blueprint may be effective until it is approved by HHS in writing or 60 days after HHS receipt of a completed request. Accordingly, for existing State Exchanges that seek to newly implement a DE program, HHS would require the State to submit an updated Exchange Blueprint and participate in operational readiness reviews related to the implementation and ongoing operation of such a DE program, as we would consider a State Exchange implementing a DE program a significant change. Once implemented, for State Exchange ongoing operation of a DE program, HHS would monitor State Exchange operations through the annual reporting by State Exchanges related to compliance with Federal requirements, consistent with our oversight authority at § 155.1200(b)(2). Specifically, HHS would use this oversight authority to evaluate State Exchange compliance with the policies we are finalizing at § 155.221 for those State Exchanges that elect to operate a DE program, as HHS does with other aspects of State Exchange operations on an annual basis. If there is information suggesting a State Exchange or one of its DE entities does not meet the requirements of § 155.221(j), we would notify the State Exchange and give them an opportunity to address the potential non-compliance. HHS intends to consider the development of new, additional tools to assist with oversight that could enhance transparency into compliance by State Exchanges, including their DE programs, with applicable Federal requirements. We may also consider use of other oversight tools and authority, including those under Part 155 of our regulations, as appropriate.
While there are other standards under § 155.221 that are applicable to DE entity operations in FFE and SBE-FP States, for the reasons stated in the proposed rule (88 FR 82566) and earlier in this section of this final rule, we are extending to DE entities in State Exchanges the subset of critical standards that we believe help ensure proper eligibility determinations, protect against security breaches or incidents through implementation of operational readiness reviews, and minimize consumer confusion. At the same time, for the reasons stated in the proposed rule (88 FR 82567) and earlier in this section of this final rule, our approach preserves flexibility for State Exchanges that choose to implement a DE program to tailor their programs and establish their own standards with respect to certain aspects of their DE programs, such as operational readiness demonstrations and suspension frameworks. We believe this flexibility will help ensure that State Exchanges' DE programs and their standards are designed to meet the particular operational and business needs of the State Exchanges.
In the proposed rule, we sought comment on which of the current provisions at § 155.221 should or should not apply to State Exchanges and DE entities that assist consumers in State Exchanges. We continue to encourage specific feedback from interested parties, particularly from State Exchanges and DE entities operating in State Exchanges, on additional provisions in § 155.221 we should consider extending to State Exchanges and their DE entities or new standards that we should consider adopting for all Exchanges and DE entities in the future.
At the same time, however, we continue to believe, for the reasons stated in the proposed rule (88 FR 82566) and earlier in this section of this final rule, that it is important to extend to DE entities in State Exchanges—and, consequently, those State Exchanges that choose to implement a DE program—certain HHS standards that we identified as critical consumer protections to help ensure proper eligibility determinations, protect against security breaches or incidents through implementation of operational readiness reviews, and minimize consumer confusion. Still, we appreciate commenters' input on the degree of flexibility that should be afforded to State Exchanges, and we may consider that feedback to inform potential additional proposals or changes in this area in future rulemaking.
We recognize that this approach may impose a burden on State Exchanges that choose to implement DE programs, since they would newly be subject to the HHS standards being extended to them and their DE entities. We document that burden in the Regulatory Impact Analysis and Information Collection Requirement sections of this final rule.
In response to the commenter who requested that we provide additional detail on why current State Exchange standards related to DE programs are insufficient, as we explained in the proposed rule (88 FR 82566) and noted earlier in this final rule, our regulations do not currently address whether and how DE entities may assist consumers and applicants with enrollment in QHPs and submission of applications for APTC/CSRs in State Exchanges, and to-date, no State Exchange has implemented a DE program. We pursued these proposals as we anticipate State Exchanges will be interested in exploring such programs to expand the available channels for consumers to apply for and enroll in Exchange coverage, and it is important for baseline consumer protections and Exchange operation safeguards to apply across all Exchange types.
We do not intend, or expect, for the extension of certain HHS standards applicable to DE entities assisting the FFEs' and SBE-FPs' consumers and applicants to DE entities operating in State Exchanges that choose to
We note that we published data on the impact of the DE program HHS adopted for FFE and SBE-FP States and encourage interested parties to review such data.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82571), we proposed changes and updates to § 155.305(f)(4). We proposed, in connection with the FTR process described in § 155.305(f)(4), to require all Exchanges, including State Exchanges, to send notices to tax filers for the first year in which they failed to reconcile APTC starting in PY 2025 as an initial warning to inform and educate tax filers that they need to file and reconcile or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive year. We are finalizing this policy as proposed, except that we have modified paragraph (f)(4)(i) and added paragraphs (f)(4)(i)(A) and (B) to clarify that an Exchange must either send a notice to a tax filer as described above or send a more general notice to an enrollee or their tax filer explaining that they are at risk of losing APTC. This modification does not impact any substantive rights or obligations described in the proposed rule, but rather clarifies in regulation text the method by which Exchanges can comply with the requirement.
As part of the 2024 Payment Notice (88 FR 25814 through 25816), we changed the FTR process such that an Exchange may only determine enrollees ineligible for APTC after a tax filer (or a tax filer's spouse, if married) has failed to file a Federal income tax return and reconcile their past APTC for two consecutive years (specifically, years for which tax data will be utilized for verification of household income and family size). However, in that rule, we did not impose a requirement for Exchanges to notify enrollees during the first year that the applicable tax filer failed to file and reconcile.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule, we proposed to require that all Exchanges be required to send informative notices at least annually to tax filers who have failed to file and reconcile. Since Exchanges are prohibited from sending protected Federal tax information (FTI) to an individual who may not be the tax filer, only the FTR Open Enrollment notices sent
As background, Exchange enrollees whose tax filer fails to comply with current § 155.305(f)(4) are referred to as having failed to “file and reconcile.” These individuals are referred to as having FTR status, and the Exchanges conduct the FTR process to identify such individuals. In the 2024 Payment Notice (88 FR 25814 through 25816), we finalized a new process for Exchanges to conduct FTR to address concerns that the pre-existing FTR process requiring Exchanges to determine an enrollee ineligible for APTC after one year of having an FTR status could be overly punitive. Under the previous policy, enrollees occasionally had their APTC ended due to delayed data processing, in which case their only remedy was to appeal to get their APTC reinstated. Enrollees or their tax filers also may have been confused by or received inadequate education on the requirement to file and reconcile. HHS' and the State Exchanges' experiences with running FTR operations showed that Exchange enrollees often do not understand the requirement that their tax filer must file a Federal income tax return and reconcile their APTC or that they must also submit IRS Form 8962 to properly reconcile their APTC, even though both the single, streamlined application used by Exchanges on the Federal platform and the QHP enrollment process require a consumer to attest to understanding the requirement to file and reconcile. Note, the updated policy in the 2024 Payment Notice does not relieve tax filers from their requirement to reconcile each year nor any potential tax liability. By making these changes to the FTR processes in the 2024 Payment Notice and requiring Exchanges to determine an enrollee ineligible for APTC only after having an FTR status for two consecutive years (specifically, years for which tax data will be utilized for verification of household income and family size), Exchanges now have more opportunity to conduct outreach and send notices to enrollees or their tax filers for whom data indicate the tax filer has failed to file and reconcile and to prevent erroneous terminations of APTC, as well as to provide access to APTC for an additional year even when APTC would have been correctly terminated under the original FTR process.
There are limitations to these notices; notices that are sent directly to the tax filers and explicitly describe their FTR status must be compliant with IRS requirements for disclosing FTI, which can be a complex process and incompatible with some Exchanges' infrastructure. Alternatively, combined notices, which do not contain FTI, have limitations in that they do not explicitly inform the recipients that they are at risk of losing APTC due to the household tax filer being found to have failed to file and reconcile. However, both types of notices will create an opportunity for State Exchanges to educate enrollees or their tax filers on the requirement to reconcile their APTC with the PTC allowed. This will address the consumer confusion and knowledge gaps that were identified by both HHS and State Exchanges, which were key considerations in making the changes to the FTR process described in the 2024 Payment Notice, wherein tax filers now must be identified as FTR status for two years prior to having their APTC removed. With this additional year for tax filers to correct their FTR status, consumers will be better able to take appropriate action prior to losing their APTC and file and reconcile in response to these notices.
Under the policy finalized in this rule, Exchanges on the Federal platform will continue to send notices to enrollees and their tax filers for the year in which the tax filer has failed to reconcile APTC. Direct notices to the tax filer will provide an initial warning to inform and educate them that they need to file and reconcile, or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive tax year. A combined notice to the enrollee will provide more general information about the risk of losing APTC. State Exchanges will be required to send either one of these notices and may send a combined notice to the tax filer if desired. Our policy to codify this practice for Exchanges on the Federal platform and require State Exchanges to notify either an enrollee or their tax filer as described above, ensures that tax filers who have been determined to have FTR status for one year are adequately educated on the file and reconcile requirement, and have ample opportunity to address the issue and file and reconcile their APTC before they are determined to have FTR status for two consecutive years. This policy supports compliance with the filing and reconciling requirement under section 36B(f) of the Code and its implementing regulations at 26 CFR 1.36B-4(a)(1)(i) and (a)(1)(ii)(A), minimizes the potential for APTC recipients to incur large tax liabilities over time, and supports eligible enrollees' continuous enrollment in Exchange coverage with APTC by avoiding situations where enrollees become uninsured when their APTC is terminated. Additionally, this policy better aligns State Exchanges' Failure to Reconcile processes with that of the Exchanges on the Federal platform.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with modifications to require all Exchanges to either send informative notices directly to a tax filer alerting them of their FTR status, or to send informative notices that do not contain FTI either to the enrollee or their tax filer if through the income verification processes described in § 155.320, they have been found to have failed to reconcile their APTC for only one year. We are reorganizing the regulatory text at § 155.305(f)(4)(i) to create paragraphs (f)(4)(i)(A) and (f)(4)(i)(B) for ease of readability, and are clarifying that new paragraph (f)(4)(i)(B) describes the notifications Exchanges may send to an enrollee or their tax filer that informs them that they may be at risk of being determined ineligible for APTC in the future, but does so without conveying FTI. We are also clarifying in this final rule that we will provide Exchanges with additional guidance on implementation, in particular around notice language, which is informative to the consumer without sharing protected FTI. We summarize and respond to public comments received on the proposed policy below.
While we are finalizing the requirement for Exchanges to send on an annual basis FTR notices to consumers identified as having an FTR status, we appreciate that there are other approaches to educating consumers on the FTR requirements. We wish to note that Exchanges will have flexibility in the notice content and process. While annual notices are a minimum requirement, Exchanges are welcome to expand on these with real-time education and other consumer outreach.
In the meantime, sample notices that were sent out to individuals with FTR status prior to the pause in 2020 are available at
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82572), we proposed changes and updates to § 155.315. We proposed to amend § 155.315(e) by revising paragraph (e)(1) to permit all Exchanges to accept an applicant's attestation of incarceration status and paragraph (e)(2) to allow Exchanges to electronically verify a consumer's current incarceration status using an HHS-approved verification data source. We also proposed to amend the reference in paragraph (e)(3) to reflect that if an Exchange verifies an applicant's attestation of incarceration status using an approved data source and the attestation is not reasonably compatible with the information provided from the stated data source or other information provided by the applicant or in the records of the Exchange, then the Exchange must follow the data matching issue (DMI) process set forth in § 155.315(f). We noted in the proposed rule that if the proposed policy was finalized, Exchanges using the Federal eligibility and enrollment platform, including SBE-FPs, that currently use the incarceration verification data source
As background, section 1312(f)(1)(B) of the ACA states that an individual shall not be treated as a qualified individual for enrollment in a QHP if, at the time of enrollment, the individual is incarcerated, other than incarceration pending the disposition of charges. Sections 155.315(e) and (e)(1) currently state that Exchanges must verify incarceration status with a data source approved by HHS and deemed accurate, current, and offering less administrative complexity than paper verification. When an individual's incarceration attestation conflicts with information from an approved data source or other information provided by the applicant or in the records of the Exchange, § 155.315(e)(3) requires Exchanges to create a DMI as outlined in § 155.315(f). However, if an approved data source is unavailable, an Exchange may accept attestation of incarceration without further verification under § 155.315(e)(2).
Under proposed paragraphs (e)(1) and (2), an Exchange would be able to accept a consumer's attestation of incarceration status or propose an electronic data source for incarceration verification to HHS for approval and use that approved source to verify incarceration status. Should a State Exchange choose to propose use of an alternative electronic data source for verifying incarceration status, HHS would review such proposals in accordance with the process under § 155.315(h), through which HHS would make a determination based on the proposed use of the alternative data source and whether it minimizes administrative costs and burdens on individuals while it maintains accuracy and minimizes delay. We proposed at paragraph (e)(3) that if an Exchange verifies an applicant's attestation of incarceration status using an approved data source as provided under proposed paragraph (e)(2), to the extent that the applicant's attestation is not reasonably compatible with information from the approved data source or other information provided by the applicant or in the records of the Exchange, the Exchange would be required to follow the DMI procedures at § 155.315(f).
In the Exchange Establishment Rule (77 FR 18362), we recognized that there may be challenges in the availability of electronic incarceration verification data but believed that so long as an incarceration verification data source existed that has been approved by HHS, it should be used to verify incarceration status. We also recognized that requesting consumer attestation of incarceration status and accepting such attestation without further verification when an accurate data source was unavailable is necessary since incarceration status is a statutory standard for eligibility to enroll in a QHP.
Exchanges using the Federal eligibility and enrollment platform, including SBE-FPs, currently verify whether an applicant is incarcerated through the Hub by using the Social Security Administration's (SSA) Prisoner Update Processing System (PUPS). PUPS is currently maintained by SSA and is the only national database that reflects information from Federal, State, and local correctional records. Our experience administering the Federal eligibility and enrollment platform, along with the experience from the State Exchanges that have used the PUPS data, have demonstrated that verifying incarceration data using PUPS has resulted in a high number of DMIs, few of which identify QHP applicants who are incarcerated. For example, we conducted an internal study and found that out of 110,802 incarceration DMIs generated between PYs 2018 to 2019, 96.5 percent of them were resolved in favor of the applicant. More importantly of those 3,878 applicants whose DMIs were not resolved in their favor (3.5 percent of 110,802), we found that only a total of 2,469 applied for QHP coverage during PYs 2018 and 2019. Of these 2,469 ineligible applicants, 950 applicants were released from either prison or jail within 90 days after the application submission date. Excluding these individuals leaves 1,519 QHP-ineligible individuals, of which 921 applicants effectuated coverage (that is, made the binder payment), which is allowed while awaiting DMI clearance, thus resulting in an improper APTC payment. An average annual APTC per individual of $1,569 was estimated for the 921 QHP ineligible applicants with effectuated policies.
We conducted a cost-benefit assessment and determined that the cost to verify incarceration status electronically far exceeds potential savings. Should the Exchange conduct an electronic incarceration verification check, such as a verification check of a consumer's attestation using PUPS data, it would cost more than $4 million to operate yearly, along with a one-time implementation startup cost of approximately $200,000. Furthermore, connecting to an alternative incarceration data source, such as PUPS, and conducting the DMI process outlined at § 155.315(f) can be very costly to Exchanges. In PY 2019, nearly 38,000 out of 78,000 applicants with an incarceration DMI submitted documents to attempt to resolve the incarceration DMI. To process DMIs, the Exchange incurs costs for the eligibility-verification contractor on a fixed-price basis totaling about $0.57 million per year for verification of incarceration. This figure does not include other costs related to sending notices to consumers, processing appeals, and handling call center transactions. Our 2019 study concluded that those who receive an incarceration DMI are statistically likely to be eligible to enroll in a QHP as the applicants were released from either prison or jail within 90 days after the application submission date. However, an unresolved incarcerated DMI can result in a complete loss of coverage.
The processes of notifying consumers of their DMIs and resolving them have been burdensome and has negatively impacted the consumer experience. When an incarceration DMI is generated, applicants are required to provide documentation to show that they are no longer incarcerated.
These findings support our beliefs that incarcerated individuals apply for QHP coverage at very low rates, and that their applications are considered to be a very low program integrity risk for Exchanges, which do not warrant always conducting an extensive incarceration verification check. We also believe that previous guidance to conduct incarceration status verification
Given these concerns, we proposed to amend § 155.315(e) by revising paragraph (e)(1) to permit all Exchanges to accept consumer attestation of incarceration status without further electronic verification. We proposed to revise paragraph (e)(2) to permit Exchanges to verify consumer incarceration status using an HHS-approved verification data source that is current, accurate, and minimizes administrative costs and burdens. We believe these policies would improve the Exchange enrollment process, reduce operational challenges for Exchanges, and reduce burdens on applicants, all while maintaining program integrity and ensuring that the alternative incarceration verification data source that may be used by Exchanges is not unduly burdensome or costly to administer.
We also proposed changes to paragraph (e)(3) to reflect that if an Exchange verifies an applicant's attestation of incarceration status using an approved data source, and the attestation is not reasonably compatible with the information from the approved data source or other information provided by the applicant or in the records of the Exchange, the Exchange must then follow the DMI process set forth in § 155.315(f).
We sought comment on this proposal, particularly from State Exchanges and other users of PUPS data through the Hub. We also expressed particular interest in comments about whether State Exchanges intend to continue using PUPS data to verify incarceration status. We also sought input from any State Medicaid agency that uses PUPS data available through the Hub.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to require Exchanges to start accepting consumer attestation of incarceration status without further verification or for Exchanges to use a data source for incarceration verification approved by HHS. We summarize and respond to public comments received below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82574), we proposed to reinterpret State Exchange and State Medicaid and Children's Health Insurance Program (CHIP) agency use of the Federal Data Services Hub (Hub) to access and use the income data provided by the optional Verify Current Income (VCI) Hub service as a State Exchange or a State Medicaid and CHIP agency function, because these State entities use this optional service to implement eligibility verification requirements applicable to them. While we proposed to redesignate use of the VCI Hub service by State Exchanges and State Medicaid and CHIP agencies as a State function, HHS would continue to maintain contracts that make this service available through the Hub for State Exchange and State Medicaid and CHIP agency use as part of its ongoing implementation of sections 1411 and 1413 of the ACA. We proposed to amend § 155.320(c) to reflect this reinterpretation for the Exchanges. Under this proposal, States would pay annually in advance for the State Exchanges and Medicaid and CHIP agencies' anticipated utilization of the optional VCI Hub service and be required to reconcile with HHS on an annual basis the anticipated utilization of CSI data provided by the VCI Hub service with the actual utilization. In the alternative, we proposed that HHS would invoice States on a monthly basis for their actual utilization of CSI data provided by the VCI Hub service after that utilization occurs. We noted that State Medicaid and CHIP agencies would be eligible for Federal matching for the cost of this service, as described in this section.
Under our proposal, Exchanges and State Medicaid and CHIP agencies may opt to continue to use the VCI Hub service to support their eligibility verification processes for Exchange QHP coverage or Medicaid and CHIP if they pay for the cost of their use of the service. For instance, Exchanges would still be able to use this current income information to verify a tax household's annual income attestation if they are unable to verify income using SSA Title II data, IRS income tax data, or a combination of both SSA and IRS data, in determining eligibility for APTC. Because Exchanges and State Medicaid and CHIP agencies are permitted, but not required to use the VCI Hub service to fulfill the mandatory eligibility determination requirements imposed on them, accessing the CSI data via the VCI Hub service should be characterized as an Exchange or State Medicaid and CHIP agency function.
Consistent with section 1413 of the ACA, HHS would continue to provide access to optional data sources through the Hub to support the streamlined application processes. However, as these functions would be considered Exchange or State Medicaid and CHIP agency functions, and not HHS functions, HHS would no longer fund Exchange or State Medicaid and CHIP agency use of these sources and would
Since the VCI Hub service was established in 2013 for use by both Exchanges and State Medicaid and CHIP agencies, utilization of the VCI Hub service has grown significantly over time, both in the number of State Exchanges and State Medicaid and CHIP agencies using the service, and the number of applicants and beneficiaries that require income verification as Exchange populations have increased over time. During the first open enrollment in 2013, only the Exchanges on the Federal platform, two State Exchanges, and eight State Medicaid and CHIP agencies used data from the VCI Hub service for eligibility determinations. In that first year, the Exchanges on the Federal platform initiated about 88 percent of all requests, or “pings,” to the VCI Hub service for income verification. In the past decade, more State Medicaid and CHIP agencies and State Exchanges have started using the VCI Hub service; as of June 2023, 34 States, including the District of Columbia and Puerto Rico, use the VCI Hub service for their State Medicaid and CHIP programs, and 10 of those States also use the service to verify QHP eligibility for their State Exchanges. Our analysis shows that as of January 2024, over 76 percent of monthly pings to the VCI Hub service were from State Medicaid and CHIP applications, including renewals of eligibility for Medicaid or CHIP coverage, and the Exchanges on the Federal platform now account for less than 5 percent of the total volume.
If new State Medicaid and CHIP agencies or State Exchanges are permitted to request access to the VCI Hub service, we forecast that in the next 5 years, transaction volume to the VCI Hub service would increase by over 17 percent. These trends in utilization have provided us with a clear picture of the primary uses and utilizers of the VCI Hub service. Specifically, we have learned that the queries submitted by States to the VCI Hub service have been for income verification by State Medicaid and CHIP agencies to determine Medicaid and CHIP eligibility, and by State Exchanges to assess or determine Medicaid and CHIP eligibility and determine APTC eligibility. Accordingly, we now believe this activity that has been categorized as an HHS function would be better categorized as: (1) a State Medicaid and CHIP agency eligibility determination function under title XIX or title XXI of the Act when the determination is initiated by a State Medicaid and/or CHIP agency; and (2) as an Exchange function when the determination is initiated by an Exchange.
While we believe the utilization of this optional data source is an Exchange or State Medicaid and CHIP agency function, making the optional data sources available through the Hub is consistent with the requirements at sections 1411 and 1413 of the ACA related to establishment and participation in a coordinated eligibility and enrollment system for all insurance affordability programs. As such, to facilitate Exchanges' and States Medicaid and CHIP agencies' access to this optional CSI data that is available through the VCI Hub service, HHS will continue to maintain contracts that make access to these resources available through the Hub for Exchange and State Medicaid and CHIP agency use.
In making this proposal, we noted that while use of the VCI Hub service is an integral part of the eligibility determination process in most States, Exchanges and State Medicaid and CHIP agencies may have access to other data sources to verify income. As noted previously, we are aware that many States have access to other comprehensive data sources, such as State quarterly wage data. Generally, as dictated by individual State law, employers are required to report employee information such as payroll and unemployment insurance contribution data to a State department, such as the State Department of Labor or a similar office. In place of the optional VCI Hub service, State Exchanges continue to have flexibility under 45 CFR 155.315(h) and 155.320(c)(3)(iv) to use an alternative verification source, like State wage data, when income is not verified using IRS tax data or SSA title II data. We encouraged State Exchanges, State Medicaid and CHIP agencies, and other interested parties, to submit comments regarding any operational burden, policy, or budget challenges regarding access to other State data sources of the proposed change.
As part of our consideration of the policies in this rulemaking, we considered requiring State Medicaid and CHIP agencies and State Exchanges to obtain their own contracts to administer their CSI data usage; however, we had concerns that these services cannot be procured reasonably and expeditiously, which would undermine the system we have implemented under section 1413 of the ACA. We also believe that there may be benefits to the State Medicaid and CHIP agencies and State Exchanges that prefer to use the CSI data accessible through the VCI Hub service in their States. Therefore, we proposed to retain optional access to the VCI Hub service on behalf of State Medicaid and CHIP agencies and State Exchanges that prefer to continue to use this service and are willing to pay for their CSI data usage. Under this policy, State Medicaid and CHIP agencies and State Exchanges can choose to discontinue their use of the CSI data accessible through the VCI Hub service.
Given these considerations, we proposed to amend 45 CFR 155.320(c)(1) to add new paragraph (c)(1)(iii) to require that beginning July 1, 2024, State Exchanges would be required to pay for 100 percent of their utilization of the CSI income data provided by the VCI Hub service.
Similarly, we proposed to require that beginning July 1, 2024, States pay in advance for their Medicaid and CHIP utilization of the optional, and not required, VCI Hub service to fulfill their Medicaid and/or CHIP eligibility determination requirements. As noted above, consistent with the requirements at section 1413 of the ACA (related to establishment and participation in a coordinated eligibility and enrollment system for all insurance affordability programs), which is incorporated into the Medicaid and CHIP statutes at sections 1943(b)(3) and 2107(e)(1), respectively, of the Act, in order to facilitate States' access to this optional CSI data that is available through the VCI Hub service, we would continue to
In the alternative, HHS also considered whether it could invoice States on a monthly basis for their actual utilization of CSI data provided by the VCI Hub service after that utilization occurs. If appropriate, this alternative policy could be adopted in the final rule. We considered these mechanisms for implementing State Exchange and Medicaid and CHIP agency payments for use of the VCI Hub service and solicited comments on whether a different implementation approach would be more efficient or otherwise preferable. We refer readers to the proposed rule (88 FR 82576 through 82577) for an explanation of implementation of this policy and an alternative payment structure.
Finally, we proposed that the interpretation characterizing use of the VCI Hub service as a function of State Exchanges and Medicaid and CHIP agencies and not an HHS function be effective on July 1, 2024. We recognize that this implementation date may be difficult for States, especially those with biennial budget cycles. However, given our determination that eligibility verifications using CSI data by State Exchanges and Medicaid and CHIP agencies is most appropriately characterized as a function of these agencies and not an HHS function, we believe it is appropriate to move forward with this change as expeditiously as possible, while giving States some time to plan for the change. For this reason, we proposed a July 1, 2024, effective date for this provision.
We sought comment on these proposed changes, including whether we should make this interpretation effective as of July 1, 2024, or a different date. We were interested in learning whether State Exchanges and Medicaid and CHIP agencies would seek to cease or restrict their use of the VCI Hub service, possibly using it as a last resort, and what impact, if any, might these proposed changes have on the amount of time it takes applicants to verify their income or the time it takes for States to make an eligibility determination. We also sought comment on the extent to which States may be interested in potential avenues to reduce operational burdens or address budget challenges facing State Exchanges and Medicaid and CHIP agencies. Namely, we were interested in whether States would be interested in opportunities to pay an additional fee that would allow them to reuse VCI Hub service verification results across multiple Federally-funded and State-administered human service programs (with cost allocation across those programs); whether States have separate, direct access to the same or similar source of VCI Hub services, and the cost of such direct access; and whether States anticipate that reuse of verification data, coupled with cost allocation across programs, would reduce operational burdens or address budget challenges facing State Exchanges and Medicaid and CHIP agencies.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to reinterpret State Exchange and State Medicaid and CHIP agency use of the Hub to access and use the income data provided by the optional VCI Hub service as a State Exchange or a State Medicaid and CHIP agency function, and that beginning July 1, 2024, State Exchanges and State Medicaid and CHIP agencies will be required to pay for the costs of their access to and use of the VCI Hub service. We are also finalizing the proposal with a modification: rather than requiring States to pay in advance for their use of the VCI Hub Service, HHS will invoice States monthly for the amount the State must pay to reimburse HHS for the costs of their access and actual utilization of CSI income data from the prior month. Specifically, HHS will invoice States on a monthly basis for their actual utilization of the CSI income data accessed through the VCI Hub Service, as well as an administrative fee to account for any direct or indirect costs of making CSI income data accessed through the VCI Hub service available to Exchanges and State Medicaid and CHIP agencies, in accordance with the Intergovernmental Cooperation Act and interpretive OMB Circulars A-97 and A-25.
A few commenters also expressed their concern that if State Exchanges or State Medicaid and CHIP agencies pivot to alternative data sources rather than using the CSI income data accessed through the VCI Hub service, less accurate data may lead to inaccurate eligibility determinations for either Exchange QHP or Medicaid and/or CHIP coverage, which could harm consumers by causing them to incur large tax liabilities due to income inaccuracies or increasing churn. Finally, a few commenters noted that the proposal could also lead to consumer harm due to increases in premiums, as States make budget adjustments to pay for their use of the VCI Hub service, whereas other commenters were concerned that charging Hub data fees could have negative impacts, such as reducing State flexibility to operate their own Exchanges as they see fit.
We acknowledge the concern raised by commenters that if a State chooses to reduce its use of the VCI Hub service due to this policy change, this may result in additional requests for additional documentation or other information from individuals to verify income. However, we believe there are ways to mitigate this concern. Other reliable government data sources, whether State or Federal, are available to verify income, some of which must be accessed if useful (for example, quarterly wage data, income information from a SNAP case file if the individual is receiving SNAP benefits) before a State may require additional documentation from the individual.
We understand the concern raised from States that up-to-date and accurate income data is essential for both State Exchanges and State Medicaid and CHIP agencies to make accurate eligibility determinations for Exchange QHP, Medicaid, or CHIP coverage and that this policy may lead to consumers incurring large tax liabilities when filing their Federal income taxes or increase churn in and out of Medicaid or CHIP coverage. However, there are consumer protections in place to protect consumers from incurring large tax liabilities. For example, all Exchanges are required to give consumers the opportunity to provide more up-to-date and accurate income information through the income DMI process. There are also protections in place to help mitigate Medicaid and CHIP churn. For example, 42 CFR 435.916 and 457.343 generally require that the State Medicaid and CHIP agency provide a 90-day reconsideration period, or a longer period elected by the State, which allows Medicaid or CHIP beneficiaries who are disenrolled for failure to submit the renewal form or necessary information, to provide a renewal form or necessary information to their State Medicaid and CHIP agency to reconsider eligibility for Medicaid and/or CHIP without having to complete a new application. Furthermore, as finalized in the 2024 Payment Notice (88 FR 25831), Exchanges now have the option under § 155.420(c)(6) to provide consumers losing Medicaid or CHIP with 90 days (instead of 60 days) after the loss of such coverage to enroll in a
Finally, we acknowledge that this policy change may cause State Exchanges to raise their user fees to pay for accessing CSI income data through the VCI Hub service and that this may lead to premium increases for consumers. However, we believe that there are ways for States to prevent this potential outcome, such as accessing alternative data sources for income verification or implementing logic changes to their eligibility and enrollment systems to only request CSI income data when income cannot be verified using other data sources such as IRS income data, State quarterly wage data, etc.
While we recognize States' concerns about funding this use of the CSI data by July 1, 2024, we have been proactively working with States since before the publication of the proposed rule to prepare States for this possible transition and will continue to do so. We believe that some of these concerns can be mitigated by strategizing ways to reduce their reliance on CSI income data by either using alternative data sources, such as State quarterly wage data to verify income, or only accessing CSI income data if States are unable to verify income using other available data sources. For example, an Exchange may implement logic changes within their eligibility systems to only request CSI data in cases where a consumer's current income could not be verified using IRS income tax or SSA title II income data, which would act as a cost-saving measure for States. To ease the transition by July 1, 2024, we will work with States to help navigate how to pay for their use of the CSI income data, including those States with only one VCI Hub service connection for both their State Exchange and State Medicaid and CHIP agency which may require additional effort to allocate the payment responsibility between the State Exchange and State Medicaid and CHIP agency.
Lastly, we reiterate that Exchanges and State Medicaid and CHIP agencies are not required to use the VCI Hub service to fulfill the mandatory eligibility determination requirements.
A few commenters objected to the policy on the grounds that HHS has not given States an estimate of the costs or historical volume of States' use of the VCI Hub service and requested that HHS do so before finalizing the policy. One commenter stated that HHS did not provide enough evidence as to why Hub data use fees are necessary, especially given that States have been successful in enrolling and protecting consumers using standards and processes that work best for the residents of their respective States. Another commenter noted that this policy, if finalized, would result in significant cost to States which could be detrimental to further utilization of the VCI Hub service and stated that States with a larger Medicaid and CHIP population will bear greater cost shift. The commenter stated that it is uncertain if the expense will remain sustainable for those States in future budget years.
We do not believe that the finalization of this policy will meaningfully discourage States from transitioning to, or maintaining, their status as a State Exchange. We anticipate that existing State Exchanges, as well as States considering transitioning to a State Exchange, will employ strategies to encourage efficient use of the VCI Hub service, as well as leverage other existing sources of income data.
Regarding the request that HHS provide grants to States newly transitioning to a State Exchange to obtain other data sources for income verification, currently, HHS is unable to establish such a grant program because it lacks the Congressional appropriation to do so. States transitioning to a State Exchange should set their Exchange user fees appropriately to fund their anticipated utilization of the VCI Hub Service (or establish an alternative income verification source such as State quarterly wage data) as HHS is setting the FFE and SBE-FP user fees to fund the FFE and SBE-FP utilization of the VCI Hub service.
We also note that, to assist States in estimating the costs of continued utilization of the VCI Hub Service, and in anticipation that this proposal could be finalized, we made historical cost and utilization data of the VCI Hub service available to States with State Exchanges and State Medicaid and CHIP agencies that currently utilize the VCI Hub Service. We may share historical use data with other States that are considering using the VCI Hub service. However, we note that this information may be of limited value because of the wide variation in factors, such as individual State policy, whether or not a State Exchange shares an integrated eligibility system with the State Medicaid and CHIP agency, etc., which greatly impacts a State's utilization of the VCI Hub service. As noted earlier in this rule, we intend to work with States to help navigate how to pay for their use of the CSI income data.
A few commenters supported the proposal for HHS to charge State Exchanges and State Medicaid and CHIP agencies in advance for their projected annual use of the VCI Hub service (“to prepay”). One commenter stated that paying in advance for their anticipated annual usage with an annual reconciliation process would be easier administratively and would allow for more certainty in budgeting the State's share of the matching costs each year. Another commenter stated that a prepay approach may align well with a State's budget processes and the regular Advance Planning Document (APD) process used to obtain Federal Financial Participation (FFP). Further, the commenter also stated that a more frequent than annual (for example, monthly) invoicing and estimating usage of the VCI Hub service cadence would increase the administrative burden of maintaining the service and would be unlikely to alter the methodology by which the State develops costs estimates related to their use of the VCI Hub service. Another commenter stated that, if a prepay approach is finalized, it would be efficient to align the payment to HHS with the State's FFP schedule to allow more frequent reconciliation of VCI Hub service usage estimates.
A few commenters suggested that, because different State Medicaid and CHIP agencies have different preferences on how they are invoiced, that HHS should consider providing States with several different invoicing options so that States can choose which invoicing cadence, such as monthly, quarterly, or annually, works best for their State.
Furthermore, this alternative or “postpay” approach will negate the need for States to establish, and for HHS to approve, an estimation methodology for their projected annual utilization of the VCI Hub service, which we believe would be challenging for States to estimate. While States could rely on historical utilization of the VCI Hub service to project future utilization, as Exchange populations continue to grow, past data could become less reliable and could result in inaccurate estimates, which could lead to an overly expensive and burdensome reconciliation process. Each of the States will execute an IGCA with CMS that must be in effect before the VCI Hub service can be utilized by the States. Under the terms of the IGCA, CMS will invoice the State for the actual costs of the State's use of CSI data provided via the VCI Hub service for the previous month.
We also acknowledge the preference of a few commenters for a prepay approach for administrative ease and more certainty in budgeting the State share of the matching costs each year. However, we believe that a postpay
At this time, we are unable to facilitate a mixed approach, wherein participating States choose between a prepay and postpay approach. A mixed approach would require administering parallel sets of policies, timelines, and system builds. The operational complexity and inefficiency of such an approach would increase the cost of administering the VCI Hub Service.
We will not reduce the FFE or SBE-FP user fee in an FFE or SBE-FP State where the State, State Medicaid and/or CHIP agency opts to use their own data source or service for verifying income, instead of the VCI Hub Service. Because the FFE and SBE-FP user fee rates are set as a percent of premium for all issuers in an FFE or SBE-FP and account for the cost of all special benefits provided to the FFE and SBE-FP, we do not make specific State adjustments.
For apportionment of costs between various State programs, we clarify that in States with a single Hub connection, the allocation between the State Exchange and State Medicaid and CHIP agencies will be determined by the States and reported to HHS through the Advance Planning Document processes. Conversely, in States with multiple Hub connections, each purchased transaction that returned matched data from the VCI Hub service will be attributed to the Hub connection through which the purchased transaction was initiated. As previously noted, to help States assess the potential implications of this proposed policy change, we shared data with States on their historical usage of the VCI Hub service, broken out by Hub connection in States with more than one connection.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82578), we proposed updates and changes to 155.330. At § 155.330, we proposed to redesignate paragraph (d)(3) as paragraph (d)(3)(i) and add paragraph (d)(3)(ii) to require Exchanges to conduct periodic checks for deceased enrollees twice yearly and subsequently end deceased enrollees' QHP coverage beginning with the 2025 calendar year. Additionally, we proposed to add § 155.330(d)(3)(iii) to grant the Secretary the authority to temporarily suspend the periodic data-matching (PDM) requirement during certain situations or circumstances that lead to the unavailability of data needed to conduct PDM.
Under § 155.330(d), Exchanges are required to periodically examine available data sources, referred to as PDM, to identify whether enrollees become deceased, and to identify whether enrollees on whose behalf APTC or CSRs are being paid have been found eligible for or are enrolled in Medicare, Medicaid, CHIP, or the BHP, if a BHP is operating in the service area of the Exchange. Additionally, upon such identification, § 155.330(e)(2)(i) requires Exchanges to notify the enrollee of the updated information and provide the notified enrollees 30 days from the date of the notice to appeal PDM findings.
Currently, § 155.330(d)(3) defines “periodically” only for PDM activities that identify enrollment in Medicare, Medicaid, CHIP, and, if applicable, BHP, meaning that Exchanges must conduct Medicare PDM, Medicaid or CHIP PDM, and, if applicable, BHP PDM, twice a year. The current regulation does not specify the frequency by which PDM activities to identify deceased enrollees must occur, but the 2019 Program Integrity Rule requires that Death PDM be conducted once annually, and we noted that we intended to update the frequency for Death PDM in future rulemaking. As explained in the 2019 Program Integrity Rule, we did not require Exchanges to perform PDM for death at least twice in a calendar year so that Exchanges could prioritize the implementation of the new requirement to conduct PDM for Medicare, Medicaid, CHIP and, if applicable, BHP eligibility or enrollment at least twice yearly. In the proposed rule, we proposed to add § 155.330(d)(3)(ii) to require Exchanges beginning with the 2025 calendar year to conduct periodic checks for deceased enrollees twice yearly and subsequently end deceased enrollees' QHP coverage after following the procedure specified in § 155.330(e)(2)(i).
Periodic checks for deceased enrollees help ensure Exchange program integrity. This policy would not only align with current FFE policy and operations but would also prevent overpayment of QHP premiums and APTC/CSRs, and accurately capture household QHP eligibility based on household size. Additionally, by conducting Death PDMs twice a year, Exchanges can prevent future auto re-enrollments or policy effectuation for deceased enrollees for the next plan year.
Additionally, we proposed to add § 155.330(d)(3)(iii) to grant the Secretary the authority to temporarily suspend the PDM requirement during certain situations or circumstances that lead to an unavailability of data needed to conduct PDM. PDMs are conducted as a program integrity measure where the prerequisite for conducting a proper PDM is assurance of data quality. We recognize that during certain circumstances data quality may be incomplete or lagging. For example, during the COVID-19 Public Health Emergency, State and local agencies had to strain their resources to address backlogs due to job losses and other administrative gaps further slowing down response times,
We anticipate most State Exchanges would be able to meet the proposed requirements for Death PDM based on operations already reported through the State-based Marketplace Annual Reporting Tool (SMART) as well as discussions we have had with the State Exchanges on PDM. We also anticipate that changes, including a suspension of the PDM requirement, would be well received by the Exchanges and issuers, as it is important that consumer information, such as eligibility for APTC or QHP coverage, be accurate to avoid expending administrative resources on complex processes to correct errors. Eleven State Exchanges reported in their
Under section 1313(a)(4) of the ACA, if HHS determines that an Exchange has engaged in serious misconduct with respect to compliance with Exchange requirements, it has the option to rescind up to 1 percent of payments due to a State under any program administered by HHS until such misconduct is resolved. These existing authorities apply to the PDM requirements in § 155.330(d). If HHS were to determine that it is necessary to apply this authority due to non-compliance by an Exchange with § 155.330(d), HHS would also determine the HHS-administered program from which it would rescind payments that are due to that State. However, if State Exchanges do not comply with the PDM requirements, we generally first direct a State Exchange to take corrective action. We utilize specific oversight tools (for example, the SMART, independent external programmatic & financial audits) to ensure compliance and that State Exchanges take appropriate corrective action. HHS also provides technical assistance and ongoing monitoring to track those actions until the State Exchange remediates the issue fully. We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with modifications. The final rule will require Exchanges to start conducting Death PDMs two times a year beginning calendar year 2025 and will allow the Secretary to temporarily pause PDM during certain situations or circumstances that lead to the limited availability of data (instead of the unavailability of data, as proposed) needed to conduct PDM. We are also adding that the Secretary may temporarily pause PDM during certain situations or circumstances that lead to the limited availability of documentation needed for an enrollee to notify the Exchange that the result of PDM is inaccurate, as described in paragraph (e)(2)(i)(C). We summarize and respond to public comments received on the proposed policy below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82579), we proposed to incorporate catastrophic coverage as defined in section 1302(e) of the ACA into the auto re-enrollment hierarchy at § 155.335(j). We proposed this policy because the regulation did not address auto re-enrollment for catastrophic coverage enrollees, nor did it address a scenario in which a catastrophic coverage enrollee would lose eligibility for catastrophic coverage in the coming plan year either because they exceeded the 30-year age limit or lost eligibility for the exemption that allowed them to enroll in a catastrophic plan in spite of exceeding the age limit.
We solicited comment on these proposals, including whether they reflected the State Exchanges' current practices, whether we should consider proposing changes to the auto re-enrollment hierarchy to prioritize re-enrollment in catastrophic coverage for enrollees who remain eligible for catastrophic coverage in a way that is similar to current prioritization of silver level coverage per § 155.335(j)(1)(ii), and whether there are additional strategies to help ensure continuity of coverage for enrollees in catastrophic QHPs.
After consideration of comments and for the reasons outlined in the proposed rule and in our responses to comments, we are finalizing this policy as proposed, except that we are amending the new language that we proposed at § 155.335(j)(1)(v) and (j)(2)(iv) to incorporate the phrase, “to the extent permitted by applicable State law.” This change aligns these new policies with existing re-enrollment hierarchy rules, including § 155.335(j)(2) and (j)(3), which include this phrase to indicate that Exchanges must take into account applicable State law when implementing auto re-enrollment. As discussed in further detail below, this change is also in response to a public comment that said Connecticut State law does not permit auto re-enrolling catastrophic coverage enrollees losing eligibility for catastrophic coverage. We summarize and respond to public comments below.
One commenter stated that the Idaho State Exchange had already addressed the problems that the proposed rule intended to solve, including this proposal. A few commenters stated that the proposal would not be effective because several State Exchanges do not currently have the ability to auto re-enrollee catastrophic coverage enrollees. Another commenter stated that Connecticut law prohibits auto re-enrolling enrollees losing eligibility for their catastrophic coverage, because a law specifies that only a licensed producer or agent may recommend a specific plan to a consumer.
Several commenters recommended that, rather than requiring State Exchanges to automatically re-enroll catastrophic coverage enrollees, CMS should allow Exchanges to encourage these consumers to actively select a new plan, especially in cases where an enrollee would lose eligibility for catastrophic coverage. One commenter stated that Connect for Health Colorado does not auto re-enroll enrollees losing eligibility for catastrophic coverage, and instead performs outreach encouraging them to choose a plan that works best for them.
Several commenters asked that, if the proposal is finalized, CMS continue allowing Exchanges to determine their own auto re-enrollment hierarchy.
We are otherwise finalizing the policy as proposed, because we believe that automatically re-enrolling all Exchange enrollees who do not actively select a plan or terminate their coverage is important to help ensure continuity of coverage. We intended this policy to protect against disruptions in care that could be avoided through implementation of a re-enrollment hierarchy for enrollees in catastrophic coverage. We explained in the proposed rule (88 FR 82579) that while Exchanges on the Federal platform generally already auto re-enroll these enrollees, the absence of a re-enrollment hierarchy in regulation for catastrophic coverage enrollees meant that we could not, as operator of Exchanges on the Federal platform, require issuers to provide plan crosswalk information for enrollees losing eligibility for catastrophic coverage. We are of the view that this consumer-protective policy is reasonable and appropriate regardless of whether it addresses an industry issue.
State Exchanges that cannot implement or choose not to implement the re-enrollment hierarchy as described in this rule may seek approval from the Secretary to conduct their own annual eligibility redetermination process, as described in § 155.335(a)(2)(iii). We already consider State Exchanges' requests for flexibility in this area on an annual basis, as part of their submission of their eligibility re-determination and re-enrollment plans, both in order to mitigate burden and to permit innovation that allows Exchanges to best serve their enrollees.
We also appreciate the additional detail from commenters on the extent to which State Exchanges do or do not incorporate enrollees in catastrophic coverage into their auto re-enrollment processes, including that some Exchanges do not currently auto re-enroll catastrophic coverage enrollees, or do not automatically re-enroll those who will lose eligibility for catastrophic coverage. We agree that an ideal enrollment experience is one in which an enrollee actively chooses a plan that best fits their needs for the coming year, and we note that auto re-enrollment does not prevent Exchanges from also performing robust outreach and engagement encouraging all enrollees, including those with catastrophic coverage, to actively select a new plan for the coming year. This policy, like the rest of the auto re-enrollment hierarchy at § 155.335(j), is a safeguard to prevent enrollees from losing coverage if they do not actively select a plan or cancel their coverage by the end of the annual open enrollment period.
We also do not anticipate that implementation of this policy would increase QHP issuer burden that would lead to increases in premiums, because issuers participating in Exchanges on the Federal platform have not raised concerns about supporting auto re-enrollment for catastrophic coverage enrollees. As discussed in the proposed rule (88 FR 82580), only one QHP issuer participating in our auto re-enrollment process for Exchanges on the Federal platform did not submit a crosswalk option for enrollees losing catastrophic coverage eligibility, indicating that compliance with this policy would not increase issuers' costs beyond those associated with the existing annual QHP Certification process.
Finally, we acknowledge that catastrophic coverage enrollees who are re-enrolled into bronze coverage could experience increases in premiums, including in the event the more generous subsidies provided for in the ARP and the IRA expire, and that the expiration of the more generous subsidies may cause the amount of premium that must be paid directly by the catastrophic coverage enrollee to increase. This, however, would be true
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82581), we proposed to amend § 155.400(e)(2) to codify that the flexibility for issuers experiencing billing or enrollment problems due to high volume or technical errors, or issuers directed to do so by applicable State or Federal authorities, is not limited to extensions of the binder payment.
Section 155.400(e) specifies that Exchanges may require, and the FFEs and SBE-FPs will require, enrollees to make a binder payment to effectuate enrollment, and paragraph (e)(1) specifies the range of dates within which an issuer may establish a deadline to pay binder, depending on whether coverage is being effectuated under regular, prospective, or retroactive effective dates. In the 2018 Payment Notice (81 FR 94058), we added paragraph (e)(2) to address situations in which an issuer is unable to timely process binder payments submitted by enrollees, which may impact an enrollee's ability to effectuate
Although we only addressed extensions to the binder payment deadlines in § 155.400(e)(1), we did not intend to exclude other premium payment scenarios in which Exchanges could, and the Exchanges on the Federal platform would, provide similar flexibility. In published guidance, such as the 2023
For example, in connection with the COVID-19 Public Health Emergency declared by the Secretary, HHS exercised enforcement discretion
Because current paragraph (e)(2) may be read to limit the flexibility Exchanges could provide issuers regarding payments other than the binder payment, we also proposed to add the phrase “and other premium payment deadlines.” Doing so clarifies for interested parties, particularly issuers, that Exchanges may, and Exchanges on the Federal platform will, provide flexibility regarding premium payment requirements other than the binder payment, such as the requirement to trigger a grace period to enrollees receiving APTC under § 156.270(d) if enrollees fail to pay premiums timely.
We requested comments on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to amend § 155.400(e)(2) to codify that the flexibility for issuers experiencing billing or enrollment problems due to high volume or technical errors is not limited to extensions of the binder payment. We summarize and respond to public comments received on the proposed policy below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82581), we proposed changes and updates to § 155.410. At § 155.410, we proposed to amend paragraph (e)(4)(ii) to revise parameters around the adoption of an alternative open enrollment period by a State Exchange. We proposed to require that for benefit years beginning on or after January 1, 2025, State Exchanges must adopt an open enrollment period that begins on November 1 of the calendar year preceding the benefit year and ends no earlier than January 15 of the applicable benefit year, with the option to extend the open enrollment period beyond January 15 of the applicable benefit year.
In part 3 of the 2022 Payment Notice (86 FR 53429 through 53432), where we extended the open enrollment period for the Exchanges on the Federal platform to January 15, we noted several observations regarding a 6-week open enrollment period ending on December 15 including that certain consumers may be subjected to unexpected plan cost increases that they may not be notified about until January, after open enrollment concludes. We also observed that extending the open enrollment period for the Exchanges on the Federal platform to January 15 would ensure ample time for Navigators, assisters, certified application counselors, agents, and brokers to fully assist all interested consumers. We further noted that ending open enrollment on January 15 would give consumers additional time to react to updated plan cost information and more time to seek enrollment assistance, which could improve access to health care coverage, particularly for those in underserved communities who face additional barriers to accessing health care coverage.
In the proposed rule (88 FR 82851), we expressed that these observations hold true as to State Exchanges and warrant requiring that their open enrollment periods also end no earlier than January 15. Since we extended the open enrollment period for Exchanges on the Federal platform in part 3 of the 2022 Payment Notice final rule, four States have transitioned to the State Exchange model, and we anticipate that there will be additional State Exchanges in future benefit years, which increases the potential for differing open enrollment periods. While most of the State Exchanges already hold an open enrollment period that ends on or after January 15 of the benefit year, we expressed our belief that the risk of shorter open enrollment periods in the future requires ensuring a minimum open enrollment period across all Exchanges, including State Exchanges. We predicted that this policy would impose a minimal burden on most of the State Exchanges.
Additionally, we stated that ensuring State Exchanges' open enrollment periods begin on November 1 of the calendar year and continue through at least January 15 of the benefit year—thereby ensuring substantial overlap among all Exchange open enrollment periods—would reduce consumer confusion in States with State Exchanges that currently hold open enrollment periods that are shorter than the open enrollment period for the Exchanges on the Federal platform, or that begin before November 1 and end earlier than January 15. Consumers in these States would have more time to enroll in coverage and would be less likely to miss opportunities to enroll due to confusion about the duration of the open enrollment period. The combined benefits of this policy in terms of reducing consumer confusion and building in additional time for consumers to enroll could further increase Exchange enrollment and potentially have downstream impacts like improving the uninsured rate in States.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the provision that for benefit years beginning on or after January 1, 2025, State Exchanges must adopt an open enrollment period that begins on November 1 of the calendar year preceding the benefit year and ends January 15 of the applicable benefit year or later. However, we are finalizing the rule with an addition: we are adding paragraph (e)(4)(iii) to grandfather the open enrollment period of any State Exchange that held an open enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the 2024 benefit year so that it can continue to begin open enrollment before November 1 in consecutive future benefit years, so long as that State Exchange's open enrollment period continues uninterrupted for at least 11 weeks. If the State Exchange changes the dates of its open enrollment period after the effective date of this rule, it must for that and subsequent benefit years hold an open enrollment period that is compliant with the requirements of (e)(4)(i) and (ii). We are also amending 155.410(e)(4)(i) to add a reference to new paragraph (e)(4)(iii).
We are providing this flexibility in recognition of several commenters who cited the operational success of certain State Exchanges that have recently held open enrollment periods earlier than November 1 and requested that we reconsider providing an additional measure of flexibility. We do not intend to discourage operational success or generate negative downstream impacts (for instance, decreased enrollment or revenue) for any State Exchanges that held an open enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the
We summarize and respond to public comments received on the proposed policy below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82582), we proposed amending § 155.420(b)(1) and (b)(3)(i) to align the effective dates of coverage after selecting a plan during certain SEPs across all Exchanges, including State Exchanges, so that qualifying individuals or enrollees who select and enroll in a QHP during certain SEPs receive coverage beginning the first day of the month after the consumer selects a QHP. In order to consolidate and integrate the requirements in § 155.420(b)(3), without affecting any rights or obligations, we also proposed to include the requirements currently in paragraph (b)(3)(ii) into proposed paragraph (b)(3)(i) and to delete paragraph (b)(3)(ii).
In accordance with § 155.420(b)(3)(i), in the FFEs, SBE-FPs, as well as several State Exchanges, during a SEP, consumers who select a QHP through the Exchange to which regular effective dates specified in § 155.420(b) apply have the plan's coverage begin on the first day of the month after the consumer's selection. For example, if a consumer selects a QHP on March 31, their QHP coverage would start April 1.
However, in some State Exchanges, a consumer's coverage is only made effective on the first day of the month after the consumer has selected a plan during a SEP to which regular effective dates specified in § 155.420(b) apply if the consumer selects their plan between the 1st day and the 15th day of the previous month, per § 155.420(b)(1). In these State Exchanges, if a consumer selects a plan between the 16th day and the last day of the month, coverage will not become effective until the first day of the second month after plan selection. For example, for these State Exchanges, if a consumer selects a plan on March 1, Exchange QHP coverage would start April 1, but if that consumer selected a plan on March 16, their Exchange QHP coverage would start on May 1. This may result in a coverage gap of more than a month for these consumers.
As consumers typically qualify for SEPs due to a life event that may disrupt their previous coverage (such as a move to a new State, or a change in household
In addition, when transitioning between Exchanges, such as from an Exchange in a State that operates on the Federal platform to a State Exchange that does not offer first-of-the-following-month coverage, consumers may expect that their coverage becomes effective on the first day of the month after selecting a QHP. These consumers might not be aware that the effective dates of coverage may differ between Exchanges, and they might not take appropriate steps to maintain or access alternate coverage while waiting for their QHP to become effective. As a result, these consumers may be at risk of coverage gaps due to the existing policies governing effective dates of coverage.
To address this, we proposed amending § 155.420(b)(1) and (b)(3)(i) to align effective dates of coverage across all Exchanges under these SEPs. We noted that the proposal would require all State Exchanges, beginning on January 1, 2025, or an earlier date at the option of the Exchange to provide coverage that is effective on the first day of the month following plan selection, if a consumer enrolls in a QHP during a SEP to which regular effective dates specified in § 155.420(b) apply.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to amend § 155.420(b)(1) and (b)(3)(i) to align the effective dates of coverage after selecting a plan during certain SEPs across all Exchanges, including State Exchanges, and to require qualifying individuals or enrollees who select and enroll in a QHP during certain SEPs to receive coverage beginning the first day of the month after the consumer selects a QHP. We are also finalizing the proposed modifications to incorporate section § 155.420(b)(3)(ii) into the proposed paragraph (b)(3)(i) and deleting paragraph (b)(3)(ii) for purposes of simplifying and streamlining this section. We summarize and respond to public comments received on the proposed policy below.
At § 155.420, we proposed to amend paragraph (d)(16) to revise the parameters around the availability of a SEP for APTC-eligible qualified individuals with a projected annual household income at or below 150 percent of the Federal Poverty Level (FPL), hereinafter referred to as the “150 percent FPL SEP.” We proposed an amendment to the current text from “no greater than” to “at or below” for improved readability and understanding. Specifically, we proposed the removal of the limitation that this SEP is only available to a consumer whose applicable percentage, which is used to determine the amount of the consumer's premium not covered by APTC, is zero.
As background, in part 3 of the 2022 Notice of Benefit and Payment Parameters (86 FR 53429 through 53432), we finalized, at the option of an Exchange, a monthly SEP for APTC-eligible qualified individuals with a projected annual household income at or below 150 percent of the FPL. We also finalized a provision stating that this SEP is available only during periods of time during which APTC is available such that the applicable taxpayers' applicable percentage is set at zero, such as during tax years 2021 through 2025, as provided by section 9661 of the ARP and extended by the IRA.
As a result of the enhanced financial assistance established by the ARP and extended by the IRA until December 31, 2025, many consumers with a projected annual household income at or below 150 percent of the FPL, have the opportunity to enroll in a much wider range of affordable coverage. Specifically, as a result of the legislative changes passed by Congress in the ARP and IRA, more consumers have access to Exchange and QHP coverage with zero-dollar premiums after financial subsidies, including more opportunities to enroll in zero-dollar silver-level plans with significant levels of CSRs. To provide these consumers—many of whom might have had difficulty enrolling during standard SEP timelines due to lack of awareness or other logistical difficulties—with the chance to access this generous Exchange coverage, we finalized the 150 percent FPL SEP.
We remain committed to ensuring that affordable Exchange coverage is available for individuals with lower household incomes and who are uninsured, and we believe that the availability of the 150 percent FPL SEP has made significant strides in ensuring that this population has real opportunities to enroll in free or extremely low-cost Exchange coverage.
Executive Order (E.O.) 14070, signed on April 5, 2022 (which expanded upon E.O. 15009 signed on January 28, 2021), directs Federal agencies to identify ways to continue to expand the availability of affordable health care coverage, to improve the quality of coverage, to strengthen benefits, and to help more Americans enroll in quality health care coverage. To that end, this proposed change may further ensure continued improved access to affordable coverage for this population.
Continuing to make this SEP available also may continue to help consumers who lose other MEC coverage, especially those disenrolling from Medicaid or CHIP coverage to regain health care coverage. We are aware of the challenges many consumers disenrolling from Medicaid or CHIP coverage have faced due to the end of the Medicaid continuous enrollment condition as of March 31, 2023. During this time period, we have observed, and expect to continue to observe, a higher than usual volume of individuals with lower household incomes transitioning from Medicaid or CHIP coverage to coverage through Exchanges due to the end of the Medicaid continuous enrollment condition. As discussed in our guidance released on January 27, 2023, consumers disenrolling from Medicaid or CHIP because of the Medicaid continuous enrollment condition are especially vulnerable and may face challenges with transitioning from Medicaid or CHIP into other forms of coverage, such as Exchange coverage.
Finally, our experience with the 150 percent FPL SEP suggests that the policy has been successful. Based on our analysis, between October 2022 and August 2023, about 1.3 million consumers who reside in States with Exchanges on the Federal platform were APTC-eligible, had projected annual household incomes at or below 150 percent of the FPL, and enrolled in Exchange coverage under the 150 percent FPL SEP. In 2022, 41.8 percent of enrollees on Exchanges on the Federal platform had a projected annual household income of less than 150 percent of the FPL, compared to 46.9 percent of Exchange enrollees in 2023, after the implementation of the 150 percent FPL SEP. We believe the current 150 percent FPL SEP is one factor that significantly contributed to the increase in the enrollees on the Federal platform with a projected annual household income at or below 150 percent of the FPL.
In previous rulemaking, we expressed concern about offering the 150 percent FPL SEP when APTC does not always reduce the applicable percentage of a taxpayer with projected annual household income at or below 150 percent FPL to zero. We were also receptive to concerns raised by issuers that this SEP would impact the Exchange risk pool, lead to higher premiums, and impact the population with household incomes above 400 percent FPL with higher premium contributions as the APTC phases out. The possible increasing premiums also present a risk of financial hardship for consumers who purchase insurance off Exchange including those who are not eligible for APTC due to immigration status, or any other consumers who would purchase unsubsidized plans, or only receive small subsidies. At the time, we believed that the risk for adverse selection was mitigated because consumers would not have an incentive to drop their Exchange plans when healthy and resume coverage when sick using the 150 percent FPL SEP since they would be enrolled in zero-dollar premium plans due to the enhanced financial subsidies provided by the ARP and IRA. Previously, we estimated that the adverse selection risk may result in issuers increasing premiums by approximately 0.5 to 2 percent, and a corresponding increase in APTC outlays and decrease in income tax revenues of approximately $250 million to $1 billion annually, when the enhanced APTC provisions of the ARP (and later extended by the IRA) are in effect. While it is challenging to predict the future nature of the Exchanges in 2026, we estimate that some adverse selection, though unknowable at this time, may occur once enhanced subsidies sunset on December 31, 2025, and may result in issuers increasing premiums. We acknowledge that there is a wide range of predictions for an increase to premiums due to the adverse selection risk associated with this proposed change and discuss this further in the regulatory impact analysis section of this rule.
However, an analysis of the plans available to consumers in 2020, just before implementation of the enhanced subsidies, suggests that the risk of adverse selection we acknowledged may be lower than expected, and therefore, downstream impacts of that risk may be mitigated. When consumers with household incomes at or below 150 percent of the FPL are no longer eligible for enhanced subsidies, these consumers may still be eligible for low-cost silver or bronze plans with zero-dollar premiums after regular subsidies. In 2020, before the ARP provided enhanced financial assistance in the form of enhanced subsidies, about 900,000 consumers were enrolled in bronze plans, which were fully subsidized by APTC and where the consumer portion of premium was zero dollars. Additionally, in 2020, 77 percent of the consumer population at or below 150 percent FPL had access to a zero-dollar bronze plan with 16 percent of the same population having access to a zero-dollar silver plan in addition to the zero-dollar bronze plan. We believe that if the majority of consumers with income at or below 150 percent FPL would be eligible for a zero-dollar premium plan absent the enhanced subsidies provided under the ARP and IRA, then such consumers would be unlikely to use the proposed 150 percent FPL SEP in a way that caused adverse selection. In other words, we believe that the availability of these zero-dollar bronze plans for consumers at or below 150 percent FPL mitigates the risk pool impact this proposed change might cause in addition to mitigating downstream hardships for consumers who purchase insurance without subsidies or with only small subsidies.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed to remove the requirement that the SEP only be available during periods of time when the applicable taxpayer's applicable percentage for purposes of calculating the premium assistance amount, as defined in section 36B(b)(3)(A) of the Code, is set at zero. We summarize and respond to public comments received on the proposal below.
Given that the risks of premium increases and adverse selection are challenging to predict, we will work to ensure that any effects of these risks are minimal by continuing to promote strong enrollment on the Exchanges through outreach and advertising efforts.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82584), we proposed to add § 155.430(b)(1)(iv)(D) to permit enrollees on Exchanges using the Federal platform to retroactively terminate their enrollment in a QHP through the Exchange
Currently, we do not permit enrollees in Exchanges on the Federal platform to retroactively terminate QHP coverage due to retroactive enrollment in other coverage, including Medicare. When coverage is retroactively terminated, claims submitted during the period of terminated coverage will be reversed by the QHP issuer and become the responsibility of the enrollee, who must ensure claims are submitted by the health provider to the new insurance provider, if coverage is effective retroactively.
Generally, consumers who become eligible for Medicare once they turn 65 can enroll prospectively, and those who are enrolled in Exchange coverage can normally terminate coverage prospectively so that there is no overlap between the two. In accordance with § 155.430(d)(2)(iii), Exchange enrollees may request same-day or prospective termination of coverage,
Because consumers who retroactively enroll in Medicare Parts A or B may not be able to avoid an overlap in coverage by prospectively terminating their Exchange coverage, we believe it is appropriate to allow them to retroactively terminate Exchange coverage. Allowing consumers to request retroactive terminations in this scenario ensures they can minimize an overlap between Exchange and Medicare coverage and avoid paying premium unnecessarily (if the consumer owes premium after the application of APTC). However, we note that consumers would not be required to request a retroactive termination and could maintain both Exchange and Medicare coverage if they wish. Consumers who enroll in Medicare retroactively are not categorically excluded from PTC eligibility for the period of retroactive coverage, and thus may not be required to repay APTC for the months of overlap when they file their taxes, in accordance with 26 CFR 1.36B-2(c)(2)(iv); however, a QHP enrollee receiving APTC who is voluntarily requesting and is granted a retroactive QHP termination relieves the government of subsidizing two forms of coverage, as the APTC is recouped for the terminated QHP coverage months.
Although it is also possible for consumers to become retroactively eligible for Medicaid, and have an unavoidable overlap with Exchange coverage, we continue to believe it is appropriate to limit the applicability of this provision in the Exchanges on the Federal platform to Medicare. We previously allowed retroactive terminations of Exchange coverage due to enrollment in Medicaid, CHIP, and the BHP, but removed this option for the FFEs in the 2019 Payment Notice (83 FR 16930). This option was retained for State Exchanges and SBE-FPs, which as previously mentioned are more closely integrated into their State-administered Medicaid programs. In response to commenters who opposed this change, we noted that although consumers in these cases may wish to recoup premiums paid during the period of overlapping coverage, there is significant risk that providers who participate in the consumer's Exchange coverage do not participate in Medicaid, CHIP, or BHP, which would leave the consumer with unexpected out-of-pocket costs. However, because Medicare is accepted by many, if not most, providers, it is less likely that a retroactive QHP disenrollment would leave consumers responsible for claims incurred during the period of retroactive Medicare enrollment.
We note that in the FFEs and SBE-FPs, caseworkers have system-based evidence of both QHP and Medicare eligibility dates and would be able to verify that an enrollee requesting retroactive termination is enrolled in Medicare and approve retroactive requests. This would ensure that enrollees cannot retroactively terminate their QHP coverage for other, unauthorized reasons such as low utilization of coverage, which could create an adverse selection risk. We also note that, similar to retroactive Medicaid enrollment, a consumer's retroactive enrollment in Medicare will not cause the consumer, when filing taxes for the year of coverage, to have to repay APTC for the months in which the consumer, due to the retroactive Medicare enrollment, is enrolled in both a QHP with APTC and Medicare. See 26 CFR 1.36B-2(c)(2)(iv).
Because Medicare generally does not provide coverage for dental services, there is no overlap in services with an SADP when an enrollee retroactively enrolls in Medicare, as there is with a QHP, and we therefore clarify that requests for retroactive coverage under this provision are limited to QHPs. Allowing retroactive termination of SADPs would create a much greater risk of uncovered claims, since dental claims that were reversed by an issuer would likely not be covered under Medicare Parts A or B. However, we clarify that, due to the requirement that consumers must enroll in a QHP in order to enroll in an SADP, requests for retroactive termination of QHP coverage, which also involve prospective termination of the QHP, will result in prospective termination of SADP coverage.
Finally, in recognition of the challenges associated with retroactively adjusting coverage for preceding years, we proposed to require that enrollees must request retroactive termination of coverage within 60 days of the date they retroactively enroll in Medicare (that is, the date the enrollment occurs, not the Medicare coverage effective date).
We requested comments on this proposal. Specifically, we requested comment on whether the public benefits of this proposal to honor an enrollee's choice, recoup APTC for duplicative coverage, and protect the individual market risk pool outweighs the risk that an enrollee would be left with uncovered claims for the overlapping period. We also requested comment on the best way to ensure that enrollees have the necessary information to make an informed decision about whether to retroactively terminate coverage. In the proposed rule we noted that if this proposal is finalized, we intended to monitor the impact to minimize harm to consumers. We also sought comment on whether this provision should be mandatory for State Exchanges, rather than optional, and if so, how State Exchanges would verify retroactive Medicare enrollment dates.
After consideration of comments and for the reasons outlined in the proposed rule and in our responses to comments, we are finalizing the proposal to permit enrollees on Exchanges using the Federal platform and in State Exchanges to retroactively terminate their enrollment in a QHP through the Exchange when the enrollee enrolls in Medicare Parts A or B retroactively with the following modifications: (1) we are making explicit that our reference to enrollment in Medicare Parts A or B includes enrollment through a Medicare Advantage plan; (2) retroactive termination of QHP coverage under this provision is limited to earlier than the later of (a) the day before the first day of coverage under Medicare Part A or B or a Medicare Advantage plan, and (b) the day that is 6 months before retroactive termination of QHP coverage is requested; (3) we are not permitting retroactive terminations for SAPDs; and (4) we are allowing HHS to elect whether to implement this provision for Exchanges using the Federal platform.
As noted in the proposed rule (88 FR 82585), Exchanges on the Federal platform have system-based evidence of both QHP and Medicare eligibility dates and can verify Medicare enrollment. In addition, as noted in our response to commenters, we intend to explore ways to ensure that consumers are aware of the consequences of choosing to retroactively terminate coverage and are able to make an informed decision. Finalizing that this policy is at the option of the Exchanges on the Federal platform provides time to ensure these
Regarding the potential for Medicare beneficiaries
Although providers must generally submit claims to Medicare no later than 12 months after the date of service, in certain situations where Medicare Part A or B entitlement did not exist at the time service was furnished and the beneficiary receives notice of retroactive Medicare Part A or B entitlement after the date of service, the 12-month limit may be extended through the last day of the 6th calendar month following the month in which the beneficiary receives notice of Medicare Part A or Part B entitlement.
For the comment raising potential concerns about impacts to risk adjustment from retroactive termination of coverage, we note that the EDGE server data collection requirements have always mandated that issuers of risk adjustment covered plans provide the most recent enrollment data for the applicable benefit year.
Furthermore, we also note that issuers must, in certain circumstances, recoup payment for medical or pharmaceutical claims, under the retroactive terminations allowed by current regulation. Because the number of consumers who retroactively enroll in Medicare and elect to retroactively terminate QHP coverage is limited, we do not expect this provision to significantly increase the number of claims for which issuers must recoup payment. Although it may be difficult for issuers to recoup payment for certain types of claims, such as pharmaceutical claims, we do not believe it is appropriate to reimburse issuers for these unrecoverable claims, nor is there authorization for us to do so. We note that issuers are, generally, still entitled to seek reimbursement from providers for claims that are reversed. In addition, we expect that consumers who retroactively enroll in traditional Medicare Parts A or B, but not a stand-alone Part D plan, will evaluate whether retroactively terminating QHP coverage is appropriate, given the likelihood that the costs for any pharmaceutical claims will become the consumer's responsibility. We also note that some Medicare Advantage plans include Part D prescription drug benefits, and enrollees in these Medicare Advantage plans may be able to have these claims resubmitted by the provider to the new plan. As noted elsewhere, we intend to explore ways to convey this information to consumers.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82585), we proposed to require that State Exchanges and SBE-FPs establish and impose quantitative time and distance QHP network adequacy standards that are at least as stringent as the FFEs' time and distance standards established for QHPs under § 156.230. We also proposed that State Exchanges and SBE-FPs be required to conduct quantitative network adequacy reviews prior to certifying any plan as a QHP, consistent with the reviews conducted by the FFEs under § 156.230. We further proposed to require State Exchanges and SBE-FPs permit issuers that are unable to meet the specified time and distance network adequacy standards to participate in a justification process after submitting their initial network adequacy data to account for variances and potentially earn QHP certification. In addition, we proposed a framework for granting State Exchanges and SBE-FPs an exception to the proposed quantitative network adequacy standards and review requirements if we determine that the Exchange applies and enforces quantitative network adequacy standards that are different from the FFEs' but ensure a level of access to providers that is as great as that ensured by the FFEs' network adequacy standards established for QHPs under § 156.230. Finally, we proposed to mandate that State Exchanges and SBE-FPs require all issuers seeking QHP certification to submit information to the State Exchange or SBE-FP about whether network providers offer telehealth services.
Understanding that some State Exchanges or SBE-FPs may need to promulgate regulations to comply with the proposed provisions requiring State Exchanges and SBE-FPs to impose quantitative network adequacy standards and conduct quantitative network adequacy reviews, as well as the requirement related to QHP issuer submission of telehealth information, we proposed that these provisions would be effective for plan years
In the proposed rule (88 FR 82587), we stated that network adequacy is a key factor affecting consumers' access to care. We explained that while the FFEs impose uniform network adequacy standards across the States they serve that require QHP issuers to meet quantitative metrics, a similarly uniform network adequacy standard does not exist for States served by State Exchanges and SBE-FPs. Indeed, we further explained that these circumstances prompted the National Association of Insurance Commissioners to develop the NAIC Health Benefit Plan Network Access and Adequacy Model Act (Model Act).
We noted in the proposed rule (88 FR 82587) that State Exchanges and SBE-FPs currently have a mix of network adequacy policies in place, and approximately 25 percent of those fail to impose any quantitative standard. Quantitative network adequacy standards can be monitored relatively easily and applied objectively and may include standards that measure provider-to-enrollee ratios, time and distance, or appointment wait times.
We stated in the proposed rule that, based on our experience conducting network adequacy reviews and regulating QHPs, as well as feedback from interested parties, including the many commenters who requested in the 2023 Payment Notice (87 FR 27334) that HHS extend Federal network adequacy standards to State Exchanges in future rulemaking, we are now of the view that no matter the State in which a QHP is offered, some quantitative analysis is necessary for an Exchange to objectively monitor network adequacy and determine whether a QHP provides enrollees in that State with access to an adequate network of providers.
Moreover, we stated that the proliferation in recent years of QHP issuers with narrower provider networks raises several consumer protection concerns. QHPs with narrower networks may lack access to specific provider specialties in-network, resulting in significant out-of-pocket expenses for consumers who must seek care out-of-network or resulting in consumers forgoing care to avoid these expenses. We noted that we have also been made aware, through communications with interested parties, of issues faced by consumers where in-network emergency physicians and mental health providers are in limited supply or, in the case of in-network emergency physicians, not available at in-network hospitals. Additionally, we stated that the proliferation of narrower networks risks consumers being enrolled in plans whose networks do not have sufficient capacity to serve them or whose providers are too geographically dispersed to be reasonably accessible.
Therefore, we proposed (88 FR 82587) to establish a national floor of quantitative network adequacy standards and network adequacy reviews. We stated in the proposed rule that although a number of State Exchanges and SBE-FPs have taken meaningful steps towards ensuring the adequacy of QHP networks, we are of the view that every Exchange should apply quantitative network adequacy standards and conduct a thorough review and analysis of issuer compliance with these standards to effectively evaluate the adequacy of QHP networks in order to ensure that all consumers, regardless of which State they live in, have timely access to providers to manage their health care needs.
For plan years beginning on or after January 1, 2025 and future plan years, we proposed that State Exchanges and SBE-FPs must (1) establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230; and (2) conduct reviews of a plan's compliance with those quantitative network adequacy standards prior to certifying any plan as a QHP, consistent with the manner in which the FFEs review the network adequacy of plans under § 156.230. For purposes of this proposed policy, we stated in the proposed rule that “at least as stringent as” means time and distance standards that use a specialty list that includes at least the same specialties as our provider specialty lists and time and distance parameters that are at least as short as our parameters. We explained that States would be permitted to implement network adequacy standards that are more stringent than those performed by the FFEs under § 156.230. In other words, States could use a specialty list that is broader than our specialty lists, but it must include all the provider specialties included in our lists. Similarly, we explained that the time and distance parameters could also be narrower than our parameters, meaning they could require shorter time and/or distances, but they cannot be less demanding than our time and distance parameters.
In the proposed rule, we stated that quantitative time and distance standards help strengthen QHP enrollees' timely access to a variety of providers to meet their health care needs, which in turn helps ensure that enrollees can receive
In the 2023 Payment Notice (87 FR 27322), we adopted time and distance standards that the FFEs would use to assess whether plans to be certified as QHPs in the FFEs meet network adequacy standards. The proposed provider specialty lists for time and distance standards for PY 2023 were informed by prior HHS network adequacy requirements, consultation with interested parties, and other Federal and State health care programs, such as Medicare Advantage and Medicaid. The provider specialty lists that were finalized for PY 2023 covered more provider types than previously evaluated under FFE standards so that QHP networks would be robust, comprehensive, and responsive to QHP enrollees' needs. In the proposed rule (88 FR 82588), we stated that we believe these provider specialty lists promote access to a variety of provider types and, as a result, strengthen consumer access to health care services without unreasonable delay. To establish a national floor for quantitative network adequacy standards, we proposed that the provider specialty list that State Exchanges and SBE-FPs use must include, at a minimum, the providers in the provider specialty lists for the FFEs that were applicable to PY 2023. Those lists are included in the preamble of this final rule, in Tables 9 and 10.
Consistent with the standards for the FFEs, and to strengthen QHP enrollees' timely access to a variety of providers to meet their health care needs, we proposed that State Exchanges and SBE-FPs' time and distance standards would be calculated at the county level and vary by county designation. We proposed that State Exchanges and SBE-FPs would be required to use a county type designation method that is based on the population size and density parameters of individual counties. We further stated that under our proposal, the time and distance standards State Exchanges and SBE-FPs would establish and impose would apply to the provider specialty lists contained in the proposed rule (Tables 9 and 10 in the preamble of this final rule). We explained that to count towards meeting the time and distance standards, individual and facility providers listed in Tables 9 and 10 would have to be appropriately licensed, accredited, or certified to provide services in their State, as applicable, and would need to have in-person services available.
We stated in the proposed rule that the county-specific time and distance parameters that QHPs would be required to meet would be detailed in future guidance, namely, the annual CMS Letter to Issuers in the Federally-facilitated Exchanges. We stated that we would consider industry standards in developing these standards.
For plan years beginning on or after January 1, 2025, we proposed (88 FR 82590) that State Exchanges and SBE-FPs be required to conduct quantitative network adequacy reviews prior to QHP certification, and that they conduct them consistent with network adequacy reviews conducted by the FFEs under § 156.230. Specifically, we proposed that State Exchanges and SBE-FPs would be required to conduct, prior to QHP certification, quantitative network adequacy reviews to evaluate compliance with requirements under § 156.230(a)(1)(ii) and (iii), and (a)(2)(i)(A), while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4). We stated in the proposed rule that under this proposal, State Exchanges and SBE-FPs would be prohibited from accepting an issuer's attestation as the only means for plan compliance with network adequacy standards. We further proposed that State Exchanges and SBE-FPs would make available to SADP applicants the limited exception available to SADPs under § 156.230(a)(4) pursuant to which SADPs may not be required to meet FFE network adequacy standards under § 156.230(a)(4), for the same reasons we made this exception available in the FFEs in the 2024 Payment Notice (88 FR 25878 through 25879). This exception is not available to medical QHP issuers.
In the proposed rule (88 FR 82590), we acknowledged that State-specific challenges may necessitate exceptions, and so we proposed to require State Exchanges and SBE-FPs to permit issuers that are unable to meet the specified standards to participate in a justification process after submitting their initial data to account for variances, consistent with the processes specified under § 156.230(a)(2)(ii) and (a)(3) and (4). We noted that State-specific challenges could include barriers beyond an issuer's control, such as provider supply shortages or topographic barriers.
We stated in the proposed rule that the issuer would include this justification as part of its QHP application and describe how the plan's provider network provides an adequate level of service for enrollees and how the plan's provider network will be strengthened and brought closer to compliance with the network adequacy standards prior to the start of the plan year. We further stated that the issuer would be required to provide information as requested by the State Exchange or SBE-FP to support this justification. We also explained that State Exchanges and SBE-FPs would be required to review the issuer's justification to determine whether making such health plan available through the Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates as specified under § 156.230(a)(3). We further explained that in making this determination, the factors State Exchanges and SBE-FPs could consider include whether the exception is reasonable based on circumstances such as the local availability of providers and variables reflected in local patterns of care. We stated that if the State Exchange or SBE-FP determines that making such health plan available through its Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates, it could then certify the plan as a QHP.
In the proposed rule (88 FR 82590), we stated that we are aware that some States Exchanges employ robust, quantitative network adequacy standards that differ from those used by the FFEs, but still ensure that QHPs provide consumers with reasonable, timely access to practitioners and facilities to manage their health care needs, consistent with the ultimate aim of these proposals. Accordingly, we proposed a framework for granting exceptions to the requirements that State Exchanges and SBE-FPs establish and impose network adequacy time and distance standards for QHPs that are at least as stringent as the standards applicable to QHPs in FFEs and conduct quantitative network adequacy reviews that are consistent with those carried out by the FFEs under § 156.230. We proposed that HHS could grant State Exchanges and SBE-FPs an exception if it determines that the Exchange applies and enforces quantitative network adequacy standards that are different from the FFEs' but ensure reasonable access as defined under § 156.230. We also proposed that the exception would be available only to State Exchanges and SBE-FPs that conduct quantitative reviews of network adequacy prior to certifying plans as QHPs. We further proposed that Exchanges seeking to employ alternative network adequacy standards would be required to submit an exception request, in a form and manner specified by HHS, and to support their exception request with evidence-based data demonstrating that such standards ensure access as defined under § 156.230.
For example, we explained that if a State were to provide quantitative evidence that their network adequacy time and distance standards that measure access by service types provide consumers with equal access to providers as the Federal network adequacy standards under § 156.230 that measure access by provider types, we may grant the respective State's request for an exception from measuring access by provider types. Additionally, we explained that if a State were to use different county type designations than the five county type designations that we use to assess QHP time and distance standards at the county level (that is, Large Metro, Metro, Micro, Rural, CEAC), we would consider the respective State's request for an exemption from using the same five county type designations only if the State were to provide evidence that their alternative county type designations provide consumers with equal access to providers as the Federal network adequacy standards under § 156.230. We stated that alternative quantitative network adequacy standards that we would review for potentially qualifying for the exemption must be supported by evidence-based data, demonstrating that such standards provide enrollees with a level of access to providers that is equal to or greater than that ensured by the FFE network adequacy standards under § 156.230.
Although we proposed to establish minimum standards related to network adequacy in the proposed rule, we solicited comment on how States may be able to develop a combination of data-driven quantitative and qualitative standards, developed with input from interested parties, to assess network adequacy. In the 2020 Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care final rule (85 FR 72754, 72802), we provided States the flexibility to develop quantitative network adequacy standards for determining network adequacy. In that rule, we noted that in some situations, time and distance may not be the most effective type of standard for determining network adequacy and that some States have found that the time and distance analysis produces results that may not accurately reflect provider availability. For example, a State that has a heavy reliance on telehealth in certain areas of the State may find that a health care provider-to-enrollee ratio is more useful in measuring meaningful access to all services without unreasonable delay, as the time it would take the enrollee, and the distance the enrollee would have to travel, to access the provider in-person could be well beyond applicable time and distance standards, but the enrollee may still be able to easily and quickly access many different providers on a virtual basis (85 FR 72802). In the proposed rule, we sought comment on how we should administer the process for Exchanges to apply for these exceptions, including the appropriate timelines, and the data that would be required to be submitted as part of the exception request. We also sought comment on how we should evaluate the provider access offered by QHP issuers in a State that requests an exception to establish and impose quantitative network adequacy standards that are different from the FFEs', whether and how to measure the access provided by those different standards over time, and how long an approved exemption should last.
In the proposed rule, we stated that to ensure compliance with these proposed quantitative time and distance QHP network adequacy standards and review requirements, we would coordinate with State Exchanges and SBE-FPs to provide technical assistance to support their compliance with the requirements of this policy and work with them should it be necessary to remedy any gaps in compliance. However, we stated that if a State Exchange or SBE-FP fails to comply with these standards, we
We proposed (88 FR 82591) to require State Exchanges and SBE-FPs to require that all issuers seeking certification of plans to be offered as QHPs submit information to the respective State Exchanges or SBE-FPs about whether network providers offer telehealth services. We proposed that this requirement would be applicable beginning with the QHP certification cycle for PY 2025. We stated in the proposed rule that this data would be for informational purposes; it would be intended to help inform the future development of telehealth standards and would not be displayed to consumers. We also stated that this information could be relevant to State Exchange and SBE-FP analysis of whether a QHP meets network adequacy standards. We noted that this proposal is not intended to suggest that telehealth services would be counted in place of in-person service access for the purpose of State Exchange and SBE-FP issuers meeting time and distance network adequacy standards for PY 2025. We explained that while we acknowledge the growing importance of telehealth, we want to ensure that telehealth services do not reduce the availability of in-person care.
We explained that for the purpose of this proposal, telehealth encompasses professional consultations, office visits, and office psychiatry services delivered through technology-based methods, including virtual check-ins, remote evaluation of pre-recorded patient data, and inter-professional internet consultations. We noted that, currently, for issuers in FFEs to comply with telehealth reporting standards, issuers must indicate whether each provider offers telehealth with the options “Yes,” “No,” or “Requested information from the provider, awaiting their response.” We proposed that State Exchanges and SBE-FPs would be required to impose this requirement on issuers when issuers submit provider information.
We sought comment on this proposal, including comments on how we might incorporate telehealth availability into network adequacy standards in future plan years.
To reduce burden on State Exchanges and SBE-FPs that are not yet conducting quantitative network adequacy reviews, we did not propose that State Exchanges and SBE-FPs enforce appointment wait time standards or that State Exchanges and SBE-FPs ensure that the provider network of each QHP meets applicable standards specified in § 156.230(b) through (e). However, we sought comment to inform any potential future enforcement of appointment wait time standards as well as the standards specified in § 156.230(b) through (e) and stated that we looked forward to capturing a wide range of perspectives on these topics from various interested parties. We stated that we were especially interested in comments about how State Exchanges and SBE-FPs may enforce quantitative network adequacy standards for appointment wait times, as well as the impact enforcing these standards may have on issuers and consumers.
We also sought comment on our proposal for State Exchanges and SBE-FPs to establish and impose quantitative time and distance QHP network adequacy standards that are at least as stringent as the FFEs' time and distance standards established for QHPs under § 156.230 and to conduct quantitative network adequacy reviews, prior to QHP certification, that are consistent with the reviews conducted by the FFEs under § 156.230, including comment on whether we should amend § 156.230 in addition to § 155.1050 to directly apply the same standards applicable to issuers on FFEs to issuers in State Exchanges and SBE-FPs for plan years beginning on or after January 1, 2025.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing these proposals with a clarification to the exception process and a modification to require implementation for plan years beginning on or after January 1, 2026.
First, under § 155.1050(a)(2)(i)(A), we are finalizing that for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230(a)(2)(i)(A).
Second, we are finalizing that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews prior to certifying any plan as a QHP, consistent with the reviews conducted by the FFEs under § 156.230. Specifically, we are finalizing at § 155.1050(a)(2)(i)(B) that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4).
Third, we are finalizing § 155.1050(a)(2)(ii) to provide that, for plan years beginning on or after January 1, 2026, HHS may grant an exception to the requirements described under § 155.1050(a)(2)(i) to a State Exchange or SBE-FP that demonstrates with evidence-based data, in a form and manner specified by HHS, that (1) the Exchange applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4); and (2) the Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP. In this final rule, for this exception process, we are clarifying that, for (1) above, the Exchange will need to demonstrate that it applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4), and not § 156.230 generally, to reinforce that issuers on the State Exchanges and SBE-FPs do not need to comply with the appointment wait time standards under § 156.230(a)(2)(i)(B) under this policy.
Lastly, we are finalizing § 155.1050(a)(2)(i)(C) to provide that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must require that all issuers seeking certification of a plan as a QHP submit information to the Exchange reporting whether or not network providers offer telehealth services.
In preparation for PY 2026, we will begin communicating and coordinating with State Exchanges and SBE-FPs through the provision of technical assistance. Specifically, during PYs 2024 and 2025, we will work closely with State Exchanges and SBE-FPs on their plans to comply with these network adequacy requirements for plan years beginning on or after January 1, 2026.
We summarize and respond below to public comments received on these proposals.
Additionally, harmonizing network adequacy standards across States would prevent States from enforcing quantitative network adequacy standards that are more stringent than the FFEs' standards or from using the exception process under § 155.1050(a)(2)(ii) to enforce standards that they determined are in the best interest of their consumers. We are of the view that setting the FFEs' quantitative time and distance network adequacy standards as a national floor strikes an appropriate balance of providing States with these important flexibilities while also ensuring that all consumers, regardless of which State they live in, have timely access to providers to manage their health care needs.
Our time and distance metrics for network adequacy are based on Medicare Advantage standards and were designed with careful consideration of other network adequacy standards, including those of individual States, accrediting entities, and Federal health care programs. Until we can more fully assess the impact of the time and distance standards, we finalize in this rule on QHP issuers in State Exchanges and SBE-FPs, we believe that modifying those standards would also be premature and may impose burdens on QHP issuers that we have not fully evaluated. We will further research commenters' recommended changes to our time and distance metrics as well as their implications and may consider them in future rulemaking.
We acknowledge commenters' concerns that our network adequacy proposal may create conflicting or duplicative regulations and increase administrative burden on States Exchanges, SBE-FPs, and their issuers. We believe that finalizing these proposals with a modification to require implementation for plan years beginning on or after January 1, 2026, will provide States an opportunity to revise their regulations to ensure there are no conflicting or duplicative regulations. This modification may also lessen the administrative burden of this policy on State Exchanges, SBE-FPs, and their issuers by providing them more time to come into compliance with these new requirements.
In the proposed rule (88 FR 82590), we acknowledged that State-specific factors, such as provider supply shortages, topographic barriers, or other barriers beyond an issuer's control, may necessitate exceptions to these requirements, and this network adequacy policy permits State Exchanges and SBE-FPs to consider those factors as they conduct network adequacy reviews prior to plan certification. Specifically, this final rule extends flexibility to State Exchanges and SBE-FPs to permit issuers that are unable to meet the specified standards to participate in a justification process after submitting their initial data to account for variances, consistent with the processes specified under § 156.230(a)(2)(ii) and (a)(3) and (4). The issuer would include this justification as part of its QHP application and describe how the plan's provider network provides an adequate level of service for enrollees and how the plan's provider network will be strengthened and brought closer to compliance with the network adequacy standards prior to the start of the plan year. State Exchanges and SBE-FPs will be required to review the issuer's justification to determine whether making such health plan available through the Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates as specified under § 156.230(a)(3). In making this determination, the factors State Exchanges and SBE-FPs could consider include local context factors that the commenters reference and may envision, such as whether the exception is reasonable based on circumstances such as the local availability of providers and variables reflected in local patterns of care. If the State Exchange or SBE-FP determines that making such health plan available through its Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates, it could then certify the plan as a QHP.
We will also seek to determine whether the State conducts quantitative reviews of time and distance standards for QHP network adequacy using issuer-submitted data for all plans applying for QHP certification and whether the State's quantitative review of time and distance standards for QHP network adequacy includes parameters that are at least as short as those listed in the 2023 Letter to Issuers
Before PY 2026, we will also review the information provided by State Exchanges and SBE-FPs to support their exception request. This information may include materials such as guidance documents or templates that describe the State's methodology for reviewing issuer-submitted quantitative data to assess compliance with QHP network adequacy standards, information about the frequency and timeline for network adequacy reviews for QHP issuers in the State, information regarding the State's justification process for issuers not yet meeting the network adequacy standards, and information regarding any compliance review processes the State utilizes to follow up with issuers that complete the justification process.
We stated in the proposed rule (88 FR 82591, 82638 through 82639) that this data would be for informational purposes, would be intended to help inform the future development of telehealth standards, and would not be displayed to consumers. We believe that the above-described telehealth reporting standards support these objectives by providing State Exchanges and SBE-FPs with a general picture regarding the availability of telehealth services in their State. Additionally, at this time, since this data will not be displayed to consumers, it is not necessary for State Exchanges and SBE-FPs to collect more granular telehealth data from their issuers.
We thank commenters for their feedback on these issues and will take their comments into consideration in future rulemaking.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82591), for the 2025 benefit year, we proposed to retain the 2024 benefit year FFE user fee rate of 2.2 percent of total monthly premiums and an SBE-FP user fee rate of 1.8 percent of the total monthly premiums.
Section 1311(d)(5)(A) of the ACA permits an Exchange to charge assessments or user fees on participating health insurance issuers as a means of generating funding to support its operations. If a State does not elect to operate an Exchange or does not have an approved Exchange, section 1321(c)(1) of the ACA directs HHS to operate an Exchange within the State. Accordingly, in § 156.50(c), we state that a participating issuer offering a plan through an FFE or SBE-FP must remit a user fee to HHS each month that is equal to the product of the annual user fee rate specified in the annual HHS notice of benefit and payment parameters for FFEs and SBE-FPs for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE or SBE-FP. OMB Circular A-25 established Federal policy regarding user fees and what the fees can be used for.
Based on estimated costs, enrollment (including anticipated establishment of SBE-FPs or shifts to State Exchanges in certain States in which FFEs or SBE-FPs currently are operating), and premiums for the 2025 benefit year, we proposed a 2025 user fee rate for all participating FFE issuers of 2.2 percent of total monthly premiums.
Section 156.50(c)(1) provides that, to support the functions of FFEs, an issuer offering a plan through an FFE must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE. Issuers seeking to participate in an FFE in the 2025 benefit year will receive two special benefits not available to issuers offering plans in State Exchanges: (1) the certification of their plans as QHPs; and (2) the ability to sell health insurance coverage through an FFE to individuals determined eligible for enrollment in a QHP. For the 2025 benefit year, issuers participating in an FFE will receive special benefits from the following Federal activities:
• Provision of consumer assistance tools;
• Consumer outreach and education;
• Management of a Navigator program;
• Regulation of agents and brokers;
• Eligibility determinations;
• Enrollment processes; and
• Certification processes for QHPs (including ongoing compliance verification, recertification, and decertification).
Activities performed by the Federal Government that do not provide issuers participating in an FFE with a special benefit are not covered by the FFE user fee. We expect that the user fee rates we finalize provide adequate funding for each of the special benefits issuers participating in an FFE receive. For a description of how estimates for costs are developed and a full description of how the proposed 2025 benefit year FFE
We noted in the proposed rule that if any events significantly changed our estimates around costs, premiums, or enrollment projections between the proposed rule and the final rule, we may modify the FFE and SBE-FP user fee rates that were proposed.
We proposed to charge issuers offering QHPs through an SBE-FP a user fee rate of 1.8 percent of the monthly premium charged by the issuer for each policy under plans offered through an SBE-FP for the 2025 benefit year.
In § 156.50(c)(2), we specify that an issuer offering a plan through an SBE-FP must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an SBE-FP. We expect that the user fee rates we finalize will provide adequate funding for each of the special benefits issuers participating in an SBE-FP will receive. See the proposed rule (88 FR 82592 through 82593) for a full description of how the user fee rate for SBE-FPs is calculated, special benefits to issuers using the SBE-FP, and how the proposed 2025 benefit year SBE-FP user fee rate was developed.
As previously mentioned in this section, we also noted in the proposed rule that if any events significantly change our estimates around costs, premiums, or enrollment projections between the proposed rule and the final rule, we may modify the FFE and SBE-FP rates that were proposed.
We sought comment on the proposed 2025 FFE and SBE-FP user fee rates.
After the proposed rule was published, we revised our enrollment projections as a result of newly available data based on the 2024 Open Enrollment (OE) that occurred between November 2023 and January 2024. In particular, during the 2024 OE cycle, there were more plan selections than expected, which resulted in an increase in our enrollment projections.
Accordingly, we are finalizing user fee rates of 1.5 percent of monthly premiums charged by issuers for each policy under plans offered through an FFE and 1.2 percent of monthly premiums charged by issuers for each policy under plans offered through an SBE-FP. We will continue to calculate the FFE and SBE-FP user fee rate annually in a manner that ensures sufficient funding for operations, ensuring that consumers' needs are met and consumer education and outreach, assisters, and
We will also continue to examine cost estimates for the special benefits provided to issuers offering QHPs on the FFEs and SBE-FPs and will continue to establish user fee rates that are reasonable and necessary to fully fund user fee eligible Exchange operation costs.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82593), we proposed to revise the standards for the State selection of EHB-benchmark plans at § 156.111 for benefit years beginning on or after January 1, 2027, to: consolidate the options for States to change EHB-benchmark plans at § 156.111(a); revise the scope of benefit requirements at § 156.111(b)(2); and amend § 156.111(e)(3) to require States to submit a formulary drug list as part of its application to change EHB-benchmark plans only if the State is seeking to change its prescription drug EHB. We refer readers to the proposed rule (88 FR 82593) for a discussion of the statutory and regulatory background relating to these proposals.
As we explained in the proposed rule, nine States have changed their EHB-benchmark plans since 2018 by complying with the requirements at § 156.111.
As a result of that feedback, we proposed changes to § 156.111, as discussed in the following subsections. We also sought comment on the effective date of these changes.
After consideration of comments and for the reasons outlined in our response to comments, we are changing the effective date of the changes we are finalizing to 156.111 (as further discussed in the sections below). Specifically, we are finalizing the proposed revisions to § 156.111 so that they will be effective for benefit years beginning on or after January 1, 2026, rather than benefit years beginning on or after January 1, 2027, as was proposed.
Therefore, we are finalizing the proposed revisions to § 156.111 so that they will be effective for benefit years beginning on or after January 1, 2026. We are otherwise finalizing the revisions to § 156.111 as proposed, as described in the sections that follow.
We proposed to consolidate the choices for States to change their EHB-benchmark plan by revising § 156.111(a) to add a new paragraph (a)(2) which would simply state that, subject to paragraphs (b), (c), (d), and (e) of § 156.111, for plan years beginning on or after January 1, 2027, a State may change its EHB-benchmark plan by selecting a set of benefits that would become the State's EHB-benchmark plan. We stated that the language at current § 156.111(a) would be redesignated as § 156.111(a)(1) and would be revised to provide that this paragraph applies to plan years beginning on or after January 1, 2020 through December 31, 2026. Further, we stated that the language currently at § 156.111(a)(1) through (3) would be redesignated as § 156.111(a)(1)(i) through (iii).
Under 42 CFR 440.347, Medicaid ABPs authorized under section 1937 of the Act are required to meet EHB standards. Similarly, under 42 CFR 600.405, in States that elect to operate a BHP, the standard health plans must meet EHB standards. We explained in the proposed rule that the changes to State EHB-benchmark plan options would also be applicable to States when choosing an EHB-benchmark plan used to define EHBs in a Medicaid ABP or BHP standard health plan.
We sought comment on the proposal to consolidate State EHB-benchmark plan options under § 156.111(a).
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed, though for the reasons described earlier, we are finalizing this change for plan years beginning on or after January 1, 2026, rather than for plan years beginning on or after January 1, 2027, as was proposed. We summarize and respond to public comments received on the proposed consolidation of State EHB-benchmark plan options under § 156.111(a) below.
We proposed to revise the scope of benefit requirements at § 156.111(b)(2) for plan years beginning on or after January 1, 2027, with corresponding proposed revisions to the actuarial requirements at § 156.111(e)(2). Specifically, we proposed at § 156.111(b)(2)(ii) that a State's new EHB-benchmark plan would be required to provide a scope of benefits that is equal to the scope of benefits of a typical employer plan in the State, and that the scope of benefits of a typical employer plan in the State would be defined as any scope of benefits that is as or more generous than the scope of benefits in the State's least generous typical employer plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), and as or less generous than the scope of benefits in the most generous typical employer plan in the State (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), among the typical employer plans currently defined at § 156.111(b)(2)(i)(A) and (B). We proposed to remove the generosity standard currently at § 156.111(b)(2)(ii). We also proposed a technical clarification to the language regarding supplementation at § 156.111(b)(2)(i), which currently states that a State's new EHB-benchmark plan must “provide a scope of benefits equal to,
Under 42 CFR 440.347, Medicaid ABPs authorized under section 1937 of the Act are required to meet EHB standards. Under 42 CFR 600.405, in States that elect to operate a BHP, the standard health plans are required to meet EHB standards. We explained in the proposed rule that the changes to State EHB-benchmark plan requirements would also be applicable to States when choosing an EHB-benchmark plan used to define EHBs in a Medicaid ABP or a BHP standard health plan.
We sought comment on the proposals to revise the typicality standard at § 156.111(b)(2)(i), remove the generosity standard at § 156.111(b)(2)(ii), make corresponding edits to § 156.111(e)(2), and make a technical revision to the language regarding supplementation at § 156.111(b)(2)(i).
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed though, for the reasons described earlier, we are finalizing these changes for plan years beginning on or after January 1, 2026, rather than for plan years beginning on or after January 1, 2027. We summarize and respond to public comments received on these proposals below.
Commenters indicated that the decreased burden and increased flexibility provided by the updates to the typicality standard will incentivize States to contemplate EHB-benchmark plan updates more frequently to keep pace with both the needs of their consumers and the evolving scope of benefits typically provided by employer plans. Commenters noted this is a particularly desirable outcome, given that only nine States have updated their EHB-benchmark plans to date, and many of those changes have been modest.
Commenters noted that, in light of the reduced costs and time States must allocate to update their EHB-benchmark plan under the proposed change, States may consequently be able to devote more of their attention and energy towards assessing the most optimal package of benefits to provide under their new EHB-benchmark plan, including through more robust public engagement efforts.
Commenters noted that, with the updates to the typicality standard and the elimination of the generosity standard, the scope of benefits provided by the most generous typical employer plan can now reflect the scope of benefits provided by the most generous large group typical employer plan. Commenters indicated that large group plans are more generous than the other plan options available for use in a State's typicality analysis, such that the updates to these policies taken together will provide States the opportunity to provide a potentially more generous package of EHB through their EHB-benchmark plan than they could previously.
Commenters suggested that by eliminating the generosity standard, States can better incorporate benefits
Several commenters opposed the proposed removal of the generosity standard at § 156.111(b)(2)(ii). These commenters suggested that removing the generosity standard could allow the scope of benefits in EHB-benchmark plans to outpace the scope of benefits provided by typical employer plans. Further, some commenters asserted, without the generosity standard, there would be no constraints on how generous a State could elect to make its EHB-benchmark plan and allow a State to manipulate the EHB-selection process to impermissibly expand the scope of benefits beyond what the ACA intended. Specifically, a few commenters expressed concern that, in conjunction with the proposed change at § 155.170 with regard to State-mandated benefits included in the EHB-benchmark plan, removing any constraint on EHB-benchmark plan generosity would enable States to subvert the requirement to defray the costs of mandated benefits, simply by adding all existing and future mandated benefits to their benchmark plan. Commenters expressed concerns about coverage becoming potentially unaffordable for consumers and costly for the Federal Government, in the form of increased APTCs.
We disagree with commenters' assertion that removing the generosity standard will jeopardize the connection between the EHB-benchmark plan update process and the ACA's typicality requirement. The typicality standard, which this rule amends but does not eliminate, ensures that EHB-benchmark plans cannot offer a scope of benefits that is more generous than the scope of benefits provided by the most generous typical employer plan available for comparison, except to the extent supplementation is required to provide coverage within each EHB category at § 156.110(a). As such, we believe that commenters' concern about affordability are largely disproportionate to the meaningful but modest increases the proposed changes represent to the range of plan generosity available to States when seeking to update their EHB-benchmark plans.
Nevertheless, we understand commenters' concerns that the amendments to §§ 155.170 and 156.111 could technically allow States to game the scope of benefits of the available typical employer plans in the State by mandating the coverage of benefits in large group market plans in the State. While we recognize this as a technical possibility available to States, we are not concerned that will in occur in practice. Based on our experience working with States and their selection of EHB, we understand that States are already motivated to minimize the cost impacts of additional benefit coverage in all markets, and thus do not believe it likely that States would impose benefit mandates on their large group markets solely to manipulate the typical employer plans available for comparison when seeking to change their EHB-benchmark plan. For those States that do enact benefit mandates on large group markets, our expectation is that States do so in order to improve the coverage of benefits in such plans to accommodate changes in medical evidence and scientific advancement, and not to specifically subvert Federal guidelines for changing EHB-benchmark plans. This is especially the case given that, in our experience, State legislatures typically enact mandated benefits on large group market plans with little consideration for their impact on EHB. In any event, commenters did not provide any insight on how one might distinguish between a State mandate on large group market plans designed to improve coverage in such plans and a mandate designed to allow the State to game the scope of benefits of the available typical employer plans in the State.
We believe that States understand that it is implicit that applications must be submitted in good faith, and that States may not submit applications in good faith if a State mandates the coverage of specific benefits in large group market plans with the specific intent to manipulate the scope of benefits of the available typical employer plans. We are likely to suspect that a State may be gaming its typical employer plans if it enacts a mandate for the coverage of specific benefits in large group market plans and soon thereafter seeks to add similar benefits to its EHB-benchmark plan by utilizing a large group market plan that is impacted by the State's mandate as the most generous typical employer plan. We caution States that attempt to update EHB-benchmark plans in this manner that, pursuant to § 156.111(b)(2)(ii)(B)(1) and (4) as finalized in this rule, a large group typical employer plan must, among other things, belong to a product that has at least 10 percent of the total enrollment of the five largest large group health insurance products in the State and be from a plan year beginning after December 31, 2013. We interpret that these provisions work together to mean that, while a State can select a recent large group market plan as a typical employer plan, enough time must pass between the effective date of the coverage of all large group market plans in the State for the State to make a determination that the selected plan's product has at least 10 percent of total enrollment of the five largest large group health insurance products in the State. This means a State cannot select a large group plan with an effective date that begins in the first months of the year that the State submits an application to change EHB-benchmark in May. Thus, from a timing perspective, States are not able to select a large group typical employer plan that is effective in the same year or that may be effective in a year following the year the State submits an EHB-benchmark plan application. Given this operational constraint, at this time, we do not believe it is necessary to propose a cooldown period that would prevent a State from using a large group market plan that is impacted by a State's recent benefit mandate as the most generous typical employer plan, but will consider such a cooldown period for potential future rulemaking if necessary. In addition, we clarify the interaction between the amendments to § 156.111 and the amendment to § 156.122 that
We proposed to revise § 156.111(e)(3) to require States to submit a formulary drug list as part of their documentation provided to change EHB-benchmark plans only if the State is seeking to change its prescription drug EHB. Currently, we require States to submit a formulary drug list if the State is selecting its EHB-benchmark plan using the option at current § 156.111(a)(3), even if the State is not seeking to change its prescription drug EHB. We stated in the proposed rule that we understand that creation and submission of this formulary drug list creates a significant amount of burden for the State. Since we can carry over the State's existing prescription drug EHB, as defined under § 156.122, without substantial input from the State if the State is not seeking to change its prescription drug EHB, we proposed to revise § 156.111(e)(3) as specified to reduce the burden on States.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision as proposed though, for the reasons described earlier, we are finalizing this change for plan years beginning on or after January 1, 2026, rather than for plan years beginning on or after January 1, 2027, as was proposed. We summarize and respond to public comments received on this proposal below.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82597), we proposed to remove the regulatory prohibition at § 156.115(d) on issuers from including routine non-pediatric dental services as an EHB.
In the EHB Rule, we finalized at § 156.115(d) that issuers of a plan offering EHB may not include, among other services and benefits, routine non-pediatric dental services as an EHB, even if the State's current EHB-benchmark plan includes such services as covered benefits. Section 1302(b)(2) of the ACA directs the Secretary, in defining the EHB, to ensure that they are equal in scope to the benefits provided under a typical employer plan. In the proposed EHB Rule (77 FR 70644), in support of the prohibition at § 156.115(d), we stated that routine non-pediatric dental services are not typically included in the medical plans offered by employers and are often provided as excepted benefits by the employer. In the proposed rule, we explained that we now believe a more natural reading of Section 1302(b)(2) of the ACA is one that considers all the benefits typically covered by employers. This means EHB should be equal in scope to the benefits provided under a typical employer plan, regardless of whether such benefit is historically considered a non-excepted “health benefit” or whether such benefit is “typically covered” by an employer's major medical plan. Given that oral health has a significant impact on overall health and quality of life,
In the proposed rule, we stated it appears that routine non-pediatric dental services are commonly covered
We explained in the proposed rule that removing the prohibition on issuers from including routine non-pediatric dental services as an EHB would remove regulatory and coverage barriers to expanding access to routine non-pediatric dental benefits for those plans that must cover EHB. We further stated that this would allow States to work to improve adult oral health and overall health outcomes, which are disproportionately low among marginalized communities such as people of color and people with low incomes.
We explained in the proposed rule that this proposed policy would also align with CMS' Oral Health Cross Cutting Initiative, which aims to implement policy changes and consider opportunities through existing authorities to expand access to oral health coverage.
In the proposed rule, we emphasized that the removal of this prohibition would not, by itself, mean that routine non-pediatric dental services would be an EHB, even in States with an EHB-benchmark plan that currently describes routine non-pediatric dental services as a non-EHB covered benefit. We stressed that this proposal would not require any State to add such services as an EHB, nor would we consider any existing language regarding routine non-pediatric dental services in any State's current EHB-benchmark plan to have the effect of adding such services as an EHB. We stated that under this proposal, a State seeking to provide any routine non-pediatric dental services as an EHB would be required to update its EHB-benchmark plan to include such services as an EHB pursuant to § 156.111. We explained that if a State does not update its EHB-benchmark plan to add coverage of routine non-pediatric dental services as an EHB, then such services would not be an EHB, even if the current EHB-benchmark plan document includes routine non-pediatric dental services.
We explained in the proposed rule that under this proposal, we would expect States, in determining whether it is appropriate to update their EHB-benchmark plan to add routine non-pediatric dental services as an EHB, to weigh the advantages of expanded dental services against the challenges of providing such services. We refer readers to the proposed rule (88 FR 82598) for further discussion.
We noted that while section 1302(b)(4)(F) of the ACA permits a medical QHP sold on the Exchange to omit coverage of pediatric dental EHB services if a SADP is offered through an Exchange,
We explained that this proposal, if finalized, may impact plans that are not directly subject to the EHB requirements, such as self-insured group health plans and fully-insured group health plans in the large group market, that are required to comply with the annual limitation on cost sharing and restrictions on annual or lifetime dollar limits in accordance with applicable regulations with respect to such EHBs.
Additionally, under 42 CFR 440.347, Medicaid ABPs authorized under section 1937 of the Act are required to
We sought comment on the proposal to revise § 156.115(d) to remove the regulatory prohibition on issuers from including routine non-pediatric dental services as an EHB, and whether other impacts should be considered, including the impact this proposal would have, if finalized, on health insurance coverage in the individual, small group, and large group markets, as well as self-insured plans.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision, as proposed, to remove the regulatory prohibition at § 156.115(d) on issuers from including routine non-pediatric dental services as an EHB. We also finalize that the changes at § 156.115(d) will be effective beginning with PY 2027. Pursuant to this effective date, if a State wants to add a routine non-pediatric dental benefit to its EHB-benchmark plan, the earliest it can do so is with the calendar year 2025 submission cycle, for applications due to CMS on or before May 7, 2025. Therefore, if CMS approves the application, then the changes would be effective in the State for plan years beginning on or after January 1, 2027. Further, we acknowledge that the annual limitation on cost-sharing for Exchange-certified stand-alone dental plans (SADPs), which is updated and published annually in the Letter to Issuers, is applicable to only to those services that are EHB and only to SADPs. We summarize and respond to public comments received on the proposed policy below.
We do not believe further delay of these changes is necessary. In PY 2024, approximately 9.9 percent of QHPs on the FFEs included coverage for some degree of routine non-pediatric dental services as non-EHB; thus, it is not unprecedented for health plans, including QHPs, to cover routine non-pediatric dental services as non-EHB. Accordingly, we expect that this experience will mitigate any operational challenges that States may face when adding such services as EHB.
Further, State EHB-benchmark applications are due approximately 18 months before any change in EHB would be realized in plans. Before these applications are due, States have typically devoted several months or years interacting with interested parties in the State to understand what changes should be made to the EHB-benchmark plans, and what the impact of those changes would be. Thus, we expect ample time for issuers to operationalize the provision of routine non-pediatric dental services as EHB. Given that the finalization of this amendment would only begin to impact coverage beginning on January 1, 2027 in those States that might submit EHB-benchmark plan applications during the calendar year 2025 cycle, there will be sufficient lead time to allow issuers to build the infrastructure necessary to administer the routine non-pediatric dental benefits that States add as EHB. If a State is considering adding routine non-pediatric dental benefits as an EHB but believes it would be beneficial to take more time to assess the potential cost, operational, and other implications of the policy for their State, the State can wait to add this benefit to their EHB-benchmark plan until it is ready to do so.
However, several commenters disagreed with HHS's reinterpretation of this provision. These commenters asserted that the statutory text limits the EHB to those provided under a singular typical employer plan, and not all of the benefits provided by an employer under a combination of plans. Some of these commenters asserted that the ACA specifically excludes routine non-pediatric dental services, routine non-pediatric eye exam services, and long-term/custodial nursing home care benefits from consideration as EHB. In these commenters' view, HHS's reinterpretation would impermissibly allow for the inclusion of any employer benefit as EHB, including employee assistance programs, short-term disability, critical illness, group life, legal assistance, and 401(k) benefits. These commenters also explained that, except for pediatric oral and vision services, all of the EHB categories explicitly mentioned in statute refer to benefits that have historically been considered “health benefits” that are typically covered under major medical plans and not excepted benefit plans. One commenter asserted that HHS's reinterpretation would undermine statutory intent that the EHB be “essential benefits”, as it would include benefits that employers do not deem necessary to include in their major medical plan, but instead offer as a “voluntary add-on” for those employees who may desire them. Additionally, some commenters asserted that the majority of employers actively decide to provide routine dental services through a standalone dental plan rather than through a major medical plan.
We disagree with commenters that employer-sponsored dental benefits cannot be considered an EHB simply because of the manner of the contractual arrangements by which employers provide benefits to their employees. The impact of routine dental care on overall health and quality of life is not in question, nor is the fact that employers clearly view dental benefits as an essential part of the entire set of health benefits they provide for employees, given how many employers provide dental benefits to their employees.
Further, we disagree with those commenters that claimed that employers have a choice whether to provide routine dental services through their major medical plan or through a standalone dental plan. We understand that, in many cases, the benefits that employers may select to cover for employees is contingent on the decisions made by health insurance companies on what benefits they want to make available for the employer's selection.
We are not persuaded by commenters that insist the intent of the statute requires HHS to define the EHB in accordance with “benefits that have historically been considered a health benefit.” Many of the core tenets that support our modern understanding of health insurance as providing coverage of items and services are less than a hundred years old, and there is no universally understood set of essential items and services; even the ACA's statutory text recognizes that HHS's definition of the EHB need not be limited to the enumerated categories of EHB (“. . . the Secretary shall define the essential health benefits, except that such benefits shall include
The availability of benefits in health plans is always evolving. As a very limited example, consider that the very first health plans in the 1920s and 1930s only provided coverage for hospitalization, and coverage for professional services began later in the 1930s.
Regardless of how one interprets statutory text, one intent of the ACA with regard to the EHB is clear—that enrollees should have access to a minimum set of benefits that take into account the health care needs of diverse segments of the population.
We also note that commenters opposing the policy made no argument regarding the treatment of
In the 2019 Payment Notice (83 FR 17012), we stated that “a State's EHB-benchmark plan may not have the exact same benefits and limits as the typical employer plan the State identifies under this policy.” However, this actuarial approach, which restricts the range of typical employer plans to which an EHB-benchmark plan can be compared, coupled with the requirement that the EHB-benchmark plan cover items and services in each of the 10 specified categories of EHB, assures that the scope of benefits of the EHB-benchmark plan is equal to that of a typical employer plan.
Restricting the set of group health plans for the typicality standard to major medical plans merely establishes this actuarial benchmark for State EHB selections in a manner that balances State flexibility, ease of implementation, and a limitation on the range of what can be considered a typical employer plan.
When we originally implemented § 156.115(d) to prohibit issuers from covering routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, and non-medically necessary orthodontia as EHB, we did so based on a finding that “they are not typically included in medical plans offered by a typical employer.” However, this finding did not conclude that such benefits are never included in such plans. In addition, such a finding only justifies the prohibition of designating certain benefits as EHB; it does not prohibit a State from including such benefits in their typicality analysis, to the extent such benefits are present among the set of typical employer plans designated by HHS. Put another way, nothing in regulation prohibits a State from including the quantitative value of routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, or non-medically necessary orthodontia in its typicality analysis. Rather, we simply did not include non-major-medical benefits in the selected range of typical employer plans for ease of comparability.
We do not disagree with commenters that this policy may be disruptive to those issuers in States that add routine non-pediatric dental services as EHB; indeed, the intent of this policy was to effect a change in the availability of high-priority, high-impact, and relative low-cost benefits as EHB in order to improve the overall health of large segments of the population, and we cited several of these challenges in the proposed rule. We are sympathetic to the upfront costs that may be incurred by issuers to create the infrastructure necessary to administer routine dental benefits, or to contract with third parties to administer such a benefit on the health plan's behalf. However, we believe action is justified given the likelihood that it results in significant public health improvements. In addition, we expect States to take these burdens into account in determining whether to add routine non-pediatric dental services as EHB.
We also do not agree with the commenters' concerns regarding this amendment's impact on stand-alone dental premiums sold on the Exchange if a State adds routine non-pediatric dental benefits as EHB, and potential disparities between dental plan premiums on- versus off-Exchange. Under §§ 146.145(b)(3) and 148.220(b)(1), limited-scope dental plans are considered excepted benefits that are not required to provide the EHB. Thus, if a State adds routine non-pediatric dental benefits as EHB, stand-alone dental plans are not required to cover such benefits, whether on- or off-Exchange.
We also acknowledge the commenters that questioned the impact this policy will have on other Federal provisions, including but not limited to provisions addressing AV, MLR, network adequacy, APTC, and PAPI. This final provision will not affect these programs any differently than any other benefits that a State adds to its EHB-benchmark plan, since States that seek to add routine non-pediatric dental services will need to adhere to the same requirements for updating their EHB-benchmark plans as they would for other benefits. We do encourage States adding routine non-pediatric dental services to ensure that issuers' networks include sufficient dental providers so that enrollees can access the benefit.
However, section 2707(b) of the PHS Act requires all non-grandfathered group health plans, including non-grandfathered self-insured and non-grandfathered insured small and large group market health plans, to limit cost sharing imposed by the plan on EHB in accordance with the annual limitation on cost sharing, and section 2711(a)(1)(A) and (B) of the PHS Act generally prohibits all group health plans and group or individual health insurance coverage from establishing annual or lifetime dollar limits on the dollar value of EHB for any participant, beneficiary, or enrollee.
Thus, for purposes of compliance with PHS Act sections 2707(b) and 2711, as applicable, a self-insured group health plan, large group market health insurance coverage, or grandfathered plan that selects an EHB-benchmark plan from a State that has updated its EHB-benchmark plan pursuant to this finalized policy to include routine non-pediatric dental services as an EHB would be required to treat routine non-pediatric dental services as EHB as they would with any other benefit that is an EHB in the selected benchmark plan. However, if the selected plan is from a State that has not updated its EHB-benchmark plan to include routine non-pediatric dental services as EHB, then those plans and issuers would not be required to treat routine non-pediatric dental services as EHB for purposes of complying with the annual limitation on cost sharing in PHS Act section 2707(b) or the prohibition in PHS Act section 2711 on imposing annual and lifetime dollar limits on EHB, as applicable, even if such benefits appear in the EHB-benchmark plan. As we stated in the proposed rule (88 FR 82598), we would not consider any existing language regarding routine non-pediatric dental services in any State's current EHB-benchmark plan to have the effect of adding such services as an EHB. Rather, States interested in covering routine non-pediatric dental services as EHB must proactively update their EHB-benchmark plans pursuant to § 156.111 to add such benefits.
We acknowledge that this policy could impact non-grandfathered self-insured group health plans, and large group market health insurance coverage that cover routine non-pediatric dental benefits with respect to their compliance with the annual limitation on cost sharing and this policy could impact all such plans, as well as grandfathered health plans, with respect to the prohibition on annual or lifetime dollar limits; however, we believe the advantages of this policy outweigh the disadvantages. Particularly, we believe the advantages—including improving access to routine non-pediatric dental care, reducing oral health disparities, improving health equity, and improving overall health and quality of life in these markets—are worth the potential cost or operational impacts to health plans.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82599), we proposed revisions to certain EHB prescription drug benefit requirements at § 156.122, and requested comments on a possible future policy proposal, as further discussed below.
In the proposed rule, we requested information to confirm or further expand our understanding of the risks and benefits associated with replacing the reference to the USP MMG with a reference to the USP DC as a means of classifying the drugs required to be covered as EHB under § 156.122(a)(1). We thank commenters for their feedback and will take these comments into consideration if we pursue potential updates for future benefit years through notice and comment rulemaking.
We proposed to amend § 156.122 to codify that prescription drugs in excess of those covered by a State's EHB-benchmark plan are considered EHB. We stated that, as a result, they would be subject to the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the coverage of the drug is mandated by State action and is in addition to EHB pursuant to § 155.170, in which case the drug would not be considered EHB. When § 155.170 is read in conjunction with the proposed amendment to § 156.122, this means that any prescription drug that an issuer voluntarily covers in excess of the minimum number of drugs required to be covered under the State's EHB-benchmark plan is EHB
In the EHB Rule (78 FR 12845), in response to commenter concerns regarding how plans must address new prescription drugs that come onto the market during the course of a plan year pursuant to § 156.122, we stated that while plans must offer at least the greater of one drug for each USP category and class or the number of drugs in the EHB-benchmark plan, plans are permitted to go beyond the number of drugs offered by the EHB-benchmark plan without exceeding EHB. We clarified in the preamble of the 2016 Payment Notice (80 FR 10749) in a discussion of requirements related to § 156.122(c) that this meant that if the plan is covering drugs beyond the number of drugs covered by the EHB-benchmark, all prescription drugs in excess of the drug count standard at § 156.122(a) are considered EHB, such that they are subject to EHB protections and must count towards the annual limitation on cost sharing.
In the proposed rule, we stated that we believed that this policy as noted in both the EHB Rule and preamble of the 2016 Payment Notice was clearly understood by issuers until we received comments in response to the EHB RFI that included a significant number of requests from interested parties to clarify this policy in rulemaking. In addition, a small number of commenters in response to the EHB RFI noted concerns regarding some plans that have stated that some prescription drugs in excess of the drug count standard at § 156.122(a) are not EHB and have developed programs to provide some drugs as “non-EHB,” outside of the terms of the rest of the coverage. We sought comment regarding how widespread these practices are.
To resolve these concerns, we proposed to amend § 156.122 to add paragraph (f), which would explicitly state that prescription drugs in excess of the EHB-benchmark plan are considered EHB. We stated that, to the extent that a health plan covers prescription drugs, in any circumstance, in excess of the EHB-benchmark plan, these drugs would be considered an EHB and would be required to count towards the annual limitation on cost sharing. We explained that this policy would apply unless the coverage of the drug is mandated by State action and is in addition to EHB pursuant to § 155.170, in which case the drug would not be considered EHB.
We noted that we had been made aware of a few plans within the individual and small group markets that have either developed or are offering programs that provide some drugs as “non-EHB.” We stated that, as we had only recently begun receiving comments from interested parties regarding this issue, we did not believe that there are a large number of plans that offer these types of programs; however, we sought comment regarding how widespread these programs are.
We sought comment on this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with a technical edit to the regulation text to clarify the entire scope of cost-sharing requirements that apply to these prescription drugs. In the proposed rule, we proposed that the prescription drugs in excess of those covered by a State's EHB-benchmark plan are considered EHB, and thus subject to both the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits. The proposed regulation text at § 156.122(f), however, referenced the annual limitation on cost sharing at § 156.130 as the only applicable cost-sharing requirement. We are finalizing the regulation text to reflect that prescription drugs in excess of those covered by a State's EHB-benchmark plan are considered EHB, and thus subject to both the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits.
We summarize and respond below to public comments received on the proposal to amend § 156.122 to codify that prescription drugs in excess of those covered by a State's EHB-benchmark plan are considered EHB such that they are subject to EHB protections, including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless the coverage of the drug is mandated by State action and is in addition to EHB (in which case the drug would not be considered EHB). We also point readers to the preamble discussion above of § 155.170 regarding defrayal of State-mandated benefits, in which we clarified that a covered benefit in a State's EHB-benchmark plan is considered an EHB even if mandated by State action after 2011.
In response to our request for comment regarding how widespread programs to provide some drugs as non-EHB are, a few commenters noted that these types of programs have been identified more frequently in self-insured group health plans and large group market health plans.
We first stated that prescription drugs in excess of the minimum drug count do not exceed EHB in the EHB Rule (78 FR 12845), which was finalized over a decade ago, and we made clear in the 2016 Payment Notice (80 FR 10817) that “if the plan is covering drugs beyond the number of drugs covered by the benchmark, all of these drugs are EHB and must count towards the annual limitation on cost sharing.” In the proposed rule, we proposed to codify that, to the extent that a health plan covers prescription drugs, in any circumstance, in excess of the EHB-benchmark plan, these drugs would be considered EHB and would be required to count towards the annual limitation on cost sharing, unless the coverage of the drug is mandated by State action and is in addition to EHB pursuant to § 155.170, in which case the drug would not be considered EHB. Consequently, we now clarify that this interpretation means that issuers subject to the requirement to cover EHB will be considered to be failing to provide EHB if they do not treat those drugs as EHB, including by subjecting them to the annual limitation on cost sharing, by not applying annual or lifetime dollar limits, and by factoring them in the availability of APTCs, unless the drugs are mandated by State action. We agree with commenters' concerns that coverage is diminished if a drug is no longer considered EHB. For example, a plan might designate certain drugs as “non-EHB,” but indicate that the member can obtain coverage of such drugs so long as they enroll into a third-party program. If the member declines to enroll in the program or fills a prescription for a “non-EHB” drug outside of the program, they risk assuming responsibility for cost sharing that does not count towards the member's deductible or annual limitation on cost sharing.
From an operational perspective, it is not apparent on what basis issuers make distinctions between covered drugs that are EHB and “non-EHB,” including at what point certain drugs become “too costly” for the plan to consider them EHB. Further, it is not apparent that issuers are capable of readily explaining the rationale behind designations of “non-EHB” for specific drugs to consumers in advance of their enrollment in the plan. Even if an issuer is capable of explaining that rationale and providing any amount of notice to affected consumers in advance of their enrollment, we believe it is unreasonable to expect enrollees to be able to understand the complicated impacts that getting coverage for specific “non-EHB” drugs would have on enrollee out-of-pocket costs and consumer protections. This is especially true considering that those drugs most likely to be designated as “non-EHB” are drugs that are more likely to be prescribed for members of particularly vulnerable segments of the population.
We also find uncompelling the argument that issuers may classify drugs as specialty drugs or apply another similar label and thus designate them as “non-EHB.” We have not defined “specialty drug” for the purposes of EHB and formulary standards; rather, issuers must meet the formulary requirements at § 156.122. Accordingly, while the ACA does not explicitly identify specialty drugs within the category of prescription drugs that must be covered, the ACA also does not provide for a blanket exclusion from the EHB coverage requirement for such drugs, and therefore the requirements under § 156.122 apply to such drugs. Additionally, although EHB standards do not prohibit issuers from designating certain drugs as “specialty” drugs or tiering them as such if non-discriminatory, we believe it would be difficult, if not impossible, for an issuer to remove all drugs it currently deems “specialty” from the formulary and still be in compliance with § 156.122.
For plan years beginning on or after January 1, 2026, we proposed to amend § 156.122 to provide that the P&T committee must include a consumer representative.
In the 2016 Payment Notice (80 FR 10749), we required plans providing EHB to establish P&T committees to review and update plan formularies in conjunction with the USP MMG. At § 156.122(a)(3)(i), we require P&T committees to: (a) have members that represent a sufficient number of clinical specialties to adequately meet the needs of enrollees; (b) consist of a majority of individuals who are practicing physicians, practicing pharmacists, and other practicing health care professionals who are licensed to prescribe drugs; (c) prohibit any member with a conflict of interest with respect to the issuer or a pharmaceutical manufacturer from voting on any matters for which the conflict exists; and (d) require at least 20 percent of its membership to have no conflict of interest with respect to the issuer and any pharmaceutical manufacturer.
We noted in the proposed rule that many of the P&T committee requirements are also found in the Principles of a Sound Drug Formulary System, which was first developed in September 1999 by a coalition of national organizations representing health care professionals, government, and business leaders and later adopted in 2000 by the Academy of Managed Care Pharmacy (AMCP), Alliance of Community Health Plans, American Medical Association, American Society of Health-Systems Pharmacists, Department of Veterans Affairs, Pharmacy Benefits Management Strategic Healthcare Group, National
While a P&T committee is usually composed of actively practicing physicians, pharmacists, and other health care professionals, forum participants stated that a well-structured committee should also include patient representation since it provides additional insight into the patient perspective regarding the practical use of therapies and effects on quality-of-life outcomes, which can be a helpful component of the formulary evaluation process. Additionally, participants noted that the patient perspective should be considered a key voice in formulary decisions as they are directly affected by P&T committee decisions and can assist the committee in better understanding the value of different treatments and medications for patients.
We stated in the proposed rule that while we are aware that the inclusion of consumers in the P&T committee process is not common, it has been observed in different health care systems. We noted that one example of this practice includes the Uniform Formulary Beneficiary Advisory Panel (UFBAP), which provides independent advice and recommendation on the development of the TRICARE Uniform formulary.
We explained in the proposed rule that P&T committee decisions have the power to impact a consumer's overall quality of life and encompass important elements of care and cost for the consumer. Therefore, we proposed to add paragraph (a)(3)(i)(E) to § 156.122 to update P&T membership standards to require the P&T committee to include a consumer representative as part of its membership for plan years beginning on or after January 1, 2026. In addition, we proposed to specify at § 156.122(a)(3)(E)(
We stated in the proposed rule that we believe the proposed addition of § 156.122(a)(3)(i)(E) would ensure that the consumer experience with a disease or condition is considered in the design of formulary benefits. We explained that consumer representatives would offer insights into real consumer experiences unknown to P&T committees, which would educate the committee on consumer challenges related to medication use and assist the committee in exploring solutions to these challenges during the formulary development process. We also noted that broader inclusion of perspectives on the P&T committee would align with other groups, including the AMCP.
We sought comment on these proposals. We stated that the consumer representative, as a member of the P&T committee, would be subject to the conflict-of-interest standards as specified in § 156.122(a)(3); however, we stated we were interested in comments regarding whether we should further define additional membership standards for the consumer representative. In particular, we sought comments on the qualifications necessary to serve as a consumer representative on a P&T committee, to
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with the following modifications: (1) we are making a change to § 156.122(a)(3)(i)(E) introductory text, § 156.122(a)(3)(i)(E)(
Finally, a few commenters recommended that the patient representative should function in an advisory or non-voting capacity. Two commenters suggested that patient representatives serving on the P&T committees must have clinical experience to have voting rights. One commenter recommended that patient representatives meet existing P&T committee membership criteria or be barred from voting rights.
However, we agree with commenters that noted that a patient representative should have background knowledge related to more than one condition or disease to sufficiently represent the concerns of a diverse population. Background knowledge of a given condition or disease can include but is not limited to information about the causes, symptoms, risk factors, diagnostic methods, available treatments, and potential outcomes associated with a specific medical condition or disease. The addition of the standard at § 156.122(a)(3)(i)(E)(
We disagree that patient representatives should function in an advisory role or non-voting capacity or that the voting rights of a patient representative be dependent upon clinical experience. Unlike members of the P&T committee who serve in a clinical capacity, such as the physician, pharmacist, or nurse, the patient representative is included as a member of the P&T committee to serve in a non-clinical capacity to offer insight into real patient experiences that P&T committees may be unaware of that would help the committee better understand patient challenges related to medication use as well as assist them in exploring solutions to these challenges during the formulary development process. Additionally, in States where P&T committees already include patient representatives, such as Pennsylvania, Connecticut, and New York, which include clinicians along with consumer or patient representatives, voting rights are extended to all members. We are not aware of States that require P&T committees to include patient representatives where those members are not afforded voting privileges. These examples demonstrate to us that, once a qualified candidate has been identified to serve as a patient representative and becomes a member of the P&T committee, this member should be granted voting privileges like all other committee members who meet member requirements and fulfill the duties associated with their role.
Finally, we appreciate the suggestion to collaborate with patient organizations and interested parties to enhance standards and address potential conflicts of interest. We may consider developing additional standards to be applied to patient representatives on the P&T committee in the future and will consider such collaboration.
Further, we agree with commenters that requiring the patient representative to have experience in the analysis and interpretation of complex data and be able to understand its public health significance is also restrictive. The background requirement as proposed may not easily be identified in candidates who only have relevant experience or participation in patient or community-based organizations unless they have additional background experience in interdisciplinary fields such as epidemiology, biostatistics, or data science where they would have gained the expertise needed to analyze and interpret complex data with a focus on public health significance. While this level of experience could be beneficial, we agree that it should not be a prerequisite for serving as a patient representative on a P&T committee considering that this member will serve in a non-clinical capacity to provide additional insight into the patient perspective regarding the practical use of therapies and effect on quality-of-life outcomes. We acknowledge that the proposed requirements may not accurately reflect the practical demands of the role and therefore may hinder issuer recruitment of qualified candidates to serve as a patient representative on the P&T committee, which was not our intent. However, we believe the patient representative should be able to demonstrate the ability to attentively consider data interpretations and thoughtfully integrate them with practical considerations affecting patients in order to help them contribute meaningfully to P&T committee member discussions and to assist the committee in better understanding the value of different treatments and medications for patients. Therefore, we are amending § 156.122(a)(3)(i)(E)(
In response to comments, we considered the establishment of an exception process should a health plan make a good faith effort and is unable to find a qualified candidate to serve as a patient representative. However, we are concerned that if we allow an exception process, this may incentivize some issuers to identify loopholes to obtain an exception to the rule and not make a meaningful attempt to comply with the requirements set forth to seek out a qualified candidate to serve as a patient representative on the P&T committee. Not implementing an exception process ensures consistent application of the policy, minimizes potential loopholes, and maintains a
As noted above, we are finalizing this policy with modifications to broaden certain requirements to further assist issuers in identifying qualified candidates to serve as patient representatives. We recognize the challenges that plans and issuers may encounter while recruiting a qualified candidate to serve as a patient representative. However, several States currently include at least one patient representative as a member of their P&T committee which indicates that these committees were able to identify qualified candidates who are willing to serve in this role. We encourage issuers to reach out to their State should they experience challenges while making a good faith effort to identify a qualified candidate to serve as a patient representative and comply with this new requirement, as the State is responsible for the oversight and enforcement of the P&T committee standards.
As established in part 2 of the 2022 Payment Notice (86 FR 24238), we publish the premium adjustment percentage, the required contribution percentage, and maximum annual limitations on cost sharing and reduced maximum annual limitation on cost sharing in guidance annually starting with the 2023 benefit year. We note that these parameters are not included in this rulemaking, as we did not propose to change the methodology for these parameters for the 2025 benefit year. Instead, on November 15, 2023, we published these 2025 benefit year parameters in guidance in accordance our 2022 Payment Notice regulations.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82603), HHS proposed to exercise its authority under sections 1311(c)(1) and 1321(a)(1)(B) of the ACA to make minor updates to the standardized plan options for PY 2025. Section 1311(c)(1) of the ACA directs the Secretary to establish criteria for the certification of health plans as QHPs. Section 1321(a)(1)(B) of the ACA directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the ACA for, among other things, the offering of QHPs through such Exchanges.
Specifically, we proposed to make minor updates to the plan designs for PY 2025 to ensure these plans have AVs within the permissible
We proposed this approach for several reasons. In the proposed rule (88 FR 82604), we explained that we intended to continue to require FFE and SBE-FP issuers to offer standardized plan options in large part due to continued plan proliferation, which has only increased since the standardized plan option requirements were finalized in the 2023 Payment Notice. We stated that, in light of this continued plan proliferation, it is increasingly important to continue to attempt to streamline and simplify the plan selection process for consumers on the Exchanges. We explained that we believe these standardized plan options continue to play a meaningful role in that simplification by reducing the number of variables that consumers must consider when selecting a plan option, making it easier for consumers to compare available plan options.
More specifically, we stated that with these standardized plan options, consumers continue to be able to more easily consider meaningful factors, such as networks, formularies, and premiums, when selecting a plan. We stated that we further believe these standardized plan options include several distinctive features, such as enhanced pre-deductible coverage for several benefit categories and copayments instead of coinsurance rates for a greater number of benefit categories, that will continue to play an important role in reducing barriers to access, combatting discriminatory benefit designs, and advancing health equity.
We explained that including enhanced pre-deductible coverage for these benefit categories (specifically, primary care visits, specialist visits, speech therapy, occupational and physical therapy, and generic drugs at all metal levels, with an increasing number of benefit categories exempt at
Furthermore, we proposed to maintain a high degree of continuity with many aspects of the standardized plan option policy finalized in the 2024 Payment Notice to reduce the risk of disruption for all involved interested parties, including issuers, agents, brokers, States, and enrollees. We stated that we believe making major departures from the methodology used to create the standardized plan options finalized in the 2023 and 2024 Payment Notices could result in drastic changes in these plan designs that may create undue burden for interested parties. For example, we noted that if the standardized plan options that we create vary significantly from year to year, those enrolled in these plans could experience unexpected financial harm if the cost sharing for services they rely upon differs substantially from the previous year. We stated that we ultimately believe consistency in standardized plan options is important to allow issuers and enrollees to become accustomed to these plan designs.
We sought comment on our proposed approach to standardized plan options for PY 2025. Additionally, we sought comment on requiring issuers offering QHPs in individual market State Exchanges to offer, in a future plan year, some version of standardized plan options, while not necessarily subjecting them to the full scope of standardized plan option requirements applicable to issuers offering QHPs through the FFEs or SBE-FPs under § 156.201.
In particular, we sought comment on requiring issuers offering QHPs in individual market State Exchanges that are not already required to offer standardized plan options under State requirements to offer some version of standardized plan options, even if these plan designs differ from the requirements of those included in the applicable Payment Notice for that plan year. We also sought comment on requiring States that intend to transition their Exchange model type from an FFE or SBE-FP to a State Exchange to require their issuers to offer standardized plan options as one condition of this transition. As such, we stated that we were particularly interested in comments from individual market State Exchanges that do not currently require QHP issuers to offer standardized plan options, States with an FFE or SBE-FP Exchange model type that intend to transition their Exchange model type to a State Exchange, and issuers offering QHPs through such Exchanges.
We explained that while we recognize that State Exchanges are generally best positioned to set the requirements that serve the nuances of their respective individual markets, we underscored the benefits of offering at least some version of standardized plan options, which we discussed in greater detail in the preamble discussion of § 156.201 in the 2023 Payment Notice (87 FR 27316). We also explained that we believe the fact that over half of all State Exchanges currently require issuers to offer standardized plan options in one form or another suggests that they, too, see value in standardized plan options.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing our proposed approach with respect to standardized plan options, as proposed. Our finalized plan designs for PY 2025 are detailed in Tables 11 and 12 of this final rule and reflect no changes to the plan designs in Tables 12 and 13 of the proposed rule. We summarize and respond to public comments received on the proposed approach to standardized plan options below.
In particular, commenters explained that standardizing the cost sharing parameters for these plans allows consumers to focus on other important plan attributes, such as networks, formularies, quality ratings, and premiums, when selecting a plan. This in turn allows consumers to ensure the health plan they ultimately select has a network that includes providers important to them, a formulary that includes critical prescription drug coverage, and quality ratings that meet consumers' desired standards. Commenters further explained that promoting informed decision-making reduces the risk of plan choice overload, suboptimal plan selection, and unexpected financial harm for those consumers least able to afford it.
Several commenters also supported the continuation of differential display of these standardized plan options on
Regarding the comments recommending that we make “additional enhancements” to choice architecture and the user experience on
We believe the fact that issuers continue to be permitted to offer these non-standardized plan options ensures that consumers will continue to have access to a sufficiently broad range of plan designs that meet their diverse needs and that issuers can continue to offer innovative plan designs. We further believe that continuing to require issuers to offer standardized plan options, reducing the non-standardized plan option limit, and introducing an exceptions process for this limit strikes an appropriate balance between limiting the risk of plan choice overload while simultaneously continuing to permit issuers a sufficient degree of flexibility to offer innovative plan designs.
Further, we reiterate that issuers are not limited in the number of standardized plan options they may offer, meaning issuers continue to retain the ability to offer standardized plan options with different benefit packages, networks, and formulary variations, so long as they conform to the required cost sharing parameters for these plans.
Finally, differential display of these standardized plan options on
Furthermore, this form of differential display does not elevate standardized plan options to the top of the sorting feature over non-standardized plan options such that they would always be the first plans that consumers see regardless of premium, as would be done if standardized plan options were preferentially displayed. Thus, although standardized plan options are distinguished from non-standardized plan options, the form of differential display currently employed on
Several commenters also recommended lowering the deductibles and expanding pre-deductible coverage to include additional benefit categories. These commenters explained that high deductibles often act as an obstacle that prevents consumers from obtaining the health care they need. These commenters further explained that lowering the deductibles for these plans and expanding pre-deductible coverage would reduce barriers to access to health care, reducing the risk of consumers forgoing obtaining medical care and, consequently, experiencing poorer health outcomes.
Several commenters supported the decision to continue including copayments instead of coinsurance rates for a range of benefit categories within these plan designs. Several of these commenters recommended expanding the use of copayments to apply to a greater number of benefit categories. These commenters explained that utilizing copayments instead of coinsurance rates increases financial certainty for consumers when they obtain the health care they need. Other commenters recommended standardizing the cost-sharing parameters for additional benefit categories not already standardized within these plan designs to further enhance plan comparability and reduce financial uncertainty. Several commenters recommended including health savings account (HSA)-compliant high-deductible health plan (HDHP) designs in each of these sets of standardized plan options.
However, due to AV constraints arising from the permissible
Finally, we note that although it may be possible to make some combination of these modifications to these plan designs while maintaining an AV near the floor of the
We also note that we are not standardizing the cost sharing for additional benefit categories beyond those already included in these plan designs since EHB-benchmark plans vary significantly by State, and we do not wish to standardize the cost sharing for benefits that issuers may not be required to offer in particular States. We also note that we have not included an HSA-eligible HDHP in these sets of plan designs due to decreased enrollment in these plans in the last several plan years, which suggests they may be less competitive and in-demand than traditional health insurance plans.
We thus declined to include HSA-eligible HDHPs in these sets of plan designs because our approach is to design standardized plan options that reflect the most popular QHPs offered through the Exchanges (87 FR 27319). We also declined to include an HSA-eligible HDHP in these sets of plan designs because we have not included these types of plans in the sets of standardized plan options for PY 2023 or PY 2024, and we want to maintain a high degree of continuity with the standardized plan option policies and designs finalized in the 2023 and 2024 Payment Notices. However, we note that QHP issuers in the FFEs and SBE-FPs continue to be permitted to offer HSA-eligible HDHPs as non-standardized plan options, if so desired.
Many commenters pointed to the fact that many State Exchange issuers are already required to offer standardized plan options, which commenters argued demonstrates the utility of standardized plan options. These commenters further explained that the benefits of standardized plan options should not be limited to consumers purchasing health insurance coverage through FFEs and SBE-FPs—and instead, that these benefits should also be extended to consumers purchasing health insurance coverage through State Exchanges. Several of these commenters explained that the trend of plan proliferation that has been present in the FFEs and SBE-FPs for several years has also been present in many State Exchanges. These commenters thus explained that HHS should employ the same measures to address plan proliferation in State Exchanges that it utilizes in the FFEs and SBE-FPs.
Conversely, many commenters opposed requiring State Exchange issuers to offer some version of standardized plan options in a future plan year. Some of these commenters opposed expanding this requirement to all State Exchange issuers, while others only opposed expanding this requirement to State Exchange issuers not already subject to such a requirement. Other commenters only opposed expanding this requirement to State Exchange issuers as a condition of a State transitioning its Exchange model type from an FFE or SBE-FP to a State Exchange in a future plan year.
These commenters explained that expanding this requirement to apply to State Exchange issuers would unnecessarily constrain a State's flexibility in operating its Exchange. These commenters highlighted the importance of the flexibility inherent to the State Exchange model type as one of the primary factors that motivates States to pursue this model type. These commenters further explained that requiring State Exchange issuers to offer some version of standardized plan options would make it more difficult for issuers to tailor health plans to meet the unique needs of each State's population. These commenters also explained that State regulators' and issuers' experience with and insight into their respective individual markets makes them uniquely suited to determine whether standardized plan options fit the health care coverage needs of their consumers.
Consistent with our rationale for not expanding the requirement that QHP issuers offer standardized plan options to State Exchange issuers in the 2023 Payment Notice (87 FR 27311), we continue to believe that expanding this requirement to State Exchange issuers would unnecessarily constrain a State's flexibility in operating its Exchange. We further continue to believe that State Exchanges' experience with and insight into their respective individual markets makes them uniquely suited to determine whether standardized plan options fit the health care coverage needs of their consumers and, if so, how those plans should be designed. In addition, imposing duplicative standardized plan option requirements on issuers in State Exchanges that already have existing State standardized plan option requirements runs counter to our goals of enhancing the consumer experience, increasing consumer understanding, simplifying the plan selection process, combatting
We note that we will consider the potential advantages and disadvantages of expanding the requirement that QHP issuers offer standardized plan options to State Exchange issuers, including the advantages and disadvantages of expanding this requirement to all State Exchange issuers not already subject to such a requirement, as well as the advantages and disadvantages of expanding this requirement only to issuers that offer QHPs through an Exchange that transitions from an FFE or SBE-FP to a State Exchange in a future plan year. These considerations may inform our approach in any future rulemaking regarding standardized plan options.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82606), HHS proposed to exercise its authority under sections 1311(c)(1) and 1321(a)(1)(B) of the ACA to amend § 156.202 by adding paragraphs (d) and (e) to introduce an exceptions process that would allow issuers to offer additional non-standardized plan options per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area for PY 2025 and subsequent plan years, if issuers demonstrate that these additional non-standardized plans have specific design features that would substantially benefit consumers with chronic and high-cost conditions. Section 1311(c)(1) of the ACA directs the Secretary to establish criteria for the certification of health plans as QHPs. Section 1321(a)(1)(B) of the ACA directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the ACA for, among other things, the offering of QHPs through such Exchanges.
In the 2024 Payment Notice (88 FR 25855 through 25865), we finalized requirements limiting the number of non-standardized plan options that issuers of QHPs can offer through Exchanges on the Federal platform (including SBE-FPs) to four non-standardized plan options per product network type (as described in the definition of “product” at § 144.103), metal level (excluding catastrophic plans), inclusion of dental and/or vision benefit coverage, and service area for PY 2024, and two for PY 2025 and subsequent plan years. In the 2025 Payment Notice proposed rule, we did not propose to amend these non-standardized plan option limits at § 156.202(a) through (b).
In the 2024 Payment Notice, we explained that we phased in this limit over 2 plan years (instead of adopting the limit of two in PY 2024) primarily to decrease the risk of disruption for both issuers and enrollees and to provide increased flexibility to issuers. We explained that many commenters supported adopting a more gradual approach in which the number of non-standardized plan options that issuers can offer is incrementally decreased over a span of 2 plan years, instead of adopting a limit of two for PY 2024. We referred readers to the preamble of the 2024 Payment Notice discussing § 156.202 (88 FR 25855 through 25865) for more detailed discussion of our approach to non-standardized plan option limits for PY 2024 and related background.
As a result of the limit on the number of non-standardized plan options that issuers can offer through the Exchanges being reduced from four in PY 2024 to two in PY 2025, in the proposed rule (88 FR 82607), we estimated (based on then-current PY 2024 plan offering data) that the weighted average number of non-standardized plan options available to each consumer would be reduced from 67.3 in PY 2024 to approximately 41.7 in PY 2025. We also estimated that the weighted average total number of plans, including both standardized and non-standardized plan options, available to each consumer would be reduced from 91.8 in PY 2024 to approximately 66.2 in PY 2025.
Furthermore, in the proposed rule, we estimated that approximately 28,275 of the total 109,229 non-standardized plan option plan-county combinations
However, based on updated PY 2024 plan offering and enrollment data, we now estimate that the weighted average number of non-standardized plan options available to each consumer will be reduced from 71.4 in PY 2024 to approximately 48.5 in PY 2025. Additionally, we estimate that the weighted average total number of plans, including standardized and non-standardized plan options, available to each consumer will be reduced from 99.5 in PY 2024 to approximately 76.6 in PY 2025.
Furthermore, based on this updated data, we estimate that approximately 27,660 of the total 87,620 non-standardized plan option plan-county combinations (31.6 percent) will be discontinued as a result of this limit in PY 2025. Relatedly, we estimate that approximately 1.43 million of the 16.34 million enrollees on the FFEs and SBE-FPs (8.7 percent) will be affected by these discontinuations in PY 2025.
In the proposed rule (88 FR 82607), we proposed an exceptions process at new § 156.202(d) and (e) that would permit FFE and SBE-FP issuers to offer more than two non-standardized plan options per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area for PY 2025 and subsequent plan years, if issuers demonstrate that these additional non-standardized plans beyond the limit at § 156.202(b) have specific design features that would substantially benefit consumers with chronic and high-cost conditions. We further proposed that issuers would not be limited in the number of exceptions permitted per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, so long as they meet specified criteria.
Specifically, we stated in the proposed rule that pursuant to proposed § 156.202(d), issuers would be permitted to offer more than two non-standardized plan options if these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area.
We stated that the reduction could not be limited to a part of the year, or an otherwise limited scope of benefits. Instead, we stated that issuers would be required to apply the reduced cost sharing for these benefits any time the covered item or service is furnished. For example, we explained that an issuer could not reduce cost sharing for the first three office visits or drug fills and then increase it for remaining visits or drug fills. Furthermore, we stated that issuers would be prohibited from conditioning reduced cost sharing for these benefits on a particular diagnosis. That is, we stated that although the benefit design would have reduced cost sharing to address one or more articulated conditions, the reduced cost sharing must be available to all enrolled in the plan who receive the service(s) covered by the benefit.
We explained in the proposed rule that no other plan design features (such as the inclusion of additional benefit coverage, different provider networks, different formularies, or reduced cost sharing for benefits provided through the telehealth modality) would be evaluated under this exceptions process, meaning no other differences in plan design features would allow issuers to be excepted from the limit to the number of non-standardized plan options offered per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area.
Additionally, we stated in the proposed rule that, as part of this exceptions process, issuers would be required, under proposed § 156.202(e), to submit a written justification in a form and manner and at a time prescribed by HHS that provides additional details and explains how the particular plan design the issuer desires to offer above the non-standardized plan option limit of two satisfies the proposed standards for receiving an exception to this limit—namely, how the particular plan would substantially benefit consumers with chronic and high-cost conditions. We noted that we would provide issuers with a justification form upon publication of the final rule and when the QHP templates for the applicable plan year are released.
We proposed that this justification form would ask the issuer to (1) identify the specific condition(s) for which cost sharing is reduced, (2) explain which benefits would have reduced annual enrollee cost sharing (as opposed to reduced cost sharing for a limited number of visits) for the treatment of the specified condition(s) by 25 percent or more relative to the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan offerings in the same product network type, metal level, and service area, and (3) explain how the reduced cost sharing for these services pertains to clinically indicated guidelines for treatment of the specified chronic and high-cost condition(s).
Additionally, we stated that to allow the Exchange adequate time to review these justification forms, issuers would need to submit their QHP application in a form and manner and at a time specified by us. We further stated that we anticipated requesting that issuers submit QHP applications for non-standardized plan options that exceed the two-plan limit by the QHP certification Early Bird deadline.
We proposed to allow exceptions only for plans that meet the previously described requirements for benefits pertaining to the treatment of conditions that are chronic and high-cost in nature. We clarified that, for purposes of this standard, chronic conditions are those that have an average duration of one year or more and require ongoing medical attention or limit activities of daily living, or both.
However, for purposes of this standard, we clarified that we would also consider additional conditions to be chronic and high-cost in nature. We stated that additional representative examples of conditions that we would consider to be chronic and high-cost in nature for purposes of this proposal include Alzheimer's disease, kidney disease, osteoporosis, heart disease, diabetes, and all kinds of cancer. We further stated that examples of conditions that we would not consider chronic and high-cost in nature would be those that are generally acute in nature, including bronchitis, the flu, pneumonia, strep throat, and respiratory infections.
We proposed this approach for several reasons. Considering that chronic and high-cost conditions (including the examples previously discussed) affect a comparatively low number of consumers, we stated that we anticipated that a significant portion of the non-standardized plan options that may be discontinued due to having comparatively lower rates of enrollment among each issuer's portfolio of offerings could potentially be those that have plan design features that benefit consumers with these chronic and high-cost conditions (such as plans with some combination of enhanced pre-deductible coverage for relevant services, reduced cost sharing for relevant benefits, lower maximum out-of-pocket limitations, lower deductibles, more comprehensive provider networks with more specialized providers, more generous formularies with more specialized medications, higher AVs, and higher premiums).
We explained in the proposed rule (88 FR 82608) that even with comparatively lower rates of enrollment, these non-standardized plan options can still fulfill an important role in addressing chronic and high-cost conditions, which are responsible for a disproportionate amount of health care expenditures.
We stated in the proposed rule that not limiting the number of permitted exceptions per issuer, product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area (instead of allowing exceptions for only two such plans, for example) would ensure that issuers are not restricted in the number of innovative plans they can offer. We noted that this would in turn help ensure that a greater portion of consumers with chronic and high-cost conditions have access to plans that reduce barriers to access to care for
We further stated in the proposed rule (88 FR 82608), that although issuers would not be limited in the number of exceptions they may be granted under this proposal, we anticipated that most issuers would determine that the burden of creating and certifying additional non-standardized plans intended to benefit a comparatively small population of consumers would outweigh the benefit of doing so. We noted that we also previously solicited comments on innovative plan designs, such as in the 2024 Payment Notice proposed rule.
We stated that in response to this comment solicitation, we received only two examples of plan designs that commenters considered to be innovative in nature: plan designs that have reduced cost sharing for benefits provided through telehealth, and plan designs that have reduced cost sharing for services and medications related to the treatment of diabetes (such as in the form of insulin). We clarified that the former example (reduced cost sharing for benefits provided through the telehealth) would not qualify for this exceptions process, while the latter example (reduced cost sharing for benefits related to the treatment of diabetes) could potentially qualify for this exceptions process, if the specified criteria are met.
Regardless, we stated that given that we only received two examples of plan designs that particular issuers considered to be innovative in nature, we did not anticipate that issuers would seek to have a substantial number of non-standardized plan options excepted from the non-standardized plan option limit. As a result, we explained that we did not anticipate this proposal would result in an increased risk of plan choice overload for consumers interested in plans with better benefits for qualifying conditions.
We stated in the proposed rule (88 FR 82608), that permitting exceptions solely based on whether a non-standardized plan option has reduced cost sharing of 25 percent or more for benefits pertaining to the treatment of chronic and high-cost conditions, as opposed to considering other factors (such as specialized networks, specialized formularies, or specialized benefit packages), is appropriate since the current standardized plan option requirements do not limit issuers in the number of standardized plan options they can offer per product network type, metal level, or service area.
However, we noted that standardized plan option requirements do not permit issuers to deviate from the specified cost sharing parameters for standardized plan options—meaning issuers would not be able to offer standardized plan options with reduced cost sharing of 25 percent or more for the treatment of specific conditions if the benefit category's cost sharing does not comply with the specified standards. Thus, we noted that under the current standardized plan option framework, issuers already have the flexibility to offer specialized provider networks, formularies, and benefit packages (including those that decrease barriers to access for the treatment of chronic and high-cost conditions—such as by including additional specialized providers, prescription drugs, or benefits) as standardized plan options.
We further stated that the cost sharing difference threshold of 25 percent or more is appropriate since we have observed that cost sharing differences below this threshold represent normal variation within a particular metal level, while differences at or above this threshold are more often associated with cost sharing differences between different metal levels. We do not believe that a difference in a cost sharing amount that is of the same magnitude as normal variation within a particular metal level (specifically, less than 25 percent) would warrant being excepted from the non-standardized plan option limit.
We noted that under this proposed exceptions process, if additional plans were permitted to be offered in excess of the limit of two non-standardized plan options, in accordance with the guaranteed availability requirements at § 147.104(a), these plans would also be required to be made available on the same basis to consumers without these chronic and high-cost conditions. Further, we emphasized that these plans would be prohibited from discriminating in accordance with the nondiscrimination requirements at §§ 147.104(e), 156.125, and 156.200(e).
Furthermore, although we acknowledged that non-standardized plan options excepted under this proposal would primarily benefit consumers with chronic and high-cost conditions, we stated that a sufficiently satisfactory range of both non-standardized and standardized plan options currently exist that are primarily intended for consumers without chronic and high-cost conditions. As a result, we explained that were not concerned that any risk of discrimination created by this exceptions process would negatively impact consumers, including but not limited to consumers with chronic and high-cost conditions.
We sought comment on this proposed approach. Specifically, we sought comment on the proposed exceptions process, and whether there should be any exceptions at all to the limit on the number of non-standardized plan options that issuers can offer through the Exchanges. In addition, we noted that we were particularly interested in comments on the following topics: whether exceptions should be permitted only for a specific set of chronic and high-cost conditions as opposed to any chronic and high-cost condition; whether there are other plan attributes we should consider outside of sufficiently differentiated cost sharing, such as the inclusion of alternative payment models or sufficiently differentiated benefits, networks, or formularies; the specific difference threshold for these cost-sharing amounts, including whether a threshold higher or lower than 25 percent would be more appropriate; the specific components of the justification form that issuers would be required to submit; the deadline for issuers to submit the materials necessary for us to consider whether non-standardized plan options should be excepted from the limit; and whether we should require that non-standardized plan options excepted from the limit be visually differentiated from other non-standardized plan options not excepted from the limit—such as by differentially displaying these excepted plans on
We also sought comment on other ways to balance the dual aims of reducing the risk of plan choice overload while simultaneously ensuring that truly innovative plan designs that
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing this provision with the following modifications. In particular, we are finalizing at new § 156.202(d)(1) that a 25 percent reduction in cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions will be evaluated at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition.
In addition, we are moving the requirement that the reduction in cost sharing must not be limited to a part of the year, or an otherwise limited scope of benefits, from § 156.202(d) in the proposed regulation text to § 156.202(d)(2) in the final regulation text. We are also moving the requirement that the reduction in cost sharing for these benefits cannot be conditioned on a consumer having a particular diagnosis from § 156.202(d) in the proposed regulation text to § 156.202(d)(3) in the final regulation text.
We are also finalizing at new § 156.202(d)(4) that the required reduction in cost sharing only applies to the standard variant of the plan for which an issuer seeks an exception, and not to the income-based cost-sharing reduction plan variations required by § 156.420(a), nor to the zero and limited cost-sharing plan variations required by § 156.420(b). In addition, we are finalizing at new § 156.202(d)(5) that issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition. We are also moving the requirement that the chronic and high-cost conditions that may qualify an issuer for this exception will be determined by HHS from § 156.202(d) in the proposed regulation text to § 156.202(d)(6) in the final regulation text.
Furthermore, we are modifying the regulation text describing requirements related to the written justification issuers will be required to submit to utilize this exceptions process at § 156.202(e)(1) through (3), to more accurately reflect how the reduction in cost sharing will be evaluated under this exceptions process. Finally, we are adding a requirement at § 156.202(e)(4) for issuers to submit a corresponding actuarial memorandum demonstrating the underlying actuarial assumptions made in the design of the plan the issuer is requesting to except, which includes a confirmatory actuarial opinion. These modifications are discussed in greater detail later in this section.
In addition, we note that we no longer anticipate requesting that issuers submit exception requests and accompanying justification forms by the QHP certification Early Bird deadline. Instead, we anticipate that the exception request and justification form submission deadline for issuers seeking to utilize this exceptions process will be the initial submission deadline for QHP certification applications, aligning the exception request deadline with the submission deadlines for QHP certification applications for standardized and non-standardized plan option offerings.
We also clarify that the example included in the 2024 Payment Notice that illustrated issuer flexibility to vary the inclusion of dental and/or vision benefit coverage in accordance with § 156.202(c) under the non-standardized plan option limits at § 156.202(a) through (b) failed to distinguish between the adult and pediatric dental benefit coverage categories.
In the 2024 Payment Notice (88 FR 25858), we stated that for PY 2025, for example, an issuer will be permitted to offer two non-standardized gold HMOs with no additional dental or vision benefit coverage, two non-standardized gold HMOs with additional dental benefit coverage, two non-standardized gold HMOs with additional vision benefit coverage, and two non-standardized gold HMOs with additional dental and vision benefit coverage, as well as two non-standardized gold PPOs with no additional dental or vision benefit coverage, two non-standardized gold PPOs with additional dental benefit coverage, two non-standardized gold PPOs with additional vision benefit coverage, and two non-standardized gold PPOs with additional dental and vision benefit coverage, in the same service area.
However, in PY 2024, issuers had the ability to vary the inclusion of dental and/or vision benefit coverage (including varying the inclusion of the distinct adult and pediatric dental benefit coverage categories), such that issuers could offer plans in the manner reflected in Table 13, instead of in the more limited manner reflected in the incomplete example in the 2024 Payment Notice.
We affirm that issuers continue to retain this flexibility for PY 2025. Thus, under the non-standardized plan option limit of two for PY 2025, if an issuer desires to offer the theoretical maximum number of plans, and if that issuer varies the inclusion of dental and/or vision benefit coverage in these plans in accordance with the flexibility provided for at § 156.202(c)(1) through (3), that issuer could offer a theoretical maximum of 16 plans in a given product network type, metal level, and service area in the manner demonstrated in Table 13. Furthermore, if an issuer offers QHPs with two product network types (for example, HMO and PPO), that issuer could offer a theoretical maximum of 32 plans in a given metal level and service area in the manner demonstrated in Table 13.
Below, we summarize and respond to public comments received on the proposed non-standardized plan option limit exceptions process and the related issues we sought comment on.
Many of these commenters noted that individuals with chronic and high-cost conditions are especially price-sensitive, and that, relative to the average enrollee, these individuals often encounter significantly higher out-of-pocket costs associated with the higher rates of utilization of the services related to treatment of these conditions. Commenters thus explained that plans reducing cost sharing for these services would allow consumers to more easily obtain the medical care they need, resulting in improved patient outcomes. Commenters further explained that this exceptions process could play an important role in advancing health equity by reducing cost sharing for conditions that disproportionately affect disadvantaged populations. Commenters specifically cited diabetes, COPD, HIV, hepatitis C, and rheumatoid arthritis as chronic and high-cost conditions that could be effectively targeted by issuers under this exceptions process.
Conversely, many commenters opposed introducing an exceptions process. Several of these commenters explained that introducing an exceptions process that would allow issuers to exceed the non-standardized plan option limit would contradict the action HHS has taken to reduce the rate of plan proliferation. Additionally, many commenters explained that prioritizing the treatment of chronic and high-cost conditions does not necessarily require HHS to permit issuers to offer additional non-standardized plans above the non-standardized plan option limit. They explained that plans could still be designed to include specialized benefits and cost sharing for those with chronic and high-cost health conditions within the non-standardized plan option limit.
Many commenters also explained that plans designed specifically to reduce cost sharing for services pertaining to the treatment of chronic and high-cost conditions are likely to involve trade-offs in the form of increasing cost sharing for other services. Commenters noted that consumers with chronic and high-cost conditions are still likely to experience other health needs and may be unlikely to realize a net benefit from the excepted plan if that plan precludes them from appropriately generous cost sharing for a broader set of services.
However, we agree that reducing the non-standardized plan option limit while simultaneously introducing a targeted exceptions process that will allow issuers to offer additional non-standardized plan options that substantially benefit consumers with chronic and high-cost conditions, including consumers who have relatively less common and high-cost health care needs, strikes an appropriate balance between reducing plan proliferation and the risk of plan choice overload while still permitting issuers a sufficient degree of flexibility to innovate as well as a sufficiently ensure a diverse range of plan offerings for consumers to select from.
We also agree that reducing cost sharing for benefits that pertain to the treatment of chronic and high-cost conditions will significantly reduce the total out-of-pocket costs for consumers with these conditions. We further agree that this reduction in out-of-pocket costs will allow consumers to more easily obtain the medical care they need, resulting in improved health outcomes. We also agree that improving health outcomes for consumers with chronic and high-cost conditions that disproportionately affect disadvantaged populations—including diabetes, COPD, HIV, hepatitis C, and rheumatoid arthritis—would advance health equity. Accordingly, we believe that the risk that these types of plans will be discontinued as a result of the reduction in the non-standardized plan option limit from four in PY 2024 to two in PY 2025 is sufficiently mitigated by the targeted exceptions process we are finalizing in this rule.
We also believe the criteria that we have set forth in the exceptions process finalized in this rule, such as requiring issuers to demonstrate that the additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions is at least 25 percent lower than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area, ensures that any excepted plans will be meaningfully different from other non-standardized plan options. We also believe these criteria will ensure that this exceptions process will not be utilized as a means to simply offer duplicative non-standardized plan options similar to existing plan offerings. Furthermore, in the last several plan years, the majority of FFE and SBE-FP issuers have not offered plans that would have been eligible for this exceptions process.
Although it is our hope that issuers will take advantage of this exceptions process as a means of advancing health equity, we also anticipate that issuers will carefully consider applying for such exceptions in general, particularly given the stringent requirements of the exceptions process. Furthermore, we note, in particular, that under § 156.202(d)(5), issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition. Thus, we believe there will be a very limited increase in the number of non-standardized plan options as a result of this exceptions process, and that the risk of the exceptions process causing a meaningful increase in plan proliferation is very low.
We also recognize the importance of plans designed specifically to improve cost sharing for services pertaining to the treatment of chronic and high-cost conditions, and we acknowledge the trade-offs that will likely be required for issuers to create and maintain these plans—namely, increased cost sharing for other services. We also acknowledge that plans could still technically be designed to include specialized benefits and cost sharing for those with chronic and high-cost health conditions within the non-standardized plan option limit.
However, we note that the plans that will likely be discontinued as a result of the reduction in the non-standardized plan option limit for PY 2025 and subsequent years will be those tailored to appeal to a smaller segment of the population—such as those with chronic and high-cost conditions. Thus, we believe this targeted exceptions process will effectively counterbalance the impact that the reduction of this limit may have on these types of plans and the consumers who rely on them. Consumers without the chronic and high-cost conditions targeted by plans that are likely to be discontinued can continue to select among the many available plans that have broader appeal.
Conversely, several commenters opposed limiting the number of potential exceptions. These commenters stated that limiting the number of potential exceptions permitted for each issuer would unnecessarily restrict issuer innovation and may harm consumers who have a comparatively less common chronic and high-cost condition that issuers may choose to not target with this exceptions process, which could hinder efforts to advance health equity.
Upon consideration of comments, we share commenters' concerns that permitting an unlimited number of exceptions for each issuer runs counter to our goal of reducing the risk of plan proliferation, a non-standardized plan option policy goal we explained in the proposed rule (88 FR 82608). Without a limit on the number of exceptions permitted, issuers could choose to submit multiple exception requests for non-standardized plan options that reduce cost sharing for benefits pertaining to the treatment of the same chronic and high-cost condition—with minor or no differences between the benefits with reduced cost sharing, or with minor or no difference in the amount that cost sharing is reduced for these benefits.
For example, without a limit on the number of exceptions permitted, issuers could submit exception requests for two identical non-standardized plan options that reduce cost sharing for benefits pertaining to the treatment of diabetes—each of which reduce cost sharing for the same benefits by the same amount. We do not believe it would be in consumers' interest to permit issuers to offer both of these plans due to their duplicative nature. Specifically, we believe that permitting issuers to offer both of these plans creates significant risk of plan choice overload, which, as we noted in the proposed rule (88 FR 82608), we want to minimize. However, we also agree that limiting the total number of exceptions could harm consumers who have a comparatively less common chronic and high-cost condition that issuers may choose to not target with this exceptions process,
To balance these concerns, at § 156.202(d)(5), we are limiting issuers to one exception per chronic and high-cost condition, in each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. Under this limitation, one exception would be permitted for each separate non-standardized plan option that reduces cost sharing for benefits pertaining to the treatment of a different chronic and high-cost condition—so long as the specified requirements are met.
For example, if an issuer submits exception requests for three separate plans in a given product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area (such as one plan that reduces cost sharing for benefits pertaining to the treatment of diabetes, one plan that reduces cost sharing for benefits pertaining to the treatment of COPD, and one plan that reduces cost sharing for benefits pertaining to the treatment of hepatitis C), we would permit exceptions for each of these plans, assuming these plans meet all other certification and exception requirements.
However, under this limitation, multiple exceptions will not be permitted for separate plans that reduce cost sharing for benefits pertaining to the treatment of the same chronic and high-cost condition, regardless of whether these benefits with reduced cost sharing vary between the separate plans. Thus, under this limitation, for example, if an issuer submits two exception requests for two separate plans that have reduced cost sharing for benefits pertaining to the treatment of diabetes (and both plans reduce cost sharing for insulin), only one exception would be permitted. Similarly, if an issuer submits exception requests for two separate plans with reduced cost sharing for different benefits pertaining to the treatment of diabetes (with one plan reducing cost sharing for insulin, and the other reducing cost sharing for diabetic foot care, diabetic retinal exam, and diabetic lab testing), the issuer would be permitted only one exception.
We believe adopting this approach will ensure that issuers do not offer duplicative exceptions plans with only minor differences in cost sharing, and that the exceptions process will instead encourage issuers to focus on reducing cost sharing for the most impactful benefits pertaining to the treatment of particular chronic and high-cost conditions. We believe that these exceptions will be an important way for issuers to further health equity and address pressing health needs in their service areas, and we believe that this limit will encourage issuers to focus their time and efforts on creating the strongest plan designs for these conditions as possible. We also believe this limit is congruent with existing market trends and will not impede issuers' ability to use non-standardized plan options to develop and offer the full desired scope of innovative plan designs.
However, we note that we would also consider additional conditions to be chronic and high cost in nature for purposes of this standard. As we explained in the proposed rule (88 FR 82608), additional representative examples of conditions that we would consider to be chronic and high cost in nature include, but are not limited to, Alzheimer's disease, kidney disease, osteoporosis, heart disease, diabetes, and all kinds of cancer. Examples of conditions that we would not consider chronic and high cost in nature for purposes of this standard would be those that are generally acute in nature, including bronchitis, the flu, pneumonia, strep throat, and respiratory infections.
Several commenters thus recommended modifying the exceptions process to consider product ID, network ID instead of product network type, formulary ID, and inclusion of telehealth services. One commenter recommended expanding the exceptions process criteria to allow issuers to offer plan design options with benefits tailored to address documented health disparities in underserved communities (such as non-standardized plan options that include benefits designed to improve access to “critical services,” enhance the quality of care for “critical services,” and/or lower out-of-pocket costs for “critical services,” as well as provide access to wellness programs and promote native-language inclusivity to increase engagement and health literacy).
Specifically, considering these criteria in determining eligibility for an exception would allow issuers to slightly vary included provider IDs, formulary IDs, and the inclusion of telehealth services, which could result in these plans having a different product IDs, network IDs, formulary IDs and telehealth benefits while still failing to provide meaningfully different coverage between excepted plans. We do not believe that including one different provider in a plan's network, for example, should result in that plan being permitted an exception on that basis alone. We believe such an approach would weigh against our goals of reducing plan proliferation and choice overload (88 FR 82608).
In response to the commenter who recommended incorporating additional criteria to allow issuers to better address health disparities documented in underserved communities, we note that we continue to believe that the criteria that we will consider under § 156.202(d) in determining whether to grant an exception will help ensure that non-standardized plan options offered pursuant to this exceptions process are well-designed to address health disparities in underserved communities. As we explained in the proposed rule (88 FR 82608), we believe this
Relatedly, we believe that since members of underserved communities suffer from the type of chronic and high-cost conditions that may qualify an issuer for an exception at greater rates than the general population, and since this exceptions process permits issuers to offer innovative non-standardized plan options that include substantially reduced cost sharing for services related to treatment of those conditions, we believe the criteria considered under this exceptions process will improve this population's access to care and, subsequently, their health outcomes.
Finally, we note that issuers are not limited in the number of standardized plan options they can offer. Given this flexibility, issuers are permitted to offer different standardized plan options with different product IDs, network IDs, and formulary IDs, so long as they conform to the required cost-sharing parameters for these plans.
Third, if an issuer does choose to offer an excepted plan, we believe the current structure and operation of HHS-operated risk adjustment program
For example, HCC 01 (HIV/AIDS), HCC 118 (Multiple Sclerosis), and multiple HCCs for diabetes related diagnoses, HCC 19 (Diabetes with Acute Complications), HCC 20 (Diabetes with Chronic Complications), HCC 21 (Diabetes without Complication), and HCC 22 (Type 1 Diabetes Mellitus, add-on to Diabetes HCC 19-21) are payment HCCs that account for chronic and high-cost conditions targeted with this exceptions process. Therefore, we believe the current structure and operation of HHS-operated risk adjustment program sufficiently accounts for the risk that may arise from attracting a higher number of enrollees with chronic and high-cost conditions into these plans.
Lastly, these excepted plans are limited to the individual markets, and the HHS risk adjustment models are national models that are used in all States where the HHS-operated risk adjustment program applicable to the individual, small group, and merged markets is operated. These models are intended to reflect the relative national average costs for HCCs and have not been developed to account for specific State or market specific variation in plan liability. We have found, based on our experience in modeling, that the nationwide dataset is often necessary to ensure that we have adequate sample size and stability in our risk adjustment models, including the models' factors and coefficients. If an issuer offers excepted non-standardized plan options that attract a higher number of enrollees with chronic and high-cost conditions, the issuer would receive credit for the increased actuarial risk as part the risk score and transfer calculations for the applicable benefit year.
Conversely, several commenters expressed concern with the proposed cost sharing difference threshold. These commenters noted that it would be difficult to demonstrate a 25 percent reduction in cost sharing for benefits associated with the treatment of chronic and high-cost conditions while maintaining an AV for these plans within the permissible
Altogether, we do not believe that a difference in a cost sharing amount that is of the same magnitude as normal variation within a particular metal level (specifically, less than 25 percent) would warrant being excepted from the non-standardized plan option limit. We further agree that reducing the cost sharing difference threshold to below 25 percent may allow issuers to utilize this exceptions process to offer non-
Finally, we note that it will be possible for issuers to reduce cost sharing for benefits pertaining to the treatment of a chronic and high-cost condition by at least 25 percent in these plans while maintaining AVs within the permissible
Many commenters also noted that, historically, the Early Bird submission deadline does not offer issuers sufficient time to conduct all these activities while meeting the individual market filing deadlines imposed by their respective States. Commenters explained that imposing too early a submission deadline would substantially reduce the likelihood that issuers would apply for exceptions, resulting in fewer non-standardized plan options targeting chronic and high-cost conditions being submitted for possible inclusion above the limit.
Several commenters also cited operational concerns related to interfacing with State Departments of Insurance that would make it difficult for issuers to be able to submit complete exception requests by the Early Bird deadline. In particular, many commenters noted that although it may be possible for issuers to submit exception requests by the Early Bird deadline, depending on the publication date of this final rule and related QHP certification materials, it would be difficult for State Departments of Insurance that transfer plan submission data to CMS on behalf of their respective issuers to do so prior to the Early Bird submission deadline.
This is because issuers in some States are required to first submit plan data to their State Department of Insurance before the State Department of Insurance transfers the plan submission data to CMS. This process may take several weeks to complete from beginning to end, which would effectively require issuers to submit complete plan portfolios—including these exception requests—to their State Departments of Insurance several weeks in advance of the Early Bird deadline, possibly only several weeks after the Payment Notice is published. Accordingly, some commenters do not believe that it is feasible for State Departments of Insurance that transfer plan submission data to CMS on behalf of their respective issuers to do so prior to the Early Bird submission deadline.
Several commenters suggested alternatives to requiring issuers to submit QHP applications for non-standardized plan options that exceed the two-plan limit by the QHP certification Early Bird deadline. One commenter recommended that exception requests be approved or rejected in concept by CMS prior to the formal submission of the complete QHP certification application by the Initial Application Deadline. The commenter suggested that this approach would mitigate any operational burden imposed on the issuer while reducing the risks associated with coordinating with State Departments of Insurance and managing varying filing deadlines (such as issuers being unable to submit complete plan portfolios and exception requests to their State Departments of Insurance in advance of the Early Bird deadline). The commenter stated this approach would also allow CMS to provide feedback on the proposed excepted plan, helping to circumvent any quality assurance challenges (such as issuers formally submitting exception requests that do not meet the requirements of the exceptions process).
As such, we anticipate that the exception request submission deadline for issuers will be the Initial Application Deadline for QHP certification, aligning the exception request submission deadline with the Initial Application Deadline for QHP certification applications for standardized and non-standardized plan option offerings. We note that the Initial Application Deadline for QHP certification for each plan year will continue to be communicated in sub-regulatory guidance. We believe adopting this approach will permit issuers sufficient time to finalize unique benefits coverage and cost sharing, secure network agreements, and conduct market reviews necessary to bring these novel plan designs to the market in a feasible timeframe. We also believe that adopting this approach obviates the need for CMS to approve or reject exception request materials in advance of the deadline for submitting a complete QHP certification application.
One commenter recommended imposing restrictions on mentioning specific chronic and high-cost conditions in the plan marketing names of non-excepted plans. The commenter noted that currently available QHPs that are marketed as being uniquely relevant to a certain chronic and high-cost condition may not actually provide substantial benefits to individuals seeking treatment for that condition. The commenter suggested that some plans with references to diabetes in their planned marketing names may fail to substantially reduce cost sharing for benefits related to diabetes treatment, for example. The commenter stated that, therefore, issuers should not be permitted to display a plan marketing name that markets a non-excepted QHP as if it had been approved under this exceptions process.
For example, without considering deductibles and annual limitations on cost sharing and their interactions with coinsurance rates and copayments when evaluating the 25 percent reduction in cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions under this exceptions process, it would be difficult to assess whether the required reduction in cost sharing is achieved if the in-limit non-standardized plan option the issuer is using as a comparison has a coinsurance rate of 50 percent subject to the deductible as the form of cost sharing for a particular benefit, whereas the corresponding benefit in the non-standardized plan option the issuer requests to be excepted has a copayment of $30 exempt from the deductible as the form of cost sharing. It would similarly be difficult to assess whether the required reduction in cost sharing is achieved if the two plans have different deductibles and/or annual limitations on cost sharing.
We also clarify that under new § 156.202(d)(1), a 25 percent reduction in cost sharing for benefits pertaining to the treatment of a chronic and high-cost condition will not be evaluated at the individual benefit level, but will instead be evaluated at the level of total out-of-pocket costs for the treatment of the particular chronic and high-cost condition for a population of enrollees with that particular chronic and high-cost condition.
This is because if we were to adopt an approach that evaluated this difference in cost sharing at the individual benefit level, issuers may reduce cost sharing for only one or several already relatively inexpensive or infrequently utilized benefits—which may technically meet the required difference in cost sharing threshold under the standard but may not actually meaningfully reduce cost sharing for enrollees with that chronic and high-cost condition. For example, if this difference in cost sharing were evaluated at the individual benefit category level, an issuer would be able to reduce cost sharing for a particular prescription drug used to treat a chronic and high-cost condition from a $20 copay exempt from the deductible to a $15 copay exempt from the deductible to meet the required cost sharing difference threshold under the standard. We do not believe this reduction in cost sharing would substantially benefit consumers with the relevant chronic and high-cost condition.
Thus, we believe evaluating the required difference in cost sharing at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition represents a more comprehensive and holistic approach in ensuring that excepted plans substantially benefit consumers with chronic and high-cost conditions. As we explained in the proposed rule (88 FR 82607), one of our goals with the proposed exceptions process is to ensure that excepted plans substantially benefit consumers with chronic and high-cost conditions.
Consider the following hypothetical scenario as an illustration of how the 25 percent reduction in cost sharing for benefits pertaining to the treatment of a chronic and high-cost condition will be evaluated. In this scenario, an issuer desires to offer two non-standardized plan options per product network type, metal level, and inclusion of dental and/or vision benefit coverage. This issuer also desires to submit an exception request for an additional non-standardized plan option that reduces cost sharing for benefits pertaining to
The cost sharing structure in the non-standardized plan option the issuer has chosen as the in-limit comparison includes a $40 copayment exempt from the deductible for each primary care visit, an $80 copayment exempt from the deductible for each podiatrist specialist visit, an $80 copayment exempt from the deductible for each ophthalmologist specialist visit, and a 40 percent coinsurance rate exempt from the deductible for each utilization of laboratory services. The cost sharing structure in the non-standardized plan option that the issuer requests be excepted from the limit includes a $20 copayment exempt from the deductible for each primary care visit, a $70 copayment exempt from the deductible for each podiatrist visit, a $70 copayment exempt from the deductible for each ophthalmologist visit, and a 20 percent coinsurance rate exempt from the deductible for each utilization of laboratory services, with the cost sharing for all other benefits remaining the same between both plans.
Under this exceptions process, the 25 percent reduction in cost sharing for benefits pertaining to the treatment of a chronic and high-cost condition will not be evaluated at the individual benefit category level (in this case, primary care visit, podiatrist specialist visit, ophthalmologist specialist visit, and laboratory services) between the in-limit non-standardized plan option the issuer is using as a point of comparison and the additional non-standardized plan option the issuer is requesting to have excepted from the limit. Rather, the required reduction in cost sharing will be evaluated at the level of total out-of-pocket costs for a representative treatment scenario for the relevant chronic and high-cost condition. In this hypothetical scenario, for example, a representative treatment scenario for the treatment of diabetes is comprised of four primary care visits, one podiatrist specialist visit, one ophthalmologist specialist visit, and the utilization of laboratory services one time.
Under the cost sharing structure in the non-standardized plan option the issuer has chosen as an in-limit point of comparison, this representative treatment scenario would result in the enrollee paying the $40 copayment exempt from the deductible for a primary care visit four times, amounting to $160; the $80 copayment exempt from the deductible for a podiatrist specialist visit one time; the $80 copayment exempt from the deductible for an ophthalmologist specialist visit one time; and, assuming a total cost of $200 for each utilization of laboratory services and a coinsurance rate of 40 percent exempt from the deductible for this service, one utilization of laboratory services amounting to $80. Altogether, the total out-of-pocket costs for this representative treatment scenario under the cost-sharing structure in the non-standardized plan option the issuer has chosen as an in-limit point of comparison would amount to $400.
Under the cost sharing structure in the non-standardized plan option that the issuer requests be excepted from the limit, the representative treatment scenario would result in the enrollee paying the $20 copayment exempt from the deductible for a primary care visit four times, amounting to $80; the $70 copayment exempt from the deductible for a podiatrist specialist visit one time; the $70 copayment exempt from the deductible for an ophthalmologist specialist visit one time; and, assuming a total cost of laboratory services of $200 for each utilization of laboratory services and a coinsurance rate of 20 percent exempt from the deductible for this service, one utilization of laboratory services amounting to $40. Altogether, the total out-of-pocket costs for this representative treatment scenario under the cost-sharing structure in the non-standardized plan option the issuer is requesting to be excepted from the limit would amount to $260.
Thus, although there is not necessarily a 25 percent reduction when comparing each individual benefit category between these two plans, the standard would still be satisfied, so long as the overall cost sharing (in the form of total out-of-pocket costs, which takes into consideration maximum out-of-pocket limitations and deductibles) for a population of enrollees with diabetes will still be reduced by at least 25 percent under the excepted non-standardized plan option (which in this case would be $260) compared to the non-standardized plan option being used as an in-limit point of comparison (which in this case would be $400). We note that an issuer seeking to utilize this exceptions process must demonstrate underlying actuarial assumptions in the required actuarial memorandum (which includes corresponding actuarial attestation) as part of the exception request that we explain later in this section of this final rule.
We are also making several changes to the requirements related to the written justification form that issuers will be required to submit to utilize this exceptions process at § 156.202(e)(1) through (3), to more accurately reflect how the reduction in cost sharing will be evaluated under this exceptions process and ensure that excepted non-standardized plan options have specific design features that will substantially benefit consumers with chronic and high-cost conditions, a goal we explained in the proposed rule (88 FR 82606). We also introduced new paragraph (4) to ensure that the form issuers submit adequately explains the underlying actuarial assumptions made in designing the proposed excepted plan.
In particular, under proposed § 156.202(e)(1), an issuer seeking to utilize this exception request process would have been required to identify the specific condition(s) for which cost sharing is reduced. However, under finalized § 156.202(e)(1), an issuer seeking to utilize this exceptions request process must identify the specific chronic and high-cost condition that their additional non-standardized plan option offers substantially reduced cost sharing for, in accordance with the definition of “cost sharing” at § 156.20.
We made this change to reflect the fact that each excepted non-standardized plan option should be tailored to the treatment of one chronic and high-cost condition, since we believe it will be both difficult and impractical for issuers to reduce cost sharing for benefits pertaining to the treatment of two or more chronic and high-cost conditions while maintaining AVs within the permissible
Under proposed § 156.202(e)(2), an issuer seeking to utilize this exception request would have been required to
As such, under finalized § 156.202(e)(2), an issuer seeking to utilize this exceptions process must identify which specific benefits in the Plans and Benefits Template are discounted to provide reduced treatment-specific cost sharing for individuals with the specified chronic and high-cost condition. These discounts must be relative to the treatment-specific cost sharing for the same corresponding benefits in the issuer's other non-standardized plan option offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area.
For the purposes of this standard, “treatment specific cost sharing” consists of the costs for obtaining services that pertain to the treatment of a particular chronic and high-cost disease—but not the costs for obtaining services that do not pertain to the treatment of the relevant condition. For example, costs for obtaining chemotherapy would not be considered treatment-specific cost sharing for a plan designed to address diabetes for the purposes of this standard. However, as an additional clarifying example, a primary care visit would pertain to the treatment of the diabetes to the extent that this visit entails the treatment of the relevant condition.
We also clarified in this paragraph (e)(2) that the issuer must identify all services for which the benefits substantially reduce cost sharing in the Plans and Benefits Template. These benefits must encompass a complete list of relevant services pertaining to the treatment of the relevant condition. For example, if an issuer intends to offer a plan that is designed to address diabetes, the issuer should list only the benefits with reduced cost sharing for services pertaining to the treatment of diabetes. We made these modifications to ensure that the written justification that issuers will be required to submit as part of this exceptions process accurately explains how the excepted plan substantially reduces cost sharing at the level of total out-of-pocket costs for the treatment of a particular chronic and high-cost condition, in accordance with § 156.202(d)(1).
Under proposed § 156.202(e)(3), an issuer seeking to utilize this exceptions process would have been required to explain how the reduced cost sharing for these benefits pertain to clinically indicated guidelines for treatment of the specified chronic and high-cost condition(s). However, under finalized § 156.202(e)(3), an issuer seeking to utilize this exceptions process must explain how the reduced cost sharing for these services pertains to clinically indicated guidelines and a representative treatment scenario for treatment of the specified chronic and high-cost condition. We also clarified in this paragraph that the issuer must include any relevant studies, guidelines, or supplementary documents to support the application, as applicable. In addition, we clarified in this paragraph that for purposes of this standard, a representative treatment scenario is an annual course of treatment for a chronic and high-cost condition (for example, osteoporosis, diabetes, cancer).
We made this modification to ensure that each excepted non-standardized plan option is tailored to the treatment of one chronic and high-cost condition. We also made this modification to ensure that issuers would not be able to simply reduce cost sharing for one already relatively inexpensive or relatively infrequently utilized service by 25 percent or more to meet the standard, which could result in the plan failing to substantially benefit consumers with a chronic and high-cost condition. Instead, under the final requirement in this paragraph, issuers will be required to reduce cost sharing for a representative treatment scenario in order to reduce cost sharing for the treatment of that particular condition by 25 percent or more, which we believe ensures the plan would substantially benefit consumers with the relevant chronic and high-cost condition.
We also finalized new § 156.202(e)(4) requiring that issuers include a corresponding actuarial memorandum that explains the underlying actuarial assumptions made in the design of the plan the issuer is requesting to except. In this memorandum, an issuer must demonstrate how the benefits that are discounted to provide reduced treatment-specific cost sharing of at least 25 percent identified at § 156.202(e)(2) for the treatment of the condition identified at § 156.202(e)(1) under the excepted plan compare to the identified in-limit offering in the same product network type, metal level, inclusion of dental and/or vision coverage, and service area.
We also clarified in this paragraph that this demonstration must specifically be in reference to the specific population that would be seeking treatment for the relevant condition and not the general population. We also clarified that this memorandum also must include an actuarial opinion confirming that this analysis was prepared in accordance with the appropriate Actuarial Standards of Practice and the profession's Code of Professional Conduct. We made these modifications to ensure issuers' exception requests accurately explain how the excepted plans substantially reduce cost sharing at the level of total cost sharing for the treatment of a particular chronic and high cost condition, which enables the assessment of whether the required difference in cost sharing is achieved in accordance with § 156.202(d)(1).
This modification avoids requirements on issuers that would be unworkable, such as requiring the issuer to further reduce the cost sharing for a particular benefit in the excepted non-standardized plan option when there is no cost sharing for the benefit in the in-limit non-standardized plan option. For
Furthermore, since the AI/AN zero cost share variant at § 156.420(b)(1) eliminates cost sharing for all services, while the AI/AN limited cost share variant at § 156.420(b)(2) eliminates cost sharing on any item or service that is an EHB furnished directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization (each as defined in 25 U.S.C. 1603), or through referral under contract health services, cost sharing cannot be further reduced.
As such, we are finalizing at § 156.202(d)(4) that the reduced cost sharing requirement that excepted plans must meet only applies to the standard variant of the plan for which the issuer is seeking exception, and not to the income-based CSR plan variations required by § 156.420(a) or the zero and limited cost sharing plan variations required by § 156.420(b). We are making this change to ensure that issuers can achieve the required reduction in cost sharing between the non-standardized plan option the issuer chooses as an in-limit comparison and the non-standardized plan option the issuer requests to be excepted.
The regulations under MHPAEA set forth six classifications of benefits for applying the parity rules for financial requirements and treatment limitations.
QHP issuers seeking to reduce cost sharing in non-standardized plans under the exceptions process will need to carefully evaluate whether and how designing a plan with reduced cost sharing for certain chronic or high-cost conditions can be achieved consistent with MHPAEA and its implementing regulations. Depending on the extent to which reducing cost sharing for medical/surgical benefits in a benefit classification (or any other design feature of the excepted plan) affects the results of the substantially all/predominant analysis under MHPAEA, the QHP issuer may not be permitted to impose the cost-sharing (or other unique) requirement on mental health or substance use disorder benefits in that classification, or may be required to reduce cost sharing for mental health and substance use disorder benefits in the classification, to ensure compliance with MHPAEA. Further, the issuer must comply in all other regards with applicable requirements under MHPAEA and its implementing regulations.
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82609), we proposed to amend § 156.520(f) to enable CMS to approve requests by CO-OP borrowers to voluntarily terminate their loan agreement with CMS, and thereby cease to constitute a qualified non-profit health insurance issuer (QNHII),
Section 1322 of the ACA requires a CO-OP loan recipient, or qualified nonprofit health insurance issuer (QNHII), to be, among other things, an entity “substantially all of the activities of which consist of the issuance of qualified health plans in the individual and small group markets in each State in which it is licensed to issue such plans.”
The ACA also mandates that a QNHII be subject to governance by “a majority vote of its members.”
Section 1322 of the ACA mandates that the Secretary require an entity receiving a CO-OP loan to enter into a loan agreement with the Secretary. The required loan agreement must obligate the borrower to “meet, and to continue to meet” the requirements of a QNHII, and “any other requirements contained in the agreement.”
We explained in the proposed rule that as a result of these requirements, a CO-OP cannot pursue new business arrangements that would impose a governance structure under which it is possible for a majority of directors to be elected by a majority vote of persons who are not covered by health insurance policies issued by the CO-OP. We further explained that a CO-OP also cannot enter into new business arrangements under which voting members need not be individuals covered by policies issued by the CO-OP. We stated that it is also not possible for a CO-OP to enter into a business plan under which potentially less than two-thirds of the company's activities may consist of issuing qualified health plans.
In the proposed rule, we explained that the loan agreements currently in force only permit a CO-OP to initiate voluntary termination of its loan agreement on grounds that the loan recipient believes that it cannot create a viable and sustainable CO-OP.
We stated that, informed by 8 years of experience with business operations for the CO-OP program, we have become aware of opportunities that may be available to CO-OPs to terminate their loan agreement, cease to constitute a QNHII, and thus become able to pursue new opportunities that appear well-calculated to expand operations from regional areas within a State to Statewide operations, and also improve consumer access to other health insurance products, while remaining a non-profit, member-focused entity.
We therefore proposed to amend § 156.520(f) to add § 156.520(f)(2) which would enable CMS, in its sole discretion, to approve requests by CO-OP borrowers to voluntarily terminate their loan agreement with CMS, and thereby cease to constitute a QNHII, for the purpose of permitting the loan recipient to pursue innovative business plans that are not otherwise consistent
As a general matter, we anticipated that plans could be deemed innovative and likely to enhance consumer access to quality, affordable, member-focused health care if they appear to be well-calculated to lead directly to marketing non-profit, member-focused health plans in new regions of a State, or to offer health plans on a Statewide basis for the first time, or to expand operations into new States, or to enhance consumer access to new non-profit products that are not qualified health plans. We noted that these examples of innovative business plans are illustrative, and not exclusive.
After consideration of comments, and for the reasons outlined in the proposed rule and our responses to comments below, we are finalizing this provision as proposed. We summarize and respond below to public comments received on the proposed amendments § 156.520(f).
In the HHS Notice of Benefit and Payment Parameters for 2025 proposed rule (88 FR 82510, 82610), we proposed conforming amendments to the payment and collections process set forth at § 156.1215 to align with the policies and regulations proposed in the Federal Independent Dispute Resolution Operations proposed rules (88 FR 75744). We proposed that the administrative fees for utilizing the No Surprises Act
To implement this policy, we proposed to amend § 156.1215(b) to allow HHS to net payments owed to issuers and their affiliates
We sought comment on the proposed amendments to § 156.1215(b) and (c).
After consideration of comments and for the reasons outlined in the proposed rule and our responses to the comments, we are finalizing this provision as proposed. We summarize and respond below to public comments received on the proposed amendments to the payment and collections process at § 156.1215(b) and (c).
To further explain this netting process, HHS will include amounts owed to the Federal Government from issuers and their affiliates operating under the same TIN for administrative fees for utilizing the Federal IDR process in accordance with § 149.510(d)(2) when netting payments owed to issuers and their affiliates operating under the same tax identification number against amounts due to the Federal Government from the issuers and their affiliates under the same taxpayer identification number for advance payments of the premium tax credit, advance payments of and reconciliation of cost-sharing reductions, payment of Federally-facilitated Exchange user fees, payment of State Exchanges utilizing the Federal platform user fees, and risk adjustment, reinsurance, and risk corridors payments and charges.
As part of this netting policy, we will also provide that any amount owed to the Federal Government by an issuer and its affiliates for unpaid administrative fees due to the Federal Government from these issuers and their affiliates for utilizing the Federal IDR process in accordance with § 149.510(d)(2), after HHS nets amounts owed by the Federal Government under these programs, would be the basis for calculating a debt owed to the Federal Government. Should the parallel related proposals related to the manner of the administrative fee collection and netting be finalized in the Federal Independent Dispute Resolution Operations proposed rules, we will work with issuers to prevent additional administrative burdens or unintended challenges for HHS and issuers in implementing this netting policy. Specifically, we intend to leverage our current integrated payment and collections process and reporting to simplify the implementation of this netting policy, to assist issuers in identifying debts owed through its current invoice process, and to keep issuers informed of updates to the integrated payment and collections processes.
Under the Paperwork Reduction F of 1995, we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of the agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs). The public comments and our responses appear in this section, and in the applicable ICR sections that follow.
To derive wage estimates, we generally use data from the Bureau of Labor Statistics to derive average labor costs (including a 100 percent increase for the cost of fringe benefits and overhead) for estimating the burden associated with the ICRs.
As indicated, employee hourly wage estimates have been adjusted by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and overhead costs vary significantly across employers, and because methods of estimating these costs vary widely across studies. Nonetheless, there is no practical alternative, and we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.
We are finalizing amendments to the section 1332 waiver implementing regulations to set forth flexibilities related to State public notice requirements and post-award public participation requirements. Current regulations at 31 CFR 33.112 and 45 CFR 155.1312 specify State public notice and comment period and participation requirements for finalized section 1332 waiver requests, and 31 CFR 33.116(b) and 45 CFR 155.1316(b) specify the public notice and comment period and approval requirements under the accompanying Federal process.
However, this final rule does alter any of the requirements related to section 1332 waiver applications, compliance and monitoring, or evaluation in a way that would impose any additional costs or burdens for States seeking waiver approval or those States with approved waiver plans that have not already been captured in prior burden estimates. The Departments anticipate that implementing these provisions will not significantly change or decrease the associated burden currently approved under OMB control number: 0938-1389, expiration date: February 29, 2024.
We did not receive any comments on ICRs regarding the amendments to normal public notice requirements for section 1332 waivers.
We are finalizing requirements at 42 CFR 600.320(c)(1) through (3) that a State operating a BHP must establish a uniform method of determining the effective date of eligibility for enrollment in a standard health plan which follows: (1) the Exchange coverage effective date standards at 45 CFR 155.420(b)(1); (2) the Medicaid effective date standards at 42 CFR 435.915 exclusive of § 435.915(a); or (3) an effective date of eligibility of the first day of the month following the month in which BHP eligibility is determined. We are also adding 42 CFR 600.320(c)(4) which allows for a State to establish its own effective date of eligibility for enrollment policy subject to HHS approval. We note that only 42 CFR 600.320(c)(3) and (4) are newly finalized. The options under 42 CFR 600.320(c)(1) and (2) currently exist.
We estimate that the policies under 42 CFR 600.320(c)(3) and (4) will have no impact on the information collection burden. We note that any cost would be incurred 100 percent by the State, as Federal BHP funds cannot be used for program administration.
We sought comment on these assumptions.
We did not receive any comments in response to the burden estimates for this policy change. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.106(a)(2) to add new paragraphs (a)(2)(i) and (ii). Specifically, we are finalizing that as part of a State's activities for its establishment of a State Exchange, the State provide upon request, supplemental documentation to HHS detailing the State's implementation of its State Exchange functionality, including information regarding the State's ability to implement and comply with Federal requirements for operating an Exchange. Such supporting documentation would inform HHS's decision to approve or conditionally approve a State Exchange and could include, for example, materials demonstrating progress toward meeting State Exchange Blueprint application requirements, documentation that details a State's plans to implement and meet the Exchange functional requirements as laid out in the State Exchange Blueprint application, or plans to engage in consumer assistance programs and activities. Additionally, we are finalizing the requirement that when a State submits its State Exchange Blueprint application to HHS for approval, the State must provide the public with notice and a copy of its State Exchange Blueprint application. Further, at some point following a State's submission of its State Exchange Blueprint application to HHS, a State must conduct at least one public engagement (such as a townhall meeting or public hearing), in a timeline and manner considered effective by the State, with concurrence from HHS, at which interested parties can learn about the State's intent to establish a State Exchange and the State's progress toward executing that transition. We are also finalizing the requirement that while a State is in the process of establishing a State Exchange and until HHS has approved or conditionally approved the State Exchange Blueprint application, the State conduct periodic public engagements at which interested parties can continue to learn about the State's progress towards establishing a State Exchange, in a timeline and manner considered effective by the State, with concurrence from HHS. These finalized requirements will impact States that are considering, or are in the process of, establishing a State Exchange for PY 2025 and subsequent years. We anticipate minimal burden on these States, as we believe they will have sufficient time to plan for such public-facing State Exchange
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.220 to apply to web-brokers operating in State Exchanges, and consequently in State Exchanges, in both the Individual Market Exchanges and SHOPs, certain existing HHS standards governing web-brokers' use of non-Exchange websites to assist consumers with enrolling in QHPs and applying for APTC/CSRs in a manner that constitutes enrollment through the Exchange. The burden associated with these amendments includes costs for web-brokers assisting consumers in State Exchanges to meet the requirements in finalized § 155.220(n) and for State Exchanges related to the development and oversight of web-broker programs within their State. We anticipate that the same number of web-brokers operating in the Exchanges on the Federal platform (20) will also operate in the 5 State Exchanges and will be required to incur this burden for each of the 5 State Exchanges they may operate in. We estimate the relevant costs based on current Federal costs. These estimates are described below.
These amendments will impose burdens on web-brokers assisting consumers in State Exchanges for costs related to web-development to meet the finalized website display requirements to be extended to web-brokers operating in these State Exchanges and costs associated with creating and submitting audit documentation for the applicable Exchange's review. We solicited feedback from State Exchanges regarding these burden estimates and the number of web-brokers expected to participate in State Exchanges pursuant to this proposal. Although we have allowed certain flexibility for State Exchanges to tailor their web-broker program and establish their own standards with respect to operational readiness demonstrations by their web-brokers, we expect the costs can be reasonably estimated based on the Federal costs as follows.
We estimate it will take 5 hours for a Business Operations Specialist at an hourly rate of $73.12 to implement the standardized disclaimers required under § 155.220(c)(3)(i)(A) and (G), along with 30 hours at an hourly rate of $80.04 for a Web and Digital Interface Designer to modify the website to implement the standardized disclaimers across 5 State Exchanges. Therefore, for the standardized disclaimers under § 155.220(c)(3)(i)(A) and (G), we estimate each web-broker assisting consumers in State Exchanges will incur a cost of $2,766.80 (5 hours × $73.12 per hour + 30 hours × $80.04 per hour). We estimate a cumulative burden of $55,336 for the anticipated 20 web-brokers operating across the State Exchanges ($2,766.80 × 20 web-brokers). Additionally, finalized new paragraph § 155.220(n)(1) allows State Exchanges the flexibility to add State-specific language to the standardized disclaimers, provided the additional language does not conflict with the HHS-provided standardized disclaimers. We solicited feedback from State Exchanges regarding how these flexibilities would impact these burden estimates.
Additionally, we anticipate it will take up to 100 hours at an hourly rate of $80.04 for a Web and Digital Interface Designer to modify the website to implement and display the standardized QHP comparative information required under § 155.220(c)(3)(i)(A) (including the quality ratings assigned by HHS and enrollee satisfaction survey) across 5 State Exchanges. Therefore, for the display of the QHP comparative information on web-broker non-Exchange websites, we estimate each web-broker operating in State Exchanges will incur a cost of $8,004 (100 hours × $80.04 per hour). We estimate a cumulative burden of $160,080 for the anticipated 20 web-brokers operating across the State Exchanges ($8,400 × 20 web-brokers).
We anticipate it will take 25 hours for a Web and Digital Interface Designer at an hourly rate of $80.04 to modify the website to display the APTC and CSR eligibility information required under § 155.220(c)(3)(i)(I) across 5 State Exchanges. Therefore, for changes related to implementation of the HHS minimum web-broker standards related to display of consumer APTC and CSR eligibility information, we estimate each web-broker operating in States with State Exchanges will incur a cost of $2,001 (25 hours × $80.04). We therefore estimate a cumulative burden of $40,020 for the anticipated 20 web-brokers operating across the 5 State Exchanges ($2,001 × 20 web-brokers). Additionally, as discussed in the proposed rule (88 FR 82560), we allow State Exchanges flexibility in how consumer eligibility information for APTC or CSRs is displayed on websites by web-brokers in State Exchanges, at the discretion of the State Exchange on the display of that information. We solicited feedback from State Exchanges regarding how these flexibilities would impact these burden estimates.
Finalized paragraph § 155.220(c)(4)(iii) will extend certain downstream agent and broker requirements at § 155.220(c)(4)(i) that currently apply to web-brokers in FFE and SBE-FP States and govern the use of the web-broker's non-Exchange website by other agents or brokers assisting Exchange consumers to also apply to web-brokers, and their downstream agents and brokers in State Exchanges, and consequently to these State Exchanges. Under the finalized provision, web-brokers that permit other agents or brokers, through a contract or other arrangement, to use the web-broker's non-Exchange website to help an applicant or enrollee complete a QHP selection or complete the Exchange eligibility application will be required to meet the standards at § 155.220(c)(4)(i)(A), (B), (D), and (F) when assisting consumers in States with State Exchanges. This includes extension of requirements for web-brokers to verify that any agent or broker accessing or using the website is licensed in the State in which the consumer is selecting the QHP and has completed training and registration and has signed all required agreements with the applicable State Exchange. It will also require web-brokers to terminate the agent or broker's access to its website if the applicable State Exchange determines the agent or broker is in violation of the provisions described in this section and/or if the applicable State Exchange terminates any required agreement with the agent or broker. In addition, it will also extend a requirement for web-brokers to provide State Exchanges with a list of agents and brokers who enter into such a contract or other arrangement to use the web-broker's non-Exchange website, in a form and manner to be specified by the State Exchanges similar to the requirement in § 155.220(c)(4)(i)(A) for web-brokers in FFE and SBE-FP States to report the same information to HHS. We understand that web-brokers who work with and allow other agents and brokers to use the web-brokers' non-Exchange websites to assist Exchange consumers typically obtain and manage information on each of their downstream agents or brokers as part of an onboarding process. As a result, we expect web-brokers will already have the necessary data to provide a list to the applicable State Exchange of each of
We estimate it will take 95 hours for a Business Operations Specialist at an hourly rate of $73.12 to oversee and monitor compliance with the operational readiness requirements established by State Exchanges, as required by new § 155.220(n)(2) across 5 State Exchanges. Therefore, for compliance requirements, we estimate each web-broker operating in States with State Exchanges will incur a cost of $6,946.40 (95 hours × $73.12) for the finalized operational readiness requirements. We estimate a cumulative burden of $138,928 for the anticipated 20 web-brokers operating across the 5 State Exchanges ($6,946.40 × 20 web-brokers). These burden estimates are provided based on the estimates of the cost for DE entities to comply with the operational readiness requirements established by HHS. Finalized paragraph § 155.220(n)(2) will allow State Exchanges to define and establish the form and manner for their web-brokers to establish operational readiness. Although we anticipate State Exchanges would establish requirements similar to the requirements for demonstrating operational readiness to operate in the FFE or SBE-FPs, we solicited feedback from State Exchanges regarding how well these burden estimates reflect their anticipated requirements.
Therefore, we estimate each web-broker operating in all 5 State Exchanges will incur a one-time burden in PY 2025 of 505 hours at a cost of $43,019. We estimate a cumulative burden of 10,100 hours at an estimated cost of $860,380 for all 20 web-brokers operating across the 5 State Exchanges. We sought comment on the number of State Exchanges that would be interested in establishing a web-broker program to allow web-brokers to host non-Exchange websites to assist Exchange consumers in their State and on the number of web-brokers interested in operating in those State Exchanges.
Finalized paragraph 155.220(n) will require State Exchanges to comply with the HHS standards described above and in the preamble. Finalized paragraph 155.220(n)(1) will allow State Exchanges the flexibility to add State-specific language to the standardized disclaimers provided the additional language does not conflict with the HHS-provided standardized disclaimers and provides flexibility in how consumer eligibility information for APTC or CSRs is displayed on websites by web-brokers in State Exchanges, at the discretion of the State Exchange on the display of that information. Finalized paragraph (2) under this new section will also require State Exchanges to establish the form and manner for their web-brokers to demonstrate operational readiness, which may include submission or completion of the same items addressed in § 155.220(c)(6)(i)-(v) to the State Exchanges, in the form and manner specified by the Exchange. The burden associated with these finalized changes includes costs for existing and future State Exchanges related to drafting new policy, updating standards, and potentially hiring additional staff to perform functions not currently being performed by the State Exchange, such as for drafting web-broker disclaimer language, drafting consumer-facing educational content, and engaging web-brokers in operational readiness, that will now incur new costs related to establishment of a web-broker program and ongoing monitoring of web-brokers to enforce the minimum HHS standards and any additional State-specific requirements.
We estimate the relevant costs based on current Federal costs as follows. We estimate that 5 States will opt to host a web-broker program for their State Exchanges. We anticipate the total burden associated with the State Exchanges developing the associated policies and procedures, including providing web-brokers with examples and technical assistance (including technical implementation guidance such as providing the quality ratings assigned and enrollee satisfaction survey data) to be up to 528 hours per State. This assumes 480 hours for a GS-13, Step 5 employee at an hourly rate of $121.66 (the hourly wage rate for a GS-13, Step 5 employee in the Washington, DC area,
We estimate it will take 40 hours each for the State Exchange equivalent of 2 GS-13, Step 5 employees at an hourly rate of $121.66 (the hourly wage rate for a GS-13, Step 5 employee in the Washington, DC area,
We recognize that some State Exchanges may utilize web-brokers already assisting consumers in the FFEs and SBE-FPs, and encourage State Exchanges to leverage web-broker operational readiness demonstrated to participate in the FFEs or SBE-FPs when possible, as to minimize the burdens on the State Exchanges and their web-brokers.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates with modifications to the estimated burden hours for web-brokers to implement the requirements associated with this policy. We summarize and respond to public comments received regarding this provision below.
As discussed in the preamble of this finalized rule, we are finalizing without modification but with technical changes additional language to § 155.221 requiring that, in FFE and SBE-FP States, would require DE entities to implement and prominently display website display changes made by HHS to
Based on our experience with operating the DE program on the FFEs and SBE-FPs over the past several years, we estimate that approximately three or fewer display changes will be required annually. We estimate that a total of 100 web-brokers and QHP issuers participating in DE in FFE and SBE-FP States will be required to comply with these requirements. These display changes may range from changes such as, but not limited to, relatively simple text-based updates to more complex display changes involving the website's backend display methodology or algorithms. We estimate approximately two simpler and one more complex display change annually. We estimate that it will take a Web and Digital Interface Designer 30 hours annually, at a cost of $80.04 per hour, to implement these changes, at a total annual cost of approximately $2,401.20 ($80.04 × 30 hours) per web-broker or QHP issuer. We therefore estimate a total annual burden of 3,000 hours (30 × 100) at a cost of $240,120 (3,000 hours × $80.04 per hour) for all applicable web-brokers and QHP issuers.
We recognize that system constraints may prevent DE entity non-Exchange websites from precisely mirroring the
Based on internal data, we estimate that 25 web-brokers and QHP issuers assisting consumers in FFE or SBE-FP States will submit a request to deviate from the standards defined by HHS annually. We estimate it will take a compliance officer approximately 3 hours annually, at a rate of $68.94 per hour, to prepare and submit the request to deviate from the communicated standards, including preparing the rationale explaining the request. We therefore estimate the total annual burden for all web-brokers and issuers in completing and submitting a request to deviate to be approximately $5,170.50 annually.
We do not expect this finalized policy to impose a new burden on EDE entities, as EDE entities are already following the process outlined in this finalized policy through the change request processes described in the Third-Party Auditor Guidelines.
Because the proposal to ensure DE entities assisting consumers in State Exchanges meet certain standards applicable in the FFEs and SBE-FPs at new § 155.221(j) was finalized, we estimate that DE entities may incur burden related to the website development needed to implement and prominently display changes made to State Exchange websites per the standards defined by the State Exchange. We anticipate that the web-development costs cited above will apply for each DE entity assisting consumers in State Exchanges. As described in the preamble, there may be burden associated with maintaining DE environments tailored to each States Exchanges' display requirements. However, based on our experience conducting oversight of DE entity non-Exchange websites assisting consumers in FFEs and SBE-FPs, it is our understanding that DE entities are familiar with and capable of tailoring website displays based on specific criteria and, as such, we anticipate entities are capable of tailoring website displays to the requirements of the State the consumer is seeking assistance in. We anticipate a total annual burden of $247,358.70 for DE entities assisting consumers in States with State Exchanges associated with implementing display changes and submitting requests to deviate from the standards defined by the State Exchange across 5 State Exchanges, should the State Exchange elect to permit deviation requests. The total burden was calculated by multiplying the costs associated with implementing display changes among 20 DE entities expected to operate across 5 State Exchanges ($2,401.20 × 5 State Exchanges × 20 DE entities) and adding this to the expected costs for 7 DE entities operating across 5 State Exchanges to submit requests to deviate from the standards defined by the State Exchanges ($206.82 × 5 State Exchanges × 7 DE entities). If the State Exchange permits deviation requests, those requests will be subject to review by the State Exchange in advance of implementation of any alternative website displays. We sought comment on the burden of this proposal on DE entities planning to operate in State Exchanges.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comment received regarding the requirements that
We are finalizing amendments to § 155.221 to apply to DE entities operating in State Exchanges, and consequently State Exchanges that choose to implement a DE program, certain existing HHS standards applicable to DE entities assisting consumers with enrolling in QHPs and applying for APTC/CSRs in FFEs and SBE-FPs, in both the Individual Market Exchanges and SHOPs. We anticipate approximately 20 DE entities will operate in the 5 State Exchanges and will be required to incur this burden for each of the 5 State Exchanges they may operate in. The burden associated with these changes includes costs for DE entities assisting consumers in State Exchanges to meet the requirements described in finalized § 155.221(j) and for State Exchanges related to the development and oversight of DE programs within their State. We estimate relevant costs based on current Federal costs. These estimates are described below.
The burden associated with operating a DE program includes costs for DE entities related to web-development to meet the website display requirements being applied to DE entities operating in States with State Exchanges and costs for creating, storing, and submitting operational readiness documentation for Exchange review. Although these policies allow States certain flexibility for State Exchanges to tailor their DE program and establish their own standards with respect to operational readiness demonstrations by their DE entities, including whether to require third-party audits of DE entities and to impose additional requirements beyond the proposed HHS minimum standards as they determine may be appropriate based on their operational or business needs, we expect the costs to reasonably be estimated based on the Federal costs as follows.
We estimate it will take 5 hours for a DE entity's Business Operations Specialist at an hourly rate of $73.12 to implement the standardized disclaimer required under § 155.221(b)(2), along with 15 hours at an hourly rate of $80.04 for a Web and Digital Interface Designer to modify the DE entity non-Exchange website to implement the standardized disclaimer across 5 State Exchanges. Therefore, for the standardized disclaimer under § 155.221(b)(2), we estimate each DE entity operating in State Exchanges that operate their own eligibility and enrollment platform will incur a burden of 20 hours at an estimated cost of $1,566.20 (5 hours × $73.12 per hour + 15 hours × $80.04 per hour). We estimate the anticipated 20 DE entities will incur a cumulative burden of 400 hours at an estimated cost of $31,324 ($1,566.20 × 20 DE entities).
Costs related to demonstrating operational readiness at finalized § 155.221(j) will depend on the DE entity's desired enrollment pathway and the options made available by the State Exchange. Although we are allowing States the flexibility to establish operational readiness requirements, including the form and manner for their DE entities to demonstrate operational readiness, we encourage State Exchanges to leverage the existing items in § 155.220(b)(4)(i) and (ii) as the starting point for their operational readiness reviews. If State Exchanges leverage these items, we anticipate the burden associated with DE entity demonstration of operational readiness can be estimated based on the Federal costs as follows. We estimate it will take up to 360 hours for an Auditor at an hourly rate of $75.00 to submit business audit documentation across 5 State Exchanges, and we estimate 1 DE entities will participate in a manner that would trigger this information collection, resulting in an estimated cost of $27,000 per DE entity (360 hours × $75.00). We estimate it will take up to 122 hours for an Auditor at an hourly rate of $75.00 to submit security and privacy audit documentation across 5 State Exchanges, and we estimate 3 DE entities will participate in a manner that would trigger this information collection, resulting in an estimated cost of $9,150 per DE entity (122 hours × $75.00). We estimate it will take 45 hours for a Business Operations Specialist to complete and submit a typical Enhanced Direct Enrollment (EDE) documentation package and related information across 5 State Exchanges at an hourly rate of $73.12, and 15 DE entities will participate in a manner that will trigger this information collection, resulting in an estimated cost of $3,290.40 per DE entity (45 hours × $73.12). Therefore, for a DE entity to demonstrate operational readiness and compliance with applicable requirements to State Exchanges, we estimate each DE entity will incur a burden of up to 527 hours at an estimated cost of up to $39,440.40 (360 hours × $75.00 per hour + 122 hours × $75.00 per hour + 45 hours × $73.12), but many DE entities will incur a lower burden and cost due to not participating in a manner that would trigger some of these information collection costs. We estimate a cumulative burden of 1,401 hours at an estimated cost of $103,806 for all applicable DE entities operating across the 5 State Exchanges ($27,000 × 1 DE entities + $9,150 × 3 DE entities + $3,290.40 × 15 entities). We solicited feedback from State Exchanges with regards to the form and manner of documentation they would require DE entities to submit to demonstrate operational readiness, along with the estimated burden associated with those submissions.
We estimate it will take 100 hours for a Web and Digital Interface Designer at a rate of $80.04 per hour to modify the DE entity's non-Exchange website to comply with the requirements to display and market QHPs offered through the Exchange, individual health insurance coverage, and any other products on at least three separate websites pages in accordance with §§ 155.221(b)(1) and (3) and (c) across 5 State Exchanges. Therefore, for these website display requirements, we estimate each DE entity operating in State Exchanges will incur an estimated cost of $8,004 (100 hours × $80.04 per hour). We estimate 8 DE entities will trigger this information collection with a cumulative burden of 800 hours at an estimated cost of $64,032 across the State Exchanges ($8,004 × 8 DE entities).
The burden associated with this change also includes costs for DE entities operating in State Exchanges with oversight of direct enrollment entity application assisters, as described in § 155.221(d) (citing § 155.415(b)), for those DE entities that opt to use these application assisters, when permitted by the applicable State Exchange and only to the extent permitted by applicable
Finalized paragraph § 155.221(j)(3) will extend requirements for DE entities assisting consumers in State Exchanges to implement and prominently display changes in a manner that is consistent with the display changes made by the State Exchange to the State Exchanges' website by meeting standards communicated and defined by the State Exchange within a time period set by the State Exchange, unless the State Exchange approves a deviation from those standards under the deviation request process it would be required to establish should the State Exchange elect to permit deviations. The costs associated with DE entities implementing this finalized policy in State Exchanges is discussed in the ICR section related to finalized paragraph § 155.221(b)(6).
Regarding finalized paragraph § 155.221(a) extending requirements under § 156.1230(a) to DE QHP issuers operating in State Exchanges, we do not anticipate any additional burdens for QHP issuers, beyond the estimated burdens for the website display requirements described above, to provide consumers with correct information, without omission of material fact, regarding the Exchanges, QHPs offered through the Exchanges, and insurance affordability programs, or to refrain from marketing or conduct that is misleading, coercive, or discrimination based on race, color, national origin, disability, age, or sex.
Therefore, we estimate each DE entity operating in State Exchanges will incur a one-time burden in PY 2025 of up to 1,397 hours at a cost of up to $100,715.60 for an overall total for all DE entities operating across the State Exchanges of up to 17,601 hours at an estimated cost of $1,233,262 to comply with these finalized requirements. We sought comment on the burden of these requirements on DE entities planning to participate in State Exchanges. For the purposes of better determining burden estimates, we also sought comment on the number of State Exchanges that operate their own eligibility and enrollment platforms and would be interested in implementing a DE program in their State and on the number of DE entities interested in operating in those State Exchanges.
Finalized paragraph § 155.221(j) will require State Exchanges to comply with the FFE standards described above and in the preamble. § 155.221(j)(1) allows State Exchanges the flexibility to add State-specific information to the standardized disclaimer that does not conflict with the HHS-provided language. Finalized paragraph (2) under this new section also requires State Exchanges to establish the form and manner for their DE entities to demonstrate operational readiness and compliance with applicable requirements, in the form and manner specified by the Exchange. Finalized paragraph (3) will require State Exchanges establish requirements for their DE entities to implement and prominently display website changes in a manner that is consistent with display changes made by the State Exchange to State Exchanges' websites by meeting standards communicated and defined by the State Exchange within a time period set by the State Exchange. The burden associated with these finalized changes includes costs for State Exchanges related to drafting new policy, updating standards, and potentially hiring additional staff to perform functions not currently being performed by the State Exchange, such as for drafting DE entity program requirements and guidelines, including establishment of DE entity operational readiness programs, establishment of procedures related to defining and communicating standards for required display changes, establishment of any State-specific disclaimer text, and ongoing monitoring of DE entity compliance with applicable HHS standards and any additional State-specific requirements. DE entities operating in States transitioning off of the Federal Platform to a State Exchange will likely have fewer costs as they should already be meeting the HHS minimum requirements. No State Exchange has implemented DE to date, so we are not able to provide precise costs estimates of the burden associated with these finalized changes for State Exchanges. However, we anticipate that operational costs related to establishing polices and adding staff in order to operate a compliant DE program under § 155.221 may be estimated based on Federal platform costs and will be added to the costs and burdens of transitioning to State Exchange.
We estimate that 5 States will opt to host a DE program for their State Exchanges. We anticipate the total burden associated with the State Exchanges developing the associated policies and procedures to be up to 528 hours per State. This assumes 480 hours for a GS-13, Step 5 employee at an hourly rate of $121.66 (the hourly wage rate for a GS-13, Step 5 employee in the Washington, DC area,
Based on the Federal platform costs, we estimate it will take 60 hours each for the State Exchange equivalent of 2 GS-13, Step 5 employees at an hourly rate of $121.66 (the hourly wage rate for a GS-13, Step 5 employee in the Washington, DC area,
We recognize that some State Exchanges may decide to utilize DE entities already assisting consumers in the FFEs and SBE-FPs and encourage State Exchanges to leverage DE operational readiness demonstrated to participate in the FFEs or SBE-FPs when possible, so as to help minimize burden on both the State Exchanges that operate their own eligibility and enrollment platform and their DE entities.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates with modifications to the burden hours and number of entities subject to these information collection requirements. We summarize and respond to public comments received regarding this provision below.
We are finalizing amendments to § 155.305(f)(4) to provide that when an enrollee or their tax filer is identified as having FTR status for one-year State Exchanges must either notify the tax filer directly, and alert them of their FTR status, or send informative notices to the enrollee or their tax filer that provide information on the APTC reconciliation requirement, and lets the recipient know that they are at risk of being determined ineligible for APTC without containing protected FTI. This requirement will ensure that State Exchanges provide notifications, similar to how Exchanges on the Federal platform do, and that tax filers on State Exchanges are adequately educated on the requirement to file and reconcile. This final rule will impact State Exchange FTR noticing processes for PY 2025 and subsequent years. For State Exchanges, FTR will be conducted in the same manner it had previously been conducted with respect to collection of information, with minimal changes to the language of the Exchange application questions necessary to obtain relevant information; as such, we anticipate that the finalized amendment will not impact the existing information collection requirements (OMB control number: 0938-1191) or burden for consumers.
Under previous FTR policy, State Exchanges were already required to notify tax filers identified as FTR at a minimum of once per year. As such, we do not anticipate this requirement increasing State Exchanges' burden of noticing beyond their existing FTR processes. We sought comment on these assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing several revisions to § 155.315(e) that will allow Exchanges to accept consumer attestation of incarceration status without further verification or, alternatively, to propose an alternative data source for incarceration verification for HHS approval. Exchanges that elect to verify incarceration status will continue to be required to use the DMI process if the data source provides a mismatch against the consumer attestation of incarceration status or other information provided by the applicant or in the records of the Exchange. Should a State Exchange choose to propose using an alternative electronic data source for verifying incarceration status, HHS will review such proposals for consistency with the finalized standard in § 155.315(e)(2).
Of the 18 State Exchanges (operating in 12 States and the District of Columbia) that have incarceration verification processes, 8 conduct incarceration verifications similar to the one used to date by Exchanges on the Federal platform, and 5 have connected to an individual State or local incarceration facility for verifications and have received approval to do so from HHS. Additionally, 3 States are currently in process of transitioning to State Exchanges for PY 2024 or beyond and may choose to connect to an alternative incarceration verification data source with HHS approval. Subtracting the 5 Exchanges with preexisting approvals, we anticipate 11 State Exchanges could connect to an alternative incarceration verification data source, should they assess that an alternative data source exists and want to continue verification of consumer incarceration status using it.
For the purposes of assessing whether an alternative data source should be used, we estimate that a Management Analyst will spend 20 hours, at an hourly rate of $91.62, to synthesize a cost-benefit analysis regarding whether the Exchange should continue to verify incarceration status using an approved data source instead of accepting a consumer's attestation that they are not incarcerated. If the Exchange finds a viable alternative data source and determines that it should be used, we anticipate that a Business Operations Specialist will take about 2 hours, at an hourly rate of $73.12, to submit a request for HHS approval. We also anticipate that it will take a Chief Executive equivalent for the Exchange 1 hour, at an hourly rate of $182.24, to approve the paperwork for submission to request HHS approval of the alternative incarceration data source. In total, the assessment of whether the Exchange should continue to verify incarceration status using an alternative data source instead of accepting
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.330(d) to require that Exchanges periodically examine available data sources described in §§ 155.315(b)(1) and 155.320(b) to identify changes related to death of an applicant on whose behalf APTC or CSRs are being provided. The Exchanges have developed electronic data exchanges to support obtaining this information to determine the applicant's eligibility at the point of application and could reuse those data exchanges here. Consequently, we estimate costs associated with this requirement to be minimal.
However, State Exchanges not already conducting Death PDM with the required frequency or not deemed in compliance with the finalized PDM requirements will be required to engage in IT system development activity to communicate with these programs and act on enrollment data either in a new way, or in the same way more frequently. Thus, there may be additional associated administrative cost for these State Exchanges to implement the finalized PDM requirement.
Based on experience with other PDMs, for each State Exchange not already conducting Death PDM at least twice a year, we estimate that it will take 40 hours by a Computer Systems Analyst at an hourly rate of $98.30 to implement this finalized provision, for a cost of $3,932 per State Exchange. Therefore, for all 11 State Exchanges not currently meeting the finalized requirement, we estimate a total burden of 440 hours at a cost of $43,252. We assume that this burden will be incurred primarily in 2025.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
The burden associated with subjecting QHP issuers in State Exchanges and SBE-FPs to time and distance standards as proposed at § 155.1050 is covered by the information collection currently approved under OMB control number 0938-1312 (CMS-10593). We note that we are also revising the information collection currently approved under OMB control number 0938-1415 (CMS-10803) regarding appointment wait time standards encompassed in previously finalized regulations at 45 CFR 156.230(a)(2)(B). We sought comment on these burden estimates. We did not receive any comments related to this collection.
Under § 155.1050(a)(2)(i)(A), we are finalizing that for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230(a)(2)(i)(A).
Second, we are finalizing that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews prior to certifying any plan as a QHP, consistent with the reviews conducted by the FFEs under § 156.230. Specifically, we are finalizing at § 155.1050(a)(2)(i)(B) that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4). Under this policy, State Exchanges and SBE-FPs will be prohibited from accepting an issuer's attestation as the only means for plan compliance with network adequacy standards.
We are aware that some State Exchanges employ robust, quantitative network adequacy standards that differ from those used by the FFEs, but still ensure that QHPs provide consumers with reasonable, timely access to practitioners and facilities to manage their health care needs, consistent with the ultimate aim of these policies. Therefore, we are finalizing § 155.1050(a)(2)(ii) to provide that, for plan years beginning on or after January 1, 2026, HHS may grant an exception to the requirements described under § 155.1050(a)(2)(i) to a State Exchange or SBE-FP that demonstrates with evidence-based data, in a form and manner specified by HHS, that (1) the Exchange applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4); and (2) the Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP. In this final rule, for this exception process, we are clarifying that, for (1) above, issuers on the State Exchanges and SBE-FPs do not need to comply with the appointment wait time standards under § 156.230(a)(2)(i)(B).
Lastly, we are finalizing § 155.1050(a)(2)(i)(C) to provide that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must require that all issuers seeking certification of a plan as a QHP submit information to the Exchange reporting whether or not network providers offer telehealth services.
We estimate that the total annual burden associated with State Exchanges and SBE-FPs establishing and imposing the finalized network adequacy standards, conducting the network adequacy reviews, collecting telehealth information from issuers seeking QHP certification, and submitting any exception to be up to 900 hours. Assuming the compliance officer average hourly rate of $68.94 per hour, we estimate the cost of the data collection, operations, and maintenance pertaining to these requirements on each State Exchange and SBE-FP to be $62,046 per year (900 hours × $68.94 per hour). In total, for the 19 State Exchanges and 3 SBE-FPs anticipated to be operational in 2025, we estimate a burden of 19,800 hours (22 State Exchanges and SBE-FPs × 900 hours per Exchange) at a cost of $1,365,012 (22 State Exchanges and SBE-FPs × 900 hours per Exchange × $68.94 per hour).
We estimate that the burden for QHP issuers in State Exchanges and SBE-FPs to gather and submit the time and distance data, including any justification, to the respective State Exchanges or SBE-FPs will be 10 hours in total for each medical QHP issuer (a QHP issuer that is not an SADP issuer) and 2 hours in total for each SADP issuer submitted by a compliance officer at a rate of $68.94 per hour. The 10-hour estimate includes the burden associated with the requirement that all issuers seeking QHP certification submit
Approximately half of the parent companies of issuers on the State Exchanges and over two thirds of the parent companies of issuers on SBE-FPs offer Medicare Advantage plans, and Medicare Advantage offers a telehealth credit for network adequacy. Therefore, many more issuers on State Exchanges and SBE-FPs likely already have access to this information. We also believe that QHP issuers that do not currently collect this information may do so using the same means and methods by which they already collect information from their network providers relevant to time and distance standards and provider directories. For these reasons, we estimate that any additional burden resulting from the requirement that QHP issuers report whether each network provider is furnishing telehealth services would be minimal.
The requirement that all issuers seeking QHP certification submit information to the State Exchange or SBE-FP about whether network providers offer telehealth services will account for 3 of the total 10 hours we estimate for gathering and submitting the time and distance data to the respective State Exchange or SBE-FP for medical QHP issuers and 30 minutes of the total 2 hours we estimate for SADP issuers. We believe the cost estimates of 3 hours for medical QHP issuers and 30 minutes for SADP issuers to be a maximum and that the burden could be less to issuers that are already collecting telehealth data for other purposes.
We estimate that the total annual burden associated with QHP issuers in State Exchanges and SBE-FPs to gather and submit the time and distance and telehealth data to the respective State Exchanges or SBE-FPs for up to 149 medical QHP issuers in State Exchanges and SBE-FPs would be up to 1,490 hours (10 hours × 149 medical QHP issuers). Assuming the compliance officer average hourly rate of $68.94 per hour, we estimate that the cost of gathering and submitting this network adequacy data for an individual medical QHP issuer could be up to $689.40 (10 hours × $68.94 per hour), and for all 149 medical QHP issuers in State Exchanges and SBE-FPs, up to $102,720.60 (149 medical QHP issuers × 10 hours per issuer × $68.94 per hour). We estimate that the total annual burden associated with this requirement for 89 SADP issuers in State Exchanges and SBE-FPs will be up to 178 hours (2 hours × 89 SADP issuers). Assuming the compliance officer average hourly rate of $68.94 per hour, we estimate that the cost of gathering and submitting the network adequacy data for an individual SADP could be up to $137.88 (2 hours × $68.94 per hour), and for all 89 SADP issuers in State Exchanges and SBE-FPs, up to $12,271.32 (89 SADP issuers × 2 hours per issuer × $68.94 per hour). We estimate the total annual burden associated with this finalized requirement across both medical QHP and SADP issuers in State Exchanges and SBE-FPs beginning in 2025 will be approximately $114,992.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the establishment of Exchange network adequacy standards policy below.
We stated in the proposed rule (88 FR 82591, 82638 through 82639) that this data would be for informational purposes, would be intended to help inform the future development of telehealth standards, and would not be displayed to consumers. We believe that the above-described telehealth reporting standards support these objectives by providing State Exchanges and SBE-FPs with a general picture regarding the availability of telehealth services in their State. Additionally, at this time, since this data will not be displayed to consumers, it is not necessary for State Exchanges and SBE-FPs to collect more granular telehealth data from their issuers.
The existing OMB approval (0938-1174) PRA package, for which we are seeking a renewal for use beginning in March 2024, would remain in effect until the amendments to § 156.111 finalized in this rule would come into effect.
We are finalizing several revisions to § 156.111 that will reduce the burden associated with State selection of EHB-benchmark plans. For plan years beginning on or after January 1, 2026, we are finalizing revisions to the standards for State selection of EHB-benchmark plans at § 156.111 to consolidate the options for States to change EHB-benchmark plans at § 156.111(a); revisions to the scope of benefit requirements at § 156.111(b)(2); and revisions to § 156.111(e)(3) to require States to submit a formulary drug list as part of their application to change EHB-benchmark plans only if the State is seeking to change their prescription drug EHB. We are also finalizing revisions to the actuarial certification requirements at § 156.111 to reflect the finalized scope of benefit changes. The changes to § 156.111 will first be applicable during the EHB-benchmark plan selection cycle in 2024 and the anticipated reduction in burden to States will begin to be realized at that time.
The changes to § 156.111 will lead to an overall reduction in burden on States to change their EHB-benchmark plans in accordance with the revisions to § 156.111. The revisions to § 156.111 will remove the requirement that States report which option under § 156.111(a) they are using as a basis to change their EHB-benchmark plans, their methodology for confirming compliance with the generosity standard at current § 156.111(b)(2)(ii), and the submission of a formulary drug list under § 156.111(e)(3) unless the State is seeking to make changes to their prescription drug EHB. We will also change the information States submit to HHS to confirm compliance with the scope of benefit requirements at
These policies will not change the number of documents States will be required to submit to change their EHB-benchmark plans under § 156.111(e)(3), unless the State is not seeking to make changes to its prescription drug EHB, in which case, the State will not be required to submit a formulary drug list as specified in § 156.111(e)(3). In addition, a response will not be required from all States under current § 156.111 and its finalized revisions. Only States choosing to modify the State's EHB-benchmark plan will need to submit this information to HHS.
Since finalizing the addition of § 156.111 in the 2019 Payment Notice, between one and three States have changed their EHB-benchmark plan each year between 2019 and 2023. While we anticipate that the finalized revisions to § 156.111 will reduce overall burden on States and incentivize more frequent changes to EHB-benchmark plans, we anticipate that at most 5 States will choose to make a change to their EHB-benchmark plans in any given year (15 States over 3 years within the authorization of this ICR).
To change an EHB-benchmark plan, a State currently provides confirmation that the State's EHB-benchmark plan selection complies with certain requirements, including those under § 156.111(a), (b), and (c). This information collection will be revised under the finalized policies in this rule. To comply with the finalized requirement, we estimate that a financial examiner will require 4 hours (at a rate of $79.04 per hour) to fill out, review, and transmit a complete and accurate document. We estimate that it will cost each State approximately $316.16 to meet the reporting requirement, with a total annual burden for all 5 States of 20 hours and an associated total cost of $1,580.80.
Section 156.111(e)(2) currently requires States to submit an actuarial certification and associated actuarial report of the methods and assumptions when selecting options under § 156.111(a). Presently, before compiling this report, States must consider which of the options provided at current § 156.111(a) best facilitate their intended EHB-benchmark changes. This deliberation often involves both research and discussion within the State and between the State and HHS. The finalized consolidation of the options currently available at § 156.111(a) into one overarching approach for EHB-benchmark plan updates will eliminate the need for, and time spent by, States contemplating the merits of one option or another. This actuarial certification and associated actuarial report must also demonstrate compliance with section § 156.111(b)(2)(i), which requires a State's EHB-benchmark plan to provide a scope of benefits that is equal in scope to the scope of benefits under one of the typical employer plans at § 156.111(b)(2)(i)(A) and (B). While the finalized revisions to § 156.111(b)(2)(i) will still require a State's EHB-benchmark plan to provide benefits that are equal in scope to the scope of benefits under a typical employer plan, they will also allow a State to select any scope of benefits that is as or more generous than the scope of benefits in the least generous plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), and as or less generous than the scope of benefits in the most generous plan in the State (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), among the plans currently defined at § 156.111(b)(2)(i)(A) and (B). We anticipate that these revisions will substantially reduce the burden on States to perform the required actuarial analyses. Under this revision, we anticipate that a State will typically only need to perform three actuarial analyses to determine the scope of benefits in the least and most generous plans among the plans currently defined at § 156.111(b)(2)(i)(A) and (B), and the scope of benefits in the State's new EHB-benchmark plan. Under current regulation, a State may need to perform an indeterminate number of actuarial analyses of the plans defined at § 156.111(b)(2)(i)(A) and (B) until the State identifies a plan with a scope of benefits equal to the State's EHB-benchmark plan. This revision will significantly reduce the likelihood that a State would need to perform as many actuarial analyses. Accordingly, we anticipate a reduction in the estimated burden on States to perform the actuarial analysis to confirm compliance with § 156.111(b)(2)(i).
This actuarial certification and associated actuarial report must also demonstrate compliance with § 156.111(b)(2)(ii), which currently requires a State's EHB-benchmark plan to not exceed the generosity of the most generous among a set of comparison plans. For benefit years beginning on or after January 1, 2026, we are finalizing the removal of this requirement and will revise this estimate to reflect a reduced burden on States that would no longer need perform the actuarial analyses required to confirm compliance with § 156.111(b)(2)(ii).
The actuarial certification that will be collected under this ICR will be required to include an actuarial report that complies with generally accepted actuarial principles and methodologies. This estimate includes complying with all applicable actuarial standards of practice (ASOPs) (including ASOP 41 on actuarial communications). For example, ASOP 41 on actuarial communications includes disclosure requirements, including those that apply to the disclosure of information on the methods and assumptions being used for the actuarial certification and report. The actuarial certification for this requirement currently includes an attestation that the standard actuarial practices have been followed or that exceptions have been noted. The signing actuary is required to be a Member of the American Academy of Actuaries. These requirements will continue to apply with this finalized policy.
We estimate that an actuary, who is a member of the American Academy of Actuaries, will be required to complete 12 hours of work (at a rate of $109.60 per hour) on average for § 156.111(e)(2). This will include the certification and associated actuarial report from an actuary to affirm, in accordance with generally accepted actuarial principles and methodologies that the State's EHB-benchmark plan must provide a scope of benefits that is equal to the scope of benefits provided under a typical employer plan. For these calculations, the actuary will need to conduct the appropriate calculations to create and review an actuarial certification and associated actuarial report, including minimal time required for recordkeeping. The precise level of effort for the actuarial certification and associated actuarial report under § 156.111(e)(2) will likely vary depending on the State's approach to its EHB-benchmark plan and this certification requirement, but we are estimating 12 hours of work for the actuary to complete the actuarial certification and associated report in this final rule in recognition that the definition of typical employer plan may require the actuary to determine whether the typical employer plan meets minimum value requirements. We estimate that it will cost each State approximately $1,315.20 to meet this reporting requirement, with a total annual burden for all 5 States of 60 hours and an associated total cost of $6,576.
We estimate that a financial examiner will require 1 hour (at a rate of $79.04 per hour) to review, combine, and
We require at § 156.111(e)(3) that each State seeking to make a change to its EHB-benchmark plan submit its new EHB-benchmark plan documents. The level of effort associated with this requirement could depend on the State's selection of the EHB-benchmark plan options under the regulation at § 156.111(a). However, for the purposes of this estimate, we estimate that it will require a financial examiner (at a rate of $79.04 per hour) 12 hours on average to create, review, and electronically transmit the State's EHB-benchmark plan document that accurately reflects the benefits and limitations, resulting in a burden of 12 hours and an associated cost of $948.48, with a total annual burden for all 5 States of 60 hours and an associated cost of $4,742.40. This estimate of 12 hours will also include the burden necessary for a State to submit a formulary drug list for the State's EHB-benchmark plan in a format and manner specified by HHS, in accordance with § 156.111(e)(3). However, we are finalizing revisions to § 156.111(e)(3) in this final rule to require a State to submit this formulary drug list only if the State is changing the prescription drug EHB. We do not anticipate that all States would change prescription drug EHB, so we anticipate this burden will be lower for some States. To collect the formulary drug list, the State will be required to use the template provided by HHS and must submit the formulary drug list as a list of RxNorm Concept Unique Identifiers (RxCUIs).
Section 156.111(e)(4) requires a State to submit the documentation necessary to operationalize the State's EHB-benchmark plan. This reporting requirement includes the EHB summary file that is currently posted on CCIIO's website and is used as part of the QHP certification process and is integrated into HHS' IT Build systems that feeds into the data that is displayed on
We estimate that the total number of respondent States would be 5 per year, for a total yearly burden of 205 hours
We sought comment on these burden estimates.
We did not receive any comments on ICRs regarding the amendments to State selection of EHB-benchmark plans. We are finalizing these estimates as proposed.
As was previously discussed in the preamble to this finalized rule, we are finalizing permitting issuers to offer non-standardized plan options in excess of the limit of two per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area for PY 2025 and subsequent years, if issuers demonstrate that these additional non-standardized plans beyond the limit at § 156.202(b) have specific design features that would substantially benefit consumers with chronic and high-cost conditions and meet other specified requirements.
Specifically, at § 156.202(d), for PY 2025 and subsequent years, an issuer may offer additional non-standardized plan options for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area.
We finalized several specifications for issuers seeking to utilize this exceptions process at § 156.202(d)(1) through (6). Specifically, at paragraph (d)(1), the 25 percent reduction in cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions will be evaluated at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition. At paragraph (d)(2), the reduction must not be limited to a part of the year, or an otherwise limited scope of benefits. At paragraph (d)(3), the reduction in cost sharing for these benefits cannot be conditioned on a consumer having a particular diagnosis.
At paragraph (d)(4), the required reduction in cost sharing only applies to the standard variant of the plan for which an issuer seeks an exception, and not to the income-based cost-sharing reduction plan variations required by § 156.420(a), nor to the zero and limited cost sharing plan variations required by § 156.420(b). At paragraph (d)(5), issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition. At paragraph (d)(6), the chronic and high-cost conditions that may qualify an issuer for this exception will be determined by HHS. Refer to § 156.202 of the preamble to this rule for a more detailed discussion regarding these requirements.
Additionally, at § 156.202(e), an issuer that seeks to utilize this exceptions process is required to submit a written justification in a form and manner and at a time prescribed by HHS. At paragraph (e)(1), the written justification must identify the specific chronic and high-cost condition that its additional non-standardized plan option offers substantially reduced cost sharing for, in accordance with the definition of “cost sharing” at § 156.20.
At paragraph (e)(2), the written justification must identify which benefits in the Plans and Benefits Template are discounted to provide reduced treatment-specific cost sharing for individuals with the specified chronic and high-cost condition. These discounts must be relative to the treatment-specific cost sharing for the same corresponding benefits in the issuer's other non-standardized plan offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. For the purposes of this standard, treatment specific cost sharing consists of the costs for obtaining services that pertain to the treatment of a particular chronic and high-cost disease—but not the costs for obtaining services that do not pertain to the treatment of the relevant condition. The issuer must identify all services for which the benefits substantially reduce cost sharing in the Plans and Benefits Template. These benefits must
At paragraph (e)(3), the written justification must explain how the reduced cost sharing for these services pertains to clinically indicated guidelines and a representative treatment scenario for treatment of the specified chronic and high-cost condition (and include any relevant studies, guidelines, or supplementary documents to support the application, as applicable). For the purposes of this standard, a representative treatment scenario is an annual course of treatment for a chronic and high-cost condition.
At paragraph (e)(4), the written justification must include a corresponding actuarial memorandum that explains the underlying actuarial assumptions made in the design of the plan the issuer is requesting to except. In this memorandum, an issuer must demonstrate how the benefits that are discounted to provide reduced treatment-specific cost sharing of at least 25 percent identified at § 156.202(e)(2) for the treatment of the condition identified at § 156.202(e)(1) under the excepted plan compare to the identified in-limit offering in the same product network type, metal level, inclusion of dental and/or vision coverage, and service area. This demonstration must specifically be in reference to the specific population that would be seeking treatment for the relevant condition and not the general population. This memorandum must also include an actuarial opinion confirming that this analysis was prepared in accordance with the appropriate Actuarial Standards of Practice and the profession's Code of Professional Conduct.
In order for an issuer to complete the necessary documentation to submit a request to be excepted from the non-standardized plan option limit at § 156.202(b) in accordance with the requirements at § 156.202(d) through (e), we estimate that it will take an actuary (OES occupational code 15-2011) 5 hours annually at a median hourly cost of $109.60 per hour (amounting to $548 annually) to create a new plan design with sufficiently differentiated cost sharing and to set the premium rate for this plan; a general internal medicine physician (OES occupational code 29-1216) 2 hours annually at a median hourly cost of $206.22 (amounting to $412.44 annually) to complete the justification form for this exceptions process; and a general and operations manager (OES occupational code 11-1021) 10 hours annually at a median hourly cost of $94.32 per hour (amounting to $943.20 annually) to review and submit the justification form, including all required data, as part of an issuer's portfolio of plan offerings that it seeks certification of during QHP certification.
Altogether, we estimate a total burden of 17 hours at a cost of $1,903.64 per issuer annually to create a new non-standardized plan option that substantially benefits consumers with a chronic and high-cost condition, and to submit a request for that new non-standardized plan option to be excepted from the non-standardized plan option limit. We do not anticipate that issuers will seek to have more than one additional non-standardized plan option excepted from the limit. We further estimate that approximately 50 FFE and SBE-FP issuers (of the 228 issuers based on current PY 2024 plan offering data, amounting to approximately 22 percent) will request to be excepted from the non-standardized plan option limit in order to offer these additional plans annually, at a total burden of 850 hours and associated cost of $95,182 for all issuers annually. We estimate that 50 issuers will submit a request to be excepted from the non-standardized plan option limit since we anticipate that most issuers would believe that the burden of creating and certifying additional plans intended to benefit a comparatively small population of consumers would outweigh the benefit of doing so.
We sought comment on these burden estimates.
We did not receive any comments on ICRs associated with non-standardized plan option limit exceptions.
The following information collection requests will be submitted for OMB approval outside of this rulemaking, through separate
This rule finalizes several HHS risk adjustment updates, such as to use the 2019, 2020, and 2021 data for recalibration of the HHS risk adjustment models for benefit year 2025; to update and retain the AI/AN CSR adjustment factors for benefit year 2025 and beyond, unless changed through notice-and-comment rulemaking; to establish the risk adjustment user fee for benefit year 2025; and to give HHS the authority to require corrective action plans for certain observations identified as a result of risk adjustment audits for the high-cost risk pool. The rule further finalizes State Exchange and agent, broker, web-broker, and DE entity standards; requiring State Exchanges and State Medicaid and CHIP agencies
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), Executive Order 14094 entitled “Modernizing Regulatory Review” (April 6, 2023), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), and Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2))
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). The April 6, 2023 Executive Order on Modernizing Regulatory Review
A regulatory impact analysis (RIA) must be prepared for significant rules. OMB's OIRA has determined that this rulemaking is `significant' as measured by the $200 million threshold under section 3(f)(1). We have prepared an RIA that to the best of our ability presents the costs and benefits of the rulemaking. OMB has reviewed these finalized regulations, and the Departments have provided the following assessment of their impact.
As required by OMB Circular A-4 (available at
This final rule implements standards for programs that will have numerous effects, including providing consumers with access to affordable health insurance coverage, reducing the impact of adverse selection, and stabilizing premiums in the individual and small group (including merged) health insurance markets and in Exchanges. We are unable to quantify all the benefits and costs of this final rule. The effects in Table 16 reflect qualitative assessment of impacts and estimated direct monetary costs and transfers resulting from the provisions of this final rule for health insurance issuers and consumers. The annual monetized transfers described in Table 16 include changes to costs associated with the risk adjustment user fee paid to HHS by issuers.
In this final rule, the Departments are finalizing modifications to the section 1332 waiver implementing regulations to set forth flexibilities in the public notice requirements and post-award public participation requirements for section 1332 waivers. However, this final rule does not alter any of the requirements related to section 1332 waiver applications, compliance and monitoring, or evaluation in a way that will create any additional costs or burdens for States submitting proposed waiver applications or those States with approved waiver plans that have not already been captured in prior burden estimates. The Departments are of the view that both States with approved section 1332 waivers and States that apply for section 1332 waivers will be minimally impacted or would benefit from reduced burden by these policy changes. The Departments anticipate that implementing these provisions will not significantly change the associated burden currently approved under OMB control number: 0938-1389, Expiration date: February 29, 2024. The Departments are of the view that section 1332 waivers help increase State innovation, which in turn lead to more affordable health coverage for individuals and families in States that consider implementing a section 1332 waiver program.
The Departments sought comment on these impacts and assumptions but did not receive any comments in response to the cost and benefit estimates for this policy. We are finalizing these estimates as proposed.
Current 42 CFR 435.601(d) authorizes States to apply less restrictive methodologies than those that would otherwise be required to be considered in the individual's eligibility determination. Paragraph (d)(4) requires that the application of less restrictive methodologies by State Medicaid agencies be comparable for all persons within each Medicaid eligibility group. For example, if a State wants to apply an income disregard to an eligibility group serving individuals who are 65 years old or older, it must either agree to apply the income disregard to all members of the eligibility group who are 65 years old or older or forego application of the disregard. We proposed to eliminate this requirement; however, as explained above, we are not finalizing the proposal at this time, and therefore, we are not finalizing the burden estimates included in the proposed rule.
Section 1331 of the ACA (42 U.S.C. 18051) requires the Secretary to establish a BHP, and section 1331(c)(4) specifically provides that a State shall coordinate the administration of, and provision of benefits under the BHP with other State programs. These finalized regulations build from previous BHP regulations to provide for options for BHP implementation and operations beginning with program year 2024.
In this final rule, we are finalizing the additional options for a State establishing a uniform method of determining the effective date of eligibility for enrollment in a standard health plan. We believe this finalized policy will provide additional flexibility for States when implementing their BHP. If the State chooses to follow either new effective date of eligibility for enrollment option, we believe this finalized policy will also benefit enrollees by providing coverage sooner than if the State were to follow the Exchange effective date of coverage option. We do not anticipate any costs to States because of this finalized policy, as we are only finalizing to provide other options by which a State could determine the effective date of eligibility for purposes of its BHP.
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing the recalibration of the HHS risk adjustment models for the 2025 benefit year using the 2019, 2020, and 2021 enrollee-level EDGE data. We believe that continuing to maintain the approach of blending (or averaging) 3 years of separately solved coefficients provides stability within the HHS-operated risk adjustment program and minimizes volatility in changes to risk scores from the 2024 benefit year to the 2025 benefit year. We also finalized continuing to apply a market pricing adjustment to the plan liability associated with Hepatitis C drugs in the HHS risk adjustment models.
We are finalizing the recalibration of the CSR adjustment factors for AI/AN zero-cost sharing and limited cost sharing CSR plan variant enrollees for the 2025 benefit year, and to retain the finalized AI/AN CSR adjustment factors for all future benefit years unless changed through notice-and-comment rulemaking. We also finalized maintaining the current CSR adjustment factors for silver plan variant enrollees (70 percent, 73 percent, 87 percent, and 94 percent AV plan variants)
We anticipate that changes to the AI/AN CSR adjustment factors will result in an increase in overall individual market risk pool HHS risk adjustment transfers under the State payment transfer formula in States with a sizable share of AI/AN enrollees. We anticipate that the finalized recalibration of the AI/AN CSR adjustment factors will increase transfer payments (or decrease transfer charges) to the issuers with the larger shares of the AI/AN subpopulation and increase transfer charges (or decrease transfer payments) under the State payment transfer formula for the issuers with smaller shares of the AI/AN subpopulation. Therefore, we anticipate that issuers with larger shares of AI/AN enrollees will have the ability to lower premium rates slightly, as the additional plan liability associated with AI/AN CSR recipients will be offset by the increase in HHS risk adjustment transfer payments (or decrease in transfer charges) to these issuers.
Based on internal analyses, the States with the highest proportion of AI/AN enrollees as a percentage of member months in the 2021 benefit year were Oklahoma (15 percent), Alaska (4 percent), Montana (2 percent), South
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
For the 2025 benefit year, HHS will operate risk adjustment in every State and the District of Columbia. As described in the 2014 Payment Notice (78 FR 15416 through 15417), HHS' operation of risk adjustment under section 1343 of the ACA on behalf of States is funded through a risk adjustment user fee. For the 2025 benefit year, we finalized using the same methodology to estimate our administrative expenses to operate the HHS risk adjustment program as was used in the 2024 Payment Notice. As discussed previously in this final rule, risk adjustment user fee costs for the 2025 benefit year are expected to increase from the prior 2024 benefit year estimates. However, in the proposed rule, we project higher enrollment than our prior estimates in the individual and small group (including merged) markets in the 2024 and 2025 benefit years due to the enhanced PTC subsidies provided for in section 9661 of the ARP
We estimate that the total cost for HHS to operate the risk adjustment program on behalf of all States and the District of Columbia will increase from $60 million in 2024 to approximately $66 million in 2025. However, we believe that the increased enrollment projections will more than offset the increased risk adjustment user fee costs, and therefore, we proposed that the finalized risk adjustment user fee will be reduced from the $0.21 PMPM for the 2024 benefit year to $0.20 PMPM for the 2025 benefit year. In the proposed rule, we expected that the finalized risk adjustment user fee for the 2025 benefit year would reduce the amount transferred from issuers of risk adjustment covered plans to the Federal Government by approximately $3.5 million.
Since the proposed rule, we have further revised our enrollment projections used for the calculation of the risk adjustment user fee based on newly available data, and as result of that data, we are finalizing a lower 2025 benefit year risk adjustment user fee rate of $0.18 PMPM than proposed. This 2025 benefit year final user fee rate will further reduce the amount transferred from issuers of risk adjustment covered plans to the Federal Government by approximately $11 million.
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 153.620(c)(4) to require issuers of risk adjustment covered plans to complete, implement, and provide to HHS written documentation of any corrective action plans when required by HHS if a risk adjustment audit results in the inclusion of certain observations in the final audit report. Based on data from the 2018 benefit year high-cost risk pool audits, we estimate that each issuer audited may receive approximately 2 observations on average in future benefit years of high-cost risk pool audits where there is evidence of non-compliance with applicable Federal requirements, thereby triggering the finalized requirement for the issuer to take corrective action. We also estimate that it will take approximately 4 hours by a business operations specialist (at $73.12 per hour), 2 hours by a compliance officer (at $68.94 per hour), and 2 hours by a computer systems analyst (at $98.30 per hour) to complete, implement, and provide documentation to HHS of a corrective action plan for 2 observations. This results in a total cost per issuer of $626.96 (4 hours × $73.12 per hour + 2 hours × $68.94 per hour + 2 hours × $98.30 per hour). We estimate that we may conduct high-cost risk pool audits for approximately 40 issuers for each benefit year. Therefore, the total estimated cost to issuers of risk adjustment covered plans for each benefit year being audited will be approximately $25,078 (40 issuers × $626.96 per issuer).
We sought comment on these burden estimates and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing the addition of a requirement that a State seeking to transition to a State Exchange must first operate an SBE-FP, meeting all requirements under § 155.200(f), for at least one plan year, including its first open enrollment period.
We do not anticipate this finalized policy will create an additional burden to the States that are currently transitioning to a State Exchange, since those States have already operated an SBE-FP for at least 1 year or will first be operating an SBE-FP. Since PY 2020, all States that have transitioned to a State Exchange have first transitioned to an SBE-FP for one or more plan years. Furthermore, based on our experience, the costs for a State to transition from an FFE to operating an SBE-FP are relatively low in comparison to the costs a State will incur to transition from an FFE, or an SBE-FP, to establishing a State Exchange. This is due to the significant investment of costs incurred in implementing and operating a State Exchange consumer-facing website, eligibility and enrollment technology platform, and associated eligibility and enrollment support infrastructure, such as the State Exchange's consumer call center technology and resources, that FFEs and SBE-FPs rely on HHS to provide. We also expect the impact and costs to States that are considering, or may consider, establishing a State Exchange in the future to be minimal because we believe there will be sufficient time to plan for operating an SBE-FP before operating a State Exchange.
We believe that one of the primary benefits of States operating an SBE-FP prior to implementing and operating a State Exchange lies in the investment of time and resources that a State transitioning to, and operating, an SBE-FP makes in the establishment of direct
We sought comment on these assumptions of the financial impact of this proposal on States that transition to an SBE-FP for at least one plan year before operating a State Exchange pursuant to this proposal.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
As discussed in the preamble, we are finalizing that a State, as part of its activities for its establishment of a State Exchange, provide upon request, supplemental documentation to HHS detailing the State's implementation of its State Exchange functionality, including information regarding the State's ability to implement and comply with Federal requirements for operating an Exchange. Such supporting documentation would inform HHS's decision to approve or conditionally approve a State Exchange and could include, for example, materials demonstrating progress toward meeting State Exchange Blueprint application requirements, documentation that details a State's plans to implement and meet the Exchange functional requirements as laid out in the State Exchange Blueprint application, or plans to engage in consumer assistance programs and activities.
We do not anticipate additional burden associated with this policy. The current State Exchange Blueprint application already includes requests for supporting documentation that a State is progressing toward meeting State Exchange Blueprint application requirements. As a result, this provision codifies existing policy, which States currently comply with. Blueprint application. The information collection burden associated with this policy is already accounted for under approved OMB control number: 0938-1172, Expiration date: August 31, 2025.
Further, as discussed in the preamble, we are finalizing the requirement that when a State submits its State Exchange Blueprint application to HHS for approval, the State must provide the public with notice and a copy of its State Exchange Blueprint application. We are also finalizing the requirement that at some point following a State's submission of its State Exchange Blueprint application to HHS, a State must conduct at least one public engagement (such as a townhall meeting or public hearing), in a timeline and manner considered effective by the State, with concurrence from HHS, at which interested parties can learn about the State's intent to transition to a State Exchange and the State's progress toward effectuating that transition. We are also finalizing the requirement that while a State is making this transition and until HHS has approved or conditionally approved the State Exchange Blueprint application, a State conducts periodic public engagements at which interested parties can continue to learn about the State's progress toward finalizing its transition to a State Exchange, in a timeline and manner, either in-person or virtually, considered effective by the State.
We do not anticipate significant additional burden associated with these requirements, as States are currently required to submit a State Exchange Blueprint application to HHS for approval, and so the impact of sharing a copy of the submitted Exchange Blueprint application with the public using their website would be
We sought comment on this burden estimate and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.170(a)(2) to provide that benefits covered in a State's EHB-benchmark plan will not be considered in addition to EHB and thus will not be subject to defrayal by the State beginning with PY 2025. We believe that this revision will have a mixed effect on the cost to the Federal Government. In States that update EHB-benchmark plans to include benefits, the costs of which are currently being defrayed, the percentage of premium attributable to coverage of EHB for purpose of calculating APTC will increase and any increase remains subject to the typicality requirement in that section. In a State that enacts a mandate for a benefit that is currently covered in its EHB-benchmark plan, there will be no effect on Federal Government expense as the benefit was already included in the percentage of premium attributable to coverage of EHB for purpose of calculating APTC. States may choose to evaluate the overlap between mandates and EHB-benchmark-plans for benefits they are currently defraying the costs of but are not required to. Issuers may have to make modifications to their plan designs and plan filings to reflect any possible changes in designation of benefits as EHB because of this policy in the regular course of updating those annual materials. We do not anticipate an additional burden on States or issuers associated with this finalized policy.
We sought comment on this burden estimate and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
As discussed in the preamble, we are finalizing the addition of minimum standards for Exchange call center operations, such that Exchanges, other than SBE-FPs and SHOP Exchanges that do not provide for enrollment in SHOP coverage through an online SHOP enrollment platform, meet the following additional requirements: their call center must provide consumers with access to a live call center representative during the Exchanges' published hours of operation and their live call center representatives must be able to assist consumers with submitting their Exchange application for QHP coverage.
We believe this policy will support the intent of sections 1311(d)(4)(B) and 1413(b)(1)(A)(ii) of the ACA by codifying the requirement that a consumer must be able to obtain live call center support with submitting an application for QHP coverage during reliable, published hours of operation. It is our presumption that speaking to a live representative will better aid in troubleshooting consumer Exchange application issues, provide a real time opportunity for a live representative to explain Exchange application terminology to a consumer, provide for a live representative to ensure the consumer provides the most correct information to the Exchange application (thereby alleviating unnecessary follow-up), and provide greater overall consumer satisfaction.
As stated in the preamble, we believe that all State Exchanges already meet these finalized minimum standards, and we know that the Exchanges on the Federal platform does as well. As such, we do not anticipate an additional burden associated with this finalized policy.
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.205(b)(4) to require that an Exchange operate a centralized eligibility and enrollment platform on the Exchange's website (or, for an SBE-FP, through the Federal eligibility and enrollment platform) such that the Exchange allows for the submission of the single, streamlined application for enrollment in a QHP and insurance affordability programs by consumers, in accordance with § 155.405, through the Exchange's website and performs eligibility determinations for all consumers based on submissions of the single, streamlined application. Further, we are finalizing amendments to § 155.302(a)(1) to clarify that the Exchange, through the centralized eligibility and enrollment platform operated on the Exchange's website (or, for an SBE-FP, the Federal eligibility and enrollment platform) is the entity responsible for making all determinations regarding the eligibility for QHP coverage and insurance affordability programs regardless of whether an individual files an application for enrollment in a QHP on the Exchange's website, or on a website operated by an entity described under § 155.220, such as a web-broker defined at § 155.20, or a direct enrollment entity or QHP issuer described under § 155.221. This amendment to § 155.302(a)(1) will also clarify that only entities that an Exchange elects to contract with to operate its centralized eligibility and enrollment platform can perform this function on behalf of an Exchange and would prohibit Exchanges from solely relying on non-Exchange entities, including a web-broker (defined at § 155.20) or other entities under § 155.220 or § 155.221, from making such eligibility determinations on behalf of an Exchange.
We also are finalizing amendments to § 155.205(b)(5) to require that an Exchange operate a centralized eligibility and enrollment platform through the Exchange's website (or, for an SBE-FP, by relying on the Federal eligibility and enrollment platform) so that the Exchange (or, for an SBE-FP, the Federal eligibility and enrollment platform) meets the requirement under § 155.400(c) to maintain records of all effectuated enrollments in QHPs, including changes in effectuated QHP enrollments.
Since all Exchanges, including State Exchanges, SBE-FPs, and FFEs, currently provide access to a centralized eligibility and enrollment platform and process for consumers that they serve, and all Exchanges also currently perform all eligibility determinations through the operation of a centralized eligibility and enrollment platform on their websites, we believe the burden of this policy on Exchanges and interested parties will be minimal.
We sought comment on the assumptions and estimated impacts of this proposal.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.220 to apply to web-brokers operating in State Exchanges, and consequently in State Exchanges, in both the Individual Market Exchanges and SHOPs, certain existing HHS standards governing use of web-brokers' non-Exchange websites to assist consumers with enrolling in QHPs and applying for APTC/CSRs in a manner that constitutes enrollment through an Exchange. As discussed in the preamble of this final rule, the finalized regulatory amendments will require these State Exchanges to draft policy, update standards, and potentially hire more staff to perform functions not currently being performed by the State Exchange as a result of applying the identified § 155.220 standards to web-brokers participating in State Exchanges. These changes will also require web-brokers hosting non-Exchange websites in these State Exchanges to perform web-development and oversight to ensure compliance with the HHS minimum standards this rulemaking finalized to extend to these web-brokers. These changes will also require web-brokers in State Exchanges who want to assist consumers with enrolling in QHPs and applying for ATPC and CSRs to display standardized disclaimers, display QHP comparative information, display information pertaining to a consumer's eligibility for APTC or CSRs, to participate in operational readiness reviews and potentially maintain relevant documentation, and to extend downstream agent and broker requirements to web-brokers operating in State Exchanges. Although these policies allow States certain flexibility for State Exchanges to tailor their web-broker program (including the flexibility to add State-specific language to standardized disclaimers, provided the additional language does not conflict with the HHS-provided standardized disclaimers) and establish their own standards with respect to operational readiness demonstrations by their web-brokers, we expect the impact and costs to be reasonably-based on the impacts seen on the FFEs and SBE-FPs.
Although there will be some additional burden for web-brokers operating in State Exchanges, amounting to approximately $43,019
We estimate a total cumulative burden of $860,380 associated with this policy for an estimated 20 web-brokers operating across the 5 State Exchanges. We anticipate these changes to extend certain HHS minimum standards governing web-broker participation in FFEs and SBE-FPs to also apply to State Exchanges and their web-brokers will be beneficial to consumers by establishing uniform, baseline requirements for agent, broker, and web-broker participation across all Exchange types. These finalized changes will allow State Exchanges to leverage the framework that has already been established and currently applies to FFEs and SBE-FPs, thereby decreasing the burden to these State Exchanges to establish such a program, while providing some flexibility for these State Exchanges to tailor the new requirements to include State-specific content (such as the updating disclaimer language to refer to the State Exchange website rather than the
We sought comment on these estimated impacts and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates with the modifications to the estimated burden hours for web-brokers to implement the requirements associated with this proposal. We summarize and respond to public comments received regarding this provision below.
As discussed in the preamble to this final rule, we are finalizing revisions to § 155.220(h) to specify that the CMS Administrator, a principal officer, will review agent, broker, and web-broker requests for reconsideration of HHS' decision to terminate their Exchange agreement(s) for cause. We are finalizing that the CMS Administrator's determination would be final and binding. We believe this policy will improve transparency for agents, brokers, and web-brokers by ensuring they know who will be responsible for handling these reconsideration decisions under § 155.220(h).
We sought comment on the estimates associated with this proposal.
We received only positive comments on this proposal, with commenters stating this would improve transparency and clarity in the regulation. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.221 as proposed but with technical changes to require that DE entity non-Exchange websites assisting consumers in FFEs and SBE-FPs implement and prominently display website changes in a manner that is consistent with display changes made by HHS to
As discussed in the preamble of this final rule, this policy will require web-brokers and QHP issuers participating in DE in FFE and SBE-FP States to update their non-Exchange websites to implement and prominently display website changes in a manner that is consistent with display changes made by HHS to
As discussed in the preamble for this final rule, we continue to support DE entities' use of innovative decision-support tools and user interface designs, and this policy is not intended to prohibit the implementation of display features beyond the baseline provided by
Finalized § 155.221(j) will extend this new finalized DE entity non-Exchange website display requirement to require State Exchanges to require their DE entities to implement and prominently display website changes in a manner that is consistent with display changes made by State Exchanges to the State Exchanges' websites on their non-Exchange websites for purposes of assisting consumers with DE in QHPs offered through the Exchange in a manner that constitutes enrollment through the Exchange. This will require State Exchanges to establish requirements for DE entities operating in State Exchanges to reflect changes to the State Exchange website on their DE entity non-Exchange websites. This change will also require State Exchanges to establish processes for communicating and defining standards and for setting advance notice periods. We also encourage State Exchanges to consider the same factors (that is, complexity of the change and the urgency with which the change must be implemented on the DE entity's non-Exchange website) when setting advance notice periods. Similarly, we encourage State Exchanges to provide DE entities operating in their States examples of the State Exchange display, and technical assistance, including technical implementation guidance, to ease the burden of required display changes.
We anticipate this requirement will benefit consumers by codifying and expanding our existing EDE HHS-initiated change request practices to apply to all DE entities and ensuring that all Exchange consumers receive consistent, clear, and accurate information in a timely fashion as they navigate the QHP selection and enrollment process. We are further of the view that this requirement will mitigate the risk that consumers receive different, and possibly confusing or misleading, information based on the platform they choose to utilize when enrolling in or applying for coverage. This requirement will help ensure consumers using the DE pathways benefit from policies we introduce to improve the
As discussed in the ICR for this requirement, the cumulative cost estimate as a result of the new finalized paragraph § 155.221(j)(3) will be approximately $247,359 for 20 entities operating in the State Exchanges in the 2025 benefit year. This includes the estimated costs for entities that submit a request to deviate from the display approach adopted by the State Exchange website, should the State Exchange elect to permit deviation requests, which is estimated at a cost of approximately $7,239 annually.
We sought comment on these estimated impacts.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.221 to apply to DE entities operating in State Exchanges, and consequently State Exchanges that utilize DE entities, certain existing HHS standards applicable to DE entities assisting consumers with enrolling in QHPs and applying for APTC/CSRs in FFEs and SBE-FPs, in both the Individual Market Exchanges and SHOPs.
As discussed earlier in this final rule, regulatory amendments will require these State Exchanges to draft policy, update standards, and potentially hire additional staff to perform functions not currently being performed by the State Exchange because of applying certain § 155.221 standards to the State. The amendments will also require DE entities participating in DE programs in State Exchanges to perform web-development to ensure compliance with the Federal minimum standards that this rulemaking finalized to extend to these DE entities, along with any State-specific requirements that may be adopted under the flexibility provided to State Exchanges in this rulemaking.
Although there will be additional burden for DE entities operating in State Exchanges, amounting to approximately $100,716 per DE entity, as discussed in the information collection requirements section of this final rule, we anticipate that some of these State Exchanges may utilize DE entities already participating in the FFEs and SBE-FPs, which will help provide administrative savings related to the approval process under § 155.221(b)(4) if the State does not impose additional State-specific requirements beyond the HHS standards. We encourage State Exchanges to leverage DE operational readiness demonstrated for the FFEs and SBE-FPs when possible. Additionally, we expect those DE entities already participating in the FFEs and SBE-FPs to be able to leverage their existing web-development work with additional burden only required for tailoring the website display to any State-specific requirements adopted by the State Exchange (for example, updating website disclaimers to reference the State Exchange website rather than the
We anticipate that these finalized changes to extend certain minimum HHS standards governing DE entity participation in FFEs and SBE-FPs to also apply to State Exchanges will benefit consumers by establishing uniform, baseline requirements for DE entity participation across all Exchange types. These finalized changes will allow State Exchanges to leverage the framework that has already been established and currently applies to FFEs and SBE-FPs, thereby decreasing the burden to these State Exchanges to establish such a program, while providing some flexibility for these State Exchanges to tailor the applicable standards to include State-specific content. Additionally, this policy will establish administrative and operational consistency throughout the Exchanges, which benefits DE entities by allowing them to expand their business into States with State Exchanges with minimal costs and burdens. Consumers will also benefit by the expansion of entities and enrollment pathways available to assist with enrolling in health insurance coverage.
We sought comment on these estimated impacts and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates with modifications to the burden hours and number of entities subject to these information collection requirements. We summarize and respond to public comments received regarding this provision below.
We are finalizing in connection with the FTR process described in § 155.305(f)(4) that Exchanges will be required to send notices to tax filers for the first year in which they failed to reconcile APTC as an initial warning to inform and educate tax filers that they need to file and reconcile, or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive year. If the Exchange cannot send the notice directly to the tax filer, or otherwise cannot send protected FTI, it may send a more general notice to an enrollee or their tax filer informing them of the APTC reconciliation requirement, along with other possible reasons they may be at risk of losing APTC eligibility.
Under this policy, Exchanges on the Federal platform will continue to send notices to tax filers for the year in which they have failed to reconcile APTC as an initial warning to inform and educate tax filers that they need to file and reconcile, or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive tax year. Our policy to codify this practice and require it of all Exchanges, including State Exchanges, to ensure that tax filers who have been determined to have FTR status for 1 year are adequately educated on the file and reconcile requirement, and have ample opportunity to address the issue and file and reconcile their APTC before they are determined to have FTR status for 2 consecutive years. We requested comment on how best to conduct outreach to tax filers who need more intensive assistance in understanding FTR status, including directing them to resources such as Navigator or Assisters that could help explain what they need to do to reconcile their APTC.
This policy will support compliance with the filing and reconciling requirement under 36B(f) of the Code and its implementing regulations at 26 CFR 1.36B-4(a)(1)(i) and (a)(1)(ii)(A), minimize the potential for APTC recipients to incur large tax liabilities over time, and support eligible enrollees' continuous enrollment in Exchange coverage with APTC by avoiding situations where enrollees become uninsured when their APTC is terminated. Additionally, this policy will better align State Exchanges' failure to reconcile processes with that of the Exchanges on the Federal platform.
We are aware of seven States that will operate their own State Exchange for PY 2025 and have not yet fully implemented the infrastructure to run FTR operations for plan years through 2024 due to the flexibility the Exchanges were given to temporarily pause FTR operations due to the COVID-19 PHE.
We sought comment on the estimated one-time costs for these States to fully implement the functionality and infrastructure to conduct FTR operations, and the estimated annual costs to maintain FTR operations.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
Finalizing revisions to § 155.315(e) so that Exchanges can accept incarceration attestations without further verification and verify incarceration status using an HHS-approved data source only if they choose to will minimize administrative costs and burdens for Exchanges. Flexibility in verifying incarceration status for Exchanges will result in significant cost savings through not creating and processing incarceration DMIs. The current incarceration verification process resulted in a high number of DMIs, almost all of which are resolved in favor of the applicant and has been burdensome and costly for the Exchanges to implement. By revising the current incarceration verification process, this policy will also eliminate undue burdens and barriers to care for applicants, particularly formerly incarcerated people, a population comprised of a significant number of people with disabilities.
From PY 2018 to 2019, there were 110,802 incarceration DMIs generated. In PY 2019, nearly 38,000 out of 78,000 applicants submitted documents to attempt to resolve the incarceration DMI. Conducting an intensive incarceration verification check through the DMI process for each DMI caused HHS to incur additional costs totaling about $0.57 million per year for verification of incarceration along with the PUPS annual maintenance and transaction fees. The additional costs associated with generating incarceration DMIs include the costs to inform applicants of their DMI through their eligibility determination notice, and to process the DMI and any documentation mailed by the applicants. State Exchanges have likely incurred similar costs. Of the 13 State Exchanges (operating in 12 States and the District of Columbia) with incarceration verification processes, eight conduct incarceration verifications similar to those conducted by the Exchanges on the Federal platform. We estimate that incarceration DMI processing costs approximately $9,561,000 annually across all eight of these State Exchanges. Of the 13 State Exchanges with incarceration verification processes, five State Exchanges connected to an individual State or local incarceration facility for verifications and fully process incarceration DMIs. These State Exchanges currently incur DMI processing costs, including costs associated with noticing the applicant of their DMIs and costs associated with DMI and appeals casework. Based on costs incurred by the Exchanges on the Federal platform to process DMIs, we estimate that incarceration DMI processing costs State Exchanges approximately $7,171,000 annually across all 5 of these State Exchanges. Finally, 3 States are transitioning to State Exchanges. We anticipate their incarceration verification operations will cost approximately $3,585,000 annually. In total, the costs to an anticipated 16 State Exchanges would be approximately $20,317,000 annually if current policy continued.
By providing flexibility to Exchanges to verify incarceration status and allowing Exchanges to accept applicant attestations without verification, this policy will enable HHS and Exchanges to avoid incurring the aforementioned costs associated with DMI creation and processing. Exchanges will not have to invest resources into building data transfer connections with an alternative incarceration verification data source and will not have to invest in providing DMI notices and support to applicants. Therefore, the cost savings to State Exchanges associated with this policy will be approximately $20,317,000.
As previously mentioned, conducting an intensive incarceration verification check through the DMI process for each DMI caused HHS to incur additional costs totaling approximately $570,000 per year for verification of incarceration along with the PUPS annual maintenance and transaction fees. While overall, this policy will reduce the burden and costs associated with incarceration verification operations and data sourcing, there will be a modest up-front cost of $1,200,000 to HHS to modify the Federal platform's current incarceration verification processes for the purposes of verifying eligibility for QHP, and it will cost $340,000 to update the Federal platform's system logic for HHS to stop sending incarceration verification requests to PUPS. Once these operations and noticing have stopped, no further costs will be incurred by HHS, or by Exchanges that opt to act on the flexibilities provided by this policy. In total, we anticipate a cost of $1,540,000 to HHS because of this change. We reiterate that this cost will be overshadowed by the expected savings of approximately $20,317,000 because of this policy.
We sought comment on these estimates.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.320(c) by adding a new requirement at paragraph (c)(1)(iii) to require that State Exchanges pay for their utilization of the CSI data provided by the VCI Hub service to verify a tax household's attested annual income, or a Medicaid applicant's current household income, due to our reinterpretation of State Exchange and State Medicaid and CHIP agency use of the Hub to access and use the income data provided by the optional VCI Hub service as a State Exchange or a State Medicaid and CHIP agency function. We are finalizing that beginning on July 1, 2024, State Exchanges and State Medicaid and CHIP agencies will be required to pay for the costs of their use of the VCI Hub Service. We are also finalizing the proposal with a modification: rather than requiring States to pay in advance for their use of the VCI Hub Service, HHS will invoice States on a monthly basis for their actual utilization of the CSI income data accessed through VCI Hub service, as well as an administrative fee to account for any direct or indirect costs of making CSI income data accessed through VCI Hub service available to State Exchanges and State Medicaid and CHIP agencies.
Because the price per transaction for CSI data is proprietary information, we are unable to provide those numbers in this rulemaking, or the precise utilization rates for State Exchanges and State Medicaid and CHIP agencies as this would be a direct conflict with the contract that HHS holds with the CSI contractor. However, based on HHS' own analysis, in fiscal year (FY) 2022, State Exchange utilization of the VCI Hub service led to costs of approximately $26 million dollars. Similarly, in FY 2022, State Medicaid and CHIP agency utilization of the VCI Hub service resulted in costs of approximately $77 million dollars. We also estimate that by having State Medicaid and CHIP agencies pay for 25 percent of their transaction costs, the Federal Government can save between $32 to $55 million per year. By having State Exchanges pay for 100 percent of their transaction costs, we estimate savings to the Federal Government could be between $39 and $67 million per year; this cost estimate includes an assumption of one to two States transitioning to State Exchanges in future years. Assuming one to two new States transition to a State Exchange in the next 4 years, we applied a 5 percent increase to estimate the additional pings from these additional States. We
We are aware that six State Exchanges currently only have one connection for both their State Exchange and State Medicaid and CHIP agency, which may pose a challenge when determining which VCI Hub transactions are attributable to the State Exchange, and which are attributed to the State Medicaid and CHIP agency. We anticipate that one to three State Exchanges may elect to build a separate connection in order to accurately account for which VCI Hub transactions originate from their State Exchange and their State Medicaid and CHIP agency and we estimate about $1 to 3 million in one-time costs in 2024 to build the IT infrastructure for a second Hub connection, totaling about $3 to 6 million in one-time costs for the one to three States that choose to make any changes with how they currently access the VCI Hub service. States that do not elect to build a separate connection would instead need to develop a cost allocation methodology to track VCI Hub transaction volume from their State Exchange and State Medicaid and CHIP agency and communicate this to HHS so that HHS can invoice accurately and appropriately.
We sought comment on these estimates.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed with the following modification that rather than requiring States to pay in advance for their use of the VCI Hub Service, HHS will invoice States on a monthly basis for their actual utilization of the CSI income data accessed through the VCI Hub Service, as well as an administrative fee to account for any direct or indirect costs of making CSI income data accessed through the VCI Hub service available to Exchanges and State Medicaid and CHIP agencies, in accordance with the Intergovernmental Cooperation Act and interpretive OMB Circulars A-97 and A-25.
We are finalizing revisions to § 155.330(d) to require Exchanges to conduct periodic checks for deceased enrollees twice yearly and subsequently end deceased enrollees' QHP coverage beginning with the 2025 calendar year. Additionally, we are finalizing amendments to § 155.330(d)(3) to grant the Secretary the authority to temporarily suspend the PDM requirement during certain situations or circumstances that lead to the limited availability data needed to conduct PDM or of documentation needed for an enrollee to notify the Exchange that the result of PDM is inaccurate, as described in § 155.330(e)(2)(i)(C).
Currently, § 155.330(d)(3) defines “periodically” only for PDM activities that identify enrollment in Medicare, Medicaid, CHIP, and BHP, meaning that Exchanges must conduct Medicare PDM, Medicaid or CHIP PDM, and BHP PDM twice a year. The current regulation does not specify the frequency by which PDM activities to identify deceased enrollees must occur. The 2019 Program Integrity Rule did not require Exchanges to perform PDM for death at least twice in a calendar year so that Exchanges could prioritize the implementation of the new requirement to conduct PDM for Medicare, Medicaid, CHIP and, if applicable, BHP eligibility or enrollment at least twice yearly. Periodic checks for deceased enrollees are a critical aspect to ensuring Exchange program integrity.
We are finalizing revisions to § 155.330(d) to require Exchanges to conduct periodic checks for deceased enrollees twice yearly and subsequently end deceased enrollees' QHP coverage beginning with the 2025 calendar year. This policy will not only align with current policy and operations on the Exchanges on the Federal platform but will also prevent overpayment of QHP premiums and accurately capture household QHP eligibility based on household size.
Based on internal data, we anticipate that it will cost the Federal Government approximately $58,923 to conduct an additional check for deceased enrollees per year. In 2023, we conducted two rounds of Death PDM where the average number of expired households was 7,151; the average APTC amount per household was $549 per month; and, at the time of the expiration activities, there was an average of 6.5 months left in the plan year. We calculate the APTC savings to be approximately $25 million. Prior to implementing Death PDM in 2019, we looked at the number of consumers that were removed from coverage by the surviving family without the aid of Death PDM and close to 50 percent of the deceased consumers were removed from coverage. Thus, we estimate the net amount of APTC saved is estimated will be approximately $12.5 million per year beginning in 2025.
State Exchanges that are not already conducting Death PDM with the finalized required frequency, or deemed in compliance with PDM requirements, will be required to engage in IT system development activity to communicate with these programs and act on enrollment data either in a new way, or in the same way more frequently if this proposal is finalized. Thus, there may be additional associated administrative cost for these State Exchanges to implement the PDM requirement. As discussed in the information collection requirements section of this final rule, for a State Exchange not already conducting Death PDM at least twice a year, we estimate that it will cost approximately $3,932 per State Exchange (a total of $43,252 for all 11 State Exchanges currently not meeting the finalized requirement) to implement this finalized provision through their system. We assume that this cost will be incurred primarily in 2025 by State Exchanges. These costs will be incurred by the State Exchanges as they are required to be financially self-sustaining and do not receive Federal funding for their establishment or operations.
We sought comments in response to the burden estimates for this policy.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing as proposed.
We are finalizing the policy to incorporate catastrophic coverage as defined in section 1302(e) of the ACA into the auto re-enrollment hierarchy at § 155.335(j) as proposed, except that we are amending the language at § 155.335(j)(1)(v) and (j)(2)(iv) to incorporate the phrase, “to the extent permitted by applicable State law.” As further discussed in preamble for this policy, this language is to reflect that, as with existing re-enrollment hierarchy rules, Exchanges must take into account applicable State law when implementing auto re-enrollment. We are also finalizing the addition of § 155.335(j)(5) to establish that an Exchange may not newly auto re-enroll an enrollee into catastrophic coverage who is currently enrolled in coverage of a metal level as defined in section 1302(d) of the ACA. Because this policy is being finalized, we will also update the FFE Enrollment Manual to incorporate catastrophic coverage into the re-enrollment hierarchy for alternate enrollments.
We sought comment on the proposal's impacts, including whether it would result in an increase in costs and burden for issuers and Exchanges. In the proposed rule, we stated that burden for Exchanges on the Federal platform and issuers participating in those Exchanges would be mitigated because we already encourage issuers to submit crosswalk options for catastrophic enrollees, including those who will lose eligibility for catastrophic coverage. We also sought comment on our belief that this change would make it more likely that catastrophic coverage enrollees would be auto re-enrolled.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the policy to incorporate catastrophic coverage into the auto re-enrollment hierarchy below.
We anticipate that the finalized amendment to § 155.400(e)(2) to codify that flexibility for issuers experiencing billing or enrollment problems due to high volume or technical errors is not limited to extensions of the binder payment will benefit issuers. Because HHS has already provided enforcement discretion in the past to account for such situations, we do not anticipate that there will be any additional costs for HHS associated with this finalized policy, nor do we anticipate any costs to interested parties.
We sought comment on these impacts and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.410(e)(4) to revise parameters around the adoption of an alternative open enrollment period by a State Exchange not utilizing the Federal platform. We are finalizing that for benefit years beginning on or after January 1, 2025, State Exchanges must adopt an open enrollment period that begins on November 1 of the calendar year preceding the benefit year and ends January 15 of the applicable benefit year or later. We are also adding paragraph (e)(4)(iii) to grandfather the open enrollment period of any State Exchange that held an open enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the 2024 benefit year so that it can continue to begin open enrollment before November 1 in consecutive future benefit years, so long as that State Exchange's open enrollment period continues uninterrupted for at least 11 weeks. If the State Exchange later changes the dates of its open enrollment period after the effective date of this rule, it must for that, and subsequent benefit years, hold an open enrollment period that is compliant with the requirements of (e)(4)(i) and (ii).We have previously observed that when open enrollment ends in December, certain consumers may be subjected to unexpected plan cost increases that they may not be notified about until January. For consumers in the vast majority of Exchanges, this policy will be beneficial for reducing such unexpected plan cost increases since most Exchanges will end on or after January 15. This policy will also ensure ample time for Navigators, certified application counselors, agents, and brokers to fully assist all interested consumers during open enrollment while also improving access to health coverage by giving consumers ample time to react to updated plan cost information and seek enrollment assistance, including consumers in underserved communities who face additional barriers to accessing health coverage. Finally, by reducing consumer confusion, increasing consumer access to assisters, and giving consumers more time to consider up-to-date plan cost information, this policy could increase QHP enrollment, benefiting all interested parties, including consumers, Exchanges, issuers, and assisters.
All 19 State Exchanges except one already meet these finalized parameters, beginning their annual open enrollment periods on November 1 and concluding on or after January 15 of the benefit year, pursuant to current § 155.410(e)(4)(ii). Since most State Exchanges already are aligned with the parameters described in the policy, we anticipate that this new amendment would have a
We sought comment on this burden estimate and assumptions. We were particularly interested in comments regarding whether this proposal would impose a significant burden on outlying State Exchanges and interested parties (for instance, Navigators, assisters, issuers).
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 155.420(b)(1) and (b)(3)(i) to align the effective dates of coverage after selecting a plan during certain special enrollment periods across all Exchanges, including State Exchanges, so that during a special enrollment period that follows the regular effective dates of coverage listed at § 155.420(b)(1), qualifying individuals or enrollees who select and enroll in a QHP receive coverage beginning the first day of the month after the consumer selects a QHP.
In the 2021 Payment Notice final rule (85 FR 29251), where this policy was finalized for Exchanges on the Federal platform, we noted that ensuring that consumers who select a plan during a special enrollment period using the regular effective dates at § 155.420(b)(1) receive coverage on the first day of the following month, rather than on the first day of the second month following plan selection, would result in several benefits, such as reducing consumer confusion and minimizing coverage gaps while also enhancing operational efficiency. In addition, we noted that the standardization of effective coverage dates for special enrollment periods provided using the regular effective dates at § 155.420(b)(1) would result in standardization for issuers due to more plans beginning in the same month, Exchanges, and consumers; the reduction of system errors and related casework, including reduced confusion among relevant consumer support staff; and simplified Exchange billing practices due to the expedited effective dates. We believe that, similarly, State Exchanges and the issuers and consumers in their States will also experience these benefits under the policy to align the effective coverage dates across all Exchanges for special enrollment periods that use the regular effective dates of coverage at § 155.420(b)(1) (unless an earlier coverage effective date were selected pursuant to § 155.420(b)(3), which would reduce potential burdens associated with this policy.
Additionally, we expect that issuers will not incur substantial new costs as a result of applying this policy across Exchanges since they routinely effectuate coverage on the first of the month following plan selection or earlier when permitted or required under applicable regulation. We expect that consumers in States which do not currently apply this policy will also benefit from a faster effectuation of coverage, as this will result in fewer coverage gaps for consumers transitioning between or newly enrolling in a health insurance plan.
We sought comment on these assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the policy to align effective dates of coverage during certain special enrollment periods across all Exchanges.
We are finalizing amendments to § 155.420(d)(16) to revise the parameters around the availability of a special enrollment period (SEP) for APTC-eligible qualified individuals with a projected annual household income at or below 150 percent of the Federal Poverty Level (FPL), hereinafter referred to as the “150 percent FPL SEP.” Specifically, we are finalizing to remove the limitation that this SEP is only available to a consumer whose applicable percentage, which is used to determine the amount of the consumer's premium not covered by APTC, is zero percent, a circumstance provided for under section 9661 of the ARP and later under the IRA.
The impact of this policy will be zero if enhanced subsidies under the IRA are continued beyond 2025. It is difficult to estimate, with confidence, the impacts of this policy on premiums, APTC payments, and enrollment if the enhanced subsidies are not continued, and we note that those impacts are likely to be quite different by State. However, under various scenarios, we estimated that if this policy were to be finalized, national premiums in the individual market could increase by an average of 3 to 4 percent for plan year 2026 when the enhanced PTC provisions of the IRA are due to expire. We would expect that any average national impact would have a high variance between States that have expanded Medicaid coverage compared to States that have not, because States that have not expanded Medicaid coverage are likely to have more consumers with projected annual household income below 150 percent FPL applying for coverage through the Exchange. Unknown factors making these parameters difficult to estimate include the utilization of this SEP by healthy and unhealthy enrollees, the impact to the average duration of coverage for enrollees, and additional policy changes between now and 2025. At an aggregate level, APTC outlays could increase nationally up to $2 billion to $3 billion beginning in 2026. The direction and magnitude of enrollment changes in the individual market is also highly uncertain.
We sought comment on these estimates, including on the premium impacts at the State level, but did not receive responses.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We anticipate that the policy to permit enrollees in Exchanges on the Federal platform to retroactively terminate coverage back to the date in which they retroactively enroll in Medicare Part A or B (including enrollment in Parts A or B through a Medicare Advantage plan), but no earlier than (a) the day before the first day of coverage under Medicare Parts A or B or a Medicare Advantage plan, and (b) the day that is 6 months before retroactive termination of QHP coverage is requested, will benefit enrollees by allowing them to avoid an overlap in coverage and paying premiums for coverage they do not need. We anticipate that there may be some minor costs for the FFE associated with implementing this policy, which is at the option of HHS, such as processing the additional requests for retroactive terminations of coverage allowed by this policy. However, we do not have adequate data to estimate the number of requests for retroactive termination HHS is likely to receive, and so we cannot provide an estimate for these costs, nor for the amount of APTC that is likely to be returned to the government as a
Finally, we also anticipate that there may be a financial impact to State Exchanges associated with implementing this policy, which is optional for State Exchanges. However, we do not have access to the data necessary to estimate the costs to State Exchanges associated with implementing this policy, nor do we have access to the data necessary to determine how long it will take State Exchanges to implement it.
We sought comment on these impacts and assumptions, as well as any additional data sources we could use to estimate the costs associated with this proposal.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
Under § 155.1050(a)(2)(i)(A), we are finalizing that for plans years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must establish and impose quantitative time and distance network adequacy standards for QHPs that are at least as stringent as standards for QHPs participating on the FFEs under § 156.230(a)(2)(i)(A). For these purposes, “as stringent as” means time and distance standards that use a specialty list that includes at least the same specialties as our provider specialty lists and time and distance parameters that are at least as short as our parameters. States will be permitted to implement network adequacy standards that are more stringent than those performed by the FFEs under § 156.230. In other words, States could use a specialty list that is broader than our specialty lists, but it must include all the provider specialties included in our lists. Similarly, the time and distance parameters could also be narrower than our parameters, meaning they could require shorter time and/or distances, but they cannot be less demanding than our time and distance parameters. Consistent with the standards for the FFEs, and to strengthen QHP enrollees' timely access to a variety of providers to meet their health care needs, the State Exchanges and SBE-FPs' time and distance standards will be calculated at the county level and vary by county designation. State Exchanges and SBE-FPs will be required to use a county type designation method that is based upon the population size and density parameters of individual counties. Under this policy, the time and distance standards State Exchanges and SBE-FPs will establish and impose will apply to our provider specialty lists. To count towards meeting the time and distance standards, individual and facility providers in these lists will have to be appropriately licensed, accredited, or certified to provide services in their State, as applicable, and will need to have in-person services available.
Second, we are finalizing that, for plans years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews prior to certifying any plan as a QHP, consistent with the reviews conducted by the FFEs under § 156.230. Specifically, we are finalizing at § 155.1050(a)(2)(i)(B) that, for plans years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must conduct quantitative network adequacy reviews to evaluate a plan's compliance with network adequacy standards under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) prior to certifying any plan as a QHP, while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4). Under these flexibilities, the issuer will include its justification as part of its QHP application and describe how the plan's provider network provides an adequate level of service for enrollees and how the plan's provider network will be strengthened and brought closer to compliance with the network adequacy standards prior to the start of the plan year. The issuer will be required to provide information as requested by the State Exchange or SBE-FP to support the justification. State Exchanges and SBE-FPs will be required to review the issuer's justification to determine whether making such health plan available through the Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates as specified under § 156.230(a)(3). In making this determination, the factors State Exchanges and SBE-FPs could consider include whether the justification is reasonable based on circumstances such as the local availability of providers and variables reflected in local patterns of care. If the State Exchange or SBE-FP determines that making such health plan available through its Exchange is in the interests of qualified individuals in the State or States in which such Exchange operates, it could then certify the plan as a QHP. Under this policy, State Exchanges and SBE-FPs will be prohibited from accepting an issuer's attestation as the only means for plan compliance with network adequacy standards.
We are aware that some States Exchanges employ robust, quantitative network adequacy standards that differ from those used by the FFEs, but still ensure that QHPs provide consumers with reasonable, timely access to practitioners and facilities to manage their health care needs, consistent with the ultimate aim of these policies. Therefore, we are finalizing § 155.1050(a)(2)(ii) to provide that, for plan years beginning on or after January 1, 2026, HHS may grant an exception to the requirements described under § 155.1050(a)(2)(i) to a State Exchange or SBE-FP that demonstrates with evidence-based data, in a form and manner specified by HHS, that (1) the Exchange applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4); and (2) the Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP. In this final rule, for this exceptions process, we are clarifying that, for (1) above, issuers on the State Exchanges and SBE-FPs do not need to comply with the appointment wait time standards under § 156.230(a)(2)(i)(B).
Lastly, we are finalizing § 155.1050(a)(2)(i)(C) to provide that, for plan years beginning on or after January 1, 2026, State Exchanges and SBE-FPs must require that all issuers seeking certification of a plan as a QHP submit information to the Exchange reporting whether or not network providers offer telehealth services. This data will be for informational purposes; it will be intended to help inform the future development of telehealth standards and will not be displayed to consumers. We note that this policy is not intended to suggest that telehealth services will be counted in place of in-person service access for the purpose of meeting network adequacy standards for PY 2025. While we acknowledge the growing importance of telehealth, we want to ensure that telehealth services do not reduce the availability of in-person care. For this purpose, telehealth encompasses professional consultations,
As discussed in the information collection requirements section of this final rule, we estimate that the total annual burden associated with State Exchanges and SBE-FPs establishing and imposing the finalized network adequacy standards, conducting the network adequacy reviews as finalized, collecting telehealth information from issuers seeking QHP certification, and submitting any exception to be up to 19,800 hours and to have a total cost of $1,365,012 per year. This estimate includes State Exchanges and SBE-FPs developing the finalized standards, reviewing any issuer justification, and submitting any exception requests to HHS. We further estimate that the total annual burden associated with both medical QHP and SADP issuers in State Exchanges and SBE-FPs gathering and submitting the time and distance and telehealth data, including any justification, to the respective State Exchanges or SBE-FPs beginning in 2025 would be approximately $114,992.
As discussed in the information collection requirements section of this final rule, the requirement that State Exchanges and SBE-FPs collect telehealth data may increase related administrative costs for State Exchange and SBE-FP issuers that do not already possess these data, though many issuers already collect and submit this information for network adequacy submissions in other markets. While we anticipate that increased burden related to telehealth data collection will be minimal for many State Exchange and SBE-FP issuers, the increased burden could ultimately lead to an increase in premiums for consumers. As noted previously, we believe that obtaining telehealth information and using it to inform future network adequacy standards is in the best interests of both QHP enrollees and QHP issuers. As such, we anticipate that the additional burden will be outweighed by the expected benefits.
We sought comment on the potential costs and benefits associated with this proposal.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the establishment of Exchange network adequacy standards policy below.
We stated in the proposed rule (88 FR 82591, 82638 through 82639) that this data would be for informational purposes, would be intended to help inform the future development of telehealth standards, and would not be displayed to consumers. We believe that the above-described telehealth reporting standards support these objectives by providing State Exchanges and SBE-FPs with a general picture regarding the availability of telehealth services in their State. Additionally, at this time, since this data will not be displayed to consumers, it is not necessary for State Exchanges and SBE-FPs to collect more granular telehealth data from their issuers.
We are finalizing an FFE user fee rate of 1.5 percent of monthly premiums for the 2025 benefit year, which is a decrease from the 2.2 percent FFE user fee rate finalized in the 2024 Payment Notice (88 FR 25845 through 25847). We are also finalizing an SBE-FP user fee rate of 1.2 percent for the 2025 benefit year, which is a decrease from the 1.8 percent SBE-FP user fee rate finalized in the 2024 Payment Notice. Based on our estimated costs, enrollment (including anticipated transitions of States from the FFE and SBE-FP models to either the SBE-FP or State Exchange model, increased Open Enrollment numbers and anticipated Medicaid redeterminations), premiums for the 2025 benefit year, and user fee rates, we are estimating that FFE and SBE-FP user fee transfers from issuers to the Federal Government will be $340 million lower compared to those estimated for the prior benefit year. We also anticipate that the lower user fee rates may exert downward pressure on premiums.
We sought comment on the impact estimates and assumptions in the proposed rule (88 FR 82639).
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these lower estimates.
For plan years beginning on or after January 1, 2026, we are finalizing revisions to the standards for State selection of EHB-benchmark plans at § 156.111 to consolidate the options for States to change EHB-benchmark plans at § 156.111(a); revisions to the regulatory standard for States to comply with scope of benefit requirements at § 156.111(b)(2); and revisions to § 156.111(e)(3) to require States to submit a formulary drug list as part of their application to change EHB-benchmark plans only if the State is seeking to change its prescription drug EHB.
We understand that certain aspects of the current process to change EHB-benchmark plans under § 156.111 may impose unanticipated difficulty for and burden on States, and we have received feedback that this difficulty can have a chilling effect on States' ability to make more frequent or more substantial changes to their EHB-benchmark plans. We believe that, to the extent States take advantage of the finalized changes to the EHB-benchmark plan standard, States
We also estimate a potential increase in burden to States and issuers to develop new policies and implement new plan designs, to the extent these finalized changes would result in more frequent or more substantial changes to EHB-benchmark plans by States. It is our aim that these policies will allow States and issuers to offer more comprehensive and innovative benefit structures that benefit the consumer, including by addressing health equity concerns.
However, we realize that this policy will have varied impact on consumers depending on how a State chooses to implement these changes. To the extent these finalized changes result in more frequent or more substantial changes to EHB-benchmark plans by States, consumers enrolled in individual and small group market plans will be impacted by changes to EHB in that their benefits may change, and in some cases, premiums could increase or decrease depending upon State implementation of the policies. CMS has approved changes in nine EHB-benchmark plans since 2018. Every approved EHB-benchmark plan application was estimated an increase in premiums of less than one percent.
Additionally, a State's EHB-benchmark plan selection may impact the amount of APTC and CSRs for enrollees in a State. For these consumers, subsidies will increase or decrease when compared to their State's current EHB-benchmark plan. PTC is available only for that portion of a plan's premium attributed to EHB, so to the extent that a State's EHB-benchmark plan leads to lower premiums for the second lowest cost silver plan, APTC will be reduced, but not the percent of income a consumer with APTC is expected to contribute to their premium. This effect will represent a transfer from consumers who receive APTC to the Federal Government. Individual and small group market enrollees who do not receive APTC would experience lower premiums for less comprehensive coverage that could result in more affordable coverage options but possibly higher out-of-pocket costs for the consumer. To the extent that a State's EHB-benchmark plan leads to higher premiums for the second lowest cost silver plan, we expect the opposite outcome to occur. Given the nine previously approved State EHB-benchmark plan changes, we expect the amendments to § 156.111 finalized in this rule will result in around a one percent increase in premium costs for the second lowest cost silver plan in State(s) that seek to update their EHB-benchmark plans with corresponding impacts on PTC.
It is not possible to provide more specific estimations for the potential cost impacts of these policy changes due to the number of unascertainable variables in projecting future State EHB-benchmark plan selections and how those selections could influence changes in the premiums of plans to cover those EHB, and therefore, cost to the Federal Government in the form of APTC. These variables include but are not limited to: the number of States that choose to pursue EHB-benchmark plan updates, the scope of benefits among the set of typical employer comparison plans in each of those States, the number and types of benefits each State looks to add to or subtract from their EHB-benchmark plan, and the variable cost and utilization of those benefits, especially as they may change over time.
Consumers who have specific health needs may also be impacted by the finalized changes. In the individual and small group markets, depending on the selection made by the State in which the consumer lives, consumers with more comprehensive plans may gain coverage for certain services. In other States, again depending on State choices, consumers may no longer have coverage for some services, though we note that no State has sought to remove benefits from their EHB-benchmark plan to date under § 156.111.
Although we cannot anticipate in advance exactly how States might adjust their EHB-benchmark plan applications as a result of these amendments, and as States are not required to make any changes to their EHB-benchmark plans, we also believe the reduced burden might produce premium savings in the long-term, as States will have greater incentive to update their EHB-benchmark plans more frequently and more substantively. We believe that States with more regular and more substantive EHB-benchmark plan changes would better respond to public health priorities and may adjust benefits in ways that could more cost-effectively contribute to greater overall population health, which would improve the health of the State's risk pool over time, reducing cost to insurers, therefore potentially enabling issuers to reduce plan premiums, increasing affordability of health insurance for consumers in the individual and small group markets in the State.
We stress that States would not be required to make any changes under this policy; as already implemented at § 156.115(d)(1), if a State does not make an EHB-benchmark plan selection by the first Wednesday in May of the year that is 2 years before the effective date of the new EHB-benchmark plan, or its benchmark plan selection does not meet the requirements of this section and section 1302 of the ACA, the State's EHB-benchmark plan for the applicable plan year will be that State's EHB-benchmark plan applicable for the prior year.
As discussed in the ICR for this policy, we anticipate a total annual cost estimate associated with this policy of approximately $18,036, in addition to the potential effects on premium costs and therefore PTC discussed elsewhere.
We sought comments on the impact of these proposals on the EHB-benchmark plan selection process and whether other impacts should be considered.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the proposed updates to the process for State Selection of EHB-benchmark plans below.
Moreover, we disagree with commenters on the second point—that the removal of the generosity standard creates an environment in which States can add significantly more generous benefits to their EHB-benchmark plans with impunity. Rather, as discussed elsewhere, while we are finalizing the removal of the generosity standard at § 156.111(b)(2)(ii), the typicality standard at § 156.111(b)(2)(i) will still require that State EHB selections be constrained to a particular scope of benefits by demonstrating their EHB-benchmark plan is as or less generous than the most generous plan among a set of typical employer comparison plans. We believe this requirement will sufficiently balance States' desired flexibility to design a benefit package that best fits the needs of their consumers, while also ensuring that coverage does not become unaffordable, nor unreasonably increase Federal outlays in the form of PTCs.
We are finalizing the removal of the regulatory prohibition at § 156.115(d) on issuers from including routine non-pediatric dental services as an EHB. We are also finalizing that the changes at § 156.115(d) will be effective beginning with PY 2027.
Removing the prohibition on issuers from including routine non-pediatric dental services as an EHB will remove regulatory and coverage barriers to expanding access to non-pediatric dental benefits. This will allow States greater flexibility to add benefits to improve non-pediatric oral health and overall health outcomes, which are disproportionately low among marginalized communities such as people of color and people with low incomes. Therefore, this policy will promote health equity by addressing non-pediatric oral health disparities and improving the health outcomes of vulnerable populations.
Pursuant to section 2707(b) of the ACA, a group health plan must ensure that any annual cost sharing imposed under the plan does not exceed the limitations provided for under section 1302(c)(1) of the ACA. To the extent that a group health plan selects an EHB-benchmark plan that includes routine non-pediatric dental coverage as an EHB, such plan will need to ensure that any cost sharing for those services is limited in accordance with section 1302(c)(1) of the ACA.
We do not anticipate any immediate costs to the Federal Government, States, issuers, or enrollees because of this policy. This policy will simply remove the prohibition on issuers from including routine non-pediatric dental services as an EHB; it will not automatically make any routine non-pediatric dental services an EHB. This policy will only have a premium impact to the extent that States choose to include routine non-pediatric dental services in their EHB-benchmark plans. It may also increase costs for issuers to expand their networks to cover these new required services, although issuers could contract with a dental vendor to administer the routine non-pediatric dental EHB if such a benefit is adopted by a State as an EHB. It should also be noted that the size of non-pediatric dental networks varies by State. Therefore, some States would be affected by the need to build a new network of dental providers (or contract with dental vendors) more than others. It is up to each State to consider the potential costs and network burden and determine whether to add routine non-pediatric dental services as an EHB.
We sought comment on the impact of this proposal to remove the regulatory prohibition on issuers from including routine non-pediatric dental services as an EHB and whether other impacts should be considered.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received regarding the routine non-pediatric dental EHB policy below.
Given that States are the primary enforcers of EHB and this policy is optional for States to adopt, we emphasize that the decision to add routine non-pediatric dental benefits as an EHB is entirely up to each individual State. Each State considering adding this benefit should weigh the advantages against the disadvantages before implementing this policy. Therefore, we recommend that States interested in adding routine non-pediatric dental benefits as an EHB coordinate with health plan actuaries and other relevant stakeholders to conduct a thorough analysis of the potential cost impact before implementing this policy, should the State see a benefit to conducting such an analysis. We also anticipate that the benefit design, cost, and operational impacts will vary heavily by each State.
At § 156.122(a)(3)(i), we are finalizing updates to P&T membership standards by adding new § 156.122(a)(3)(i)(E), which will require the P&T committee to include a patient representative as part of its membership for plan years beginning on or after January 1, 2026. While there is no Federal requirement to provide compensation to P&T committee members, those plans or issuers that choose to compensate their P&T committee members for their service to the committee may incur a nominal fee when adding an additional member to the committee. Further, we estimate a potential increase in burden to States and issuers to develop criteria used to select a consumer representative for the P&T committee, to create or revise standard operating procedures for the committee, as well as for any additional training that may be required of the selectee because of the new membership standard. We believe that the impact of this burden will be most notable during the initial plan year that this policy goes into effect and should be minimal in future years. We solicited comments on the impact of this proposal to the P&T committee membership standards and whether other impacts should be considered. We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We also are finalizing amendments to § 156.122 to codify the requirement for coverage of prescription drug benefits. Specifically, we are finalizing amendments to § 156.122 by adding a new § 156.122(f) to further clarify that, to the extent that a health plan covers prescription drugs in excess of the benchmark, these drugs will be considered EHB and are subject to requirements including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits. This policy will apply unless the coverage of the drug is mandated by State action and is in addition to EHB pursuant to § 155.170, in which case the drug will not be considered EHB. Given that this revision merely codifies our existing policy regarding the coverage of prescription drugs as EHB, we do not anticipate any additional burden on States or issuers.
We sought comment on these impact estimates and assumptions.
After consideration of comments and for the reasons outlined in the proposed rule and our responses to comments, we are finalizing the burden estimates as proposed. We summarize and respond to public comments received below.
We are finalizing updates to the standardized plan options for PY 2025 with minor changes to ensure these plans continue to have AVs within the permissible
Thus, like the approach taken in the 2023 and 2024 Payment Notices, we are finalizing a standardized plan options that will continue to resemble the most popular QHP offerings that millions of consumers are already enrolled in. As such, these finalized standardized plan options are based on updated PY 2023 cost sharing and enrollment data to ensure that these plans continue to reflect the most popular offerings in the Exchanges.
By finalizing a policy to maintain an approach to standardized plan options like that taken in the 2023 and 2024 Payment Notices, issuers will continue to be able to utilize many existing benefit packages, networks, and formularies, including those paired with standardized plan options for PY 2024. Also, issuers will continue to not be required to extend plan offerings beyond their existing service areas.
Furthermore, as discussed earlier in the preamble, we will continue to differentially display standardized plan options on
In addition, as noted in the preamble, we will continue enforcement of the standardized plan option display requirements for approved web-brokers and QHP issuers using a direct enrollment pathway to facilitate enrollment through an FFE or SBE-FP—the Classic DE and EDE Pathways—at §§ 155.220(c)(3)(i)(H) and 156.265(b)(3)(iv), respectively. We believe that continuing the enforcement of these differential display requirements will not impose a significant burden on these entities or require major modification of their non-Exchange websites, especially since the bulk of this burden was previously imposed in the 2018 Payment Notice,
Finally, since we will continue to allow approved web-brokers and QHP issuers to submit requests to deviate from the manner in which standardized plan options are differentially displayed on
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
In this final rule, we are finalizing permitting issuers to offer non-standardized plan options in excess of the limit of two per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area for PY 2025 and subsequent years, if issuers demonstrate that these additional non-standardized plans beyond the limit at § 156.202(b) have specific design features that would substantially benefit consumers with chronic and high-cost conditions and meet other requirements finalized in this rule.
Specifically, at § 156.202(d), for PY 2025 and subsequent years, an issuer may offer additional non-standardized plan options for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area, subject to the criteria discussed below.
We finalized several specifications for issuers seeking to utilize this exceptions process at § 156.202(d)(1) through (6). Specifically, at paragraph (d)(1), the 25 percent reduction in cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions will be evaluated at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition. At paragraph (d)(2), the reduction in cost sharing must not be limited to a part of the year, or an otherwise limited scope of benefits. At paragraph (d)(3), the reduction in cost sharing for these benefits cannot be conditioned on a consumer having a particular diagnosis.
At paragraph (d)(4), the required reduction in cost sharing only applies to the standard variant of the plan for which an issuer seeks an exception, and not to the income-based cost-sharing reduction plan variations required by § 156.420(a), nor to the zero and limited cost sharing plan variations required by § 156.420(b). At paragraph (e)(5), issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition. At paragraph (d)(6), the chronic and high-cost conditions that may qualify an issuer for this exception will be determined by HHS. Refer to § 156.202 of the preamble to this rule for a more detailed discussion regarding these requirements.
We do not anticipate that the exceptions process finalized in this rule will substantially impact the average weighted number of non-standardized plan options available to each consumer, the average weighted number of standardized plan options available to each consumer, the average weighted number of total plan options available to each consumer, the number of plan-county discontinuations, or the number of affected enrollees since we do not anticipate a substantial number of issuers will utilize this exceptions process to offer the aforementioned additional non-standardized plan options that will substantially benefit consumers with chronic and high-cost conditions. This is because we expect that most issuers will believe that the burden of creating and certifying additional plans intended to benefit a comparatively small population of consumers outweighs the benefit of doing so.
Although we do not anticipate that a substantial number of issuers will utilize this exceptions process, we acknowledge that issuers that choose to do so will be impacted. Specifically, if issuers choose to utilize this exceptions process, they will be required to design additional non-standardized plan options and proceed through QHP certification for these plans, which will necessarily entail additional burden.
Additionally, at § 156.202(e), an issuer that seeks to utilize this exceptions process is required to submit a written justification in a form and manner and at a time prescribed by HHS. At paragraph (e)(1), the written justification must identify the specific chronic and high-cost condition that its additional non-standardized plan option offers substantially reduced cost sharing for, in accordance with the definition of “cost sharing” at § 156.20.
At paragraph (e)(2), the written justification must identify which benefits in the Plans and Benefits Template are discounted to provide reduced treatment-specific cost sharing for individuals with the specified chronic and high-cost condition. These discounts must be relative to the treatment-specific cost sharing for the same corresponding benefits in the issuer's other non-standardized plan offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. For the purposes of this standard, treatment specific cost sharing consists of the costs for obtaining services that pertain to the treatment of a particular chronic and high-cost disease—but not the costs for obtaining services that do not pertain to the treatment of the relevant condition. The issuer must identify all services for which the benefits substantially reduce cost sharing in the Plans and Benefits
At paragraph (e)(3), the written justification must explain how the reduced cost sharing for these services pertains to clinically indicated guidelines and a representative treatment scenario for treatment of the specified chronic and high-cost condition (and include any relevant studies, guidelines, or supplementary documents to support the application, as applicable). For the purposes of this standard, a representative treatment scenario is an annual course of treatment for a chronic and high-cost condition.
At paragraph (e)(4), the written justification must include a corresponding actuarial memorandum that explains the underlying actuarial assumptions made in the design of the plan the issuer is requesting to except. In this memorandum, an issuer must demonstrate how the benefits that are discounted to provide reduced treatment-specific cost sharing of at least 25 percent identified at § 156.202(e)(2) for the treatment of the condition identified at § 156.202(e)(1) under the excepted plan compare to the identified in-limit offering in the same product network type, metal level, inclusion of dental and/or vision coverage, and service area. This demonstration must specifically be in reference to the specific population that would be seeking treatment for the relevant condition and not the general population. This memorandum also must include an actuarial opinion confirming that this analysis was prepared in accordance with the appropriate Actuarial Standards of Practice and the profession's Code of Professional Conduct.
We estimate the burden of this will be approximately $95,182 for an estimated 50 issuers annually, and we discuss this burden in further detail in the ICRs Regarding Non-Standardized Plan Option Limits (§ 156.202) section of the Collection of Information Requirements section of this final rule.
We also acknowledge that this exceptions process could impact consumers in a range of ways. Specifically, because we are finalizing the exceptions process, and if issuers choose to utilize this exceptions process to offer additional non-standardized plan options, consumers with qualifying chronic and high-cost conditions would benefit from reduced cost sharing for benefits that pertain to the treatment of these conditions. Reduced cost sharing for these benefits would reduce barriers to access to benefits important to consumers with chronic and high-cost conditions, which could play an important role in combatting health disparities and advancing health equity since disadvantaged populations
We do not have sufficient data to further estimate the costs associated with these finalized changes. As such, we sought comment from interested parties regarding cost estimates associated with this proposal and data sources that may be used to determine those estimates.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
In this rule, we are finalizing revisions to § 156.520(f) to provide a clear mechanism by which an existing CO-OP may request termination of its loan agreement with CMS to enable it to pursue new, innovative business plans that are otherwise not compatible with CO-OP requirements, but which CMS believes will be in the best interest of affected consumers. Of the 23 CO-OP loan agreements CMS successfully executed with qualified borrowers in 2012, only 3 remain in operation as active insurance companies offering QHPs. The others have been placed in receivership by State regulators, or otherwise gone out of business due to the borrower's inability to establish a viable CO-OP that is financially stable and on course to ultimately repay the loans. As discussed in section III.E.8 of this preamble, CO-OPs operate under governance and product limitations that can present significant obstacles to new business opportunities. To provide a means to overcome these limitations, under the finalized revisions to § 156.520(f), we will be able to approve a request by a CO-OP to terminate its loan agreement with us for the purpose of permitting the CO-OP to pursue innovative business plans that are not otherwise consistent with CO-OP requirements, if all outstanding CO-OP loans issued to the loan recipient are repaid in full prior to termination of the loan agreement, and we believe that granting the request would benefit consumers by meaningfully enhancing consumer access to quality, affordable, member-focused, non-profit health care options in affected markets. Examples of such proposals that may be deemed innovative and in the interests of consumers would be plans that appear well-calculated to lead directly to marketing non-profit, member-focused health plans in new regions of a State, to offer health plans on a Statewide basis for the first time, to expand operations into new States, or enhance consumer access to new non-profit products that are not qualified health plans, in particular when such plans are likely to favorably impact traditionally underserved communities. These examples are illustrative, however, not exclusive.
This finalized regulatory policy also contemplates plans that involve non-profit enterprises, and that reflect a strong consumer focus. A strong consumer focus will generally consist of an enterprise that focuses informational or financial resources, or plans to focus informational or financial resources, on member-oriented programs such as health education, consumer education, or forms of direct or indirect health-related financial assistance. We recognize that significant coordination with State regulators will be essential to implementing any plans to act on the finalized regulatory changes.
Given that only three CO-OPs remain in business operating with small portfolios across five States, we do not believe there will be a significant economic impact because of this policy for at least several years, if ever.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
We are finalizing amendments to § 156.1215(b) and (c) to align with the policies and regulations proposed in the Federal Independent Dispute Resolution Operations proposed rule (88 FR 75744). These finalized amendments will provide that administrative fees for utilizing the No Surprises Act Federal IDR process for health insurance issuers
To implement this policy, we are finalizing amendments to § 156.1215(b) to allow HHS to net payments owed to issuers and their affiliates operating under the same TIN against amounts due to the Federal Government from the issuers and their affiliates operating under the same TIN for APTC, advance payments of and reconciliation of CSRs, payment of FFE user fees, payment of SBE-FP user fees, HHS risk adjustment, reinsurance, and risk corridors payments and charges, and administrative fees from these issuers and their affiliates for utilizing the Federal IDR process in accordance with § 149.510(d)(2). We are also finalizing amendments to § 156.1215(c) to provide that any amount owed to the Federal Government by an issuer and its affiliates for unpaid administrative fees due to the Federal Government from these issuers and their affiliates for utilizing the Federal IDR process after netting under § 156.1215(b) will be the basis for calculating a debt owed to the Federal Government. We will not begin netting the Federal IDR administrative fees until disputing parties are required to pay Federal IDR administrative fees directly to HHS, if the proposal in Federal Independent Dispute Resolution Operations proposed rules (88 FR 75744) is finalized. We do not believe that the finalized amendments will impose substantial additional costs to HHS beyond the costs previously estimated in the Federal Independent Dispute Resolution Process proposed rule (88 FR 75814 through 75815). Furthermore, this policy will only apply to those issuers and their affiliates operating under the same TIN that participate in the financial programs under the ACA. Since the provisions of the Federal IDR process apply more broadly to include issuers and their affiliates that do not participate in the financial programs under the ACA currently specified in the list of programs for which netting is permitted (86 FR 55982),
Therefore, we anticipate that this policy will streamline our payments and collections processes and limit the administrative burden for operating our programs.
We sought comment on these impact estimates and assumptions.
We did not receive any comments in response to the burden estimates for this policy. We are finalizing these estimates as proposed.
If regulations impose administrative costs on private entities, such as the time needed to read and interpret this final rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that will review the rule, we assume that the total number of unique commenters on last year's final rule (286) will be the number of reviewers of this final rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. It is possible that not all commenters reviewed last year's rule in detail, and it is also possible that some reviewers chose not to comment on the final rule. For these reasons, we believe that the number of past commenters will be a fair estimate of the number of reviewers of this rule. We welcome any comments on the approach in estimating the number of entities which will review this final rule.
We also recognize that different types of entities are in many cases affected by mutually exclusive sections of this final rule, and therefore, for the purposes of our estimate we assume that each reviewer reads approximately 50 percent of the rule. We sought comments on this assumption.
Using the wage information from the BLS for medical and health service managers (Code 11-9111), we estimate that the cost of reviewing this rule is $100.80 per hour, including overhead and fringe benefits.
For the HHS-operated risk adjustment program (§ 153.320), we are finalizing recalibrating the CSR adjustment factors for AI/AN zero cost sharing and limited cost sharing CSR plan variant enrollees for the 2025 benefit year, and retaining the AI/AN CSR adjustment factors for future benefit years unless changed through notice-and-comment rulemaking. We are also finalizing maintaining the current CSR adjustment factors for silver plan variant enrollees (70 percent, 73 percent, 87 percent, and 94 percent AV plan variants)
As an alternative to amendments to § 155.315(e), we considered using an electronic data source other than PUPS to verify applicant incarceration status. However, we estimate that sourcing an alternative national incarceration verification data source would be a significant expense to HHS, costing the agency approximately $35 million annually. Additionally, these other data sources are currently not sufficiently comprehensive to meet the needs of the Exchanges using the Federal eligibility and enrollment platform and therefore may not provide Exchanges with accurate results on a consistent basis. Thus, the alternative data source must be current, accurate, and minimize burden and costs to administration.
About the changes to § 155.320(c), we considered taking no action to add new language in paragraph(c)(1)(iii) that State Exchanges and State Medicaid and CHIP agencies must pay in advance for their use of the VCI Hub service to verify income. However, we determined that this finalized reinterpretation and policy change is appropriate given our better understanding of how the VCI Hub service is used by State Exchanges and State Medicaid and CHIP agencies to verify eligibility for QHP coverage or
About amending 155.330(d)(2), we considered maintaining the status quo for continuing the PDM requirements under § 155.330(d)(1)(i) and (d)(ii) but note that it may be difficult or infeasible to operationalize existing processes and operations during certain emergency situations. Allowing consumers to go uninsured during a national emergency, such as a public health emergency like the COVID-19 public health emergency, will not improve the national health and well-being of all consumers. We found it to be least burdensome for Exchanges to implement as a successful pause of PDM operations occurred during the 2020 pandemic.
We considered only updating sub-regulatory guidance to incorporate catastrophic coverage into the auto re-enrollment hierarchy, for example, through the annual draft and final Letters to Issuers. However, we believe that instead incorporating catastrophic coverage into the auto re-enrollment hierarchy in regulation at § 155.335(j) creates stronger authority for Exchanges to auto re-enroll catastrophic enrollees and provides better transparency for our auto re-enrollment operations in the Exchanges on the Federal platform. Many public comments agreed that this policy would achieve these effects.
We considered taking no action regarding amendments to § 155.400(e)(2) to codify that the flexibility for issuers experiencing billing or enrollment problems due to high volume or technical errors is not limited to extensions of the binder payment. However, we believe it is important to clarify for interested parties that HHS may provide enforcement discretion for other premium payment requirements.
We considered taking no action related to amendments to § 155.420(d)(16), to revise the parameters around the availability of a SEP that grants APTC-eligible qualified individuals with a projected household income at or below 150 percent of the FPL. However, HHS believes that many consumers will benefit from having additional opportunities to enroll in low-cost Exchange coverage, and that those who will be eligible for this special enrollment period and who do not enroll during the annual open enrollment period are likely to have been unaware of their option to enroll in a plan with no monthly premium through the Exchange, after application of APTC.
We considered taking no action regarding modifications to § 155.430(b)(1)(iv) to permit enrollees in Exchanges on the Federal Platform to retroactively terminate coverage back to the date in which they retroactively enroll in Medicare Parts A and B (including enrollment in Parts A and B through a Medicare Advantage plan), but no earlier than (a) the day before the first day of coverage under Medicare Parts A or B, and (b) the day that is 6 months before retroactive termination of QHP coverage is requested. However, we believe it is important to allow enrollees to retroactively terminate coverage when they were unable to do so prospectively due to retroactive enrollment in Medicare coverage. We considered whether to also permit Exchange enrollees to retroactively terminate coverage back to the date in which they enrolled in Medicaid, CHIP, or BHP coverage retroactively, but we determined that this would not be appropriate due to the increased risk that claims reversed by QHP issuers would not be covered by providers under these programs.
For standardized plan options (§ 156.201), we considered a range of proposals, such as modifying the methodology used to create the standardized plan options for PY 2025. Specifically, we considered lowering the deductibles in these plan designs and offsetting this increase in plan generosity by increasing cost sharing amounts for several benefit categories. We also considered simultaneously maintaining the current cost-sharing structures and decreasing the deductibles for these plan designs, which would increase the AVs of these plans to the ceiling of each AV
For non-standardized plan option limits (§ 156.202), we considered a range of proposals. Specifically, for PY 2025 and subsequent years, we considered maintaining the PY 2024 limit of four non-standardized plan options per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. We also considered not proposing an exceptions process that would allow issuers to offer non-standardized plan options exceeding the limit of two that we previously finalized for PY 2025 and subsequent years. We also considered basing this exceptions process on a range of other factors, including the degree of plan proliferation in a given service area (as determined by the number of plan offerings per consumer or issuer), whether a plan has a sufficiently differentiated network, and whether a plan has a sufficiently differentiated formulary. We also considered permitting issuers to request to offer an indefinite number of additional non-standardized plan option per product network type, metal level, and service area, as opposed to one exception per chronic and high-cost condition (as in the finalized policy). We also considered permitting exceptions only for an exclusive list of chronic and high-cost conditions, as opposed to any condition that is chronic and high-cost in nature (as described in the finalized policy).
However, we ultimately decided to finalize an exceptions process that will allow an issuer to offer additional non-standardized plan options for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent
We are finalizing this approach primarily because we believe that allowing exceptions to the non-standardized plan option limit of two could play an important role in enhancing the quality of life for those affected by these conditions, combatting health disparities, advancing health equity, and reducing health care expenditures. We further believe that introducing this exceptions process will balance the dual aims of reducing the risk of plan choice overload while simultaneously ensuring that issuers can continue to offer truly innovative plan designs that may benefit consumers with chronic and high-cost conditions.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that small businesses, nonprofit organizations, and small governmental jurisdictions are small entities as that term is used in the RFA. The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $8.0 million to $41.5 million in any 1 year). We do not anticipate that providers will be directly impacted by the provisions in this final rule. Individuals and States are not included in the definition of a small entity. The provisions in this final rule will affect issuers, agents, brokers, web-brokers, and DE entities.
For purposes of the RFA, we believe that health insurance issuers
We further believe that agents, brokers, and web-brokers
The finalized policies that will result in an increased burden to small entities are described below.
We proposed to require issuers of risk adjustment covered plans to complete, implement, and provide to HHS written documentation of any corrective action plans when required by HHS if a high-cost risk pool audit results in the inclusion of certain observations in the final audit report. The annual burden per issuer associated with this policy is $627. For more details, please refer to the Regulatory Impact Analysis section associated with this policy in this final rule.
We proposed to apply to agents, brokers, and web-brokers operating in State Exchanges that operate their own eligibility and enrollment platform, and consequently in State Exchanges, in both the Individual Market Exchanges and SHOPs, certain existing HHS standards regarding web-brokers assisting consumers with enrolling in QHPs and applying for APTC/CSRs. The one-time burden per agent, broker, or web-broker associated with this policy is $43,019. For more details, please refer to the information collection requirements section associated with this policy in this final rule.
We proposed to require that DE entities implement and prominently display website changes in a manner that is consistent with display changes made by HHS to
We proposed to apply to DE entities operating in State Exchanges that operate their own eligibility and enrollment platform, and consequently State Exchanges that utilize DE entities, certain existing HHS standards regarding DE entities assisting consumers with enrolling in QHPs and applying for APTC/CSRs, in both the Individual Market Exchanges and SHOPs. The one-time burden per DE entity associated with this policy is $100,715.60. For more details, please refer to the information collection requirements section associated with this policy in this final rule.
We also proposed to require State Exchange and SBE-FP issuers to gather
Finally, we finalized § 156.202(d) through (e) to permit each issuer to offer additional non-standardized plan options for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area. The annual burden per issuer associated with this policy is $1,904. For more details, please refer to the information collection requirements section associated with this policy in this final rule.
Thus, the per-entity estimated annual cost for small issuers and/or DE entities is $5,828, and the total estimated annual cost for small issuers and/or DE entities is $507,036. The per-entity estimated one-time cost for small issuers and/or DE entities is $100,716, and the total estimated one-time cost for small issuers and/or DE entities is $8,762,257. The per-entity estimated one-time cost for small agents, brokers, and web-brokers is $43,019, and the total estimated one-time cost for small agents, brokers, and web-brokers is $860,380. There is no estimated annual cost for small agents, brokers, and web-brokers. See Tables 18, 19, 20, and 21.
The annual cost per small issuer and/or DE entity of $5,828 is approximately 0.32 percent of the average annual receipts per small issuer. We anticipate that small issuers could pass on these increased costs to consumers in the form of higher premiums, resulting in an increase in receipts commensurate with the increase in costs. However, because the proportion of cost to receipts is so small, we anticipate this would have a
We sought comment on this analysis and seek information on the number of small issuers, agents, brokers, web-brokers, or DE entities that may be affected by the provisions in these final rules.
As its measure of significant economic impact on a substantial number of small entities, HHS uses a change in revenue of more than 3 to 5 percent. We do not believe that this threshold will be reached by the requirements in this final rule, given that the annual per-entity cost of $5,828 per small issuer represents approximately 0.32 percent of the average annual receipts for a small issuer,
In addition, section 1102(b) of the Act requires us to prepare a regulatory
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2024, that threshold is approximately $183 million. Although we have not been able to quantify all costs, we expect that the combined impact on State, local, or Tribal governments and the private sector does not meet the UMRA definition of unfunded mandate.
Executive Order 13132 establishes certain requirements that an agency must meet when it issues a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications.
In compliance with the requirement of E.O. 13132 that agencies examine closely any policies that may have Federalism implications or limit the policy making discretion of the States, we have engaged in efforts to consult with and work cooperatively with affected States, including participating in conference calls with and attending conferences of the NAIC, and consulting with State insurance officials on an individual basis.
While developing this rule, we attempted to balance the States' interests in regulating health insurance issuers with the need to ensure market stability. By doing so, we complied with the requirements of E.O. 13132.
Because States have flexibility in designing their Exchange and Exchange-related programs, State decisions will ultimately influence both administrative expenses and overall premiums. States are not required to establish an Exchange or risk adjustment program. For States that elected previously to operate an Exchange, those States had the opportunity to use funds under Exchange Planning and Establishment Grants to fund the development of data. Accordingly, some of the initial cost of creating programs was funded by Exchange Planning and Establishment Grants. After establishment, Exchanges must be financially self-sustaining, with revenue sources at the discretion of the State. Current State Exchanges charge user fees to issuers.
This rule may have Federalism implications due to potential direct effects on the distribution of power and responsibilities among the State and Federal Governments relating to determining standards relating to health insurance that is offered in the individual and small group (including merged) markets. For example, we are finalizing the addition of requirements by which a State seeking to transition to a State Exchange provides the public with a notice and copy of its State Exchange Blueprint application. We are further finalizing the requirement that a State, within 3 months of submitting its State Exchange Blueprint to HHS for approval, conduct at least one public hearing whereby interested parties can learn about the State's intent to transition, as well as a State's progress toward transitioning, and conduct regular hearings every 3 months until the transition is complete. However, the Federalism implications of this policy may be mitigated because States have the option to establish their own Exchange, and we do not anticipate any additional burden on States because of this policy.
We believe that the finalized revisions to § 155.220(h) do not have Federalism implications as the CMS Administrator's review of agent, broker, and web-broker requests for reconsideration of administrative decisions is not based on State law, nor does it prevent a State from taking other legal actions under State law against an entity whose Exchange agreement(s) are terminated for cause by HHS.
The finalized revisions to §§ 155.220 and 155.221 applying certain web-broker and DE entity standards to State Exchanges that operate their own eligibility and enrollment platform may have Federalism implications, but they are substantially mitigated by allowing State Exchanges to leverage the oversight framework established by HHS for Exchanges that utilize the Federal Platform to evaluate web-broker and DE entity operational readiness to participate in an Exchange. We expect State Exchanges will be able to leverage audits conducted for the FFEs and SBE-FPs, as well as disclaimer language developed by HHS, while State operational costs would include any State-specific requirements or language to be added at the States' discretion. We believe that providing State Exchanges the opportunity to leverage the FFEs' oversight framework will likely reduce costs to State Exchanges as compared to the costs associated with State Exchanges establishing an independent framework for oversight and web-broker or DE entity approval independent of the FFEs.
The finalized revisions to § 155.315(e) may have Federalism implications due to our policy to use existing requirements and flexibilities under § 155.315(e) permitting all Exchanges to accept consumer attestation of incarceration status without further electronic verification. However, Exchanges that wish to continue electronically verifying an individual's incarceration status will be permitted do so, if HHS determines their data source is current, accurate, and minimizes administrative costs and burdens.
In addition, this final rule may have Federalism implications due to the finalized revisions pertaining to State selection of EHB-benchmark plans. The existing requirements pertaining to State selection of EHB-benchmark plans at § 156.111 already imposed Federalism implications on States that choose to change or revise their EHB-benchmark plans. As discussed elsewhere in this final rule, we understand that certain aspects of the current process to change or revise EHB-benchmark plans may impose unanticipated difficulty on and create confusion for States. Accordingly, the finalized revisions to § 156.111 are intended to reduce State burden and confusion to change or revise EHB-benchmark plans. As a result, the finalized revisions to § 156.111 may reduce the existing Federalism implications.
Our finalized amendments to § 155.320 adding new paragraph (c)(1)(iii) may have Federalism implications for States given that State Exchanges and State Medicaid agencies will pay fees for use of the VCI Hub service. However, the Federalism implications may be mitigated because use of the VCI Hub service is optional such that State Exchanges and State Medicaid agencies continue to have flexibility under § 155.315(h) and § 155.320(c)(3)(iv) to use other data sources, like State wage data, when income is not verified using IRS tax data or SSA Title II data.
Our finalized amendments to § 155.420(d)(16) may have Federalism implications; however, by maintaining the 150 percent FPL SEP to be available at the option of the Exchange, these implications may be mitigated because we allow State Exchanges to decide whether to implement it based on their specific market dynamics, needs, and priorities.
Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act, 5 U.S.C 801
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on March 27, 2024.
Health care, Health insurance, and Reporting and recordkeeping requirements.
Administrative practice and procedure, Health care, health insurance, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health care, Health insurance, Health records, Intergovernmental relations, Organization and functions (Government agencies), Reporting and recordkeeping requirements.
Administrative practice and procedure, Advertising, Brokers, Conflict of interests, Consumer protection, Grants administration, Grant programs-health, Health care, Health insurance, Health maintenance organizations (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Intergovernmental relations, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, Technical assistance, Women and youth.
Administrative practice and procedure, Advertising, Advisory committees, Brokers, Conflict of interests, Consumer protection, Grant programs-health, Grants administration, Health care, Health insurance, Health maintenance organization (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Loan programs-health, Medicaid, Organization and functions (Government agencies), Public assistance programs, Reporting and recordkeeping requirements, State and local governments, Sunshine Act, Technical assistance, Women, and Youth.
For the reasons set forth in the preamble, the Department of the Treasury amends 31 CFR subtitle A, part 33, as set forth below:
Sec. 1332, Pub. L. 111-148, 124 Stat. 119.
(c) * * *
(3) Such public hearings shall be conducted in an in-person, virtual (that is, one that uses telephonic, digital, and/or web-based platforms), or hybrid (that is, one that provides for both in-person and virtual attendance) format.
(c)
For the reasons set forth in the preamble, under the authority at 5 U.S.C. 301, the Department of Health and Human Services amends 42 CFR chapter IV, subchapter I, and 45 CFR subtitle A, subchapter B, as set forth below.
Section 1331 of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148, 124 Stat. 119), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152, 124 Stat. 1029).
(c)
(1) Follows the Exchange effective date standards at 45 CFR 155.420(b)(1);
(2) Follows the Medicaid effective date standards at § 435.915 of this chapter exclusive of § 435.915(a);or
(3) Follows an effective date of eligibility of the first day of the month following the month in which BHP eligibility is determined; or
(4) Follows an effective date of eligibility standard established by the State and subject to HHS approval to ensure that the effective date is:
(i) No later than the first day of the second month following the date that an individual has been determined BHP-eligible; and
(ii) No more restrictive than paragraphs (c)(1) through (3) of this section.
42 U.S.C. 18031, 18041, and 18061 through 18063.
(c) * * *
(4)
42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 18081-18083.
The addition reads as follows:
(b) * * *
(4) The Exchange first operates a State Exchange on the Federal platform under § 155.106(c), meeting all requirements established under § 155.200(f), for at least one plan year, including its first open enrollment period.
(a) * * *
(2) Submit an Exchange Blueprint application for HHS approval at least 15 months prior to the date on which the Exchange proposes to begin open enrollment as a State Exchange. HHS requires that a State submitting a Blueprint Application to operate a State Exchange provide, upon request, supplemental information to HHS detailing the State's implementation of its State Exchange functionality, including information on the ability to implement and comply with Federal requirements for operating an Exchange.
(i)
(ii)
(a) * * *
(2) A benefit required by State action taking place on or before December 31, 2011, a benefit required by State action for purposes of compliance with Federal requirements, or a benefit covered in the State's EHB-benchmark plan is considered an EHB. A benefit required by State action taking place on or after January 1, 2012, other than for purposes of compliance with Federal requirements, that is not a benefit covered in the State's EHB-benchmark plan is considered in addition to the essential health benefits.
(a)
(b) * * *
(4) Allows for an individual to submit a single streamlined eligibility application to the Exchange in accordance with § 155.405 and for the Exchange to make all determinations of eligibility for enrollment in a QHP and insurance affordability programs, in accordance with subpart D of this part, through the operation of a centralized eligibility and enrollment platform on the Exchange's website; or, if the Exchange is a State-based Exchange on the Federal platform, through the Federal eligibility and enrollment platform.
(5) Allows a qualified individual to select a QHP and allows the Exchange to maintain records of all QHP enrollments, in accordance with subpart E of this part, through the operation of a centralized eligibility and enrollment platform on the Exchange's website; or, if the Exchange is a State-based Exchange on the Federal platform, through the Federal eligibility and enrollment platform.
(c) * * *
(4) * * *
(iii) Web-brokers operating in State Exchanges that do not use the Federal platform that permit other agents and brokers, through a contract or other arrangement, to use their internet website to help an applicant or enrollee complete a QHP selection or complete the Exchange eligibility application must comply with the standards in paragraphs (c)(4)(i)(A), (B), (D) and (F) of this section, except that all references to “Federally-facilitated Exchange” or “HHS” in paragraphs (c)(4)(i)(A), (B), (D), and (F) will be understood to mean “the applicable State Exchange.”
(h) * * *
(2)
(3)
(n)
(1) State Exchanges may add State-specific information to the standardized disclaimers and information under paragraphs (c)(3)(i)(A), (G), and (I) of this section that does not conflict with the HHS-provided language.
(2) State Exchanges must establish the form and manner for their web-brokers to demonstrate operational readiness and compliance with applicable requirements in order for the web-broker's internet website being used to complete an Exchange eligibility application or a QHP selection, which may include submission or completion of the following items to the State Exchange, in the form and manner specified by the Exchange:
(i) Operational data including licensure information, points of contact and third-party relationships;
(ii) Enrollment testing, prior to approval or renewal;
(iii) website reviews performed by the State Exchange;
(iv) Security and privacy documentation, including:
(A) Penetration testing results;
(B) Security and privacy assessment reports;
(C) Vulnerability scan results;
(D) Plans of action and milestones; and
(E) System security and privacy plans.
(v) Agreements between the web-broker and the State Exchange.
(a)
(1) * * *
(i) For purposes of applying the requirements of § 156.1230(b) of this subchapter to State Exchanges, all references to “Federally-facilitated Exchange” and “HHS”, and “HealthCare.gov” will be understood to mean “the applicable State Exchange”, “the applicable State Exchange”, and “the applicable State Exchange website”, respectively.
(ii) [Reserved]
(b) * * *
(6) Implement and prominently display website changes in a manner that is consistent with display changes made to the Federally-facilitated Exchange website by meeting standards communicated and defined by HHS within a time period set by HHS, unless HHS approves a deviation from those standards. Direct enrollment entities may request a deviation by submitting a proposed alternative
(j)
(1) State Exchanges may add State-specific information to the standardized disclaimer under paragraph (b)(2) of this section that does not conflict with the HHS-provided language.
(2) State Exchanges must establish the form and manner for their direct enrollment entities to demonstrate operational readiness and compliance with applicable requirements in order for the direct enrollment entity's internet website being used to complete an Exchange eligibility application or a QHP selection, which may include submission or completion of the following documentation to the State Exchange, in the form and manner specified by the Exchange:
(i) Business audit documentation including:
(A) Notices of intent to participate including auditor information;
(B) Documentation packages including privacy questionnaires, privacy policy statements, and terms of service; and
(C) Business audit reports including testing results.
(ii) Security and privacy audit documentation including:
(A) Interconnection security agreements;
(B) Security and privacy controls assessment test plans;
(C) Security and privacy assessment reports;
(D) Plans of action and milestones;
(E) Privacy impact assessments;
(F) System security and privacy plans;
(G) Incident response plans; and
(H) Vulnerability scan results.
(3) State Exchanges must require their direct enrollment entities to implement and prominently display website changes in a manner that is consistent with the display changes made by State Exchanges to the State Exchanges' websites, consistent with the process of defining and communicating standards and setting advance notice periods in paragraph (b)(6) of this section, except that all references in paragraph (b)(6) of this section to “Federally-Facilitated Exchange website” would be understood to mean “State Exchange website,” references to “HHS” would be understood to mean “State Exchange,” and the reference to “unless HHS approves a deviation from those standards” would be understood to mean “unless the State Exchange approves a deviation from those standards under the deviation request process it is required to establish should the State Exchange elect to permit deviation requests.”
(a) * * *
(1) Directly, through contracting arrangements in accordance with § 155.110(a) under which the Exchange carries out all eligibility determinations for QHP coverage and related insurance affordability programs; or, as a State-based Exchange on the Federal platform, through a Federal platform agreement under which HHS carries out eligibility determinations and other requirements contained within this subpart; or
(f) * * *
(4) * * *
(i) If HHS notifies the Exchange as part of the process described in § 155.320(c)(3) that APTC payments were made on behalf of either the tax filer or spouse, if the tax filer is a married couple, for 1 year for which tax data would be utilized for verification of household income and family size in accordance with § 155.320(c)(1)(i), and the tax filer or the tax filer's spouse did not comply with the requirement to file an income tax return for that year as required by 26 U.S.C. 6011, 6012, and their implementing regulations and reconcile APTC for that period (“file and reconcile”), the Exchange must:
(A) Send a notification to the tax filer, consistent with the standards applicable to the protection of Federal Tax Information, that informs the tax filer that the Exchange has determined that the tax filer or the tax filer's spouse, if the tax filer is married, has failed to file and reconcile, and educate the tax filer of the need to file and reconcile or risk being determined ineligible for APTC if they fail to file and reconcile for a second consecutive tax year; or
(B) Send a notification to either the tax filer or their enrollee, that informs the tax filer or enrollee that they may be at risk of being determined ineligible for APTC in the future. These notices must educate tax filers or their enrollees on the requirement to file and reconcile, while not directly stating that the IRS indicates the tax filer or the tax filer's spouse, if the tax filer is married, has failed to file and reconcile.
(ii) [Reserved]
(e)
(1) Accepting an applicant's attestation that they are not currently incarcerated; or
(2) Verifying an applicant's attestation of incarceration status using any electronic data source that is available to the Exchange and which has been approved by HHS for this purpose. HHS will approve an electronic data source for incarceration verification if it provides data that are current and accurate, and if its use minimizes administrative costs and burdens.
(3) If an Exchange verifies an applicant's attestation of incarceration status using an approved data source under paragraph (e)(2) of this section, to the extent that an applicant's attestation is not reasonably compatible with information from the approved data source or other information provided by the applicant or in the records of the Exchange, the Exchange must follow the procedures specified in § 155.315(f).
(c) * * *
(1) * * *
(iii)
(d) * * *
(3)
(ii) Beginning with the 2025 calendar year, the Exchange must perform the periodic examination of data sources described in paragraph (d)(1)(i) of this section at least twice in a calendar year.
(iii) Notwithstanding the requirements of paragraphs (d)(3)(i) and (ii) of this section, the Secretary has authority to temporarily suspend the requirement that Exchanges conduct the PDM processes described at paragraph (d)(3)(i) or (ii) of this section during certain situations or circumstances that leads to the limited availability of data needed to conduct PDM or of documentation needed for an enrollee to notify the Exchange that the result of PDM is inaccurate as described in paragraph (e)(2)(i)(C) of this section.
The revisions and additions read as follows:
(j) * * *
(1) * * *
(ii) If the enrollee's current QHP is not available through the Exchange, the Exchange will re-enroll the enrollee in a QHP within the same product at the same coverage level as described in sections 1302(d) or (e) of the ACA as the enrollee's current QHP that has the most similar network compared to the enrollee's current QHP;
(iii) If the enrollee's current QHP is not available through the Exchange and the enrollee's product no longer includes a QHP at the same coverage level as described in sections 1302(d) or (e) of the ACA as the enrollee's current QHP and—
(A) The enrollee's current QHP is a silver level plan, the Exchange will re-enroll the enrollee in a silver level QHP under a different product offered by the same QHP issuer that is most similar to the enrollee's current product and that has the most similar network compared to the enrollee's current QHP. If no such silver level QHP is available for enrollment through the Exchange, the Exchange will re-enroll the enrollee in a QHP under the same product that is coverage level higher or lower than the enrollee's current QHP and that has the most similar network compared to the enrollee's current QHP; or
(B) The enrollee's current QHP is not a silver level plan, the Exchange will re-enroll the enrollee in a QHP under the same product that is one coverage level higher or lower than the enrollee's current QHP and that has the most similar network compared to the enrollee's current QHP;
(iv) If the enrollee's current QHP is not available through the Exchange and the enrollee's product no longer includes a QHP that is at the same coverage level as described in sections 1302(d) or (e) of the ACA as, or one coverage level higher or lower than, the enrollee's current QHP, the Exchange will re-enroll the enrollee in any other QHP offered under the product in which the enrollee's current QHP is offered in which the enrollee is eligible to enroll and that has the most similar network compared to the enrollee's current QHP; or
(v) Notwithstanding the other provisions in this paragraph (j)(1), to the extent permitted by applicable State law, if the enrollee's current QHP is a catastrophic plan as described in section 1302(e) of the ACA, and the enrollee will no longer meet the criteria for enrollment in a catastrophic plan as described in section 1302(e)(2) of the ACA:
(A) The Exchange will re-enroll the enrollee in a bronze metal level QHP within the same product as the enrollee's current QHP that has the most similar network compared to the enrollee's current QHP; or
(B) If no bronze plan is available through this product, the Exchange will re-enroll the enrollee in the QHP with the lowest coverage level offered under the product in which the enrollee's current QHP is offered in which the enrollee is eligible to enroll and that has the most similar network compared to the enrollee's current QHP.
(2) * * *
(i) The Exchange will re-enroll the enrollee in a QHP at the same coverage level as the enrollee's current QHP in the product offered by the same issuer that is the most similar to the enrollee's current product and that has the most similar network compared to the enrollee's current QHP;
(ii) If the issuer does not offer another QHP at the same coverage level as the enrollee's current QHP, the Exchange will re-enroll the enrollee in a QHP that is one coverage level higher or lower than the enrollee's current QHP and that has the most similar network compared to the enrollee's current QHP in the product offered by the same issuer through the Exchange that is the most similar to the enrollee's current product;
(iii) If the issuer does not offer another QHP through the Exchange at the same coverage level as, or one metal level higher or lower than the enrollee's current QHP, the Exchange will re-enroll the enrollee in any other QHP offered by the same issuer in which the enrollee is eligible to enroll and that has the most similar network compared to the enrollee's current QHP in the product that is most similar to the enrollee's current product; or
(iv) Notwithstanding the other provisions in this paragraph (j)(2), to the
(A) The Exchange will re-enroll the enrollee in a bronze metal level QHP offered by the same issuer in which the enrollee is eligible to enroll and that has the most similar network compared to the enrollee's current QHP in the product that is most similar to the enrollee's current product; or
(B) If no bronze plan is available through this product, the Exchange will re-enroll the enrollee in the QHP with the lowest coverage level offered under the product in which the enrollee's current QHP is offered in which the enrollee is eligible to enroll and that has the most similar network compared to the enrollee's current QHP.
(5) For purposes of this section, catastrophic coverage is not a coverage level that is considered higher or lower than metal level coverage when re-enrolling an enrollee to a plan that is a metal level higher or lower than their current plan, and an Exchange may not re-enroll an enrollee that has coverage under section 1302(d) into catastrophic coverage.
(e) * * *
(2)
(e) * * *
(4) * * *
(i) Subject to paragraphs (e)(4)(ii) and (iii) of this section, the annual open enrollment period begins on November 1 of the calendar year preceding the benefit year and extends through January 15 of the benefit year.
(ii) For State Exchanges, for the benefit years beginning on or after January 1, 2025, a later annual open enrollment period end date may be adopted, such that the open enrollment period begins on November 1 of the calendar year preceding the benefit year and ends after January 15 of the benefit year.
(iii) For any State Exchange with an annual open enrollment period that began before November 1, 2023, and ended before January 15, 2024, for the 2024 benefit year, that State Exchange may continue to begin open enrollment before November 1 for consecutive future benefit years, so long as the open enrollment period continues uninterrupted for at least 11 weeks. If such State Exchange changes the date(s) of their annual open enrollment period, it must comply with paragraphs (e)(4)(i) and (ii) for all future annual open enrollment periods.
(b) * * *
(1)
(3) * * *
(i) For a QHP selection received by the Exchange under a special enrollment period for which the effective dates of coverage specified in paragraph (b)(1) or (b)(2)(i) of this section would apply, the Exchange may provide a coverage effective date that is earlier than specified in such paragraph.
(d) * * *
(16) At the option of the Exchange, a qualified individual or enrollee, or the dependent of a qualified individual or enrollee, who is eligible for advance payments of the premium tax credit, and whose household income, as defined in 26 CFR 1.36B-1(e), is expected to be at or below 150 percent of the Federal poverty level, may enroll in a QHP or change from one QHP to another one time per month.
(b) * * *
(1) * * *
(iv) The Exchange must permit an enrollee to retroactively terminate or cancel the enrollee's coverage or enrollment in a QHP in the following circumstances:
(D) In a Federally-facilitated Exchange or a State-based Exchange on the Federal platform, if HHS elects to permit such terminations, and in a State Exchange that elects to permit such terminations, the enrollee demonstrates to the Exchange that the enrollee enrolled in Medicare Part A or B coverage with a retroactive effective date, and requests retroactive termination of QHP coverage within 60 days of the enrollment. The effective date of the retroactive termination must be no earlier than the later of the day before the first day of coverage under Medicare Part A or B, and the day that is six months before the retroactive termination in QHP coverage is requested. A retroactive termination date as described in this paragraph is not available for enrollments in stand-alone dental plans.
(a) Except with regard to multi-State plans:
(1) A federally facilitated Exchange must ensure that the provider network of each QHP meets the standards specified in § 156.230 of this subtitle.
(2) State Exchanges and State-based Exchanges on the Federal Platform must ensure that the provider network of each QHP meets applicable standards specified in § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(4) of this sub
(i) For plan years beginning on or after January 1, 2026, to comply with the requirement under paragraph (a)(2) of
(A) Establish and impose network adequacy time and distance standards for QHPs that are at least as stringent as standards for QHPs participating on the Federally-facilitated Exchanges under § 156.230(a)(2)(i)(A) of this subchapter;
(B) Conduct, prior to QHP certification, quantitative network adequacy reviews to evaluate compliance with requirements under § 156.230(a)(1)(ii), (a)(1)(iii), and (a)(2)(i)(A) of this subchapter, while providing QHP certification applicants the flexibilities described under § 156.230(a)(2)(ii) and (a)(3) and (4); and
(C) Require that all issuers seeking certification of a plan as a QHP submit information to the Exchange reporting whether or not network providers offer telehealth services.
(ii) For plan years beginning on or after January 1, 2026, HHS may grant an exception to the requirements described under paragraphs (a)(2)(i) of this section to a State Exchange or State-based Exchange on the Federal platform that demonstrates with evidence-based data, in a form and manner specified by HHS, that:
(A) the Exchange applies and enforces alternate quantitative network adequacy standards that are reasonably calculated to ensure a level of access to providers that is as great as that ensured by the Federal network adequacy standards established for QHPs under § 156.230(a)(1)(iii), (a)(2)(i)(A), and (a)(4) of this subchapter; and
(B) the Exchange evaluates whether plans comply with applicable network adequacy standards prior to certifying any plan as a QHP.
(c) * * *
(3) Such public hearings shall be conducted in an in-person, virtual (that is, one that uses telephonic, digital, and/or web-based platforms), or hybrid (that is, one that provides for both in-person and virtual attendance) format.
(c)
42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.
(a)(1) Subject to paragraphs (b) through (e) of this section, for plan years beginning on or after January 1, 2020, through December 31, 2025, a State may change its EHB-benchmark plan by:
(i) Selecting the EHB-benchmark plan that another State used for the 2017 plan year under §§ 156.100 and 156.110;
(ii) Replacing one or more categories of EHBs established at § 156.110(a) in the State's EHB-benchmark plan used for the 2017 plan year with the same category or categories of EHB from the EHB-benchmark plan that another State used for the 2017 plan year under §§ 156.100 and 156.110; or
(iii) Otherwise selecting a set of benefits that would become the State's EHB-benchmark plan.
(2) Subject to paragraphs (b) through (e) of this section, for plan years beginning on or after January 1, 2026, a State may change its EHB-benchmark plan by selecting a set of benefits that would become the State's EHB-benchmark plan.
(b) * * *
(2)
(A) Provide a scope of benefits equal to the scope of benefits provided under a typical employer plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), defined as either:
(
(
(
(
(
(
(B) Not exceed the generosity of the most generous among a set of comparison plans, including:
(
(
(ii) For plan years beginning on or after January 1, 2026, provide a scope of benefits that is equal to the scope benefits of a typical employer plan in the State. The scope of benefits in a typical employer plan in a State is any scope of benefits that is as or more generous than the scope of benefits in the least generous plan (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), and as or less generous than the scope of benefits in the most generous plan in the State (supplemented by the State as necessary to provide coverage within each EHB category at § 156.110(a)), among the following:
(A) One of the selecting State's 10 base-benchmark plan options established at § 156.100, and available for the selecting State's selection for the 2017 plan year; or
(B) The largest health insurance plan by enrollment within one of the five
(
(
(
(
(e) * * *
(2) An actuarial certification and an associated actuarial report from an actuary, who is a member of the American Academy of Actuaries, in accordance with generally accepted actuarial principles and methodologies, that affirms that the State's EHB-benchmark plan complies with the applicable scope of benefits requirements at paragraph (b)(2) of this section.
(3) The State's EHB-benchmark plan document that reflects the benefits and limitations, including medical management requirements, a schedule of benefits and, if the State is changing the number of prescription drugs pursuant to § 156.122(a)(1)(ii), a formulary drug list in a format and manner specified by HHS; and
(d) For plan years beginning on or before January 1, 2026, an issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, or non-medically necessary orthodontia as EHB. For plan years beginning on or after January 1, 2027, an issuer of a plan offering EHB may not include routine non-pediatric eye exam services, long-term/custodial nursing home care benefits, or non-medically necessary orthodontia as EHB.
(a) * * *
(3) * * *
(i) * * *
(E) For plan years beginning on or after January 1, 2026, include at minimum one patient representative who must:
(
(
(
(
(5) Have a broad understanding of one or more conditions or diseases, associated treatment options, and research.
(6) Disclose financial interests on their conflict-of-interest statements. Disclosed financial interests must include all interests with any entity that would benefit from decisions regarding plan formularies as well as specific information about their financial interests, such as the nature of the relationship and the value of the financial interest.
(f) If a health plan covers prescription drugs in excess of the prescription drugs required to be covered under paragraph (a)(1) of this section, the additional prescription drugs are considered an essential health benefit and subject to requirements including the annual limitation on cost sharing and the restriction on annual and lifetime dollar limits, unless coverage of the drug is mandated by State action and is in addition to an essential health benefit pursuant to § 155.170, in which case the drug would not be considered an essential health benefit.
(d) For plan year 2025 and subsequent years, an issuer may offer additional non-standardized plan options for each product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area if it demonstrates that these additional plans' cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions (including benefits in the form of prescription drugs, if pertaining to the treatment of the condition(s)) is at least 25 percent lower, as applied without restriction in scope throughout the plan year, than the cost sharing for the same corresponding benefits in an issuer's other non-standardized plan option offerings in the same product network type, metal level, and service area.
(1) The 25 percent reduction in cost sharing for benefits pertaining to the treatment of chronic and high-cost conditions will be evaluated at the level of total out-of-pocket costs for the treatment of the chronic and high-cost condition for a population of enrollees with the relevant chronic and high-cost condition.
(2) The reduction in cost sharing must not be limited to a part of the year, or an otherwise limited scope of benefits.
(3) The reduction in cost sharing for these benefits cannot be conditioned on a consumer having a particular diagnosis.
(4) The required reduction in cost sharing only applies to the standard variant of the plan for which an issuer seeks an exception, and not to the income-based cost-sharing reduction plan variations required by § 156.420(a), nor to the zero and limited cost-sharing plan variations required by § 156.420(b).
(5) Issuers are limited to one exception per product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area, for each chronic and high-cost condition.
(6) Chronic and high-cost conditions that may qualify an issuer for this exception will be determined by HHS.
(e) An issuer that seeks to utilize this exceptions process is required to submit a written justification in a form and manner and at a time prescribed by HHS that:
(1) Identifies the specific chronic and high-cost condition that its additional non-standardized plan option offers substantially reduced cost sharing for, in accordance with the definition of “cost sharing” at § 156.20;
(2) Identifies which benefits in the Plans and Benefits Template are discounted to provide reduced treatment-specific cost sharing for individuals with the specified chronic and high-cost condition. These discounts must be relative to the treatment-specific cost sharing for the same corresponding benefits in the issuer's other non-standardized plan offerings in the same product network type, metal level, inclusion of dental and/or vision benefit coverage, and service area. For the purposes of this standard, treatment specific cost sharing consists of the costs for obtaining services that pertain to the treatment of a particular chronic and high-cost condition—but not the costs for obtaining services that do not pertain to
(3) Explains how the reduced cost sharing for these services pertains to clinically indicated guidelines and a representative treatment scenario for treatment of the specified chronic and high-cost condition (and include any relevant studies, guidelines, or supplementary documents to support the application, as applicable). For the purposes of this standard, a representative treatment scenario is an annual course of treatment for a chronic and high-cost condition; and
(4) Includes a corresponding actuarial memorandum that explains the underlying actuarial assumptions made in the design of the plan the issuer is requesting to except. In this memorandum, an issuer must demonstrate how the benefits that are discounted to provide reduced treatment-specific cost sharing of at least 25 percent identified at § 156.202(e)(2) for the treatment of the condition identified at § 156.202(e)(1) under the excepted plan compare to the identified in-limit offering in the same product network type, metal level, inclusion of dental and/or vision coverage, and service area. This demonstration must specifically be in reference to the specific population that would be seeking treatment for the relevant condition and not the general population. This memorandum must also include an actuarial opinion confirming that this analysis was prepared in accordance with the appropriate Actuarial Standards of Practice and the profession's Code of Professional Conduct.
(f)
(2) CMS may, in its sole discretion, approve a request by a loan recipient to voluntarily terminate its loan agreement with CMS, and cease to constitute a QNHII, for the purpose of permitting a loan recipient to pursue innovative business plans that are not otherwise consistent with the requirements of this subpart, provided that all outstanding CO-OP loans issued to the loan recipient are repaid in full prior to termination of the loan agreement, and CMS believes granting the request would meaningfully enhance consumer access to quality, affordable, member-focused, non-profit health care options in affected markets.
(b)
(c)
Securities and Exchange Commission.
Final rule.
The Securities and Exchange Commission (“Commission” or “SEC”) is adopting amendments to a rule under the Securities Exchange Act of 1934 (“Exchange Act”) that requires disclosures for order executions in national market system (“NMS”) stocks. First, the amendments expand the scope of reporting entities subject to the preexisting rule that requires market centers to make available to the public monthly execution quality reports to encompass broker-dealers with a larger number of customers. Next, the amendments modify the definition of “covered order” to include certain orders submitted outside of regular trading hours and certain orders submitted with stop prices. In addition, the amendments modify the information required to be reported under the rule, including changing how orders are categorized by order size as well as how they are categorized by order type. The amendments, as part of the changes to the order size categories, modify the rule to capture execution quality information for fractional share orders, odd-lot orders, and larger-sized orders. Additionally, the amendments modify reporting requirements for non-marketable limit orders (“NMLOs”) in order to capture more relevant execution quality information for these orders by requiring statistics to be reported from the time such orders become executable. The amendments modify time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and calculated on a share-weighted basis for all orders. The amendments require that the time of order receipt and time of order execution be measured in increments of a millisecond or finer, and that realized spread be calculated at multiple time intervals. Finally, the amendments enhance the accessibility of the reported execution quality statistics by requiring all reporting entities to make a summary report available.
Kathleen Gross, Senior Special Counsel, Lauren Yates, Senior Special Counsel, Susie Cho, Special Counsel, Christopher Chow, Special Counsel, David Michehl, Special Counsel, or Laura Harper Powell, Special Counsel at (202) 551-5500, Division of Trading and Markets, Commission, 100 F Street NE, Washington, DC 20549.
The Commission is adopting amendments to 17 CFR 242.600 (“Rule 600”) to add new defined terms to and modify certain existing defined terms in Rule 600 that are used in 17 CFR 242.605 (“Rule 605”) as amended, as well as amendments to Rule 605; and to make conforming amendments to defined terms in 17 CFR 242.602, 242.611, and 242.614; and conforming amendments to defined terms in 17 CFR 240.3a51-1, 240.13h-1, 242.105, 242.201, 242.204, and 242.1000.
On December 14, 2022, the Commission proposed amendments to Rule 605 under Regulation National Market System (17 CFR 242.600 through 242.614) (“Regulation NMS”) to update the disclosure of order execution quality statistics in national market system (“NMS”) stocks.
At the time the Commission adopted Rule 11Ac1-5, there was little publicly available information to enable investors to compare and evaluate execution quality among different market centers.
The information disclosed under Rule 605 has provided significant insight into execution quality at different market centers.
The U.S. equity markets have evolved significantly in the last couple of decades. For instance, the equities markets have become increasingly fragmented, as both the market shares of individual national securities exchanges have decreased and an increased percentage of order flow has moved off-exchange. In 2000, there were nine registered national securities exchanges and one registered national securities association.
In contrast, trading in the U.S. equity markets today is highly automated and spread even more among different types of trading centers, allowing even more choices about where orders may be routed. The types of trading centers that currently trade NMS stocks are: (1) national securities exchanges operating self-regulatory organization (“SRO”) trading facilities;
In addition, developments in trading further point toward the utility of amending Rule 605. Average stock prices have continued to increase over time,
Moreover, since the adoption of Rule 605, the Commission and its staff have continually assessed market events and their impact on market structure, with much of this effort aimed at achieving enhanced transparency for investors.
In 2018, the Commission modified Rule 606, which requires broker-dealers to disclose the identity of market centers to which they route orders on behalf of customers.
At the time of the 2018 Rule 606 Amendments, the Commission considered suggestions from the EMSAC and other commenters that the Commission include more or different execution quality statistics in the required disclosures.
Separately, each broker-dealer has a legal duty to seek to obtain best execution of customer orders.
In acknowledgment of the myriad changes to the securities markets since the adoption of Rule 605 more than two decades ago, the proposed amendments to Rule 605 sought to ensure the continued transparency and utility of the execution quality statistics required by Rule 605. The Commission proposed to amend Rule 605 by expanding the scope of reporting entities to include broker-dealers with a larger number of customers (“larger broker-dealers”).
The Commission received numerous comment letters in response to the Proposing Release, a large portion of which were from individual investors.
One industry group recommended that the Commission reissue the proposed rule after incorporating comments from it and other market participants “to ensure that the final rule achieves the Commission's intended purpose and allow market participants to identify additional enhancements.”
Contemporaneously with the proposal to modify Rule 605, the Commission issued three other proposals related to separate aspects of equity market structure and Regulation NMS.
The Commission is not releasing anonymized subsets of CAT data used in connection with the proposals, including CAT data used in connection with data and figures in the Proposing Release. The CAT database contains highly sensitive and granular market information.
Market participants, such as broker-dealers, may analyze their own order and transaction information as well as commercially available data and use this analysis to provide meaningful comment on the Proposing Release from their own perspectives.
In addition, several commenters suggested a sequencing of the equity market structure proposals, such that the Commission would implement the amendments to Rule 605 and evaluate the execution quality data from the updated reports, before undertaking further action on the remaining equity market structure proposals.
The proposed amendments to Rule 605, as well as the costs and benefits of the proposed amendments, were detailed in the Proposing Release and received substantial public comment. The proposed amendments to Rule 605 received broad support from many commenters. The Commission has considered the comments received, updated its data analysis where needed, and, in some instances, has modified the proposal in response to comments received.
After reviewing the comments received and considering the recommendations from commenters,
As discussed in section II (Modifications to Reporting Entities) below, the Commission is adopting the amendments to the scope of reporting entities largely as proposed, with a few modifications. The Commission is retaining in the adopted amendments to Rule 605 the proposed requirements that brokers and dealers introducing or carrying 100,000 or more customer accounts prepare Rule 605 reports and that separate reports be prepared for a firm's broker-dealer activity and its market center activity. The Commission is also providing additional explanation of these requirements. The Commission has determined not to require market centers that operate a proposed qualified auction to prepare a separate report for covered orders received for execution in the qualified auction. The Commission is specifying that ATSs must prepare Rule 605 reports separately from their broker-dealer operators as proposed and is also retaining the proposed requirement that a broker-dealer that operates an SDP prepare a separate report for activity specific to the SDP, but with a modified description of what constitutes an SDP.
In addition, as discussed in section III (Modifications to Scope of Orders Covered and Required Information) below, the Commission is adopting amendments to the information required to be reported in the detailed report required by Rule 605(a)(1) with modifications from the proposal. The Commission is adopting amendments to
Further, as discussed in section IV (Summary Execution Quality Report) below, the Commission is adopting a requirement for a summary report pursuant to Rule 605(a)(2), with several changes from the proposal. The Commission is changing the weighting of certain statistics and grouping orders into notional size buckets. The Commission is modifying the required statistics related to average order size in shares; share-weighted average percentage price improvement; and effective spread divided by quoted spread. The Commission is including additional metrics in the summary report for share-weighted average midpoint; share-weighted average notional size; average percentage quoted spread; and average percentage realized spread as calculated at two time horizons. The Commission also is requiring that the summary report be provided in an alternative format.
Finally, as discussed in section V (Requirements for Making Rule 605 Reports Available to the Public) below, the Commission is adopting procedures for making the Rule 605 reports publicly available as proposed.
The Commission endeavors to ensure that investors are provided with timely and accurate information needed to make informed investment decisions, and the final amendments to Rule 605 reflect the Commission's ongoing commitment to enhance transparency for investors. Facilitating the ability of the public to compare and evaluate execution quality among different market centers, brokers, and dealers, is an effective means of reconciling the need to promote both vigorous price competition and fair competition among market centers and broker-dealers, to the benefit of individual investors. Section 11A of the Exchange Act
Prior to the adopted amendments, Rule 605 of Regulation NMS required only market centers, such as national securities exchanges, OTC market makers, and ATSs, to produce publicly available, monthly execution quality reports. The Commission proposed to expand the scope of entities that must prepare Rule 605 reports to include larger broker-dealers that introduce or carry at least 100,000 customer
To implement this proposed expansion, the Commission proposed to insert references to “brokers” and “dealers” where prior Rule 605 referred to “market centers.”
Proposed Rule 605(a)(7) stated that a broker or dealer that is not a market center shall not be subject to the requirements of Rule 605 unless that broker or dealer introduces or carries 100,000 or more customer accounts through which transactions are effected for the purchase or sale of NMS stocks (the “customer account threshold”).
The proposed customer account threshold also required brokers-dealers to include in their calculations the public customer accounts that they introduce, as well as the customer accounts that they carry.
Proposed Rule 605(a)(7) stated that any broker or dealer that meets or exceeds the customer account threshold and is also a market center shall produce separate reports pertaining to each function.
Prior to the amendments, Rule 605 required that reporting entities calculate certain statistics based on the time of order receipt.
The Commission is adopting amendments to Rule 605 to include larger broker-dealers as proposed and addresses certain commenters' questions below. These amendments will provide enhanced transparency to investors, allowing them to compare and evaluate execution quality among different customer-facing larger broker-dealers and promoting competition among these broker-dealers. As discussed in section II.A.2.a), the Commission is adopting the customer account threshold as proposed. In addition, as discussed in section II.A.2.b), the Commission is adopting as proposed the requirement that larger broker-dealers that are also market centers produce separate reports pertaining to each function. Finally, as discussed in section II.A.2.c), the Commission is adopting as proposed the requirement that all reporting entities, including larger broker-dealers, measure certain statistics from the time of order receipt.
The Commission received comments from a variety of market participants on the proposed expansion to require larger broker-dealers to provide Rule 605 reports. Certain individual investors supported the proposed expansion of publicly available Rule 605 reports to include broker-dealers because this expansion would increase transparency and encourage competition among broker-dealers.
For reasons similar to those offered by individual investors, financial services firms, industry groups, and a group of academics supported the proposed expansion of Rule 605 reporting requirements to larger broker-dealers.
Some broker-dealers and financial services firms opposed the proposed expansion to include larger broker-dealers, citing costs and the risk of confusion, especially for individual investors.
After considering the comments, the Commission is adopting the requirement for broker-dealers that meet the 100,000 customer account threshold to produce Rule 605 reports, as proposed. To implement this requirement, the Commission also is adopting the related amendments to Rules 600 and 605.
The Commission disagrees with commenters' concerns that larger broker-dealer reporting will be too confusing or misleading to investors, or will create a “false sense of comfort” about order execution practices and quality.
The stock-by-stock order execution information that will be provided in the detailed report will allow market participants, including individual investors familiar with data analysis, to make their own determinations about how to group stocks or orders when comparing execution quality information across broker-dealers. However, the Commission is mindful that the detailed report will contain a larger volume of statistical data and many market participants, including individual investors, may not have the means to directly analyze the detailed report. As discussed further below, the Commission is adopting a requirement that every market center, broker, or dealer produce a summary execution quality report in addition to the more detailed report required by Rule 605(a)(1).
One industry group stated that it remains unclear whether broker-dealers' Rule 605 reports would increase competition.
An industry group suggested that the Commission allow firms an opportunity to provide a statement in their Rule 605 reports explaining how to contextualize the report based on the nature of the firm's order flow.
A broker-dealer recommended that rather than expanding Rule 605 to include larger broker-dealers, the Commission should update Rule 606, which already applies to nonmarket center broker-dealers, to require additional information regarding execution quality.
An investor advocacy group and a national securities exchange specifically supported the proposed customer account threshold that would include in scope a broker or dealer that introduces or carries 100,000 or more customer accounts.
After considering the comments, the Commission is adopting the 100,000 customer account threshold, as proposed. The Commission's analysis of available data on the number of broker-dealers that will meet the minimum reporting threshold of 100,000 customers confirmed that such threshold will balance the benefits of having broker-dealers produce execution quality statistics with the costs of implementation and continued reporting,
The customer account threshold will require brokers-dealers to include in their calculations the customer accounts that they introduce, as well as the customer accounts that they carry. Rule 605 reports that reflect orders received from customer accounts that a broker-dealer introduces or carries will provide useful information to market participants because both introducing and carrying broker-dealers make decisions about where to route those orders and it will be helpful for customers to be able to evaluate the execution quality received as a result of those decisions.
One industry group requested an exception from the Rule 605 reporting requirement for an introducing firm that routes all of its customer orders to its clearing firm, on a non-directed basis, where the clearing firm makes all routing decisions and the introducing firm does not receive payment for order flow (“PFOF”).
The Commission considered these commenters' suggestion that Rule 605 provide an exception for certain introducing broker-dealers, but is not adopting the suggested exception for the following reasons: (1) Rule 605 reports prepared by larger broker-dealers will provide market participants and other interested parties with information relevant to evaluating how relationships among broker-dealers may affect execution quality, and the payment of PFOF is not the only circumstance that leads to conflicted relationships between an introducing broker-dealer and its customers;
An industry group asked for clarification regarding how firms would calculate their number of customer accounts for purposes of the customer account threshold.
Two investor advocacy groups expressed their support for the proposed requirement that larger broker-dealers that are also market centers produce separate reports for each activity.
After considering the comments, the Commission is adopting the requirement that larger broker-dealers that are also market centers produce separate reports pertaining to each function, as proposed. As explained in the Proposing Release, requiring a firm to produce separate reports pertaining to its market center function and its broker-dealer function will allow market participants and other interested parties to view the firm's execution quality from the perspective of how it operates in each of these separate roles.
An industry group stated that the proposed distinction between broker-dealer activity and market center activity in Rule 605 reports requires clarification and asked specific questions to clarify this distinction for purposes of grouping orders to prepare the separate reports.
Second, a firm that engages in a mixed capacity trade (
Third, a firm that trades in a riskless principal capacity with respect to a transaction handled by its non-market center, internal broker-dealer business rather than its OTC market making business generally should not need to include the transaction in its Rule 605 report pertaining to its market center function because this division of business lines suggests that the firm is acting in its capacity as a broker-dealer only. However, the firm generally should evaluate whether or not it acts as an OTC market maker in connection with its internal broker-dealer business, in which case that portion of the business may be a market center and thus be required to be reported as such.
A financial services firm requested clarification of whether a broker-dealer that principally facilitates the trading of fractional shares must publish a separate Rule 605 report as a market center.
One group of academics suggested that the Commission require separate disclosures for each account type at each broker-dealer to reflect the observation that execution quality differs across platforms with different commission and PFOF structures.
The Commission is not adopting these commenters' suggestions that larger broker-dealers be required to produce multiple reports that differentiate between account types, business segments, or routing destinations. Requiring larger broker-dealers to split their orders amongst multiple Rule 605 reports pertaining to their broker-dealer function would create additional implementation costs and potentially undercut the goal of having standardized reports that are comparable across entities. For instance, differences among how firms structure different business lines would pose challenges in ensuring that each firm is capturing order flow with similar characteristics in the same way, which could impede the comparability of reports.
One investor advocacy group stated that broker-dealers should be required to calculate time of order receipt based on when that broker-dealer received the
After consideration of comments, the Commission is adopting the requirement that larger broker-dealers calculate time of order receipt based on the time that they received the initial order, as proposed.
A financial services firm that suggested the use of order route time stated that larger share orders are more likely to be sent to a review queue and could have a “disproportionate negative impact” on average execution speed.
An industry group requested confirmation that orders rejected based on the application of risk and compliance controls would not count as having been received for purposes of Rule 605 reporting.
In today's equity markets, retail brokers often identify and route the marketable orders of individual investors in NMS stocks to wholesalers and the wholesalers often internalize these orders.
If the Commission adopts the order competition rule proposal, a national securities exchange or NMS Stock ATS that serves as an open competition trading center and is required to prepare execution quality reports under Rule 605 would be required to include covered orders that it received for execution in a qualified auction within its blended execution quality statistics. Because of concerns that differences in execution quality for orders executed within proposed qualified auctions as compared to orders executed outside of these qualified auctions would not be apparent in blended execution quality statistics, the Commission proposed to amend Rule 605(a)(1) to state that market centers that operate a qualified auction must prepare a separate report under Rule 605 pertaining only to covered orders that the market center receives for execution in a qualified auction.
In this release, the Commission is not acting on the proposal to require separate Rule 605 reports for orders that a market center receives for execution from a qualified auction. The Commission received generally supportive comments from a variety of market participants, including individual investors, on this proposed amendment.
The Commission is still considering the order competition rule proposal and the proposal to require separate Rule 605 reports for orders that a market center receives for execution in a qualified auction. Therefore, the qualified auctions contemplated by the Order Competition Rule Proposing Release do not exist as a place of execution at this time. Accordingly, in this release, the Commission is not acting on the proposed separate Rule 605 reporting requirement for orders a market center receives for execution in a qualified auction.
Under Rule 605 prior to the amendments, firms that operate two separate markets must prepare separate Rule 605 reports for each market center.
The Commission is specifying that NMS Stock ATSs must report separately from their broker-dealer operators, as proposed, and adopting a separate reporting requirement for SDPs largely as proposed. In each instance, separate reporting under Rule 605 will bring transparency to these segments of the OTC equity market.
The Commission received generally supportive comments from a variety of market participants regarding having firms produce separate Rule 605 reports for NMS Stock ATSs and for SDPs.
Two commenters requested clarification and confirmation that order and execution management systems (“OEMSs”) will not need to register as ATSs under the Commission's proposal to amend the definition of “exchange” under 17 CFR 240.3b-16 (“Rule 3b-16”)
An industry group and a broker-dealer requested additional clarity around what constitutes an SDP.
After considering the comments, the Commission is adopting separate reporting for SDPs largely as proposed. The Commission acknowledges that SDPs have different business models and that SDPs that receive blind IOCs throughout the trading day (so-called “blind pinging”) would likely have execution quality statistics that differ significantly from the statistics of SDPs that send out IOIs. Although a commenter raised concerns about potential differential impacts on Rule 605 metrics for SDPs with different business models,
In response to one commenter's statement that imposing a separate reporting requirement on SDPs lacks any clear benefit to justify the additional cost,
In response to one commenter's suggestion that the Commission consider revisions to Rule 605 “in order to accurately report execution quality for non-retail orders,”
The Commission also agrees with the two commenters regarding the need for additional clarity around the scope of entities that are SDPs for purposes of Rule 605. After considering commenter suggestions,
A broker-dealer recommended that the Commission clarify: (i) the circumstances in which an SDP can be considered to be embedded within an ATS (
An industry group asked specific questions about how to distinguish between OTC market making and SDP activities in Rule 605 reports.
The reports required by Rule 605(a)(1) prior to these amendments grouped orders by both order size and order type and included certain standardized execution quality metrics for all types of orders, as well as additional metrics for market orders and marketable limit orders. For all reporting entities, including larger broker-dealers, the Commission proposed to: (1) modify the order size and order type groupings; and (2) make changes to the required information for all types of orders, market and marketable limit order types, and non-marketable order types. The Commission is adopting the proposed changes to Rule 605 largely as proposed, with certain modifications discussed below. Section III.A. describes the ways in which the Commission is modifying its proposed definition of “covered order” in the adopted amendments. Section III.B. describes the modifications that the Commission is making to the information contained in the detailed execution quality reports required by Rule 605(a)(1), including how orders are categorized by size and type, the timestamp conventions, and which execution quality statistics are included.
The scope of Rule 605's reporting requirements is limited to covered orders.
Prior to these amendments, Rule 605 reports were required to include only orders received during regular trading hours
In the Proposing Release, the Commission proposed to: (1) expand the scope of Rule 605 reporting to include certain NMLOs submitted outside of regular trading hours if they become executable after the opening or reopening of trading during regular trading hours;
The Commission is adopting as proposed an expansion to the scope of Rule 605 reporting to include NMLOs submitted outside of regular trading hours that become executable after the opening or reopening of trading during regular trading hours.
Generally, individual investors supported including certain orders submitted outside of regular trading hours within the scope of covered orders.
A broker-dealer supported the inclusion of pre-market orders in Rule 605 reports, stating these orders (along with other included order types) would provide investors with a more complete picture of order execution quality across the marketplace.
A national securities exchange supported inclusion of certain orders submitted outside of regular trading hours within the definition of “covered order.”
An industry group stated that the proposed definition of “covered order,” in the context of NMLOs, does not address orders received during regular trading hours but prior to the primary listing market disseminating its first firm, uncrossed quotations in a security (referred to herein as the “interim opening period”).
After a review of the comments, for the reasons discussed in the Proposing Release and discussed below, the Commission is adopting the definition of “covered order,” along with other changes addressing the expansion of the scope of Rule 605 to include certain orders received outside of regular trading hours, largely as proposed.
When proposing to incorporate the exemptive relief contained in the Opening Exemption
Accordingly, the Commission is adopting a definition of “covered order” that scopes in any NMLO (including an order submitted with a stop price) that is received by a market center, broker, or dealer at a time before the primary listing market has disseminated its first firm, uncrossed quotations in the security and that, if executed, is executed during regular trading hours.
The Commission is also adopting a modified version of the proposed definition of “executable” that specifies that whether an NMLO is executable will be determined based on the order's limit price during regular trading hours and after the primary listing market has disseminated its first firm, uncrossed quotations in the security.
In addition, the Commission is revising the proposed definition of “marketable limit order” so that, with respect to an order received at a time when the NBBO is being disseminated but before the primary listing market has disseminated its first firm, uncrossed quotations in the security (
Orders submitted with stop prices were not included in Rule 605 reports prior to these amendments because the definition of “covered order” excluded orders with special handling instructions, including orders submitted with stop prices.
The Commission is adopting the definition of “covered order” as proposed to include orders submitted with stop prices within the scope of Rule 605. However, the Commission is modifying the proposed definition of “executable” as it pertains to orders submitted with stop prices in response to recommendations from commenters. Additionally, the Commission is modifying the proposed definition of “categorized by order type” to include separate categories for executable market orders submitted with stop prices, executable marketable limit orders submitted with stop prices (“executable stop marketable limit orders”), and executable non-marketable limit orders submitted with stop prices (“executable stop non-marketable limit orders” or “executable stop NMLOs”), in response to comments. As part of adding these separate stop order categories, the Commission is also adding new definitions of “executable stop marketable limit order” and “executable stop non-marketable limit order.”
Individual investors generally supported including certain orders submitted with stop prices within the definition of “covered order.”
Another broker-dealer supported including stop orders, but stated that there are many different types of stop orders. This commenter stated that, “rather than attempting to define what constitutes a trigger and its corresponding reference market for purposes of determining whether and how a stop order is included within Rule 605, it would be preferable to simply require that all stop orders that are triggered be included in Rule 605 reports to the extent that the resulting market or limit order is a covered order.”
An industry group suggested that the Commission and FINRA adopt consistent usage of the term “stop order” and other relevant terms because the proposed definition is inconsistent with the terminology in FINRA Rule 5350 in a number of respects.
After review of the comments, the Commission is adopting a modified definition of “executable” as it pertains to orders submitted with stop prices. As adopted, “executable,” with respect to orders submitted with stop prices, means that the stop price has been triggered during regular trading hours and after the primary listing market has disseminated its first firm, uncrossed quotations in the security.
A commenter suggested that Rule 605 reports should exclude stop orders to “avoid confusion” and allow firms to disclose the relevant details to their clients in a manner consistent with the clients' trading experience.
An industry group recommended that: (1) once a stop order without a limit price has been triggered, the order should be reported as a stop market order; and (2) once a stop limit order has been triggered, the order should be reported in one of several new order type categories based on the status of the order at the time the order is triggered.
In consideration of these comments, the Commission is modifying Rule 605's treatment of stop orders from the proposal to split executable stop orders into three categories—executable market orders submitted with stop prices, executable stop marketable limit orders, and executable stop NMLOs—based on the stop orders' status at the time that they are triggered. Separating executable stop orders into these three categories will group orders with similar execution profiles.
In response to comments received, the Commission conducted a supplemental analysis of the distribution of stop orders that fell into six existing order type categories once triggered using a sample of CAT data for 400 stocks for March 2023. The results are presented in Table 1 and show that the majority of orders submitted with a stop price that trigger are market orders when triggered (almost 86%). However, a significant percentage of orders submitted with a stop price that trigger are limit orders.
The Commission is adopting definitions for “executable stop marketable limit order” and “executable stop non-marketable limit order” to provide that the determination of which of these two categories a limit order submitted with a stop price falls into is made using the point in time that the order submitted with a stop price is triggered.
As proposed, Rule 605 would have required that the execution quality statistics provided for executable orders submitted with stop prices include those execution quality statistics required for non-marketable order types.
The Commission is not adopting the commenter's recommendation to add an additional column to the Rule 605(a)(1) detailed report to denote whether a particular row pertains to stop orders.
Commission staff has taken the position that staff would view all short sale orders that are not marked “short exempt” (“non-exempt short sale orders”) as special handling orders and, in the staff's view, these orders may be excluded from the definition of “covered order.”
The Commission is adopting as proposed its position that non-exempt short sales orders will not be considered special handling orders unless a price test restriction is in effect for the security. The Commission received several comments on this aspect of the proposal. One national securities exchange supported the proposed treatment of non-exempt short sale orders.
After consideration of the comments, the Commission is adopting the position that non-exempt short sale orders will not be considered special handling orders unless a price test restriction is in effect for the security, as proposed. As discussed in the Proposing Release, when a non-exempt short sale order is subject to a price test restriction under Rule 201 of Regulation SHO, a trade may only take place at least one tick above the national bid or offer; however, non-exempt securities are infrequently subject to such a price test restriction.
Prior to the amendments, Rule 605 reports utilized order size categories based on the numbers of shares in the order (
The Commission proposed to amend the definition of “categorized by order size” to designate the following categories for order sizes: (i) less than 1 share; (ii) odd-lot; (iii) 1 round lot to less than 5 round lots; (iv) 5 round lots to less than 20 round lots; (v) 20 round lots to less than 50 round lots; (vi) 50 round lots to less than 100 round lots; and (vii) 100 round lots or greater.
In response to comments, the Commission is adopting a definition of “categorized by order size” that differs from the proposal's focus on round lot increments. Instead, as adopted, each order size category reflects a notional dollar value range, along with an indication that the category reflects orders that were for an odd-lot, a round lot, or less than a share. As adopted, this amendment will increase transparency regarding distribution of order sizes that a reporting entity handles, particularly for higher-priced stocks. The Commission also is adopting an execution quality statistic for cumulative notional order size of covered orders.
Individual investors generally supported the proposed order size categories.
Other commenters addressed specific elements of the proposed order size categories. An investor advocacy group supported basing the order size categories on round lots, stating that doing so not only would harmonize Rule 605 disclosure with the MDI Rules
Similarly, several commenters, including a broker-dealer and financial services firms, suggested using notional size categories rather than round lot-based size categories.
Two industry groups also recommended grouping orders based on their notional dollar values.
A national securities exchange suggested using the following notional value buckets rather than share size categories: less than $10,000; $10,000 to less than $50,000; $50,000 to less than $100,000; $100,000 to less than $200,000; and $200,000 to $400,000.
To address the Commission's concern that defining order size buckets according to notional dollar values would no longer produce a meaningful distinction between round lot and odd-lot orders, one industry group suggested adding a column to the Rule 605 report to signify whether the orders in the applicable row are round lot or odd-lot orders.
Several individual investor commenters supported the proposed inclusion of odd-lot and fractional share orders in Rule 605 reports.
Explaining that when a round lot or odd-lot order has a fractional share component, the time to execution and execution price may be impacted, one industry group recommended that: (1) fractional share orders (
With respect to the proposed inclusion of larger-sized orders, a commenter stated that a “natural breakpoint” between size categories exists at $200,000 and suggested establishing a size bucket of $200,000 and greater.
Taking into consideration the comments received, the Commission is adopting a modified definition of “categorized by order size.” The Commission followed the suggestion that it use CAT data to examine which notional order size buckets would be appropriate.
Each adopted order size category reflects one of these notional dollar value ranges, along with an indication that the orders were for an odd-lot, a round lot, or less than a share.
• Less than $250 and less than a share;
• Less than $250 and odd-lot;
• Less than $250 and at least a round lot;
• $250 to less than $1,000 and less than a share;
• $250 to less than $1,000 and odd-lot;
• $250 to less than $1,000 and at least a round lot;
• $1,000 to less than $5,000 and less than a share;
• $1,000 to less than $5,000 and odd-lot;
• $1,000 to less than $5,000 and at least a round lot;
• $5,000 to less than $10,000 and less than a share;
• $5,000 to less than $10,000 and odd-lot;
• $5,000 to less than $10,000 and at least a round lot;
• $10,000 to less than $20,000 and less than a share;
• $10,000 to less than $20,000 and odd-lot;
• $10,000 to less than $20,000 and at least a round lot;
• $20,000 to less than $50,000 and less than a share;
• $20,000 to less than $50,000 and odd-lot;
• $20,000 to less than $50,000 and at least a round lot;
• $50,000 to less than $200,000 and less than a share;
• $50,000 to less than $200,000 and odd-lot;
• $50,000 to less than $200,000 and at least a round lot;
• $200,000 or more and less than a share;
• $200,000 or more and odd-lot; and
• $200,000 or more and at least a round lot.
As discussed further below, the adopted categories will facilitate market participants' ability to compare across orders of different sizes in higher-priced stocks, while controlling for potential differences in the treatment of larger-sized orders. Additionally, the adopted buckets better account for potential differences in the distribution of order sizes that reporting entities typically handle for a given stock when comparing execution quality metrics across reporting entities, facilitating apples-to-apples comparisons of execution quality across reporting entities.
For purposes of the order size categories, a mixed lot order (
The Commission used CAT data to examine the distribution of orders
When trying to determine the optimal cut-off points between notional order size buckets, the Commission considered how the order size buckets selected could meaningfully capture variations in order sizes across a variety of different factors, including stock prices, market centers, lot type and order share size categorization (
Second, orders valued below $250 contain a higher percentage of individual investor orders than higher-valued orders. To proxy for small individual investor orders, the Commission analyzed the distribution of non-IOC orders that are valued less than $1,000 and that originate from Individual Customer
Third, for stocks priced less than $50 (which, again, represent 85% of all stocks
Fourth, 69.6% of round lots have relatively higher notional order sizes of between $10,000 and $200,000. In addition, some market centers seem to specialize in larger orders. For example, 63.3% of order flow to ATSs is valued between $10,000 and $200,000. The remaining adopted notional order size buckets ($10,000 to less than $20,000; $20,000 to less than $50,000; and $50,000 to less than $200,000) capture the distributions of these larger notional value orders, and thus allow for measurement of execution quality at market centers that specialize in larger notional value order sizes.
Lastly, the additional notional order size category for orders for valued $200,000 or more will be useful because these orders typically warrant different treatment than smaller orders.
Designating order size categories based on notional order size buckets represents a shift in approach from the proposed order size categories based on round lot size ranges. In the Proposing Release, the Commission stated that modifying the order size categories to reflect the number of round lots would better allow Rule 605 reports to group orders with similar characteristics and notional values, and thereby provide more useful execution quality information.
In addition, in response to commenters' suggestions that the statistics in the summary report should be derivable from the detailed report,
For the reasons discussed in the Proposing Release and as described below, the Commission continues to believe that fractional, odd-lot, and larger-sized orders of 10,000 or more shares represent important order flow segments.
With respect to the commenter's statement that the cost of modifying market infrastructure to accommodate fractional share trading “would be high compared to the minimal benefit” of including fractional shares in Rule 605 reports,
In addition, the Commission is not adopting the commenter's suggestion that Rule 605 reports also include separate reporting categories for round lot orders with a fractional share component and odd-lot orders with a fractional share component.
Rule 605 reports include data for orders as categorized by order type. Prior to the amendments, Rule 605 defined “categorized by order type” to mean dividing orders into separate categories for market orders, marketable limit orders, inside-the-quote limit orders, at-the-quote limit orders, and near-the-quote limit orders.
The Commission received comments supporting the overall changes to order type categories being proposed.
The Commission proposed to eliminate the three separate order type categories pertaining to NMLOs (
An individual investor supported the proposed modifications to reporting requirements for NMLOs, stating they would capture more relevant execution
After reviewing the comments, the Commission is eliminating the definition of “inside-the-quote limit order, at-the-quote limit order, and near-the-quote limit order,”
A national securities exchange stated that under the Limit-Up Limit-Down (“LULD”) Plan, certain NMLOs would not necessarily be “executable” and requested that the Commission modify the definition of “executable” to conform to the provisions of the LULD Plan.
Inside-the-quote limit orders were a separate order type category under Rule 605 before the amendments,
Additionally, the Commission proposed to require that the execution quality statistics for beyond-the-midpoint limit orders include the additional information required of both marketable and non-marketable order types.
A national securities exchange and a broker-dealer supported including beyond-the-midpoint orders among the new order type categories.
After consideration of the comments, the Commission is adopting an order type for limit orders priced aggressively as compared to the midpoint, but with several modifications from the beyond-the-midpoint limit order that was proposed. The specific changes being made from the proposal are: (1) revising the definition of “beyond-the-midpoint limit order” to include limit orders priced at the midpoint and renaming this term “midpoint-or-better limit order”; and (2) making a modification to this definition to account for the interim opening period, as suggested by a commenter.
The Commission is expanding the scope, as compared to the proposal, of the “midpoint-or-better” order types to include limit orders priced at the midpoint in response to a commenter's concern that a category for orders that are priced more aggressively than the midpoint may not be worthwhile because these types of NMLOs are sparsely used.
In response to a commenter's request for clarification that an order that falls within this order type would not also be a NMLO,
Prior to the amendments, Rule 605 reports grouped marketable IOCs together with other marketable orders.
A national securities exchange supported establishing a new order type category for marketable IOC orders.
A broker-dealer stated that it supported assigning IOCs to a separate order category so that they would no longer be commingled with retail orders.
Following consideration of the comments, the Commission is adopting a separate order type category for marketable IOCs as propose
However, the Commission is not fully adopting commenters' suggestion that the Commission differentiate between IOCs and orders that are not immediate-or-cancel for every order type category used in Rule 605.
Prior to the amendments, Rule 605 required the reporting of information on the number of shares of covered orders executed within certain timeframes, as measured in seconds after the time of order receipt.
The Commission proposed to update the timestamp conventions in the definitions of “time of order receipt” and “time of order execution” so that these definitions require that such times be measured in increments of a millisecond or finer.
As discussed below, after consideration of the comments, the Commission is adopting the use of timestamp conventions of a millisecond or finer for time-based execution quality statistics as proposed. The Commission is also requiring average time-to-execution statistics for all order types and specifying that for NMLOs these statistics will be measured from when the order becomes executable as proposed. However, the Commission is not adopting the proposed median and 99th percentile execution quality statistics for all order types. Instead, the Commission is retaining the time-to-execution buckets from Rule 605 prior to these amendments, which apply to all order types, but is modifying the associated time ranges to account for the overall increase in trading speeds since Rule 605 was adopted and as supported by certain commenters.
Several individual investors supported the proposal to require reporting of average time to execution, median time to execution, and 99th percentile time to execution in increments of a millisecond or finer.
One industry group stated that the use of milliseconds is the best approach at this time.
The Commission is adopting the updates to the timestamp conventions to measure time-based statistics in increments of a millisecond or finer as proposed for the reasons discussed in the Proposing Release.
A broker-dealer stated that although it supports transitioning time-to-execution metrics to smaller increments of time, it is concerned that more granular timestamps may lead to greater variation across firms because firms may have different practices around when to mark the same event, quotation information may vary materially due to geographic latency, and SIP data are likely to vary from proprietary feeds.
One individual investor, who expressed concern related to the proposal, stated that focusing on the speed of execution only benefits high-frequency traders who can take advantage of small price discrepancies to make quick profits.
The Commission is adopting, as proposed, the requirement that average time-to-execution statistics be calculated for all order types, including non-marketable order types.
An industry group raised concerns with reporting time to execution when the size of the customer's order exceeds the size of the opposite-side bid or offer and suggested that time-to-execution statistics for marketable orders should only consider the time to execution for shares executed by a reporting firm during the time period prior to the order first becoming unmarketable.
The Commission is not adopting these commenters' suggestions to limit the application of time-to-execution statistics to take into account concerns about marketable limit orders that exceed the available quantity at the opposite side bid or offer. The Commission disagrees with restricting time-to-execution statistics so that they apply to market orders only because time-to-execution statistics will provide meaningful information for all marketable and non-marketable order types and the time it takes to execute an initially marketable limit order that becomes non-marketable is still relevant.
Individual investors and a national securities exchange supported the proposed addition of median and 99th percentile time-to-execution statistics for all order types.
The Commission agrees with the commenter that it would not be possible to aggregate median or 99th percentile time-to-execution statistics across symbols or order types.
The Commission is not adopting the commenter's suggestion that, instead of requiring median and 99th percentile time-to-execution statistics, the Commission should require the separate reporting of average time to execution with outliers and without outliers.
As another means of providing such distribution information, and consistent with the alternative that the Commission considered in the Proposing Release
The adopted time-to-execution buckets differ from the time-to-execution buckets that existed in Rule 605 prior to the amendments in two respects. First, the Commission is utilizing new time ranges for the time-to-execution buckets to make the buckets more granular in recognition of increased execution speeds and consistent with comment. As adopted, the time-to-execution bucket ranges are: (1) less than 100 microseconds; (2) 100 microseconds to less than 1 millisecond; (3) 1 millisecond to less than 10 milliseconds; (4) 10 milliseconds to less than 1 second; (5) 1 second to less than 10 seconds; (6) 10 seconds to less than 30 seconds; (7) 30 seconds to less than 5 minutes; and (8) 5 minutes or more.
Specifically, the Commission is including a time-to-execution bucket of less than 100 microseconds in order to provide visibility into differences in execution times for IOCs. Most IOCs execute in less than 100 microseconds and the distribution of some IOCs across slower time-to-execution buckets will
Under the amended rule, the Commission is adopting time-to-execution buckets at the sub-millisecond level while also adopting a timestamp convention that will not require the use of reporting increments finer than a millisecond. These two aspects of Rule 605 are not inconsistent because the time-to-execution buckets will not require reporting entities to record time in microseconds. Instead, reporting entities that record time at the millisecond-level only generally should bucket orders based on the difference between the recorded time of order receipt (or executability in the case of NMLOs) and the recorded time of execution.
Second, when calculating where an NMLO falls within a time-to-execution bucket, time to execution will be calculated from the time the order becomes executable.
Preexisting Rule 605(a)(1) required market centers to include in their monthly reports columns of detailed execution quality information. For all order types, the required statistics included information on the number of orders; cumulative number of shares; cumulative number of shares cancelled prior to execution; cumulative number of shares executed at the receiving market center and at any other venue; and average realized spread.
As described further herein, the Commission proposed to modify the execution quality statistics required for all order types and marketable order types, and to add execution quality statistics specific to non-marketable order types. As proposed, the required statistics for all order types would have included information on the number of orders; cumulative number of shares; cumulative number of shares cancelled prior to execution; cumulative number of shares executed at the receiving market center, broker, or dealer, and at any other venue; cumulative number of shares of the full displayed size of the protected bid or offer at the time of execution; average realized spread and average percentage realized spread at two time intervals; average effective spread; average percentage effective spread; and average effective over quoted spread.
Several individual investors generally supported the proposal to add new execution quality statistics.
An industry group stated that the Commission does not appear to have considered the impact of variable tick sizes for securities, as contemplated by the proposed harmonization of quoting and trading increments discussed in the Minimum Price Increments Proposing Release, on market participants' ability to compare execution quality over several months.
A group of academics stated that although some of the new disclosure requirements may be helpful for a subset of trades, they suggest limiting changes to the Rule 605 statistics to the new order size categories, including new categories for fractional shares and odd-lots, and E/Q statistics.
The Commission received many comments concerning specific execution quality statistics and discusses these comments below. Further, with respect to the proposed execution quality statistics in general, an academic suggested adding median data in addition to average data because, according to this commenter, “fat tails” can make average numbers “highly misleading.”
The Commission is adopting the proposed detailed execution quality statistics with several adjustments. In the subsections below, the Commission discusses the comments received and the execution quality statistics being adopted as they pertain to: (1) realized spread, (2) average effective spread, (3) percentage-based effective and realized spread, (4) effective over quoted spread, (5) size improvement, (6) riskless principal, (7) price improvement, and (8) relative fill rate.
Prior to these amendments, Rule 605 required calculation of average realized spread for executions of all covered orders and this metric was calculated by comparing the execution price of an order and the midpoint of the NBBO as it stands 5 minutes after the time of order execution.
The Commission is adopting the proposed realized spread time horizons of 15 seconds and 1 minute for the realized spread statistics required for all order types. After considering comments received, the Commission is also adding shorter time horizons of 50 milliseconds and 1 second, and additionally retaining preexisting Rule 605's requirement to calculate realized spread 5 minutes after the time of order execution. In total, there will be five realized spread time horizons: 50 milliseconds, 1 second, 15 seconds, 1 minute, and 5 minutes.
A national securities exchange, an investor advocacy group, and an individual investor supported the proposed changes to realized spread.
The Commission observes that commenters to the original Rule 11Ac1-5 proposal also questioned the usefulness of a realized spread statistic and recommended that it be eliminated.
The Commission stated in the Proposing Release that to the extent realized spreads capture adverse selection costs faced by liquidity providers, they provide a measure of the potential profitability of trading for liquidity providers.
Several commenters discussed the proposed time horizons for measuring realized spread. An investor advocacy group stated the 15 second and 1 minute time horizons “better capture the reality of today's fast-paced market transactions and align well with the available academic literature.”
As discussed in the Proposing Release, requiring realized spread information at different time horizons will provide investors with relevant information for more liquid stocks and more thinly traded stocks.
The Commission replicated its realized spread analysis from the Proposing Release, using data from Q1 2023, and in both analyses the cumulative decline in realized spread captured at different time horizons varies by market capitalization.
After consideration of the comments and the Commission's original and updated analysis, the Commission is adopting two shorter time horizons (50 milliseconds and 1 second) and one longer time horizon (5 minutes, consistent with prior Rule 605) in addition to the two time horizons that were proposed (15 seconds and 1 minute).
In response to commenters critical of the Commission's basis for its selection of realized spread time horizons,
Prior to these amendments, Rule 605 required firms to calculate average effective spread for market and marketable limit order types only.
The Commission proposed to expand effective spread reporting requirements to require that firms report average effective spread statistics for all covered orders, and to modify the methodology for calculating this metric for executable NMLOs, beyond-the-midpoint limit orders, and executable stop orders.
The Commission is adopting a requirement to report effective spread statistics for marketable order types (
One broker-dealer suggested that the Commission should reconsider whether to require firms to report effective spread statistics for NMLOs because “effective spread is not widely accepted as a meaningful measure of execution quality for NMLOs.”
After consideration of the comments, the Commission is adopting a modified version of the proposed amendments. The Commission is adopting amendments that will expand effective spread reporting requirements to include marketable stop order types and midpoint-or-better order types, in addition to market and marketable limit order types as required by the preexisting rule. However, the Commission is not adopting the proposed requirement to require average effective spread statistics for all covered orders, and thus is not requiring reporting for other non-marketable order types. The Commission is also revising the proposed definition of “average effective spread” to specify that, for order executions of marketable stop order and midpoint-or-better limit orders, average effective spread is calculated from the time the order becomes executable. In effect, the adopted amendments require average effective spread for all marketable order types (
The Commission acknowledged in the Proposing Release that average effective spread for NMLOs and orders submitted with stop prices would measure something different than the average effective spread for marketable order types.
Finally, because marketable stop orders will be either market orders or marketable limit orders at the time they are triggered (
Prior to these amendments, Rule 605 statistics included the average realized spread and average effective spread for executions of covered orders, and these statistics provide dollar-based spread data.
The Commission is adopting the proposed requirement to disclose percentage-based spread statistics for average realized spread and average effective spread. However, the Commission is modifying the proposed definitions of “average percentage effective spread” and “average percentage realized spread” to use a new defined term (“average midpoint”) in the denominator. Doing so will eliminate any ambiguity about how to calculate these statistics, as described in more detail below. In addition, the Commission is making the percentage effective spread statistic applicable to marketable order types, marketable stop order types, and midpoint-or-better limit order types only, rather than all order types as proposed. Further, the Commission is adding a requirement to include an average midpoint statistic, which serves as the denominator of percentage-based spread statistics, in the detailed reports required pursuant to Rule 605(a)(1).
An investor advocacy group stated that a percentage-based spread measure would provide additional information where there is a significant price change in a security during the month.
The Commission continues to believe including percentage-based statistics for effective spread and realized spread, in addition to the dollar-based statistics in the existing report, will account for differing underlying stock prices and better facilitate comparisons of spread statistics across different time periods and securities.
A commenter stated it interpreted the definition of share-weighted average percentage spread as the ratio of share-weighted effective spread divided by share-weighted midpoint.
Specifically, “average percentage effective spread” will be defined as the average effective spread
Finally, the Commission is requiring average percentage effective spread only for marketable order types, marketable stop order types, and midpoint-or-better order types for the same reasons that the Commission is requiring average effective spread only for these order types.
Effective over quoted spread (“E/Q”) can be derived from Rule 605 reports required prior to these amendments, but the prior Rule did not require the reporting of E/Q or quoted spread.
The Commission is adopting a statistic for average E/Q, expressed as a percentage, but with a modified
A financial services firm stated that E/Q is a “very common metric used within the industry to judge execution quality” and that it “does a good job of providing a normalized comparison of price improvement relative to the price improvement opportunity.”
However, several commenters recommended that the Commission require spread-based weighting, rather than share-based weighting, for the calculation of average E/Q and indicated that the industry uses spread-based weighting when calculating E/Q.
Similarly, a financial services firm stated share-weighting detaches E/Q from the ability to understand it in the context of the opportunity for price improvement and this “opens the door for possible manipulation of results.”
An industry group and a financial services firm suggested that Rule 605 reports not include E/Q and leave it to users of the report to calculate E/Q from other statistics that are currently included in the reports.
After review of the comments, as stated above, the Commission is adopting a requirement that Rule 605 reports include a statistic for average E/Q, expressed as a percentage, but is adjusting the weighting methodology from the proposal. The Commission is adopting a spread-weighted average E/Q statistic, consistent with commenters' suggestions.
The Commission agrees with commenters that the use of a spread-weighting methodology will provide a consistent measure of E/Q that will not vary based on the specific symbols to which price improvement is allocated.
The adopted definition of “average quoted spread” is the same as the description of “total quoted spread” that was embedded in the proposed definition of “average effective over quoted spread,” with two modifications from the embedded definition as proposed.
In addition, because effective spread is a necessary input into E/Q, the Commission is not adopting the application of E/Q to non-marketable order types other than midpoint-or-better order types (and marketable stop order types, which are generally non-marketable orders upon receipt).
Prior to the amendments, Rule 605 reports included price improvement metrics but did not include any statistics that directly measured whether orders received an execution of more than the displayed size at the quote.
The Commission is adopting a modified version of the proposed size improvement benchmark metric that measures the displayed size at the time of order receipt (or the time the order becomes executable for midpoint-or-better order types) instead of measuring the displayed size at the time of order execution as proposed. The Commission is also modifying the proposed size improvement benchmark metric by having it apply only to marketable order types, marketable stop order types, and midpoint-or-better order types rather than all order types, as proposed. Finally, based on comments received, the Commission is adopting an additional size improvement metric (as discussed below, “size improved outsized shares”) that was not part of the proposal and indicates the amount of size improvement in those instances in which an order could have received size improvement.
Several commenters supported adding a requirement that Rule 605 reports include the proposed size improvement benchmark metric.
An industry group stated that it agreed with the Commission on the value of including size improvement statistics, but opposed measuring size improvement based on the number of shares available at the time of execution.
Further, this commenter stated that a market could have protected bids and offers that are not represented in the NBBO but are at the same price as the NBBO, and these bids and offers are included in Level 1 market data.
A broker-dealer stated that the proposal “falls well short of including the necessary statistics to reflect the benefits of size improvement.”
As discussed in the Proposing Release, this commenter also suggested in a petition for rulemaking to the Commission that Rule 605 should include an alternative metric, referred to as “real price improvement” (“RPI”), that combines price improvement with size improvement by using as its benchmark a price that reflects the equivalent size of shares-including depth of book quotes and odd-lot quotes.
In commenting on this rulemaking, this commenter again suggested that the Commission add an RPI benchmark or metric to Rule 605 and responded to the Commission's statement that such measure could be too costly for market participants who would need to subscribe to exchanges' depth-of-book data feeds.
An investor advocacy group recommended eliminating the proposed size improvement metric until such a time when the public data feed contains more information regarding the depth of quotations.
The Commission considered the comments and, in response to commenter feedback, is modifying the proposed size improvement benchmark metric and adding an additional size improvement metric. Further, the Commission is requiring the disclosure of both size improvement metrics only for marketable order types, marketable stop order types, and midpoint-or-better order types, rather than for all order types as proposed. To implement these changes, the Commission is adopting a defined term for the size improvement benchmark metric—the “order size benchmark.” As adopted, “order size benchmark” means the number of shares of the full displayed size of all protected bids at the same price as the national best bid at the time of order receipt, in the case of a market or limit order to sell, or the full displayed size of all protected offers at the same price as the national best offer at the time of order receipt, in the case of a market or limit order to buy.
First, in response to the commenter who recommended the size improvement benchmark be captured at the time of order receipt,
Second, the Commission is adopting a modification to make clear that the order size benchmark measures the full displayed size of all shares at the same price as the protected bid or offer (as applicable).
The Commission considered commenter's suggestions for alternative size improvement metrics.
The Commission agrees with the commenter that it would provide useful information to add a size improvement metric that will measure the level of size improvement in those instances in which the order presents an opportunity for size improvement.
Where the size improved outsized shares will differ from information derivable from other execution quality statistics in final Rule 605 is in cases where there is size dis-improvement, which may occur when some shares execute at prices worse than the quote or do not execute even though a sufficient number of shares are displayed at the quote. With respect to the information that can be derived from other Rule 605 statistics, as discussed in the Proposing Release, the order size benchmark can be compared to the number of shares executed at or better than the quote to calculate whether the reporting entity filled any portion of the customer order at the opposite side of the NBBO (or better), even when insufficient depth was available at that price (“net size improvement”).
The ability to compare size improved outsized shares and net size improvement will contain useful information for market participants as well. For example, market participants will be able to use this variable to tell the difference between a market center that has a net size improvement value
Finally, the Commission is limiting the application of the size improvement metrics to marketable order types, marketable stop order types, and midpoint-or-better order types, rather than to all order types as proposed. The order size benchmark is more useful in conjunction with information about the number of shares executed at, better than, or worse than the NBBO,
The Commission is not adopting a metric based on RPI.
In response to the commenter's suggestion that the Commission should not adopt Rule 605 metrics concerning size improvement, among others, because of concerns about implementation costs and adoption speed,
In effecting riskless principal transactions, a market center or broker-dealer submits a principal order to an away market center in order to fulfill a customer order. Upon execution at the away market center, the market center or broker-dealer that initially received the customer order (
The Commission is adopting the requirement that the calculation of the number of shares of covered orders executed at the receiving market center, broker, or dealer will exclude shares executed on a riskless principal basis as proposed, for the reasons described in the Proposing Release.
A broker-dealer requested clarification regarding the Commission's proposed changes to the treatment of riskless principal orders.
The Commission agrees with the commenter that the execution quality statistics for these shares are already reported as part of Rule 605 reports (
Preexisting Rule 605 required the reporting, for marketable order types, of: (1) the cumulative number of shares of covered orders (a) executed with price improvement, (b) executed at the quote, and (c) executed outside the quote; (2) for shares executed with price improvement, the share-weighted average amount per share that prices were improved; and (3) for shares executed outside the quote, the share-weighted average amount per share that prices were outside the quote.
The Commission proposed to add a definition for “best available displayed price,” which would include the best priced odd-lot if that price is inside the NBBO and to provide additional price improvement statistics related to the best available displayed price.
The Commission further proposed to add two defined terms—”executed outside the best available displayed price” and “executed with price improvement relative to the best available displayed price”—to classify order executions based on their execution price relative to the best available displayed price.
The Commission is adopting the definition of “best available displayed price” as proposed. Further, the Commission is requiring price improvement statistics relative to the best available displayed price, in addition to price improvement statistics relative to the NBBO, for marketable order types and midpoint-or-better order types as proposed.
An investor advocacy group agreed with the Commission that additional price improvement statistics specifically related to the best available displayed price would allow market participants to evaluate how well market centers and broker-dealers perform in executing covered orders relative to the best available displayed price.
However, several commenters disagreed with the proposed price improvement statistics based on the best available displayed price because, according to these commenters, these statistics could be “misleading.”
Another broker-dealer suggested that the Commission reconsider the use of execution quality statistics based on best available displayed price because the use of two sets of execution quality statistics with differing reference points would be “confusing to retail investors.”
After consideration of the comments, the Commission is adopting the definition of “best available displayed price” and the addition of price improvement statistics based on this price for marketable order types and midpoint-or-better order types as proposed. As discussed in the Proposing Release, requiring price improvement statistics relative to the best available displayed price in the market, whether that is the NBBO or the best odd-lot order to buy or sell, will enhance the ability of market participants to evaluate the performance of market centers and broker-dealers.
Under the MDI Rules, odd-lot information will include pricing information about odd-lots priced better than the NBBO and competing consolidators will be able to offer a product that contains information on the best priced odd-lot on each exchange.
The Commission disagrees with commenters' concerns that price improvement statistics relative to the best available displayed price will be misleading or confusing.
Prior to these amendments Rule 605 did not contain any execution quality metrics specific to non-marketable order types. Recognizing the need for more meaningful measures of execution quality for NMLOs and orders submitted with stop prices, the Commission proposed requiring additional information for executable NMLOs, executable stop orders, and beyond-the-midpoint limit orders. Specifically, the Commission proposed to require the reporting of the number of orders that received either a complete or partial fill.
The Commission did not receive comment on the proposal to report the number of orders that received either a complete or partial fill. For the reasons discussed in the Proposing Release, the Commission is adopting Rule 605(a)(1)(iii)(A) as proposed, with one correction to the rule text.
With respect to the proposed metric based on the cumulative number of shares executed regular way at prices that could have filled the order while it was in force, an industry group stated that it would be fairer to measure a
After consideration of the comments, the Commission is adopting the requirement for reporting of the cumulative number of shares executed regular way at prices that could have filled the order while the order was in force as proposed, for the reasons discussed in the Proposing Release.
Prior to the amendments, Rule 605 required market centers to produce detailed execution quality statistics and make this data available via large electronic data files, as required by the Rule 605 NMS Plan.
Proposed Rule 605(a)(2) would have required every market center, broker, or dealer
The Commission proposed that the summary report be made available using the most recent version of the XML schema and the associated PDF renderer published on the Commission's website.
The Commission is adopting Rule 605(a)(2), with modifications from the proposal, to require that every market center, broker, or dealer produce a summary execution quality report in addition to the more detailed report required by Rule 605(a)(1).
Several commenters supported the proposal to produce a summary report on the basis that investors would benefit from the greater access to execution quality data.
In contrast, other commenters, including broker-dealers, stated that a summary report could mislead investors, especially if the metrics required by Rule 605(a)(2) do not adequately account for differences in broker-dealer business models and customer bases.
The Commission acknowledges that differences in execution quality can be driven by differences between reporting entities other than differences in their skills at handling and/or executing orders, such as differences in the characteristics of their order flow. Any particular market center or broker-dealer's order flow may be made up of a different mixture of securities, order types, and order sizes, which may impact that market center or broker-dealer's execution quality statistics
Although a commenter suggested that the summary reports be “normalized across brokers” in order to reflect differences in order flow that may impact a broker's execution quality, including “the difficulty of order flow the broker is handling,”
Another broker-dealer stated that the detailed Rule 605 reports are often difficult for retail investors to analyze.
Finally, according to an individual investor, the information contained in the proposed summary report is not useful to investors, and “[m]ost retail investors lack the knowledge and expertise to interpret these reports and use them to make informed trading decisions.”
Moreover, the changes that the Commission is making to the summary report in response to commenters, including breaking out the statistics into notional size categories and adding average percentage realized and quoted spreads, will provide more information about the type of order flow received by the reporting entity. The increased amount of data required by final Rule 605(a)(2) will add some complexity to the adopted summary report as compared to the proposed summary report, however, based on such information, users of the report will be able to identify reporting entities with more comparable order flow and have greater context to understand the differences in execution quality statistics across market centers or broker-dealers with less comparable order flow.
The summary report contains a selection of execution quality metrics for interested parties to assess, rather than imposing a single metric that might require a subjective judgment or obscure meaningful differences in execution quality among broker-dealers or market centers. Despite being an abbreviated overview of the more detailed Rule 605(a)(1) report, as with the detailed report, independent analysts, consultants, broker-dealers, the financial press, and market centers likely will respond to the needs of investors by analyzing the disclosures and producing even more digestible information using data from the summary report, so that the broader public, including those that may not read the summary report, will benefit.
The Commission received comments discussing the calculation and utility of individual proposed statistics in the proposed summary report, along with comments recommending the addition of new statistics or requesting clarification or confirmation of how proposed statistics should be calculated, as described further below.
After review of the comments, the Commission is adopting the statistics in Rule 605(a)(2) largely as proposed, with modifications to the computation of certain statistics. The Commission is also adding new execution quality statistics to the summary report.
The Commission agrees with one industry group that stated it is “important to ensure that the summary report provides the necessary information to allow for a fair comparison across reporting firms.”
Some commenters stated that any statistic included in the summary report or necessary to calculate a statistic in the summary report should also be included in the Rule 605(a)(1) report, so that the statistics in the summary report may be derived from the detailed Rule 605(a)(1) report.
A broker-dealer suggested that the summary report may be more informative if it differentiated between retail investors and professional customers because the nature of each order flow is different and segmentation would allow retail investors to obtain execution quality statistics for similar types of orders.
Another commenter argued that the summary report should limit the orders in the report to those with a notional value of less than $200,000.
The Commission proposed that within each section of the summary report, each symbol would have been equally weighted based on share volume. The Commission stated in the Proposing Release that equal weighting of each symbol would facilitate the comparability of execution quality statistics among market centers or broker-dealers that receive for execution different mixes of stocks and prevent the nature of the stocks traded from making it more difficult to determine how the reporting entity performed with respect to execution quality for the particular mix of orders that it received for execution.
One industry group, however, stated that the summary report statistics should not be equally weighted by symbol based on share volume because this approach would result in misleading data being provided to customers.
After considering the comments, the Commission is not requiring that the summary report be equally weighted by symbol based on share volume as proposed.
The summary report required by final Rule 605(a)(2) includes sections for NMS stocks in the S&P 500 Index and for all other NMS stocks. Within each section, the final rule requires that the summary report divide market and marketable limit orders into categories based on eight notional order size buckets and an aggregated bucket for orders with a notional value less than $200,000 (as described below). The Commission is requiring that the summary report include the following statistics as proposed, as described below: (i) percentage of shares executed at the quote or better; (ii) percentage of shares that received price improvement; (iii) average percentage effective spread; and (iv) average execution speed, in milliseconds. The Commission is also requiring that the summary report include the following statistics with modifications from the proposal, as described below: (i) average order size in shares; (ii) share-weighted average percentage price improvement; and (iii) average effective spread divided by the average quoted spread, expressed as a percentage. Finally, the Commission is requiring that the summary report include the following additional statistics that were not part of the
One industry group recommended that “average order size in shares for the summary report be calculated (for the covered orders that must be reported in the summary report) by dividing the aggregate number of shares of covered orders by the number of orders.”
After reviewing the comments, the Commission is retaining the “average order size” metric in the summary report largely as proposed with a modification to state that average order size will be reported in number of shares because the proposed rule was ambiguous about whether average order size would have been measured in number of shares or notional value.
However, the Commission also agrees with commenters that the average order size in notional value is relevant to understanding relative order size. For example, one broker-dealer stated that certain orders may be harder to execute, “for example, when market liquidity is scarce or when the customers have difficult (
With respect to the categorization of the data by notional order size, the statistical information in the summary reports for market orders and marketable limit orders is divided into eight notional order size ranges: less than $250; $250 to less than $1,000; $1,000 to less than $5,000; $5,000 to less than $10,000; $10,000 to less than $20,000; $20,000 to less than $50,000; $50,000 to less than $200,000; and $200,000 or more. These notional order size ranges correspond with the notional order size ranges that are used in the detailed reports required pursuant to Rule 605(a)(1).
As an additional measure of categorization by notional order size, the summary report also includes overall statistics for non-block size market and marketable limit orders—
Finally, because average order size in both shares and notional value are the average order size received rather than executed, the Commission is modifying the first sentence of Rule 605(a)(2) to remove the words “executions of” in the clause referring to summary report “providing summary statistics on all
Average percentage price improvement will be measured as a percentage of the midpoint of the national best bid and national best offer at the time of order receipt.
After reviewing the comments, the Commission is: (1) adopting average E/Q as a metric on the summary report largely as proposed, while adjusting the weighting methodology from share-based weighting to spread-based weighting as suggested by commenters;
An industry group stated that order flow characteristics such as the amount of “informed” order flow received by a broker-dealer and the size of an order relative to the average daily volume of a stock are factors outside of the control of order-handling parties but can impact the amount of price improvement received.
The Commission agrees with the commenters that viewing the average realized spread in the summary report will be useful to investors. The average realized spread metrics for 15 seconds and 1 minute after the time of execution were proposed for inclusion in the detailed report required pursuant to Rule 605(a)(1) and will similarly allow users of the summary report to differentiate between various types of order flow.
An industry group further suggested adding share-weighted average execution price as a metric to the summary report.
As discussed below, commenters supported the production of the summary report in a human-readable format. A financial services firm supported the proposal to require a standardized summary report in a “user-friendly format.”
After review of the comments, the Commission is requiring the use of PDF format as proposed and modifying proposed Rule 605(a)(2) to require that market centers and broker-dealers also produce the summary report in CSV format instead of XML format as suggested by the commenter.
The Commission further agrees with the industry group commenter that investors will benefit from the summary report being provided in CSV format and has modified proposed Rule 605(a)(2) to require that the summary report required therein be provided in CSV format, instead of XML, and also provided using the associated PDF renderer. As would have been the case using XML, the requirement to use the Commission's schema for CSV format will result in the summary report data being provided in a format that is structured and machine-readable, which allows users to more easily process and analyze the data, and provides consistency of format across reports. Requiring a CSV file format also provides market participants and other interested parties with a simple and versatile format that is viewable in many programs. Like XML (and PDF), CSV is “open standard,” which is a term that is generally applied to technological specifications that are widely available to the public, royalty-free, at no cost. However, the Commission agrees with the commenter that a CSV file format may allow investors and other members of the public to compare summary data across firms more readily than XML. Investors and other members of the public may find a CSV file format preferable to an XML file format because the data can be more readily viewed and analyzed in widely used spreadsheet applications.
An industry group and an association of securities regulators both strongly encouraged the Commission to provide investor education or testing to ensure that the summary report is useful.
The Commission does not agree that prescribed testing or investor focus groups or roundtables are needed at this time. Rule 605 has been in existence for over two decades. Although larger broker-dealers will be required to produce the detailed report under Rule 605(a)(1) for the first time, and both market centers and larger broker-dealers will be required to create and post a summary report under Rule 605(a)(2) for the first time, investors should be broadly familiar with many of the execution quality metrics that the summary report is intended to highlight. Further, many commenters, including individuals, supported the proposed summary report as it provides greater access to execution quality data.
Some commenters suggested that the Commission directly provide educational resources to individual investors related to the final Rule 605 amendments. However, many market participants, in addition to the Commission,
Prior to these amendments, the requirements for the dissemination of the market center report required by Rule 605 were set forth in paragraphs (a)(2) and (3) of Rule 605.
Rule 605(a)(2), prior to these amendments, also specified that the detailed reports required by Rule 605(a)(1) must be posted on an internet website that is free and readily accessible to the public for a period of three years from the initial date of posting.
Finally, prior to these amendments, Rule 605(a)(3) specified that the detailed report required by Rule 605(a)(1) must be made available within one month after the end of the month addressed in the report.
The Commission is updating these provisions of preexisting Rule 605 by reorganizing paragraphs (a)(2) and (3) of preexisting Rule 605 into amended paragraph (a)(3) and new paragraphs (a)(4) through (6) as proposed.
Rule 605(a)(3) directs the SROs to act jointly in establishing procedures for market centers, brokers, and dealers to follow in making available to the public the detailed report under Rule 605(a)(1) and summary report under Rule 605(a)(2). The Rule 605 NMS Plan establishes procedures for market centers to make data available to the public in a uniform, readily accessible, and usable electronic form.
With respect to report formatting, an investor advocacy group stated that header data should be included in the Rule 605 reports, arguing that “it is impossible to understand the reports” without looking separately to published Commission guidance.
In the event that an amendment to the Rule 605 NMS Plan establishing
In the Proposing Release, the Commission solicited comment on whether to require centralized posting of Rule 605 reports and discussed as an alternative that instead of, or in addition to, having market centers and larger broker-dealers post Rule 605 reports to their websites, the Commission could require these reporting entities to submit their Rule 605 reports to a centralized electronic system, which would then make these reports available to market participants.
Specifically, the Commission considered two options for how to implement a centralized electronic system. One option would have been for the Commission to require that the Plan Participants establish procedures pursuant to the Rule 605 NMS Plan to provide for the creation and maintenance of a centralized electronic system to serve as a repository for Rule 605 reports and make such reports available for viewing and downloading in a manner that is free and readily accessible to the public.
Several commenters supported the centralized posting of Rule 605 reports (summary and detailed).
The Commission has considered the comments but is not adopting a requirement for centralized posting of Rule 605 reports for a number of reasons. While several commenters supported the goal of centralizing Rule
The changes to Rule 605 discussed herein will expand the scope of the reports and improve the usefulness of the execution quality statistics provided and made public. For example, the addition of a reporting requirement for larger-broker dealers will provide investors with information that they could use to compare the execution quality provided by different broker-dealers. The current disclosure requirements set forth in the amended rule and under the Plan will help ensure that implementation of final Rule 605 will proceed in a timely manner.
As an alternative to the proposed Rule 605 amendments, the Commission asked for comment on using CAT data to have either the Commission or the CAT NMS Plan Processor
A few commenters supported the use of CAT data to produce Rule 605 reports.
The Commission recognizes the value in having one entity calculate the statistics required under Rule 605 and produce execution quality disclosures because it could result in more standardized data. This in turn could help facilitate one of the primary goals of the Rule 605 amendments—to enhance order execution quality reporting to better enable investors to compare and evaluate execution quality among different market centers and larger-broker-dealers. This approach could also allow for the publication of execution quality data for all broker-dealers instead of just those that meet the customer account threshold. However, there are potentially significant costs and time delays associated with implementation of this alternative. The obstacles associated with authorizing and enabling FINRA CAT to prepare execution quality disclosures could hinder the ability of investors and market participants more broadly to have ready access to enhanced execution quality information. Rule 605, as adopted, will require updated disclosure within a comparatively shorter timeframe.
If the Commission in the future determines that CAT data should be utilized to produce execution quality disclosures, the Commission could also consider whether to eliminate the requirement that market centers and broker-dealers themselves produce Rule 605 reports in that context.
An industry group stated that “[t]o the extent FINRA/CAT are not utilized to produce Rule 605 reports, the Commission or FINRA should be required to provide a publicly available data template that specifies
Upon the compliance date of the amendments to Rules 600 and 605, the Commission exemptive relief and staff statements listed below will be withdrawn. To the extent any staff statement is inconsistent with or conflicts with the requirements of Rule 600 or Rule 605, as amended, even if not specifically identified below, those statements are superseded.
As discussed in section III.A.1, the Commission is incorporating the Opening Exemption into the definition of covered order with respect to market or limit orders received during regular trading hours at a time when an NBBO is being disseminated.
In addition to the Opening Exemption, the Market Systems Exemptive Letter included a separate exemption from Rule 605 for orders received during a time when the consolidated best bid and offer (“BBO”) reflects a spread that exceeds $1 plus 5% of the midpoint of the consolidated BBO (“Spread Width Exemption”).
As discussed in section III.B.1, commenters supported the inclusion of larger-sized orders, which necessarily requires the recission of the Large Order Exemptive Relief.
Finally, two additional staff FAQs are specifically superseded by Rule 605, as amended, and the guidance contained in this release.
The Commission is providing a transition period between when the amendments to Rule 605 are adopted and when the changes are fully implemented. As discussed above, the Rule 605 NMS Plan establishes procedures for market centers to make data available to the public in a uniform, readily accessible, and usable electronic form.
The Proposing Release did not include a proposed compliance date for final Rule 605, but several commenters recommended that the Commission provide a sufficient implementation period for the proposed Rule 605 amendments, including an industry group that recommended a minimum of one year and an industry group that recommended a minimum of one year from “approval of applicable Plan amendments.”
The amendments to Rule 605 discussed herein shall become effective 60 days after the date of publication in the
As part of the implementation process, and pursuant to the requirement in paragraph (a)(3) of Rule 605 as amended directing the SROs to act jointly in establishing procedures for market centers, brokers, and dealers to follow in making Rule 605 reports available to the public, the Rule 605 NMS Plan Participants (16 national securities exchanges and one national securities association) will need to file with the Commission a proposed Rule 605 NMS Plan amendment updating the Plan to reflect the amendments made herein to Rule 605, pursuant to Rule 608(a)(1) of Regulation NMS. The NMS Plan Participants are the appropriate parties to update the Rule 605 NMS Plan provisions given their experience in administering the Rule 605 NMS Plan since its approval by the Commission in 2001. Many of the detailed issues relating both to the format of the reports under Rule 605 as amended, and to the means of access to the reports, are appropriately addressed in the context of approval of an amendment to the
In accordance with Rule 605 as amended, the Rule 605 NMS Plan amendment will need to establish procedures for market centers, brokers, and dealers to follow in making Rule 605 reports publicly available.
In addition, market centers, brokers, and dealers will need to make necessary preparations to be in a position to comply with Rule 605 as amended by the Compliance Date.
The Compliance Date is designed to allow time for both an amendment to the Rule 605 NMS Plan and time for brokers, dealers, and market centers time to comply with Rule 605 as amended.
Notwithstanding the Compliance Date, reporting entities will not be able to calculate the price improvement statistics relative to best available displayed price that will be required to be included in the detailed reports required by Rule 605(a)(1) for marketable order types, marketable stop orders, and midpoint-or-better order types until odd-lot order information is made available pursuant to an effective transaction reporting plan or effective national market system plan.
Certain provisions of the rule amendments contain “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995 (“PRA”).
Views of commenters relevant to the Commission's analysis of the reporting burdens imposed by the collection of information for Rule 605 as proposed are discussed below. In addition, certain estimates have been modified, as necessary, to conform to the adopted amendments and to reflect the most recent data available to the Commission.
The amendments create burdens under the PRA by: (1) adding new categories of respondents to the existing collection of information and (2) modifying the requirements of such existing collection of information. The
The categories of new respondents subject to Rule 605, as amended, are larger broker-dealers and new market centers, consisting of SDPs and entities that act as market centers for orders that were previously not covered by Rule 605,
The amendments modify both the scope of the standardized monthly reports required under Rule 605 and the required information. Rule 605, as amended: (1) expands the definition of “covered order” to include certain orders submitted outside of regular trading hours, certain orders submitted with stop prices, and non-exempt short sale orders; (2) modifies the existing order size categories to base them on notional value as well as whether an order is for less than a share, for an odd-lot, or for a round lot or greater rather than number of shares; (3) creates four new order type categories (marketable IOCs, executable market orders submitted with stop prices, executable marketable limit orders submitted with stop prices, and executable non-marketable limit orders submitted with stop prices) and replaces three existing categories of non-marketable order types with four new categories of order types (midpoint-or-better limit orders, midpoint-or-better IOCs, executable NMLOs, and NMLO IOCs); (4) modifies current time-to-execution reporting buckets; (5) modifies realized spread statistics to require realized spread to be calculated after 50 milliseconds, 1 second, 15 seconds, 1 minute, and 5 minutes; and (6) requires new statistical measures of execution quality including average effective spread divided by quoted spread, percentage effective and realized spread statistics, a size improvement benchmark and statistic, and certain statistical measures that could be used to measure execution quality of NMLOs. The amendments require all reporting entities to make a summary report available that will be formatted using the most recent versions of the schema for CSV format and the associated PDF renderer as published on the Commission's website. Finally, as a result of the amendments to Rule 605, Rule 605 NMS Plan Participants will need to amend the Rule 605 NMS Plan to account for the new data fields.
The purpose of the information collection is to make information about order execution practices available to the public and allow investors, broker-dealers, and market centers (which include exchange markets, OTC market makers, and ATSs)
The collection of information obligations of Rule 605 applies to larger broker-dealers and market centers that receive covered orders in national market system securities (collectively, “reporting entities”). The Commission estimates that there are approximately 228 reporting entities (91 OTC market makers, plus 16 national securities exchanges, 1 national securities association, 87 exchange market makers, and 33 ATSs) under Rule 605 prior to these amendments.
In addition, the amendments to Rule 605 will require the Rule 605 NMS Plan Participants (16 national securities exchanges and 1 national securities association) to prepare and file an amendment to the Rule 605 NMS Plan.
Rule 605, as amended, will require broker-dealers and market centers to make available to the public monthly order execution reports in electronic form. Broker-dealers and market centers retain most, if not all, of the underlying raw data necessary to generate these reports in electronic format or, if they do not, may obtain this information from publicly available data sources.
The currently approved PRA for prior Rule 605 estimates that each respondent spends 6 hours a month to collect the data necessary to generate the reports, or 72 hours per year.
One commenter stated that the proposal did not include burdens related to business-line personnel or technical staff.
In response to the commenters, the Commission is adjusting its estimated annual burdens to account for work to be performed by technical staff, as described below. In addition, the Commission is adjusting the hourly rates used to monetize burden hours in order to account for recent inflation rates.
The Commission estimates that the initial and ongoing burdens will be different for those respondents that are already required to prepare reports and for new respondents. The Commission estimates that Rule 605 amendments will result in an initial burden for current respondents of 50 hours per respondent
The Commission estimates that Rule 605 amendments will result in an initial burden for new respondents of 100 hours for each respondent
The Commission estimates that in lieu of preparing both summary and detailed monthly reports in-house, an individual respondent could retain a service provider to prepare its monthly reports for between approximately $3,000 and $3,500 per month or approximately $36,000 to $42,000 per year.
Finally, the 16 national securities exchanges and 1 national securities association will need to amend the Rule 605 NMS Plan to account for the new data fields required to be reported and to include references to larger broker-dealers in addition to market centers. The Commission is modifying the estimates for the initial burden and costs to the SROs to file the amendment to eliminate the per respondent burden for each SRO and instead estimate the burden for the SROs collectively because the respondents would file this amendment jointly, rather than individually, in connection with their status as participants in the effective national market system plan.
The Commission estimates that there will be outsourcing of legal time to develop and draft the Rule 605 NMS Plan amendment in order to account for additional data fields and reporting parties. The Rule 605 NMS Plan amendment will be an update to the list of formats and fields to track the data elements set forth in the Rule and add references to broker-dealers subject to the Rule, and therefore the Commission estimates the hours necessary to develop and draft the amendment will be significantly lower than other recent NMS plan amendments. The Commission estimates that the plan participants will outsource 34 hours of legal time to prepare and file an amendment to the Rule 605 NMS Plan, at an average hourly rate of $575.
The Commission currently estimates a total initial burden of 23,019 hours for all respondents and a total annual burden of 45,276 hours for all respondents.
The Commission is mindful of the economic effects that may result from these amendments to Rule 605, including the benefits, costs, and the effects on efficiency, competition, and capital formation.
In 2000, when the Commission adopted Rule 11Ac1-5, which was later redesignated as Rule 605, it stated that the rule should facilitate comparisons across market centers and provoke more vigorous competition on execution quality and broker-dealer order routing performance.
The Commission recognizes that these amendments to Rule 605 will entail additional costs to market centers and broker-dealers of disclosing the required
The Commission has considered and is describing the economic effects of these amendments to Rule 605 and wherever possible has quantified the likely economic effects of these amendments. The Commission has incorporated data and other information, such as academic literature, to assist in the analysis of the economic effects of these amendments. However, because the Commission does not have, and in certain cases does not believe that it reasonably can obtain, data that may inform on certain economic effects, the Commission is unable to quantify those economic effects. Further, even in cases where the Commission has some data, the number and type of assumptions necessary to quantify certain economic effects would render any such quantification unreliable. Our inability to quantify certain costs, benefits, and effects does not imply that such costs, benefits, or effects are less significant.
The information disclosed under Rule 605 has provided significant insight into execution quality at different market centers.
The Commission does not believe that improvements to the preexisting Rule 605 metrics are likely to be achieved through a market-based solution.
Furthermore, it may be difficult for certain market participants to compute accurate and relevant execution quality metrics from data sources other than Rule 605 reports, due to the lack of granularity and significant time delay of many other publicly available datasets, which can lead to imprecise or stale measures. This limits certain market participants' ability to conduct analyses that examine and compare execution quality across market centers to inform investors. Moreover, even if execution quality information were voluntarily reported by market centers, there may also be limits to market participants' incentives to access it. For example, even if a subset of market centers is able to coordinate on and produce a standardized set of voluntary execution quality metrics, the ability of market participants to use this measure to make comparisons across reporting entities would depend on the subset of reporting entities that choose to report it. If this subset is not of a significant enough size, there may be few incentives for market participants to access the information.
In addition to modernizing the content of Rule 605, expanding the scope of entities that will be required to prepare Rule 605 reports to include larger broker-dealers will result in benefits that are unlikely to be achieved absent the amendments.
As with market centers, most broker-dealers also do not necessarily have incentives to produce public and standardized execution quality reports and, therefore, are subject to the same market failures identified in the Rule 11Ac1-5 Adopting Release and described above. Furthermore, as discussed above in the context of market centers, even if broker-dealers are incentivized to produce execution quality reports, for example for marketing purposes or to protect against reputation loss, there are few incentives for broker-dealers to provide execution quality information that is standardized.
One commenter stated that vendors could provide a market-based solution for producing comprehensive metrics and could compete for business.
The baseline is the status quo against which the costs, benefits, and the effects on efficiency, competition, and capital formation of these amendments are measured. This baseline consists, first, of the regulatory baseline, which frames both investors' access to execution quality information under Rule 606 and preexisting Rule 605 and market participants' access to market data, both currently and as expected under the
Rule 605 requires reporting entities to make available, on a monthly basis, standardized information concerning execution quality for covered orders in NMS stocks; prior to these amendments, these reporting entities included only market centers.
In addition, the execution quality information required by Rule 605 pertains to several different aspects of execution quality, namely, execution prices, execution speeds, and fill rates. Prior to these amendments, this information on execution prices included, for market orders and marketable limit orders, the average effective spread,
The Rule 605 NMS Plan establishes procedures for market centers to make data available to the public in a uniform, readily accessible, and usable electronic form.
Under Rule 606, broker-dealers are required to identify the venues, including market centers, to which they route customer orders for execution.
When the Commission adopted the predecessor to Rule 606, it was intended to supply investors with information on where their orders are routed, which could be used along with information from Rule 605 about the quality of execution from the market centers to which their orders are routed.
Following amendments to Rule 606 in 2018,
In 2020, the Commission adopted a new rule and amended existing rules to establish a new infrastructure for consolidated market data,
The Commission received comments regarding uncertainty over the market effect of the MDI Rules, once implemented, and how this will affect the baseline assumptions of Rule 605, as amended.
Consolidated market data are made widely available to investors through the national market system, a system set forth by Congress in section 11A of the Exchange Act
Among other things, the unimplemented MDI Rules update and expand the content of consolidated market data to include: (1) certain odd-lot information;
In the MDI Adopting Release, the Commission established a transition period for the implementation of the MDI Rules.
The Operating Committees of the CTA/CQ Plan and UTP Plan filed the MDI Plan Amendments on November 5, 2021.
Given that the MDI Rules have not yet been implemented, they have not affected market practice and therefore data that would be required for a quantitative analysis of a baseline that includes the effects of the MDI Rules is not available. It is possible that the baseline (and therefore the economic effects relative to the baseline) could be different once the MDI Rules are implemented. The following discussion reflects the Commission's assessment of the anticipated economic effects of the MDI Rules described in the MDI Adopting Release as they relate to the baseline for the adoption of these amendments.
The Commission anticipated that the new round lot definition will result in narrower NBBO spreads for most stocks with prices greater than $250 because, for these stocks, fewer odd-lot shares will need to be aggregated together (possibly across multiple price levels
The Commission also anticipated that the MDI Rules could result in a smaller number of shares at the NBBO for most stocks in higher-priced round lot tiers.
The new round lot definition will result in fewer odd-lot orders in stocks with prices greater than $250, as some orders that were defined as odd-lots prior to the MDI Rules are now defined as round lots. At the same time, the MDI Rules may also result in a higher number of odd-lot trades, as the inclusion of odd-lot quotes that may be priced better than the current NBBO in consolidated market data may attract more trading interest from market participants that did not have access to this information prior to the MDI Rules.
The MDI Rules may have implications for broker-dealers' order routing practices. For those market participants that rely solely on SIP data for their routing decisions and that choose to receive the expanded set of consolidated market data, the Commission anticipated that the additional information contained in consolidated market data will allow them to make more informed order routing decisions. This in turn would help facilitate best execution, which would reduce transaction costs and increase execution quality.
The MDI Rules may also result in differences in the baseline competitive standing among different trading venues, for several reasons. First, for stocks with prices greater than $250, the Commission anticipated that the new definition of round lots may affect order flows as market participants who rely on consolidated data will be aware of quotes at better prices that are currently in odd-lot sizes, and these may not be on the same trading venues as the one that has the best 100 share quote.
Second, national securities exchanges and ATSs have a number of order types that are based on the NBBO, and so the Commission anticipated that the changes in the NBBO caused by the new round lot definitions may affect how these order types perform and could also affect other orders with which they interact.
Third, the Commission anticipated that, as the NBBO narrows for securities in the smaller round lot tiers, it may become more difficult for the retail execution business of wholesalers to provide price improvement and other execution quality metrics at levels similar to those provided under a 100 share round lot definition.
Where implementation of the above-described MDI Rules may affect certain numbers in the baseline, the description of the baseline below notes those effects.
Several commenters requested that the Commission consider interactions between the economic effects of the proposal to amend Rule 605 and other recent Commission proposals.
In addition, commenters stated that there were overlapping compliance costs between the final amendments and the proposals that have not been adopted: in particular, the Order Competition Rule Proposing Release, the Regulation Best Execution Proposing Release, and the Minimum Pricing Increments Proposing Release.
In a related comment, one commenter stated that the other market structure proposals should be delayed for a period sufficient to analyze the metrics under the amended Rule 605 reporting requirements, to establish an updated baseline for the other rules' benefits and costs and—if the other rules are adopted—to accurately measure their impact.
When a customer places an order in an NMS stock with a broker-dealer, the broker-dealer acts as an agent on behalf of that customer, to whom the broker-dealer owes a duty of best execution.
Standardized execution quality information, such as the information available from Rule 605 reports, alleviates these information asymmetries.
Information on the execution quality obtained by broker-dealers is particularly important for investors. As broker-dealers that route customer orders have many choices about how and where to route orders for execution,
Some information asymmetries are not fully addressed through the use of aggregated execution quality information, such as that available through Rule 605 (both prior to and after these amendments), because the principal is not able to use these data to observe the execution quality that the agent achieved for the principal's individual orders. However, the principal is able to receive a signal of the execution quality that the agent has achieved for comparable orders over a certain time period. This signal can be a useful proxy that investors and their broker-dealers can use to assess and compare the execution quality that they can expect to receive across market centers. Despite being aggregated, Rule 605 reports have indeed been useful. One academic study examining the introduction of Rule 605 found that the routing of marketable order flow by broker-dealers became more sensitive to changes in execution quality across market centers after Rule 605 reports became available.
Market participants have access to some public information about the execution quality of market centers from sources other than Rule 605. For example, some wholesalers and ATSs produce order flow and execution quality statistics other than those required under Rule 605 and make them available either on their websites or as part of their ATS-N filings.
The extent to which individual investors directly access Rule 605 reports has likely been limited. Several commenters to the Proposing Release stated that individual investors have limited or no usage of Rule 605 data.
First, since Rule 605 reporting requirements did not extend to broker-dealers that were not market centers prior to these amendments,
Unlike institutional investors,
The Commission understands that, while the usage of Rule 605 reports by institutional investors has been limited by several factors, Rule 605 reports nevertheless contain information about execution quality that has been useful for institutional investors.
First, the ability of institutional investors to use preexisting Rule 605 to assess and compare the execution quality that they receive from their broker-dealers has been limited, for several reasons. First, Rule 605 reports only contain information about the execution quality of investors' held orders. Not held orders, which are excluded from the definition of “covered order,”
Second, even if institutional investors are incentivized to access execution quality information such as that in Rule 605 reports, institutional investors typically have access to alternative sources of execution quality information. Many institutional investors regularly conduct, directly or through a third-party vendor, transaction cost analysis (“TCA”) of their orders to assess execution quality against various benchmarks. Institutional investors that perform their own in-house analyses of execution quality or obtain analyses of execution quality from third-party vendors may have been less likely to rely on information from Rule 605 reports. Furthermore, Rule 606(b)(3) requires broker-dealers to provide some of their customers with individualized reports of execution quality of not held orders upon request.
At the same time, the information on execution quality that is collected by institutional investors from these alternative sources may only cover the institutions' own orders, and as such could be highly individualized and nonpublic.
To the extent that institutional investors do utilize Rule 605 reports, the Commission believes that, due to their typically greater resources, institutional investors may be more likely than individual investors to access Rule 605 reports directly. Rule 605 reports are machine-readable, which makes them useful for facilitating further processing and analysis by market participants that have access to the resources necessary for handling large amounts of raw data,
While the direct usage of Rule 605 reports by individual and institutional investors may have been limited, Rule 605 reports have been used by other market participants, including analysts and researchers,
The Commission understands that investment advisers and broker-dealers typically use Rule 605 reports as part of their internal review of execution quality. As fiduciaries, investment advisers owe their clients a duty of care and a duty of loyalty.
The information disclosed under preexisting Rule 605 has provided significant insight into execution quality at different market centers. However, market participants' access to information about execution quality under Rule 605 has been limited in several areas. Specifically, broker-dealers that are not market centers have not been required to report under Rule 605, which has limited market participants' ability to assess and compare the execution quality that broker-dealers obtain for their customers. Furthermore, changes in equity market conditions and technological advancements since Rule 11Ac1-5 was adopted in 2000, such as an increase in the number of high-priced stocks,
The scope of entities that were required to report under Rule 605 prior to these amendments did not include broker-dealers that only route customer orders externally, rather than executing customer orders internally, because they did not meet the definition of a market center. As a result, it has been difficult for market participants to use available execution quality statistics to compare execution quality across these broker-dealers. Furthermore, to the extent that firms operating two separate market centers commingled execution quality information about multiple market centers in Rule 605 reports, this has made it difficult for market participants to assess the execution quality of each market center individually.
Prior to these amendments, broker-dealers that were not market centers were not required to prepare Rule 605 reports,
Rules 605 and 606 operate together to allow investors to evaluate what happens to their orders after investors submit their orders to a broker-dealer for execution.
Prior to these amendments, the commingling of SDP activity in Rule 605 reports with other market center activity, by market centers that also operate SDPs, may have obscured or distorted information about the market centers' execution quality, making it more difficult for market participants to observe the execution quality of each separate trading venue. For example, an SDP that accepts IOC orders will offer different order execution quality than other market centers.
Prior to these amendments, Rule 605 reporting requirements excluded execution quality information about some order sizes and types that are relevant to market participants.
To estimate the percentage of shares that have been excluded from Rule 605 reporting requirements and the driving factor behind their exclusion (
The following sections will discuss the various facets of preexisting Rule 605 reporting requirements that led to the exclusion of orders from Rule 605 reports prior to these amendments, as well as the extent to which these orders are relevant for assessing execution quality. This includes orders that were excluded on the basis of size, as well as other orders that were excluded such as stop orders, non-exempt short sale orders, and orders submitted outside of regular trading hours.
Prior to these amendments, orders of certain sizes were excluded from Rule 605 reporting requirements, including orders for less than 100 shares and larger-sized orders.
Due to preexisting Rule 605's exclusion of orders sized smaller than 100 shares, which excluded all odd-lot orders and, in some cases, round lot orders where a round lot was less than 100 shares, information about an important segment of order flow has been missing from Rule 605 reports.
The rise in the use of odd-lot orders is a phenomenon that has been well-documented in modern markets.
There is evidence that these high percentages are not only the case for odd-lot trades, but for odd-lot orders as well. Using data from January to March 2021, a recent academic working paper found that the rate of orders sized between 1 and 100 shares ranges from 5.6% of all submitted orders for less than 500 shares in the lowest-priced stocks, to 46.9% of all such orders in the highest-priced stocks.
Market commentators have attributed this rise in odd-lot trading to a variety of factors. For example, an increase in the number of high-priced stocks caused order sizes to decrease in these stocks, where trading in larger order sizes is more expensive.
Another factor is a rise in algorithmic trading, which chops orders into many smaller orders. Broker-dealers that handle institutional orders often make use of odd-lot orders because of trading algorithms that split larger parent orders into smaller child orders to reduce the market impact of their trades.
Due to the exclusion of fractional orders that are smaller than one share from Rule 605 prior to these amendments,
An estimation of the percentage of orders that were excluded from preexisting Rule 605 reporting requirements because they are smaller than one share is difficult, as these orders are executed off-exchange and therefore not included in public datasets. However, an analysis using data from CAT
Due to the exclusion of orders sized larger than 10,000 shares from preexisting Rule 605,
Furthermore, larger-sized orders make up a non-negligible percent of order flow. Figure 6,
The exclusion of orders with stop prices from the definition of “covered order” prior to these amendments has resulted in the exclusion of orders that are likely relevant for investors from preexisting Rule 605 reports. A stop order, also referred to as a stop-loss order, is an order to buy or sell a stock once the price of the stock reaches the specified price, known as the stop price. When the stop price is reached, a stop order becomes a market order, or a limit order in the case of so-called stop limit orders.
The Commission understands that stop orders resting on national securities exchanges have been uncommon, and the vast majority of stop orders are handled by broker-dealers.
Prior to these amendments, Commission staff had taken the position that staff would view all non-exempt short sale orders as special handling orders.
Non-exempt short sale orders are orders that are subject to price restrictions under Rule 201 of Regulation SHO,
In the years since Rule 201's adoption, it has become clear that Rule 201 price test restrictions are not often triggered. Between April 2015 and November 2023, a Rule 201 trigger event only occurred on 1.8% of trading days for an average stock.
When Rule 605 was first adopted, the Commission explained the decision to exclude orders submitted outside of regular trading hours by stating that there are substantial differences in the nature of the market between regular trading hours and after-hours, and therefore orders executed at these times should not be blended together.
When Rule 605 was first adopted, after-hours markets were still mostly the purview of institutional investors, but a growing number of broker-dealers had recently begun providing their retail customers with the ability to have their orders directed to electronic communication networks (ECNs) after the major markets close for the day. The growth in the availability of after-hours trading for individual investors raised concerns over, and heightened awareness of, the differences in execution quality for after-hours trades, which tend to be much riskier due to lower liquidity levels and higher volatility in after-hours markets.
Along with an increase in access to after-hours trading, the late 1990s and early 2000s saw an increase in the prevalence of online brokerages, in which individual investors in particular were given newfound access to order entry systems. Early research into the rise of online brokerages describes a shift from a system in which retail brokers “communicate buy/sell recommendations to clients over the telephone” (presumably during regular working hours), to a system in which individual investors have “round-the-clock access to trading systems and account information.”
To estimate the amount of orders that are submitted outside of regular trading hours, data from the Tick Size Pilot B.I Market Quality dataset
At least some of these orders, while submitted outside of regular market hours, execute during regular trading hours,
This is consistent with the idea that at least some of this order flow represents orders that are submitted by individual investors outside of market hours,
In addition to decreasing the coverage of Rule 605, subsequent market changes since the initial adoption of Rule 605 may have also decreased the relevance of some of the metrics required to be reported by preexisting Rule 605 reporting entities. This section will discuss how market changes may have affected, or will likely affect in the near future, aspects of several such metrics, including the definition of round lots for order size categories, the granularity of metrics related to time-to-execution, and the use of a five-minute time horizon for realized spreads.
Preexisting Rule 605 defined order size categories in terms of numbers of shares. Given that share prices and thus the notional value of orders can differ dramatically, defining a size category in terms of number of shares has disadvantages.
Lastly, the Commission's 2020 adoption of the MDI Rules included a new definition of “round lot” that would have caused some round lots to be excluded from reporting requirements, absent an update to Rule 605's order size categories.
As
Given that the aim of Rule 605 is to enable investors to compare and evaluate execution quality among different market centers,
However, the likelihood of execution of a NMLO greatly depends on the movement of the NBBO, such that even an order submitted within 10 cents of the NBBO may never receive an opportunity to be executed if that order never touches the NBBO (
To get an idea of the extent to which these orders were included in Rule 605 statistics prior to these amendments, Figure 9
Furthermore, the fact that the threshold for inclusion in preexisting Rule 605 reports was based on nominal terms (
Preexisting Rule 605 also required execution quality information for NMLOs to be measured relative to the time of order receipt. As will be shown in Figure 12 below, NMLOs that are submitted further away from the NBBO tend to take longer from the time of order receipt to execute than those submitted closer to the NBBO, as the NBBO has a further distance to move before it reaches the order's limit price. This requirement thus may have made it difficult to compare the execution times of market centers that handle NMLOs with varying distances from the NBBO.
Prior to these amendments, Rule 605 reports required the separate reporting of execution quality information for inside-the-quote NMLOs. However, the Commission understands that some inside-the-quote limit orders may have different execution quality characteristics than other types of NMLOs, including other inside-the-quote NMLOs, and that this may vary across market centers. In particular, similarly to market and marketable limit orders, some at-the-midpoint and beyond-the-midpoint limit orders (collectively, “midpoint-or-better” orders) are submitted by traders with the intention of executing immediately, in this case against hidden or odd-lot inside-the-quote liquidity. However, because they are not a marketable order type (
Confirming that there are differences between certain types of inside-the-quote NMLOs, Table 4
Prior to these amendments, Rule 605 required the reporting of time-to-execution information in two ways. First, for market and marketable limit orders, reporting entities were required to report the share-weighted average time-to-execution for orders executed with price improvement, at the quote, and with price dis-improvement, calculated based on timestamps recorded in seconds. Second, for all orders, reporting entities were required to report the number of shares executed within certain predefined time-to-execution categories or buckets.
First, calculating average time-to-execution statistics using timestamps recorded in terms of seconds does not reflect changes in market speeds. Figure 11
Second, given that many orders are executed on a sub-second basis, the time-to-execution buckets prescribed by preexisting Rule 605 are not able to fully capture variations in execution times across order types.
MIDAS data include only orders and quotes that are posted on national securities exchanges' limit order books and trades that are executed against those orders,
Echoing the results using MIDAS data in Figure 12, Figure 13 shows that, for at-the-quote and near-the-quote limit orders, executions are reasonably well distributed across the different time-to-execution buckets and there is positive volume in the longer time-to-execution buckets that are included in both preexisting Rule 605 and the Tick Size Pilot categorizations (30 to 59 seconds, 60 to 299 seconds, and 5 to 30 minutes). However, similar to the results for inside-the-quote NMLOs, for market and marketable limit orders, execution times are mostly bunched up at the faster end of their time buckets; in fact, the vast majority of these orders are executed in under one second, falling within the shortest preexisting Rule 605 category of shares executed from 0 to 9 seconds. Likewise, the longer time-to-execution buckets that are included in both preexisting Rule 605 and the Tick Size Pilot categorizations are virtually empty. Therefore, as with inside-the-quote NMLOs, preexisting Rule 605 time-to-execution categories were missing information about potential differences across reporting entities in terms of the execution times of the market and marketable limit orders that they handle, which has limited the usefulness of time-to-execution information for investors.
Because of the increase in the speed at which markets operate,
Realized spreads are calculated by comparing an order's transaction price to the NBBO midpoint (
Several commenters stated that realized spread is an imperfect proxy for revenue from liquidity provision.
Realized spreads vary significantly with the chosen time horizon. An academic study shows that realized spreads will generally decrease as the time horizon over which they are calculated is lengthened, highlighting that realized spreads are highly dependent on the time horizon over which they are calculated.
In order to examine how realized spreads vary with the chosen time horizon, the Commission analyzed realized spreads calculated over time horizons ranging from 10 milliseconds to five minutes,
Figure 14 also shows that, except for the largest market capitalization group, realized spreads tend to decline as market capitalization size increases.
Prior to these amendments, reporting entities were not required to include information about the effective spreads of NMLOs in Rule 605 reports, including the effective spreads of midpoint-or-better NMLOs. The effective spread is calculated by comparing the trade execution price to the midpoint of the prevailing NBBO at the time of order receipt, which is used as an estimate of the stock's value.
The fact that reports under preexisting Rule 605 contained information on average realized and average effective spreads only in terms of dollar amounts, and not in terms of percentages, made it difficult for market participants to account for differences in share prices when comparing across market centers.
Also, measuring spreads in absolute terms may lead to comparisons across reporting entities that do not account for potential differences in the timing of order flow, particularly for stocks whose prices vary significantly over the course of the monthly reporting period. For example, say that a stock's price increased dramatically over the course of a month from $2.50 to $250 and that, by chance, Market Center A executed more order flow for that stock at the beginning of the month, while Market Center B executed more order flow for that stock at the end of the month. In its Rule 605 report for that month, Market Center A showed an average effective spread of $0.01, while Market Center B showed an average effective spread of $0.10. Measured in dollar terms, Market Center B would seem to have offered worse execution prices than Market Center A, since it is associated with higher effective spreads. However, relative to the stock price, Market Center B would actually have offered the better prices (a percentage effective spread of 0.04%) compared to Market Center A (a percentage effective spread of 0.4%).
The measure of price improvement required by preexisting Rule 605 may not have always succeeded in capturing price improvement relative to the best available prices. Prior to these amendments, market centers were required to report price improvement only as the difference between the trade price and the NBBO. However, in cases where odd-lot volume is available at prices better than the NBBO, price improvement measured relative to the NBBO will not reflect the best available displayed prices.
Information about price improvement is different from information about whether orders received an execution of more than the displayed size at the quote,
As the Commission stated in the Rule 11Ac1-5 Adopting Release, the average effective spread captures some information about size improvement.
Under preexisting Rule 605 requirements, grouping IOCs together with other orders may have skewed the execution quality metrics of reporting entities that handle a large number of IOCs,
In an analysis in the Proposing Release, the Commission found that including IOCs along with other types of market and marketable limit orders may skew the execution quality of these other order types, particularly since IOCs make up more than 90% of market and marketable share volume.
The preexisting Rule 605 reporting requirements for riskless principal transactions
In a riskless principal transaction, a market center routes a principal order to a second market center, typically an exchange or ATS, in order to fulfill a customer order; upon execution at the second market center, the first market center executes the customer transaction on the same terms as it received from the principal execution at the second market center. Both prior to and after these amendments, the second (executing) market center in this example will be required to report this transaction as having been executed at the market center under Rule 605(a)(1)(i)(D). However, prior to these amendments, the first (routing) market center will also report the riskless principal transaction under prior Rule 605(a)(1)(i)(D), rather under Rule 605(a)(1)(i)(E) (cumulative number of shares of covered orders executed at any other venue)
Particularly in the case of riskless principal transactions that are handled by wholesalers, grouping transactions that are handled on a riskless principal basis together with other orders executed at the market center under prior Rule 605(a)(1)(i)(D) has obscured information about the extent to which wholesalers internalize orders. Wholesalers primarily choose between two options to execute the individual investor orders that they handle: they either internalize orders by executing orders against their own inventory, or they execute orders on a riskless principal basis.
Rule 605 requires market centers to post their monthly reports on an internet website that is free of charge and readily accessible to the public.
Rule 605 reports are designed to be machine readable, rather than human readable. While machine-readable data are useful for facilitating further processing and analysis, they are not easily consumable by market participants who do not have the access to necessary software or programming skills. Prior to these amendments, this may have limited the accessibility of Rule 605 reports, particularly for those individual investors who may be less likely to have access to these resources.
Based on information from broker-dealers' FOCUS Report Form X-17A-5 Schedule II, there were 3,494 registered broker-dealers as of Q2 2023.
The high level of fragmentation of NMS stock trading
The Commission understands that the structure of the market for brokerage services can broadly be separated into two distinct markets—brokerage services for individual investors on the one hand, and brokerage services for institutional investors on the other—that differ somewhat in terms of their market structure.
As of the end of 2022, there were approximately 1,006 registered broker-dealers that originated orders on behalf of individual investors in the market for NMS stocks.
Investors may incur switching costs when changing broker-dealers, such as the cost of withdrawing or transferring funds and potential administrative fees. Switching broker-dealers could also involve time delays resulting in lost investment opportunities or revenues and other opportunity costs.
As of the end of 2022, there were approximately 837 registered broker-dealers that originated institutional orders in the market for NMS stocks.
The Commission understands that some investors, particularly some institutional investors, are likely to use multiple broker-dealers,
Broker-dealers compete with one another along a variety of dimensions,
When making routing decisions, some broker-dealers may face conflicts of interest that arise when their interests are not aligned with their customers' interest in receiving better execution quality.
If information asymmetries, such as those resulting from insufficient public information about broker-dealer execution quality,
Trading services for NMS stocks are highly fragmented among different types of market centers.
Market centers' primary customers are the broker-dealers that route their own orders or their customers' orders for execution at the trading venue, and market centers compete with each other for their members' customers' flow on a number of dimensions, including execution quality. Broker-dealers may face switching costs from changing the primary trading venues to which they route orders. For example, the extent to which broker-dealers may have arrangements to route orders to specific market centers could hamper their ability to switch trading venues.
While national securities exchanges cater to a broader spectrum of investors, ATSs and OTC market makers, including wholesalers, tend to focus more on providing trading services either for institutional or for individual investor order flow. For example, an analysis of retail brokers' routing practices showed that a group of six wholesalers handled more than 87% of the customer orders of retail brokers in Q1 2022.
Trading venues compete with one another on the basis of the execution quality that they offer, as well as on the basis of other potential factors.
As discussed above, if information asymmetries, such as those resulting from insufficient public information about broker-dealer execution quality, prevent investors from observing differences in execution quality across broker-dealers, this limits the extent to which broker-dealers need to compete on the basis of execution quality.
The amendments expanding and modifying the reporting requirements under Rule 605 will result in numerous beneficial economic effects. These economic effects will mainly derive from improvements in the transparency of execution quality of broker-dealers and market centers, which will promote competition among these reporting entities on the basis of execution quality. These amendments to Rule 605 will also result in initial and ongoing compliance costs to reporting entities.
This section measures the economic effects of these amendments to Rule 605 relative to a regulatory baseline that includes the implementation of the MDI Rules
These amendments to Rule 605 will promote increased transparency of order execution quality, particularly for larger broker-dealers who were not required to disclose execution quality information under preexisting Rule 605, but also for all reporting entities, whose execution quality information will be more relevant and easier to access because of improvements to existing Rule 605 disclosure requirements.
This increased transparency, together with increased competition resulting from this transparency, will result in improvements in execution quality, for several reasons. First, investors and their broker-dealers will be able to make
The following sections will discuss the expected benefits of these amendments for transparency, competition, and execution quality, including those expected from expanding the scope of reporting entities, modernizing the required information, and improving accessibility. The Commission acknowledges that there may be limitations to these benefits and discusses these below, though none will significantly reduce the benefits of the amended rule.
As a primary effect, the adopted amendment expanding the scope of Rule 605 reporting entities to include larger broker-dealers
First, as a result of the adopted amendment, customers of larger broker dealers, along with other market participants, will no longer need to make inferences about their broker-dealers' execution quality based on routing information from Rule 606 data combined with market centers' execution quality information from Rule 605 data, but will instead have access to direct information about the aggregate execution quality achieved by their broker-dealers.
This increase in market participants' ability to compare execution quality across broker-dealers will increase the extent to which broker-dealers compete on the basis of execution quality when making their order routing decisions.
These amendments will require larger broker-dealers to report the same execution quality information as market centers, including information about execution prices, execution speeds, and fill rates,
The Commission is mindful that Rule 605's execution quality reports contain a large volume of statistical data, and, as a result, it may be difficult for individual investors to review and digest the reports. Should certain market participants not have the means to directly analyze the detailed statistics,
The adopted amendment requiring larger broker-dealers to report both the number of shares executed at the receiving broker-dealer and the number of shares executed at any other venue
Several commenters did not support expanding the scope of Rule 605 reporting entities to include larger broker-dealers.
First, the Commission agrees that, as a result of different business models, a particular broker-dealer's order flow may be made up of a different mixture of securities, order types, and order sizes, which may impact or constrain that broker-dealer's overall execution quality level.
However, under these amendments, larger broker-dealers will be required to categorize the execution quality information required by Rule 605 by individual security, different types of orders, and different order sizes. Larger broker-dealers will also be required to report realized spread, which is a measure of adverse selection.
One commenter stated that “it is not apparent that [requiring larger brokers to report on order execution quality] would improve retail execution quality, as the retail broker market is highly
One commenter stated that, absent investor education on how to interpret Rule 605 summary reports, “investors may misinterpret the data and make suboptimal decisions as a result.”
Meanwhile, it is unlikely that market participants will use information in Rule 605 reports to compare broker-dealers to market centers. Information about the execution quality of these two types of reporting entities is useful to different market participants for fundamentally different purposes. In terms of the principal-agent relationship described in the Market Failure section,
In addition to expanding the scope of Rule 605 reporting entities to include larger broker-dealers, these amendments promote greater transparency by specifying that broker-dealers post separate Rule 605 reports for their ATSs
One commenter stated that “certain Rule 605 metrics,” such as fill rates, “may be unduly impacted by differences in SDP business models,” such as whether they send out indications of interest or solely receive IOCs.
Another commenter stated that, because “users of SDPs are all sophisticated entities capable of carrying out their own execution quality measurements and, in fact, do carry out these measurements on their own,” requiring separate reporting “imposes an additional cost on SDPs without any clear benefit.”
As a result of the amendments expanding and modernizing Rule 605 disclosure requirements, the metrics used for the required Rule 605 disclosures will be more informative about execution quality, which will increase transparency into the differences in execution quality achieved by reporting entities. This increase in informativeness and transparency will enhance the benefits of expanding the scope of reporting entities, including the expansion to larger broker-dealers.
These benefits will stem from modifications aimed at clarifying and expanding the scope of Rule 605 reporting entities, modernizing the information required to be reported under Rule 605 and improving the accessibility of the information contained in Rule 605 reports.
The amendments expanding the definition of “covered order” to include additional order types will increase transparency about the execution quality that reporting entities achieve for these additional order types, including orders submitted with stop prices, non-exempt short sale orders, and orders submitted outside of regular trading hours.
First, the adopted amendment expanding the definition of “covered order” to include NMLOs submitted outside of regular trading hours that become executable during regular trading hours
While several commenters supported the inclusion of NMLOs submitted outside of regular trading hours into Rule 605 reports,
Second, the adopted amendment removing the exclusion of orders with
The amendment to include stop orders within separate order type categories rather than grouping them together with other order types
One commenter stated that the inclusion of stop orders “will create increased complexity with little benefit for the individual investor,” and that therefore “the Commission should consider excluding stop orders from the report entirely.”
The Commission is adopting its position that non-exempt short sales orders will not be considered special handling orders unless a price test restriction is in effect for the security.
By enabling investors to make better apples-to-apples comparisons across reporting entities with potentially different order flow,
The amendments modernizing the order size categories are expected to make Rule 605 reports more relevant by showing more meaningful differentiation in execution quality across different order sizes. This will allow consumers of Rule 605 reports to control for potential differences in order sizes across different reporting entities, while also increasing the extent to which reporting entities compete on the basis of execution quality across order sizes.
First, the amendments defining order size categories in terms of notional values
Figure 16 shows the distribution of orders across the adopted notional size buckets for stocks with different price levels, using a sample of CAT data for 400 stocks for Q1 2023.
Figure 17 shows the distribution across the notional order size buckets of orders associated with individual customer accounts as compared to those from institutional customer accounts,
Second, as a result of the new order size categories, amended Rule 605 reports will contain information about some orders that were missing from preexisting Rule 605 reports, including orders less than a share, orders less than 100 shares, and larger-sized orders of 10,000 or more shares.
Commenters
Third, to further facilitate the comparison of execution quality across similar orders, these amendments will require information within each notional order size category to be separated according to whether the orders were odd-lots, round-lots, or fractional orders less than one share. Requiring information to be reported separately for round-lot orders and odd-lot orders within each notional order size category addresses a potential issue with notional order size buckets, namely, that while such categories remain in the spirit of distinguishing between “small” and “large” orders, they no longer produce a meaningful distinction between orders that may or may not be at quotes protected under Rule 611.
Including separate execution quality information for fractional orders less than one share will provide greater insight into an important segment of individual investor order flow.
One commenter stated that, based on their trading experience, “fractional market orders also receive widely different price improvement across brokers,” and that “full share price improvement statistics are not informative for the execution quality of our fractional trades.”
Lastly, requiring order size categories under Rule 605 to include information about fractional orders less than one share
The amendments to Rule 605 modifying the order type categories required by Rule 605, including modifications to the coverage of NMLOs, and separate order type categories for marketable, midpoint-or-better, and other non-marketable IOCs, will improve the relevance of the information in Rule 605 reports regarding execution quality across different order types. This will facilitate comparisons and competition among reporting centers on the basis of execution quality for these orders.
The amendment modifying Rule 605's coverage of NMLOs so that reporting entities are required to disclose execution quality information only for those NMLOs that become executable
This is evident from an analysis comparing the fill rates of all near-the-quote and away-from-the-quote NMLOs to the fill rates of executable NMLOs, calculated using the sample of MIDAS data.
The adopted amendment to include a separate order type category for midpoint-or-better orders
First, the high percentage of midpoint-or-better NMLOs submitted with IOC designations shown in Table 4 implies that a significant portion of these orders have the expectation of executing immediately, for example, against hidden or odd-lot liquidity inside of the spread. Therefore, these orders are likely to have different execution profiles than other types of NMLOs, such as faster time-to-execution. Furthermore, the Commission understands that different reporting entities treat beyond-the-midpoint NMLOs differently from other types of NMLOs, and that as a result beyond-the-midpoint NMLOs have systematically different execution quality characteristics than other types of NMLOs. For example, beyond-the-midpoint limit orders may be offered price improvement at some market centers, such as wholesalers, so the execution quality of these orders will be highly dependent on which type of market center to which the broker-dealer routes such orders.
Lastly, the adopted amendment assigns marketable, midpoint-or-better, and other non-marketable IOCs to separate order type categories so that they no longer will be commingled with other order types.
Several of these amendments will increase the relevance of time-to-execution information in Rule 605 reports, which in turn will improve market participants' ability to compare time-to-execution across reporting entities. For those investors that value fast executions, this is expected to lead to improved execution times, as investors will be better able to identify and route orders to reporting entities offering faster execution speeds.
First, the adopted amendment increasing the granularity of the timestamp conventions used for the time of order receipt and time of order execution from seconds to milliseconds, as well as requiring millisecond granularity for the time of executability,
One commenter, while generally recognizing benefits of smaller increments for time to execution statistics, stated that “the more granular a timestamp needs to be, the more subject it is to variances across reporting entities,” and that this has “the potential to distort statistics.”
Second, the amendments increasing the granularity of time-to-execution buckets
Figure 20 plots the distribution of share volume across the adopted time-to-execution buckets, using a sample of CAT data for 400 stocks for the period of Q1 2023.
Figure 21 also plots the distribution of share volume across the adopted time-to-execution buckets, this time breaking the result down by order type.
The amendments requiring time-to-execution information to be reported for all order types will help ensure that all order types benefit from increased transparency.
Finally, these amendments will require NMLO execution times to be measured from the time that the order becomes executable rather than from the time of order receipt.
For those investors that value fast executions, these amendments are expected to lead to improved execution times, as the increased transparency around reporting entities' execution times will increase these investors' ability to identify and route orders to reporting entities offering faster execution speeds.
One individual investor stated that focusing on the speed of execution only benefits high-frequency traders, and that the commenter is more concerned as a retail investor with getting a fair price for their trades than with the speed of execution.
For institutional investors, the benefits of fast execution may be different.
The amendments to Rule 605 will improve the relevance of the information contained in Rule 605 reports by increasing the granularity of time-to-execution buckets; modifying the calculations of average realized spreads; expanding existing requirements to report average effective spreads to midpoint-or-better orders; adding additional metrics such as percentage realized and effective spreads, effective over quoted spreads, and size improvement; and modifying the categorization of riskless principal trades.
The adopted amendment modifying the time horizon used to calculate the realized spread from a single horizon of five minutes to a range of horizons between 50 milliseconds and 5 minutes
Selecting an appropriate time horizon to calculate the realized spread must strike a balance between too short, which could fail to incorporate the realization of the price impact, and too long, which could include additional noise
Referencing the Commission's analysis of realized spread time horizons in the Proposing Release, one commenter stated that “the Commission has not appropriately analyzed inventory turnover, which is necessary to convey relevant meaning to the analysis.”
Table 7
Echoing the Commission's statements in the Proposing Release, Table 7 also shows that, for smaller stocks, a sizeable proportion of the overall decline in realized spreads (around 23-26%) does not occur until the five-minute horizon. Therefore, retaining the five-minute horizon will be useful in capturing additional information about realized spreads, particularly for the smallest stocks.
Other commenters similarly stated that the Commission did not provide a basis for its selection of realized spread time horizons.
First, as described in section IX.C.3.(c)(5), realized spreads can be decomposed into effective spreads and price impact. Price impact is designed to measure the change in a stock's fundamental value following a trade; if a market maker is trading against a more informed trader, price impact will capture the adverse price movement for the market maker resulting from the incorporation of the informed trader's private information into prices.
Second, as an additional method for measuring the time horizon that minimizes the noise embedded in the price impact component of realized spread measures, the Commission used the sample TAQ data described above
Figure 23 presents these ratios over all the time intervals for four market capitalization groups and shows clear differences between smaller and larger stocks. First, it is clear from the figure that larger, more liquid stocks have more informative measures of price impact than smaller, less liquid stocks. Second, for the two smaller stock groups, the results show a small but steady increase in the signal-to-noise ratio as the time horizon increases, implying that realized spread measures are becoming more informative as the noise in the price impact component decreases. This result supports
While some commenters supported the usefulness of realized spreads as a measure of order flow characteristics,
The adopted amendment to require reporting entities to include information about average effective spreads for midpoint-or-better NMLOs,
For midpoint-or-better NMLOs, the high percentage of these orders submitted with IOC designations shown in Table 4 implies that a significant portion of these orders have the expectation of executing immediately, for example, against hidden or odd-lot liquidity inside of the spread. By definition, midpoint-or-better NMLOs will have an effective spread that is either zero (if at-the-midpoint) or positive (if beyond-the-midpoint), reflecting that the more aggressive of these orders are paying a higher percentage of the spread for this immediacy.
One commenter disagreed that price improvement information for beyond-the-midpoint orders will be useful for comparing across market centers because some of the price improvement of these orders is driven by the order's limit price, which is controlled by the investor, and not the market center.
One commenter stated that “the effective spread is not widely accepted as a meaningful measure of execution quality for NMLOs,” and “does not measure a dimension of execution quality that is likely to differ across market centers” because “the NBBO midpoint at the moment the NBBO first touches the limit price . . . mechanically must be the same on every market center.”
The adopted amendment requiring reporting entities to report average effective spreads and average realized spreads in percentage terms,
The adopted amendment requiring reporting entities to include information on effective over quoted spreads
Consistent with commenters' suggestions,
Several commenters suggested that Rule 605 reports not include E/Q and leave it to users of the report to calculate E/Q from other statistics.
The adopted amendment expanding Rule 605 reporting requirements to include measures of size improvement will provide market participants with more information about an additional dimension of execution quality that has not been not fully captured by preexisting Rule 605 statistics.
The adopted amendment will require reporting entities to report, for executions of covered shares, a benchmark metric calculated as the consolidated reference quote size, capped at the size of the order at the time of order receipt (or order executability in the case of marketable stop orders and midpoint-or-better orders) (“order size benchmark”).
If information about size improvement were already captured by preexisting Rule 605 statistics, the addition of the order size benchmark and information about size improved outsized shares would not increase transparency. To examine the extent to which size improvement measures calculated using these metrics will contain information that is different from measures required by preexisting Rule 605, data from the Tick Size Pilot B.II Market and Marketable Limit Order dataset
Results are presented in Table 8
The correlation between price improvement and the outsized size improvement rate is comparatively low. The fact that price improvement and size improvement metrics are not strongly correlated implies that each of these measures to some degree conveys different information about execution quality. Therefore, including the order size benchmark and size improved outsized shares into Rule 605 reporting requirements will provide market participants with more information about an additional dimension of execution quality that was not fully captured by Rule 605 statistics prior to these amendments.
The Commission expects that these amendments will improve execution quality in terms of size improvement by increasing the extent to which market centers and broker-dealers compete with one another on the basis of their ability to offer size improvement. In order to attract broker-dealer order flow, market centers will be incentivized to compete on the basis of size improvement, for example by executing orders against their own inventory at or better than the NBBO, or offering additional incentives to attract hidden liquidity priced at or better than the NBBO. Investors that particularly value the ability of reporting entities to offer size improvement, such as investors trading in larger order sizes, will be able to use this metric to discern which reporting entity might offer better size improvement to their orders, which will allow them to make better routing decisions and obtain increased size improvement as a result.
One commenter stated that “[to] accurately identify size improvement not only would proprietary depth of book feeds be required, the statistic would be misleading as it would not reflect . . . top of book across public quotes, nor would it reflect hidden or mid-point priced orders which are extremely prevalent in today's market if sole reliance was on the SIP.”
One commenter stated that the proposed size improvement benchmark metric “is not a useful measure of the actual size improvement,” because the benchmark measure will “include all orders in the calculation, even when there is no opportunity to provide size improvement,” which “dilutes the amount and obfuscates the value of size improvement provided when the need for size improvement actually exists.”
The Commission agrees that whether there was an opportunity to provide size improvement is an important aspect of an analysis of size improvement.
Another commenter was critical of the benefits of the proposed size improvement measure because “it would indicate only whether and the number of shares for which size improvement was achieved,” and “it would not indicate whether and to what extent such size improvement increased the amount of price improvement.”
The adopted amendment requiring that market centers include riskless principal trades in the category of trades executed away from the market center
One commenter stated that the statement in the Proposing Release that “execution quality statistics would be more informative to market participants”
The amendment to Rule 605 requiring, for marketable order types (
Multiple commenters supported including a measure of price improvement relative to the best displayed price.
Other commenters stated that including two sets of price improvement metrics using two different reference points would be confusing for retail investors,
Commenters were also critical of the inclusion of price improvement information for non-marketable limit orders, because “price improvement is only a relevant statistic for marketable group orders”
The adopted amendment requiring reporting entities to report the number of shares that executed regular way at prices that could have filled an executable NMLO while the order was in force will promote transparency regarding differences in the execution probabilities of NMLOs between reporting entities. This will increase the ability of investors and their broker-dealers to route orders to those reporting entities with higher fill rates of executable NMLOs (including limit orders submitted with stop prices and at-and-beyond-the-midpoint NMLOs). Market participants will have access to information about the extent to which a NMLO did not execute or executed after a large number of shares executed elsewhere in the market, despite the fact that the NMLO was executable. In order to attract this order flow, reporting entities will need to improve their ability to achieve executions for executable NMLOs. Market centers can achieve higher fill rates for NMLOs, for example, by reducing access fees to encourage more marketable orders to execute against resting NMLOs, or by discouraging excessive submissions and cancellations of NMLOs, for example by instituting or raising excessive messaging fees.
Furthermore, the adopted amendment requiring the reporting of the number of orders that received either a complete or partial fill will provide important additional information about the nature of a market center or broker-dealer's NMLO and stop order executions—
Execution quality will also increase as a result of the adopted amendment requiring reporting entities to prepare human-readable summary reports,
The usefulness of summary reports particularly for individual investors was supported by several commenters.
In a change from the proposal, the amended rules require the use of CSV and PDF formats for the summary report, rather than XML and PDF formats as proposed.
Unlike the CSV format, the PDF format is generally meant for a human reader rather than for a machine reader. Requiring market centers and broker-dealers to post a PDF version of the summary report will allow an individual human reader to open and read a summary report without having to download the data into a spreadsheet or other analytical program. This will make the information in the summary reports accessible to a broader range of individual users. In addition, because PDF documents are presented consistently across websites, operating systems, and applications, the PDF requirement will provide individual human readers with more comparable summary reports and facilitate their understanding of the reported summary execution statistics.
Requiring market centers to post summary reports in two formats (PDF and CSV) will permit market participants to use the summary reports for a variety of different purposes. For example, a retail investor could use the PDF version of a market center's latest summary report to easily identify the percentage of shares executed at the quote or better at that market center. By contrast, a broker-dealer assessing its own order routing practices could download the CSV versions of 10 different market centers' summary reports in each of the preceding 12 months, and identify which of those market centers had consistent month-to-month increases in percentage of shares executed at the quote over that period.
To the extent that these amendments to Rule 605 increase incentives for reporting entities to compete in areas other than improved execution quality, customers may benefit from improvements that are not directly related to execution quality, such as lower fees, higher rebates, new products or functionalities, or better customer service. Improvements in areas other than execution quality because of the increase in competition among reporting entities may be either complementary to or a substitute for improvements in execution quality. Investors are more likely to see an overall benefit from these amendments to the extent that these improvements are complementary. Furthermore, to the extent that these amendments increase competition in related markets, market participants may benefit from lower costs and/or improved quality in these markets. For example, the quality of TCA reports may improve if their publishers need to offer better products to compete with the publicly available data under Rule 605.
There are certain factors, however, that could limit the benefits of these amendments for transparency and competition, which could limit the effectiveness of these amendments in improving execution quality.
The expanded scope of Rule 605 includes only larger broker-dealers. Hence, investors, as they gain transparency into the execution at these larger broker-dealers, may route more transactions to these broker-dealers at the expense of smaller broker-dealers who are not included in the scope of Rule 605. That said, smaller broker-dealers may gain a competitive advantage relative to larger broker-dealers, as they will not incur the compliance costs of preparing Rule 605 reports. Also, increased levels of competition among larger broker-dealers may spill over to affect smaller broker-dealers, as their customers may expect more transparency, and smaller broker-dealers will continue to be able to publish ad hoc execution quality reports that focus on execution quality metrics in which they perform well.
One commenter stated that smaller broker-dealers could be disadvantaged by not being required to prepare Rule 605 reports, which could lead to the
One commenter stated that excluding smaller broker-dealers from reporting requirements means that “only 6.7% of broker-dealers” would be subject to reporting requirements, and “[c]ustomers who use smaller broker-dealers are just as entitled to information about how their orders are or may be handled as customers who use larger broker-dealers.”
The same commenter also stated that limiting the Rule 605 reporting requirements to larger broker-dealers would “create an information gap about new entrants to the retail broker-dealer space where there may be a greater need to see data about execution quality.”
The effects of these amendments to Rule 605 on competition among reporting entities may be limited if investors incur high costs to switch between broker-dealers, and/or if broker-dealers incur costs to switch between market centers in response to information about execution quality. To the extent that competition among reporting entities on the basis of execution quality is limited, this could limit the extent to which execution quality will improve as a result of these amendments.
First, if the costs for customers to switch broker-dealers are significant,
Second, the presence of switching costs that broker-dealers incur from changing the primary trading venues to which they route orders
The benefits of these amendments to Rule 605 for transparency, competition, and execution quality may be limited if market participants are not likely to make use of the additional information available under these amendments,
For example, investors currently have access to information about the execution quality achieved by their broker-dealers for their not held orders,
Furthermore, the volume and complexity of data produced by Rule 605 reports (
The benefits of these amendments to Rule 605 for transparency, competition, and execution quality may also be limited by the presence of search costs. These amendments are expected to increase the number of Rule 605 reporting entities from 228 to 343.
The effects of these amendments to Rule 605 on competition among market centers may be limited by the development of liquidity externalities, or the consolidation of liquidity on a few dominant market centers.
The expected benefits from these amendments to Rule 605 may be lessened to the extent that there are dimensions of execution quality not captured by Rule 605 reports which drive order handling decisions. For example, the ability of customers and/or traders to remain anonymous or limit information leakage may not be a dimension that is easily discernible from looking at Rule 605 data, though it is a feature of execution quality that may be valued by some investors.
Furthermore, the extent to which the reported statistics are perceived as an insufficiently timely proxy for a reporting entities' ability to secure favorable executions may dampen the benefits of these amendments for execution quality. This may happen if, for example, future market developments render the monthly reporting requirement too infrequent to be useful.
In this vein, one commenter stated that policymakers should not “prescribe or endorse certain statistical benchmarks,” because “other shopping comparisons emphasize different aspects, such as customer service,”
The Commission received a comment stating that the MDI Rules, once implemented, could have positive interacting effects with the final Rule 605 amendments.
As discussed in detail below, the Commission recognizes that these amendments to Rule 605 will result in initial and ongoing compliance costs to reporting entities. The Commission quantifies the costs where possible and provides qualitative discussion when quantifying costs is not feasible. Most of the compliance costs related to these amendments to Rule 605 involve a collection of information, and these costs are discussed above in relation to the expected burdens under the Paperwork Reduction Act, with those estimates being used in the economic analysis below.
The majority of costs related to these amendments to Rule 605 will be in the form of compliance costs, including both initial and ongoing. Table 9 provides a summary of the estimated change in compliances costs
Table 9 further breaks aggregate compliance costs down into three separate categories—costs related to the expansion of reporting entities, costs related to modifications to information required, and costs related to the preparation of summary execution quality reports. Estimates for the costs in each of these categories depend on a number of factors, including wages, inflation, and firm size, and the Commission acknowledges that the aggregate costs presented may be underestimated to the extent that wages and/or inflation are higher than those used in the estimation. Meanwhile, costs in each of these categories may also be overestimated if reporting entities are able to more cost-effectively contract with third-party vendors to prepare their reports.
As a result of the amendments expanding the scope of Rule 605 reporting entities, market centers and broker-dealers that were not required to publish Rule 605 reports prior to these amendments will incur initial costs to prepare and post Rule 605 reports for the first time, which may include developing any policies and procedures that may be needed to do so, and ongoing costs to continue to prepare them each month. Larger broker-dealers will incur initial and ongoing compliance costs as a result of the amendment expanding the scope of Rule 605 reporting entities to include larger broker-dealers. Similarly, the amendments requiring reporting entities to prepare separate reports for their SDPs will result in market centers that, prior to these amendments, were not required to prepare Rule 605 reports facing initial and ongoing compliance costs. The Commission estimates that 85 broker-dealers, along with 10 SDPs operated by broker-dealers,
New reporters will face one-time, initial compliance costs to prepare Rule 605 reports for the first time, which may include costs to develop and implement procedures. It is likely that the majority of these costs will relate to the development of systems to obtain, store and process the data required for Rule 605 reports.
Larger broker-dealers that generally or exclusively route orders away will need to obtain information, such as the time of order execution and execution price, from trade confirmations provided by the execution venue. In addition, both broker-dealers and market centers will need to match their order information to historical price and depth information available via the exclusive SIPs or, following the implementation of the MDI Rules, competing consolidators,
One commenter stated that requiring larger broker-dealers to newly prepare Rule 605 reports will be costly because “[t]his is not a type of report that broker-dealers that are not also market centers generally prepare.”
These compliance costs related to expanding the scope of Rule 605 reporting entities may be under- or overestimated to the extent that larger broker-dealers, which are assumed to have the same ongoing compliance costs as market centers and the same initial and ongoing compliance costs as SDPs operated by broker-dealers, may experience higher or lower initial and/or ongoing costs than other types of reporting entities. For example, larger broker-dealers may incur higher initial costs to the extent that they did not obtain transaction information, such as the time of order execution and execution price, from trade confirmations provided by execution venues prior to these amendments, and therefore will need to develop the procedures for doing so. Broker-dealers
Furthermore, many of the larger broker-dealers that will be newly included in the scope of reporting requirements have experience with filing Rule 605 reports prior to these amendments;
One commenter stated that “many broker-dealers outsource reporting,” and that “bringing that reporting in-house would be a substantial cost.”
As a result of the amendments modernizing and expanding the coverage of orders and information required by Rule 605 reports, reporting entities will incur initial compliance costs and additional ongoing compliance costs.
As a result of these amendments, prior reporters will incur initial compliance costs to update their systems to collect and store new information.
Prior reporters will also incur initial compliance costs to update their data
After prior reporters update their systems to reflect the amendments, it is likely that changes to their ongoing costs will be limited, as the process for generating and publishing Rule 605 reports will largely be unchanged.
One commenter stated that some of the amendments will impose additional costs on reporting entities as a result of an increase in the complexity of the calculations.
As a result of the adopted amendment expanding the scope of Rule 605 to include information about orders for less than one share, the Commission estimates that some broker-dealers that exclusively execute fractional shares, and therefore, prior to these amendments, were not required to file Rule 605 reports in their capacity as a market center due to fractional shares falling below the smallest order size category in Rule 605 prior to these amendments, will be required to begin publishing Rule 605 reports. The Commission is assuming that these broker-dealers will incur similar initial and ongoing costs as those discussed above for larger broker-dealers and SDPs. These compliance costs may be over- or underestimated if broker-dealers that exclusively execute fractional shares have different characteristics (
One commenter stated that the requirement for market centers that exclusively engage in fractional trading to comply with Rule 605 “would harm smaller broker-dealers by creating a barrier to entry to support fractional share programs.”
In addition, according to this commenter, because “much of today's market infrastructure does not yet support fractional share trading,” (including that “FINRA does not currently have a mechanism to report fractional share trades”), “the costs to fully modify this infrastructure would be high compared to the minimal benefit of including fractional share reporting.”
Lastly, the Commission estimates that the 16 national securities exchanges and 1 national securities association will incur a one-time initial cost to amend the NMS Plan to account for the new data fields required to be reported. The Commission estimates that this will mostly consist of legal time to develop and draft the amendments to the NMS Plan.
The estimated 228 prior reporters
The Commission estimates that these costs will not comprise the majority of overall costs to comply with Rule 605 reporting requirements, because Rule 605 summary reports contain only a small subset of the information published in the fuller Rule 605 reports. However, there may be incremental costs in structuring these summary reports using a custom CSV schema and providing these reports in a human-readable format using a PDF
While the primary competitive effect of these amendments to Rule 605 will be to increase competition among reporting entities on the basis of execution quality,
The Commission is unable to quantify the likelihood that either a trading venue or a brokerage firm will cease operating as a result of the compliance costs associated with these amendments. While the Commission does not believe that these compliance costs are large enough such that this will be likely,
On the other hand, if Rule 605 compliance costs are variable, then the scalability of compliance costs means that smaller reporting entities will incur lower compliance costs related to execution quality reports, which will mitigate some of these concerns. Rule 605 compliance costs may be variable,
Furthermore, even if compliance costs are fixed from the perspective of reporting entities (which will be the case,
However, even if some smaller reporting entities were to exit, the Commission does not believe this would significantly impact competition in either the market for brokerage services or the market for trading services, because both markets are served by a large number of competitors.
Some commenters stated that proposed Rule 605 and another recently adopted rule, the Settlement Cycle Adopting Release, would have interacting effects. Commenters stated that implementing the rules together would impact industry resources, or that the rules had uncertain interacting effects.
The Commission acknowledges that there are compliance dates for certain requirements of the Settlement Cycle Adopting Release that overlap in time with the amended rule, which may impose costs on resource-constrained entities affected by multiple rules.
While the Commission received comments on the interaction of the MDI Rules and the final amendments to Rule 605, the commenters did not specifically address costs associated with overlapping compliance periods.
The Operating Committees of the CTA/CQ Plan and UTP Plan filed the MDI Plan Amendments on November 5, 2021.
Some market participants may incur costs other than compliance costs as a result of these amendments to Rule 605. Many of these costs are difficult to quantify, especially as the practices of market participants are expected to evolve and may change due to the information on execution quality that is required to be reported under these amendments to Rules 605. Therefore, much of the following discussion is qualitative in nature.
In addition to compliance costs, these amendments could result in costs to some reporting entities based on how market participants adjust their behavior in response to increased transparency and competition on the basis of execution quality.
First, increased transparency and competition on the basis of execution quality, and subsequent scrutiny by customers and other market participants, might make broker-dealers less likely to route orders based on payment relationships and/or fees and rebates. While this will likely benefit customers in the form of better execution quality, if broker-dealers were to reduce the order flow sent to wholesalers who pay for it, the broker-dealers will receive less payment for such order flow and might make up for the lost payments by, for example, by raising brokerage commissions or other fees on customers. The same outcome might occur if broker-dealers were to route orders to trading centers with lower rebates and higher fees. Broker-dealers may make up for lost payments or revenues at the expense of customers in other ways as well, for example, by reducing the quality of some bundled services or paying a lower interest rate on deposit accounts.
Second, increased competition on the basis of execution quality may result in costs to reporting entities to the extent that they need to update or improve their routing or execution systems in order to remain competitive. If the reporting entity is executing an order, an improvement in execution systems will correspond to a direct improvement in execution quality for its customers (that is, the cost is a transfer from the reporting entity to its customers). If the reporting entity is routing the order, then the cost of improved routing will also benefit the customer in terms of superior execution (the cost is, in part, a transfer). The reporting entity may pass some of the costs of improved routing on to its customers, reducing the benefit from improved execution quality relative to what it might otherwise have been. If the cost to the reporting entity from improvements to routing is sufficiently high, and if this cost cannot be passed on to customers, then on net, there may be costs from improved execution practices.
It is possible that the capital expenditure associated with upgrading their order routing and execution systems may be such that some reporting entities will no longer remain profitable.
If reporting entities offering worse execution quality exit the market, the Commission does not believe that it will have an adverse effect on competition, either in the market for brokerage services or in the market for trading services. Both markets are served by a large number of competitors and if a reporting entity were to exit for this reason, these markets will be served by more efficient firms that are better able to offer execution quality to customers in line with their industry peers.
These amendments to Rule 605 may entail additional costs if smaller broker-
The Commission acknowledges that, to the extent that these amendments to Rule 605 fail to capture relevant dimensions of execution quality or cause market participants to focus on some dimensions of execution quality to the detriment of others, these amendments may reduce execution quality along certain dimensions that are relevant to some investors. The nature of execution quality as a multi-faceted concept has been a focus of academic papers, which have stated that execution quality is composed of multiple aspects or dimensions, including price and speed, among others.
For example, if size improvement becomes a major driver of order flow, national securities exchanges may try to incentivize hidden liquidity and broker-dealers may route orders to venues with higher expected hidden orders, as size improvement measures mechanically benefit from a greater degree of hidden volume.
One commenter stated that, because of the expansion of Rule 605 reporting requirements to include larger broker-dealers, “brokers could become less willing to accept difficult orders, or orders under challenging market conditions, in an attempt to maintain favorable summary statistics.”
Several commenters stated that execution quality could worsen for some market participants if the amendments result in changes in order flow as more difficult-to-handle order flow shifts to broker-dealers that previously had easier-to-handle orders.
One commenter stated that, to the extent that “perceived differences in execution quality” result in the consolidation of order flow among a smaller number of firms, this could result in a reduction in competition and harm overall execution quality.
As a result of these amendments to Rule 605, financial service providers that are subject to best execution obligations
One commenter stated that the enhanced reporting requirements under Rule 605 would result in “giving away vast amounts of information to free riders,” which would result in vulnerabilities.
The amendment expanding the set of Rule 605 reporting entities to include larger broker-dealers could impose a cost on broker-dealer customers if those broker-dealers that voluntarily provided their customers with execution quality reports prior to these amendments stop providing these reports, which potentially contain more or different information than what these amendments require.
As another potential cost, the amendments to Rule 605 may render the preexisting Rule 605 data less useful and reduce the ability of researchers to perform statistical analyses. Some Rule 605 metrics will lose comparability before and after the new reporting requirements are implemented, so that in some cases there will be two shorter data sets rather than one longer one, leading to reduced statistical power.
The Commission received comments stating that the round lot definition in the MDI Rules, once implemented, could reduce the benefits of the amendments to Rule 605; or that the amendments to Rule 605 could add to the cost of consolidated market data, an effect that could be compounded by the implemented MDI rules.
The Commission believes that these amendments to Rule 605 will improve the efficiency of analyzing Rule 605 reports, which will result in improved price efficiency. Improved transparency is expected to result in an increase in competition, which, in turn, is expected to improve order execution quality and price efficiency. Investors are expected to benefit from improved execution quality as a result of these amendments, such that these investors will also likely benefit from lower transaction costs. Transaction costs reflect a friction in the trading process that limits the ability of prices to fully reflect a stock's underlying value.
As previously discussed in the benefits section of this economic analysis, the Commission believes that these amendments to Rule 605 will facilitate competition on the basis of execution quality in the markets for brokerage services and trading services.
An increase in the extent to which Rule 605 reporting entities compete on the basis of execution quality as a result of these amendments may also spill over to increase incentives to compete along other lines,
First, national securities exchanges may be incentivized to increase rebates or lower fees as a result of these amendments. Exchanges compete on the basis of fees and rebates to incentivize broker-dealers to route more order flow to them.
Reporting entities may also be incentivized to innovate to offer new products in order to compete. For example, some broker-dealers may be incentivized to differentiate themselves by offering new functionalities that
These amendments to Rule 605 can have an impact on markets other than brokerage and trading services, such as the market for TCA. For example, suppose that a customer chooses to no longer purchase TCA once the amended Rule 605 reports become available, because the customer decides that the information contained in the reports is sufficient. If fewer customers purchase TCA, this will have a negative impact on the market for third-party providers of TCA as well as third-party data vendors, because of a reduction in the demand for their services. Further, the quality of TCA provided by third parties may decrease because third-party providers of TCA may have fewer resources for the development and maintenance of their product offerings and because with fewer customers, third-party providers may have less data to use to build their models. At the same time, the quality of TCA reports may also improve if their publishers need to offer better products in order to compete with the publicly available data, and/or use the expanded information available under the final rule to offer new or better products.
In addition, as stated above, some commenters requested the Commission consider interactions between the economic effects of the proposed rule and other recent Commission rules.
These amendments to Rule 605 might promote capital formation by improving price efficiency. As discussed above, these amendments are expected to improve order execution quality and reduce transaction costs, which is expected to improve price efficiency, and to reduce financial friction and promote investors' ability to trade. Financial friction in the form of higher transaction costs can limit trading activity, and thereby hinder the efficient adjustment of prices and limit the ability of prices to reflect fundamental values. Less efficient prices can result in some issuers experiencing a cost of capital that is higher or lower than if their prices fully reflected underlying values, as a result of the market's incomplete information about the value of the issuer. This, in turn, may limit efficient allocation of capital and capital formation. Under these amendments, improved price efficiency is expected to cause firms' stock prices to reflect their underlying values more accurately, which can improve capital allocation and promote capital formation.
The Commission considered alternatives to the adopted amendment, which requires larger broker-dealers
In order to examine the number of broker-dealers that would be subject to Rule 605 reporting requirements under the final rule at different customer account thresholds, it is first necessary to estimate the number of customers both for carrying and for introducing broker-dealers.
Lowering the customer account threshold might be beneficial if more broker-dealer customer accountholders are able to benefit from the enhanced reporting requirements. To estimate the benefits of different customer account thresholds, the Commission calculated the cumulative number of customer accounts (expressed as a percentage of all identified carrying and introducing broker-dealer customer accounts) associated with broker-dealers that will be subject to the amended reporting requirements of Rule 605 according to various definitions of the customer account threshold. Additionally, using estimates of the number of orders that originate from institutional or individual accounts at broker-dealers as identified in CAT,
Table 13
Meanwhile, reducing the customer account threshold from 100,000 to 10,000 would increase the coverage of customer order originations by an additional 21.0 percentage points. However, it would significantly increase both the initial and ongoing compliance costs, which would increase by approximately 187%.
An indirect cost of requiring these smaller broker-dealers to publish Rule 605 reports is an increased risk of information leakage. To the extent that a broker-dealer serves multiple institutional investors and/or these institutional investors exclusively use not held orders, it might be difficult to identify the orders of a particular customer in the amended Rule 605 reports. However, a smaller broker-dealer might have only a few institutional investor customers that represent the majority of its business and this might be known to other market participants. In this case, it might be possible to learn from Rule 605 reports some information about the customer's order flow that is handled by the specific broker-dealer. This information will only pertain to historical order flow and will only include a possibly limited subset of the customer's orders that are held orders, but could nevertheless provide information about the general characteristics of the customer's order flow, which might be useful to other market participants. Such a potential outcome could put smaller broker-dealers (that is, those with a small set of customers or handling a relatively small number of institutional orders) at a competitive disadvantage relative to larger broker-dealers, as institutional investors might avoid using smaller broker-dealers to avoid possible disclosure that could be traced back to the customer.
Another alternative to the adopted amendment to require larger broker-dealers to prepare execution quality reports pursuant to Rule 605 is to require all broker-dealers to prepare such reports, excluding broker-dealers with de minimis order flow. Several commenters supported this alternative.
Expanding reporting requirements to all broker-dealers, subject to a de minimis threshold, would greatly increase the scope of these amendments, as there were 3,494 registered broker-dealers as of Q2 2023.
The Commission also considered defining the threshold for differentiating larger broker-dealers using number of customer transactions rather than number of customer accounts. An approach requiring that broker-dealers handling above a threshold level of customer transactions publish Rule 605 reports would likely capture an overall larger number of customer orders. However, it would also be subject to a number of issues that would limit the benefits of this approach. The Commission did not receive comment on this alternative, which was also in the Proposing Release.
First, this approach would likely exclude from reporting requirements broker-dealers that have a large number of relatively inactive customer accounts, and include broker-dealers that have a small number of accounts associated with large amounts of trading volume. While the former are likely to be accounts belonging to individual investors, the latter are very likely to be institutional accounts. Institutional investors are likely to have access to alternative information about the execution quality achieved by their broker-dealers and/or are likely to make use of not held orders that are excluded from Rule 605 reporting requirements, and would therefore be less likely to depend on Rule 605 reports for information about their broker-dealers' execution quality.
Second, defining the threshold using the number of customer transactions might result in a less stable classification of broker-dealers into those that are and are not subject to Rule 605 requirements, as there is likely to be more month-to-month variation in transaction numbers resulting from changes in market conditions, as compared to number of customer accounts.
Lastly, the number of customer accounts is likely less costly for broker-dealers to calculate and track compared to the number of transactions associated with customer accounts. Given that around 88.1% of customer-carrying broker-dealers reported the actual number of their customer transactions (rather than an estimated number) on their FOCUS Report Form X-17A-5 Schedule I in 2022,
Both prior to and after these amendments, marketable Intermarket Sweep Orders (“ISOs”) with a limit price inferior to the NBBO,
ISOs make up a large percentage of on-exchange trade volume; one academic working paper found that, between January 2019 and April 2021, ISOs accounted for 48% of on-exchange trade volume.
However, there are questions as to whether ISOs with inferior limit prices would be comparable to other marketable limit orders. When the limit price of an ISO is inferior to the NBBO at time of order receipt, the customer is effectively instructing the trading center that it can execute the order at a price inferior to the NBBO. If the order executes, any adverse effects that this inferior limit price has on the order's execution quality metrics (
One alternative could be to explicitly include ISOs with inferior limit prices as a separate order type category in Rule 605 reports. However, the instruction that a market center should execute an ISO order at a price inferior to the NBBO, even when other market centers are displaying liquidity at better prices, limits broker-dealers' discretion over the execution price of these orders. Thus, market participants might only benefit from this information to the extent that market centers or broker-dealers still have some discretion over some dimension of the order's execution quality such that this information would be useful in comparing metrics across reporting entities.
Limit orders that are canceled within a very short amount of time after submission are likely driven by trading strategies (for example, high frequency trading
In order to examine how the presence of quickly cancelled orders might impact fill rates and subsequently impact the ranking of market centers, the Commission first examined data on cancellation and execution times of executable NMLOs from MIDAS during the month of March 2023.
Therefore, it might be the case that excluding orders cancelled below some minimum threshold might lead to more informative fill rates. However, one question might be how to determine this threshold. For example, if the intent is to exclude cancellations that are part of high-frequency trading strategies such as pinging, it might be useful to keep in mind that estimates of human reaction time range from between one second and several hundred milliseconds, setting an upper bound for what might be considered high-frequency trading.
The benefit of excluding quickly cancelled orders is also likely to be limited if excluding these orders systemically increases fill rates across all reporting entities and does not necessarily lead to a change in ranking between reporting entities. To explore this possibility, the Commission limited the sample to the five largest market centers in terms of execution volume, to examine how the rankings between these market centers changes in terms of their fill rates for executable NMLOs resulting from changes to the threshold below which to exclude cancelled orders. Then it examined changes to their fill rate rankings for executable NMLOs as the threshold below which to exclude cancelled orders increased. The Commission found that market centers' rankings did not change until cancellations below one second were excluded, when the market centers ranked first and third switched places. As for reasons described above one second represents a maximum bound on a reasonable threshold for excluding cancellations, this again implies that the benefits of excluding quickly cancelled orders on fill rates might be limited.
These amendments to Rule 605 will require NMLOs submitted outside of regular trading hours to be included in Rule 605 reports if they become executable during regular trading hours. The Commission considered whether it would be useful to include these orders as a separate order type category in Rule 605 reports. If NMLO orders submitted outside of regular trading hours have characteristics that are fundamentally different from other types of orders and have sufficient volume, their inclusion along with other orders could skew execution quality statistics. Pre-open orders likely have characteristics that differ from orders submitted during regular hours.
Instead of redefining order size categories according to notional values, the Commission considered an alternative that defined categories based on the number of round lots.
The Commission considered an alternative in which, in addition to odd-lots, round lots, and fractional orders less than one share, reporting entities would also be required to report separate execution quality information for round lots with a fractional component, and odd-lots with a fractional component. This was suggested by a commenter, who stated that “when a round lot or odd-lot order has a fractional share component, this could, in some cases, impact the time to execution and the execution price.”
In the Proposing Release, the Commission proposed eliminating time-to-execution buckets and instead requiring reporting entities to report additional time-to-execution statistics,
The Commission continues to believe that requiring time-to-execution statistics as proposed would provide market participants with useful information about the distribution of time-to-execution for a given stock, order size, and order type combination (
The Commission understands that consumers of Rule 605 reports benefit from the ability to aggregate information across various order types and sizes (
The Commission also considered an alternative in which, rather than calculating order execution times from the time of order receipt, broker-dealers would calculate the execution time from the time of order route,
The adopted amendments to Rule 605 will require the realized spread to be calculated at a range of time horizons between 50 milliseconds and 5 minutes. This represents an expansion to what was proposed, that the realized spread be calculated at two time horizons (15 seconds and one minute).
In the Proposing Release, the Commission acknowledged that “requiring an additional specification of realized spreads would entail adding another data item, which would also increase the complexity of Rule 605 reports.”
One commenter suggested replacing the five-minute time horizon with “short timeframes to include 50ms, 100ms.”
The Commission also considered whether the time horizon used to calculate realized spreads should be measured in terms of “trade time,” rather than “clock time.” The Commission did not receive comment on this alternative, which was also in the Proposing Release.
Instead of setting a fixed “clock time” horizon, volume or “trade time” measures changes between the “the initial trade to the
However, the Commission is mindful of the additional computational resources that would be required if trade time were required to calculate realized spreads, as this would require reporting entities to match their execution information both to information on the NBBO, as would be necessary under the proposed clock time horizons, but additionally historical trade information from the exclusive SIPs.
Under the adopted amendments, Rule 600(b)(8) defines effective spreads as, for buy orders, double the amount of difference between the execution price and the midpoint of the national best bid and national best offer at the time of order receipt and, for sell orders, as double the amount of difference between the midpoint of the national best bid and national best offer at the time of order receipt and the execution price. For midpoint-or-better limit orders, the time of executability is used rather than the time of order receipt.
The presence of bias in effective spreads in Rule 605 reports would impact market participants' ability to use this metric to make comparisons across reporting entities, particularly if the bias leads to a systematic over- or under-estimation of spreads for a particular entity or group of entities. However, there are benefits and costs to the use of the midpoint compared to the weighted midpoint for calculating effective spreads. On the one hand, the midpoint requires only data on the best available bid and ask price. Calculating the weighted midpoint on the other hand would require that reporting entities additionally collect data on the depth available at the NBBO.
The Commission considered alternative measures of size improvement, including requiring a measure of dollar size improvement that would capture the dollar savings that an investor receives from size improvement offered by a reporting entity, taking into account the depth of book quotes and odd-lot quotes available from all exchanges' proprietary depth-of-book data feeds. The measures of dollar size improvement considered include both RPI and a modified RPI measure that would account for the fact that order sizes may exceed the consolidated depth available across all order levels.
First, as suggested by a petitioner, the Commission considered requiring the reporting of RPI, which would be calculated as the signed difference between the value-weighted average price (“VWAP”) of the transaction, and a reference price calculated as the VWAP that the trader would have gotten from walking a consolidated limit order book consisting of displayed liquidity from all national securities exchanges, taking into account both odd-lots and depth available at prices outside of the NBBO.
In addition to RPI, the Commission also considered a modified RPI measure that would account for the fact that order sizes may exceed the consolidated depth available across all order levels.
Dollar size improvement metrics differ from the size improvement metrics in the adopted amendments in several ways. First, in the adopted amendments, both the order size benchmark and the size improved outsized shares
Requiring the reporting of dollar size improvement in Rule 605 reports could result in additional benefits for market participants relative to the adopted amendments. Because it incorporates information across all order book levels, a measure of dollar size improvement (such as RPI) may be more informative than measures calculated only using information about depth at the best displayed prices. In order to compare the extent to which RPI and the adopted size improvement metrics contain similar information about size improvement, the Commission used data from the Tick Size Pilot B.II Market and Marketable Limit Order dataset
Results are presented in Table 15 and show that RPI and price improvement have a correlation of around 0.4 for both national securities exchanges and off-exchange market centers, implying that these measures contain some (but not all) of the same information about execution quality.
Reporting RPI or the modified version of RPI would require depth-of-book information. In the Proposing Release, the Commission stated that it was not clear that the cost of requiring reporting entities to have access to the full set of consolidated depth information would justify the benefits of RPI. One commenter disagreed with this conclusion and stated that “[t]he SEC does not however quantify these costs or benefits.”
To mitigate the costs of calculating dollar size improvement using full depth-of-book data, the Commission considered a second alternative that would add a field (or fields) to Rule 605 reports for a dollar size improvement measure (or measures), but allow reporting entities that subscribe to the full set of proprietary data feeds to voluntarily report this measure.
The Commission also considered an alternative that would require all Rule 605 reporting entities to report information that is similar to the petitioner's measure of RPI described above but adapted to require this information only to be reported relative to the odd-lot, aggregate quotation size, and depth-of-book information that will be available from competing consolidators following the implementation of the MDI Rules.
Specifically, this alternative would consist of the following three data elements: (1) The share-weighted average of, for each order, the signed difference between the value-weighted average price (“VWAP”) that the trader would have gotten from walking a consolidated limit order book consisting of the depth available from odd-lot information, aggregate quotation size, and depth-of-book data (“reference spread”); (2) The share-weighted average of, for each order, the signed difference between the VWAP that the trader actually received on their order and the midpoint. If the number of executed shares exceeds the depth available from odd-lot information, aggregate quotation size, and depth-of-book data, the VWAP should only be calculated for those executed shares that are not in excess of this sum (“truncated effective spread”); (3) The sum of, for each order, the number of shares executed in excess of the depth available from odd-lot information, aggregate quotation size, and depth-of-book data (“shares executed in excess of consolidated depth-of-book”).
Requiring the reporting of dollar size improvement calculated using data available from competing consolidators could result in some additional costs, as reporting entities (following the implementation of MDI rules) would be required to obtain depth-of-book data from competing consolidators in order to calculate these measures.
As an alternative to the adopted size improvement metrics, one commenter suggested including three metrics related to size improvement: “(1) the number of orders for which the order size exceeded the available shares displayed on the relevant side of the NBBO (`outsized orders'); (2) the total number of shares executed as part of these outsized orders; and (3) the number (or percentage) of shares within the outsized orders that received size improvement (
The Commission agrees with the commenter that “the number (or percentage) of shares within the outsized orders that received size improvement (
The suggested metric, “the number of orders for which the order size exceeded the available shares displayed on the relevant side of the NBBO (`outsized orders'),” is similar to the outsized share count in the adopted amendments but less informative because it is based on the number of orders.
The suggested metric, “the total number of shares executed as part of these outsized orders,” is similar to the outsized share count in the adopted amendments, but less informative because it would not control for size improvement opportunities. While the commenter did not specify why this metric would be informative to market participants regarding size improvement, one possible use would be to assess the number of shares within outsized orders that execute with size improvement, as a percentage of total executed shares within outsized orders, as a way to calculate a size improvement “rate.” For example, if the metrics would reveal that 200 shares executed as part of outsized orders, and 100 shares of outsized orders received size improvement, a market participant could infer that 50% of shares executed as part of outsized orders were executed with size improvement. However, this rate metric would not be able to distinguish between different size improvement opportunities in cases of different levels of available depth, and thus would lead to an inaccurate comparison across market centers.
To see this, consider Market A, which fully executes a 500-share order at the NBBO while there were only 200 shares of available NBBO depth. The metrics suggested by the commenter would reveal the following information: (1) one outsized order, (2) 500 shares executed as part of outsized orders, and (3) 300 shares of outsized orders that received size improvement. Compare this to Market Center B, which fully executes a 500-share order at the NBBO while there were 400 shares of available NBBO
In sum, because a size improvement rate calculated relative to “the total number of shares executed as part of these outsized orders” would not control for size improvement opportunity, and because a measure of submitted volume that exceed available depth expressed in terms of number of orders would not allow market participants to compare this measure to most other Rule 605 measures, the Commission does not believe that the metrics suggested by the commenter would be more informative than those included in these amendments. Furthermore, the Commission disagrees that the metrics suggested by the commenter “would be more informative as they are not affected by orders in which there was not a need to provide size improvement.”
Instead of or in addition to having market centers and larger broker-dealers post Rule 605 reports on their websites, the Commission considered requiring market centers to submit Rule 605 reports to a centralized electronic system, which would have then made these reports available to market participants. Multiple commenters supported the centralized posting of Rule 605 reports, stating that such centralization would “facilitate accessibility”
Market participants may face search costs when collecting existing Rule 605 reports in order to compare execution quality across reporting entities, in particular when collecting Rule 605 reports for multiple entities and across longer time periods.
Likewise, compared to the adopted amendments, a centralized electronic system would have better enabled broker-dealers to use Rule 605 reports to compare execution quality across market centers, and thus might have increased competition among market centers on the basis of execution quality in order to attract order flow.
While the Commission agrees with commenters that centralizing Rule 605 reports would have created these benefits, the Commission also recognizes that requiring such centralization would impose uncertainties and costs related to implementation. As discussed above, commenters did not have a consensus view on how to accomplish centralization.
The entity or entities responsible for administering the Rule 605 centralized electronic system would have incurred costs to create and maintain a system (including any compliance, programmatic formatting, completeness, and/or consistency checks that the system would run on the reports before dissemination). Administering entities could have passed these costs on to reporting entities in the form of filing fees, and/or to consumers of Rule 605 reports in the form of access fees. If potential consumers of Rule 605 reports decided not to access the reports because of these access fees, this would have represented a cost in the form of reduced accessibility of Rule 605 reports.
The Commission specifically considered two options for how to implement the centralized electronic system: using the existing Rule 605 NMS Plan and the Commission's EDGAR system.
One commenter supported a requirement that procedures established pursuant to the NMS Plan provide for the creation and maintenance of a centralized electronic system to serve as a repository for Rule 605 reports.
The Commission also considered requiring reporting entities to disclose Rule 605 information directly to the Commission through the Commission's EDGAR system, with the Commission subsequently making the information publicly available on EDGAR.
Because the centralization of Rule 605 disclosures, whether through an NMS Plan, EDGAR, or some other means, would have introduced implementation costs and uncertainties as well as implementation time delays compared to the adopted amendments, the Commission did not adopt a requirement for centralized posting of Rule 605 reports.
Rule 605 requires reports to be made available to the public in a uniform, readily accessible, and usable electronic format through procedures established by the NMS plan participants,
On the other hand, this alternative would have required reporting entities to establish technical systems to format the reports using the expanded XML schema and render them using the PDF renderer, thus imposing additional compliance costs relative to the adopted amendments. Furthermore, because Rule 605 reports consist solely of a series of discrete numeric values, and do not contain elements in nested structures, the sophisticated validations that XML enables would not have provided significant benefits for Rule 605 reports. In addition, because the nature of the Rule 606 data (which include narrative discussions) differs from the nature of the Rule 605 data (which are limited to a discrete set of numerical statistics), and because the population of entities that report Rule 606 data (broker-dealers) does not coincide with the population of entities that will report Rule 605 data (market centers and larger broker-dealers), the benefits to be realized from interchangeable usage of Rule 605 and Rule 606 data would not have been significant.
In a change from the proposal, the adopted amendments require market centers to publish summary reports in CSV and PDF formats. One commenter recommended this approach, stating CSV (or another format that can be copied into a spreadsheet program) “would allow investors to compare summary data across firms more readily.”
As an alternative to the adopted amendments, the Commission considered using CAT data to have either the Commission or the CAT Plan Processor
This approach would have lower compliance costs for reporting entities than the adopted amendments, as it would not require reporting entities to prepare Rule 605 reports. Another benefit of this alternative with regard to the adopted amendments is that the data in this alternative could be more comprehensive in terms of the breadth of broker-dealers whose execution quality information could be aggregated and published, because the Commission could publish aggregated data on execution quality from all broker-dealers instead of just those that meet the customer account threshold. As a result, the data would be more comprehensive, resulting in even greater benefits from transparency.
Numerous commenters supported this alternative, stating that requiring CAT to produce Rule 605 reports would increase efficiency and reduce the burdens and costs associated with preparing Rule 605 reports,
However, there are several drawbacks to this alternative relative to the adopted amendments. First, it would take some time before CAT data could be used to produce execution quality reports. The Commission continues to believe that it would be a major undertaking for the Plan Processor to build out and adapt systems to collect, process, and publish this information. This might result in a delay in market participants' access to information about execution quality, which would delay the benefits of the adopted rule. Second, costs associated with the Plan Processor would also increase because of increased requirements for processing power for the aggregation of CAT data if such computations could not be performed with existing resources (without reducing other functionality). Any costs incurred by the Plan Processor would be passed along to Plan Participants and Industry Members, which could result in larger costs to some reporting entities.
The Commission also considered an alternative suggested by a commenter in which, rather than requiring larger broker-dealers to prepare Rule 605 reports, broker-dealers would be required to submit expanded Rule 606 reports
The RFA
In the Proposing Release, the Commission certified that the proposed amendments to Rules 600 and 605 would not have a significant economic impact on a substantial number of small entities for purposes of the RFA.
As adopted, the amendments to Rules 600 and 605 apply to market centers—which includes any exchange market maker, OTC market maker, ATS, national securities exchange registered with the Commission under section 6 of the Exchange Act, or national securities association registered with the Commission under section 15A of the Exchange Act—and certain brokers or dealers that are not a market center.
None of the exchanges registered under section 6 that will be subject to the proposed amendments are “small entities” for purposes of the RFA.
A broker-dealer is considered a small entity for purposes of Regulatory Flexibility Act if: (1) it had total capital of less than $500,000 on the date in the prior fiscal year as of which its audited financial statements were prepared, or, if not required to prepare such statements, it had total capital of less than $500,000 on the last business day of the preceding fiscal year; and (2) it is not affiliated with any person (other than a natural person) that is not a small entity. Applying this standard, the Commission estimates that, of the firms that will be impacted by the amendments, only one exchange market maker, no OTC market makers, no larger broker-dealers, and no ATSs are small entities.
If any of the provisions of these rules, or the application thereof to any person or circumstance, is held to be invalid, such invalidity shall not affect other provisions or application of such provisions to other persons or circumstances that can be given effect without the invalid provision or application.
Pursuant to the Congressional Review Act,
Pursuant to the Exchange Act and particularly sections 3(b), 5, 6, 11A, 15, 17, 19, 23(a), 24, and 36 thereof, 15 U.S.C. 78c, 78e, 78f, 78k-1, 78
Brokers, Confidential business information, Fraud, Reporting and recordkeeping requirements, Securities.
For the reasons stated in the preamble, the Commission is amending title 17, chapter II of the Code of Federal Regulations:
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 78g, 78i, 78j, 78j-1, 78j-4, 78k, 78k-1, 78
15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78c-4, 78g(c)(2), 78i(a), 78j, 78k-1(c), 78
(b) * * *
(1)
(i) Symbol;
(ii) Side (buy or sell);
(iii) A price that is equal to or better than the national best bid for buy orders and the national best offer for sell orders; and
(iv) A size that is at least equal to one round lot.
(2)
(3)
(4)
(5)
(6)
(i) Permits an incoming order to be marked as immediate-or-cancel;
(ii) Immediately and automatically executes an order marked as immediate-or-cancel against the displayed quotation up to its full size;
(iii) Immediately and automatically cancels any unexecuted portion of an order marked as immediate-or-cancel without routing the order elsewhere;
(iv) Immediately and automatically transmits a response to the sender of an order marked as immediate-or-cancel indicating the action taken with respect to such order; and
(v) Immediately and automatically displays information that updates the displayed quotation to reflect any change to its material terms.
(7)
(i) Has implemented such systems, procedures, and rules as are necessary to render it capable of displaying quotations that meet the requirements for an automated quotation set forth in paragraph (b)(6) of this section;
(ii) Identifies all quotations other than automated quotations as manual quotations;
(iii) Immediately identifies its quotations as manual quotations whenever it has reason to believe that it is not capable of displaying automated quotations; and
(iv) Has adopted reasonable standards limiting when its quotations change from automated quotations to manual quotations, and vice versa, to specifically defined circumstances that promote fair and efficient access to its automated quotations and are consistent with the maintenance of fair and orderly markets.
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(i) Of at least 10,000 shares; or
(ii) For a quantity of stock having a market value of at least $200,000.
(18)
(i) Less than $250 and less than a share;
(ii) Less than $250 and odd-lot;
(iii) Less than $250 and at least a round lot;
(iv) $250 to less than $1,000 and less than a share;
(v) $250 to less than $1,000 and odd-lot;
(vi) $250 to less than $1,000 and at least a round lot;
(vii) $1,000 to less than $5,000 and less than a share;
(viii) $1,000 to less than $5,000 and odd-lot;
(ix) $1,000 to less than $5,000 and at least a round lot;
(x) $5,000 to less than $10,000 and less than a share;
(xi) $5,000 to less than $10,000 and odd-lot;
(xii) $5,000 to less than $10,000 and at least a round lot;
(xiii) $10,000 to less than $20,000 and less than a share;
(xiv) $10,000 to less than $20,000 and odd-lot;
(xv) $10,000 to less than $20,000 and at least a round lot;
(xvi) $20,000 to less than $50,000 and less than a share;
(xvii) $20,000 to less than $50,000 and odd-lot;
(xviii) $20,000 to less than $50,000 and at least a round lot;
(xix) $50,000 to less than $200,000 and less than a share;
(xx) $50,000 to less than $200,000 and odd-lot;
(xxi) $50,000 to less than $200,000 and at least a round lot;
(xxii) $200,000 or more and less than a share;
(xxiii) $200,000 or more and odd-lot; and
(xxiv) $200,000 or more and at least a round lot.
(19)
(20)
(21)
(22)
(i) The prices, sizes, and market identifications of the national best bid and national best offer for a security; and
(ii) Consolidated last sale information for a security.
(23)
(24)
(i) Core data;
(ii) Regulatory data;
(iii) Administrative data;
(iv) Self-regulatory organization-specific program data; and
(v) Additional regulatory, administrative, or self-regulatory organization-specific program data elements defined as such pursuant to the effective national market system plan or plans required under § 242.603(b).
(25)
(26)
(i) The following information with respect to quotations for, and transactions in, NMS stocks:
(A) Quotation sizes;
(B) Aggregate quotation sizes;
(C) Best bid and best offer;
(D) National best bid and national best offer;
(E) Protected bid and protected offer;
(F) Transaction reports;
(G) Last sale data;
(H) Odd-lot information;
(I) Depth of book data; and
(J) Auction information.
(ii) For purposes of the calculation and dissemination of core data by competing consolidators, as defined in paragraph (b)(21) of this section, and the calculation of core data by self-aggregators, as defined in paragraph (b)(94) of this section, the best bid and best offer, national best bid and national best offer, protected bid and protected offer, and depth of book data shall include odd-lots that when aggregated are equal to or greater than a round lot; such aggregation shall occur across multiple prices and shall be disseminated at the least aggressive price of all such aggregated odd-lots.
(iii) Competing consolidators shall represent the quotation sizes of the following data elements, if disseminated in a consolidated market data product as defined in paragraph (b)(25) of this section, as the number of shares rounded down to the nearest multiple of a round lot: The best bid and best offer, national best bid and national best offer, protected bid and protected offer, depth of book data, and auction information.
(iv) Competing consolidators shall attribute the following data elements, if disseminated in a consolidated market data product as defined in paragraph (b)(25) of this section, to the national securities exchange or national securities association that is the source of each such data element: Best bid and best offer, national best bid and national best offer, protected bid and protected offer, transaction reports, last sale data, odd-lot information, depth of book data, and auction information.
(27)
(28)
(29)
(30)
(31)
(32)
(33)
(i) Permits real-time monitoring, on a dynamic basis, of transaction reports, last sale data, or quotations with respect to a particular security; and
(ii) Displays the most recent transaction report, last sale data, or quotation with respect to that security until such report, data, or quotation has been superseded or supplemented by the display of a new transaction report, last sale data, or quotation reflecting the next reported transaction or quotation in that security.
(34)
(35)
(36)
(i) Any system that crosses multiple orders at one or more specified times at a single price set by the system (by algorithm or by any derivative pricing mechanism) and does not allow orders to be crossed or executed against directly by participants outside of such times; or
(ii) Any system operated by, or on behalf of, an OTC market maker or exchange market maker that executes customer orders primarily against the account of such market maker as principal, other than riskless principal.
(37)
(38)
(39)
(40)
(41)
(42)
(43)
(44)
(45)
(46)
(47)
(i) When routed to a trading center, the limit order is identified as an intermarket sweep order; and
(ii) Simultaneously with the routing of the limit order identified as an intermarket sweep order, one or more additional limit orders, as necessary, are routed to execute against the full displayed size of any protected bid, in the case of a limit order to sell, or the full displayed size of any protected offer, in the case of a limit order to buy, for the NMS stock with a price that is superior to the limit price of the limit order identified as an intermarket sweep order. These additional routed orders also must be marked as intermarket sweep orders.
(48)
(49)
(50)
(51)
(52)
(53)
(54)
(55)
(56)
(57)
(58)
(59)
(60)