[Federal Register Volume 75, Number 148 (Tuesday, August 3, 2010)]
[Proposed Rules]
[Pages 45584-45590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-18924]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 170


Planning and Establishment of State-Level Exchanges; Request for 
Comments Regarding Exchange-Related Provisions in Title I of the 
Patient Protection and Affordable Care Act

AGENCY: Office of Consumer Information and Insurance Oversight, 
Department of Health and Human Services.

ACTION: Request for comments.

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SUMMARY: This document is a request for comments regarding the 
Exchange-related provisions of the Patient Protection and Affordable 
Care Act (the Affordable Care Act), enacted on March 23, 2010. The 
Department of Health and Human Services (HHS) invites public comments 
in advance of future rulemaking and grant solicitations.

DATES: Submit written or electronic comments by October 4, 2010.

ADDRESSES: In commenting, please refer to file code OCIIO-9989-NC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
     Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions under 
the ``More Search Options'' tab.
     By regular mail. You may mail written comments to the 
following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: OCIIO-9989-NC, P.O. 
Box 8010, Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
     By express or overnight mail. You may send written 
comments to the following address ONLY: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: OCIIO-
9989-NC, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 
21244-1850.
     By hand or courier. If you prefer, you may deliver (by 
hand or courier) your written comments before the close of the comment 
period to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-9994 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Donna Laverdiere, Office of Consumer 
Information and Insurance Oversight, Department of Health and Human 
Services, at (301) 492-4100.

[[Page 45585]]

    Customer Service Information: Individuals interested in obtaining 
information about the Patient Protection and Affordable Care Act may 
visit the Department of Health and Human Services' Web site (http://www.HealthCare.gov).

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments. All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all electronic 
comments received before the close of the comment period on the 
following public Web site as soon as possible after they have been 
received: http://www.regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will be available for public inspection as 
they are received, generally beginning approximately 3 weeks after 
publication of a document, at Room 445-G, Department of Health and 
Human Services, Hubert H. Humphrey Building, 200 Independence Avenue, 
SW., Washington, DC 20201, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, call 
1-800-743-3951.

I. Background

A. General

    Title I of the Patient Protection and Affordable Care Act 
(Affordable Care Act, or the Act), Public Law 111-148, enacted on March 
23, 2010, expands access to health insurance through the establishment 
of American Health Benefits Exchanges (``Exchanges''). Sections 1311(b) 
and 1321 (b) of the Affordable Care Act provide that each State may 
elect to establish an Exchange that would (consistent with definitions 
relating to the individual and group markets and employer size 
established in Section 1304 of the Act): (1) Facilitate the purchase of 
qualified health plans (QHPs); (2) provide for the establishment of a 
Small Business Health Options Program (``SHOP Exchange'') designed to 
assist qualified employers in facilitating the enrollment of their 
employees in QHPs offered in the SHOP Exchange; and (3) meet other 
requirements specified in the Act. Additionally, section 1321(c)(1) 
requires the Secretary to establish and operate an Exchange within 
States that do not elect to establish an Exchange, or if the Secretary 
determines, on or before January 1, 2013, that the State will not have 
an Exchange operable by January 1, 2014 or has not taken the actions 
necessary to meet required Exchange standards as defined by regulation 
or to implement other requirements in Subtitles A and C of the 
Affordable Care Act (relating to insurance market reforms). For 
purposes of the remainder of this notice, the term ``Exchange'' will 
refer to State-operated Exchanges and the Exchange operated by the 
Federal government on behalf of States that do not elect to establish 
an Exchange.

B. Requirements for Establishing and Operating Exchanges

    Section 1311(d) of the Affordable Care Act specifies certain 
requirements for Exchanges, and section 1311(e) specifies the 
requirements for a plan to be certified by the Exchange as a QHP. 
Additionally, Section 1321 of the Affordable Care Act discusses State 
flexibility in the operation and enforcement of Exchanges and related 
requirements. The Secretary will issue regulations setting standards 
for meeting the requirements under Title I of the Act with respect to 
the establishment and operations of the Exchanges. Each State electing 
to establish and operate an Exchange must have in effect Federal 
standards or a State law or regulation that implements the Federal 
standards within the State. Also, section 1311(k) specifies that 
Exchanges may not establish rules that conflict with or prevent the 
application of regulations promulgated by the Secretary under Subtitle 
D of the Affordable Care Act.
    Section 1321(c) of the Act provides the authority for the Secretary 
to establish and operate an Exchange on behalf of a State that does not 
elect to establish an Exchange or that the Secretary determines will 
not have an Exchange operable by January 1, 2014; or has not taken the 
necessary actions to implement the requirements in 1321(a) or other 
market reforms specified in Subtitles A and C of Title I of the 
Affordable Care Act.
1. General Requirements for Exchanges
    Section 1311(d)(1) requires that an Exchange must be a governmental 
agency or nonprofit entity established by a State. Section 1311(d)(2) 
requires Exchanges to make QHPs available to eligible individuals and 
employers. Section 1311(d)(6) requires Exchanges to consult with 
various stakeholders relevant to carrying out their responsibilities.
    Section 1311(d)(4) identifies the minimum functions that an 
Exchange must perform. These functions include, but are not limited to: 
Implementing procedures for certification, recertification, and 
decertification of QHPs; providing for the operation of a toll-free 
telephone hotline to respond to requests for assistance; maintaining an 
Internet website containing standardized comparative information on 
QHPs; assigning ratings to each QHP offered through the Exchange on the 
basis of relative quality and price, in accordance with criteria as 
defined by the Secretary; utilizing a standardized format for 
presenting health benefits options in the Exchange; consistent with 
requirements in Section 1413 of the Act, informing individuals of 
eligibility requirements for the Medicaid and CHIP programs or any 
applicable State or local public program, and enrolling individuals in 
those programs if the Exchange determines they are eligible through 
screening of the application by the Exchange; establishing and making 
available by electronic means a calculator to determine the actual cost 
of coverage after application of any premium tax credit and cost-
sharing reduction; granting certifications to individuals relating to 
hardship or other exemptions; and establishing a Navigator program 
consistent with the requirements in Section 1311(i).
2. Requirements Relating to Plan Ratings and Internet Portals
    Section 1311(c)(3) requires the Secretary to develop a rating 
system that would rate QHPs offered through an Exchange on the basis of 
the relative quality and price. Additionally, Section 1311(c)(4) 
requires the Secretary to develop an enrollee satisfaction system that 
would evaluate the level of satisfaction with QHPs that had more than 
500 enrollees during the previous year that are offered through an 
Exchange. The Act requires Exchanges to include quality and enrollee 
satisfaction ratings in the information provided to individuals and 
employers through their Internet portals.
    Section 1311(c)(5) directs the Secretary to make a model template 
available to Exchanges for an Internet portal that may be used to 
direct eligible individuals and employers to QHPs; assist individuals 
and employers in determining eligibility for participation in 
Exchanges, premium tax credits, or cost-sharing reductions; and present 
standardized information (including plan ratings) to assist consumers 
in making health insurance choices. The Affordable Care Act also 
directs the Secretary to continue operating, maintaining and updating 
the Federal Internet portal developed under Section 1103(a) and to 
assist States in developing and maintaining their own portals.

[[Page 45586]]

3. Requirements Relating to Navigator Programs
    Section 1311(i) provides that an Exchange shall establish a 
Navigator program under which it awards grants to eligible entities 
that meet the law's criteria, including demonstrating to the Exchange 
that they have existing relationships or could establish relationships 
with employers and employees, consumers, or self-employed individuals 
likely to be eligible to enroll in a qualified health plan. The duties 
of entities that serve as Navigators under such a grant include: 
Conducting public education activities to raise awareness of the 
availability of QHPs; distributing fair and impartial information 
concerning enrollment in QHPs and the availability of premium tax 
credits and cost-sharing reductions; facilitating enrollment in QHPs; 
providing referrals to any applicable office of health insurance 
consumer assistance, health insurance ombudsman, or other State agency 
to address enrollee complaints and questions about their health plans 
and coverage determination; and providing information in a manner that 
is culturally and linguistically appropriate to the needs of the 
population being served by the Exchange. The Affordable Care Act 
directs the Secretary, in collaboration with States, to develop 
standards to ensure that information made available by Navigators is 
fair, accurate and impartial.
4. Other Requirements Relating to Exchanges
    Section 1311(c)(6) requires Exchanges to provide for an initial 
open enrollment period (as determined by the Secretary no later than 
July 1, 2012), annual open enrollment periods (as determined by the 
Secretary), and special enrollment periods.
    Section 1311(d)(5)(A) specifies that States must ensure that their 
Exchanges are self-sustaining on or after January 1, 2015, including 
allowing Exchanges to charge assessments or user fees to participating 
health insurance issuers, or otherwise generate funding to support 
their operations. Section 1311(d)(5)(B) prohibits wasteful use of funds 
by Exchanges. Additionally, Section 1313 requires Exchanges to keep an 
accurate accounting of all activities, receipts, and expenditures, and 
annually submit to the Secretary a report concerning such accounting. 
Section 1313(a) also specifies that the Secretary has certain 
enforcement authority if an Exchange or a State has engaged in serious 
misconduct related to compliance with Title I of the Act.
5. Establishment of Exchanges in the Territories
    Section 1323 of the Affordable Care Act provides an opportunity for 
U.S. Territories to elect to establish Exchanges and appropriates a 
fixed amount of funds to reduce the cost of coverage provided through 
an Exchange in the Territories. The Act stipulates that Territories' 
elections related to establishing Exchanges must be consistent with 
Section 1321, relating to standards for establishing and operating 
Exchanges, and received not later than October 1, 2013.

II. Solicitation of Comments

    Section 1321(a)(2) of the Affordable Care Act requires the 
Secretary to consult with stakeholders to ensure balanced 
representation among interested parties. HHS is inviting public comment 
to aid in the development of standards for establishment and operation 
of the Exchanges, to address other Exchange-related provisions in Title 
I of the Affordable Care Act, and to inform for the awarding of grants 
to the States to assist them in planning and developing Exchanges. The 
Department is interested in comments from all interested parties. To 
assist interested parties in responding, this request for comments 
describes specific areas in which the Department is particularly 
interested.
    Commenters should use the questions below to provide the Department 
with relevant information for the development of regulations regarding 
the Exchange-related provisions in Title I of the Affordable Care Act. 
However, it is not necessary for commenters to address every question 
below and commenters may also address additional issues under the 
Exchange-related provisions in Title I of the Affordable Care Act. 
Individuals, groups, and organizations interested in providing comments 
may do so at their discretion by following the above mentioned 
instructions.
    Specific areas in which HHS is particularly interested include the 
following:

A. State Exchange Planning and Establishment Grants

    Section 1311(a) directs the Secretary to make planning and 
establishment grant awards to States for activities related to 
establishing an Exchange. For each fiscal year, the Secretary must 
determine the total amount that will be made available to each State. 
Grants awarded under this Section may be renewed if a State is making 
sufficient progress toward establishing an Exchange, implementing other 
insurance market reforms, and meeting other benchmarks. The Secretary 
must make the initial grant awards under this Section no later than one 
year after enactment, and no grants shall be awarded after January 1, 
2015.
    1. What factors are States likely to consider in determining 
whether they will elect to offer an Exchange by January 1, 2014? To 
what extent are States currently planning to develop their own 
Exchanges by 2014 (e.g., become electing States) versus choosing to 
opt-in to an Exchange operated by the Federal government for their 
State? When will this decision be made? Can planning grants assist in 
identifying and assessing relevant factors and making this decision?
    2. To what extent have States already begun to plan for 
establishment of Exchanges? What kinds of activities are currently 
underway (e.g., legislative, regulatory, etc.)? What internal and/or 
external entities are involved, or will likely be involved in this 
planning process?
    a. What kinds of governance structures, rules or processes have 
States established or are they likely to establish related to operating 
Exchanges (e.g., legal structure (such as placement in State agency or 
nonprofit organization), governance structure, requirements relating to 
governing board composition, etc.)?
    b. To what extent have States begun developing business plans or 
budgets relating to Exchange implementation?
    3. What are some of the major factors that States are likely to 
consider in determining how to structure their Exchanges (e.g., 
separate or combined individual Exchanges and SHOP Exchanges; regional 
or interstate Exchanges; subsidiary Exchanges, State agency versus 
nonprofit entity)? What are the pros and cons of these various options?
    4. What kinds of factors are likely to affect States' resource 
needs related to establishing Exchanges?
    a. What is the estimated range of costs that States are likely to 
incur during the upcoming year (e.g., calendar 2010 through calendar 
2011) for each of the major categories of Exchange activities? Which of 
these expenses are fixed costs, and which costs are variable?
    b. To what extent do States have existing resources that could be 
leveraged as a starting point for Exchange operations (e.g., existing 
information technology (IT) systems, toll-free hotlines, Web sites, 
business processes, etc.)?

[[Page 45587]]

    c. For what kinds of activities are States likely to seek funding 
using the Exchange establishment and planning grants?
    5. What kinds of questions are States likely to receive during the 
initial planning and start-up phase of establishing Exchanges? How can 
HHS provide technical assistance, and in what forms, in helping States 
to answer these questions?

B. Implementation Timeframes and Considerations

    Section 1321(b) requires each State that elects to establish an 
Exchange meeting the Secretary's requirements to have an Exchange 
operational by January 1, 2014. Section 1321(c) directs the Secretary 
to establish and operate an Exchange within each State that: (1) Does 
not elect to establish an Exchange; or (2) the Secretary determines 
will not have an Exchange operational by January 1, 2014, or has not 
taken the actions the Secretary determines necessary to implement the 
requirements in Section 1321(a) or the other insurance market reform 
requirements in Subtitles A and C of Title I of the Act.
    Additionally, the Affordable Care Act includes several statutory 
deadlines for the Secretary related to establishment of Exchanges, 
including:
     Issuing regulations and/or guidance relating to 
requirements for Exchanges, requirements for QHPs, and risk adjustment 
as soon as practicable;
     Awarding State planning grants no later than one year 
after enactment (March 23, 2011);
     Determining the dates of the initial open enrollment 
period by July 1, 2012;
     No later than January 1, 2013, determining States' 
readiness to have Exchanges operational and implement required 
insurance market reforms by January 1, 2014;
     No later than July 1, 2013, issuing regulations for health 
choice compacts and the CO-OP program, and awarding CO-OP program 
grants; and
     Having in place additional insurance market reforms and 
providing cost-sharing reductions beginning on January 1, 2014.
    In order to carry out the Federal implementation activities to 
ensure Exchanges are fully operational on January 1, 2014, the 
Department is seeking comments from stakeholders relating to 
implementation timeframes.
    1. What are the key implementation tasks that need to be 
accomplished to meet Exchange formation deadlines and what is the 
timing for such tasks? What kinds of business functions will need to be 
operational before January 1, 2014, and how soon will they need to be 
operational?
    2. What kinds of guidance or information would be helpful to 
States, plans, employers, consumers, and other groups or sectors as 
they begin the planning process?
    3. What potential criteria could be considered in determining 
whether an electing State is making sufficient progress in establishing 
an Exchange and implementing the insurance market reforms in Subtitles 
A and C of Title I of the Affordable Care Act? What are important 
milestones for States to show they are making steady and sufficient 
progress to implement reforms by the statutory deadlines?
    4. What other terms or provisions require additional clarification 
to facilitate implementation and compliance? What specific 
clarifications would be helpful?

C. State Exchange Operations

    Section 1311(b) requires an Exchange to be established in each 
State not later than January 1, 2014 that: Facilitates the purchase of 
QHPs; provides for the establishment of a SHOP Exchange that assists 
small employers in facilitating the enrollment of their employees in 
QHPs offered in the small group market in the State; and meets 
additional requirements for Exchanges outlined in Section 1311(d). The 
Act requires the Secretary to publish regulations relating to the 
requirements for operating State Exchanges as soon as practicable, and 
provides various types of flexibility for States.
    A number of additional programs established by the Act are closely 
related to the establishment of health insurance Exchanges, such as the 
Navigator program in Section 1311(i) and other consumer assistance 
programs. In addition, the insurance reforms, consumer protection 
provisions, and premium rating requirements will apply to plans both 
inside and outside the Exchanges.
    1. What are some of the major considerations for States in planning 
for and establishing Exchanges?
    2. For which aspects of Exchange operations or Exchange standards 
would uniformity be preferable? For which aspects of Exchange 
operations or Exchange standards is State flexibility likely to be 
particularly important?
    3. What kinds of systems are States likely to need to enable 
important Exchange operational functions (e.g., eligibility 
determination, plan qualification, data reporting, payment flows, 
etc.), to ensure adequate accounting and tracking of spending, provide 
transparency to Exchange functions, and facilitate financial audits? 
What are the relative costs and considerations associated with building 
Exchange operational, financial, and/or IT systems off of existing 
systems, versus building new stand-alone Exchange IT systems?
    4. What are the tradeoffs for States to utilize a Federal IT 
solution for operating their Exchanges, as compared to building their 
own unique systems to conform to the current State environment? For 
what kinds of functions would it make more sense for States to build 
their own systems, or modify existing systems?
    5. What are the considerations for States as they develop web 
portals for the Exchanges?
    6. What factors should Exchanges consider in reviewing 
justifications for premium increases from insurers seeking 
certification as QHPs? How will States leverage/coordinate the work 
funded by the rate review grants to inform the decisions about which 
plans will be certified by QHPs?
    7. To what extent are Territories likely to elect to establish 
their own Exchanges? What specific issues apply to establishing 
Exchanges in the Territories?
    8. What specific planning steps should the Exchanges undertake to 
ensure that they are accessible and available to individuals from 
diverse cultural origins and those with low literacy, disabilities, and 
limited English proficiency?
    9. What factors should the Secretary consider in determining what 
constitutes as wasteful spending (as outlined in Section 1311 
(d)(5)(B))?

D. Qualified Health Plans (QHPs)

    Section 1311(d)(2)(A) requires Exchanges to make QHPs available to 
qualified individuals and employers, and Section 1311(d)(4)(A) requires 
Exchanges to implement procedures for the certification, 
recertification, and decertification of health plans as QHPs, 
consistent with criteria developed by the Secretary under section 
1311(c). This certification criteria include, at a minimum: Meeting 
marketing requirements; ensuring a sufficient choice of providers and 
providing information on the availability of providers; including 
essential community providers within health insurance plan networks; 
receiving appropriate accreditation; implementing a quality improvement 
strategy; utilizing a uniform enrollment form and a standard format to 
present health benefit plan options; and providing quality information 
to enrollees and prospective enrollees.

[[Page 45588]]

    1. What are some of the major considerations involved in certifying 
QHPs under the Exchanges, and how do those considerations differ in the 
context of individual and SHOP State Exchanges, subsidiary Exchanges, 
regional or interstate Exchanges, or an Exchange operated by the 
Federal government on behalf of States that do not elect to establish 
an Exchange?
    2. What factors should be considered in developing the Section 
1311(c) certification criteria? To what extent do States currently have 
similar requirements or standards for plans in the individual and group 
markets?
    a. What issues need to be considered in establishing appropriate 
standards for ensuring a sufficient choice of providers and providing 
information on the availability of providers?
    b. What issues need to be considered in establishing appropriate 
minimum standards for marketing of QHPs and enforcement of those 
standards? What are appropriate Federal and State roles in marketing 
oversight?
    3. What factors are needed to facilitate participation of a 
sufficient mix of QHPs in the Exchanges to meet the needs of consumers?
    a. What timeframes and key milestones will be most important in 
assessing plans' participation in Exchanges?
    b. What kinds of factors are likely to encourage or discourage 
competition among plans in the Exchanges based on price, quality, 
value, and other factors?
    4. What health plan standards and bidding processes would help to 
facilitate getting the best value for consumers and taxpayers?
    5. What factors are important in establishing minimum requirements 
for the actuarial value/level of coverage?
    6. What factors, bidding requirements, and review/selection 
practices are likely to facilitate the participation of multiple plans 
in Exchanges? To what extent should the Exchanges accept all plans that 
meet minimum standards or select and negotiate with plans?
    7. What are some important considerations related to establishing 
the program to offer loans or grants to foster the promotion of 
qualified nonprofit health plans under CO-OP plans? How prevalent are 
these organizations today? What is the likely demand for these loans 
and grants? What kinds of guidance are they likely to need from HHS and 
what legislative or regulatory changes are they likely to need from 
States?
    8. Are there any special factors that are important for 
consideration in establishing standards for the participation of multi-
State plans in Exchanges?
    9. To what extent are States considering setting up State Basic 
Health Plans under Section 1331 of the Act?

E. Quality

    The Affordable Care Act requires the Secretary to develop a health 
plan rating system on the basis of quality and prices that would be 
used by the Exchanges and to establish quality improvement criteria 
that health plans must meet in order to be qualified plans for 
Exchanges.
    1. What factors are most important for consideration in 
establishing standards for a plan rating system?
    a. How best can Exchanges help consumers understand the quality and 
cost implications of their plan choices?
    b. Are the measures and standards that are being used to establish 
ratings for health plans in the Medicare Advantage program appropriate 
for rating QHPs in the Exchanges? Are there other State Medicaid or 
commercial models that could be considered?
    c. How much flexibility is desirable with respect to establishing 
State-specific thresholds or quality requirements above the minimum 
Federal thresholds or quality requirements?
    2. What are some minimum standards or other factors that could be 
considered with respect to establishing quality measurement and 
improvement thresholds or quality requirements that should be met by 
QHPs? What other strategies, including payment structures, could be 
used by plans to improve the practices of plan providers?

F. An Exchange for Non-Electing States

    Section 1321(c) requires that in the case of States that do not 
elect to establish Exchanges, or that the Secretary determines will not 
have Exchanges operational by January 1, 2014 or have not taken the 
necessary actions to implement the requirements in Section 1321(a) or 
other insurance market reforms specified in Subtitles A and C of Title 
I of the Act, the Secretary shall establish (directly or through 
agreement with a not-for-profit entity) and operate an Exchange within 
the State.
    1. How can the Federal government best work to implement an 
Exchange in States that do not elect to establish or are unable to 
establish their own Exchanges?
    2. Are there considerations for an Exchange operated by the Federal 
government on behalf of States that do not elect to establish an 
Exchange that would be different from the State-run Exchanges?

G. Enrollment and Eligibility

    Section 1411 of the Affordable Care Act requires the Secretary to 
establish a program for determining whether an individual meets certain 
eligibility requirements for Exchange participation, premium tax 
credits and cost-sharing reductions, and individual responsibility 
exemptions. Additionally, Sections 1412, 1413 and 2201 contain 
additional requirements to assist Exchanges by making advance 
determinations regarding income eligibility and cost-sharing 
reductions; providing for residents of each State to apply for 
enrollment in, receive a determination of eligibility for participation 
in, and continue participation in applicable State health subsidy 
programs; and simplifying and coordinating enrollment in the Exchanges, 
Medicaid and the Children's Health Insurance Program (CHIP).
    1. What are the advantages and issues associated with various 
options for setting the duration of the open enrollment period for 
Exchanges for the first year and subsequent years? What factors are 
important for developing criteria for special enrollment periods?
    2. What are some of the key considerations associated with 
conducting online enrollment?
    3. How can eligibility and enrollment be effectively coordinated 
between Medicaid, CHIP, and Exchanges? How could eligibility systems be 
designed or adapted to accomplish this? What steps can be taken to ease 
consumer navigation between the programs and ease administrative 
burden? What are the key considerations related to States using 
Exchange or Medicaid/CHIP application information to determine 
eligibility for all three programs?
    4. What kinds of data linkages do State Medicaid and CHIP agencies 
currently have with other Federal and State agencies and data sources? 
How can the implementation of Exchanges help to streamline these 
processes for States, and how can these linkages be leveraged to 
support Exchange operations?
    5. How do States or other stakeholders envision facilitating the 
requirements of Section 1411 related to verification with Federal 
agencies of eligibility for enrollment through an Exchange?
    6. What are the verification and data sharing functions that States 
are capable of performing to facilitate the determination of Exchange 
eligibility and enrollment?
    7. What considerations should be taken into account in establishing

[[Page 45589]]

procedures for payment of the cost-sharing reductions to health plans?

H. Outreach

    Section 1311(i) provides that Exchanges shall establish grant 
programs for Navigators, to conduct public education activities, 
distribute enrollment information, facilitate enrollment, and provide 
referrals for grievances, complaints, or questions.
    1. What kinds of consumer enrollment, outreach, and educational 
activities are States and other entities likely to conduct relating to 
Exchanges, insurance market reforms, premium tax credits and cost-
sharing reductions, available plan choices, etc., and what Federal 
resources or technical assistance are likely to be beneficial?
    2. What resources are needed for Navigator programs? To what extent 
do States currently have programs in place that can be adapted to serve 
as patient Navigators?
    3. What kinds of outreach strategies are likely to be most 
successful in enrolling individuals who are eligible for tax credits 
and cost-sharing reductions to purchase coverage through an Exchange, 
and retaining these individuals? How can these outreach efforts be 
coordinated with efforts for other public programs?

I. Rating Areas

    Section 2701(a)(2) of the Public Health Service Act, as added by 
Section 1201 of the Affordable Care Act requires each State to 
establish one or more rating areas within the State for purposes of 
applying the requirements of Title I of the Affordable Care Act 
(including the Exchange provisions), subject to review by the 
Secretary.
    1. To what extent do States currently utilize established premium 
rating areas? What are the typical geographical boundaries of these 
premium rating areas (e.g., Statewide, regional, county, etc.)? What 
are the pros and cons associated with interstate, statewide, and sub-
State premium rating areas? What insurance markets are typically 
required to utilize these premium rating areas?
    2. To the extent that States utilize premium rating areas, how are 
they established? What kinds of criteria do States and other entities 
typically consider when determining the adequacy of premium rating 
areas? What other criteria could be considered?

J. Consumer Experience

    1. What kinds of design features can help consumers obtain coverage 
through the Exchange? What information are consumers likely to find 
useful from Exchanges in making plan selections? Which kinds of 
enrollment venues are likely to be most helpful in facilitating 
individual enrollment in Exchanges and QHPs?
    2. What kinds of information are likely to be most useful to 
consumers as they determine whether to enroll in an Exchange and which 
plans to select (within or outside of an Exchange)? What are some best 
practices in conveying information to consumers relating to health 
insurance, plan comparisons, and eligibility for premium tax credits, 
or eligibility for other public health insurance programs (e.g., 
Medicaid)? What types of efforts could be taken to reach individuals 
from diverse cultural origins and those with low literacy, 
disabilities, and limited English proficiency?
    3. What are best practices in implementing consumer protections 
standards?
    4. Given that consumer complaints can be an important source of 
information in identifying compliance issues, what are the pros and 
cons of various options for collecting and reporting Exchange-related 
complaints (e.g., collecting complaints at the Federal level, versus at 
the State or Exchange level)?

K. Employer Participation

    Section 1311(b)(1)(B) provides for the establishment of Small 
Business Health Options Programs, referred to as SHOP Exchanges, which 
are designed to assist qualified employers in the State who are small 
employers in facilitating the enrollment of their employees in QHPs 
offered in the small group market in the State. Section 1304(b) 
provides that for plan years beginning before January 1, 2016, States 
have the option to define ``small employers'' as those with (1) 100 or 
fewer employees, or (2) 50 or fewer employees. Section 1312(f)(2)(B) 
specifies that beginning in 2017, States may elect to include issuers 
of health insurance coverage in the large group market to offer QHPs 
through the Exchange, and for large employers to purchase coverage 
through the Exchange.
    In addition, employers that do not offer affordable coverage to 
their employees will also interact with the Exchanges including where 
their employees purchase coverage through the Exchange.
    1. What Exchange design features are likely to be most important 
for employer participation, including the participation of large 
employers in the future? What are some relevant best practices?
    2. What factors are important for consideration in determining the 
employer size limit (e.g., 50 versus 100) for participation in a given 
State's Exchange?
    3. What considerations are important in facilitating coordination 
between employers and Exchanges? What key issues will require 
collaboration?
    4. What other issues are there of interest to employers with 
respect to their participation in Exchanges?

L. Risk Adjustment, Reinsurance, and Risk Corridors

    Sections 1341, 1342, and 1343 of the Act provide for the 
establishment of transitional reinsurance programs, risk corridors, and 
risk adjustment systems for the individual and small group markets 
within States.
    1. To what extent do States and other entities currently risk-
adjust payments for health insurance coverage in order to counter 
adverse selection? In what markets (e.g., Medicaid, CHIP, government 
employee plans, etc.) are these risk adjustment activities currently 
performed? To the extent that risk adjustment is or has been used, what 
methods have been utilized, and what are the pros and cons of such 
methods?
    2. To what extent do States currently collect demographic and other 
information, such as health status, claims history, or medical 
conditions under treatment on enrollees in the individual and small 
group markets that could be used for risk adjustment? What kinds of 
resources and authorities would States need in order to collect 
information for risk adjustment of plans offered inside and outside of 
the Exchanges?
    3. What issues are States likely to consider in carrying out risk 
adjustment for health plans inside and outside of the Exchanges? What 
kinds of technical assistance might be useful to States and QHPs?
    4. What are some of the major administrative options for carrying 
out risk adjustment? What kinds of entities could potentially conduct 
risk adjustment or collect and distribute funds for risk adjustment? 
What are some of the options relating to the timing of payments, and 
what are the pros and cons of these options?
    5. To what extent do States currently offer reinsurance in the 
health insurance arena (e.g., Medicaid, State employee plans, etc.) or 
in other arenas? How is that reinsurance typically structured in terms 
of contributions, coverage levels, and eligibility? How much is 
typically taken in and paid out? Is the reinsurance fund capped in any 
way?

[[Page 45590]]

    6. What kinds of non-profit entities currently exist in the 
marketplace that could potentially fulfill the role of an ``applicable 
reinsurance entity'' as defined in the Act?
    7. What methods are typically used to determine which individuals 
are deemed high-risk or high cost for the purposes of reinsurance?
    8. What challenges are States likely to face in implementing the 
temporary reinsurance program?
    9. How do other programs (e.g., Medicaid) use risk corridors to 
share profits and losses with health plans or other entities? How are 
the corridors defined and monitored under these programs? What 
mechanisms are used to collect and disburse payments?
    10. Are there non-Federal instances in which reinsurance and/or 
risk corridors and/or risk adjustment were used together? What kinds of 
special considerations are important when implementing multiple risk 
selection mitigation strategies at once?

M. Comments Regarding Economic Analysis, Paperwork Reduction Act, and 
Regulatory Flexibility Act

    Executive Order 12866 requires an assessment of the anticipated 
costs and benefits of a significant rulemaking action and the 
alternatives considered, using the guidance provided by the Office of 
Management and Budget. These costs and benefits are not limited to the 
Federal government, but pertain to the affected public as a whole. 
Under Executive Order 12866, a determination must be made whether 
implementation of the Exchange-related provisions in Title I of the 
Affordable Care Act will be economically significant. A rule that has 
an annual effect on the economy of $100 million or more is considered 
economically significant.
    In addition, the Regulatory Flexibility Act may require the 
preparation of an analysis of the economic impact on small entities of 
proposed rules and regulatory alternatives. An analysis under the 
Regulatory Flexibility Act must generally include, among other things, 
an estimate of the number of small entities subject to the regulations 
(for this purpose, plans, employers, and in some contexts small 
governmental entities), the expense of the reporting, recordkeeping, 
and other compliance requirements (including the expense of using 
professional expertise), and a description of any significant 
regulatory alternatives considered that would accomplish the stated 
objectives of the statute and minimize the impact on small entities.
    The Paperwork Reduction Act requires an estimate of how many 
``respondents'' will be required to comply with any ``collection of 
information'' requirements contained in regulations and how much time 
and cost will be incurred as a result. A collection of information 
includes recordkeeping, reporting to governmental agencies, and third-
party disclosures.
    Furthermore, Section 202 of the Unfunded Mandates Reform Act of 
1995 (UMRA) requires that agencies assess anticipated costs and 
benefits and take certain other actions before issuing a final rule 
that includes any Federal mandate that may result in expenditure in any 
one year by State, local, or tribal governments, in the aggregate, or 
by the private sector, of $135 million.
    The Department is requesting comments that may contribute to the 
analyses that will be performed under these requirements, both 
generally and with respect to the following specific areas:
    1. What policies, procedures, or practices of plans, employers and 
States may be impacted by the Exchange-related provisions in Title I of 
the Affordable Care Act?
    a. What direct or indirect costs and benefits would result?
    b. Which stakeholders will be affected by such benefits and costs?
    c. Are these impacts likely to vary by insurance market, plan type, 
or geographic area?
    2. Are there unique effects for small entities subject to the 
Exchange-related provisions in Title I of the Affordable Care Act?
    3. Are there unique benefits and costs affecting consumers? How 
will these consumer benefits be affected by States' Exchange design and 
flexibilities and the magnitude and substance of provisions mandated by 
the Act? Please discuss tangible and intangible benefits.
    4. Are there paperwork burdens related to the Exchange-related 
provisions in Title I of the Affordable Care Act, and, if so, what 
estimated hours and costs are associated with those additional burdens?

N. Comments Regarding Exchange Operations

    The Exchange-related provisions in Title I of the Affordable Care 
Act may affect/will involve various stakeholders. HHS wants to ensure 
receipt of all comments pertaining to the operations of the Exchanges.
    1. What other considerations related to the operations of Exchanges 
should be addressed? If your questions related to the operations of 
Exchanges have not been asked, or you would like to add additional 
comments, you may do so here.

    Signed at Washington, DC, this 27th day of July 2010.
Jay Angoff,
Director, Office of Consumer Information and Insurance Oversight, 
Department of Health and Human Services.
[FR Doc. 2010-18924 Filed 7-29-10; 11:15 am]
BILLING CODE 4150-65-P