[Federal Register Volume 81, Number 23 (Thursday, February 4, 2016)]
[Rules and Regulations]
[Pages 5917-5920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02055]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 403

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 1331

RIN 0985-AA11


State Health Insurance Assistance Program (SHIP)

AGENCY: Administration for Community Living (ACL), Department of Health 
and Human Services (HHS) and Centers for Medicare & Medicaid Services 
(CMS), HHS.

ACTION: Interim final rule.

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SUMMARY: This rule implements a provision enacted by the Consolidated 
Appropriations Act of 2014 and reflects the transfer of the State 
Health Insurance Assistance Program (SHIP) from the Centers for 
Medicare & Medicaid Services (CMS), in the Department of Health and 
Human Services (HHS) to the Administration for Community Living (ACL) 
in HHS. The previous regulations were issued by CMS under the authority 
granted by the Omnibus Budget Reconciliation Act of 1990 (OBRA `90), 
Section 4360.

DATES: Effective date: This interim final rule is effective on February 
4, 2016.
    Comment date: To be assured of consideration, comments must be 
received by ACL electronically through www.regulations.gov no later 
than midnight Eastern Standard Time (E.S.T.) on April 4, 2016.

ADDRESSES: You may submit comments in one of following ways (no 
duplicates, please): Written comments may be submitted through any of 
the methods specified below. Please do not submit duplicate comments.
     Federal eRulemaking Portal: You may (and we encourage you 
to) submit electronic comments on this regulation at http://www.regulations.gov. Follow the instructions under the ``submit a 
comment'' tab. Attachments should be in Microsoft Word, WordPerfect, or 
Excel; however, we prefer Microsoft Word.
     Regular, Express, or Overnight Mail: You may mail written 
comments to the following address ONLY: Administration for Community 
Living, Attention: SHIP Interim Rule, U.S. Department of Health and 
Human Services, Washington, DC 20201. Please allow sufficient time for 
mailed comments to be received before the close of the comment period.
     Individuals with a Disability: We will provide an 
appropriate accommodation, including alternative formats, upon request. 
To make such a request, please contact Marlina Moses-Gaither, (202) 
357-3552 (Voice) or at [email protected].

FOR FURTHER INFORMATION CONTACT: Josh Hodges, Administration for 
Community Living, telephone (202) 795-7364 (Voice). This is not a toll-
free number. This document will be made available in alternative 
formats upon request. Written correspondence can be sent to 
Administration for Community Living, U.S. Department of Health and 
Human Services, 330 C St. SW., Washington, DC 20201.

SUPPLEMENTARY INFORMATION:

I. Background

    The State Health Insurance Assistance Program (SHIP) was created 
under Section 4360 of the Omnibus Budget Reconciliation Act (OBRA) of 
1990 (Pub. L. 101-508). This section of the law authorized the Centers 
for Medicare & Medicaid Services (CMS) to make grants to States to 
establish and maintain health insurance advisory service programs for 
Medicare beneficiaries. Grant funds were made available to support 
information, counseling, and assistance activities relating to 
Medicare, Medicaid, and other related health insurance options such as: 
Medicare supplement insurance, long-term care insurance, managed care 
options, and other health insurance benefit information. In January 
2014, authorized in the Consolidated Appropriations Act of 2014, the 
SHIP program was transferred from CMS to the Administration for 
Community Living (ACL). This transfer reflects the existing formal and 
informal collaborations between the SHIP programs and the networks that 
ACL serves.

II. Transfer of Language and Technical Amendments

    In this interim final rule, ACL transfers all provisions of the 
existing SHIP regulations at 42 CFR part 403 subpart E, Sec. Sec.  
403.500-403.512, to a new part at 45 CFR 1331.1-1331.7, and 42 CFR part 
403 subpart E is reserved. This transfer positions the regulations 
governing the SHIP program alongside the other ACL regulations, 
reflecting the transfer of the program to ACL's administration.
    In addition, as Congress has transferred the entirety of the SHIP 
program to ACL, all references to CMS' administration of the program 
are changed in this rule to ACL.
    Finally, as HHS has promulgated new Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for HHS Awards, 
codified at 45 CFR part 75 since the previous rule's implementation, 
this rule changes a reference to previous guidance in Sec.  1331.7 
Administration.

III. Regulatory Analysis

A. Executive Order 12866

    This rule is not being treated as a ``significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
rule has not been reviewed by the Office of Management and Budget.

B. Regulatory Flexibility Analysis

    The Secretary certifies under 5 U.S.C. 605(b), the Regulatory 
Flexibility Act (Pub. L. 96-354), that this regulation will not have a 
significant economic impact on a substantial number of small

[[Page 5918]]

entities. The primary impact of this regulation is on entities applying 
for SHIP funding opportunities, specifically researchers, States, 
public or private agencies and organizations, institutions of higher 
education, and Indian tribes and Tribal organizations. The regulation 
does not have a significant economic impact on these entities.

C. Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Ch. 3506; 5 CFR 1320 Appendix A.1) (PRA), ACL and CMS have determined 
that there are no new collections of information contained in this 
interim final rule.

D. Waiver of Proposed Rulemaking

    Under the Administrative Procedure Act (APA), ACL and CMS are 
required to publish a notice of proposed rulemaking and provide the 
public with an opportunity to comment on proposed regulations prior to 
establishing a final rule unless it is determined for good cause that 
the notice and comment procedure is impracticable, unnecessary or 
contrary to public interest. 5 U.S.C. 553(b). As noted previously, 
Congress has already transferred the SHIP program to ACL under the 
Consolidated Appropriations Act of 2014. This interim final rule makes 
no changes other than aligning the location of the regulations within 
the Federal Register with other ACL programs; amending the name of the 
administering agency to ACL; and updating a reference to new Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for HHS Awards, which have already undergone notice and comment 
rulemaking, therefore, there is good cause under 5 U.S.C. 553(b)(B) for 
waiving proposed rulemaking as unnecessary.

E. Waiver of Delayed Effective Date

    Agencies are required to delay the effective date of their final 
regulations by 30 days after publication, as required under 5 U.S.C. 
553(d), unless an exception under subsection (d) applies. Under 5 
U.S.C. 553(d), ACL and CMS may waive the delayed effective date 
requirement if they find good cause and explain the basis for the 
waiver in the final rulemaking document or if the regulations grant or 
recognize an exemption or relieve a restriction.
    In the present case, there is good cause to waive the delayed 
effective date for this interim final rule, because the substance of 
the regulation, other than the name of the administering agency, is 
identical to the current regulation.

F. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any Federal mandate that may result 
in expenditures by State, local, or Tribal governments, in the 
aggregate, or by the private sector, of $100 million, adjusted for 
inflation, or more in any one year. ACL and CMS have determined that 
this rule does not result in the expenditure by State, local, and 
Tribal government in the aggregate or by the private sector of more 
than $100 million in any one year.

G. Congressional Review

    This rule is not a major rule as defined in 5 U.S.C. Section 
804(2).

H. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a policy or 
regulation may affect family well-being. If the agency's conclusion is 
affirmative, then the agency must prepare an impact assessment 
addressing seven criteria specified in the law. These regulations do 
not have an impact on family well-being as defined in the legislation.

I. Executive Order 13132

    Executive Order 13132 on ``federalism'' was signed August 4, 1999. 
The purposes of the Order are: ``. . . to guarantee the division of 
governmental responsibilities between the national government and the 
States that was intended by the Framers of the Constitution, to ensure 
that the principles of federalism established by the Framers guide the 
executive departments and agencies in the formulation and 
implementation of policies, and to further the policies of the Unfunded 
Mandates Reform Act . . .'' Executive Order 13132 applies to actions 
with federalism implications, which are actions that have substantial 
direct effect on States, on the relationship between the Federal 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. For actions 
that have federalism implications and preempt state law or have 
federalism implications and impose substantial compliance costs on 
states and local governments, the agency must consult with state and 
local officials before publishing the rule and include a federalism 
statement in the preamble.
    The Department certifies that this rule does not have a substantial 
direct effect on States, on the relationship between the Federal 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.
    ACL and CMS are not aware of any specific state laws that would be 
preempted by the adoption of the regulation.

List of Subjects

42 CFR Part 403

    Grant programs, Health insurance, Medicare, Reporting and 
recordkeeping requirements.

45 CFR Part 1331

    Grant programs, Health insurance, Medicare, Reporting and 
recordkeeping requirements.

    Dated: December 17, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: December 17, 2015.
Kathy Greenlee,
Administrator, Administration for Community Living.
    Approved: January 25, 2016.
Sylvia M. Burwell,
Secretary, U.S. Department of Health and Human Services.

Regulatory Text

    For the reasons discussed in the preamble, the Centers for Medicare 
& Medicaid Services, HHS, and Department of Health and Human Services 
amend title 42, chapter IV and title 45, chapter XIII, subchapter C, of 
the Code of Federal Regulations, respectively, as follows:

42 CFR CHAPTER IV

PART 403--SPECIAL PROGRAMS AND PROJECTS

0
1. The authority citation for part 403 continues to read as follows:

    Authority: 42 U.S.C. 1395b-3 and Secs. 1102 and 1871 of the 
Social Security Act (42 U.S.C. 1302 and 1395hh).

Subpart E [Removed and Reserved]

0
2. Subpart E, consisting of Sec. Sec.  403.500 through 403.512, is 
removed and reserved.

45 CFR CHAPTER XIII

0
3. Part 1331 is added to subchapter C read as follows:

PART 1331--STATE HEALTH INSURANCE ASSISTANCE PROGRAM

Sec.

[[Page 5919]]

 1331.1 Basis, scope, and definition.
 1331.2 Eligibility for grants.
 1331.3 Availability of grants.
 1331.4 Number and size of grants.
 1331.5 Limitations.
 1331.6 Reporting requirements.
 1331.7 Administration.

    Authority:  42 U.S.C. 1395b-4.


Sec.  1331.1  Basis, scope, and definition.

    (a) Basis. This part implements, in part, the provisions of section 
4360 of Public Law 101-508 by establishing a minimum level of funding 
for grants made to States for the purpose of providing information, 
counseling, and assistance relating to obtaining adequate and 
appropriate health insurance coverage to individuals eligible to 
receive benefits under the Medicare program.
    (b) Scope of part. This part sets forth the following:
    (1) Conditions of eligibility for the grant.
    (2) Minimum levels of funding for those States qualifying for the 
grants.
    (3) Reporting requirements.
    (c) Definition. For purposes of this subpart, the term ``State'' 
includes (except where otherwise indicated by the context) the 50 
States, the District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, and American Samoa.


Sec.  1331.2  Eligibility for grants.

    To be eligible for a grant under this subpart, the State must have 
an approved Medicare supplemental regulatory program under section 1882 
of the Act and submit a timely application to ACL that meets the 
requirements of--
    (a) Section 4360 of Public Law 101-508 (42 U.S.C. 1395b-4);
    (b) This subpart; and
    (c) The applicable solicitation for grant applications issued by 
ACL.


Sec.  1331.3  Availability of grants.

    ACL awards grants to States subject to availability of funds, and 
if applicable, subject to the satisfactory progress in the State's 
project during the preceding grant period. The criteria by which 
progress is evaluated and the performance standards for determining 
whether satisfactory progress has been made are specified in the terms 
and conditions included in the notice of grant award sent to each 
State. ACL advises each State as to when to make application, what to 
include in the application, and provides information as to the timing 
of the grant award and the duration of the grant award. ACL also 
provides an estimate of the amount of funds that may be available to 
the State.


Sec.  1331.4  Number and size of grants.

    (a) General. For available grant funds, up to and including 
$10,000,000, grants will be made to States according to the terms and 
formula in paragraphs (b) and (c) of this section. For any available 
grant funds in excess of $10,000,000, distribution of grants will be at 
the discretion of ACL, and will be made according to criteria that ACL 
will communicate to the States via grant solicitation. ACL will provide 
information to each State as to what must be included in the 
application for grant funds. ACL awards the following type of grants:
    (1) New program grants.
    (2) Existing program enhancement grants.
    (b) Grant award. Subject to the availability of funds, each 
eligible State that submits an acceptable application receives a grant 
that includes a fixed amount (minimum funding level) and a variable 
amount.
    (1) A fixed portion is awarded to States in the following amounts:
    (i) Each of the 50 States, $75,000.
    (ii) The District of Columbia, $75,000.
    (iii) Puerto Rico, $75,000.
    (iv) American Samoa, $25,000.
    (v) Guam, $25,000.
    (vi) The Virgin Islands, $25,000.
    (2) A variable portion which is based on the number and location of 
Medicare beneficiaries residing in the State is awarded to each State. 
The variable amount a particular State receives is determined as set 
forth in paragraph (c) of this section.
    (c) Calculation of variable portion of the grant. (1) ACL bases the 
variable portion of the grant on--
    (i) The amount of available funds, and
    (ii) A comparison of each State with the average of all of the 
States (except the State being compared) with respect to three factors 
that relate to the size of the State's Medicare population and where 
that population resides.
    (2) The factors ACL uses to compare States' Medicare populations 
comprise separate components of the variable amount. These factors, and 
the extent to which they each contribute to the variable amount, are as 
follows:
    (i) Approximately 75 percent of the variable amount is based on the 
number of Medicare beneficiaries living in the State as a percentage of 
all Medicare beneficiaries nationwide.
    (ii) Approximately 10 percent of the variable amount is based on 
the percentage of the State's total population who are Medicare 
beneficiaries.
    (iii) Approximately 15 percent of the variable amount is based on 
the percentage of the State's Medicare beneficiaries that reside in 
rural areas (``rural areas'' are defined as all areas not included 
within a metropolitan Statistical Area).
    (3) Based on the foregoing four factors (that is, the amount of 
available funds and the three comparative factors), ACL determines a 
variable rate for each participating State for each grant period.
    (d) Submission of revised budget. A State that receives an amount 
of grant funds under this subpart that differs from the amount 
requested in the budget submitted with its application must submit a 
revised budget to ACL, along with its acceptance of the grant award, 
which reflects the amount awarded.


Sec.  1331.5  Limitations.

    (a) Use of grants. Except as specified in paragraph (b) of this 
section, and in the terms and conditions in the notice of grant award, 
a State that receives a grant under this subpart may use the grant for 
any reasonable expenses for planning, developing, implementing and/or 
operating the program for which the grant is made as described in the 
solicitation for application for the grant.
    (b) Maintenance of effort. A State that receives a grant to 
supplement an existing program (that is, an existing program 
enhancement grant)--
    (1) Must not use the grant to supplant funds for activities that 
were conducted immediately preceding the date of the initial award of a 
grant made under this subpart and funded through other sources 
(including in-kind contributions).
    (2) Must maintain the activities of the program at least at the 
level that those activities were conducted immediately preceding the 
initial award of a grant made under this subpart.


Sec.  1331.6  Reporting requirements.

    A State that receives a grant under this subpart must submit at 
least one annual report to ACL and any additional reports as ACL may 
prescribe in the notice of grant award. ACL advises the State of the 
requirements concerning the frequency, timing, and contents of reports 
in the notice of grant award that it sends to the State.


Sec.  1331.7  Administration.

    (a) General. Administration of grants will be in accordance with 
the provisions of this subpart, 45 CFR part 75 (``Uniform 
Administrative Requirements for Grants and Cooperative Agreements to 
State and Local Governments''), the terms of the solicitation, and the 
terms of the notice of grant award. Except for the minimum funding 
levels established by

[[Page 5920]]

Sec.  1331.4(b)(1), in the event of conflict between a provision of the 
notice of grant award, any provision of the solicitation, or of any 
regulation enumerated in 45 CFR part 75, the terms of the notice of 
grant award control.
    (b) Notice. ACL provides notice to each applicant regarding ACL's 
decision on an application for grant funding under Sec.  1331.4.
    (c) Appeal. Any applicant for a grant under this subpart has the 
right to appeal ACL's determination regarding its application. Appeal 
procedures are governed by the regulations at 45 CFR part 16 
(Procedures of the Departmental Grant Appeals Board).

[FR Doc. 2016-02055 Filed 2-3-16; 8:45 am]
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