[Federal Register Volume 82, Number 32 (Friday, February 17, 2017)]
[Proposed Rules]
[Pages 10980-10998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-03027]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 147, 155, and 156
[CMS-9929-P]
RIN 0938-AT14
Patient Protection and Affordable Care Act; Market Stabilization
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This rule proposes changes that would help stabilize the
individual and small group markets. This proposed rule would amend
standards relating to special enrollment periods, guaranteed
availability, and the timing of the annual open enrollment period in
the individual market for the 2018 plan year; standards related to
network adequacy and essential community providers for qualified health
plans; and the rules around actuarial value requirements.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on March 7, 2017.
ADDRESSES: In commenting, please refer to file code CMS-9929-P. 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):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. 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: CMS-9929-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. 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: CMS-9929-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
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,
call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments erroneously 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:
Jeff Wu, (301) 492-4305, Lindsey Murtagh, (301) 492-4106, or
Michelle Koltov, (301) 492-4225, for general information.
Rachel Arguello, (301) 492-4263, for matters related to Exchange
special enrollment periods and annual open enrollment periods.
Erika Melman, (301) 492-4348, for matters related to network
adequacy, and essential community providers.
Allison Yadsko, (410) 786-1740, for matters related to actuarial
value.
Jacob Ackerman, (301) 492-4179, for matters related to guaranteed
availability.
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 comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received at http://regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will be also available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
I. Executive Summary
Affordable Insurance Exchanges, or ``Exchanges'' (in this proposed
rule, we also call an Exchange a Health Insurance Marketplace\SM\,\1\
or Marketplace\SM\) are competitive marketplaces through which
qualified individuals and qualified employers can purchase health
insurance coverage. Many individuals who enroll in qualified health
plans (QHPs) through individual market Exchanges are eligible to
receive a premium tax credit to make health insurance premiums
[[Page 10981]]
more affordable, and receive reductions in cost-sharing payments to
reduce out-of-pocket expenses for health care services.
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\1\ Health Insurance Marketplace\SM\ and Marketplace\SM\ are
service marks of the U.S. Department of Health & Human Services.
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The health and competitiveness of the Exchanges, as well as the
individual and small group markets in general, have recently been
threatened by issuer exit and increasing rates in many geographic
areas. Some issuers have had difficulty attracting and retaining the
healthy consumers necessary to provide for a stable risk pool that will
support stable rates. In particular, some issuers have cited special
enrollment periods as a potential source of adverse selection that has
contributed to this problem. Concerns over the risk pool have led some
issuers to cease offering coverage on the Exchanges in particular
states and counties, and other issuers have increased their rates.
A stabilized individual and small group insurance market will
depend on greater choice to draw consumers to the market and vibrant
competition to ensure consumers have access to competitively priced,
affordable coverage. Higher rates, particularly for consumers who are
not receiving advance payments of the premium tax credit (APTC),
resulting from minimal choice and competition can cause healthier
individuals to drop out of the market, further damaging the risk pool,
and risking additional issuer attrition from the market. This proposed
rule would take steps to provide needed flexibility to issuers to help
attract healthy consumers to enroll in health insurance coverage,
improving the risk pool and bringing stability and certainty to the
individual and small group markets.
To improve the risk pool and promote stability in the individual
insurance market, we propose taking several steps to increase the
incentives for individuals to maintain enrollment in health coverage
and decrease the incentives for individuals to enroll only after they
discover they require services. First, we propose changing the dates
for open enrollment in the individual market for the benefit year
starting January 1, 2018, from a range of November 1, 2017, to January
31, 2018 (the previously established open enrollment period for 2018),
to a range of November 1, to December 15. This change would require
individuals to enroll in coverage prior to the beginning of the year,
unless eligible for a special enrollment period, and is consistent with
the open enrollment period established for the open enrollment periods
for 2019 and beyond. We anticipate this change could improve the risk
pool because it would reduce opportunities for adverse selection by
those who learn they will need services in late December and January;
and will encourage healthier individuals who might have previously
enrolled in partial year coverage after December 15th to instead enroll
in coverage for the full year.
Second, in response to concerns from issuers about potential abuse
of special enrollment periods in the individual market Exchanges
resulting in individuals enrolling in coverage only after they realize
they will need services, we propose increasing pre-enrollment
verification of eligibility for all categories of individual market
special enrollment periods for all States served by the HealthCare.gov
platform from 50 to 100 percent of new consumers who seek to enroll in
Exchange coverage. We also propose making several additional changes to
our regulations regarding special enrollment periods that we believe
could improve the risk pool, improve market stability, and promote
continuous coverage.
Third, we propose revising our interpretation of the guaranteed
availability requirement to allow issuers to apply a premium payment to
an individual's past debt owed for coverage from the same issuer
enrolled in within the prior 12 months. We believe this proposal would
have a positive impact on the risk pool by removing economic incentives
individuals may have had to pay premiums only when they were in need of
health care services. We also believe this proposal is important as a
means of encouraging individuals to maintain continuous coverage
throughout the year and prevent gaming.
Fourth, we propose to increase the de minimis variation in the
actuarial values (AVs) used to determine metal levels of coverage for
the 2018 plan year. This proposed change is intended to allow issuers
greater flexibility in designing new plans and to provide additional
options for issuers to keep cost sharing the same from year to year. We
are not proposing a modification for the de minimis range for the
silver plan variations.
We believe these changes are critical to improving the risk pool,
and would together promote a more competitive market with increased
choice for consumers.
The proposed amendments in this rule are also intended to affirm
the traditional role of States in overseeing their health insurance
markets while reducing the regulatory burden of participating in
Exchanges for issuers. The first of these proposals relates to network
adequacy review for QHPs. The modified approach would not only lessen
the regulatory burden on issuers, but also would recognize the primary
role of States in regulating this area. The second change would allow
issuers to use a write-in process to identify essential community
providers (ECPs) who are not on the HHS list of available ECPs for the
2018 plan year; and lower the ECP standard to 20 percent (rather than
30 percent), which we believe would make it easier for a QHP issuer to
build networks that comply with the ECP standard.
Robust issuer participation in the individual and small group
markets is critical for ensuring consumers have access to affordable
coverage, and have real choice in coverage. Continued uncertainty
around the future of the markets and concerns regarding the risk pools
are two of the primary reasons issuer participation in some areas
around the country has been limited. The proposed changes in this rule
are intended to promote issuer participation in these markets and to
address concerns raised by issuers, States, and consumers. We believe
such changes would result in broader choices and more affordable
coverage.
II. Background
A. Legislative and Regulatory Overview
The Patient Protection and Affordable Care Act (Pub. L. 111-148)
was enacted on March 23, 2010. The Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised
several provisions of the Patient Protection and Affordable Care Act,
was enacted on March 30, 2010. In this proposed rule, we refer to the
two statutes collectively as the ``Affordable Care Act.''
The Affordable Care Act reorganizes, amends, and adds to the
provisions of title XXVII of the Public Health Service Act (PHS Act)
relating to group health plans and health insurance issuers in the
group and individual markets.
Section 2702 of the PHS Act, as added by the Affordable Care Act,
requires health insurance issuers that offer non-grandfathered health
insurance coverage in the group or individual market in a State to
offer coverage to and accept every employer and individual in the State
that applies for such coverage unless an exception applies.
Section 2703 of the PHS Act, as added by the Affordable Care Act,
and former section 2712 and section 2742 of the PHS Act, as added by
the Health Insurance Portability and Accountability Act of 1996
(HIPAA), require health insurance issuers that
[[Page 10982]]
offer health insurance coverage in the group or individual market to
renew or continue in force such coverage at the option of the plan
sponsor or individual, unless an exception applies.
Section 1302(d) of the Affordable Care Act describes the various
levels of coverage based on actuarial value. Consistent with section
1302(d)(2)(A) of the Affordable Care Act, AV is calculated based on the
provision of essential health benefits (EHB) to a standard population.
Section 1302(d)(3) of the Affordable Care Act directs the Secretary to
develop guidelines that allow for de minimis variation in AV
calculations. Section 2707(a) of the PHS Act directs health insurance
issuers that offer non-grandfathered health insurance coverage in the
individual or small group market to ensure that such coverage includes
essential health benefits.
Section 1311(c)(1)(B) of the Affordable Care Act requires the
Secretary to establish minimum criteria for provider network adequacy
that a health plan must meet to be certified as a QHP.
Section 1311(c)(6)(B) of the Affordable Care Act states that the
Secretary is to set annual open enrollment periods for Exchanges for
calendar years after the initial enrollment period.
Section 1311(c)(6)(C) of the Affordable Care Act states that the
Secretary is to provide for special enrollment periods specified in
section 9801 of the Internal Revenue Code of 1986 (the Code) and other
special enrollment periods under circumstances similar to such periods
under part D of title XVIII of the Social Security Act (the Act) for
the Exchanges.
Section 1321(a) of the Affordable Care Act 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 Affordable Care Act.
1. Market Rules
A proposed rule relating to the 2014 health insurance market rules
was published in the November 26, 2012 Federal Register (77 FR 70584).
A final rule implementing the health insurance market rules was
published in the February 27, 2013 Federal Register (78 FR 13406) (2014
Market Rules).
A proposed rule relating to Exchanges and Insurance Market
Standards for 2015 and Beyond was published in the March 21, 2014
Federal Register (79 FR 15808) (2015 Market Standards Proposed Rule). A
final rule implementing the Exchange and Insurance Market Standards for
2015 and Beyond was published in the May 27, 2014 Federal Register (79
FR 30240) (2015 Market Standards Rule).
2. Exchanges
We published a request for comment relating to Exchanges in the
August 3, 2010 Federal Register (75 FR 45584). We issued initial
guidance to States on Exchanges on November 18, 2010.\2\ We proposed a
rule in the July 15, 2011 Federal Register (76 FR 41865) to implement
components of the Exchanges, and a rule in the August 17, 2011 Federal
Register (76 FR 51201) regarding Exchange functions in the individual
market, eligibility determinations, and Exchange standards for
employers. A final rule implementing components of the Exchanges and
setting forth standards for eligibility for Exchanges was published in
the March 27, 2012 Federal Register (77 FR 18309) (Exchange
Establishment Rule).
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\2\ Initial Guidance to States on Exchanges (November 10, 2018).
Available at https://www.cms.gov/CCIIO/Resources/Files/guidance_to_states_on_exchanges.html.
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In the March 8, 2016 Federal Register (81 FR 12203), we published
the Patient Protection and Affordable Care Act; HHS Notice of Benefit
and Payment Parameters for 2017 (2017 Payment Notice), and established
additional Exchange standards, including requirements for network
adequacy and essential community providers; and established the timing
of annual open enrollment periods.
In the September 6, 2016 Federal Register (81 FR 61456), we
published the Patient Protection and Affordable Care Act; HHS Notice of
Benefit and Payment Parameters for 2018 proposed rule (proposed 2018
Payment Notice). In the December 22, 2016 Federal Register (81 FR
94058), we published the Patient Protection and Affordable Care Act;
HHS Notice of Benefit and Payment Parameters for 2018 final rule (2018
Payment Notice) and established additional Exchange standards,
including requirements for network adequacy and essential community
providers.
3. Special Enrollment Periods
In the July 15, 2011 Federal Register (76 FR 41865), we published a
proposed rule establishing special enrollment periods for the Exchange.
We implemented these special enrollment periods in the Exchange
Establishment Rule (77 FR 18309). In the January 22, 2013 Federal
Register (78 FR 4594), we published a proposed rule amending certain
special enrollment periods, including the special enrollment periods
described in Sec. 155.420(d)(3) and (7). We finalized these rules in
the July 15, 2013 Federal Register (78 FR 42321).
In the June 19, 2013 Federal Register (78 FR 37032), we proposed to
add a special enrollment period when the Exchange determines that a
consumer has been incorrectly or inappropriately enrolled in coverage
due to misconduct on the part of a non-Exchange entity. We finalized
this proposal in the October 30, 2013 Federal Register (78 FR 65095).
In the March 21, 2014 Federal Register (79 FR 15808), we proposed to
amend various special enrollment periods. In particular, we proposed to
clarify that later coverage effective dates for birth, adoption,
placement for adoption, or placement for foster care would be effective
the first of the month. The rule also proposed to clarify that earlier
effective dates would be allowed if all issuers in an Exchange agree to
effectuate coverage only on the first day of the specified month.
Finally, this rule proposed adding that consumers may report a move in
advance of the date of the move and established a special enrollment
period for individuals losing medically needy coverage under the
Medicaid program even if the medically needy coverage is not recognized
as minimum essential coverage (individuals losing medically needy
coverage that is recognized as minimum essential coverage already were
eligible for a special enrollment period under the regulation). We
finalized these provisions in the May 27, 2014 Federal Register (79 FR
30348). In the October 1, 2014 Federal Register (79 FR 59137), we
published a correcting amendment related to codifying the coverage
effective dates for plan selections made during a special enrollment
period and clarifying a consumer's ability to select a plan 60 days
before and after a loss of coverage.
In the November 26, 2014 Federal Register (79 FR 70673), we
proposed to amend effective dates for special enrollment periods, the
availability and length of special enrollment periods, the specific
types of special enrollment periods, and the option for consumers to
choose a coverage effective date of the first of the month following
the birth, adoption, placement for adoption, or placement in foster
care. We finalized these provisions in the February 27, 2015 Federal
Register (80 FR 10866). In the July 7, 2015 Federal Register (80 FR
38653), we issued a correcting amendment to include those who become
newly eligible for a QHP due to a release from incarceration. In the
[[Page 10983]]
December 2, 2015 Federal Register (80 FR 75487) (proposed 2017 Payment
Notice), we sought comment and data related to existing special
enrollment periods, including data relating to the potential abuse of
special enrollment periods. In the 2017 Payment Notice, we stated that
in order to review the integrity of special enrollment periods, the
Federally-facilitated Exchange (FFE) will conduct an assessment by
collecting and reviewing documents from consumers to confirm their
eligibility for the special enrollment periods under which they
enrolled.
In an interim final rule with comment published in the May 11, 2016
Federal Register (81 FR 29146) we amended the parameters of certain
special enrollment periods.
In the 2018 Payment Notice we established additional Exchange
standards, including requirements for certain special enrollments.
4. Actuarial Value
On February 25, 2013, we established the requirements relating to
EHBs and AVs in the Standards Related to Essential Health Benefits,
Actuarial Value, and Accreditation Final Rule, which was published in
the Federal Register (78 FR 12833) (EHB Rule), implementing section
1302 of the Affordable Care Act and 2707 of the PHS Act. In the 2018
Payment Notice published in the December 22, 2016 Federal Register (81
FR 94058), we finalized a provision that allow an expanded de minimis
range for certain bronze plans.
B. Stakeholder Consultation and Input
HHS has consulted with stakeholders on policies related to the
operation of Exchanges. We have held a number of listening sessions
with consumers, providers, employers, health plans, the actuarial
community, and State representatives to gather public input, with a
particular focus on risks to the individual and small group markets. We
consulted with stakeholders through regular meetings with the National
Association of Insurance Commissioners, regular contact with States
through the Exchange Establishment grant and Exchange Blueprint
approval processes, and meetings with Tribal leaders and
representatives, health insurance issuers, trade groups, consumer
advocates, employers, and other interested parties.
III. Provisions of the Proposed Rule
A. Part 147--Health Insurance Reform Requirements for the Group and
Individual Health Insurance Markets
1. Guaranteed Availability of Coverage (Sec. 147.104)
The guaranteed availability provisions at section 2702 of the PHS
Act and Sec. 147.104 require health insurance issuers offering non-
grandfathered coverage in the individual or group market to offer
coverage to and accept every individual and employer in the State that
applies for such coverage unless an exception applies. Individuals and
employers typically are required to pay the first month's premium to
have coverage effectuated.
We have previously interpreted the guaranteed availability
requirement to mean that an issuer may not apply any premium payment
made for coverage in a different product to any outstanding debt owed
from any previous coverage and then refuse to effectuate the enrollment
based on failure to pay premiums.\3\ Under that interpretation, any
coverage under a different product would fall under the guaranteed
availability requirements and the consumer must be allowed to purchase
coverage without having to pay past due premiums. However, under our
previous interpretation, should the individual seek to renew prior
coverage with the same issuer in the same product, the issuer could
attribute the enrollee's forthcoming premium payments to prior non-
payments.
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\3\ Federally-facilitated Marketplace (FFM) and Federally-
facilitated Small Business Health Options Program Enrollment Manual,
Section 6.3 Terminations for Non-Payment of Premiums, available at
https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/ENR_FFMSHOP_Manual_080916.pdf.
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HHS has received comments from stakeholders expressing concerns
about the potential for individuals with histories of non-payment to
take advantage of guaranteed availability by declining to make premium
payments for coverage at the end of a benefit year, for example.\4\ In
the preamble to the 2014 Market Rules, HHS encouraged States to
consider approaches to discourage gaming and adverse selection while
upholding consumers' guaranteed availability rights and indicated that
we intended to address this issue in future guidance.
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\4\ 78 FR 13416 (Feb. 27, 2013).
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To address the concern about potential gaming, we propose to modify
our interpretation of the guaranteed availability rules with respect to
non-payment of premiums. Under this proposal, an issuer would not be
considered to violate the guaranteed availability requirements if the
issuer attributes a premium payment for coverage under the same or a
different product to the outstanding debt associated with non-payment
of premiums for coverage from the same issuer enrolled in within the
prior 12 months and refuses to effectuate new coverage for failure to
pay premiums. Assuming State law does not prohibit such action, this
would permit an issuer to require a policyholder whose coverage is
terminated for non-payment of premium in the individual or group market
to pay all past due premium owed to that issuer after the applicable
due date for coverage enrolled in the prior 12 months in order to
resume coverage from that issuer. The issuer would be required to apply
its premium payment policy uniformly to all employers or individuals
regardless of health status, and consistent with applicable non-
discrimination requirements.\5\ This proposal would not prevent the
individual or employer from enrolling in coverage with a different
issuer, or affect the ability of any individual other than the person
contractually responsible for the payment of premium to purchase
coverage, whether from the same or different issuer. We encourage
States to adopt a similar approach, with respect to any State laws that
might otherwise prohibit this practice.
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\5\ We remind issuers that they may also have obligations under
other applicable Federal laws prohibiting discrimination, and
issuers are responsible for ensuring compliance with all applicable
laws and regulations. For example, issuers that receive Federal
financial assistance are subject to Title VI of the Civil Rights Act
of 1964, section 504 of the Rehabilitation Act of 1973, and section
1557 of the Affordable Care Act, and as a result, have separate
responsibilities not to discriminate on the basis of race, color,
national origin, sex, age, and disability, in providing access to
their services. In addition, Sec. 156.200(e) requires QHP issuers
to not discriminate on the basis of race, color, national origin,
disability, age, sex, gender identity or sexual orientation. There
may also be separate, independent non-discrimination obligations
under State law.
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Because of rules regarding grace periods and termination of
coverage, individuals with past due premium would generally owe no more
than 3 months of premiums.\6\ Furthermore, for
[[Page 10984]]
individuals on whose behalf the issuer received APTC, their past
premium owed would be net of any APTC paid on their behalf to the
issuer.
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\6\ Section 156.270(d) requires issuers to observe a 3
consecutive month grace period before terminating coverage for those
enrollees who are eligible for and have elected to receive APTC and
who upon failing to timely pay their premiums are receiving APTC.
Section 155.430(d)(4) requires that when coverage is terminated
following this grace period, the last day of enrollment in a QHP
through the Exchange is the last day of the first month of the grace
period. Therefore, individuals whose coverage is terminated at the
conclusion of a grace period would owe at most 1 month of premiums.
Individuals who attempt to enroll in new coverage while in a grace
period (and whose coverage has not yet been terminated) could owe up
to 3 months of premium, net of any APTC paid on their behalf to the
issuer.
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We note that due to operational constraints, the Federally-
facilitated Small Business Health Options Program will be unable to
offer issuers this flexibility at this time.
We seek comment on this proposal, including whether issuers that
choose to adopt this type of premium payment policy should be permitted
to implement it with a premium payment threshold policy, under which
the issuer can consider an individual to have paid all amounts due, if
the individual pays an amount sufficient to maintain a percentage of
total premium paid out of the total premium owed equal to or greater
than a level prescribed by the issuer. We also seek comment on whether
issuers should be required to provide notice to individuals regarding
whether they have adopted a premium payment policy permitted under this
proposal.
In addition, we propose to amend paragraph (b)(2)(i) to conform
with proposed changes to special enrollment periods discussed in
greater detail in section III.B.2. of this proposed rule. Because the
proposed changes to Sec. 155.420(a)(4) through (5) are being proposed
for special enrollment periods in the individual market, both inside
and outside of an Exchange, we propose to amend Sec. 147.104(b)(2)(i)
to specify that these paragraphs apply to special enrollment periods
throughout the individual market. We seek comment on how these changes
would be operationalized outside of the Exchanges.
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
1. Initial and Annual Open Enrollment Periods (Sec. 155.410)
We propose to amend paragraph (e) of Sec. 155.410, which provides
the dates for the annual Exchange open enrollment period in which
qualified individuals and enrollees may apply for or change coverage in
a QHP. In prior rulemaking, we established that the open enrollment
period for the benefit year beginning on January 1, 2018 would begin on
November 1, 2017 and extend through January 31, 2018; and that the open
enrollment period for benefit years beginning on January 1, 2019 and
beyond would begin on November 1 and extend through December 15 of the
calendar year preceding the benefit year.\7\ We noted at the time that
we believe that, as the Exchanges continue, a month-and-a-half open
enrollment period provides sufficient time for consumers to enroll in
or change QHPs for the upcoming plan year. We also noted that this
timeframe would achieve our goals of shifting to an earlier end date
for open enrollment so that all consumers who enroll during this time
will receive a full year of coverage, which will simplify operational
processes for issuers and the Exchanges. We also believe that this
shorter open enrollment period may have a positive impact on the risk
pool because it will reduce opportunities for adverse selection by
those who learn they will need services in late December or January.
While we originally included a longer transition period before moving
to this shorter open enrollment period, we believe that the market and
issuers are ready for this adjustment sooner. Therefore, we propose to
amend Sec. 155.410(e) to change the open enrollment period for plan
year 2018 so that it begins on November 1, 2017, and ends on December
15, 2017. All consumers who select plans on or before December 15, 2017
would receive an enrollment effective date of January 1, 2018, as
already required by Sec. 155.410(f)(2)(i). We believe that this open
enrollment period would align better with many open enrollment periods
for employer-based coverage, as well as the open enrollment period for
Medicare. We would intend to conduct extensive outreach to ensure that
all consumers are aware of this change and have the opportunity to
enroll in coverage within this shorter time frame.
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\7\ 81 FR 12203, 12273.
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We seek comment on this proposal, in particular on the capacity of
State-based Exchanges to shift to the shorter open enrollment period
for the 2018 plan year, on the effect of the shorter enrollment period
on issuers' ability to enroll healthy consumers, and any difficulties
agents, brokers, navigators and assisters may have in serving consumers
seeking to enroll during this shorter time period.
2. Special Enrollment Periods (Sec. 155.420)
Section 1311(c)(6) of the Affordable Care Act establishes
enrollment periods, including special enrollment periods for qualified
individuals, for enrollment in QHPs through an Exchange. Section
1311(c)(6)(C) of the Affordable Care Act states that the Secretary is
to provide for special enrollment periods specified in section 9801 of
the Code and other special enrollment periods under circumstances
similar to such periods under part D of title XVIII of the Act. Section
2702(b)(3) of the PHS Act also directs the Secretary to provide for
market-wide special enrollment periods for qualifying events under
section 603 of the Employee Retirement Income Security Act of 1974.
Special enrollment periods are a longstanding feature of employer-
sponsored coverage. They exist to ensure that people who lose health
coverage during the year (for example, through non-voluntary loss of
minimum essential coverage provided through an employer), or who
experience other qualifying events such as marriage or the birth or
adoption of a child, have the opportunity to enroll in new coverage or
make changes to their existing coverage. While the annual open
enrollment period allows previously uninsured individuals to enroll in
new coverage, special enrollment periods are intended, in part, to
promote continuous enrollment in health coverage during the plan year
by allowing those who were previously enrolled in coverage to obtain
new coverage without a lapse or gap in coverage.
Our past practice, in many cases, was to permit individuals seeking
coverage through the Exchanges to self-attest to their eligibility for
most special enrollment periods and to enroll in coverage without
further verification of their eligibility or without submitting proof
of prior coverage. This practice had the virtue of minimizing barriers
for consumers to obtain coverage, which can, in particular, deter
enrollment by healthy individuals. However, as the Government
Accountability Office noted in a November 2016 report, relying on self-
attestation without verifying documents submitted to support a special
enrollment period triggering event could allow applicants to obtain
subsidized coverage they would otherwise not qualify for.\8\ In
addition, allowing previously uninsured individuals who elected not to
enroll in coverage during the annual open enrollment period to instead
enroll in coverage through a special enrollment period that they would
not otherwise qualify for during the coverage year, undermines the
incentive for enrolling in a full year of coverage through the annual
open enrollment period and increases the risk of adverse selection from
individuals who wait to enroll until they are sick. Such behaviors can
[[Page 10985]]
create a sicker risk pool, leading to higher rates and less
availability of coverage.
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\8\ November 2016, Results of Enrollment Testing for the 2016
Special Enrollment Period, GAO-17-78, U.S. Government Accountability
Office.
---------------------------------------------------------------------------
In an effort to curb abuses of special enrollment periods, in 2016
we added warnings on HealthCare.gov regarding inappropriate use of
special enrollment periods. We also eliminated several special
enrollment periods and tightened certain eligibility rules.\9\ Also in
2016, we announced retrospective audits of a random sampling of
enrollments through loss of minimum essential coverage and permanent
move special enrollment periods, two commonly used special enrollment
periods. Additionally, we created The Special Enrollment Confirmation
Process under which consumers enrolling through common special
enrollment periods were directed to provide documentation to confirm
their eligibility.\10\ Finally, we proposed to implement (beginning in
June 2017) a pilot program for conducting pre-enrollment verification
of eligibility for certain special enrollment periods.\11\
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\9\ February 25, 2016. Fact Sheet: Special Enrollment
Confirmation Process. Available online at https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-24.html.
\10\ Ibid.
\11\ December 14, 2016, Fact Sheet: Pre-Enrollment Verification
for Special Enrollment Periods, available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Pre-Enrollment-SEP-fact-sheet-FINAL.PDF.
_____________________________________-
As discussed in the 2018 Payment Notice, the impact of special
enrollment period verification on risk pools may be complex. Some
commenters suggested that additional steps to determine special
enrollment period eligibility worsen the problem by creating new
barriers to enrollment, with healthier, less motivated individuals, the
most likely to be deterred. The pilot was initially planned to sample
50 percent of consumers who were attempting to newly enroll in Exchange
coverage through certain special enrollment periods in order to provide
a statistically sound method to compare the claims experience in the
second half of 2017 between individuals subject to pre-enrollment
verification with those who were not.
However, based on strong issuer feedback and the potential to help
to stabilize the market for 2018 coverage, we propose to increase the
scope of pre-enrollment verification of special enrollment periods to
all applicable special enrollment periods, as outlined below, in order
to ensure complete verification of eligibility. We would begin to
implement this expanded pre-enrollment verification starting in June
2017. We have consistently heard from issuers and other stakeholders
that pre-enrollment verification of special enrollment periods is
critical to promote continuous coverage, protect the risk pool, and
stabilize rates. We agree that policies and practices that allow
individuals to remain uninsured and wait to sign up for coverage
through a special enrollment period only after becoming sick can
contribute to market destabilization and reduced issuer participation,
which can reduce the availability of coverage for individuals.
Therefore, this rule proposes that HHS conduct pre-enrollment
verification of eligibility for Exchange coverage for all categories of
special enrollment periods for all new consumers in all States served
by the HealthCare.gov platform, which includes Federally-facilitated
Exchanges and State-based Exchanges on the Federal platform (SBE-FPs).
Under pre-enrollment verification, HHS would verify eligibility for
certain special enrollment period categories for all new consumers who
seek to enroll in Exchange coverage through a special enrollment
period. Consumers would be able to submit their applications and select
a plan and, as is the current practice for most special enrollment
periods, the start date of that coverage would be determined by the
date of plan selection. However, the consumers' enrollment would be
``pended'' until verification of special enrollment period eligibility
is completed. In this context, ``pending'' means holding the
information regarding plan selection and coverage date at the FFE or
SBE-FP until special enrollment period eligibility is confirmed, before
releasing the enrollment information to the relevant issuer. Consumers
would be given 30 days to provide documentation, and would be able to
upload documents into their account on HealthCare.gov or send their
documents in the mail. Where applicable, we intend to make every effort
to verify an individual's eligibility for the applicable special
enrollment period through automated electronic means instead of through
documentation. For example, verifying a birth by confirming the baby's
existence through existing electronic verifications or verifying
electronically that a consumer was denied Medicaid or CHIP coverage,
where such information is available. Otherwise, we will seek
documentation from the individual applying for the special enrollment
period. We note that even though we do not currently perform
verification for all consumers new to the Exchange, we already require
all consumers to provide documentation if they are applying for a
special enrollment period based on certain triggering events. Under
this proposal, we anticipate approximately the same amount of
documentation and therefore would not anticipate an increased burden on
consumers. We seek comment on the impact on consumers. We seek comment
on our proposed method for pre-enrollment verification and whether we
should retain a small percentage of enrollees outside the pre-
enrollment verification process to conduct the study discussed above.
If we do not, HHS would continue to monitor other indicators of risk
where available in lieu of the statistical comparison. Recognizing that
pre-enrollment verification could have the unintended consequence of
deterring healthier individuals from purchasing Exchange coverage, we
also seek comment on what strategies HHS should take to increase the
chances that these individuals complete the verification process.
We also recommend that State-based Exchanges that do not currently
conduct pre-enrollment verification of special enrollment period
eligibility consider following this approach as well, and request
comment on whether State-based Exchanges should also be required to
conduct pre-enrollment verification, with an appropriate amount of time
to implement such a process, and how long that transition period should
be.
As noted above, the pre-enrollment verification of special
enrollment period eligibility is intended to address concerns about
potential adverse selection. However, we have heard concerns that
existing Exchange enrollees are utilizing special enrollment periods to
change plan metal levels based on ongoing health needs during the
coverage year, and that this is having a negative impact on the risk
pool. We have concerns about applying the approach of pending a plan
selection until pre-enrollment verification is conducted while the
consumer would still have an active policy because we believe the
potential overlap of current, active policies and pended plan
selections will create significant confusion for consumers and create
burden on issuers to manage the potential operational issues. For
example, if a consumer who is currently enrolled is seeking to add a
new spouse under the marriage special enrollment period, the current
coverage would remain in force until the consumer submits documentation
to verify the marriage. At that time the pended plan selection would be
released, potentially with a retroactive coverage effective date based
on the date of the plan
[[Page 10986]]
selection with both individuals; and the current coverage with the
single enrollee would be retroactively terminated to when the new
policy begins. If the new plan selection is with a new issuer, any
claims incurred during that time period would need to be reconciled
across the issuers.
As an alternative, we are proposing new paragraph (a)(4) to limit
the ability of existing Exchange enrollees to change plan metal levels
during the coverage year. The proposed changes in paragraph (a)(4)
would apply in the individual market outside the Exchanges, but would
not apply in the group market. We are proposing changes to Sec.
147.104(b)(2)(i) and Sec. 155.725(j)(2)(i) to specify this. We are
also proposing to amend the introductory language in paragraph (d) of
this section and to add a new paragraph (a)(3) to conform with this
proposed change. For special enrollment periods administered on the
Exchange, the Exchange would limit the plan selection choices. We
request comment on all aspects of this proposal, including whether it
would be preferable to address adverse selection concerns for existing
enrollees by applying the approach of pending plan selections until
pre-enrollment verification is completed based on document reviews
instead of the current plan and metal level restrictions. We also
request comment on any alternative strategies for addressing potential
adverse selection issues for existing enrollees who are eligible for a
special enrollment period.
We understand that State-based Exchanges may not be able to
implement these changes starting in 2017, and seek comment on an
appropriate transitional period for State-based Exchanges, or whether
these changes should be optional for State-based Exchanges.
Under new paragraph (a)(4)(i), we propose to require that if an
enrollee qualifies for a special enrollment period due to gaining a
dependent in paragraph (d)(2)(i) of this section, the Exchange may
allow him or her to add the new dependent to his or her current QHP
(subject to the ability to enroll in silver level coverage in certain
circumstances as discussed in the next paragraph). Alternatively, if
the QHP's business rules do not allow the new dependent to enroll, the
Exchange may allow the enrollee and his or her new dependent to enroll
in another QHP within the same level of coverage (or an ``adjacent''
level of coverage, if no such plans are available), as defined in Sec.
156.140(b). This ensures that enrollees who qualify for the special
enrollment period due to gaining a dependent are using this special
enrollment period for its primary purpose of enrolling the new
dependent in coverage. If finalized, we intend to implement this policy
for the FFEs and SBE-FPs as soon as practicable. We seek comment on
this proposal.
New paragraph (a)(4)(ii) proposes to require that if an enrollee or
his or her dependent is not enrolled in a silver level QHP and becomes
newly eligible for cost-sharing reductions and qualifies for the
special enrollment periods in paragraph (d)(6)(i) and (ii) of this
section, the Exchange may allow the enrollee and dependent to enroll in
only a QHP at the silver level, as specified in Sec. 156.140(b)(2). We
seek comment on this proposal, including with respect to whether
individuals newly eligible for APTC in this circumstance should also be
able to enroll in a silver level QHP, or QHPs of other metal levels.
New paragraph (a)(4)(iii) proposes that, for an enrollee who
qualifies for the remaining special enrollment periods specified in
paragraph (d), the Exchange must only allow the enrollee and his or her
dependents to make changes to their enrollment in the same QHP or to
change to another QHP within the same level of coverage, as defined in
Sec. 156.140(b), if other QHPs at that metal level are available. This
restriction would extend to enrollees who are on an application where a
new applicant is enrolling in coverage through a special enrollment
period. This proposal ensures that enrollees who qualify for a special
enrollment period or are on an application where an applicant qualifies
for a special enrollment period to newly enroll in coverage are not
using this special enrollment period to simply switch levels of
coverage during the coverage year. This policy would apply to most
Exchange enrollees who qualify for a special enrollment period during
the coverage year, further protecting the Exchanges from adverse
selection. Affected special enrollment periods include special
enrollment periods for enrollees who lost minimum essential coverage
through the Exchange during the coverage year in accordance with
paragraph (d)(1); demonstrated to the Exchange that the QHP into which
they have enrolled has violated a material provision of its contract in
accordance with paragraph (d)(5); gained access to a new QHP due to a
permanent move in accordance with paragraph (d)(7); or were affected by
a material plan or benefit display errors in accordance with paragraph
(d)(12). Enrollees who qualify for the special enrollment periods in
paragraphs (d)(4), (d)(9), and (d)(10) would be excluded from this new
requirement because the qualifying events that enabled them to qualify
for these special enrollment periods may have also resulted in an
inability to enroll in their desired plan during the annual open
enrollment period. In addition, we propose to exclude the special
enrollment period in paragraph (d)(8) for Indians and their dependents.
We seek comment on this proposal, and whether other special enrollment
periods should be excluded. We also seek comment on the appropriate
transitional period to enable State-based Exchanges to build these
capacities, or whether the proposals in new paragraph (a)(4) should be
at the option of the Exchanges. We also seek comment on how this
proposal would be operationalized in the off-Exchange individual
market.
In the 2018 Notice of Payment and Benefit Parameters, HHS finalized
paragraph (b)(5) to allow consumers to request a later coverage
effective date than originally assigned if his or her enrollment was
delayed due to an eligibility verification and the consumer would be
required to pay 2 or more months of retroactive premium in order to
effectuate coverage or avoid termination of coverage due to nonpayment
of premiums. When finalizing this amendment, we did not place a limit
on how much later the coverage effective date could be. After further
consideration and concerns raised by stakeholders regarding potential
adverse selection impacts, we propose modifying that requirement and
instead allowing consumers to start their coverage 1 month later than
their effective date would ordinarily have been, if the special
enrollment period verification process results in a delay in their
enrollment such that they would be required to pay 2 or more months of
retroactive premium to effectuate coverage or avoid termination for
non-payment. Therefore, a consumer who was originally scheduled to
begin coverage on March 1, may elect to have coverage start on April 1,
if he or she owes retroactive premiums for March, April, and May due to
delays in document verification. We note that we do not anticipate that
many consumers would be eligible to request a later effective date
under this paragraph, as we do not expect the pre-enrollment
verification processes to result in such significant delays. However,
we recognize that there may be unforeseen challenges as we implement
the verification process, and believe it is important to offer this
flexibility in the event of such delays. We believe the
[[Page 10987]]
option to have a later effective date could help keep healthier
individuals in the market, who otherwise might be deterred by the
prospect of paying for 2 or more months of retroactive coverage that
they did not use. We seek comment on this proposal, and the appropriate
coverage effective date for these consumers.
As part of our enhanced verification efforts for special enrollment
periods, we are proposing to take additional steps to strengthen and
streamline the parameters of several existing special enrollment
periods and ensure consumers are adhering to existing and new
eligibility parameters to further promote continuity of coverage and
market stability.
First, in order to ensure that a special enrollment period for loss
of minimum essential coverage in paragraph (d)(1) is not granted in
cases where an individual was terminated for non-payment of premium, as
described in paragraph (e)(1), FFE (and SBE-FPs) will permit the issuer
to reject an enrollment for which the issuer has a record of
termination due to non-payment of premiums unless the individual
fulfills obligations for premiums due for previous coverage, consistent
with the guaranteed availability approach discussed in the preamble for
Sec. 147.104. We believe that verifying that consumers are not
attempting to enroll in coverage through the special enrollment period
for loss of minimum essential coverage when the reason for their loss
of coverage is due to non-payment of premiums is an important measure
to prevent instances of gaming related to individuals only paying
premiums and maintaining coverage for months in which they seek
services. We seek comment on this proposal.
Further, HHS intends to explore options for verifying that a
consumer was not terminated due to non-payment of premiums for coverage
within the FFEs as a precursor for being eligible for the loss of
minimum essential coverage special enrollment period. HHS proposes to
allow Exchanges to collect and store information from issuers about
whether consumers have been terminated from Exchange coverage due to
nonpayment of premiums so that the Exchange may automatically prevent
these consumers from qualifying for the special enrollment period due
to a loss of minimum essential coverage if the consumer attempts to
renew his or her Exchange coverage within 60 days of being terminated.
We note that, if the consumer attempts to renew his or her Exchange
coverage more than 60 days after being terminated, the consumer would
not be eligible for a special enrollment period due to loss of minimum
essential coverage. We seek comment on this proposal.
Second, in response to concerns that consumers are opting not to
enroll in QHP coverage during the annual open enrollment period and are
instead newly enrolling in coverage during the coverage year through
the special enrollment period for marriage, we are proposing to add new
paragraph (d)(2)(i)(A) to require that, if consumers are newly
enrolling in QHP coverage through the Exchange through the special
enrollment period for marriage, at least one spouse must demonstrate
having had minimum essential coverage as described in 26 CFR 1.5000A-
1(b) for 1 or more days during the 60 days preceding the date of
marriage. However, we recognize that individuals who were previously
living abroad or in a U.S. territory may not have had access to
coverage that is considered minimum essential coverage in accordance
with 26 CFR 1.5000A-1(b) prior to moving to the U.S. Therefore, we
propose that, when consumers are newly enrolling in coverage during the
coverage year through the special enrollment period for marriage, at
least one spouse must either demonstrate that they had minimum
essential coverage or that they lived outside of the U.S. or in a U.S.
territory for 1 or more days during the 60 days preceding the date of
the marriage. This proposed change would only apply in the individual
market. We seek comment on this proposal.
To streamline our regulations regarding special enrollment periods
that require consumers to demonstrate prior coverage, we propose to add
new paragraph (a)(5) to clarify that qualified individuals who are
required to demonstrate prior coverage can either demonstrate that they
had minimum essential coverage as described in 26 CFR 1.5000A-1(b) for
1 or more days during the 60 days preceding the date of the qualifying
event or that they lived outside of the U.S. or in a U.S. territory for
1 or more days during the 60 days preceding the date of the qualifying
event. Paragraph (a)(5) would apply to paragraph (d)(2)(i)(A) for
marriage (discussed above) and paragraph (d)(7)(i) for permanent move
and this paragraph would replace current paragraph (d)(7)(ii). We seek
comment on this proposal.
HHS acknowledges that this rule proposes changes for special
enrollment periods in the individual market that differ from the rules
regarding special enrollment periods in the group market. For example,
this rule proposes changes that would require consumers to demonstrate
prior coverage to qualify for the special enrollment period for
marriage in proposed paragraph (d)(2)(i)(A) and would generally limit
plan selection to the same plan or level of coverage when an enrollee
qualifies for a special enrollment period during the coverage year in
proposed paragraph (a)(4). However, we believe that the differences in
the markets--and the impacts of those differences on the risk pool--
warrant an approach in the individual market that diverges from long-
standing rules and norms in the group market. Employer-sponsored
coverage is generally a more stable risk pool and less susceptible to
gaming because the coverage is tied to employment and often
substantially subsidized by the employer. Thus, we believe taking an
approach in the individual market that imposes tighter restrictions on
special enrollments and the ability to change plans for current
enrollees better addresses the unique challenges faced in the
individual market. We believe that this approach is consistent with the
requirement in section 1311(c)(6)(C) of the Affordable Care Act
directing the Secretary to require Exchanges to establish special
enrollment periods as specified in section 9801of the Code and under
circumstances similar to such periods under Part D of title XVIII of
the Act and the Secretary's authority under section 2702(b)(3) to
promulgate regulations for the individual market with respect to
special enrollment periods for qualifying events under section 603 of
the Employee Retirement Income Security Act of 1974. We interpret
section 1311 of the Affordable Care Act and section 2702 of the PHS Act
to require the Secretary to implement special enrollment periods with
the same triggering events as in the group market, but to provide the
Secretary with flexibility in the specific parameters around how those
special enrollment periods are implemented in the individual market,
due to these unique dynamics of the individual market.
Third, we propose to expand the verification requirements related
to the special enrollment period for a permanent move in paragraph
(d)(7). This special enrollment period is only available to a qualified
individual or enrollee who has gained access to new QHPs as a result of
a permanent move and had coverage for 1 or more days in the 60 days
preceding the move, unless he or she is moving to the U.S. from abroad
or a U.S. territory. Currently, we require documentation to show a move
occurred, and accept an attestation
[[Page 10988]]
regarding having had prior coverage or moving from abroad or a U.S.
territory. To ensure that consumers meet all the requirements for this
special enrollment period, we propose to require that new applicants
applying for coverage through this special enrollment period submit
acceptable documentation to the FFEs and SBE-FPs to prove both their
previous and new addresses and evidence of prior coverage, if
applicable, through the pre-enrollment verification process. If
finalized, we intend to release guidance on what documentation would be
acceptable. We seek comment on this proposal.
Fourth, for the remainder of 2017 and for future plan years, we
propose to significantly limit the use of the exceptional circumstances
special enrollment period described in paragraph (d)(9). In previous
years, this special enrollment period has been used to address
eligibility or enrollment issues that affect large cohorts of
individuals where they had made reasonable efforts to enroll but were
hindered by outside events. For example, in past years, the FFEs have
offered exceptional circumstances special enrollment periods to groups
of consumers who were enrolled in coverage that they believed was
minimum essential coverage at the time of enrollment, but was not. HHS
proposes to henceforth apply a more rigorous test for future uses of
the exceptional circumstances special enrollment period, including
requiring supporting documentation where practicable, under which we
would only grant this special enrollment period if provided with
sufficient evidence to conclude that the consumer's situation was truly
exceptional and in instances where it is verifiable that consumers were
directly impacted by the circumstance, as practicable. We would provide
guidance on examples of situations that we believe meet this more
rigorous text and what corresponding documentation consumers will be
required to provide, if requested by the FFE. We seek comment on this
proposal.
Over the past few years, the Exchange has, at times, offered
special enrollment periods for a variety of circumstances related to
errors that occurred more frequently in the early years of operations.
However, as the Exchanges continue, HHS will evaluate existing special
enrollment periods to determine their continued utility and necessity.
This rule proposes to formalize previous guidance\12\ from HHS that the
following special enrollment periods are no longer available. We are
publishing this list in this proposed rule in response to confusion by
stakeholders about whether current special enrollment periods
previously made available through guidance are still available to
consumers, for the purposes of clarity.
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\12\ HHS, Clarifying, Eliminating and Enforcing Special
Enrollment Periods (January 19, 2016), available at http://wayback.archive-it.org/2744/20170118130449/https://blog.cms.gov/2016/01/19/clarifying-eliminating-and-enforcing-special-enrollment-periods/.
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Consumers who enrolled with advance payments of the
premium tax credit that are too large because of a redundant or
duplicate policy;
Consumers who were affected by a temporary error in the
treatment of Social Security Income for tax dependents;
Lawfully present non-citizens that were affected by a
temporary error in the determination of their eligibility for advance
payments of the premium tax credit
Lawfully present non-citizens with incomes below 100% FPL
who experienced certain processing delays; and
Consumers who were eligible for or enrolled in COBRA and
not sufficiently informed about their coverage options.
Because of concerns that improper uses of the special enrollment
periods outlined in this section will lead to adverse selection and
immediate, unexpected financial losses in the remaining months of this
year, which could lead to premium increases or issuers exiting the
market, we believe that the changes discussed above are needed to
stabilize the risk pool and encourage robust issuer Exchange
participation, which will also benefit both consumers and the
individual market as a whole in the future.
3. Continuous Coverage
Because of the challenges in the individual market related to
adverse selection, HHS believes it is especially important in this
market to adopt policies that promote continuous enrollment in health
coverage and to discourage individuals from waiting until illness
occurs to enroll in coverage.
While the proposals in this rule relating to guaranteed
availability, the annual open enrollment period, and special enrollment
periods would encourage individuals to maintain coverage throughout the
year, we are also actively exploring additional policies in the
individual market that would promote continuous coverage and seek input
on which policies would effectively do so consistent with existing
legal authorities. For example, with respect to special enrollment
periods that require evidence of prior coverage, we are considering
policies for the individual market that would require that individuals
show evidence of prior coverage for a longer ``look back'' period. For
example, we could require prior coverage for 6 to 12 months, except
that we might consider an individual to have had prior coverage, even
if there was a small gap in coverage (for example, up to 60 days).
Alternatively, for individuals who are not able to provide evidence of
prior coverage during such a look back period, an exception could allow
them to enroll in coverage if they otherwise qualify for a special
enrollment period, but impose a waiting period of at least 90 days
before effectuating enrollment, or assess a late enrollment penalty.
These policies could provide a disincentive for individuals to drop out
of coverage, thus promoting continuous coverage.
HHS is also interested in whether policies are needed for the
individual market similar to those that existed under the Health
Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191)
(HIPAA), which required maintenance of continuous, creditable coverage
without a 63-day break in the group market if individuals wished to
avoid the pre-existing condition exclusions, and allowed waiting
periods to be imposed under certain circumstances. Although the HIPAA
rules did not require that individuals maintain coverage, the rules
were designed to provide an important incentive for individuals to
enroll in coverage year-round, not just when in need of health care
services; reduce adverse selection; and help prevent premiums from
climbing to levels that would keep most healthy individuals from
purchasing coverage.
With these policies, we likely would seek not only to encourage
uninsured individuals to enroll in coverage during the open enrollment
period, but also to encourage those with coverage to maintain
continuous coverage throughout the year.
We note that we seek comment on additional policies that would
promote continuous coverage, but are not, at this time, proposing any
of the policies described in this section III.B.3. of this notice.
4. Enrollment Periods Under SHOP
Because the proposed changes to Sec. 155.420(a)(3) through (5) are
being proposed for special enrollment periods in the individual market
only, we propose to amend Sec. 155.725(j)(2)(i) to
[[Page 10989]]
specify that these paragraphs do not apply to special enrollment
periods under the Small Business Health Options Program (SHOP). A more
detailed discussion of the proposed changes in Sec. 155.420(a) is
provided in section III.B.2. of this proposed rule.
5. Exchange Functions: Certification of Qualified Health Plans (Part
155, Subpart K)
In light of the need for issuers to make modifications to their
products and applications to accommodate the changes proposed in this
rule, should they be finalized, we would issue separate guidance to
update the QHP certification calendar and the rate review submission
deadlines to give additional time for issuers to develop, and States to
review, form and rate filings for the 2018 plan year that reflect these
changes.
C. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges
1. Levels of Coverage (Actuarial Value) (Sec. 156.140)
Section 2707(a) of the PHS Act and section 1302 of the Affordable
Care Act direct issuers of non-grandfathered individual and small group
health insurance plans, including QHPs, to ensure that these plans
adhere to the levels of coverage specified in section 1302(d)(1) of the
Affordable Care Act. A plan's coverage level, or actuarial value (AV),
is determined based on its coverage of the EHB for a standard
population. Section 1302(d)(1) of the Affordable Care Act requires a
bronze plan to have an AV of 60 percent, a silver plan to have an AV of
70 percent; a gold plan to have an AV of 80 percent; and a platinum
plan to have an AV of 90 percent. Section 1302(d)(2) of the Affordable
Care Act directs the Secretary to issue regulations on the calculation
of AV and its application to the levels of coverage. Section 1302(d)(3)
of the Affordable Care Act authorizes the Secretary to develop
guidelines to provide for a de minimis variation in the actuarial
valuations used in determining the level of coverage of a plan to
account for differences in actuarial estimates.
In the EHB Rule, at Sec. 156.140(c), HHS established that the
allowable variation in the AV of a health plan that does not result in
a material difference in the true dollar value of the health plan is +/
-2 percentage points. As finalized in the 2018 Payment Notice, Sec.
156.140(c) permits a de minimis variation of +/- 2 percentage points,
except if a bronze health plan either covers and pays for at least one
major service, other than preventive services, before the deductible or
meets the requirements to be a high deductible health plan within the
meaning of 26 U.S.C. 223(c)(2), the allowable variation in AV for such
plan is -2 percentage points and +5 percentage points. We established
this additional flexibility for certain bronze plans in the 2018
Payment Notice to provide a balanced approach to ensure that a variety
of bronze plans can be offered, including high deductible health plans,
while ensuring that bronze plans can remain at least as generous as
catastrophic plans. As discussed in the EHB Rule, our intention with
the de minimis variation of +/-2 percentage points was to give issuers
the flexibility to set cost-sharing rates that are simple and
competitive while ensuring consumers can easily compare plans of
similar generosity. While the de minimis range is intended to allow
plans to float within a reasonable range and is not intended to freeze
plan designs preventing innovation in the market, it was also intended
to mitigate the need for annual plan redesign, allowing plans to retain
the same plan design year to year while remaining at the same metal
level.
At this time, we believe that further flexibility is needed for the
AV de minimis range for metal levels to help issuers design new plans
for future plan years, thereby promoting competition in the market. In
addition, we believe that changing the de minimis range will allow more
plans to keep their cost sharing the same from year to year. Although
the AV Calculator is not a pricing tool, changing the de minimis range
could also put downward pressure on premiums. Thus, we anticipate that
this flexibility could encourage healthier consumers to enroll in
coverage, improving the risk pool and increasing market stability. For
these reasons, we believe that changing the AV de minimis range would
help retain and attract issuers to the non-grandfathered individual and
small group markets, which would increase competition and help
consumers. Therefore, we propose amending the definition of de minimis
included in Sec. 156.140(c), to a variation of -4/+2 percentage
points, rather than +/- 2 percentage points for all non-grandfathered
individual and small group market plans that are required to comply
with AV. Under the proposed standard, for example, a silver plan could
have an AV between 66 and 72 percent. We believe that a de minimis
amount of -4/+2 percentage points would provide the necessary
flexibility to issuers in designing plans while striking the right
balance between ensuring comparability of plans within each metal level
and allowing plans the flexibility to use convenient and competitive
cost-sharing metrics.
We also note that as established at Sec. 156.135(a), to calculate
the AV of a health plan, the issuer must use the AV Calculator
developed and made available by HHS for the given benefit year. The AV
Calculator represents an empirical estimate of the AV calculated in a
manner that provides a close approximation to the actual average
spending by a wide range of consumers in a standard population. For the
2018 AV Calculator, we made several key updates to the AV Calculator,
including updating the claims data underlying the continuance tables
that represent the standard population to reflect more current claims
data. For example, all previous versions of the AV Calculator had been
using 2010 (pre-Affordable Care Act) claims data and the 2018 AV
Calculator is using 2015 (post-Affordable Care Act) claims data. As
discussed in the 2018 AV Calculator Methodology, due to the scope and
number of updates in the 2018 AV Calculator, the impact on current
plans' AVs will vary.\13\ Indeed, issuers have reported that the AV of
2017 plans have varied in unexpected ways when entered into the 2018 AV
Calculator. Therefore, the proposed flexibility in the de minimis range
is also intended to help provide some stability to those plans that are
being impacted by the updates to the AV Calculator.
---------------------------------------------------------------------------
\13\ 2018 AV Calculator Methodology is available at https://www.cms.gov/cciio/resources/regulations-and-guidance/#Plan.
---------------------------------------------------------------------------
We are proposing to provide the increased flexibility in the de
minimis range starting with the 2018 AV Calculator. We seek comment on
whether making the change effective for the 2019 plan year would be
preferable, given the lead time issuers require to design plans.
While we are proposing to modify the de minimis range for the metal
level plans (bronze, silver, gold, and platinum), we are not proposing
to modify the de minimis range for the silver plan variations (the
plans with an AV of 73, 87 and 94 percent) under Sec. Sec. 156.400 and
156.420 at this time. The de minimis variation for a silver plan
variation of a single percentage point would still apply. In the
Actuarial Value and Cost-Sharing Reductions Bulletin we issued on
February 24, 2012,\14\ we
[[Page 10990]]
explained why we did not intend to require issuers to offer a cost-
sharing reduction plan variation with an AV of 70. However, given our
proposal, we also are considering whether the ability for an issuer to
offer a standard silver level plan at an AV of 66 would require a plan
variation to be offered at an AV of 70 or some other mechanism to
provide for cost-sharing reductions for eligible individuals with
household incomes that are more than 250 percent but not more than 400
percent of the poverty line for a family of the size involved.
---------------------------------------------------------------------------
\14\ Available at https://www.cms.gov/CCIIO/Resources/Files/Downloads/Av-csr-bulletin.pdf.
---------------------------------------------------------------------------
We also would maintain the bronze plan de minimis range policy
finalized in the 2018 Payment Notice at Sec. 156.140(c) with one
modification. We propose to change the de minimis range for the
expanded bronze plans from +5/-2 percentage points to +5/-4 percentage
points to align with the policy in this rule. Therefore, for those
bronze plans that either cover and pay for at least one major service,
other than preventive services, before the deductible or meet the
requirements to be a high deductible health plan within the meaning of
26 U.S.C. 223(c)(2), we are proposing the allowable variation in AV
would be -4 percentage points and +5 percentage points.\15\
---------------------------------------------------------------------------
\15\ Although we are expanding the de minimis range for bronze
plans to -4 percentage points, we recognize that achieving an AV
below 58 percent is difficult with the claims distribution
underlying the current AV calculator.
---------------------------------------------------------------------------
We seek comment on this proposal, including on the appropriate de
minimis values for metal level plans and silver plan variations, and
whether those values should differ when increasing or decreasing AV.
To implement the amended AV de minimis range in this proposed rule,
we would update the 2018 AV Calculator in accordance with this policy.
2. Network Adequacy (Sec. 156.230)
At Sec. 156.230, we established the minimum criteria for network
adequacy that health and dental plan issuers must meet to be certified
as QHPs, including stand-alone dental plans (SADPs), in accordance with
the Secretary's authority in section 1311(c)(1)(B) of the Affordable
Care Act. Section 156.230(a)(2) requires a QHP issuer to maintain a
network that is sufficient in number and types of providers, including
providers that specialize in mental health and substance abuse
services, to assure that all services will be accessible without
unreasonable delay.
In recognition of the traditional role States have in developing
and enforcing network adequacy standards, we propose to rely on State
reviews for network adequacy in States in which an FFE is operating,
provided the State has a sufficient network adequacy review process,
rather than performing a time and distance evaluation. For the 2018
plan year, we propose to defer to the States' reviews in States with
the authority that is at least equal to the ``reasonable access
standard'' defined in Sec. 156.230 and means to assess issuer network
adequacy, regardless of whether the Exchange is a State-based Exchange
(SBE) or FFE, and regardless of whether the State performs plan
management functions.
We are also proposing a change to our approach to reviewing network
adequacy in States that do not have the authority and means to conduct
sufficient network adequacy reviews. In those States, we would, for the
2018 plan year, apply a standard similar to the one used in the 2014
plan year.\16\ As HHS did in 2014, in States without the authority or
means to conduct sufficient network adequacy reviews, we would rely on
an issuer's accreditation (commercial or Medicaid) from an HHS-
recognized accrediting entity. HHS has previously recognized 3
accrediting entities for the accreditation of QHPs: the National
Committee for Quality Assurance, URAC, and Accreditation Association
for Ambulatory Health Care.\17\ We would recognize these same three
accrediting entities for network adequacy reviews for the 2018 plan
year. Unaccredited issuers would be required to submit an access plan
as part of the QHP Application. To show that the QHP's network meets
the requirement in Sec. 156.230(a)(2), the access plan would need to
demonstrate that an issuer has standards and procedures in place to
maintain an adequate network consistent with the National Association
of Insurance Commissioners' Health Benefit Plan Network Access and
Adequacy Model Act (the Model Act is available at http://www.naic.org/store/free/MDL-74.pdf). This approach would supersede the time and
distance criteria described in the 2018 Letter to Issuers in the
Federally-facilitated Marketplaces.\18\
---------------------------------------------------------------------------
\16\ Letter to Issuers on Federally-facilitated and State
Partnership Exchanges (April 5, 2013). Available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2014_letter_to_issuers_04052013.pdf.
\17\ Recognition of Entities for the Accreditation of Qualified
Health Plans 77 FR 70163 (November 23, 2012) and Approval of an
Application by the Accreditation Association for Ambulatory Health
Care (AAAHC) To Be a Recognized Accrediting Entity for the
Accreditation of Qualified Health Plans 78 FR 77470 (December 23,
2013).
\18\ 2018 Letter to Issuers in the Federally-facilitated
Marketplaces (December 16, 2016). Available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces.pdf.
---------------------------------------------------------------------------
We would further coordinate with States to monitor network
adequacy, for example, through complaint tracking. As noted elsewhere
in this rule, we intend to release a proposed timeline for the QHP
certification process for plan year 2018 that would provide issuers
with additional time to implement proposed changes that are finalized
prior to the 2018 coverage year.
We seek comment on these proposals.
3. Essential Community Providers (Sec. 156.235)
Essential community providers (ECPs) include providers that serve
predominantly low-income and medically underserved individuals, and
specifically include providers described in section 340B of the PHS Act
and section 1927(c)(1)(D)(i)(IV) of the Social Security Act. Section
156.235 establishes requirements for inclusion of ECPs in QHP provider
networks and provides an alternate standard for issuers that provide a
majority of covered services through employed physicians or a single
contracted medical group.
In conducting reviews of the ECP standard for QHP and SADP
certification for the 2018 plan year, HHS proposes to follow the
approach previously finalized in the 2018 Payment Notice and outlined
in the 2018 Letter to Issuers in the Federally-facilitated
Marketplaces, with two changes as outlined below. States performing
plan management functions in the FFEs would be permitted to use a
similar approach.
Section 156.235(2)(i) stipulates that a plan has a sufficient
number and geographic distribution of ECPs if it demonstrates, among
other criteria, that the network includes as participating
practitioners at least a minimum percentage, as specified by HHS. For
the 2014 plan year, we set this minimum percentage at 20 percent, but,
starting with the 2015 Letter to Issuers in the Federally-facilitated
Marketplaces, we increased the minimum percentage to 30 percent.\19\
For certification for the 2018 plan year we propose to return to the
percentage used in the 2014 plan year, and would instead again consider
the issuer to have satisfied the regulatory standard if the issuer
contracts with at least 20 percent of
[[Page 10991]]
available ECPs in each plan's service area to participate in the plan's
provider network. The calculation methodology outlined in the 2018
Letter to Issuers in the Federally-facilitated Marketplaces and 2018
Payment Notice would remain unchanged.
---------------------------------------------------------------------------
\19\ 2015 Letter to Issuers in the Federally-facilitated
Marketplaces. Available online at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2015-final-issuer-letter-3-14-2014.pdf.
---------------------------------------------------------------------------
We believe this standard will substantially lessen the regulatory
burden on issuers while preserving adequate access to care provided by
ECPs. In particular, we believe this proposal would result in fewer
issuers needing to submit a justification to prove that they include in
their provider networks a sufficient number and geographic distribution
of ECPs to meet the standard in Sec. 156.235. For the 2017 plan year,
six percent of issuers were required to submit such a justification.
Although none of their networks met the 30 percent ECP threshold, all
of these justifications were deemed sufficient, and each network would
have met the 20 percent threshold. We anticipate that issuers will
readily be able to contract with at least 20 percent of ECPs in a
service area.
We also propose to modify our previous guidance regarding which
providers issuers may identify as ECPs within their provider networks.
Under our current guidance, issuers would only be able to identify
providers in their network who are included on a list of available ECPs
maintained by HHS (``the HHS ECP list''). This list is based on data
maintained by HHS, including provider data that HHS receives directly
from providers through the ECP petition process for the 2018 plan
year.\20\ In previous years, issuers were also permitted to identify
ECPs through a write-in process. Because the ECP petition process is
intended to ensure qualified ECPs are included in the HHS ECP list, we
indicated in guidance that we would not allow issuers to submit ECP
write-ins for plan year 2018. However, we are aware that not all
qualified ECPs have submitted an ECP petition, and therefore have
determined the write-in process is still needed to allow issuers to
identify all ECPs in their network. Therefore, as for plan year 2017,
for plan year 2018, we propose that an issuer's ECP write-ins would
count toward the satisfaction of the ECP standard only for the issuer
that wrote in the ECP on its ECP template, provided that the issuer
arranges that the written-in provider has submitted an ECP petition to
HHS by no later than the deadline for issuer submission of changes to
the QHP application. For example, issuers may write in any providers
that are currently eligible to participate in 340B programs that are
not included on the HHS list, or not-for-profit or state-owned
providers that would be entities described in section 340B but do not
receive federal funding under the relevant section of law referred to
in section 340B, as long as the provider has submitted a timely ECP
petition. Such providers include not-for-profit or governmental family
planning service sites that do not receive a grant under Title X of the
PHS Act. We believe this proposal would (1) help build the HHS ECP list
so that it is more inclusive of qualified ECPs; and (2) better
recognize issuers for the ECPs with whom they contract.
---------------------------------------------------------------------------
\20\ List available at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/FINAL-CMS-ECP-LIST-PY-2018_12-16-16.xlsx.
---------------------------------------------------------------------------
As in previous years, if an issuer's application does not satisfy
the ECP standard, the issuer would be required to include as part of
its application for QHP certification a satisfactory narrative
justification describing how the issuer's provider networks, as
presently constituted, provide an adequate level of service for low-
income and medically underserved individuals and how the issuer plans
to increase ECP participation in the issuer's provider networks in
future years. At a minimum, such narrative justification would include
the number of contracts offered to ECPs for the 2018 plan year, the
number of additional contracts an issuer expects to offer and the
timeframe of those planned negotiations, the names of the specific ECPs
to which the issuer has offered contracts that are still pending, and
contingency plans for how the issuer's provider network, as currently
designed, would provide adequate care to enrollees who might otherwise
be cared for by relevant ECP types that are missing from the issuer's
provider network.
We seek comment on these proposals.
IV. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget for review and approval. This
proposed rule contains information collection requirements (ICRs) that
are subject to review by OMB. A description of these provisions is
given in the following paragraphs, with an estimate of the annual
burden, summarized in Table 1. To fairly evaluate whether an
information collection should be approved by OMB, section 3506(c)(2)(A)
of the Paperwork Reduction Act of 1995 requires that we solicit comment
on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our 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 are soliciting public comment on each of these issues for the
following sections of this proposed rule that contain ICRs.
A. ICRs Regarding Verification of Eligibility for Special Enrollment
Periods (Sec. 155.420)
This proposed rule proposes that, starting in June 2017, HHS would
begin to implement pre-enrollment verification of eligibility for all
categories of special enrollment periods for all States served by the
HealthCare.gov platform. Currently, individuals self-attest to their
eligibility for many special enrollment periods and submit supporting
documentation, but enroll in coverage through the Exchanges without any
pre-enrollment verification. As mentioned earlier in the preamble, we
planned to implement a pilot program to conduct pre-enrollment
verification for a sample of 50 percent of consumers attempting to
enroll in coverage through certain special enrollment periods. Under
the proposed rule, we propose to expand pre-enrollment verification to
all new consumers for certain categories of special enrollment periods,
so that enrollment would be delayed or ``pended'' until verification of
eligibility is completed. Individuals would have to provide supporting
documentation within 30 days. Where applicable, the FFE would make
every effort to verify an individual's eligibility for the applicable
special enrollment period through automated electronic means instead of
through documentation. Since consumers currently provide required
supporting documentation, the proposed provisions would not impose any
additional burden. We seek comment on this impact.
Based on enrollment data, we estimate that HHS Eligibility Support
Staff members would conduct pre-enrollment verification for an
additional 650,000 individuals. Once individuals have submitted the
required verification documents, we estimate that it will take a staff
member approximately 12 minutes (at an hourly cost of $40.82) to review
and verify submitted verification
[[Page 10992]]
documents. The verification process would result in an additional
annual burden for the federal government of 130,000 hours with an
equivalent cost of $5,306,600. We will revise the information
collection currently approved under OMB control number 0938-1207
(Medicaid and Children's Health Insurance Programs: Essential Health
Benefits in Alternative Benefit Plans, Eligibility Notices, Fair
Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges:
Eligibility and Enrollment) to account for this additional burden.
State-based Exchanges that currently do not conduct pre-enrollment
verification for special enrollment periods would be encouraged to
follow the same approach. States that choose to do so would change
their current approach. Under 5 CFR 1320.3(c)(4), this ICR is not
subject to the PRA as it would affect fewer than 10 entities in a 12-
month period.
B. ICRs Regarding Network Adequacy Reviews and Essential Community
Providers (Sec. 156.230, Sec. 156.235)
In this proposed rule, we are proposing that, for the 2018 plan
year, HHS would defer to the State's reviews in States with authority
and means to assess issuer network adequacy; while in States without
authority and means to conduct sufficient network adequacy reviews, HHS
would rely on an issuer's accreditation (commercial or Medicaid) from
an HHS-recognized accrediting entity. This would reduce the burden
related to the time and distance evaluation for issuers. Unaccredited
issuers would be required to submit an access plan as part of the QHP
Application. We are not aware of any unaccredited issuer that plans to
enter the market in 2018, therefore we expect that none of the issuers
will need to submit an access plan. We estimate that this would reduce
the burden related to the review by 15 hours per issuer on average. The
total annual reduction in burden for 450 QHP issuers and would be 6,750
hours with an equivalent reduction in cost of $519,750 (at an hourly
cost of $77). For stand-alone dental issuers, the estimated reduction
in burden would be 10 hours on average annually for each issuer. For
250 issuers, the total annual reduction in burden would be 2,500 hours
with an equivalent reduction in cost of $192,500 (at an hourly rate of
$77).
We expect to collect access plans from all stand-alone dental
issuers in states without adequate review. We assume that approximately
125 stand-alone dental issuers would need to submit access plans, and
each issuer would require approximately 1 hour to prepare and submit a
plan. For all 125 issuers, the total annual burden would be 125 hours,
with an annual equivalent cost of $9,625 (at an hourly rate of $77).
The proposed change in the ECP standard would reduce the burden for
issuers that previously needed to submit a justification to prove that
they include in their provider networks a sufficient number and
geographic distribution of ECPs to meet the standard in Sec. 156.235.
We estimate that in the absence of this change, approximately 20 QHP
and stand-alone dental plan issuers would have each spent 45 minutes on
average to prepare an submit a justification. The total reduction in
burden for 20 issuers would be 15 hours with an equivalent reduction in
cost of $1,155 (at an hourly rate of $77).
We will revise the information collection currently approved under
OMB control number 0938-1187 (Continuation of Data Collection to
Support QHP Certification and other Financial Management and Exchange
Operations) to account for this reduction in burden.
TABLE 1--Annual Reporting, Recordkeeping and Disclosure Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hourly Total
Burden per Total labor cost labor cost
Regulation section OMB control Number of Responses response annual of of Total cost
number respondents (hours) burden reporting reporting ($)
(hours) ($) ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Network Adequacy-Access Plan (Sec. 156.230)....... 0938-1187 125 125 1 125 77 9,625 9,625
Network Adequacy-QHP issuers (Sec. 156.230)....... 0938-1187 450 450 (15) (6,750) 77 (519,750) (519,750)
Network Adequacy-Stand-alone dental plan issuers 0938-1187 250 250 (10) (2,500) 77 (192,500) (192,500)
(Sec. 156.230)...................................
ECP justification (Sec. 156.235).................. 0938-1187 20 20 (0.75) (15) 77 (1,155) (1,155)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: There are no capital/maintenance costs associated with the information collection requirements contained in this rule; therefore, we have removed
the associated column from Table 1.
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VI. Regulatory Impact Analysis
A. Statement of Need
As noted previously in the preamble, the Exchanges have experienced
a decrease in the number of participating issuers and many States have
recently seen increases in premiums. This proposed rule, which is being
published as issuers develop their proposed plan benefit structures and
premiums for 2018, aims to ensure market stability and issuer
participation in the Exchanges for the 2018 benefit year. This proposed
rule also aims to reduce the fiscal and regulatory burden on
individuals, families, health insurers, patients, recipients of health
care services, and purchasers of health insurance. This proposed rule
seeks to lower insurance rates and ensure a dynamic and competitive
market in part by preventing and curbing potential abuses associated
with special enrollment periods and gaming by individuals taking
advantage of the current regulations on grace periods and termination
of coverage due to the non-payment of premiums.
This proposed rule would address these issues by changing a number
of requirements that HHS believes will provide needed flexibility to
issuers and help stabilize the individual insurance market, allowing
consumers in many State or local markets to retain or obtain health
insurance while incentivizing issuers to enter, or remain, in these
markets while returning autonomy to the States for a number of issues.
[[Page 10993]]
B. Overall Impact
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), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 202 of the Unfunded Mandates Reform Act
of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on
Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C.
804(2)), and Executive Order 13771 on Reducing Regulation and
Controlling Regulatory Costs (January 30, 2017).
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). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a proposed
rule--(1) having an annual effect on the economy of $100 million or
more in any one year, or adversely and materially affecting a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year), and a ``significant'' regulatory action is subject to review by
the OMB. HHS has concluded that this rule is likely to have economic
impacts of $100 million or more in at least one year, and therefore
meets the definition of ``significant rule'' under Executive Order
12866. Therefore, HHS has provided an assessment of the potential
costs, benefits, and transfers associated with this proposed rule.
The provisions in this proposed rule aim to improve the health and
stability of the Exchanges. They provide additional flexibility to
issuers for plan designs, reduce regulatory burden, seek to improve the
risk pool and lower premiums by reducing gaming and adverse selection
and incentivize consumers to maintain continuous coverage. Issuers
would experience a reduction in costs related to network adequacy
reviews. Through the reduction in financial uncertainty for issuers and
increased affordability for consumers, these proposed provisions are
expected to increase access to affordable health coverage. Although
there is some uncertainty regarding the net effect on enrollment,
premiums and total premium tax credit payments by the government, we
anticipate that the provisions of this proposed rule would help further
HHS's goal of ensuring that all consumers have quality, affordable
health care and that markets are stable and that Exchanges operate
smoothly.
In accordance with Executive Order 12866, HHS has determined that
the benefits of this regulatory action justify the costs.
C. Impact Estimates and Accounting Table
In accordance with OMB Circular A-4, Table 2 depicts an accounting
statement summarizing HHS's assessment of the benefits, costs, and
transfers associated with this regulatory action.
The proposed provisions in this rule would have a number of
effects, including reducing regulatory burden for issuers, reducing the
impact of adverse selection, stabilizing premiums in the individual
insurance market, and providing consumers with more affordable health
insurance coverage. The effects in Table 2 reflect qualitative impacts
and estimated direct monetary costs and transfers resulting from the
provisions of this proposed rule.
Table 2--Accounting Table
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Qualitative:
Improved health and protection from the risk of catastrophic medical expenditures for the
previously uninsured, especially individuals with medical conditions (if health insurance enrollment
increases) a...............................................................................................
Cost savings due to reduction in medical service provision (if health insurance enrollment
decreases) a b.............................................................................................
Cost savings to issuers from not having to process claims while enrollment is ``pended'' during pre-
enrollment verification of eligibility for special enrollment periods......................................
Cost savings to the government and plans associated with the reduced open enrollment period;.......
----------------------------------------------------------------------------------------------------------------
Costs Estimate Year Discount Period
(million) dollar rate percent covered
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($millions/year)........... ($0.7) 2016 7 2017-2021
($0.7) 2016 3 2017-2021
----------------------------------------------------------------------------------------------------------------
Includes costs incurred by stand-alone dental issuers for preparing access plans and costs savings to issuers
due to reduction in administrative costs related to network adequacy review for QHP certification
----------------------------------------------------------------------------------------------------------------
Qualitative:
Harms to health and reduced protection from the risk of catastrophic medical expenditures for the
previously uninsured, especially individuals with medical conditions (if health insurance enrollment
decreases) a...............................................................................................
Cost due to increases in medical service provision (if health insurance enrollment increases) a b..
Decreased quality of medical services (for example, reductions in continuity of care due to lower
ECP threshold).............................................................................................
Administrative costs incurred by the federal government and by States that start conducting
verification of special enrollment period eligibility......................................................
Costs to issuers of redesigning plans..............................................................
Costs to the federal government and issuers of outreach activities associated with shortened open
enrollment period..........................................................................................
----------------------------------------------------------------------------------------------------------------
[[Page 10994]]
Transfers
----------------------------------------------------------------------------------------------------------------
Qualitative:
Transfers, via premium reductions, from special enrollment period abusers to all other enrollees...
Transfers related to changes in actuarial value from enrollees to issuers and, via possible
reductions in subsidies, from some combination of enrollees and issuers to the federal government..........
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Enrollment could increase due to decreases in premiums resulting from pass-through of administrative cost
savings (as listed) and savings associated with reductions in special enrollment period abuse. Enrollment
could decrease due to lessened consumer appeal of insurance with reduced actuarial value and less access to
ECPs, increases in premiums resulting from pass-through of administrative costs (as listed), former special
enrollment period users discontinuing participation, or due to shortened enrollment periods. The net effect on
enrollment is ambiguous.
\b\ These cost and cost savings generalizations are somewhat oversimplified because uninsured individuals are
relatively likely to obtain health care through high-cost providers (for example, visiting an emergency room
for preventive services).
1. Guaranteed Availability of Coverage
The proposed regulation would allow issuers to apply a premium
payment made for new coverage under the same or a different product to
the outstanding debt associated with non-payment of premiums for
coverage from the same issuer enrolled in within the prior 12 months.
This means that issuers would be able to require a policyholder whose
coverage is terminated for non-payment of premium in the individual or
group market to pay all past due premium owed to that issuer after the
applicable due date for coverage in the prior 12-month period in order
to resume coverage from that same issuer. Individuals with past due
premium would generally owe no more than 1 to 3 months of past-due
premiums. The issuer would have to apply its premium payment policy
uniformly to all employers or individuals regardless of health status.
This would reduce the risk of gaming and adverse selection by consumers
while likely also discouraging some individuals from obtaining
coverage.
A recent study \21\ surveying consumers with individual market
plans concluded that approximately 21 percent of consumers stopped
premium payments in 2015. Approximately 87 percent of those individuals
repurchased plans in 2016, while 49 percent of these consumers
purchased the same plan they had previously stopped payment on.
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\21\ 2016 OEP: Reflection on enrollment, Center for U.S. Health
System Reform, McKinsey&Company, May 2016, available at http://healthcare.mckinsey.com/2016-oep-consumer-survey-findings.
---------------------------------------------------------------------------
Based on available data, we estimate that approximately one in ten
enrollees had their coverage terminated due to non-payment of premiums
in 2016. We estimated that approximately 86,000 (or 16 percent) of
those individuals terminated due to non-payment of premium in 2016 and
living in an area where their 2016 issuer was available in 2017 had an
active 2017 plan selection with the same issuer at the end of the open
enrollment period. Additionally, for those individuals living in an
area were their 2016 issuer was the only issuer available in 2017, 23
percent of those individuals terminated due to non-payment in 2016 had
an active 2017 plan selection this issuer at the end of the open
enrollment period--equating to approximately 21,000 individuals. In the
absence of data, we are unable to determine the amount of past due
amounts that consumers would have to pay in order to resume coverage
with the same issuer, though individuals would generally owe no more
than 3 months of premiums. We are seeking comments on this impact.
2. Open Enrollment Periods
The proposed regulation proposes to amend Sec. 155.410(e) and
change the annual open enrollment period for coverage year 2018 to
begin on November 1, 2017 and end on December 15, 2017. This is
expected to have a positive impact on the risk pool by reducing the
risk of adverse selection. However, the shortened enrollment period
could lead to a reduction in enrollees, primarily younger and healthier
enrollees who usually enroll late in the enrollment period. The change
in the open enrollment period could lead to additional reductions in
enrollment if Exchanges and enrollment assisters do not have adequate
support, which could lead to potential enrollees facing longer wait
times. In addition, this change is expected to simplify operational
processes for issuers and the Exchanges. However, the Federal
government, State-based Exchanges, and issuers may incur costs if
additional consumer outreach is needed.
We are seeking comments regarding the potential effects of the
shortening of the open enrollment period on all stakeholders.
3. Special Enrollment Periods
Special enrollment periods ensure that people who lose health
insurance during the year (for example, through non-voluntary loss of
minimum essential coverage provided through an employer), or who
experience other qualifying events such as marriage or birth or
adoption of a child, have the opportunity to enroll in new coverage or
make changes to their existing coverage. While the annual open
enrollment period allows previously uninsured individuals to enroll in
new insurance coverage, special enrollment periods are intended to
promote continuous enrollment in health insurance coverage during the
plan year by allowing those who were previously enrolled in coverage to
obtain new coverage without a lapse or gap in coverage.
However, allowing previously uninsured individuals to enroll in
coverage via a special enrollment period that they would not otherwise
qualify for can increase the risk of adverse selection, negatively
impact the risk pool, contribute to gaps in coverage, and contribute to
market instability and reduced issuer participation.
Currently, in many cases, individuals self-attest to their
eligibility for most special enrollment periods and submit supporting
documentation, but enroll in coverage through the Exchanges without
further pre-enrollment verification. As mentioned earlier in the
preamble, in 2016 we took several steps to further verify eligibility
for special enrollment periods and planned to implement a pilot program
to conduct pre-enrollment verification for a sample of 50 percent of
consumers attempting to enroll in coverage through certain special
enrollment periods. The provisions in this proposed rule would increase
the scope of pre-enrollment verification, strengthen and streamline the
parameters of several existing special enrollment periods, and limit
several other special enrollment periods. Starting in June 2017,
individuals attempting to enroll through certain special enrollment
periods would have to undergo pre-enrollment verification of
eligibility, so that their enrollment would be delayed or ``pended''
until verification of eligibility is completed. Where applicable, the
FFE would make
[[Page 10995]]
every effort to verify an individual's eligibility for the applicable
special enrollment period through automated electronic means instead of
through documentation. Based on past experience, we estimate that the
expansion in pre-enrollment verification to all individuals seeking to
enroll in coverage through all applicable special enrollment periods
would result in an additional 650,000 individuals having their
enrollment delayed or ``pended'' annually until eligibility
verification is completed. As discussed previously in the Collection of
Information Requirements section there would be an increase in costs to
the federal government for conducting the additional pre-enrollment
verifications. State-based Exchanges that begin to conduct pre-
enrollment verification would incur administrative costs to conduct
those reviews. We anticipate that there would be a reduction in costs
to issuers since they would not have to process any claims while the
enrollments are ``pended''.
The proposed changes would promote continuous coverage and allow
individuals who qualify for a special enrollment period to obtain
coverage, while ensuring that uninsured individuals that would not
qualify for a special enrollment period obtain coverage during open
enrollment instead of waiting until they get sick, which is expected to
protect the Exchange risk pools, enhance market stability, and in doing
so, limit rate increases. On the other hand, it is possible that the
additional steps required to verify eligibility might discourage some
eligible individuals from obtaining coverage, and reduce access to
health care for those individuals, increasing their exposure to
financial risk. If it deters younger and healthier individuals from
obtaining coverage, it could also worsen the risk pool.
If pre-enrollment verification causes premiums to fall and all
individuals that inappropriately enrolled via special enrollment
periods continue to be covered, there would be a transfer from such
individuals to other consumers. On the other hand, if some individuals
are no longer able to enroll via special enrollment period, they would
experience reduced access to health care.
The net effect of pre-enrollment verification and other proposed
changes on premiums and enrollment is uncertain. If there is a
significant decrease in enrollment, especially for younger and
healthier individuals, it is possible that premiums would not fall, and
potentially might increase. We seek comment on the impacts of these
provisions.
4. Levels of Coverage (Actuarial Value)
In this proposed rule, we are proposing amending the de minimis
range included in Sec. 156.140(c), to a variation of -4/+2 percentage
points, rather than +/-2 percentage points for all non-grandfathered
individual and small group market plans that are required to comply
with AV (We also propose to change the de minimis range for the
expanded bronze plans from +5/-2 percentage points to +5/-4 percentage
points to align with the policy in this rule) for plans beginning in
2018. While we are proposing to modify the de minimis range for the
metal level plans (bronze, silver, gold, and platinum), we are not
proposing to modify the de minimis range for the silver plan variations
(the plans with an AV of 73, 87 and 94 percent) under Sec. Sec.
156.400 and 156.420 at this time. In the short run, the impact of this
proposed change would be to generate a transfer from consumers to
insurers. The proposed change in AV could reduce the value of coverage
for consumers, which could lead to more consumers facing increases in
out-of-pocket expenses, thus increasing their exposure to financial
risks associated with high medical costs. However, in the longer run,
providing issuers with additional flexibility could help stabilize
premiums, increase issuer participation and ultimately provide some
offsetting benefit to consumers. We estimate that the proposed change
in AV could lead to up to a 1 to 2 percent reduction in premiums. This,
in turn, would increase enrollment. A reduction in premiums would
likely reduce the benchmark premium for purposes of the premium tax
credit, leading to a transfer from credit recipients to the government.
An increase in enrollment would likely result in an increase in total
premium tax credit payments by the government. The net effect is
uncertain. We seek comments on the impact of this proposed change.
5. Network Adequacy
Section 156.230(a)(2) requires a QHP issuer to maintain a network
that is sufficient in number and types of providers, including
providers that specialize in mental health and substance abuse
services, to assure that all services will be accessible without
unreasonable delay. In this proposed rule, we are proposing that, for
the 2018 plan year, HHS would defer to the State's reviews in States
with authority and means to assess issuer network adequacy; while in
States without authority and means to conduct sufficient network
adequacy reviews, HHS would rely on an issuer's accreditation
(commercial or Medicaid) from an HHS-recognized accrediting entity. As
discussed previously in the Collection of Information Requirements
section, this would reduce related administrative costs for issuers.
Unaccredited issuers would be required to submit an access plan as part
of the QHP Application. Reduced burden for issuers could ultimately
lead to reduced premiums for consumers.
Depending on the level of review by State regulators and
accrediting entities, this could have an impact on plan design. Issuers
could potentially use network designs to encourage enrollment into
certain plans, exacerbating selection pressures. The net effect on
consumers is uncertain. We are seeking comments on the potential
impacts.
6. Essential Community Providers
Section 156.235(2)(i) stipulates that a plan has a sufficient
number and geographic distribution of ECPs if it demonstrates, among
other criteria, that the network includes as participating
practitioners at least a minimum percentage, as specified by HHS. For
the 2014 plan year, this minimum percentage was 20 percent, but
starting with the 2015 Letter to Issuers in the Federally-facilitated
Marketplaces, we increased the minimum percentage to 30 percent. In
this proposed rule, we are proposing that, for certification and
recertification for the 2018 plan year, we would instead consider the
issuer to have satisfied the regulatory standard if the issuer
contracts with at least 20 percent of available ECPs in each plan's
service area to participate in the plan's provider network. In
addition, we are proposing to reverse our previous guidance that we
were discontinuing the write-in process for ECPs, and would continue to
allow this process for the 2018 plan year. If an issuer's application
does not satisfy the ECP standard, the issuer would be required to
include as part of its application for QHP certification a satisfactory
narrative justification describing how the issuer's provider networks,
as presently constituted, provide an adequate level of service for low-
income and medically underserved individuals and how the issuer plans
to increase ECP participation in the issuer's provider networks in
future years. We expect that issuers would be able to meet this
requirement, with the exception of issuers that do not have any ECPs in
their service area.
[[Page 10996]]
Less expansive requirements for network size would lead to both
costs and cost savings. Costs could take the form of increased travel
time and wait time for appointments or reductions in continuity of care
for those patients whose providers have been removed from their
insurance issuers' networks.
Cost savings for issuers would be associated with reductions in
administrative costs of arranging contracts and, if issuers focus their
networks on relatively low-cost providers to the extent possible,
reductions in the cost of health care provision. In addition, fewer
issuers would need to submit a justification to prove that they include
in their provider networks a sufficient number and geographic
distribution of ECPs to meet the standard, as discussed previously in
the Collection of Information Requirements section.
We seek comments on the impacts of this proposed change.
7. Uncertainty
The net effect of these proposed provisions on enrollment, premiums
and total premium tax credit payments are ambiguous. On the one hand,
premiums would tend to fall if more young and healthy individuals
obtain coverage, adverse selection is reduced and issuers are able to
lower costs due to reduced regulatory burden, and offer greater
flexibility in plan design. On the other hand, if changes such as
shortened open enrollment period, pre-enrollment verification for
special enrollment periods, reduced actuarial value of plans, less
expansive provider networks result in lower enrollment, especially for
younger, healthier adults, it would tend to increase premiums. Lower
premiums in turn would increase enrollment, while higher premiums would
have the opposite effect. In addition, lower premiums would tend to
decrease total premium tax credit payments, which could be offset by an
increase in enrollment. Increased enrollment would lead to an overall
increase in healthcare spending by issuers, while a decrease in
enrollment would lower it, although the effect on total healthcare
spending is uncertain, since uninsured individuals are more likely to
obtain health care through high cost providers such as emergency rooms.
D. Regulatory Alternatives Considered
In developing the policies contained in this proposed rule, we
considered maintaining the status quo with respect to our
interpretation of guaranteed availability, network adequacy
requirements and essential community provider requirements. However, we
determined that the changes are urgently needed to stabilize markets,
to incentivize issuers to enter or remain in the market and to ensure
premium stability and consumer choice.
With respect to our proposal regarding essential community
providers, we considered proposing a minimum threshold other than 20
percent, but believe that reverting to the previously used 20 percent
threshold that issuers were used to would better help stabilize the
markets, while adequately protecting access to ECPs.
We also considered keeping the original open enrollment period for
2018 coverage, but determined that an immediate change would have a
positive impact on the risk pool by reducing the risk of adverse
selection and that the market is mature enough for an immediate
transition.
In addition, we considered increasing the scope of pre-enrollment
verification for certain special enrollment periods to 90 percent
instead of 100 percent. This would have allowed us to maximize the
verification of eligibility while providing some population for claims
comparison as envisioned by the scaled pilot. We are seeking comment on
the issue, but believe that in order to minimize the risk of adverse
selection, complete pre-enrollment verification for certain special
enrollment periods is necessary. We also considered maintain the
existing parameters around special enrollment periods so that the
individual market special enrollment periods would continue to align
with group market policies. However, HHS determined that aspects of the
individual market and the unique threats of adverse selection in this
market justified a departure from the group market policies.
With respect to our proposal regarding AV, we considered proposing
that the change would be effective for the 2019 plan year. However,
given input from stakeholders regarding the 2018 AV Calculator, we
determined it was better to make the proposal effective for the 2018
plan year.
E. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) requires
agencies to prepare an initial regulatory flexibility analysis to
describe the impact of the proposed rule on small entities, unless the
head of the agency can certify that the rule would not have a
significant economic impact on a substantial number of small entities.
The RFA generally defines a ``small entity'' as (1) a proprietary firm
meeting the size standards of the Small Business Administration (SBA),
(2) a not-for-profit organization that is not dominant in its field, or
(3) a small government jurisdiction with a population of less than
50,000. States and individuals are not included in the definition of
``small entity.'' HHS uses a change in revenues of more than 3 to 5
percent as its measure of significant economic impact on a substantial
number of small entities.
This proposed rule would affect health insurance issuers. We
believe that health insurance issuers would be classified under the
North American Industry Classification System code 524114 (Direct
Health and Medical Insurance Carriers). According to SBA size
standards, entities with average annual receipts of $38.5 million or
less would be considered small entities for these North American
Industry Classification System codes. Issuers could possibly be
classified in 621491 (HMO Medical Centers) and, if this is the case,
the SBA size standard would be $32.5 million or less.\22\ We believe
that few, if any, insurance companies underwriting comprehensive health
insurance policies (in contrast, for example, to travel insurance
policies or dental discount policies) fall below these size thresholds.
Based on data from MLR annual report submissions for the 2015 MLR
reporting year, approximately 97 out of 528 issuers of health insurance
coverage nationwide had total premium revenue of $38.5 million or less.
This estimate may overstate the actual number of small health insurance
companies that would be affected, since almost 74 percent of these
small companies belong to larger holding groups, and many, if not all,
of these small companies are likely to have non-health lines of
business that would result in their revenues exceeding $38.5 million.
---------------------------------------------------------------------------
\22\ ``Table of Small Business Size Standards Matched to North
American Industry Classification System Codes'', effective February
26, 2016, U.S. Small Business Administration, available at https://www.sba.gov/contracting/getting-started-contractor/make-sure-you-meet-sba-size-standards/table-small-business-size-standards.
---------------------------------------------------------------------------
F. Unfunded Mandates
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 proposed rule that includes any
Federal mandate that may result in expenditures in any 1 year by State,
local, or Tribal governments, in the aggregate, or by the private
sector, of $100 million in 1995 dollars, updated annually for
inflation. Currently, that threshold is approximately $146
[[Page 10997]]
million. Although we have not been able to quantify all costs, we
expect the combined impact on State, local, or Tribal governments and
the private sector to be below the threshold.
G. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule that imposes
substantial direct costs on State and local governments, preempts State
law, or otherwise has Federalism implications.
In HHS's view, while this proposed rule would not impose
substantial direct requirement costs on State and local governments,
this proposed regulation has Federalism implications due to 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 markets. However, HHS anticipates that the Federalism
implications (if any) are substantially mitigated because under the
statute and our proposals, States have choices regarding the structure,
governance, and operations of their Exchanges. This rule strives to
increase flexibility for States-based Exchanges. For example, we
recommend, but would not require, that State-based Exchanges engage in
pre-enrollment verification with respect to special enrollment periods;
and we would defer to State network adequacy reviews provided the
States have the authority and the means to conduct network adequacy
reviews. Additionally, the Affordable Care Act does not require States
to establish these programs; if a State elects not to establish any of
these programs or is not approved to do so, HHS must establish and
operate the programs in that State.
In compliance with the requirement of Executive Order 13132 that
agencies examine closely any policies that may have Federalism
implications or limit the policy making discretion of the States, HHS
has engaged in efforts to consult with and work cooperatively with
affected States, including participating in conference calls with and
attending conferences of the National Association of Insurance
Commissioners, and consulting with State insurance officials on an
individual basis.
While developing this proposed rule, HHS has attempted to balance
the States' interests in regulating health insurance issuers with the
need to ensure market stability. By doing so, it is HHS's view that we
have complied with the requirements of Executive Order 13132.
H. Congressional Review Act
This proposed rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can
take effect, the Federal agency promulgating the rule shall submit to
each House of the Congress and to the Comptroller General a report
containing a copy of the rule along with other specified information,
and has been transmitted to Congress and the Comptroller for review.
I. Reducing Regulation and Controlling Regulatory Costs
Executive Order 13771, entitled Reducing Regulation and Controlling
Regulatory Costs, was issued on January 30, 2017. Section 2(a) of
Executive Order 13771 requires an agency, unless prohibited by law, to
identify at least two existing regulations to be repealed when the
agency publicly proposes for notice and comment or otherwise
promulgates a new regulation. In furtherance of this requirement,
section 2(c) of Executive Order 13771 requires that the new incremental
costs associated with new regulations shall, to the extent permitted by
law, be offset by the elimination of existing costs associated with at
least two prior regulations. OMB's interim guidance issued on February
2, 2017, explains that for Fiscal Year 2017 the above requirements only
apply to each new ``significant regulatory action that imposes costs.''
It has been determined that this proposed rule is not a ``significant
regulatory action that imposes costs'' and thus does not trigger the
above requirements of Executive Order 13771.''
List of Subjects
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping
requirements.
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers,
Conflict of interest, Consumer protection, Grant 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.
45 CFR Part 156
Administrative practice and procedure, Advertising, American
Indian/Alaska Natives, Conflict of interest, Consumer protection, Cost-
sharing reductions, Grant programs--health, Grants administration,
Health care, Health insurance, Health maintenance organization (HMO),
Health records, Hospitals, 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, Youth.
For the reasons set forth in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR parts 147, 155, and 156 as
set forth below:
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
1. The authority citation for part 147 continues to read as follows:
Authority: Secs 2701 through 2763, 2791, and 2792 of the Public
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and
300gg-92), as amended.
0
2. Section 147.104 is amended by revising paragraph (b)(2)(i)
introductory text to read as follows:
Sec. 147.104 Guaranteed availability of coverage.
* * * * *
(b) * * *
(2) * * *
(i) Subject to Sec. 155.420(a)(4) and (5) of this subchapter, a
health insurance issuer in the individual market must provide a limited
open enrollment period for the triggering events described in Sec.
155.420(d) of this subchapter, excluding the following:
* * * * *
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
3. The authority citation for part 155 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301,
1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1332, 1334,
1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C.
18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and
18081-18083).
0
4. Section 155.410 is amended by revising paragraphs (e)(2) and (3) to
read as follows:
[[Page 10998]]
Sec. 155. 410 Initial and annual open enrollment periods.
* * * * *
(e) * * *
(2) For the benefit years beginning on January 1, 2016 and January
1, 2017, the annual open enrollment period begins on November 1 of the
calendar year preceding the benefit year, and extends through January
31 of the benefit year.
(3) For the benefit years beginning on January 1, 2018 and beyond,
the annual open enrollment period begins on November 1 and extends
through December 15 of the calendar year preceding the benefit year.
* * * * *
0
5. Section 155.420 is amended by:
0
a. Adding paragraphs (a)(3) through (5);
0
b. Revising paragraphs (b)(5) and (d) introductory text;
0
c. Adding paragraph (d)(2)(i)(A) and reserved paragraph (d)(2)(i)(B);
and
0
d. Removing and reserving paragraph (d)(7)(ii).
The additions and revisions read as follows:
Sec. 155.420 Special enrollment periods.
(a) * * *
(3) Use of special enrollment periods by qualified individuals. The
Exchange must allow a qualified individual, and when specified in
paragraph (d) of this section, his or her dependent, who are not
enrolled in a QHP through the Exchange, to enroll in a QHP if one of
the triggering events specified in paragraph (d) of this section occur.
(4) Use of special enrollment periods by enrollees. (i) If an
enrollee has gained a dependent in accordance with paragraph (d)(2)(i)
of this section, the Exchange must allow the enrollee to add the
dependent to his or her current QHP, or, if the QHP's business rules do
not allow the dependent to enroll, the Exchange must allow the enrollee
and his or her dependents to change to another QHP within the same
level of coverage (or one metal level higher or lower, if no such QHP
is available), as outlined in Sec. 156.140(b) of this subchapter, or
enroll the dependent in a separate QHP.
(ii) If an enrollee and his or her dependents become newly eligible
for cost-sharing reductions in accordance with paragraph (d)(6)(i) or
(ii) and are not enrolled in a silver-level QHP, the Exchange must
allow the enrollee and his or her dependents to change to a silver-
level QHP if they elect to change their QHP enrollment.
(iii) If an enrollee qualifies for a special enrollment period
through another triggering event specified in paragraph (d) of this
section, except for paragraph (d)(4), (d)(8), (d)(9), and (d)(10), the
Exchange must allow the enrollee and his or her dependents to make
changes to their enrollment in the same QHP or to change to another QHP
within the same level of coverage, as outlined in Sec. 156.140(b) of
this subchapter, provided that other QHPs at that metal level are
available.
(5) Prior coverage requirement. Qualified individuals who are
required to demonstrate coverage in the 60 days prior to a qualifying
event can either demonstrate that they had minimum essential coverage
as described in 26 CFR 1.5000A-1(b) for 1 or more days during the 60
days preceding the date of the qualifying event or that they lived
outside of the United States or in a United States territory for 1 or
more days during the 60 days preceding the date of the qualifying
event.
(b) * * *
(5) Option for later coverage effective dates due to prolonged
eligibility verification. At the option of the consumer, the Exchange
must provide for a coverage effective date that is no more than 1 month
later than the effective date specified in this paragraph (b) if a
consumer's enrollment is delayed until after the verification of the
consumer's eligibility for a special enrollment period, and the
assignment of a coverage effective date consistent with this paragraph
(b) would result in the consumer being required to pay 2 or more months
of retroactive premium to effectuate coverage or avoid termination for
non-payment.
* * * * *
(d) Triggering events. Subject to paragraphs (a)(3) through (5) of
this section, the Exchange must allow a qualified individual or
enrollee, and, when specified below, his or her dependent, to enroll in
or change from QHP to another if one of the triggering events occur:
* * * * *
(2) * * *
(i) * * *
(A) In the case of marriage, at least one spouse must demonstrate
having minimum essential coverage as described in 26 CFR 1.5000A-1(b)
for 1 or more days during the 60 days preceding the date of marriage.
(B) [Reserved]
* * * * *
0
6. Section 155.725 is amended by revising paragraph (j)(2)(i) to read
as follows:
Sec. 155.725 Enrollment periods under SHOP.
* * * * *
(j) * * *
(2) * * *
(i) Notwithstanding Sec. 155.420(a)(3) through (5) of this
subchapter, experiences an event described in Sec. 155.420(d)(1)
(other than paragraph (d)(1)(ii)), or experiences an event described in
Sec. 155.420(d)(2), (4), (5), (7), (8), (9), (10), (11), or (12);
* * * * *
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
6. The authority citation for part 156 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301-
1304, 1311-1313, 1321-1322, 1324, 1334, 1342-1343, 1401-1402, Pub.
L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18032,
18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C.
36B, and 31 U.S.C. 9701).
0
7. Section 156.140 is amended by revising paragraph (c) to read as
follows:
Sec. 156.140 Levels of coverage.
* * * * *
(c) De minimis variation. The allowable variation in the AV of a
health plan that does not result in a material difference in the true
dollar value of the health plan is -4 percentage points and + 2
percentage points, except if a health plan under paragraph (b)(1) of
this section (a bronze health plan) either covers and pays for at least
one major service, other than preventive services, before the
deductible or meets the requirements to be a high deductible health
plan within the meaning of 26 U.S.C. 223(c)(2), in which case the
allowable variation in AV for such plan is -4 percentage points and +5
percentage points.
Dated: February 9, 2017.
Patrick Conway,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: February 9, 2017.
Norris Cochran,
Acting Secretary, Department of Health and Human Services.
[FR Doc. 2017-03027 Filed 2-15-17; 8:45 am]
BILLING CODE 4120-01-P