[Federal Register Volume 86, Number 124 (Thursday, July 1, 2021)]
[Proposed Rules]
[Pages 35156-35216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13993]
[[Page 35155]]
Vol. 86
Thursday,
No. 124
July 1, 2021
Part II
Department of the Treasury
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31 CFR Part 33
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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45 CFR Parts 147, 155 and 156
Patient Protection and Affordable Care Act; Updating Payment
Parameters, Section 1332 Waiver Implementing Regulations, and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule; Proposed
Rule
Federal Register / Vol. 86 , No. 124 / Thursday, July 1, 2021 /
Proposed Rules
[[Page 35156]]
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DEPARTMENT OF THE TREASURY
31 CFR Part 33
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
45 CFR Parts 147, 155 and 156
[CMS-9906-P]
RIN 0938-AU60
Patient Protection and Affordable Care Act; Updating Payment
Parameters, Section 1332 Waiver Implementing Regulations, and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. Department
of the Treasury.
ACTION: Proposed rule.
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SUMMARY: This proposed rule sets forth proposed revised 2022 user fee
rates for issuers offering qualified health plans (QHPs) through
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the
Federal platform (SBE-FPs); proposes repeal of separate billing
requirements related to the collection of separate payments for the
portion of QHP premiums attributable to coverage for certain abortion
services; proposes to expand the annual open enrollment period and
Navigator duties; proposes a new monthly special enrollment period for
qualified individuals or enrollees, or the dependents of a qualified
individual or enrollee, who are eligible for advance payments of the
premium tax credit (APTC) and whose household income does not exceed
150 percent of the federal poverty level (FPL); proposes to repeal the
recent establishment of a Direct Enrollment option for Exchanges; and
proposes to modify regulations and policies related to section 1332
waivers.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by July 28, 2021.
ADDRESSES: In commenting, please refer to file code CMS-9906-P.
Comments, including mass comment submissions, must be submitted in
one of the following three 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-9906-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-9906-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Alper Ozinal, (301) 492-4178, Adrianne Patterson, (410) 786-4178,
Jacquelyn Rudich, (301) 492-5211, or Nora Simmons, (410) 786-1981, for
general information.
Gian Johnson, (301) 492-4323, or Meredyth Woody, (301) 492-4404,
for matters related to Navigator program standards.
Robert Yates, (301) 492-5151, for matters related to the Exchange
Direct Enrollment option for Federally-facilitated Exchanges, State-
based Exchanges on the Federal platform, and State Exchanges.
Carly Rhyne, (301) 492-4188, or Aziz Sandhu, (301) 492-4437, for
matters related to open enrollment.
Carolyn Kraemer, (301) 492-4197, for matters related to special
enrollment periods for Exchange enrollment under parts 147 and 155.
Nikolas Berkobien, (989) 395-1836, for matters related to
standardized options.
Aaron Franz, (410) 786-8027, or Nora Simmons, (410) 786-1981, for
matters related to user fees.
Rebecca Bucchieri, (301) 492-4341, for matters related to provision
of essential health benefits and separate billing and segregation of
funds for abortion services.
Erika Melman, (301) 492-4348, Deborah Hunter, (410) 786-0625, or
Emily Martin, (301) 492-4400, for matters related to network adequacy.
Lina Rashid, (202) 260-6098, Michelle Koltov, (301) 492-4225, or
Kimberly Koch, (202) 622-0854 for matters related to section 1332
waivers.
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 comments received before the close of the comment period on the
following website as soon as possible after they have been received:
http://www.regulations.gov. Follow the search instructions on that
website to view public comments. CMS will not post on Regulations.gov
public comments that make threats to individuals or institutions or
suggest that the individual will take actions to harm the individual.
CMS continues to encourage individuals not to submit duplicative
comments. We will post acceptable comments from multiple unique
commenters even if the content is identical or nearly identical to
other comments.
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Stakeholder Consultation and Input
C. Structure of Proposed Rule
III. Provisions of the Updating Payment Parameters and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule
A. Part 147--Health Insurance Reform Requirements for the Group
and Individual Health Insurance Markets
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
C. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges
IV. Provisions of the Proposed Rule for Section 1332 Waivers
A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
V. Collection of Information Requirements
A. ICRs Regarding Navigator Program Standards (Sec. 155.210)
B. ICRs Regarding Segregation of Funds for Abortion Services
(Sec. 156.280)
C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45
CFR Part 155)
D. Submission of PRA Related Comments
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice Provisions and
Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act
F. Unfunded Mandates
G. Federalism
H. Congressional Review Act
I. Executive Summary
American Health Benefit Exchanges, or ``Exchanges,'' are entities
established under the Patient Protection and Affordable Care Act (ACA)
\1\ through
[[Page 35157]]
which qualified individuals and qualified employers can purchase
comprehensive health insurance coverage through qualified health plans
(QHPs). Many individuals who enroll in QHPs through individual market
Exchanges are eligible to receive a premium tax credit (PTC) to reduce
their costs for health insurance premiums and to receive reductions in
required cost-sharing payments to reduce out-of-pocket expenses for
health care services. This notice proposes rules and policies designed
to promote greater access to comprehensive health insurance coverage
through the Exchanges, consistent with applicable law and with the
administration's policy priorities detailed in recent Presidential
executive orders.
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\1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare 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'' or ``ACA.''
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On January 28, 2021, the President issued Executive Order 14009,
``Executive Order on Strengthening Medicaid and the Affordable Care
Act'' (E.O. 14009), which stated the Administration's policy to protect
and strengthen the ACA and to make high-quality health care accessible
and affordable for every American.\2\ This Executive Order instructed
the Secretary of Health and Human Services (hereinafter referred to as
``the Secretary''), along with the Secretaries of the Departments of
Labor and the Treasury, to review all existing regulations, guidance
documents, and other agency actions to determine whether they are
consistent with the aforementioned policy, and to consider whether to
suspend, revise, or rescind any agency actions that are inconsistent
with it.
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\2\ 86 FR 7793 (Feb. 2, 2021).
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On January 20, 2021, President Biden issued Executive Order 13985,
``On Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government'' (E.O. 13985),\3\ directing that as a
policy matter, the federal government should pursue a comprehensive
approach to advancing equity for all, including people of color and
others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality. E.O. 13985
also directs HHS to assess whether, and to what extent, its programs
and policies perpetuate systemic barriers to opportunities and benefits
for people of color and other underserved groups.
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\3\ 86 FR 7009 (Jan. 25, 2021).
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Today, of the 30 million uninsured, half are people of color.\4\ Of
those that have insurance, there are frequently barriers to using
insurance because of affordability concerns related to premiums,
deductibles, copayments, and coinsurance, as well as challenges related
to health literacy and the ability for the insured to find and access
in-network providers. These barriers to using insurance are
particularly problematic for those with chronic conditions and
individuals with social risk factors (such as poverty, minority race
and/or ethnicity, social isolation, and limited community
resources),\5\ which also includes members of underserved communities,
people of color, and others who have been historically underserved,
marginalized, and adversely affected by persistent poverty and
inequality. The COVID-19 public health emergency (PHE) has highlighted
the negative effects of these circumstances as COVID-19 has unequally
affected many racial and ethnic minority groups, putting them more at
risk of getting sick and dying from COVID-19.\6\
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\4\ ``Health Insurance Coverage: Early Release of Estimates From
the National Health Interview Survey, January-June 2020,'' National
Center for Health Statistics, February 2021, available at https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202102-508.pdf.
\5\ See ``Social Risk Factors and Medicare's Value-Based
Purchasing Programs,'' HHS Office of the Secretary of Planning and
Evaluation, available at https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs.
\6\ See Centers for Disease Control and Prevention, ``Health
Equity Considerations and Racial and Ethnic Minority Groups,''
updated April 19, 2021, available at https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#print.
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As part of its review of regulations and policies under the
Executive Orders described in the preceding paragraphs, HHS examined
certain policies and requirements addressed in this proposed rule to
analyze whether they are consistent with policy goals outlined in the
Executive Orders, including whether they might create or perpetuate
systemic barriers to obtaining health insurance coverage. The results
of our examinations and analyses led to the policies and rules proposed
in this rule.
In previous rulemakings, HHS established provisions and parameters
to implement many ACA requirements and programs. In this proposed rule,
we propose to amend and repeal some of these provisions and parameters,
with a focus on making high-quality health care accessible and
affordable for consumers. These proposed changes would provide
consumers greater access to coverage through, for example, greater
education and outreach, improve affordability for consumers, reduce
administrative burden for issuers and consumers, and improve program
integrity. As discussed more fully later in the preamble, each of these
measures would strengthen the ACA or otherwise promote the policy goals
outlined in the Executive Orders described above.\7\
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\7\ Although many of the policies proposed in this rule support
the goals outlined in recent Executive Orders, as described later in
the preamble discussions related to individual proposals, each of
the proposals is supported by statutory authority independent of the
Executive Orders.
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We propose to amend Sec. 147.104(b)(2) to specify that issuers are
not required to provide a special enrollment period in the individual
market with respect to coverage offered outside of an Exchange to
qualifying individuals who would be eligible for the proposed special
enrollment period triggering event at Sec. 155.420(d)(16) described
below.
We also propose to amend Sec. 155.210(e)(9) to reinstitute
previous requirements that Navigators in FFEs be required to provide
consumers with information and assistance on certain post-enrollment
topics, such as the Exchange eligibility appeals process, the Exchange-
related components of the PTC reconciliation process, and the basic
concepts and rights of health coverage and how to use it.
We also propose to remove Sec. 155.221(j) and repeal the Exchange
Direct Enrollment option which establishes a process for State
Exchanges, State-based Exchanges on the Federal platform, and
Federally-facilitated Exchanges to work directly with private sector
entities (including QHP issuers, web-brokers, and agents and brokers)
to operate enrollment websites through which consumers can apply for
coverage, receive an eligibility determination from the Exchange, and
purchase an individual market QHP offered through the Exchange with
APTC and cost-sharing reductions (CSRs), if otherwise eligible.
For the 2022 coverage year and beyond, we propose to amend Sec.
155.410(e) to lengthen the annual open enrollment period for coverage
through all Exchanges to November 1 through January 15, as compared to
the current annual open enrollment period of November 1 through
December 15.
We propose to add a new paragraph at Sec. 155.420(d)(16) to
establish a monthly special enrollment period for qualified individuals
or enrollees, or the dependents of a qualified individual or enrollee,
who are eligible for APTC, and whose household income does not exceed
150 percent of the FPL, in order to provide low-income individuals who
generally will have access to a
[[Page 35158]]
premium-free silver plan with a 94 percent actuarial value (AV) with
more opportunities to enroll in coverage. We also propose to clarify,
for purposes of the special enrollment periods provided at Sec.
155.420(d), that a qualified individual who meets the criteria at Sec.
155.305(f), but who qualifies for a maximum APTC amount of zero
dollars, is not considered APTC eligible. This approach would ensure
that Sec. 155.420 very clearly reflects appropriate special enrollment
period eligibility for qualifying individuals who qualify for a maximum
APTC amount of zero dollars and for those who become eligible for APTC
amounts greater than zero.
In addition, to reflect updated analysis of enrollment and the cost
of expanded services offered through the Federal platform, we propose
to set the 2022 user fee rate at 2.75 percent of total monthly premiums
charged by the issuer for each policy under plans offered through an
FFE, and 2.25 percent of the total monthly premiums charged by the
issuer for each policy under plans offered through an SBE-FP (rather
than 2.25 and 1.75 percent of the total monthly premiums charged by the
issuer for each policy under plans offered through an FFE or SBE-FP,
respectively, as finalized in part 1 of the 2022 Payment Notice final
rule). These proposed 2022 user fee rates are still less than the 2021
user fees currently being collected--3.0 and 2.5 percent of the total
monthly premiums charged by the issuer for each policy under plans
offered through an FFE or SBE-FP, respectively.
We also propose a technical amendment to requirements at Sec.
156.115(a)(3) pertaining to the provision of the essential health
benefits (EHB), to include a cross-reference to the Public Health
Service (PHS) Act to make clear that health plans subject to EHB
requirements must comply with all of the requirements under Mental
Health Parity and Addiction Equity Act of 2008 (MHPAEA), including any
amendments to MHPAEA.
We also propose to repeal the separate billing regulation at Sec.
156.280(e)(2), which requires individual market QHP issuers that offer
coverage of abortion services \8\ for which federal funds are
prohibited to separately bill for this portion of the policy holder's
premium and to instruct the policy holder to pay for the separate bill
in a separate transaction. Specifically, we are proposing to revert to
and codify prior policy finalized in the 2016 Payment Notice \9\ such
that QHP issuers offering coverage of abortion services for which
federal funds are prohibited again have flexibility in selecting a
method to comply with the separate payment requirement in section 1303
of the ACA. Under this proposal, individual market QHP issuers covering
abortion services for which federal funds are prohibited would still be
expected to comply with all statutory requirements in section 1303 of
the ACA and all applicable regulatory requirements codified at Sec.
156.280.
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\8\ These abortion services refer to abortion coverage that is
subject to the Hyde Amendment's funding limitations which prohibit
the use of federal funds for such coverage.
\9\ 80 FR 10750.
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This proposed rule also proposes modifications to the section 1332
Waivers for State Innovation (referred to throughout the preamble to
this proposed rule as section 1332 waivers) implementing regulations,
including changes to many of the policies and interpretations of the
guardrails recently codified in regulation. As outlined in this
proposed rule, the policies and interpretations proposed in this rule,
if finalized, would supersede and rescind those outlined in the October
2018 ``State Relief and Empowerment Waivers'' guidance \10\
(hereinafter referred to as the ``2018 Guidance'') and repeal the
previous codification of the interpretations of statutory guidelines in
part 1 of the 2022 Payment Notice final rule. HHS and the Department of
the Treasury (collectively, the Departments) also propose to modify
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
section 1332 waivers under certain emergent situations. The Departments
also propose in this rule processes and procedures for amendments and
extensions for approved waiver plans.
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\10\ 83 FR 53575.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish
various reforms to the group and individual health insurance markets.
These provisions of the PHS Act were later augmented by other laws,
including the ACA. Subtitles A and C of title I of the ACA reorganized,
amended, and added to the provisions of part A of title XXVII of the
PHS Act relating to group health plans \11\ and health insurance
issuers in the group and individual markets. The term ``group health
plan'' includes both insured and self-insured group health plans.
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\11\ The term ``group health plan'' is used in title XXVII of
the PHS Act and is distinct from the term ``health plan'' as used in
other provisions of title I of ACA. The term ``health plan'' does
not include self-insured group health plans.
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Section 2702 of the PHS Act, as added by the ACA, establishes
requirements for guaranteed availability of coverage in the group and
individual markets.\12\
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\12\ Before enactment of the ACA, HIPAA amended the PHS Act
(formerly section 2711) to generally require guaranteed availability
of coverage for employers in the small group market.
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Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to
cover the EHB package described in section 1302(a) of the ACA,
including coverage of the services described in section 1302(b) of the
ACA, adherence to the cost-sharing limits described in section 1302(c)
of the ACA, and meeting the actuarial value (AV) levels established in
section 1302(d) of the ACA. Section 2707(a) of the PHS Act, which is
effective for plan or policy years beginning on or after January 1,
2014, extends the requirement to cover the EHB package to non-
grandfathered individual and small group health insurance coverage,
irrespective of whether such coverage is offered through an Exchange.
In addition, section 2707(b) of the PHS Act directs non-grandfathered
group health plans to ensure that cost sharing under the plan does not
exceed the limitations described in sections 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB
package that includes coverage of EHBs (as defined by the Secretary),
cost-sharing limits, and AV requirements. Section 1302(b) of the ACA
directs that EHBs be equal in scope to the benefits provided under a
typical employer plan, and that they cover at least the following 10
general categories: Ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health treatment;
prescription drugs; rehabilitative and habilitative services and
devices; laboratory services; preventive and wellness services and
chronic disease management; and pediatric services, including oral and
vision care.
Section 1302(d) of the ACA describes the various levels of coverage
based on their AV. Consistent with section 1302(d)(2)(A) of the ACA, AV
is calculated based on the provision of EHB to a standard population.
Section 1302(d)(3) of the ACA directs the Secretary to develop
guidelines that allow for de minimis variation in AV calculations.
[[Page 35159]]
Section 1303 of the ACA, as implemented in 45 CFR 156.280,
specifies standards for issuers of QHPs through the Exchanges that
cover abortion services for which federal funding is prohibited. The
statute and regulation establish that, unless otherwise prohibited by
state law, a QHP issuer may elect to cover such abortion services. If
an issuer elects to cover such services under a QHP sold through an
individual market Exchange, the issuer must take certain steps to
ensure that no PTC or CSR funds are used to pay for abortion services
for which public funding is prohibited.
As specified in section 1303(b)(2) of the ACA, one such step is
that individual market Exchange issuers must determine the amount of,
and collect, from each enrollee, a separate payment for an amount equal
to the actuarial value of the coverage for abortions for which public
funding is prohibited, which must be no less than $1 per enrollee, per
month. QHP issuers must also segregate funds for abortion services for
which federal funds are prohibited collected through this payment into
a separate allocation account used to pay for such abortion services.
Sections 1311(b) and 1321(b) of the ACA provide that each state has
the opportunity to establish an individual market Exchange that
facilitates the purchase of insurance coverage by qualified individuals
through QHPs and meets other standards specified in the ACA. Section
1321(c)(1) of the ACA directs the Secretary to establish and operate
such Exchange within states that do not elect to establish an Exchange
or, as determined by the Secretary on or before January 1, 2013, will
not have an Exchange operable by January 1, 2014.
Section 1311(c)(1) of the ACA provides the Secretary the authority
to issue regulations to establish criteria for the certification of
QHPs, including network adequacy standards at section 1311(c)(1)(B) of
the ACA. Section 1311(d) of the ACA describes the minimum functions of
an Exchange. Section 1311(e)(1) of the ACA grants the Exchange the
authority to certify a health plan as a QHP if the health plan meets
the Secretary's requirements for certification issued under section
1311(c)(1) of the ACA, and the Exchange determines that making the plan
available through the Exchange is in the interests of qualified
individuals and qualified employers in the state. Section 1311(c)(6) of
the ACA establishes authority for the Secretary to require Exchanges to
provide enrollment periods, including special enrollment periods,
including the monthly enrollment period for Indians, as defined by
section 4 of the Indian Healthcare Improvement Act, per section
1311(c)(6)(D) of the ACA.\13\
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\13\ The Indian Healthcare Improvement Act (IHCIA), the
cornerstone legal authority for the provision of health care to
American Indians and Alaska Natives, was made permanent when
President Obama signed the bill on March 23, 2010, as part of the
ACA.
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Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange
to establish a Navigator program under which it awards grants to
entities to carry out certain Navigator duties.
Section 1312(c) of the ACA generally requires a health insurance
issuer to consider all enrollees in all health plans (except
grandfathered health plans) offered by such issuer to be members of a
single risk pool for each of its individual and small group markets.
States have the option to merge the individual and small group market
risk pools under section 1312(c)(3) of the ACA.
Section 1312(e) of the ACA directs the Secretary to establish
procedures under which a state may permit agents and brokers to enroll
qualified individuals and qualified employers in QHPs through an
Exchange and to assist individuals in applying for financial assistance
for QHPs sold through an Exchange.
Sections 1313 and 1321 of the ACA provide the Secretary with the
authority to oversee the financial integrity of State Exchanges, their
compliance with HHS standards, and the efficient and non-discriminatory
administration of State Exchange activities. Section 1321 of the ACA
provides for state flexibility in the operation and enforcement of
Exchanges and related requirements.
Section 1321(a)(1) of the ACA directs the Secretary to issue
regulations that set standards for meeting the requirements of title I
of the ACA for, among other things, the establishment and operation of
Exchanges. When operating an FFE under section 1321(c)(1) of the ACA,
HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of
the ACA to collect and spend user fees. Office of Management and Budget
(OMB) Circular A-25 establishes federal policy regarding user fees and
specifies that a user charge will be assessed against each identifiable
recipient for special benefits derived from federal activities beyond
those received by the general public.
Section 1321(d) of the ACA provides that nothing in title I of the
ACA must be construed to preempt any state law that does not prevent
the application of title I of the ACA. Section 1311(k) of the ACA
specifies that Exchanges may not establish rules that conflict with or
prevent the application of regulations issued by the Secretary.
Section 1332 of the ACA provides the Secretary of HHS and the
Secretary of the Treasury (collectively, the Secretaries) with the
discretion to approve a state's proposal to waive specific provisions
of the ACA, provided the state's section 1332 waiver plan meets certain
requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries
to issue regulations regarding procedures for section 1332 waivers.
Section 1402 of the ACA provides for, among other things,
reductions in cost sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual
market Exchanges. This section also provides for reductions in cost
sharing for American Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain
information provided by applicants under section 1411(b) of the ACA to
other federal officials for verification, including income and family
size information to the Secretary of the Treasury.
Section 1411(d) of the ACA provides that the Secretary must verify
the accuracy of information provided by applicants under section
1411(b) of the ACA for which section 1411(c) of the ACA does not
prescribe a specific verification procedure, in such manner as the
Secretary determines appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation
with the Secretary of the Treasury, the Secretary of Homeland Security,
and the Commissioner of Social Security, to establish procedures for
hearing and making decisions governing appeals of Exchange eligibility
determinations.
Section 1411(f)(1)(B) of the ACA requires the Secretary to
establish procedures to redetermine eligibility on a periodic basis, in
appropriate circumstances, including eligibility to purchase a QHP
through the Exchange and for APTC and CSRs.
Section 1411(g) of the ACA allows the use or disclosure of
applicant information only for the limited purposes of, and to the
extent necessary to, ensure the efficient operation of the Exchange,
including by verifying eligibility to enroll through the Exchange and
for APTC and CSRs.
Section 5000A of the Internal Revenue Code (``the Code''), as added
by section 1501(b) of the ACA, requires individuals to have minimum
essential coverage (MEC) for each month, qualify
[[Page 35160]]
for an exemption, or make an individual shared responsibility payment.
Under the Tax Cuts and Jobs Act (Pub. L. 115-97, December 22, 2017) the
individual shared responsibility payment has been reduced to $0,
effective for months beginning after December 31, 2018. Notwithstanding
that reduction, certain exemptions are still relevant to determine
whether individuals age 30 and above qualify to enroll in catastrophic
coverage under 45 CFR 155.305(h) or 156.155.
1. Program Integrity
In the June 19, 2013 Federal Register (78 FR 37031), we published a
proposed rule that proposed certain program integrity standards related
to Exchanges and the premium stabilization programs (proposed Program
Integrity Rule). The provisions of that proposed rule were finalized in
two rules, the ``first Program Integrity Rule'' published in the August
30, 2013 Federal Register (78 FR 54069) and the ``second Program
Integrity Rule'' published in the October 30, 2013 Federal Register (78
FR 65045). In the December 27, 2019 Federal Register (84 FR 71674), we
published a final rule that revised standards relating to oversight of
Exchanges established by states and periodic data matching frequency.
It also added new requirements for certain issuers related to the
separate billing and collection of the separate payment for the premium
portion attributable to coverage for certain abortion services. In the
May 8, 2020 Federal Register (85 FR 27550), we published the Medicare
and Medicaid Programs, Basic Health Programs and Exchanges interim
final rule with public comment (``May 2020 IFC'') and postponed the
implementation deadline for those separate billing and collection
requirements by 60 days.
2. Market Rules
An interim final rule relating to the HIPAA health insurance
reforms was published in the April 8, 1997 Federal Register (62 FR
16894). A proposed rule relating to ACA health insurance market reforms
that became effective in 2014 was published in the November 26, 2012
Federal Register (77 FR 70584). A final rule implementing those
provisions 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). The 2018 Payment Notice final
rule in the December 22, 2016 Federal Register (81 FR 94058) provided
additional guidance on guaranteed availability and guaranteed
renewability. In the Market Stabilization final rule that was published
in the April 18, 2017 Federal Register (82 FR 18346), we released
further guidance related to guaranteed availability. In the 2019
Payment Notice final rule in the April 17, 2018 Federal Register (83 FR
17058), we clarified that certain exceptions to the special enrollment
periods only apply with respect to coverage offered outside of the
Exchange in the individual market.
In part 2 of the 2022 Payment Notice final rule in the May 5, 2021
Federal Register (86 FR 24140), we made additional amendments to the
guaranteed availability regulation regarding special enrollment periods
and finalized new special enrollment periods related to untimely notice
of triggering events, cessation of employer contributions or government
subsidies to COBRA continuation coverage, and loss of APTC eligibility.
3. 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. In the July 15,
2011 Federal Register (76 FR 41865), we published a proposed rule with
proposals 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 and Small Business Health Options
Program (SHOP), eligibility determinations, and Exchange standards for
employers. A final rule implementing components of the Exchanges and
setting forth standards for eligibility for Exchanges, including
minimum network adequacy requirements, was published in the March 27,
2012 Federal Register (77 FR 18309) (Exchange Establishment Rule).
In the 2014 Payment Notice and in the Amendments to the HHS Notice
of Benefit and Payment Parameters for 2014 interim final rule,
published in the March 11, 2013 Federal Register (78 FR 15541), we set
forth standards related to Exchange user fees. We established an
adjustment to the FFE user fee in the Coverage of Certain Preventive
Services under the Affordable Care Act final rule, published in the
July 2, 2013 Federal Register (78 FR 39869) (Preventive Services Rule).
In the 2016 Payment Notice in the February 27, 2015 Federal Register
(80 FR 10750), we finalized changes related to network adequacy and
provider directories.
In the 2017 Payment Notice in the March 8, 2016 Federal Register
(81 FR 12204), we finalized six standardized plan options to simplify
the plan selection process for consumers on the Exchanges. In the 2017
Payment Notice, we also finalized policies relating to network adequacy
for QHPs on the FFEs. In the May 11, 2016 Federal Register (81 FR
29146), we published an interim final rule with amendments to the
parameters of certain special enrollment periods (2016 Interim Final
Rule). We finalized these in the 2018 Payment Notice final rule,
published in the December 22, 2016 Federal Register (81 FR 94058). The
2018 Payment Notice also modified the standardized options finalized in
the 2017 Payment Notice and included three new sets of standardized
options. In the March 8, 2016 Federal Register (81 FR 12203), the final
2017 Payment Notice codified State-based Exchanges on the Federal
platform (SBE-FPs) along with relevant requirements.
In the April 18, 2017 Market Stabilization final rule Federal
Register (82 FR 18346), we amended standards relating to special
enrollment periods and QHP certification. In the 2019 Payment Notice
final rule, published in the April 17, 2018 Federal Register (83 FR
16930), we modified parameters around certain special enrollment
periods and discontinued the designation of standardized options. In
the April 25, 2019 Federal Register (84 FR 17454), the final 2020
Payment Notice established a new special enrollment period. In the May
14, 2020 Federal Register (85 FR 29204), the 2021 Payment Notice final
rule made certain changes to plan category limitations and special
enrollment period coverage effective date rules, allowed individuals
provided a non-calendar year qualified small employer health
reimbursement arrangement (QSEHRA) to qualify for an existing special
enrollment period, and discussed plans for future rulemaking for
employer-sponsored coverage verification and non-enforcement discretion
for Exchanges that do not conduct random sampling until plan year 2021.
In part 1 of the 2022 Payment Notice final rule, published in the
January 19, 2021 Federal Register (85 FR 6138), we finalized a new
Exchange Direct Enrollment (DE) option. In part 2 of the 2022 Payment
Notice final rule in the May 5, 2021 Federal Register (86 FR 24140) we
finalized new special
[[Page 35161]]
enrollment periods related to untimely notice of triggering events,
cessation of employer contributions or government subsidies to COBRA
continuation coverage, loss of APTC eligibility, and clarified the
regulation imposing network adequacy standards with regard to QHPs that
do not use provider networks.
4. Essential Health Benefits
On December 16, 2011, HHS released a bulletin \14\ that outlined an
intended regulatory approach for defining EHB, including a benchmark-
based framework. A proposed rule relating to EHBs was published in the
November 26, 2012 Federal Register (77 FR 70643). We established
requirements relating to EHBs in the Standards Related to Essential
Health Benefits, Actuarial Value, and Accreditation Final Rule, which
was published in the February 25, 2013 Federal Register (78 FR 12833)
(EHB Rule). In the 2019 Payment Notice, published in the April 17, 2018
Federal Register (83 FR 16930), we added Sec. 156.111 to provide
states with additional options from which to select an EHB-benchmark
plan for plan years 2020 and beyond.
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\14\ ``Essential Health Benefits Bulletin,'' December 16, 2011.
Available at https://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf.
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5. Section 1332 Waivers
In the March 14, 2011 Federal Register (76 FR 13553), the
Departments published the ``Application, Review, and Reporting Process
for Waivers for State Innovation'' proposed rule \15\ to implement
section 1332(a)(4)(B) of the ACA. In the February 27, 2012 Federal
Register (77 FR 11700), the Departments published the ``Application,
Review, and Reporting Process for Waivers for State Innovation'' final
rule \16\ (hereinafter referred to as the ``2012 Final Rule''). In the
October 24, 2018 Federal Register (83 FR 53575), the Departments issued
the 2018 Guidance, which superseded the previous guidance \17\
published in the December 16, 2015 Federal Register (80 FR 78131)
(hereinafter referred to as the ``2015 Guidance''), and provided
additional information about the requirements that states must meet for
waiver proposals, the Secretaries' application review procedures, pass-
through funding determinations, certain analytical requirements, and
operational considerations. In the November 6, 2020 Federal Register
(85 FR 71142), the Departments issued an interim final rule \18\
(hereinafter referred to as the ``November 2020 IFC''), which revises
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
waivers under section 1332 during the COVID-19 PHE. In the December 4,
2020 Federal Register (85 FR 78572), the Departments published the
``Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2022 and Pharmacy Benefit Manager Standards;
Updates to State Innovation Waiver (Section 1332 Waiver) Implementing
Regulations'' proposed rule \19\ (hereinafter referred to as the ``2022
Payment Notice proposed rule'') to codify certain policies and
interpretations of the 2018 Guidance. In the January 19, 2021 Federal
Register (86 FR 6138), the Departments published the ``Patient
Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2022; Updates to State Innovation Waiver (Section 1332
Waiver) Implementing Regulations'' final rule \20\ (hereinafter
referred to as the ``part 1 of the 2022 Payment Notice final rule'')
which codified many of the policies and interpretations outlined in the
2018 Guidance into section 1332 regulations.
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\15\ https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf.
\16\ https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
\17\ https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
\18\ https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
\19\ https://www.federalregister.gov/documents/2020/12/04/2020-26534/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022-and.
\20\ https://www.federalregister.gov/documents/2021/01/19/2021-01175/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022.
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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, advocacy groups and
the actuarial community to gather public input. We have solicited input
from state representatives on numerous topics, particularly the direct
enrollment option for FFEs, SBE-FPs and State Exchanges.
We consulted with stakeholders through monthly meetings with the
National Association of Insurance Commissioners (NAIC), regular contact
with states, and health insurance issuers, trade groups, consumer
advocates, employers, and other interested parties. We considered all
public input we received as we developed the policies in this proposed
rule.
C. Structure of Proposed Rule
The regulations outlined in this proposed rule would be codified in
45 CFR parts 147, 155, and 156. In addition, the regulations outlined
in this proposed rule governing waivers under section 1332 of the ACA
at 45 CFR part 155 subpart N would also be codified in 31 CFR part 33.
The proposed changes to part 147 would specify that issuers are not
required to provide a special enrollment period in the individual
market with respect to coverage offered outside of an Exchange to
consumers who would be eligible for the proposed special enrollment
period at Sec. 155.420(d)(16).
The proposed changes to part 155 would repeal the establishment of
the Exchange DE option, which permitted State Exchanges, SBE-FPs, and
FFEs to use direct enrollment technology and non-Exchange websites
developed by approved web brokers, issuers and other direct enrollment
partners to enroll qualified individuals in QHPs offered through the
Exchange. We propose extending FFE open enrollment to end on January 15
of the applicable year, rather than December 15 of the previous year
beginning with the 2022 coverage year and beyond. We also propose to
reinstitute previous requirements that Navigators in FFEs be required
to provide consumers with information and assistance on certain post-
enrollment topics, such as the Exchange eligibility appeals process,
the Exchange-related components of the PTC reconciliation process, and
the basic concepts and rights of health coverage and how to use it. We
further propose to provide a monthly special enrollment period for
qualified individuals or enrollees, or the dependents of a qualified
individual or enrollee, who are eligible for APTC, and whose household
income does not exceed 150 percent of the FPL. Finally, we propose to
clarify that, for purposes of the special enrollment periods provided
at Sec. 155.420(d), a qualified individual or enrollee who qualifies
for APTC, or a dependent whose tax filer can qualify for APTC on their
behalf, because they meet the criteria at Sec. 155.305(f), but who
qualifies for a maximum APTC amount of zero dollars, is not considered
APTC eligible for purposes of these special enrollment periods.
The proposed changes to part 156 would update the user fee rates
for the 2022 benefit year for all issuers participating on the
Exchanges using the Federal platform. We also propose to
[[Page 35162]]
repeal the separate billing requirement, which requires individual
market QHP issuers that offer coverage for abortion services for which
federal funding is prohibited to separately bill policy holders for the
portion of the premium attributable to coverage of such abortion
services and instruct the policy holder to pay for this portion of
their premium in a separate transaction. Finally, we propose to update
a cross reference to mental health parity standards in the provision of
EHB regulations.
The proposed changes in 31 CFR part 33 and 45 CFR part 155 related
to section 1332 waivers would rescind the previous incorporation of
certain policies and interpretations announced in the 2018 Guidance
into regulation. The proposals related to section 1332 waivers include
proposed processes and procedures for amendments and extensions for
approved waiver plans. Additionally, the Departments propose to extend
certain flexibilities in the public notice requirements and post award
public participation requirements for section 1332 waivers during
future emergent situations.
III. Provisions of the Updating Payment Parameters and Improving Health
Insurance Markets for 2022 and Beyond 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)
a. Past-Due Premiums
On January 28, 2021, President Biden issued E.O. 14009,
``Strengthening Medicaid and the Affordable Care Act,'' \21\ directing
HHS, and the heads of all other executive departments and agencies with
authorities and responsibilities related to the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether such agency actions
are inconsistent with this Administration's policy to protect and
strengthen the ACA and to make high-quality health care accessible and
affordable for every American.
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\21\ 86 FR 7793 (February 2, 2021).
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In the preamble to the Market Stabilization final rule,\22\ we
stated that, to the extent permitted by applicable state law, an issuer
will not violate the guaranteed availability requirements in Sec.
147.104 where the issuer attributes a premium payment made for new
coverage to any past-due premiums owed for coverage from the same
issuer or another issuer in the same controlled group within the prior
12-month period before effectuating enrollment in the new coverage.
This policy addressed concerns regarding the potential for individuals
to take unfair advantage of the guaranteed availability rules. For
example, an individual could decline to make premium payments at the
end of a benefit year, but still receive periods of unpaid coverage
during a grace period before coverage is terminated. We were concerned
that despite such failures to pay, such individuals would be able to
immediately sign up for new coverage for the next benefit year during
the individual market open enrollment period, without making
restitution for the periods of unpaid coverage.
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\22\ 82 FR 18346, 18349 (April 18, 2017).
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HHS currently is reviewing this policy to analyze whether it may
present unnecessary barriers to accessing health coverage. In
compliance with E.O. 14009, we intend to address this interpretation of
guaranteed availability in the 2023 Payment Notice rulemaking.
b. Special Enrollment Periods (Sec. 147.104(b)(2))
As further discussed in the preamble section regarding the proposed
monthly special enrollment period for APTC-eligible qualified
individuals with an expected household income no greater than 150
percent of the FPL (Sec. 155.420(d)(16)), we propose to add a new
paragraph at Sec. 147.104(b)(2)(i)(G) to specify that issuers are not
required to provide this special enrollment period in the individual
market with respect to coverage offered outside of an Exchange. We
propose to add this paragraph because eligibility for the special
enrollment period is based on eligibility for APTC, as discussed in the
Sec. 155.420(d)(16) preamble section, and APTC cannot be applied to
coverage offered outside of an Exchange. We request comment on this
proposal.
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
1. Standardized Options (Sec. 155.20)
On March 4, 2021, the United States District Court for the District
of Maryland decided City of Columbus v. Cochran, No. 18-2364, 2021 WL
825973 (D. Md. Mar. 4, 2021). The court reviewed nine separate policies
we had promulgated in the 2019 Payment Notice final rule. The court
vacated four of these policies. One of the policies the court vacated
was the 2019 Payment Notice's cessation of the practice of designating
some plans in the FFEs as ``standardized options.'' \23\
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\23\ See 83 FR 16974-16975.
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We intend to implement the court's decision as soon as possible, as
explained in part 2 of the 2022 Payment Notice final rule.\24\ We will
not be able to fully implement those aspects of the court's decision
regarding standardized options in time for issuers to design plans and
for CMS to be prepared to certify such plans as QHPs for the 2022 plan
year. With the rule removing standardized options vacated, we will also
need to design and propose new standardized options that otherwise meet
current market reform requirements and alter the Federal Exchange
eligibility and enrollment platform system build (HealthCare.gov) to
provide differential display of such plans. Web-brokers that are direct
enrollment partners in FFE and SBE-FP states will also need time to
adjust their respective systems to provide differential display of such
plans on their non-Exchange websites.\25\ We will need to design,
propose, and finalize such plans in time for issuers to design their
own standardized options in accord with HHS's parameters and to submit
those plans for approval by applicable regulatory authorities and for
certification as QHPs. This is not feasible for the upcoming QHP
certification cycle for the 2022 plan year. The plan certification
process for that year has already begun as of April 22, 2021. CMS'
planning for the QHP certification cycle for the 2022 plan year has
taken into account the existing policies that the court vacated, and it
is too late now to revisit those factors if the process is to go
forward in time for plans to be certified by open enrollment later this
year.
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\24\ See 86 FR 24140, 24264-24265.
\25\ See 45 CFR 155.220(c)(3)(i)(H).
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Specifically, in the last iteration of standardized options we
finalized in the 2018 Payment Notice, we created three sets of
standardized options based on FFE and SBE-FP enrollment data and state
cost-sharing laws. The basis on which we created these three sets of
options as well as a number of other factors in the individual market
(for example, states with FFEs or SBE-FPs transitioning to SBEs) have
changed considerably since the last iteration of standardized options
in 2018. Further, we do not have sufficient time to conduct a full
analysis of the changes that have occurred in the last several years
necessary to timely design and propose adequate standardized options
suitable for the current environment. Additionally, in prior years, we
[[Page 35163]]
proposed and finalized standardized option plan designs prior to the
start of the QHP certification cycle for the following plan year such
that issuers had sufficient time to assess these standardized options
and could thus determine if they wanted to offer them and take the
steps necessary to do so. Issuers will not have a sufficient amount of
time to meaningfully assess any standardized options we would propose
and decide whether or not to offer them if such proposals were made
effective before the 2023 plan year.
For these reasons, we intend to resume the designation of
standardized options and propose specific plan designs in more complete
detail in the 2023 Payment Notice. As such, we seek the views of
stakeholders regarding issues related to the proposal of new
standardized options, including specifically the views of states with
FFEs or SBE-FPs regarding how unique state cost-sharing laws could
affect standardized option plan designs to assist in our development of
such proposals.
2. Navigator Program Standards (Sec. 155.210)
We propose to amend Sec. 155.210(e)(9) to reinstitute the
requirement that Navigators in the FFEs provide information and
assistance with regard to certain post-enrollment topics.
Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange
to establish a Navigator program under which it awards grants to
entities to conduct public education activities to raise awareness of
the availability of QHPs; distribute fair and impartial information
concerning enrollment in QHPs, and the availability of PTCs and CSRs;
facilitate enrollment in QHPs; provide referrals to any applicable
office of health insurance consumer assistance or health insurance
ombudsman established under section 2793 of the PHS Act, or any other
appropriate state agency or agencies for any enrollee with a grievance,
complaint, or question regarding their health plan, coverage, or a
determination under such plan or coverage; and provide information in a
manner that is culturally and linguistically appropriate to the needs
of the population being served by the Exchange. The statute also
requires the Secretary, in collaboration with states, to develop
standards to ensure that information made available by Navigators is
fair, accurate, and impartial. We have implemented the statutorily
required Navigator duties through regulations at Sec. Sec. 155.210
(for all Exchanges) and 155.215 (for Navigators in FFEs).
Further, section 1311(i)(4) of the ACA requires the Secretary to
establish standards for Navigators to ensure that Navigators are
qualified, and licensed, if appropriate, to engage in the Navigator
activities described in the statute and to avoid conflicts of interest.
This provision has been implemented at Sec. Sec. 155.210(b) (generally
for all Exchanges) and 155.215(b) (for Navigators in FFEs).
We have also established under Sec. 155.205(d) and (e) that each
Exchange must have a consumer assistance function, including the
Navigator program, and must conduct outreach and education activities
to educate consumers about the Exchange and insurance affordability
programs to encourage participation.
We propose to amend Sec. 155.210(e)(9) to reinstitute the
requirement that Navigators in the FFEs provide information and
assistance with regard to certain post-enrollment topics rather than
merely being authorized to do so.
Following a reduction in overall funding available to the FFE
Navigator program in 2020, we provided more flexibility to FFE
Navigators by making the provision of certain types of assistance,
including post-enrollment assistance, permissible, but not required,
for FFE Navigators under Navigator grants awarded in 2019 or any later
year.\26\ On June 4, 2021, CMS issued the 2021 Navigator Notice of
Funding Opportunity (NOFO), which will make $80 million in grant
funding available to Navigators in states with an FFE for the 2022 plan
year.\27\ With funding for the FFE Navigator program increasing
substantially for the 2022 plan year, we believe that there will be
sufficient Navigator grant funding available to support the post-
enrollment duties we propose to once again require of FFE Navigators.
We also believe that this proposal aligns with E.O. 14009 on
Strengthening Medicaid and the ACA because it will improve consumers'
access to health coverage information, not only when selecting a plan,
but also throughout the year as they use their coverage.\28\ In
addition, this proposal is designed to ensure that consumers would have
access to skilled assistance beyond applying for and enrolling in
health insurance coverage through the Exchange, including, for example,
assistance with the process of filing Exchange eligibility appeals,
understanding basic information about PTC reconciliation, and
understanding basic concepts and rights related to health coverage and
how to use it, such as locating providers and accessing care.
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\26\ 84 FR 17511-17514 (April 25, 2019). These post-enrollment
topics included: Understanding the process of filing Exchange
eligibility appeals; understanding and applying for exemptions from
the individual shared responsibility payment that are granted
through the Exchange; understanding the availability of exemptions
from the requirement to maintain MEC and from the individual shared
responsibility payment that are claimed through the tax filing
process and how to claim them; the Exchange-related components of
the premium tax credit reconciliation process; understanding basic
concepts and rights related to health coverage and how to use it;
and referrals to licensed tax advisers, tax preparers, or other
resources for assistance with tax preparation and tax advice on
certain Exchange-related topics.
\27\ https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0.
\28\ 86 FR 7793 (Feb. 2, 2021).
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Section 1311(i)(3)(D) of the ACA and 45 CFR 155.210(e)(4) already
expressly require Navigators to provide post-enrollment assistance by
referring consumers with complaints, questions, or grievances about
their coverage to appropriate state agencies. This suggests that
Congress anticipated that consumers would need assistance beyond the
application and enrollment process, and that Navigators would maintain
relationships with consumers and be a source of such post-enrollment
assistance.
Consistent with the requirements under section 1311(i)(3)(B) and
(C) of the ACA that Navigators distribute fair and impartial
information concerning enrollment in QHPs and facilitate enrollment in
QHPs, and pursuant to the Secretary's authority under section
1321(a)(1)(A) of the ACA, we propose to reinstitute as a requirement at
Sec. 155.210(e)(9)(i) that Navigators in the FFEs must help consumers
with understanding the process of filing appeals of Exchange
eligibility determinations. We are once again not proposing to
establish a duty for Navigators to represent a consumer in an appeal,
sign an appeal request, or file an appeal on the consumer's behalf. We
believe that helping consumers understand Exchange appeal rights when
they have received an adverse eligibility determination when applying
for health insurance coverage, and assisting them with the process of
completing and submitting appeal forms, would help to facilitate
enrollment through the FFEs and would help consumers obtain fair and
impartial information about enrollment through the FFEs. We would
interpret this proposal to include helping consumers file appeals of
eligibility determinations made by an Exchange related to enrollment in
a QHP, special enrollment periods, and any insurance affordability
program, including eligibility determinations for Exchange
[[Page 35164]]
financial assistance, Medicaid, the Children's Health Insurance Program
(CHIP), and the Basic Health Program.
Currently, pursuant to Sec. 155.210(e)(9)(ii), Navigators in the
FFEs are permitted to provide information and assistance to consumers
with regard to understanding and applying for exemptions from the
individual shared responsibility payment that are granted through the
Exchange, understanding the availability of exemptions from the
requirement to maintain minimum essential coverage and from the
individual shared responsibility payment that are claimed through the
tax filing process and how to claim them, and understanding the
availability of the Internal Revenue Service (IRS) resources on this
topic. We propose to amend Sec. 155.210(e)(9)(ii) slightly to
reinstitute as a requirement that Navigators in the FFEs must help
consumers understand and apply for exemptions from the requirement to
maintain minimum essential coverage granted by the Exchange. Although
consumers who do not maintain minimum essential coverage no longer need
to receive an exemption from the individual shared responsibility
payment to avoid having to make such a payment, Navigators can still
assist consumers age 30 or above with filing an exemption to qualify to
enroll in catastrophic coverage under Sec. 155.305(h). We believe that
this proposal is consistent with Navigators' duty under section
1311(i)(3)(B) and (C) of the ACA to distribute fair and impartial
information concerning enrollment in QHPs, since impartial information
concerning the availability of exemptions for consumers age 30 or above
to enroll in catastrophic coverage would help consumers make informed
decisions about whether or not to enroll in such coverage. This
assistance with Exchange-granted exemptions from the requirement to
maintain minimum essential coverage would include informing consumers
about the availability of the exemption; helping consumers fill out and
submit Exchange-granted exemption applications and obtain any necessary
forms prior to or after applying for the exemption; explaining what the
exemption certificate number is and how to use it; and helping
consumers understand and use the Exchange tool to find catastrophic
plans in their area.
In addition, we propose to reinstitute as a requirement at Sec.
155.210(e)(9)(iii) that Navigators must help consumers with the
Exchange-related components of the PTC reconciliation process and with
understanding the availability of IRS resources on this process. This
would include ensuring consumers have access to their Forms 1095-A and
receive general, high-level information about the purpose of this form
that is consistent with published IRS guidance on the topic. This
proposal stems from the requirement under section 1311(i)(3)(B) of the
ACA that Navigators distribute fair and impartial information
concerning the availability of the PTC under section 36B of the Code.
Consumers who receive premium assistance through APTC may need help
with a variety of issues related to the requirement to reconcile the
APTC with the PTC allowed for the year of coverage. FFE Navigators
would be required to help consumers obtain IRS Forms 1095-A and 8962,
and the instructions for both, and to provide general information,
consistent with applicable IRS guidance, about the significance of the
forms. Navigators would also be required to help consumers understand
(1) how to report errors on the Form 1095-A; (2) how to find silver
plan premiums using the Exchange tool; and (3) the difference between
APTC and PTC and the potential implications for enrollment and
reenrollment of not filing a tax return and reconciling the APTC paid
on consumers' behalf with their PTC for the year.
Navigators would still not be permitted to provide tax assistance
or advice, or interpret tax rules and forms within their capacity as
FFE Navigators. However, their expertise related to the consumer-facing
aspects of the Exchange, including eligibility and enrollment rules and
procedures, would uniquely qualify them to help consumers understand
and obtain information from the Exchange that is necessary to
understand the PTC reconciliation process. Because this proposal
includes a proposed requirement that Navigators provide consumers with
information and assistance understanding the availability of IRS
resources, Navigators would be expected to familiarize themselves with
the availability of materials on irs.gov, including the Form 8962
instructions, IRS Publication 974 Premium Tax Credit, and relevant
FAQs, and to refer consumers with questions about tax law to those
resources or to other resources, such as free tax return preparation
assistance from the Volunteer Income Tax Assistance or Tax Counseling
for the Elderly programs.
To help ensure consumers have seamless access to Exchange-related
tax information beyond the basic information that Navigators can
provide, we propose to reinstitute as a requirement at Sec.
155.210(e)(9)(v) that FFE Navigators must refer consumers to licensed
tax advisers, tax preparers, or other resources for assistance with tax
preparation and tax advice related to consumer questions about the
Exchange application and enrollment process, and PTC
reconciliations.\29\
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\29\ We note that we are not proposing to reinstitute at Sec.
155.210(e)(9)(v) the requirement that Navigators must provide
referrals to licensed tax advisers, tax preparers, or other
resources for assistance with tax preparation and tax advice related
to consumer questions about exemptions from the requirement to
maintain minimum essential coverage and from the individual shared
responsibility payment in light of the fact that the individual
shared responsibility payment was reduced to zero for months
beginning after December 31, 2018 under the Tax Cuts and Jobs Act
(Pub. L. 115-97, December 22, 2017).
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We interpret the Navigator duties to facilitate enrollment in QHPs
in section 1311(i)(3)(C) of the ACA, to distribute fair and impartial
information concerning enrollment in QHPs under section 1311(i)(3)(B)
of the ACA, and to conduct public education activities to raise
awareness about the availability of QHPs in section 1311(i)(3)(A) of
the ACA to include helping consumers understand the kinds of decisions
they will need to make in selecting coverage, and how to use their
coverage after they are enrolled. We have previously stated that one of
the overall purposes of consumer assistance programs is to help
consumers become fully informed and health literate.\30\
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\30\ See 79 FR 30276.
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To improve consumers' health literacy related to coverage
generally, and to ensure that individual consumers are able to use
their coverage meaningfully, we propose to reinstitute at Sec.
155.210(e)(9)(iv) the requirement that Navigators in the FFEs must help
consumers understand basic concepts and rights related to health
coverage and how to use it. We also propose to expand our
interpretation of this requirement and the activities that fall within
its scope. These activities could be supported through the use of
existing resources such as the CMS ``From Coverage to Care''
initiative, which we encourage Navigators to review, and which are now
available in multiple languages at https://marketplace.cms.gov/c2c.
This proposal would improve consumers' access to health coverage
information, not just when selecting a plan, but also when using their
coverage.
We believe expanding our interpretation of the requirement that
Navigators help consumers understand basic concepts and rights related
to health coverage and how to use it and
[[Page 35165]]
the activities that fall within the scope of this requirement is vital
to improving health equity and helping to address social determinants
of health, particularly among underserved and vulnerable
populations.\31\ Navigators are already required under Sec.
155.210(e)(8) to provide targeted assistance to underserved or
vulnerable populations. Underserved and vulnerable populations often
experience lower levels of health literacy, which can be a barrier to
enrolling in and accessing care.\32\ Social determinants of health can
also create significant disparities in whether and how an individual is
able to afford and access health coverage and health care services,
including primary and preventive care. As trusted partners and members
of local communities, Navigators are uniquely positioned to establish
and build trust with individuals and families as they transition from
enrolling in health coverage to using and maintaining their coverage
throughout the year.
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\31\ 86 FR 7009 (Jan. 25, 2021).
\32\ Access to Health Services: Healthy People 2020. Office of
Disease Prevention and Health Promotion, Department of Health &
Human Services. https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/access-to-health.
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Additionally, Navigators in FFEs are already required under Sec.
155.215(c)(1) to develop and maintain general knowledge about the
racial, ethnic, and cultural groups in their service area, including
each group's health literacy and other needs, and under Sec.
155.215(c)(2) to collect and maintain updated information to help
understand the composition of the communities in the service area.
Because the health literacy needs of consumers will vary depending on
their circumstances, we are not requiring Navigators to help consumers
with specific health literacy topics. Instead, we propose to expand our
interpretation of the Navigator duties proposed to be reinstituted as
requirements at Sec. 155.210(e)(9)(iv) to include, for example,
helping consumers understand (1) key terms used in health coverage
materials, such as ``deductible'' and ``coinsurance,'' and how they
relate to the consumer's health plan; (2) the cost and care differences
between a visit to the emergency department and a visit to a primary
care provider under the coverage options available to the consumer; (3)
how to evaluate their health care options and make cost-conscious
decisions, including through the use of information required to be
disclosed by their health plan as a result of the Transparency in
Coverage Final Rules; \33\ (4) how to identify in-network providers to
make and prepare for an appointment with a provider--including
utilizing tools and resources available through the No Surprises Act
\34\ to make informed decisions about their care; (5) how the
consumer's coverage addresses steps that often are taken after an
appointment with a provider, such as making a follow-up appointment and
filling a prescription; and (6) the right to coverage of certain
preventive health services without cost sharing under QHPs--including
information and resources related to accessing viral testing and
vaccination options supported by Exchange coverage. If this proposal is
finalized, CMS intends to make training materials and other educational
resources available to Navigators regarding the proposed expanded
interpretation of this requirement.
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\33\ 85 FR 72158.
\34\ Title I of Division BB of the Consolidated Appropriations
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
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FFE Navigators will continue to be permitted to perform the
Navigator duties specified in Sec. 155.210(e)(9) until this proposal,
if finalized, becomes effective. If this proposal is finalized, FFE
Navigators would be required to perform the Navigator duties specified
in Sec. 155.210(e)(9) beginning with Navigator grants awarded after
the effective date of this rule, including non-competing continuation
awards. For example, if this proposal is finalized prior to Navigator
grant funding being awarded in fiscal year (FY) 2022, FY 2021 Navigator
grantees will be required to perform these duties beginning with the
Navigator grant funding awarded in FY 2022 for the second 12-month
budget period of the 36-month period of performance. To the extent FFE
Navigators awarded grant funding in FY 2021 are not already performing
these duties under their year one project plans when this proposal, if
finalized, becomes effective, they can revise their project plans to
incorporate performance of the duties specified in Sec. 155.210(e)(9)
as part of their non-competing continuation application for their FY
2022 funding. If this proposal is finalized as proposed, we would
codify in Sec. 155.210(e)(9) the applicability date to make clear when
the Navigator duties specified in Sec. 155.210(e)(9) would once again
be required.
We interpret the requirement to facilitate enrollment in a QHP
under section 1311(i)(3)(C) of the ACA, and the requirement at Sec.
155.210(e)(2) to provide information that assists consumers with
submitting the eligibility application, to include assistance with
updating an application for coverage through an Exchange, including
reporting changes in circumstances and assisting with submitting
information for eligibility redeterminations. Additionally, Navigators
are already permitted, but not required, to help with a variety of
other post-enrollment issues. For example, we interpret the
requirements in Sec. 155.210(e)(1) and (2) that Navigators conduct
public education activities to raise awareness about the Exchange and
provide fair and impartial information about the application and plan
selection process to mean that Navigators may educate consumers about
their rights with respect to coverage available through an Exchange,
such as nondiscrimination protections, prohibitions on preexisting
condition exclusions, and preventive services available without cost-
sharing. We also interpret these requirements, together with the
requirement in section 1311(i)(3)(B) of the ACA that Navigators
distribute fair and impartial information concerning enrollment in
QHPs, and the availability of Exchange financial assistance, to mean
that Navigators may assist consumers with questions about paying
premiums for coverage or insurance affordability programs enrolled in
through an Exchange. Finally, we interpret the requirement in section
1311(i)(3)(D) of the ACA and Sec. 155.210(e)(4) to provide referrals
for certain post-enrollment issues to mean that Navigators may help
consumers obtain assistance with coverage claims denials.
Certified application counselors (CACs) do not receive grants from
the FFEs, and thus may have more limited resources than Navigators. As
a result, while we are not proposing to require CACs to further expand
their required duties, we encourage CACs to help with activities
consistent with their existing regulatory duties and recognize that
many of these CACs may already be participating in these post-
enrollment activities.
We seek comment on all aspects of this proposal.
3. Exchange Direct Enrollment Option (Sec. 155.221(j))
In part 1 of the 2022 Payment Notice final rule, we codified Sec.
155.221(j), which established a process for states to elect a new
Exchange Direct Enrollment option (Exchange DE option). Under the
Exchange DE option, State Exchanges, SBE-FPs, and FFE states may work
directly with private sector entities (including QHP issuers, web-
brokers,
[[Page 35166]]
and agents and brokers) to operate enrollment websites through which
consumers can apply for coverage, receive an eligibility determination
from the Exchange, and purchase an individual market QHP offered
through the Exchange with APTC and CSRs, if otherwise eligible. Subject
to meeting HHS approval requirements under Sec. 155.221(j)(1) and (2),
the Exchange DE option may be implemented in states with a State
Exchange beginning in plan year 2022 and in SBE-FP or FFE states
beginning in plan year 2023. We also finalized a 2023 user fee rate of
1.5 percent of the total monthly premiums charged by issuers for each
policy in FFE and SBE-FP states that elect the Exchange DE option.
Since the publication of part 1 of the 2022 Payment Notice final rule,
there have been significant changes to policy and operational
priorities resulting from recent shifting policy goals, as well as the
enactment of new federal laws. Given these changes, as well as a
general lack of interest expressed by states in the option, and
potential for the Exchange DE option to be misaligned with
administration priorities, we propose to remove Sec. 155.221(j) and
repeal the Exchange DE option.
On January 20, 2021, President Biden issued the Executive Order,
``On Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government'' (E.O. 13985),\35\ directing that as a
policy matter the federal government should pursue a comprehensive
approach to advancing equity for all, including people of color and
others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality. On January 28,
2021, President Biden issued E.O. 14009.\36\ Section 3 of E.O. 14009
directs HHS, and the heads of all other executive departments and
agencies with authorities and responsibilities related to Medicaid and
the ACA, to review all existing regulations, orders, guidance
documents, policies, and any other similar agency actions to determine
whether they are inconsistent with policy priorities described in
Section 1 of E.O. 14009, to include protecting and strengthening the
ACA by assisting people who are potentially eligible for coverage, and
eliminating unnecessary difficulties to obtaining health insurance.
Specifically, this agency review must evaluate whether existing
policies or regulations, ``. . . undermine the Health Insurance
Marketplace[supreg] \37\ or the individual, small group, or large group
markets for health insurance . . .'' or ``. . . present unnecessary
barriers to individuals and families attempting to access Medicaid or
ACA coverage . . .'' \38\
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\35\ 86 FR 7009 (Jan. 25, 2021).
\36\ 86 FR 7793 (Feb. 2, 2021).
\37\ Health Insurance Marketplace[supreg] is a registered
service mark of the U.S. Department of Health & Human Services.
\38\ 86 FR 7793 (Feb. 2, 2021).
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Section 2 of E.O. 14009 also requires that the Secretary of HHS
consider whether to implement an Exchange special enrollment period for
exceptional circumstances pursuant to Sec. 155.420(d)(9) and other
existing authorities, for uninsured and underinsured individuals to
obtain coverage in light of the special circumstances caused by the
COVID-19 pandemic. After E.O. 14009 was issued, HHS used its discretion
to make such a special enrollment period available to uninsured and
underinsured consumers through HealthCare.gov from February 15, 2021,
through May 15, 2021. To support outreach, education and enrollment
efforts for this special enrollment period, HHS has provided $2.3
million in additional funding to current Navigator grantees in the
FFE.\39\
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\39\ https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period.
_____________________________________-
All State Exchanges followed suit and implemented corresponding
special enrollment periods on similar timelines. HHS later made a
decision to extend the ability of consumers to access the special
enrollment period through HealthCare.gov through August 15, 2021, and
many State Exchanges extended their special enrollment periods, as
well. As of May 31, 2021, 1.2 million new consumers had selected plans
through HealthCare.gov, which represents a substantial increase from
previous years when special enrollment periods were available primarily
for normal qualifying life events.\40\
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\40\ https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2.
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In addition, Congress recently passed the ARP,\41\ which was signed
into law on March 11, 2021. The ARP establishes new ACA programs,
including a new grant program for Exchange modernization, which
appropriates $20,000,000 in federal funding, which is available until
September 30, 2022, to State Exchanges to implement Exchange system,
program, or technology updates to ensure compliance with applicable
federal requirements. It also modifies eligibility criteria for
existing ACA programs. For example, the provisions in the ARP include a
temporary change (for taxable years 2021 and 2022) that allows
consumers with household income above 400 percent of the FPL to be
applicable taxpayers potentially eligible for PTC, an update to
applicable percentage tables to increase the amount of PTC for
qualified individuals in all income brackets, and a modification of
eligibility for PTC for consumers receiving, or approved to receive,
unemployment compensation in 2021. Beginning on April 1, HHS
operationalized these new requirements through HealthCare.gov, and is
providing technical assistance to State Exchanges that are
operationalizing these requirements at the state level. Approximately
1.9 million consumers have returned to HealthCare.gov to reduce their
monthly premiums after APTC by over 40 percent, from $100 to $57, on
average, while for new consumers selecting plans during the special
enrollment period, the average monthly premium after APTC fell by 25
percent.\42\
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\41\ Public Law 117-2.
\42\ https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-1.
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There are also new obligations established via other health care-
related legislation for which HHS is responsible to implement in
coordination with states and other federal Departments. This includes
the No Surprises Act,\43\ which was enacted on December 27, 2020, and
establishes an extensive array of federal and state requirements and
programs to protect consumers against surprise medical bills.
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\43\ Title I of Division BB of the Consolidated Appropriations
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
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Given our obligation to review all existing policies and
regulations in line with E.O. 14009, E.O. 13985, and recent actions by
Congress, including the health care-related provisions of the ARP and
other new federal legislation, for which HHS is now responsible or
centrally involved in implementing, we have determined that all
available resources should be directed to ensuring we are able to
efficiently and effectively meet those obligations. Permitting the
establishment of the Exchange DE option would detract from those
efforts. Furthermore, meeting the new requirements of the health care
provisions of the ARP would add complexity to Exchange operations that
could reduce the prospects for successful implementation of the
Exchange DE option, even if temporarily. For instance, states and DE
entities would need to coordinate and implement new procedures to
ensure that consumers receive eligibility
[[Page 35167]]
determinations and are enrolled in coverage in line with the modified
PTC eligibility criteria under the ARP, and then, that this temporary
modification no longer applies after taxable year 2022. As part of this
process, HHS would need to ensure the adoption of appropriate
procedures, proper approvals, and ongoing oversight. To foreclose the
possibility that federal funding and resources will be diverted from
efforts to provide direct benefits to consumers made available under
recent legislation to optional programs, we are proposing to repeal the
Exchange DE option. This will help ensure that available resources are
allocated consistent with administration health care priorities and
dedicated to implementation of newly-enacted federal laws that provide
greater financial assistance and protections to consumers.
Repealing the Exchange DE option should generally have a minimal
impact on states and other interested parties. States with State
Exchanges already could engage with direct enrollment entities
preceding the addition of Sec. 155.221(j). In addition, the FFE has
already implemented the direct enrollment program (including classic
direct enrollment and enhanced direct enrollment), which provides broad
availability of non-Exchange websites to assist consumers applying for,
or enrolling in QHPs through an FFE or SBE-FP with APTC and CSRs, when
otherwise eligible.\44\ Additionally, nothing in the previous
regulatory framework prohibited State Exchanges from engaging direct
enrollment entities similar to the FFE in order to supplement Exchange
operations in their states should they so choose. In fact, although we
understand that several State Exchanges have engaged with direct
enrollment entities to discuss possibilities for collaboration, State
Exchanges and other stakeholders nearly universally cautioned against
the Exchange DE option in public comments submitted in response to the
proposal. In addition, to date, no state has expressed interest in
implementing the Exchange DE option.
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\44\ The FFE direct enrollment pathways are also available in
SBE-FP states. See 45 CFR 155.220(l) and 155.221(i).
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Finally, in reviewing Sec. 155.221(j) in line with E.O. 13985 and
E.O. 14009, and after further consideration of public comments received
when the Exchange DE option was proposed, we have determined that the
Exchange DE option is inconsistent with policies described in E.O.
13985 and sections 1 and 3 of E.O. 14009. Consistent with many public
comments received when the Exchange DE option was proposed, we believe
that shifting away from HealthCare.gov or State Exchange websites as
the primary pathway to enroll in and receive information about coverage
would harm consumers by unnecessarily fracturing enrollment processes
among the Exchange and possibly multiple direct enrollment entities
operating in a state. Such a shift would be particularly harmful now
when over one million consumers have successfully navigated
HealthCare.gov during the COVID special enrollment period to enroll in
Exchange coverage. We also agree with many commenters who noted that a
fractured process could foster consumer confusion about how to get
covered and what coverage options are available, since consumers could
be directed to direct enrollment entities that only offer assistance
with a limited selection of products and some of those products may not
provide, for example, MEC for consumers.\45\ Many commenters raised
concerns that this consumer confusion or limited product selection
through direct enrollment entities could also potentially disrupt
coordination of coverage with other insurance affordability programs,
including Medicaid and CHIP, which is inconsistent with our ``no wrong
door'' policy.\46\ In addition, these consequences could act as an
unnecessary barrier to consumers seeking Medicaid or ACA coverage
rather than facilitating enrollment, and could have additional
downstream impacts including an increased uninsured or underinsured
population, or more consumers enrolled in less comprehensive coverage
options. Commenters noted that these downstream impacts could lead to
health inequities by disparately impacting certain vulnerable groups
that tend to have a greater need for comprehensive coverage or rely
more heavily on Medicaid and CHIP. These concerns and the accompanying
risks to the health and well-being of vulnerable groups and consumers
in general are heightened as the COVID-19 PHE continues.
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\45\ Multiple commenters cited the following report as support
for their comments related to DE entities offering limited plan
selection and potential disruptions to coordination of coverage with
other insurance affordability programs: https://www.cbpp.org/research/health/direct-enrollment-in-marketplace-coverage-lacks-protections-for-consumers-exposes.
\46\ This policy is intended to ensure that consumers can
complete a single eligibility application to receive determinations
of eligibility across multiple health insurance affordability
programs, including for QHPs, APTC, CSRs, as well as Medicaid and
CHIP. See, for example, sections 1311(d)(4)(F) and 1413 of the ACA.
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By finding the Exchange DE option inconsistent with recent
Executive Orders, to ensure that resources are not diverted from
fulfilling requirements under the new health care legislation and other
initiatives like the COVID special enrollment period, and because no
state has yet expressed interest in implementing the Exchange DE
option, we propose to remove Sec. 155.221(j) and repeal the Exchange
DE option. As explained in the preamble section regarding user fee
rates for the 2022 benefit year (Sec. 156.50), we also propose to
repeal the accompanying user fee rate for FFE-DE and SBE-FP-DE states
for 2023. We seek comment on this proposal.
4. Open Enrollment Period Extension (Sec. 155.410(e))
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. The Exchange open enrollment period is extended by cross-
reference to non-grandfathered plans in the individual market, both
inside and outside of an Exchange, under guaranteed availability
regulations at Sec. 147.104(b)(1)(ii). HHS is specifically proposing
to alter the open enrollment period for the 2022 coverage year and
beyond so that it begins on November 1 and runs through January 15 of
the applicable benefit year.
In previous rulemaking, we established that the open enrollment
period for benefit years beginning on or after January 1, 2018 would
begin on November 1, 2021 and extend through December 15, 2021. In
doing so, we indicated a preference for a shorter month-and-a-half open
enrollment period, noting our belief that it provides sufficient time
for consumers to enroll in or change QHPs and that an end date of
December 15th carries the benefit of ensuring consumers receive a full
year of coverage and simplifies operational processes for issuers and
the Exchanges.\47\ Accordingly, the annual open enrollment period dates
have been set to November 1st through December 15\th\ for the 2018,
2019, 2020, and 2021 plan years. We have observed several benefits
using the present open enrollment period dates. Prior enrollment data
suggests that the majority of new consumers to the Exchange select
plans prior to December 15th so as to have coverage beginning January
1st. After 4 years, we believe
[[Page 35168]]
consumers have become accustomed to a December 15th end date for the
annual open enrollment period. Consistency in open enrollment dates
promotes consumer confidence, and a December end date generally aligns
with the open enrollment dates for other health insurance programs such
as Medicare and employer-based health plans.
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\47\ See 82 FR 18346 at 18381.
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We also observed that consumer casework volumes related to coverage
start dates and inadvertent dual enrollment decreased in the years
after the December 15th end date was adopted, suggesting that the
consumer experience was improved by having a singular deadline of
December 15th to enroll in coverage for the upcoming plan year. We note
that an extension to January 15th may cause some previously observed
consumer confusion to resurface surrounding the need to enroll by
December 15th for a full year of coverage versus the final deadline of
January 15th to enroll for a plan that would begin on February 1st.
This confusion could cause some consumers to miss out on coverage for
the month of January altogether. A January 15th end date may also
require enrollment assisters allocate budget resources over a longer
period of time.
However, after observing the effects of a month-and-a-half open
enrollment period over these years, we have also observed negative
impacts to consumers that may justify an extension of the open
enrollment end date to January 15th. In particular, we have observed
that consumers who receive financial assistance, who do not actively
update their applications during the open enrollment period, and who
are automatically re-enrolled into a plan are subject to unexpected
plan cost increases if they live in areas where the second lowest-cost
silver plan has dropped in price. These consumers will experience a
reduction in their allocation of APTC based on the second lowest-cost
silver plan price, but are often unaware of their increased plan
liabilities until they receive a bill from the issuer in early January
after the open enrollment period has concluded. Extending the open
enrollment end date to January 15th would allow these consumers the
opportunity to change plans after receiving updated plan cost
information from their issuer and to select a new plan that is more
affordable to them. We have also observed concerns from Navigators,
CACs, and agents and brokers that the current open enrollment period
does not leave enough time for them to fully assist all interested
Exchange applicants with their plan choices. Extending the open
enrollment end date to January 15th would allow more time for consumers
to seek assistance from one of these entities. Together, the impacts of
providing consumers with more time to react to updated plan cost
information and more time to seek enrollment assistance may improve
access to health coverage. The additional time for enrollment
assistance provided by this proposal may be particularly beneficial to
consumers in underserved communities who may face time or language
barriers in accessing health coverage by extending the period in which
these consumers can seek in-person assistance to enroll.
We seek comment on whether a January 15th end date would provide a
balanced approach to providing consumers with additional time to make
informed plan choices and increasing access to health coverage, while
mitigating risks of adverse selection, consumer confusion, and issuer
and Exchange operational burden. We invite comments from stakeholders
that would experience specific benefits or adverse effects from a
January 15th end date, and encourage comments on potential impacts to
resources, consumer assistance budgets, overall enrollment numbers,
premiums, and market stability. We seek comments on whether this
extension would incentivize consumers who need coverage to begin on
January 1st to still make a choice and enroll by December 15th, while
also preserving sufficient time in the remainder of the plan year for
issuers and Exchanges to perform other obligations such as QHP
certification.
We further invite comments on alternative approaches to extending
open enrollment to address coverage gaps or enrollment challenges
facing consumers and stakeholders. We also invite comments to address
whether HHS should explore the possibility of a new special enrollment
period, such as for current enrollees who are automatically re-enrolled
and experienced a significant cost increase, to address concerns for
specific consumer challenges as an alternative to extending the annual
open enrollment period. We are also considering whether approaches such
as enhanced noticing or special, targeted outreach would address the
needs of consumers who are automatically re-enrolled in areas where the
second lowest-cost silver plan drops in value, thereby reducing APTC
amounts. We seek comment on how we may improve communications and
consumer engagement around potential cost changes for consumers who do
not actively re-enroll in coverage. We are also considering if improved
education and outreach during the coverage year to raise awareness of
existing special enrollment period opportunities, such as those for
loss of coverage or becoming newly eligible or ineligible for financial
assistance, may serve consumers who do not enroll or change plans
during open enrollment. We seek comment on whether adoption of these or
other outreach approaches would be a viable alternate approach to
finalizing our proposal to extend the open enrollment end date to
January 15th.
We anticipate that if an open enrollment end date of January 15th
were finalized, this change would apply to all Exchanges, including
State Exchanges for the 2022 coverage year and beyond. We note that in
preceding plan years, a majority of State Exchanges have used special
enrollment period authority to offer additional enrollment time beyond
the end date of December 15th in the Exchanges on the Federal platform.
We invite additional comments on State Exchange flexibility, as well as
operational challenges relating to State Exchange implementation of the
proposed change for 2022 and beyond.
5. Monthly Special Enrollment Period for APTC-Eligible Qualified
Individuals With a Household Income No Greater Than 150 Percent of the
Federal Poverty Level (Sec. 155.420(d)(16))
In order to make affordable coverage available to more consumers,
we propose to codify a monthly special enrollment period for qualified
individuals or enrollees, or the dependents of a qualified individual
or enrollee, who are eligible for APTC, and whose household income is
expected to be no greater than 150 percent of the FPL.\48\ Section 9661
of the ARP amended section 36B(b)(3)(A) of the Code to decrease the
applicable
[[Page 35169]]
percentages used to calculate the amount of household income a taxpayer
is required to contribute to their second lowest cost silver plan for
tax years 2021 and 2022.\49\ The applicable percentages are used in
combination with factors including annual household income and the cost
of the benchmark plan to determine the PTC amount for which a taxpayer
can qualify to help pay for a QHP on an Exchange for themselves and
their dependents.\50\ These decreased percentages generally result in
increased PTC for PTC-eligible taxpayers. For those with household
incomes no greater than 150 percent of the FPL, the new applicable
percentage is zero. As a result of these changes, many low-income
consumers whose QHP coverage can be fully paid for with APTC have one
or more options to enroll in a silver-level plan without needing to pay
a premium after the application of APTC. All of these consumers, if
eligible to enroll through an Exchange and to receive APTC, will
qualify for CSRs to enroll in a silver plan with an AV of 94
percent.\51\
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\48\ Generally, a qualifying individual is not eligible for a
PTC if their income is below 100 percent of the FPL. However, there
are a small number of consumers with a household income below 100
percent of the FPL who may qualify for APTC. Specifically, section
1401 of the ACA amended section 36B of the Code to provide that a
taxpayer with a household income which is not greater than 100
percent of the FPL, and who is a lawfully present immigrant and
ineligible for Medicaid due to their immigration status, may qualify
for a PTC. Consumers for whom this is the case would be able to
qualify for the proposed special enrollment period, as well.
Additionally, we note that because individuals would qualify for
this special enrollment period based on their household income
level, household members who apply for coverage with financial
assistance together generally will all qualify for the special
enrollment period. However, it is also possible that one household
member could trigger the special enrollment period based on a change
in their eligibility for APTC--for example, a household member who
loses access to an offer of coverage through an employer that is
considered affordable based on 26 CFR 1.36B02(c)(3)(v).
\49\ Public Law 117-2.
\50\ See 26 CFR 1.36B-3(g) for more information on the
applicable percentage and its relationship to the PTC.
\51\ See Sec. Sec. 155.305(g)(2) and 156.420(a).
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We propose that this special enrollment period be available at the
option of the Exchange, in order to allow State Exchanges to decide
whether to implement it based on their specific market dynamics, needs,
and priorities. Additionally, we propose that Exchanges on the Federal
platform will implement this special enrollment period by providing
qualified individuals who are eligible with a pathway to access it
through the HealthCare.gov application. We propose that implementation
in Exchanges on the Federal platform be consistent with current special
enrollment period policy and operations, in particular such that there
is no limitation on how often individuals who are eligible for this
special enrollment period can obtain or utilize it.\52\ Consistency in
this area will mitigate consumer and other stakeholder confusion and
simplify Exchange operations. To provide Exchanges with flexibility to
prioritize ensuring that qualifying individuals are able to obtain
coverage through this special enrollment period quickly following plan
selection, or to implement this special enrollment period in keeping
with their current operations, we propose to add a new paragraph at
Sec. 155.420(b)(2)(vii) to provide that the Exchange must ensure that
coverage is effective in accordance with paragraph (b)(1) of this
section or on the first day of the month following plan selection, at
the option of the Exchange.
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\52\ For example, those who qualify for the special enrollment
period per Sec. 155.420(d)(8) for qualifying individuals who gain
or maintain status as an Indian, as defined by section 4 of the
Indian Health Care Improvement Act, may change their plan selection
multiple times each month, noting that only the last plan selection
before the applicable cutoff date for coverage each month will take
effect for the month in question.
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We also propose to add a new paragraph at Sec.
155.420(a)(4)(ii)(D) to provide that an Exchange must permit eligible
enrollees and their dependents to change to a silver level plan, and to
amend paragraph Sec. 155.420(a)(4)(iii), which provides other plan
category limitations for other special enrollment periods, to provide
that these other plan category limitations do not apply to enrollees or
dependents who qualify for the proposed special enrollment period.\53\
While we expect that most consumers who qualify for this special
enrollment period will select a silver level plan because based on
their household income, they will be eligible to enroll in a silver
level plan with an actuarial value of 94 percent, as further discussed
below, we believe that ensuring that current Exchange enrollees do so
through plan category limitations will help to mitigate adverse
selection. Finally, we propose to add a new paragraph at Sec.
147.104(b)(2)(i)(G) to specify that issuers are not required to provide
this special enrollment period in the individual market with respect to
coverage offered outside of an Exchange, because eligibility for the
special enrollment period is based on eligibility for APTC, and APTC
cannot be applied to coverage offered outside of an Exchange.
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\53\ This provision would not prevent enrollees who qualify for
the new special enrollment period from changing to a plan of any
category through a special enrollment period that provides this
flexibility, including the special enrollment periods at Sec.
155.420(d)(4), (8), (9), (10), (12), and (14).
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The APTC benefit changes under the ARP make affordable coverage
available to more uninsured people. However, if past trends continue,
we believe that some consumers who qualify for these benefits under the
ARP may continue to forgo enrollment in premium-free coverage due to a
lack of awareness of the opportunity to enroll or a misconception about
what the coverage would cost. For example, a February 2021 HHS
Assistant Secretary for Planning and Evaluation (ASPE) issue brief \54\
indicates that, as of 2018, 20 percent of the uninsured had a household
income no higher than $35,000, which, in 2018, was under 150 percent of
the FPL for households with four or more members.\55\ A recent analysis
of American Community Survey (ACS) and U.S. Census data also indicates
that families with low incomes are more likely to be uninsured, and
that in 2019, more than 70 percent of uninsured adults said that they
were uninsured because the cost of coverage was too high. It also noted
that in 2019, almost 70 percent of uninsured, non-elderly adults had
lacked coverage for more than a year, and that this group may be
particularly difficult to reach with outreach and education
efforts.\56\
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\54\ Trends in the U.S. Uninsured Population, 2010-2020. Office
of the Assistant Secretary for Planning and Evaluation (ASPE),
February 11, 2021: https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.
\55\ 2017 Federal Poverty Guidelines. ASPE: https://aspe.hhs.gov/2017-poverty-guidelines. We refer to 2017 FPL
information to determine APTC eligibility for 2018 because, per 26
CFR 1.36B-1(h), the FPL for computing the PTC for a taxable year is
the FPL in effect on the first day of the initial or annual open
enrollment period preceding that taxable year. For example, ASPE
released 2020 FPL information in January 2020, and so 2020 FPL
information applies during the 2020 open enrollment period for 2021
coverage.
\56\ Key Facts about the Uninsured Population: Kaiser Family
Foundation; Nov 06, 2020, https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/. https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
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Therefore, while HHS will undertake extensive outreach and
engagement efforts to promote enrollment during the open enrollment
period for 2022 coverage and to help ensure consumer awareness of
existing special enrollment periods for which they may qualify, given
the established challenges with promoting awareness of access to
coverage among low-income consumers, we believe additional enrollment
opportunities for low-income consumers are appropriate and in the best
interest of low-income consumers. The proposed monthly special
enrollment period policy would align with E.O. 14009, which requires
federal agencies to identify and appropriately address policies that
create barriers to accessing ACA coverage, including access through
mid-year enrollment.
In addition to providing certain low-income individuals with
additional opportunities to newly enroll in free or low-cost coverage
that is available to them, we believe this special enrollment period
may help consumers who lose Medicaid coverage regain health care
coverage. These consumers can already qualify for a special enrollment
period due to their loss of Medicaid coverage, per Sec. 155.420(d)(1).
Additionally, Exchanges could provide consumers who do not learn of
their opportunity to enroll in Exchange coverage until after their 60-
day special enrollment period
[[Page 35170]]
has passed with additional time to enroll in health care coverage based
on the regulation at Sec. 155.420(c)(4) recently finalized in part 2
of the 2022 Payment Notice final rule to allow a qualified individual,
enrollee, or dependent who did not receive timely notice of a
triggering event and was otherwise reasonably unaware that a triggering
event occurred to select a new plan within 60 days of the date that he
or she knew, or reasonably should have known, of the occurrence of the
triggering event.\57\ However, whether consumers in these situations
are able to benefit from this flexibility may vary, and may require
Exchanges to assess eligibility on a case-by-case basis; it may also
require consumers who generally have low household income and who
therefore may face other barriers to accessing health care coverage,
such as low health insurance literacy levels and lack of internet
access, to be aware of the potential for an extended enrollment
timeframe and to request it from their Exchange. Therefore, while this
special enrollment period would not be limited to qualified individuals
who have lost Medicaid coverage, we believe that providing access to a
monthly enrollment opportunity could help some consumers who lose
Medicaid coverage to regain health insurance coverage, especially those
who do not initially realize that loss of Medicaid is a special
enrollment period triggering event.
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\57\ 86 FR 24220.
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Further, after the COVID-19 PHE comes to an end, we expect to see a
higher than usual volume of low-income individuals transitioning from
Medicaid coverage to the Exchange, for at least several months. This is
because states will begin to catch up on a backlog of redeterminations
and terminations for Medicaid beneficiaries with increased income
following the end of the COVID-19 PHE, after having generally suspended
Medicaid disenrollments since March 2020 to comply with the continuous
enrollment provisions in section 6008(b)(3) of the Families First
Coronavirus Response Act.\58\ Individuals with household income below
150 percent of the FPL frequently experience income fluctuations that
cause them to transition between Medicaid, CHIP, and Exchange coverage
with financial assistance. Further, the consumer eligibility
determination notices sent by state Medicaid and CHIP agencies can vary
greatly as far as content, including clarity about the consumer's next
steps to apply for other coverage, where and how to apply, and the
timeframes for doing so. Consumers who become ineligible for Medicaid
are at risk of being uninsured for a period of time and putting off
accessing health care, which can lead to poorer health outcomes, if
they are not ultimately able to successfully transition between
coverage programs.
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\58\ Public Law 116-127. These provisions enabled states to
receive the temporary Federal Medical Assistance Percentage increase
under that section.
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For these consumers, 60 days may not be enough time to successfully
transition to Exchange coverage, leading to long-term lack of coverage.
We believe some of these consumers will benefit from additional time to
enroll in Exchange coverage. In some cases, the loss of Medicaid or
CHIP coverage comes at a time when consumers are least able to track
down new health coverage, but are most in need of it. An example of
this can be seen with consumers who lose pregnancy-related Medicaid or
CHIP coverage after the postpartum period, posing a health coverage
hurdle for new mothers at a time when access to health care is
paramount, but their ability to find and enroll in new coverage is
limited or impeded by their new childcare responsibilities.
Exchanges that elect to provide this proposed special enrollment
period would have the option to require consumers to submit
documentation to confirm their eligibility in accordance with their
pre- or post-enrollment verification programs. CMS will determine
eligibility for this special enrollment period in Exchanges on the
Federal platform based on consumers' attested household income. Once an
Exchange on the Federal platform grants this special enrollment period
to a consumer based on their attested household income, the Exchange
would then verify applicants' projected annual household income
consistent with 45 CFR 155.320(c).\59\ Specifically, CMS would continue
to require consumers whose projected annual household income cannot be
verified using a trusted electronic data source to submit documentation
to confirm their annual income (currently approved under OMB control
number 0938-1207/Expiration date February 29, 2024). However, we would
not require submission of household income documentation prior to
enrollment, and would not pend the enrollment as part of a pre-
enrollment verification process, because we believe that the post-
enrollment income verification process already in place is sufficient
to ensure program integrity because consumers who do not verify their
attested household income through the post-enrollment verification
process will have their APTC adjusted accordingly.
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\59\ Public Law 111-148.
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Further, CMS' experience administering the verification processes
for Exchanges on the Federal platform in accordance with Sec.
155.320(c) shows that submitting documentation quickly to verify income
can be especially onerous for those at the lowest income levels who may
not have ready access to a computer or smartphone, the internet, a
copier or scanner, or funds for postage. As noted above, consumers with
household incomes less than 150 percent of the FPL are most likely to
experience churn between our health care programs and would be
disproportionately affected by the delayed access to coverage that will
result while they complete the post-enrollment verification process.
For this reason, we are of the view that requiring pre-enrollment
verification would needlessly delay access to coverage for a
significant portion of eligible consumers; and that it is reasonable
and appropriate to allow applicants' enrollments to proceed subject to
post-enrollment verification of their household income, if additional
documentation is necessary due to inability to verify their household
income using a trusted electronic data source.
In addition to outreach and education efforts, we believe that
applying plan category limitations to this special enrollment period
would help to mitigate adverse selection because it would limit the
ability of enrollees to change to a higher metal level plan based on a
new health care need and then change back to a silver plan once the
health issue is resolved. However, enrollees may still choose to enroll
in a silver level plan that is more expensive than their zero dollar
option, and, with a monthly special enrollment period, could make this
change during the plan year based on a difference in provider network
or prescription drug formulary. We believe that enrollees who are
interested in changing plans during the year will likely be deterred
because such a change will generally mean they lose progress they have
made toward meeting their deductible and other accumulators. We seek
comment on this proposal and on whether, alternatively, plan category
limitations should not be applied. For example, we seek comment on
whether to instead exempt the proposed special enrollment period at
Sec. 155.420(d)(16) from plan category limitations in order to
alleviate the implementation burden on Exchanges, or due to a lack of
concern that eligible enrollees would use the proposed
[[Page 35171]]
special enrollment period to change to a plan category other than
silver.
Additionally, we believe that that access to premium-free or very
low-cost 94 percent AV coverage will help to mitigate risk of adverse
selection, because qualifying individuals will not have an incentive to
end coverage when health care services are no longer needed. However,
we seek comment on the degree to which the risk of adverse selection
increases due to the fact that not all qualifying individuals who have
a household income no greater than 150 percent of the FPL will have
access to a silver plan with a zero-dollar premium and therefore, due
to their small premium for a silver plan, might be more inclined to
enroll in coverage due to a health care need and end coverage once this
need has been met.
We estimate that this adverse selection risk may result in issuers
increasing premiums by approximately 0.5 to 2 percent, and a
corresponding increase in APTC outlays and decrease in income tax
revenues of approximately $250 million to $1 billion, when the enhanced
APTC provisions of the ARP are in effect. We describe this impact in
more detail and seek comment on it in the regulatory impact analysis
(RIA) section later in this proposed rule. We also discuss some of the
reasons adverse selection cannot be mitigated in the following
paragraphs.
The adverse selection risk presented by the proposal stems, in
part, from qualifying individuals who live in states where premiums for
Exchange coverage cannot be fully paid for with APTC,\60\ such that
these individuals will not have access to a silver plan with a zero-
dollar premium. Such individuals include residents of states that
require all QHPs in the state to cover services that do not qualify as
EHB, or that require coverage of certain abortion services for which
federal funding is prohibited, and we estimate that ten states may fall
into these categories. The portion of premium attributable to services
ineligible for APTC is generally small, but increases with age and
family size. Additionally, in a few locations, QHP issuers' plan
designs are such that both the lowest-cost silver plan and the second
lowest-cost silver plan \61\ cover services that do not qualify as
EHBs, which makes it impossible for most individuals, including those
whose household income does not exceed 150 percent of the FPL, to
access a silver plan with a zero dollar monthly premium.
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\60\ See section 1303(b)(2)(A) of the ACA and section
36B(b)(3)(D) of the Code.
\61\ The second lowest-cost silver plan is the ``benchmark
plan'' used to determine a household's APTC eligibility. See 26 CFR
1.36B-3(d)(1) and (f).
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Other household-level variation in access to a silver plan with a
zero-dollar premium includes households where some, but not all,
applicants are APTC-eligible (for example, a household with one or more
members with an offer of other MEC through a job), and households with
applicants living in different locations, because Exchanges must
determine APTC based on a benchmark plan specific to each location.\62\
In this case, the applicable premium amount will be based on the
subscriber's location, and so available APTC may not fully cover a
silver plan premium for the policy. Finally, households that include
one or more members who attest affirmatively to their smoking status
also may not qualify for an APTC amount sufficient to pay the full
premium of a silver plan, because consistent with 26 CFR 1.36B-3(e),
APTC eligibility is not determined using a benchmark plan that rates
for tobacco.\63\
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\62\ 26 CFR 1.36B-3(f)(4).
\63\ As of May 2021, CMS data indicate that 1-8 percent of
current enrollees, depending on the state, in Exchanges on the
Federal platform are rated for tobacco use.
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We seek comment from health insurance issuers and other
stakeholders on our position that adverse selection related to this
special enrollment period will be mitigated by the availability of free
or very low-cost coverage with a 94 percent AV and the application of
plan category limitations to this new special enrollment period, or
whether the adverse selection risk created by this new special
enrollment period cannot be sufficiently mitigated such that its
creation may result in significant rate increases. We also solicit
comment regarding whether health insurance issuers and other
stakeholders have concerns that the policy could cause any adverse
selection among higher income individuals with variable hours and
income. We also seek comment on whether the requirement that Exchanges
verify applicants' projected annual household income post-enrollment,
consistent with 45 CFR 155.320(c), is sufficient, or if there are other
measures we should put in place to further protect program integrity.
We also solicit comment on estimated implementation burdens for
Exchanges who elect to provide this additional enrollment opportunity,
including whether implementation of this special enrollment period will
be possible in time for consumers to benefit from it during the 2022
plan year. We request comment on whether issuers will have sufficient
time to adjust rate filings to account for any increased risk and
whether state regulators will have sufficient time to review those
filings after a final rule is issued.
We further request comment on whether this proposed special
enrollment period should be available indefinitely (as proposed), or
whether it should be time-limited. For example, we seek comment on
whether we should finalize the proposed special enrollment period to be
available only for coverage during years when enhanced APTC benefits
are also available, as provided by the section 9661 of the ARP or any
subsequent statute. Finally, we request comment on strategies for
providing outreach and education for consumers who may be eligible for
this special enrollment period, in particular to help qualifying
individuals understand and take advantage of the free or very low-cost
coverage that is available to them. Within this group, we request
comments on strategies for educating consumers who qualify to enroll in
a 94 percent AV silver plan about the benefits of enrolling in such a
plan even if they are required to pay a small premium, as opposed to
electing a premium-free bronze plan with a lower AV.
6. Clarification of Special Enrollment Period for Enrollees Who Are
Newly Eligible or Newly Ineligible for Advance Payments of the Premium
Tax Credit (Sec. 155.420(f))
We are proposing new language to clarify that, for purposes of the
special enrollment period rules at Sec. 155.420(d), references to
ineligibility for APTC refer to being ineligible for such payments or
being technically eligible for such payments but qualifying for a
maximum of zero dollars per month of such payments. That is, a
qualified individual, enrollee, or his or her dependent who is
technically eligible for APTC because they meet the criteria at Sec.
155.305(f), but who qualifies for a maximum APTC amount of zero
dollars, is also considered ineligible for APTC for purposes of these
special enrollment periods, even if they experience a change in
circumstance from an APTC ineligible status in accordance with Sec.
155.305(f), such as having other MEC. Currently, the special enrollment
periods to which this clarification is applicable are the triggering
events at Sec. 155.420(d)(6), but we propose that the clarification
apply to all of Sec. 155.420 to ensure consistency, for example,
between special enrollment period triggering events at Sec. 155.420(d)
and related coverage effective date and
[[Page 35172]]
enrollment window rules at Sec. 155.420(b) and (c), respectively.
We believe that the current special enrollment period rules that
reference APTC eligibility at Sec. 155.420(d)(6) could permit
inconsistent interpretations of what it means to be newly eligible or
ineligible for APTC. Exchange regulations at Sec. 155.305(f)(1) define
tax filers as APTC eligible if their expected household income for the
benefit year for which coverage is requested is greater than or equal
to 100 percent but not more than 400 percent of the FPL and they, or
their expected tax dependents for the year, (1) meet the requirements
for eligibility for enrollment in a QHP through the Exchange; and (2)
are not eligible for MEC, with the exception of coverage in the
individual market.
IRS rules at 26 CFR 1.36B-3 govern the APTC amount an individual
may receive once they are found eligible for APTC underSec.
155.420(d)(6). Pursuant to these IRS rules, an Exchange enrollee's
monthly APTC amount is the excess of the adjusted monthly premium for
the applicable benchmark plan \64\ over 1/12 of the product of the
taxpayer's household income and the applicable percentage for the
taxable year. Under this formula, if the applicable percentage of 1/12
of a taxpayer's estimated annual household income is higher than the
adjusted monthly premium of the relevant benchmark plan, a taxpayer
will be eligible generally for APTC under Sec. 155.305(f)(1), but will
qualify for a maximum APTC amount of zero dollars under 26 CFR 1.36B-3.
Currently, neither Sec. 155.305(f)(1) or 26 CFR 1.36B-3 recognize or
explain that an individual generally could be APTC eligible, but not
qualify to receive any amount in APTC greater than zero. The current
text of Sec. 155.420 similarly does not address this issue such that
there could exist some ambiguity about what it means to be APTC
eligible or ineligible for purposes of the special enrollment periods
under Sec. 155.420.
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\64\ Per IRS rules at 26 CFR 1.36B-3(f), the term ``benchmark
plan'' is generally used to refer to the second lowest-cost silver
plan, as described in section 1302(d)(1)(B) of the ACA (42 U.S.C.
18022(d)(1)(B)), offered to the taxpayer's coverage family through
the Exchange for the rating area where the taxpayer resides.
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We propose to add text to Sec. 155.420 to clarify that an
individual who qualifies for a maximum APTC amount of zero dollars is
considered ineligible for APTC for purposes of the Sec. 155.420's
special enrollment periods. Specifically, any determination that an
individual cannot receive an APTC amount greater than zero dollars is
equivalent to being found APTC ineligible for purposes of special
enrollment period eligibility under Sec. 155.420(d). We believe this
interpretation comports with the perspective of an applicant for
Exchange coverage who will take their available financial assistance
amount into account when selecting a QHP for the upcoming coverage year
and who may wish to change their QHP partway through a coverage year
because of a change in their financial assistance. Because we believe
that the current regulation permits this interpretation, but could
instead be interpreted to require strict adherence to the listed
requirements for APTC eligibility at Sec. 155.305(f) (which does not
address situations where a consumer meets these requirements but
qualifies for a zero dollar APTC amount), we are proposing regulation
text to ensure consistent and correct interpretation of what it means
to be determined ineligible for APTC. This reading of APTC
ineligibility is also consistent with our discussion of the policy in
previous rulemaking. For example, in the 2020 Payment Notice final
rule,\65\ we added a new paragraph at Sec. 155.420(d)(6)(v) allowing
Exchanges to provide a special enrollment period for qualified
individuals who experience a decrease in household income and receive a
new determination of eligibility for APTC by an Exchange, and who had
MEC for one or more days during the 60 days preceding the financial
change.
---------------------------------------------------------------------------
\65\ 84 FR 17526.
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We believe that this clarification should also apply to special
enrollment periods provided in Sec. 155.420(d)(6)(iii) through (v),
which include special enrollment periods for individuals who become
newly eligible for APTC. Section 155.420(d)(6)(iii) provides a special
enrollment period for individuals who are enrolled in an employer-
sponsored plan, and who are determined newly eligible for APTC, in
part, because they are no longer eligible for qualifying coverage in an
eligible-employer sponsored plan in accordance with 26 CFR 1.36B-
2(c)(3) (for example, because their employer changed the coverage), and
who are allowed to terminate their employer-sponsored coverage. We do
not expect that this special enrollment period would be helpful to
individuals who qualify for a maximum APTC amount of zero dollars
because they would not receive assistance to help pay for monthly QHP
premiums. Further, it likely would not benefit individuals currently
enrolled in employer-sponsored coverage to change to a QHP without the
benefit of an APTC dollar amount greater than zero, in part because
changing plans in the middle of the plan year would cause their
deductible and other accumulators to be reset. We seek comments on this
proposal.
We believe that this clarification will be especially helpful in
light of the removal of the upper APTC eligibility limit on household
income at 400 percent of the FPL for taxable years 2021 and 2022 under
the ARP.\66\ This is because, with this change, any applicants with
household incomes over 400 percent of the FPL may be eligible for APTC,
more consumers likely will qualify for APTC technically, but for an
APTC amount of zero dollars. This clarification ensures that special
enrollment period regulations clearly reflect that enrollees for whom
this is the case may qualify for a special enrollment period based on a
decrease in their household income, or any other change that makes them
newly eligible for an APTC amount of greater than zero dollars.
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\66\ Public Law 117-2.
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Additionally, this clarification is important because it helps
ensure transparency in terms of why enrollees in certain situations
that appear similar would not both qualify for one of the special
enrollment periods at Sec. 155.420(d)(6). For example, the new
affordability provisions in the ARP allow for a situation where an
enrollee with a household income above 400 percent of the FPL is newly
determined to qualify for an APTC amount of zero dollars (as opposed to
APTC-ineligible simply by virtue of exceeding the household income
limit), while another enrollee with a household income above 400
percent of the FPL who is residing in a different service area is newly
determined eligible for an APTC amount of more than zero dollars based
on the cost of their benchmark plan.\67\ Both enrollees have received
new determinations of APTC eligibility based just being enrolled in
Exchange coverage and not having another offer of MEC, but only the
latter enrollee who is determined eligible for an APTC amount of
greater than zero dollars is intended to be eligible for the special
enrollment periods at Sec. 155.420(d)(6). We believe the proposed new
language provides needed clarity regarding the eligibility parameters
of this special enrollment period to enrollees, particularly
[[Page 35173]]
enrollees with household incomes above 400 percent of the FPL.
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\67\ In Exchanges on the Federal platform, where most ARP
changes to APTC eligibility were implemented on April 1, 2021,
enrollees in this situation could change their QHP coverage through
the 2021 special enrollment period; however, this enrollment window
was not available through all Exchanges.
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Exchange regulations at Sec. 155.420(d)(6) provide several special
enrollment periods for enrollees and dependents based on a
determination that they are newly eligible or newly ineligible for
APTC. These special enrollment periods vary in terms of the details of
their qualifying events, but all of them are dedicated to ensuring that
current Exchange enrollees and other qualified individuals who become
newly eligible or ineligible for APTC have an opportunity to re-assess
previous decisions about their QHP enrollment, or their decision not to
enroll in a QHP, based on gaining or losing eligibility for financial
assistance available to them to help lower premiums. Ensuring that
Exchanges consistently apply eligibility factors for these special
enrollment periods is important under a variety of circumstances. For
example, regulations at Sec. 155.420(d)(6)(i) and (ii) provide current
Exchange enrollees with an opportunity to change to a different QHP if
they are determined newly eligible or newly ineligible for APTC for
themselves or their dependents (or have a change in eligibility for
CSRs), because such a change may impact the coverage they prefer or the
type of coverage they can afford.
Section 155.420(d)(6)(iv) allows individuals to enroll in Exchange
coverage if they either experience a change in household income or move
to a different state, and as a result become newly eligible for APTC,
after they were previously ineligible for APTC solely because of a
household income below 100 percent of the FPL and, during the same
timeframe, were ineligible for Medicaid because they lived in a non-
Medicaid expansion state. Like the other qualifying events at Sec.
155.420(d)(6), this special enrollment period benefits individuals
because it allows them to take advantage of APTC for which they were
previously ineligible, and we do not believe that it would benefit
individuals who newly qualify for APTC but who are not entitled to an
APTC amount greater than zero dollars. We also believe that, regarding
the group of potentially eligible individuals, increases from a
household income of less than 100 percent of the FPL to a household
income high enough to qualify for an APTC amount of zero dollars are
relatively uncommon.
Finally, Sec. 155.420(d)(6)(v) provides a pathway for individuals
who had MEC for at least one of the past 60 days to enroll in Exchange
coverage if they experience a decrease in household income and the
Exchange newly determines them eligible for APTC. This special
enrollment period was established in the 2020 Payment Notice,
specifically to permit individuals enrolled in coverage outside of the
Exchange to enroll in Exchange coverage based on newly being able to
access APTC.\68\ Because this special enrollment period benefits
qualified individuals by allowing them to obtain coverage that permits
them to qualify for APTC, we do not believe that individuals who newly
qualify for an APTC amount of zero dollars generally benefit from this
special enrollment period, and they may even be harmed by changing
plans mid-year because this would generally cause their deductible and
other accumulators to be re-set.
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\68\ 84 FR 17526.
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We seek comment on this proposal, including from State Exchanges,
regarding whether this definition of APTC eligibility reflects their
current implementation of the special enrollment period qualifying
events per Sec. 155.420(d)(6), and if not, whether there are policy
concerns about this clarification, or the burden of making related
changes to Exchange operations. We also seek comment on whether we
should provide Exchanges with flexibility in terms of when they are
required to ensure that their operations reflect this definition, and
whether Exchanges should be permitted to adopt a more inclusive
definition, for example, to consider an individual to be newly eligible
or ineligible for APTC for purposes of the special enrollment periods
at Sec. 155.420(d)(6) based on a change from a zero-dollar maximum
APTC amount to APTC ineligibility for another reason per regulations at
Sec. 155.305(f).
Additionally, we seek comment on whether the clarification that a
qualified individual, enrollee, or his or her dependent is considered
APTC ineligible if they meet the requirements at Sec. 155.305(f), but
qualify for a maximum APTC amount of zero dollars, should be applied as
proposed to all of the special enrollment period qualifying events at
Sec. 155.420(d)(6), or whether it should be limited to only apply to
some of them. For example, we seek comment on whether we should only
apply this clarification to the special enrollment periods at Sec.
155.420(d)(6)(i) and (ii) and (iv) and (v), to permit individuals whose
employer-sponsored coverage is no longer considered affordable or no
longer meets the minimum value standard to qualify for a special
enrollment period to enroll in Exchange coverage through Sec.
155.420(d)(6)(iii) regardless of whether they qualify for an APTC
amount of greater than zero dollars.
C. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges
1. User Fee Rates for the 2022 Benefit Year (Sec. 156.50)
In the December 4, 2020 Federal Register, we published the proposed
2022 Payment Notice that proposed to reduce fiscal and regulatory
burdens across different program areas and to provide stakeholders with
greater flexibility. In the January 19, 2021 Federal Register (86 FR
6138), we published part 1 of the 2022 Payment Notice final rule that
addressed a subset of the policies proposed in the proposed rule. That
final rule, among other things, finalized the user fee rates for
issuers offering QHPs through the FFE at 2.25 percent of total monthly
premiums, and the user fee rate for issuers offering QHPs through SBE-
FPs at 1.75 percent of total monthly premiums.
On January 28, 2021, President Biden issued E.O. 14009,
``Strengthening Medicaid and the Affordable Care Act,'' \69\ directing
HHS, and the heads of all other executive departments and agencies with
authorities and responsibilities related to the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether such agency actions
are inconsistent with this Administration's policy to protect and
strengthen the ACA and to make high-quality health care accessible and
affordable for every American. As part of this review, HHS examined
policies and requirements under the proposed 2022 Payment Notice and
part 1 of the 2022 Payment Notice final rule to analyze whether the
policies under these rulemakings might undermine the Health Benefits
Exchanges or the health insurance markets, and whether they may present
unnecessary barriers to individuals and families attempting to access
health coverage. HHS also considered whether to suspend, revise, or
rescind any such actions through appropriate administrative action.
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\69\ 86 FR 7793 (Feb. 2, 2021).
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In compliance with E.O. 14009 and as a result of HHS's review of
the proposed 2022 Payment Notice and part 1 of the 2022 Payment Notice
final rule, we have reanalyzed the additional costs of expanded
services, such as consumer outreach and education in the FFE and SBE-
FPs, and Navigators in the FFE in 2022. As explained in part 2 of the
2022
[[Page 35174]]
Payment Notice final rule,\70\ we indicated the intention to propose to
increase the user fee rates for the 2022 benefit year in future
rulemaking. Therefore, in this rule, HHS proposes new QHP issuer user
fee rates for the 2022 plan year: A new FFE user fee rate of 2.75
percent of total monthly premiums, and a new SBE-FP user fee rate of
2.25 percent of monthly premiums. These proposed rates are based on
internal projections of federal costs for providing special benefits to
FFE and SBE-FP issuers during the 2022 benefit year, taking into
account estimated changes in parameters, specifically the increased
funding to the FFE Navigator program and consumer outreach and
education. HHS is of the view that pursuit of this proposal is
necessary for consistency with E.O. 14009 and this Administration's
goal of protecting and strengthening the ACA and making high-quality
health care accessible and affordable for every American. We believe
that expanded outreach and education will lead to broader risk pools,
lower premiums, fewer uninsured consumers, and expanded use of Exchange
services.
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\70\ 86 FR 24140, 24288.
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Section 1311(d)(5)(A) of the ACA permits an Exchange to charge
assessments or user fees on participating health insurance issuers as a
means of generating funding to support its operations. If a state does
not elect to operate an Exchange or does not have an approved Exchange,
section 1321(c)(1) of the ACA directs HHS to operate an Exchange within
the state. Accordingly, in Sec. 156.50(c), we specify that a
participating issuer offering a plan through an FFE or SBE-FP must
remit a user fee to HHS each month that is equal to the product of the
annual user fee rate specified in the annual HHS notice of benefit and
payment parameters for FFEs and SBE-FPs for the applicable benefit year
and the monthly premium charged by the issuer for each policy where
enrollment is through an FFE or SBE-FP. In addition, OMB Circular No.
A-25 establishes federal policy regarding the assessment of user fee
charges under other statutes, and applies to the extent permitted by
law. Furthermore, OMB Circular No. A-25 specifically provides that a
user fee charge will be assessed against each identifiable recipient of
special benefits derived from federal activities beyond those received
by the general public.
Activities performed by the federal government that do not provide
issuers participating in an FFE with a special benefit, or that are
performed by the federal government for all QHPs, including those
offered through State Exchanges, are not covered by this user fee. As
in benefit years 2014 through 2021, issuers seeking to participate in
an FFE in the 2022 benefit year will receive two special benefits not
available to the general public: (1) The certification of their plans
as QHPs; and (2) the ability to sell health insurance coverage through
an FFE to individuals determined eligible for enrollment in a QHP.
a. FFE User Fee Rate
For the 2022 benefit year, issuers participating in an FFE will
receive the benefits of the following federal activities:
Under Consumer Information and Outreach:
Provision of consumer assistance tools;
Consumer outreach and education; and
Management of a Navigator program.
Under Health Plan Bid Review, Management, and Oversight:
Certification processes for QHPs (including ongoing
compliance verification, recertification, and decertification); and
Regulation of agents and brokers.
Under Eligibility and Enrollment:
Eligibility determinations; and
Enrollment processes.
Activities through which FFE issuers receive a special benefit also
include use of the Health Insurance and Oversight System (HIOS), which
is partially funded by FFE and SBE-FP user fees, and the
Multidimensional Insurance Data Analytics System (MIDAS) platform,
which is fully funded by FFE and SBE-FP user fees. In light of E.O.
14009,\71\ published on January 28, 2021, the administration has a
priority to increase accessibility and affordability of health care for
every American. Consistent with increasing accessibility for every
American an expanded budget for consumer support activities and
Navigators was developed, and HHS conducted additional analytic review
which revealed that the user fee rates established in part 1 of the
2022 Payment Notice final rule \72\ need to be increased to sustain
essential Exchange-related activities. Based on this new analysis of
the increased contract costs and projected premiums and enrollment
(including changes in FFE enrollment resulting from anticipated
establishment of State Exchanges or SBE-FPs in certain states in which
FFEs currently are operating) for the 2022 plan year, we are proposing
to establish the FFE user fee for all participating FFE issuers at 2.75
percent of total monthly premiums.
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\71\ 86 FR 7793 (Feb. 2, 2021).
\72\ 86 FR 6138 at 6152.
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We seek comment on this proposed FFE user fee rate for 2022.
b. SBE-FP User Fee Rate
As previously discussed, OMB Circular No. A-25 establishes federal
policy regarding user fees, and specifies that a user charge will be
assessed against each identifiable recipient for special benefits
derived from federal activities beyond those received by the general
public.
SBE-FPs enter into a Federal platform agreement with HHS to
leverage the systems established for the FFEs to perform certain
Exchange functions, and to enhance efficiency and coordination between
state and federal programs. Accordingly, in Sec. 156.50(c)(2), we
specify that an issuer offering a plan through an SBE-FP must remit a
user fee to HHS, in the timeframe and manner established by HHS, equal
to the product of the monthly user fee rate specified in the annual HHS
notice of benefit and payment parameters for the applicable benefit
year and the monthly premium charged by the issuer for each policy
where enrollment is through an SBE-FP, unless the SBE-FP and HHS agree
on an alternative mechanism to collect the funds from the SBE-FP or
state.
The benefits provided to issuers in SBE-FPs by the federal
government include use of the federal Exchange information technology
and call center infrastructure used in connection with eligibility
determinations for enrollment in QHPs and other applicable state health
subsidy programs, as defined at section 1413(e) of the ACA, and QHP
enrollment functions under Sec. 155.400. The user fee rate for SBE-FPs
is calculated based on the proportion of FFE costs that are associated
with the FFE information technology infrastructure, the consumer call
center infrastructure, and eligibility and enrollment services, and
allocating a share of those costs to issuers in the relevant SBE-FPs,
as issuers in SBE-FPs receive those special benefits and will be able
to access the increased consumer support and education.
Similar to the FFE, activities through which SBE-FP issuers receive
a special benefit also include use of HIOS, which is partially funded
by FFE and SBE-FP user fees, and the MIDAS platform, which is fully
funded by FFE and SBE-FP user fees. In light of E.O. 14009,\73\ the
[[Page 35175]]
administration has a priority to increase accessibility and
affordability of health care for every American. Consistent with
increasing accessibility for every American an expanded budget for
consumer support activities and Navigators was developed, and HHS
conducted additional analytic review which revealed that the user fee
rates established in part 1 of the 2022 Payment Notice final rule \74\
need to be increased to sustain essential Exchange-related activities.
Based on this new analysis of the increased contract costs and
projected premiums and enrollment (including changes in FFE enrollment
resulting from anticipated establishment of State Exchanges or SBE-FPs
in certain states in which FFEs currently are operating) for the 2022
plan year, we are proposing to establish the SBE-FP user fee for all
participating SBE-FP issuers at 2.25 percent of the monthly premium
charged by the issuer for each policy under plans offered through an
SBE-FP for benefit year 2022. We seek comment on the SBE-FP user fee
rate for 2022.
---------------------------------------------------------------------------
\73\ 86 FR 7793 (Feb. 2, 2021).
\74\ 86 FR 6138 at 6152.
---------------------------------------------------------------------------
c. 2023 Exchange DE Option User Fee Rate
In the January 19, 2021 Federal Register (86 FR 6138), we published
part 1 of the 2022 Payment Notice final rule that codified Sec.
155.221(j), which established a process for states to elect a new
Exchange DE option. When finalizing this new Exchange option, we also
finalized a 2023 user fee rate of 1.5 percent of the total monthly
premiums charged by issuers for each policy in FFE and SBE-FP states
that elect the Exchange DE option. As explained above, we propose to
repeal the Exchange DE option, accordingly we also propose to repeal
the user fee rate associated with Sec. 155.221(j) for the FFE-DE and
SBE-FP-DEs for 2023. We seek comment on this proposal.
2. Provision of EHB (Sec. 156.115)
We propose a technical amendment to Sec. 156.115. Section
156.115(a)(3) provides that, to satisfy the requirement to provide EHB,
a health plan must provide mental health and substance use disorder
services, including behavioral health treatment services required under
Sec. 156.110(a)(5), in a manner that complies with the parity
standards set forth in Sec. 146.136, implementing the requirements
under MHPAEA. Instead of referencing the regulation implementing
MHPAEA, we propose to reference section 2726 of the PHS Act and its
implementing regulations. We propose this change to make clear that
health plans must comply with all the requirements under MHPAEA,
including any amendments to MHPAEA, such as those made by the
Consolidated Appropriations Act, 2021,\75\ in order to satisfy the EHB
requirements.
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\75\ See section 203 of Title II of Division BB of the
Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27,
2020).
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3. Network Adequacy (Sec. 156.230)
As discussed in more detail in the preamble to Sec. 155.20, on
March 4, 2021, the United States District Court for the District of
Maryland decided City of Columbus v. Cochran, 2021 WL 825973 (D. Md.
Mar. 4, 2021). One of the policies the court vacated was the 2019
rule's elimination of the federal government's reviews of the network
adequacy of QHPs offered through the FFE in certain circumstances by
incorporating the results of the states' reviews.\76\
---------------------------------------------------------------------------
\76\ This policy was first announced in the 2018 Letter to
Issuers in the Federally-facilitated Marketplaces, December 16,
2016, available at https://wayback.archive-it.org/2744/20200125161008/ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf. See also 83
FR 17024-17026.
---------------------------------------------------------------------------
As we explained in part 2 of the 2022 Payment Notice final
rule,\77\ we intend to implement the court's decision through
rulemaking as soon as possible. However, we also will not be able to
fully implement the aspects of the court's decision regarding network
adequacy in time for issuers to design plans and for CMS to be prepared
to certify such plans as QHPs for the 2022 plan year. We instead intend
to address these issues in time for plan design and certification for
plan year 2023. Specifically, with the rule vacated, HHS would need to
set up a new network adequacy review process, and issuers would need
sufficient time before the applicable plan year to assess that their
networks meet the new regulatory standard, submit network information,
and have the information reviewed by applicable regulatory authorities
to have their plans certified as QHPs. Issuers might also have to
contract with other providers in order to meet the standard. This is
not feasible for the upcoming QHP certification cycle for the 2022 plan
year, which began April 22, 2021. We plan to propose specific steps to
address federal network adequacy reviews in future rulemaking. We
request comments and input regarding how the federal government should
approach network adequacy reviews.
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\77\ 86 FR 24140.
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4. Segregation of Funds for Abortion Services (Sec. 156.280)
Section 1303 of the ACA, as implemented in 45 CFR 156.280,
specifies standards for issuers of QHPs through the Exchanges that
cover abortion services for which federal funding is prohibited. The
statute and regulation establish that, unless otherwise prohibited by
state law, a QHP issuer may elect to cover such abortion services. If
an issuer elects to cover such services under a QHP sold through an
individual market Exchange, the issuer must take certain steps to
ensure that no PTC or CSR funds are used to pay for abortion services
for which public funding is prohibited, as required by statute.
Upon consideration of federal district court decisions invalidating
the policy, we are proposing to repeal the separate billing regulation
at Sec. 156.280(e)(2)(ii) that requires individual market QHP issuers
to send a separate bill for that portion of a policy holder's premium
that is attributable to coverage for abortion services for which
federal funds are prohibited and to instruct such policy holders to pay
for the separate bill in a separate transaction. Specifically, we
propose to revert to and codify in amended regulatory text at Sec.
156.280(e)(2)(ii) the prior policy announced in the preamble of the
2016 Payment Notice under which QHP issuers offering coverage of
abortion services for which federal funds are prohibited have
flexibility in selecting a method to comply with the separate payment
requirement in section 1303 of the ACA. Under this proposal, individual
market QHP issuers covering such abortion services would still be
expected to comply with all statutory requirements in section 1303 of
the ACA and all applicable regulatory requirements codified at Sec.
156.280.
Since 1976, Congress has included language, commonly known as the
Hyde Amendment, in the Labor, Health and Human Services, Education and
Related Agencies appropriations legislation.\78\ The Hyde Amendment, as
currently in effect, permits federal funds subject to its funding
limitations to be used for abortion services only in the limited cases
of rape, incest, or if a woman suffers from a physical disorder,
physical injury, or physical illness, including a life-endangering
physical condition caused by or arising from the pregnancy itself, that
would, as certified by a physician, place the woman in
[[Page 35176]]
danger of death unless an abortion is performed. Abortion coverage
beyond those limited circumstances is subject to the Hyde Amendment's
funding limitations which prohibit the use of federal funds for such
coverage.
---------------------------------------------------------------------------
\78\ Accordingly, the Hyde Amendment is not permanent federal
law, but applies only to the extent reenacted by Congress from time
to time in appropriations legislation.
---------------------------------------------------------------------------
Section 1303 of the ACA outlines requirements that issuers of
individual market QHPs covering abortion services for which federal
funds are prohibited must follow to ensure compliance with these
funding limitations. Section 1303(b)(2) prohibits QHPs from using any
amount attributable to PTC (including APTC) or CSRs (including advance
payments of those funds to an issuer, if any) for coverage of abortion
services for which federal funds are prohibited. Under sections
1303(b)(2)(B) and (b)(2)(D) of the ACA, as implemented in Sec.
156.280(e)(2)(i) and (e)(4), QHP issuers must collect a separate
payment from each enrollee without regard to the enrollee's age, sex,
or family status, for an amount equal to the greater of the actuarial
value of coverage of abortion services for which public funding is
prohibited, or $1 per enrollee per month. Section 1303(b)(2)(D) of the
ACA establishes certain requirements with respect to a QHP issuer's
estimation of the actuarial value of abortion services for which
federal funds are prohibited including that a QHP issuer may not
estimate such cost at less than $1 per enrollee, per month. Section
1303(b)(2)(C) of the ACA, as implemented at Sec. 156.280(e)(3),
requires that QHP issuers segregate funds for coverage of such abortion
services collected from enrollees into a separate allocation account
used to pay for such abortion services. Thus, if a QHP issuer disburses
funds for an abortion for which federal funds are prohibited on behalf
of an enrollee, it must draw those funds from the segregated allocation
account.
Notably, section 1303 of the ACA does not specify the method a QHP
issuer must use to comply with the separate payment requirement under
section 1303(b)(2)(B)(i) of the ACA. In the 2016 Payment Notice, we
provided guidance with respect to acceptable methods that an issuer of
individual market QHPs could use to comply with the separate payment
requirement.\79\ We stated that QHP issuers could satisfy the separate
payment requirement in one of several ways, including by sending the
enrollee a single monthly invoice or bill that separately itemized the
premium amount for coverage of abortion services for which federal
funds are prohibited; sending the enrollee a separate monthly bill for
these services; or sending the enrollee a notice at or soon after the
time of enrollment that the monthly invoice or bill will include a
separate charge for such services and specify the charge. We also
stated that an enrollee could make the payment for coverage of such
abortion services and the separate payment for coverage of all other
services in a single transaction.\80\ On October 6, 2017, we released a
bulletin that discussed the statutory requirements for separate
payment, as well as this previous guidance on the separate payment
requirement.\81\
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\79\ 80 FR 10750 (February 27, 2015).
\80\ 80 FR 10750 (February 27, 2015).
\81\ CMS Bulletin Addressing Enforcement of Section 1303 of the
Patient Protection and Affordable Care Act (October 6, 2017),
available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Section-1303-Bulletin-10-6-2017-FINAL-508.pdf.
---------------------------------------------------------------------------
The 2019 Program Integrity Rule \82\ prohibited the compliance
options that the 2016 Payment Notice previously provided to QHP issuers
with regard to the separate payment requirement. Specifically, the 2019
Program Integrity Rule finalized a policy requiring issuers of
individual market QHPs offering coverage of abortion services for which
federal funds are prohibited to send an entirely separate monthly bill
to policy holders just for the portion of the premium attributable to
coverage of such abortion services. QHP issuers were required to either
send separate paper bills (which could be sent in the same envelope or
mailing), or send separate bills electronically (which were required to
be in separate emails or electronic communications). The separate
billing regulation also required also required QHP issuers to instruct
the policy holder to pay for the portion of their premium attributable
to coverage of abortion services for which federal funds are prohibited
through a separate transaction from any payment made for the portion of
their premium not attributable to this coverage. It also required QHP
issuers to make reasonable efforts to collect the payments separately.
QHP issuers were to begin complying with these billing requirements on
or before the QHP issuer's first billing cycle following June 27, 2020.
Although HHS recognized that the previous methods of itemizing or
providing advance notice about the amounts noted as permissible in the
preamble of the 2016 Payment Notice arguably identifies two 'separate'
amounts for two separate purposes, HHS also reasoned that the separate
billing policy would better align the regulatory requirements for QHP
issuer billing of enrollee premiums with the intent of the separate
payment requirement in section 1303 of the ACA.\83\
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\82\ 84 FR 71674 (December 27, 2019).
\83\ 84 FR 71674, 71693 (December 27, 2019).
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HHS announced in the 2019 Program Integrity Rule that it would
exercise enforcement discretion to mitigate risk of inadvertent
coverage terminations that might result from enrollee confusion in
connection with receiving two separate bills for one insurance
contract. HHS explained that it would not take enforcement action
against a QHP issuer that implemented a policy under which the issuer
would not place an enrollee into a grace period and would not terminate
QHP coverage based solely on the policy holder's failure to pay the
separate bill. The 2019 Program Integrity Rule provided that HHS was
adopting this enforcement posture effective June 27, 2020.
In response to the proposal to adopt the separate billing
requirement finalized in the 2019 Program Integrity Rule, HHS also
received comments expressing concern that lack of transparency into
whether QHPs provided coverage of abortion services for which federal
funds are prohibited presented the risk that consumers could
unknowingly purchase such coverage. To address this risk, HHS announced
that as of the effective date of the final rule, February 25, 2020, it
would not take enforcement action against QHP issuers that allowed
enrollees to opt out of coverage of such abortion services by not
paying the separate bill for such services (the opt-out non-enforcement
policy). The opt-out non-enforcement policy effectively gave issuers
the flexibility to modify the benefits of a plan during a plan year
based on an enrollee's desire to opt out of a plan's coverage of such
abortion services.
In light of the immediate need for QHP issuers to divert resources
to respond to the COVID-19 PHE, HHS published an interim final rule
with comment in May 2020 for Medicare and Medicaid Programs, Basic
Health Programs and Exchanges (85 FR 27550) (``May 2020 IFC''). The
rule delayed by 60 days the date when individual market QHP issuers
would be required to begin separately billing policy holders. As
finalized at Sec. 156.280(e)(2)(ii), QHP issuers were expected to
comply with the separate billing regulation beginning on or before the
QHP issuer's first billing cycle following August 26, 2020. The May
2020 IFC noted that a 60-day delay was justified in light of the
ongoing litigation in the federal courts of Maryland, Washington, and
California challenging the separate billing regulation. The May 2020
IFC also noted that the extended
[[Page 35177]]
compliance deadline would only apply to the non-enforcement policy
under which issuers would have flexibility to refrain from triggering
grace periods or coverage terminations where a policy holder failed to
pay the separate monthly bill, delaying when this enforcement posture
would become available by 60 days (to August 26, 2020).
On April 9, 2020, the United States District Court for the Eastern
District of Washington issued an opinion declaring the separate billing
regulation invalid in the State of Washington.\84\ The district court
specifically found that the separate billing regulation was in conflict
with Washington's ``Single-Invoice Statute,'' \85\ which requires
health insurance issuers in the state to bill enrollees using a single
invoice. The district court held that the separate billing regulation
did not preempt Washington's Single-Invoice Statute.
---------------------------------------------------------------------------
\84\ Washington v. Azar, 461 F. Supp. 3d 1016 (E.D. Wash. 2020).
\85\ Wash. Rev. Code Sec. 48.43.074.
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On July 10, 2020, the United States District Court for the District
of Maryland found the separate billing regulation to be contrary to
section 1554 of the ACA and arbitrary and capricious under the
Administrative Procedure Act, thus declaring it invalid and
unenforceable nationwide.\86\ The district court found the separate
billing regulation to be in conflict with section 1554 of the ACA,
which, among other key provisions, prohibits the Secretary from
promulgating regulations that create any unreasonable barriers to
obtaining appropriate medical care or impede timely access to health
care services. The district court concluded that the policy imposed an
unreasonable barrier because it would make it harder for enrollees to
pay for insurance because they must keep track of two separate bills,
which is likely to cause confusion and might lead to some enrollees
losing health insurance. The district court also held the separate
billing regulation to be arbitrary and capricious, finding that HHS
failed to provide a reasoned explanation for abandoning the policy that
existed prior to the adoption of the current separate billing
regulation in the 2019 Program Integrity Rule. The district court also
held that the implementation deadline was arbitrary and capricious
because HHS failed to consider and adequately address specific,
contrary evidence from regulated stakeholders that the implementation
deadline for compliance with the separate billing regulation was
unreasonable and would not provide QHP issuers with sufficient time to
comply.
---------------------------------------------------------------------------
\86\ Planned Parenthood of Maryland, Inc. v. Azar, No. CV CCB-
20-00361 (D. Md. July 10, 2020); 5 U.S.C. 706.
---------------------------------------------------------------------------
On July 20, 2020, the United States District Court for the Northern
District of California issued an opinion \87\ holding that the separate
billing regulation was arbitrary and capricious, setting it aside
nationwide. The district court held that the required mid-year
implementation date for issuers to comply with the separate billing
regulation would cause substantial transactional costs to states,
issuers, and enrollees without any corresponding benefit. The court
further found that the 2019 Program Integrity Rule lacked a reasoned
explanation for deviating from the prior acceptable methods available
to QHP issuers for compliance with the separate payment requirement and
for departing from industry billing practice.
---------------------------------------------------------------------------
\87\ California v. U.S. Dep't of Health & Hum. Servs., 473 F.
Supp. 3d 992 (N.D. Cal. July 20, 2020).
---------------------------------------------------------------------------
HHS initially appealed all three decisions, but those appeals have
been placed on hold following the recent change in administration.
The district courts in Maryland and California vacated the 2019
Program Integrity Rule's separate billing regulation in July 2020, in
advance of the postponed compliance deadline of August 26, 2020. As
such, the timing of the courts' actions could have dissuaded issuers
from assuming further costly administrative and operational burdens
that would have been required to build the separate billing policy into
their billing and IT systems. Further, as the courts' nationwide
invalidation of the policy prevented HHS from requiring initial
implementation of the separate billing regulation, the potential
consumer confusion over payment obligations, which could have
inadvertently led to non-payment of enrollee premium and subsequent
termination of consumer coverage, was also avoided. We believe it is
prudent to reconsider the separate billing policy and its potential
effects on consumer coverage.
In light of these developments, and upon consideration of court
decisions invalidating the policy, we have reassessed the value of the
separate billing policy and no longer believe it is justified in light
of the high burden it would impose on issuers, states, Exchanges, and
consumers, as well as the high likelihood of consumer confusion and
unintended losses of coverage. Nor do we believe section 1303 of the
ACA restricts issuers offering coverage of abortion services for which
federal funds are prohibited to collect the required separate payment
through a separate bill and instruct consumers to pay for such bill in
a separate transaction. Rather, section 1303 of the ACA outlines
requirements that issuers of individual market QHPs covering such
abortion services must follow to ensure that no public funding is
utilized for coverage of such abortion services, including requiring
issuers to collect separate payments for this portion of the premium,
to segregate the funds, and deposit such funds into separate allocation
accounts. As the 2019 Program Integrity Rule acknowledged, section 1303
of the ACA does not specify the method a QHP issuer must use to comply
with the separate payment requirement.\88\
---------------------------------------------------------------------------
\88\ 84 FR 71674, 71683.
---------------------------------------------------------------------------
To address these concerns, we are proposing amendments to Sec.
156.280(e)(2)(ii) to revert to and codify the policy previously adopted
in the 2016 Payment Notice such that QHP issuers offering coverage of
abortion services for which federal funds are prohibited may have
flexibility in selecting a reasonable method to comply with the section
1303 separate payment requirement. If finalized, acceptable methods for
satisfying the separate payment requirement would be outlined at Sec.
156.280(e)(2)(ii) and would include sending the policy holder a single
monthly invoice or bill that separately itemizes the premium amount for
coverage of such abortion services; sending the policy holder a
separate monthly bill for these services; or sending the policy holder
a notice at or soon after the time of enrollment that the monthly
invoice or bill will include a separate charge for such services and
specify the charge.
We are also proposing a technical change to the section heading of
Sec. 156.280 to more accurately reflect its contents if the revisions
to rule text under Sec. 156.280 are finalized. We propose that it
would instead read, ``Segregation of funds for abortion services.'' We
seek comment on these proposals.
Under the proposed amendments to the regulatory text at Sec.
156.280(e)(2)(ii), issuers would no longer be required to send separate
paper bills or separate electronic communications. Nor would an issuer
electing to send separate bills, or utilizing any of the proposed
acceptable methods for collecting the separate payment, be required to
instruct consumers to pay for the portion of their premium attributable
to coverage of abortion services for which federal funds are prohibited
in a
[[Page 35178]]
separate transaction, or to make efforts to collect these payments
separately.
If the proposed amendments to Sec. 156.280 are finalized, we
anticipate most issuers covering abortion services for which federal
funds are prohibited will decline to send two separate monthly bills,
and will choose to collect separate payments by one of the other
proposed acceptable methods, as those alternatives minimize
administrative complexity for issuers, align with industry billing
practice, are less costly and administratively burdensome, and promote
a more seamless consumer billing and payment experience. We would
encourage any issuer electing to send two separate monthly bills to do
so in a manner that minimizes consumer confusion and promotes
continuity of coverage. For example, if an issuer still chooses to send
two separate monthly bills, we encourage issuers to include both bills
in the same mailing, explain on both bills that the total premium due
is inclusive of the amount attributable to coverage of such abortion
services, and explain that the consumer may pay for both bills in a
single transaction. We also encourage issuers sending separate bills to
explain to the consumer that non-payment of any premium due, including
for the portion of premium attributable to such abortion services,
would continue to be subject to state and federal rules regarding grace
periods to mitigate risk of inadvertent loss of coverage from failure
to pay a portion of the premium due.
Reverting to the proposed policy would provide issuers greater
billing flexibility and allow issuers to bill using one of the proposed
acceptable methods that would eliminate all risk of inadvertent
coverage terminations that could result from consumer confusion due to
receiving two monthly bills (one for a miniscule amount) in connection
with one insurance policy. If the proposed policies in this rule are
finalized, we would discontinue the non-enforcement policies we adopted
in the 2019 Program Integrity Rule and the May 2020 IFC, described
above. These non-enforcement polices, in large part, were intended to
mitigate potential coverage losses resulting from enrollee confusion
that leads to enrollees' failures to pay the separate, small monthly
bill covering abortion services for which federal funds are prohibited.
In announcing these non-enforcement policies, HHS also noted in the
2019 Program Integrity Rule that the opt-out non-enforcement policy was
intended to address commenter concerns regarding insufficient
transparency into whether QHPs include coverage of abortion services
for which federal funds are prohibited and the risk that consumers
could unknowingly purchase QHPs that include such coverage. As part of
this discussion, HHS noted the steps already taken to improve
transparency regarding QHP offerings by making it easier for consumers
to select QHPs that they believe are best suited to their needs and
preferences. For instance, HHS noted that such information is available
during plan selection to more readily identify QHPs that offer coverage
of such abortion services.\89\ This information continues to be
available on HealthCare.gov, providing consumers with the requisite
information to make an informed choice about their plan selections
regarding coverage of such abortion services. Although we acknowledge
that there are some states where there may be no QHP available on the
Exchange that omits coverage for such abortion services, such plan
availability is subject to state law and issuer choice in plan design
as permitted under section 1303 of the ACA.
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\89\ Frequently Asked Questions for Agents, Brokers, and
Assisters Providing Consumers with Details on Plan Coverage of
Certain Abortion Services (November 21, 2018), available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf.
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Section 1303(b)(1)(A)(ii) specifies that an issuer shall determine
whether or not the plan provides coverage for abortion services for
which federal funds are prohibited for the applicable plan year,
expressly providing that issuers are able to determine whether to offer
coverage for such abortion services, subject to state law. We are of
the view that continuing an opt-out non-enforcement policy would
conflict with this flexibility in issuer plan design provided under
section 1303. The opt-out non-enforcement policy also conflicts with
Sec. 147.106(e)(1), which specifies that only at the time of coverage
renewal may issuers modify the health insurance coverage for a product
offered to a group health plan or an individual, as applicable. It also
specifies that any such modification in the individual market must be
consistent with State law and be effective uniformly for all
individuals with that product. Further, the United States District
Court for the Northern District of California cited the opt-out non-
enforcement policy in finding that the 2019 Program Integrity Rule
lacked a reasoned explanation for deviating from the prior acceptable
methods available to QHP issuers for compliance with the separate
payment requirement.\90\ The court explained that inclusion of the opt-
out non-enforcement policy, which was not subject to public comment,
supported the court's conclusion that HHS changed its prior policy
without affording any reasoned explanation for the change. For these
reasons, and given that the separate billing requirements finalized in
the 2019 Program Integrity Rule have been invalidated, these non-
enforcement policies are no longer necessary or feasible long-term, and
are therefore discontinued.
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\90\ California v. U.S. Dep't of Health & Hum. Servs., 473 F.
Supp. 3d 992, 1003 (N.D. Cal. July 20, 2020) (citing Encino
Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016)).
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We note that individual market QHP issuers covering abortion
services for which federal funds are prohibited would still be expected
under these proposals to comply with section 1303 of the ACA and all
applicable requirements codified at Sec. 156.280. This includes
collecting a separate payment from each policy holder per month for an
amount equal to the greater of $1 or the actuarial value of coverage of
abortion services for which federal funds are prohibited, continuing to
ensure that no federal funding is used to pay for coverage of such
abortion services, submitting a segregation plan to the relevant state
insurance regulator, and continuing to segregate funds for coverage of
such abortion services collected from policy holders into a separate
allocation account that is to be used to pay for such abortion
services.
We believe the proposed changes to Sec. 156.280(e)(2)(ii) offer
issuers options for meaningful compliance with section 1303 and ensure
appropriate segregation of funds, without imposing the operational and
administrative burdens of the separate billing regulation and without
causing additional consumer confusion and unintended losses of
coverage. The preamble to the 2019 Program Integrity Rule acknowledged
that receipt by a QHP issuer of a single premium payment for the
entirety of the policy holder's coverage including abortion services
for which federal funds are prohibited did not preclude QHP issuer
compliance with the section 1303 separate payment requirement. Although
the separate billing regulation required QHP issuers to bill separately
and make reasonable efforts to collect the payment separately, it also
specified that QHP issuers would not be permitted to refuse a combined
payment or terminate the policy on the basis of combined payment. The
separate billing policy is ultimately nonessential to QHP issuer
compliance with the separate
[[Page 35179]]
payment requirement in section 1303 of the ACA. Upon receiving a single
premium payment inclusive of the portion of premium attributable to
coverage of such services, the QHP issuer may treat that portion as a
separate payment and disaggregate the amounts into the separate
allocation accounts, consistent with Sec. 156.280(e)(2)(iii).
Therefore, we believe requiring QHP issuers to acquire the separate
payment through sending separate bills and instructing consumers to pay
in separate transactions is more restrictive than necessary, especially
in light of the issuer and stakeholder burden and adverse consumer
impacts the separate billing regulation could impose.
The 2019 Program Integrity Rule detailed the anticipated financial
and operational burdens from the separate billing regulation. Those
burdens are discussed in further detail in section V, ``Collection of
Information Requirements,'' and section VII, ``Regulatory Impact
Analysis,'' of that rule. Those burdens included one-time cost
estimates for issuers and state Exchanges performing premium billing
and payment processing for operational changes such as implementation
of the technical build to implement the necessary system changes to
support separate billing and receipt of separate payments, which would
require significant changes to current billing practice and pose
increased challenges given the mid-plan year implementation timeline.
The anticipated burden also included ongoing annual costs for sending a
separate bill to impacted enrollees, associated record keeping,
customer service, and compliance, as well as annual materials costs
related to printing of and sending the separate bill. We also
acknowledged that the separate billing regulation would impose burden
on State Exchange operations due to one-time technical changes such as
updating online payment portals to accept separate payments and
updating enrollment materials, as well as ongoing annual costs
associated with increased customer service, outreach, and compliance.
The Program Integrity Rule also projected that FFEs would incur
additional costs due to one-time technical changes and increased call
volumes and additional customer services efforts. We also stated that
QHP issuers were likely to consider these new costs when setting
actuarially sound rates and that this would likely lead to higher
premiums for enrollees. We also anticipated increased costs to
consumers for the time required to read and understand the separate
bills and to seek help from customer service if necessary, and
additional time to read and send separate payments in subsequent
months. In total, the projected burden to all issuers, states, State
Exchanges performing premium billing and payment processing, the FFEs,
and consumers totaled $546.1 million in 2020, $232.1 million in 2021,
$230.7 million in 2022, and $229.3 million annually in 2023 and
onwards. It was also anticipated that QHP issuers might consider these
new costs when setting actuarially sound rates and that this could lead
to higher premiums for enrollees.
Upon reassessing the burden, we also believe the consumer confusion
and new logistical obstacles due to the separate billing regulation
would disproportionately burden communities who already face barriers
to accessing care, such as individuals with limited English proficiency
(LEP), individuals with disabilities, rural residents, those with
inconsistent or no access to the internet, those with low levels of
health care system literacy, and individuals within other marginalized
communities. Failure to pay the separate bill entirely due to consumer
confusion could also lead to a complete loss of coverage, further
exacerbating existing health disparities and jeopardizing health
outcomes. The 2019 Program Integrity Rule also acknowledged that the
high burden associated with the separate billing regulation might
result in issuers withdrawing coverage of abortion services for which
federal funds are prohibited altogether to avoid the associated burden,
requiring some enrollees to pay for these services out-of-pocket. Based
on a 2014 study, the average costs to patients for first-trimester
abortion care was $461, and anywhere from $860 to $1,874 for second-
trimester abortion care.\91\ Transferring these costs to enrollees
could disproportionately impact low-income women who may already face
barriers to accessing quality health care due to their socioeconomic
status, gender, sexual orientation, nationality, or race. We believe
proposing repeal of the separate billing regulation would remove these
burdensome requirements and obstacles, promoting health equity.
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\91\ See Roberts, Sarah C.M., Heather Gould, Katrina Kimport,
Tracy A. Weitz, and Diana Greene Foster. ``Out-of-Pocket Costs and
Insurance Coverage for Abortion in the United States.'' Women's
Health Issues, vol. 24, no. 2 (2014): e211-e218.
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The 2019 Program Integrity Rule reasoned that separate billing was
justified to better align with the Congressional intent of section
1303. Although we still believe sending a separate bill to enrollees
for these services is one way in which an issuer may satisfy the
separate payment requirement, we no longer believe it is the only
method contemplated by the plain reading of section 1303 and believe
restricting the acceptable methods for collecting these payments was
unnecessary, especially in light of the substantial anticipated burden
from the separate billing regulation, the risk of inadvertent coverage
terminations that could result from consumer confusion due to receiving
two monthly bills, the stakeholder reliance on the prior acceptable
methods, and federal district court concerns with barriers to
appropriate and timely medical care as well as a lack of corresponding
benefits. Consistent with federal district court orders in Maryland and
California, we revisited the section 1303 provision in which the
separate payment requirement is contained, which is titled
``Establishment of allocation accounts,'' and is in a larger section
titled ``Prohibition on the use of Federal funds.'' \92\ These sections
detail issuer requirements for calculating the actuarial value for the
portion of the premium attributable to coverage of abortion services
for which federal funds are prohibited, requires issuers to collect
separate payments for this portion of the premium, to segregate the
funds, and deposit such funds into separate allocation accounts.
Notably, these sections do not require that issuers must satisfy these
requirements by separately billing policy holders or instructing them
to pay in separate transactions.
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\92\ Section 1303(b)(2) and (b)(2)(B) of the ACA.
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Section 1303 does not specify the method a QHP issuer must use to
collect the separate payment.\93\ We are therefore proposing a policy
that allows issuers to satisfy the separate payment requirement through
methods consistent with section 1303 of the ACA, that imposes no more
burden on issuers, states, Exchanges, and consumers than is necessary,
and that removes unreasonable barriers to obtaining appropriate medical
care.
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\93\ 84 FR 71674, 71683.
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We seek comment on the proposal to repeal the separate billing
regulation and amend the regulatory text at Sec. 156.280(e)(2)(ii) to
codify the prior policy in the 2016 Payment Notice for satisfying the
separate payment requirement in section 1303 of the ACA.
[[Page 35180]]
IV. Provisions of the Proposed Rule for Section 1332 Waivers--
Department of Health and Human Services and Department of the Treasury
A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
Section 1332 of the ACA permits states to apply for a section 1332
waiver to pursue innovative strategies for providing their residents
with access to higher value, more affordable health coverage.
Under section 1332, the Secretary of HHS and the Secretary of the
Treasury (collectively, the Secretaries) may exercise their discretion
to approve a request for a section 1332 waiver only if the Secretaries
determine that the proposal for the section 1332 waiver meets the
following four requirements, referred to as the statutory guardrails:
(1) The proposal will provide coverage that is at least as
comprehensive as coverage defined in section 1302(b) of the ACA and
offered through Exchanges established under title I of the ACA, as
certified by the Office of the Actuary of CMS, based on sufficient data
from the state and from comparable states about their experience with
programs created by the ACA and the provisions of the ACA that would be
waived; (2) the proposal will provide coverage and cost-sharing
protections against excessive out-of-pocket spending that are at least
as affordable for the state's residents as would be provided under
title I of the ACA; (3) the proposal will provide coverage to at least
a comparable number of the state's residents as would be provided under
title I of the ACA; and (4) the proposal will not increase the federal
deficit. The Secretaries retain their discretionary authority under
section 1332 to deny waivers when appropriate given consideration of
the application as a whole, even if an application meets the four
statutory guardrails.
The Departments are also responsible under section 1332 for
monitoring an approved section 1332 waiver's compliance with the
statutory guardrails and for conducting evaluations to determine the
impact of the section 1332 waiver. Specifically, section 1332 requires
that the Secretaries provide for and conduct periodic evaluations of
approved section 1332 waivers.\94\ The Secretaries must also provide
for a process under which states with approved section 1332 waivers
must submit periodic reports concerning the implementation of the
state's waiver program.\95\
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\94\ See section 1332(a)(4)(B)(v) of the ACA.
\95\ See section 1332(a)(4)(B)(iv) of the ACA.
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In October 2018, the Departments issued the 2018 Guidance,\96\
which provided additional guidance for states that wish to submit
section 1332 waiver proposals regarding the Secretaries' application
review procedures, pass-through funding determinations, certain
analytical requirements, and operational considerations.\97\ The 2018
Guidance also included information regarding how the Departments will
apply and interpret the section 1332 statutory guardrails when
evaluating waiver applications. Furthermore, in part 1 of the 2022
Payment Notice final rule,\98\ the Departments finalized the
codification of many of the major policies and interpretations outlined
in the 2018 Guidance into the text of relevant section 1332
implementing regulations.
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\96\ 83 FR 53575 (Oct. 24, 2018).
\97\ The 2018 Guidance superseded guidance issued by the
Departments in December 2015, which similarly provided information
regarding the Secretaries' application review procedures, pass-
through funding determinations, certain analytical requirements,
operational considerations, and interpretations of the statutory
guardrails. See 80 FR 78131, available at https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
\98\ See 86 FR 6138.
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On January 28, 2021, President Biden issued E.O. 14009 directing
the Secretaries and the heads of all other executive departments and
agencies with authorities and responsibilities related to Medicaid and
the ACA to review all existing regulations, orders, guidance documents,
policies, and any other similar agency actions to determine whether
such agency actions are inconsistent with the policy set forth in
section 1 of E.O. 14009.\99\ As part of this review, E.O. 14009
directed agencies to look at demonstrations and waivers, as well as
demonstration and waiver policies that may reduce coverage under or
otherwise undermine Medicaid or the ACA. As such, the Departments have
reviewed both the 2018 Guidance and the policies implemented in part 1
of the 2022 Payment Notice final rule on section 1332 waivers to
determine whether they are inconsistent with the policy intention of
E.O. 14009 to protect and strengthen Medicaid and the ACA and to make
high-quality health care accessible and affordable for every American.
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\99\ 86 FR 7793 (Feb. 2, 2021).
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In addition, on January 20, 2021, President Biden issued the
Executive Order, ``On Advancing Racial Equity and Support for
Underserved Communities Through the Federal Government'' (E.O.
13985),\100\ directing that as a policy matter the federal government
should pursue a comprehensive approach to advancing equity for all,
including people of color and others who have been historically
underserved, marginalized, and adversely affected by persistent poverty
and inequality. As such, the Departments have also reviewed the 2018
Guidance and the policies implemented in part 1 of the 2022 Payment
Notice final rule on section 1332 waivers to assess whether, and to
what extent, these policies may perpetuate systemic barriers to
opportunities and benefits for people of color and other underserved
groups.
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\100\ 86 FR 7009 (Jan. 25, 2021).
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Upon review, the Departments have determined that the 2018 Guidance
and the policies implemented in part 1 of the 2022 Payment Notice final
rule on section 1332 waivers are generally inconsistent with the policy
intentions of E.O. 14009 and E.O. 13985. As explained in part 1 of the
2022 Payment Notice final rule and later in this proposed rule, the
majority of commenters on both the 2018 Guidance and the 2022 Payment
Notice Proposed Rule noted that both the 2018 Guidance and the
incorporation of its guardrail interpretations into regulations could
result in the Departments approving section 1332 waivers that would
result in fewer residents in those states enrolling in comprehensive
and affordable coverage, and that those interpretations do not
represent the best fulfillment of congressional intent behind the
statutory guardrails. After further consideration of these comments as
part of the Departments' reviews under E.O. 14009 and E.O. 13985, the
Departments propose in this rule to modify 31 CFR 33.108(f)(3)(iv)(A-C)
and 45 CFR 155.1308(f)(3)(iv)(A-C) to generally remove the language
incorporating the interpretation of the statutory guardrails first set
forth in the 2018 Guidance into the text of relevant section 1332
regulations that were finalized in part 1 of the 2022 Payment Notice
final rule. In addition, the Departments propose new interpretations
and proposed amendments to regulations to provide supplementary
information about the requirements that must be met for the approval of
a section 1332 waiver, the Secretaries' application review procedures,
certain analytical requirements, operational considerations, the
calculation of pass-through funding, and amendments and extensions of
approved waiver plans. These new proposed policies and interpretations,
if finalized, would supersede those outlined in the 2018 Guidance and,
where applicable, those
[[Page 35181]]
captured in the current section 1332 implementing regulations as
finalized in part 1 of the 2022 Payment Notice final rule.
The Departments are of the view that rescinding the 2018 Guidance,
repealing the previous codification of its guardrail interpretations in
part 1 of the 2022 Payment Notice final rule, and proposing new
policies and interpretations aligns with the Administration's goals to
strengthen the ACA and increase enrollment in comprehensive, affordable
health coverage among the remaining underinsured and uninsured. These
proposals would further advance this Administration's goal to increase
access to coverage in that it would empower states to develop
innovative health coverage options, through section 1332 waivers, that
best fit the states' individual needs and provide coverage to their
residents. The proposals are also intended to provide more information
and clarity regarding the interpretations, processes and procedures the
Departments would apply when reviewing new waiver applications and
waiver amendment and extension requests, as well as making pass-through
funding determinations for approved waivers. All of these proposals are
designed to align with the Administration's commitment to protect and
expand Americans' access to high-quality, comprehensive and affordable
health care coverage and to ensure that systemic barriers to
opportunities and benefits for people of color and other underserved
groups are not perpetuated. In addition, these proposals would further
support the Administration's efforts to build on the ACA to meet the
health care needs created by the COVID-19 PHE, reduce individuals'
health care costs, and make our health care system less complex to
navigate. Through section 1332 waivers, the Departments aim to assist
states with developing health insurance markets that expand coverage,
lower costs, and make high-quality health care accessible for every
American.\101\ In light of E.O. 13985, the Departments also encourage
states to develop waiver proposals that diminish barriers to
opportunities and benefits such as health insurance coverage for people
of color and other underserved groups. For example, states may include
waiver programs that increase plan options for comprehensive coverage,
reduce premiums, improve affordability, as well as address social
determinants of health.
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\101\ https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/15/statement-by-president-joe-biden-on-the-2021-special-health-insurance-enrollment-period-through-healthcare-gov/.
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As under similar waiver authorities,\102\ the Secretaries reserve
the right to further evaluate an approved waiver and suspend or
terminate an approved waiver, in whole or in part, any time before the
date of expiration, if the Secretaries determine that the state
materially has failed to comply with the terms and conditions of the
waiver or the section 1332 guardrails,\103\ laws and regulations,
unless specifically waived.\104\ And they must come into compliance
with any changes in federal law or regulations affecting section 1332
waivers, unless the provision being changed is expressly waived.\105\
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\102\ Section 1115 Waiver Demonstrations have similar authority.
\103\ See 31 CFR 33.120(d) and 45 CFR 155.1320(d) and STC 16 at
https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
\104\ See 31 CFR 33.120(a)(1) and 45 CFR 155.1320(a)(1).
\105\ Ibid.
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1. Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 155.1302)
Regulations at 31 CFR 33.102 and 45 CFR 155.1302 permit, but do not
require, states to submit a single application for a section 1332
waiver and a waiver under one or more of the existing waiver processes
applicable under titles XVIII, XIX, and XXI of the Social Security Act
(the Act), or under any other federal law relating to the provision of
health care items or services, provided that the application is
consistent with the procedures outlined in the 2012 Final Rule,\106\
the procedures for demonstrations under section 1115 of the Act, if
applicable, and the procedures under any other applicable federal law
or regulations under which the state seeks a waiver.
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\106\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
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Similar to the policies outlined in the 2018 Guidance, as well as
in guidance previously published in December 2015 (2015 Guidance), the
Departments' determination of whether a section 1332 waiver proposal
satisfies the statutory guardrails set forth in section 1332 takes into
consideration the projected impact of waivers of certain ACA provisions
made pursuant to the section 1332 waiver. The Departments also consider
related changes to the state's health care system that, under state
law, are contingent only on the approval of the section 1332 waiver.
For example, the Departments, in making their determination, would take
into account the impact of a new, related state-run health benefits
program that, under legislation enacted by the state, would be
implemented only if the section 1332 waiver were approved.
The Departments are not proposing any regulatory changes to 31 CFR
33.102 and 45 CFR 155.1302, but are reiterating through this preamble
the proposed policy relating to the coordinated waiver process so
states understand the process for submission and review of a
coordinated waiver. The Departments are of the view that the policies
outlined in this proposed rule, which are in line with both the 2018
and 2015 Guidance, further advance E.O. 14009 because these policies
aim to protect and strengthen Medicaid and the ACA and to make high-
quality health care accessible and affordable for every American by
specifying how a state may submit a coordinated waiver. Specifically,
under this proposal the Departments would not consider the potential
impact of policy changes that are contingent on further state action,
such as state legislation that is proposed but not yet enacted that
would be in effect during the timeframe for the section 1332 waiver.
For example, the Departments would not consider the potential impact of
state legislation to expand Medicaid that is not yet enacted. The
Departments would also not consider the impact of changes contingent on
other federal determinations, including approval of federal waivers
(such as waivers under titles XVIII, XIX, or XXI of the Act) pursuant
to statutory provisions other than section 1332 of the ACA. Therefore,
under this proposal, the Departments would not take into account
proposed changes to Medicaid or CHIP state plans that require separate
federal approval, such as changes in coverage or federal Medicaid or
CHIP spending that would result from a proposed section 1115
demonstration, regardless of whether the section 1115 demonstration
proposal is submitted as part of a coordinated waiver application with
a section 1332 waiver. Savings accrued under either proposed or current
Medicaid or CHIP section 1115 demonstrations would not be factored into
the assessment of whether a proposed section 1332 waiver meets the
deficit neutrality requirement. The Departments' determination also
would not take into account any proposed changes to the Medicaid or
CHIP state plan that are subject to federal approval.
Under this proposal, the Departments would, however, take into
account changes in Medicaid or CHIP coverage or in federal spending on
Medicaid or CHIP that would result directly from the proposed waiver of
ACA provisions pursuant to section 1332, holding state
[[Page 35182]]
Medicaid and CHIP policies constant. For example, if a state section
1332 waiver would result in more or less Medicaid spending, this impact
would be considered in the Departments assessment of the section 1332
waiver for the deficit neutrality guardrail.
Nothing in this proposed rule alters a state's authority to make
changes to its Medicaid and CHIP policies consistent with applicable
law. In addition, this proposed rule does not alter the Secretary of
HHS' authority or CMS' policy regarding review and approval of section
1115 demonstrations, and states should continue to work with the Center
for Medicaid and CHIP Services (CMCS) on issues relating to section
1115 demonstrations or other Medicaid or CHIP authorities. A state may
submit a coordinated waiver application as provided in 31 CFR 33.102
and 45 CFR 155.1302. The waiver applications included in a coordinated
waiver application would each be reviewed by the applicable agency
component independently according to the federal laws and regulations
that apply to each waiver application.
As the Departments receive and review waiver proposals, the
Departments will continue to examine the types of changes, contingent
on federal approval that will be considered in reviewing section 1332
waiver applications.
2. Section 1332 Application Procedures--Application Timing (31 CFR
33.108(b) and 45 CFR 155.1308(b))
Consistent with regulations at 31 CFR 33.108(b) and 45 CFR
155.1308(b), states are required to submit initial section 1332 waiver
applications sufficiently in advance of the requested waiver effective
date to allow for an appropriate implementation timeline. In this
proposed rule, the Departments are not proposing any regulatory changes
to 31 CFR 33.108(b) and 45 CFR 155.1308(b), but are proposing through
preamble policies related to the timing of initial section 1332 waiver
application submissions that are consistent with policies outlined in
the 2018 Guidance. These proposed policies are intended to help states
understand the requirements for submitting a section 1332 waiver
application sufficiently in advance of the requested waiver effective
date to allow for enough time for federal review and to maintain smooth
operations of the Exchange in the state. In addition, these proposed
policies are intended to help states allow for enough time for
implementation of their section 1332 waiver plan, and for affected
stakeholders, including issuers of health insurance plans that may be
affected by the waiver plan, to take necessary actions based on the
approval of the waiver plan, particularly when the waiver impacts
premium rates, if approved. As discussed elsewhere in this proposed
rule, some section 1332 waiver plans may require operational changes or
accommodations to the federal information technology platform or its
operations, and these proposed policies would help ensure the state and
the Departments are able to sufficiently plan in advance of the
effective waiver date. The proposed policies are as follows:
The Departments strongly encourage states interested in applying
for section 1332 waivers, including coordinated waivers with section
1115 demonstrations, to engage with the Departments promptly for
assistance in formulating an approach to a section 1332 waiver that
meets the requirements of section 1332.
In order to help ensure timely decision-making regarding approval,
states should plan to submit their initial section 1332 waiver
applications with enough time to allow for public comment (as required
by 31 CFR 33.112, 31 CFR 33.116(b), 45 CFR 155.1312, and 45 CFR
155.1316(b)), review by the Departments, and implementation of the
section 1332 state plan as outlined in the waiver application. For
example, for section 1332 waivers that impact the individual market,
submission before or during the first quarter of the year prior to the
year health plans affected by the section 1332 waiver would take effect
would generally permit sufficient time for review and implementation of
both the waiver application and affected plans, depending on the
complexity of the proposal. It is important to note that the
Departments cannot guarantee approval of a section 1332 waiver
submission or a state's request for expedited review and will continue
to review applications consistent with the timeline requirements
outlined in the regulations and statute.\107\ The Departments encourage
states to work with the Departments on formulating timeframes that take
into account the states' legislative sessions and timing of health plan
rate filings if the section 1332 waiver is projected to have any impact
on premiums. If a state's section 1332 waiver application includes
potential operational changes or accommodations to the federal
information technology platform or its operations, additional time for
review and implementation of the waiver application may be needed.
States should engage with the Departments early in the process to
determine whether federal infrastructure can accommodate technical
changes that support their requested flexibilities, as discussed
elsewhere in this preamble.
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\107\ 31 CFR 33.108 and 45 CFR 155.1308; Section 1332(d)(1) of
the ACA.
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The Departments seek comment on these proposals.
3. Section 1332 Application Procedures--Statutory Guardrails (31 CFR
33.108(f)(3)(iv) and 45 CFR 155.1308(f)(3)(iv))
The Departments are proposing to modify 31 CFR 33.108(f)(3)(iv)(A-
C) and 45 CFR 155.1308(f)(3)(iv)(A-C) to remove the interpretations of
the comprehensiveness, affordability, and coverage guardrails that were
codified in part 1 of the 2022 Payment Notice final rule. In addition,
as detailed later in this section of this preamble, the Departments are
proposing to adopt new policies and interpretations with regard to the
statutory guardrails that, if finalized, would supersede and rescind
those outlined in both the 2018 Guidance and part 1 of the 2022 Payment
Notice final rule. These proposed guardrail interpretations are largely
in line with those in the 2015 Guidance. The Departments are also
proposing to modify 31 CFR 33.108(f)(3)(iv) and 45 CFR
155.1308(f)(3)(iv) to remove the reference, as codified under part 1 of
the 2022 Payment Notice final rule, to interpretive guidance published
by the Departments.
The 2018 Guidance aimed to allow states to pursue section 1332
waivers with the goals of increasing consumer choice and promoting
private market competition. In particular, in the 2018 Guidance, the
Secretaries explained that their interpretations of the statutory
guardrails were meant to remove restrictions that could limit consumer
choice by allowing states to provide access to health insurance
coverage at different price points and benefits levels, including less
comprehensive plans that states considered to be better suited to
consumer needs. Specifically, the 2018 Guidance interpreted the
comprehensiveness and affordability guardrails to be satisfied if
comprehensive and affordable coverage were available to consumers,
without regard to who would actually enroll in such coverage. In
addition, the 2018 Guidance instructed that these two guardrails must
be evaluated in conjunction. The 2018 Guidance explained that it is not
enough to make available some coverage that is comprehensive but not
affordable, while making available other coverage that is affordable
but not comprehensive. Thus,
[[Page 35183]]
the Departments stated that a state plan would comply with the
comprehensiveness and affordability guardrails, consistent with the
statute, if it makes coverage that is both comprehensive and affordable
available to a comparable number of otherwise qualified residents as
would have had such coverage available absent the waiver.
In the 2018 Guidance, the Departments also stated that section
1332(b)(1)(C) of the ACA requires that a state's plan under a section
1332 waiver will provide coverage ``to at least a comparable number of
its residents'' as would occur without the waiver.\108\ The 2018
Guidance further noted that the text of the coverage guardrail
provision of the statute is silent as to the type of coverage that is
required. Accordingly, to enable state flexibility and to promote
choice of a wide range of coverage to ensure that consumers can enroll
in coverage that is right for them, in the 2018 Guidance, the
Departments would consider section 1332 waivers to satisfy the coverage
guardrail requirement if at least as many state residents were
projected to be enrolled in comprehensive and less comprehensive health
plans combined under the waiver as would be enrolled without the
waiver. Under that interpretation, the Departments could approve a
state's section 1332 waiver designed to promote residents' enrollment
in less comprehensive or less affordable coverage. As long as a
comparable number of residents were projected to be covered as would
have been covered absent the waiver, the coverage guardrail would be
met.
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\108\ 83 FR at 53577.
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The policies and interpretations in the 2018 Guidance were in line
with the Administration's priorities at the time. In particular, the
2018 Guidance noted that the Secretaries would consider favorably
section 1332 waiver applications that advance specific principles
including: Providing increased access to affordable private market
coverage, encouraging sustainable spending growth, fostering state
innovation, supporting and empowering those in need, and promoting
consumer-driven health care. The 2018 Guidance, including the
interpretations of the guardrails announced therein, aimed to advance
these principles and noted that the Secretaries intended to provide
states with maximum flexibility within the law to innovate, empower
consumers, and expand higher value and more affordable coverage
options.
In part 1 of the 2022 Payment Notice final rule, the Departments
finalized the 2018 Guidance interpretation of the guardrails into the
text of the section 1332 implementing regulations. Specifically, the
Departments finalized regulatory language in 31 CFR 33.108(f)(3)(iv)(A)
and 45 CFR 155.1308(f)(3)(iv)(A), explaining that the Departments would
consider the comprehensive coverage guardrail to be met by a state
section 1332 waiver plan if the plan would provide consumers access to
coverage options that are at least as comprehensive as the coverage
options provided without the waiver, to at least a comparable number of
people as would have had access to such coverage absent the waiver. The
final rule also added language to 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR
155.1308(f)(3)(iv)(B) providing that the Departments would consider the
affordability requirement to be met by a state section 1332 waiver plan
that would provide consumers access to coverage options that are at
least as affordable as the coverage options provided without the
waiver, to at least a comparable number of people as would have had
access to such coverage absent the waiver. These modifications also
provided, consistent with the 2018 Guidance and the Administration's
priorities at the time, that the Departments would consider the
comprehensiveness and affordability guardrails met if a section 1332
waiver plan provides access to coverage that is as comprehensive and
affordable as coverage forecasted to have been available in the absence
of the waiver, and is projected to be available to a comparable number
of people under the waiver, as opposed to the actual number of people
enrolled in comprehensive and affordable coverage as under the 2015
Guidance. The final rule also added regulatory language to 31 CFR
33.108(f)(3)(iv)(C) and 45 CFR 155.1308(f)(3)(iv)(C) providing that,
for purposes of the coverage guardrail, ``coverage'' refers to minimum
essential coverage as defined in 26 U.S.C. 5000A(f) and 26 CFR 1.5000A-
2, and health insurance coverage as defined in 45 CFR 144.103.
A majority of commenters on both the 2018 Guidance and the 2022
Payment Notice proposed rule were concerned that the 2018 Guidance and
its proposed codification would undermine the congressional intent
underlying the section 1332 guardrails and effectively codify policy
they believe is based on a misapplication of the statutory guardrails.
The commenters were concerned that the focus on the interpretation of
the availability of comprehensive and affordable coverage in the 2018
Guidance would result in fewer residents enrolled in comprehensive and
affordable coverage. Other commenters asserted that the interpretation
of the availability of comprehensive and affordable coverage for the
coverage guardrail allows for a disjointed application of the
guardrails whereby a state can meet the coverage guardrail, while its
waiver plan reduces the overall comprehensiveness and affordability of
coverage in a state. A few commenters recommended rescinding and
abandoning the 2018 Guidance completely in favor of returning to the
prior interpretation of the guardrails described in the 2015 Guidance.
In addition, some commenters also expressed concern that alternative
coverage options, which would qualify for the purposes of meeting the
coverage guardrail under the 2018 Guidance, are not subject to the same
limitations as comprehensive coverage in terms of consumer protections.
For instance, alternative plan options generally lack financial
limitations like out-of-pocket maximums and annual/lifetime limits,
and, if consumers covered by alternative plan options experience
unexpected, potentially-catastrophic health events, they are likely to
pay substantially more out-of-pocket to cover incurred costs. Further,
commenters also raised concerns that alternative plans can terminate or
deny coverage based on health status, which would tend to affect high-
risk individuals. Coupled with the diminished affordability of
comprehensive coverage, this possibility puts high-risk individuals at
great risk of going without effective coverage.
In this proposed rule, the Departments are proposing changes to 31
CFR 33.108 and 45 CFR 155.1308 to rescind the interpretations of the
statutory guardrails announced in the 2018 Guidance and codified in
part 1 of the 2022 Payment Notice final rule. The decision to rescind
those interpretations is based on further consideration of commenters'
concerns that the proposals outlined in this rule are a better
interpretation of section 1332(b)(1)(A)-(C), and the Departments'
reviews under E.O. 14009, which was intended to strengthen the ACA and
expand high-quality health care and E.O. 13985, which was intended to
pursue a comprehensive approach to advancing equity for all. After
further consideration, the Departments have concluded that the
interpretations of section 1332's comprehensiveness, affordability, and
coverage guardrails
[[Page 35184]]
codified in part 1 of the 2022 Payment Notice final rule could permit
section 1332 waivers that do not result in a comparable number of
residents overall being enrolled in coverage that is at least as
affordable and as comprehensive as they would have enrolled in without
the waiver. As discussed in more detail later in this section, the
Departments' proposed changes are intended to align with the
President's instruction in E.O. 14009 to adopt policies to strengthen
the implementation of the ACA and remove any barriers that those
policies may create for expanding coverage, lowering costs, and making
high-quality health care accessible for every American. Furthermore, in
line with E.O. 14009, this Administration is focused on ensuring high-
quality health care is accessible and affordable for every American. As
such, the Departments are of the view that the comprehensiveness and
affordability guardrails should focus on the types of coverage
residents actually purchase, rather than the types of coverage
residents have access to.
Upon further consideration of these issues, the Departments have
determined that the guardrail interpretations codified in part 1 of the
2022 Payment Notice final rule are inconsistent with the Departments'
goal of ensuring individuals are enrolled in affordable, comprehensive
coverage and not just that there is generalized access to such
coverage. The plans that could be offered to individuals under section
1332 waivers applying the interpretations codified in the part 1 of the
2022 Payment Notice final rule could allow state section 1332 waivers
that would result in more individuals enrolling in medically
underwritten plans \109\ that offer only limited benefits, charge
higher out-of-pocket costs, or both, which is inconsistent with the
goal of the E.O. 14009 to reduce barriers for expanding comprehensive
affordable coverage. Allowing more individuals to be in medically
underwritten plans could also have a disparate impact on vulnerable
populations, especially people of color and those who are in poverty,
those who are underserved, and those with pre-existing conditions,
which is inconsistent with the goal of E.O. 13985.
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\109\ Health insurance companies medically underwrite policies
to try to ascertain prospective enrollees' health statuses when they
are applying for health insurance coverage in order to determine
whether to offer these individuals coverage, or at what price, and
with what exclusions or limits, to offer coverage. (https://www.healthcare.gov/glossary/medical-underwriting/) Since 2014,
however, medical underwriting is no longer permitted in the
individual or small group markets with respect to non-grandfathered
health insurance coverage, due to ACA rules. Instead, all such
individual and small group plans are guaranteed issue. Guaranteed
issue is a requirement that health plans must permit any individual
to enroll regardless of health status, age, gender, or other factors
that might predict the use of health services. Guaranteed issue does
not limit how much individuals can be charged if they enroll in
coverage. https://www.healthcare.gov/glossary/guaranteed-issue/.
However, the ACA's community rating protections prevent health
insurers from varying premiums within a geographic area based on
age, gender, health status or other factors with respect to non-
grandfathered health insurance coverage. https://www.healthcare.gov/glossary/community-rating/.
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Additionally, the Departments are of the view that the section 1332
waiver proposals that could be available under the guardrail
interpretations in the 2018 Guidance and codified in part 1 of the 2022
Payment Notice final rule may also not be in line with E.O. 14009. For
example, the Section 1332 State Relief and Empowerment Waiver Concepts
Discussion Paper (November 2018 Discussion Paper) \110\ included waiver
concepts that were intended to foster discussion with states by
illustrating how states might take advantage of new flexibilities
provided in the 2018 Guidance. The Departments are of the view that
some of these waiver concepts which rely upon the 2018 Guidance
interpretation of the guardrails, are not in line with E.O. 14009 goals
to protect and strengthen Medicaid and the ACA and to make high-quality
health care accessible and affordable for every American. For example,
the Adjusted Plan Options section 1332 waiver concept included in the
2018 Discussion Paper would permit states to have the flexibility to
provide state financial assistance for non-QHPs. A section 1332 waiver
proposal that includes this concept could potentially increase coverage
in non-QHPs and potentially decrease enrollment in comprehensive
coverage plans by allowing consumers to use a state subsidy towards
catastrophic plans, individual market plans that are not QHPs, or plans
that do not fully meet ACA requirements. In reviewing section 1332
waiver policies in light of E.O. 14009, this waiver concept is
inconsistent with the goal of E.O. 14009, as it would likely result in
consumers enrolling in non-QHPs and plans that do not fully meet ACA
requirements, thereby increasing barriers for expanding comprehensive
affordable coverage and potentially decreasing enrollment in
comprehensive coverage. Further, commenters raised concerns in response
to the 2018 Guidance that expressed generalized concern that the 2018
Guidance permitted alternative coverage options that can be
underwritten and do not meet EHB standards. In addition, commenters
were concerned that measures taken to facilitate coverage in
alternative plan options (for example, allowing the use of subsidies
for such coverage) would result in fewer comprehensive plans on the
market, and that those comprehensive plans would become less
affordable. In light of the concerns raised by commenters and the
E.O.s, the Departments are proposing new policies in this proposed rule
that would allow states flexibility to develop waiver plans to meet
their needs and expand coverage, lower costs, and increase access to
high-quality health care with comprehensive benefits.
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\110\ https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/Waiver-Concepts-Guidance.PDF.
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Given the current policy goals, as well as the Departments' further
consideration of comments received on the 2022 Payment Notice, the
Departments are proposing new policies for how the Departments would
evaluate whether a state's section 1332 waiver plan satisfies each of
the guardrails, as outlined in more detail later in this section.
Overall, the Departments are proposing that the ``coverage'' to be
provided and evaluated in each guardrail should be interpreted the same
way in each sub-paragraph of Section 1332(b)(1)(A)-(C) for consistency.
Thus, the Departments are proposing in 31 CFR 33.108(f)(3)(iv)(A)
through (C) and 45 CFR 155.1308(f)(3)(iv)(A) through (C) to interpret
``provide'' and ``coverage'' to mean the same thing for the coverage,
comprehensiveness, and affordability guardrails and that, to be
approved, a waiver must be projected to provide coverage that is as
comprehensive and affordable as would have been provided absent the
waiver and to the same number of residents.
Similarly, given the current COVID-19 PHE, this Administration is
focused on the response to the PHE and on helping increase enrollment
in comprehensive, affordable health insurance coverage. The ARP made
numerous changes to the ACA to expand access to health insurance
coverage and lower costs. Specifically, the ARP temporarily expanded
eligibility for and increased the value of APTC/PTC, enabling
previously ineligible consumers to qualify for help paying for health
coverage and increasing assistance to eligible individuals already
enrolled in Exchange plans. These changes have already increased
enrollment through
[[Page 35185]]
the Exchanges,\111\ and the Departments are of the view that this law
will continue to increase enrollment through the Exchanges as the ARP's
enhanced subsidies lower the costs of coverage for millions of
Americans and change the incentives to seek and maintain comprehensive
health insurance coverage. In addition, increased affordability and
expansion of access to comprehensive health insurance coverage will
better support enrollment of historically uninsured communities--
especially those who have faced significant health disparities--in such
coverage, thereby improving access to health care during and beyond the
COVID-19 PHE. This Administration has also sought to strengthen the ACA
and increase enrollment by directing the establishment of a special
enrollment period, which is open from February 15, 2021 through August
15, 2021, for Exchanges using the HealthCare.gov platform (COVID
special enrollment period). Over 1.2 million Americans have already
signed up for coverage on HealthCare.gov during the COVID special
enrollment period.\112\ To promote the special enrollment period, CMS
is spending approximately $100 million on outreach and education,
including broadcast, radio, and digital advertising to reach the
uninsured, and also launched parallel outreach efforts through
stakeholders and partners to increase education and awareness across
communities on the COVID special enrollment period.\113\ Earlier this
year, CMS made approximately $2.3 million in additional funding
available to current Navigator grantees in FFEs to support the
outreach, education, and enrollment efforts around the COVID special
enrollment period.\114\ Additionally, CMS recently announced that it is
making $80 million in grant funding available to the FFE Navigator
program for the 2022 plan year through the 2021 Navigator Notice of
Funding Opportunity.\115\ This represents an eight-fold increase in
funding from the previous year. Taken together, these policies,
including the increased subsidies available under the ARP, the COVID
special enrollment period, and the increased federal investment in the
FFE Navigator program, have already led to, and are expected to
continue to lead to, increased enrollment through the Exchanges.
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\111\ 2021 Marketplace Special Enrollment Period Report, June
14, 2021 https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2.
\112\ Data reflects enrollment as of May 31, 2021: https://www.hhs.gov/about/news/2021/06/14/four-ten-new-consumers-spend-10-or-less-month-healthcaregov-coverage-following-implementation-american-rescue-plan-tax-credits.html.
\113\ On January 28, 2021, CMS announced $50 million for
outreach and marketing for the COVID special enrollment period:
https://www.cms.gov/newsroom/fact-sheets/2021-special-enrollment-period-response-covid-19-emergency. On April 1, 2021 HHS announced
an additional $50 million to further bolster the COVID special
enrollment period campaign and promote the lower premiums under the
ARP: https://www.cms.gov/newsroom/press-releases/hhs-secretary-becerra-announces-reduced-costs-and-expanded-access-available-marketplace-health.
\114\ https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period.
\115\ https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0.
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The Departments are of the view that rescinding the 2018 Guidance,
repealing the previous codification of its guardrail interpretations in
part 1 of the 2022 Payment Notice final rule, and proposing new
policies and interpretations aligns with the Administration's goals to
strengthen the ACA and increase enrollment in comprehensive, affordable
health coverage among the remaining underinsured and uninsured. The
Departments are also of the view that during a pandemic, as Americans
continue to battle COVID-19 and millions of Americans are facing
uncertainty and experiencing new health problems, it is even more
critical that Americans have meaningful access to high-quality,
comprehensive and affordable health coverage options.
The Departments are also proposing to modify 31 CFR
33.108(f)(3)(iv) and 45 CFR 155.1308(f)(3)(iv) to remove the reference,
as codified under part 1 of the 2022 Payment Notice final rule, to
interpretive guidance published by the Departments. This proposal is in
line with the Departments' efforts to provide supplementary information
about the requirements that must be met for the approval of a section
1332 waiver and the Secretaries' application review procedures. Because
the Departments are of the view that the 2018 Guidance and the
incorporation of its guardrail interpretations into regulations could
result in the Departments approving section 1332 waivers that would
result in fewer residents in those states enrolling in comprehensive
and affordable coverage, that those interpretations do not represent
the best fulfillment of congressional intent behind the statutory
guardrails, that they are inconsistent with the policy intentions of
E.O. 14009 and E.O. 13985, and that it is appropriate to address
concerns raised by commenters on the 2018 Guidance, the Departments
propose to remove the reference to the 2018 Guidance.
Under this proposal the Departments would rely upon the statute and
regulations, as well as the Departments' interpretive policy statements
as outlined in the applicable notice and comment rulemaking, in
reviewing section 1332 waiver applications.
The Departments seek comment on these proposals. The Departments
also solicit comment on whether there are policies that meet the
statutory guardrails of section 1332 waivers that the Departments could
consider that would encourage states to find innovative ways to use
section 1332 waivers to focus on equity and expand access to
comprehensive coverage for their residents. In addition, the
Departments considered whether any affected parties could be impacted
by the proposed changes in policy interpretations outlined in this
rule. The Departments are of the view that both states with approved
section 1332 waivers and states that are considering section 1332
waivers would be minimally impacted by these proposed changes in
policy. The Departments solicit comment on the impact to stakeholders.
a. Comprehensive Coverage (31 CFR 33.108(f)(3)(iv)(A) and 45 CFR
155.1308(f)(3)(iv)(A))
The Departments are proposing to modify the regulations at 31 CFR
33.108(f)(3)(iv)(A) and 45 CFR 155.1308(f)(3)(iv)(A) to remove the
comprehensiveness guardrail interpretations as adopted in part 1 of the
2022 Payment Notice final rule. In addition, the Departments are
proposing, through preamble, policies and interpretations relating to
the requirements for the comprehensive coverage guardrail that are
similar to the policies and interpretations outlined in the 2015
Guidance. Specifically, the Departments are proposing to modify the
regulations at 31 CFR 33.108(f)(3)(iv)(A) and 45 CFR
155.1308(f)(3)(iv)(A) such that to satisfy the comprehensive coverage
requirement, the Departments, as applicable, must determine that the
section 1332 waiver will provide coverage that is at least as
comprehensive overall for residents of the state as coverage absent the
waiver. The Departments' proposed policies and interpretations related
to the comprehensiveness guardrail are as follows:
To meet the comprehensiveness guardrail, health care coverage under
a section 1332 waiver would be required to be forecast to be at least
as
[[Page 35186]]
comprehensive overall for residents of the state as coverage absent the
waiver.
Comprehensiveness refers to the scope of benefits provided by the
coverage and would be measured by the extent to which coverage meets
the requirements for EHBs as defined in section 1302(b) of the ACA and
offered through Exchanges established by Title I of ACA, or, as
appropriate, Medicaid or CHIP standards. The impact on all state
residents would be considered, regardless of the type of coverage they
would have had absent the section 1332 waiver.
Comprehensiveness would be evaluated by comparing coverage under
the section 1332 waiver to the state's EHB benchmark (for the
applicable plan year), selected by the state (or if the state does not
select a benchmark, the default base-benchmark plan) pursuant to 45 CFR
156.100, as well as to, in certain cases, the coverage provided under
the state's Medicaid or CHIP programs.\116\ A section 1332 waiver would
not satisfy the comprehensiveness requirement if the waiver decreases:
(1) The number of residents with coverage that is at least as
comprehensive as the benchmark in all ten EHB categories; (2) for any
of the ten EHB categories, the number of residents with coverage that
is at least as comprehensive as the benchmark in that category; or (3)
the number of residents whose coverage includes the full set of
services that would be covered under the state's Medicaid or CHIP
programs, holding the state's Medicaid and CHIP policies constant. That
is, the section 1332 waiver could not decrease the number of
individuals with coverage that satisfies EHB requirements, the number
of individuals with coverage of any particular category of EHB, or the
number of individuals with coverage that includes the services covered
under the state's Medicaid or CHIP programs.
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\116\ In April 2018, HHS provided states with substantially more
options in the selection of an EHB-benchmark plan. As finalized in
the 2019 Payment Notice, starting in the 2020 plan year, HHS
provided states with additional flexibility in how they select their
EHB-benchmark plan. Instead of being limited to 10 options, states
are now be able to choose from the 50 EHB-benchmark plans used for
the 2017 plan year in other states or select specific EHB
categories, such as drug coverage or hospitalization, from among the
categories used for the 2017 plan year in other states.
Additionally, states are able to build their own set of benefits
that could potentially become their EHB-benchmark plan, subject to
certain scope of benefits requirements.
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Assessment of whether a section 1332 waiver proposal meets the
comprehensiveness requirement would also take into account the effects
across different groups of state residents, and, in particular, effects
on those vulnerable and underserved residents, including low-income
individuals, older adults, those with serious health issues or who have
a greater risk of developing serious health issues, and people of color
and others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality.\117\ A section
1332 waiver would be highly unlikely to be approved by the Secretaries
under the proposed interpretation outlined in this rule if the waiver
would reduce the comprehensiveness of coverage provided to these types
of vulnerable or underserved groups, even if the waiver maintained
comprehensiveness in the aggregate. Under the proposed interpretation
in this rule, this condition generally must be forecast to be met in
each year that the section 1332 waiver would be in effect.
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\117\ These groups include individuals who belong to underserved
communities that have been denied such treatment, such as Black,
Latino, and Indigenous and Native American persons, Asian Americans
and Pacific Islanders and other persons of color; members of
religious minorities; lesbian, gay, bisexual, transgender, and queer
(LGBTQ+) persons; persons with disabilities; persons who live in
rural areas; and persons otherwise adversely affected by persistent
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the
section 1332 waiver application must include analysis and supporting
data that establishes that the section 1332 waiver satisfies this
requirement. This includes an explanation of how the benefits offered
under the section 1332 waiver differ from the benefits provided absent
the waiver (if the benefits differ at all) and how the state determined
the benefits to be as ``comprehensive.''
As discussed previously in this section of this preamble, the
policies and interpretations of the comprehensiveness guardrail
outlined in the 2018 Guidance and codified in part 1 of the 2022
Payment Notice final rule, were in line with the Administration's
priorities at the time to promote private market competition and
increase consumer choice. Under those policies, analysis of
comprehensiveness and affordability of coverage under a section 1332
waiver focused on the nature of coverage that is made available to
state residents (access to coverage), rather than on the coverage that
residents actually purchase. The plans that could be offered to
individuals under section 1332 waivers as codified in part 1 of the
2022 Payment Notice final rule could therefore allow for more
individuals to enroll in medically underwritten plans that only offer
limited benefits, which is inconsistent with the goal of E.O. 14009 to
reduce barriers for expanding comprehensive affordable coverage.
In response to the proposal in the 2022 Payment Notice Proposed
Rule, commenters raised concerns that alternative plan options (which
could include medically underwritten plans) can terminate or deny
coverage based on health status, which would tend to affect high-risk
individuals. Commenters asserted that, this possibility puts
individuals with greater medical needs at risk of going without
effective coverage for their health care needs. Some commenters
expressed concern that the potential market effects would have a
disparate impact on vulnerable populations, especially low-income
consumers and those with pre-existing conditions. Additionally, these
commenters expressed concern that a disparate impact on any particular
group would not necessarily cause the Departments to deny a section
1332 waiver application, even though the impact on vulnerable
population groups would be taken into account.
The Departments are of the view that the current interpretation of
the comprehensiveness guardrail is inconsistent with the goal of E.O.
14009 to reduce barriers for expanding comprehensive affordable
coverage. The Departments are also of the view that the current
interpretation of the guardrail is inconsistent with the goal of E.O.
13985 to pursue a comprehensive approach to advancing equity and could
create barriers to health coverage for people of color and underserved
groups.
[[Page 35187]]
The proposed changes in this rule are intended to align with the
President's instructions in E.O. 14009 and E.O. 13985 to adopt policies
to strengthen the implementation of the ACA and ensure high-quality
health care coverage is accessible and affordable for every American.
The Departments are of the view that the proposals outlined in this
proposed rule would further support states providing consumers with
comprehensive, high-quality health care coverage that will better
protect consumers with pre-existing conditions and will help protect
consumers from unexpected and expected medical needs. Further, the
proposals outlined in this proposed rule would further the goal that
consumers with pre-existing conditions, particularly racial and ethnic
minorities who are 1.5 to 2.0 times more likely than whites to have
major chronic diseases \118\ and as such pre-existing conditions,
maintain comprehensive coverage.
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\118\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3794652/
#:~:text=more%20chronic%20diseases.-
,Racial%2Fethnic%20minorities%20are%201.5%20to%202.0%20times%20more%2
0likely,seem%20to%20be%20getting%20worse.
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The Departments seek comment on these proposed policies and
interpretations related to the comprehensiveness guardrail. The
Departments are of the view that this proposal would have minimal
impact on both states with section 1332 waivers under development and
states with approved waivers. The Departments solicit comment on the
impact to stakeholders.
b. Affordability (31 CFR 33.108(f)(3)(iv)(B) and 45 CFR
155.1308(f)(3)(iv)(B))
The Departments are proposing to modify the regulations at 31 CFR
33.108(f)(3)(iv)(B) and 45 CFR 155.1308(f)(3)(iv)(B) to remove the
affordability guardrail interpretations as codified in part 1 of the
2022 Payment Notice final rule. In addition, the Departments are
proposing, through preamble, policies and interpretations relating to
the requirements for the affordability coverage guardrail that are
similar to the policies and interpretations outlined in the 2015
Guidance. Specifically, the Departments are proposing to modify the
regulations at 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR
155.1308(f)(3)(iv)(B) such that to satisfy the affordability
requirement, the Departments, as applicable, must determine that the
section 1332 waiver would provide coverage that is at least as
affordable overall for residents of the state as coverage absent the
waiver. The Departments' proposed policies and interpretations related
to the affordability guardrail are as follows:
To meet the affordability guardrail, health care coverage under the
section 1332 waiver would be required to be forecast to be as
affordable overall for state residents as coverage absent the waiver.
Affordability refers to state residents' ability to pay for health
care expenses relative to their incomes and would generally be measured
by comparing each individual's expected out-of-pocket spending for
health coverage and services to their incomes. Out-of-pocket spending
for health care includes premiums (or equivalent costs for enrolling in
coverage), and spending such as deductibles, co-pays, and co-insurance,
associated with the coverage or direct payments for health care.
Spending on health care services that are not covered by a health plan
or health coverage could also be taken into account if they are
affected by the section 1332 waiver proposal. The impact on all state
residents would be required to be considered, regardless of the type of
coverage they would have had absent the section 1332 waiver. Under the
proposed policies and interpretation in this rule, this condition
generally must be forecast to be met in each year that the section 1332
waiver would be in effect.
Section 1332 waivers would be evaluated not only based on how they
affect affordability on average, but also on how they affect the number
of individuals with large health care spending burdens relative to
their incomes. Increasing the number of state residents with large
health care spending burdens would cause a section 1332 waiver proposal
to fail the affordability requirement, even if the waiver would
increase affordability for many other state residents. Given that
eligibility for comprehensive coverage among the uninsured varies
across racial and ethnic groups, the Departments' assessment of whether
the proposal meets the affordability requirement would also take into
account the effects across different groups of state residents, and, in
particular, effects on vulnerable or underserved residents, including
low-income individuals, older adults, those with serious health issues
or who have a greater risk of developing serious health issues, and
people of color and others who have been historically underserved,
marginalized, and adversely affected by persistent poverty and
inequality.\119\ A section 1332 waiver would be highly unlikely to be
approved by the Secretaries under the proposed policies and
interpretations set forth in this rule if it reduces affordability for
these vulnerable or underserved groups, even if the waiver would
maintain affordability in the aggregate. In addition, a section 1332
waiver would fail to meet the affordability guardrail if it would
reduce the number of individuals with coverage that provides a minimal
level of protection against excessive cost sharing. In particular,
section 1332 waivers that reduce the number of people with insurance
coverage that provides both an actuarial value equal to or greater than
60 percent and an out-of-pocket maximum that complies with section
1302(c)(1) of the ACA, would fail to meet this guardrail under the
proposed policies and interpretations set forth in this rule. Section
1332 waivers that reduce the number of people with coverage that meets
the affordability requirements set forth in sections 1916 and 1916A of
the Act, as codified in 42 CFR part 447, subpart A, while holding the
state's Medicaid policies constant would also fail under the
affordability guardrail.
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\119\ These groups include individuals who belong to underserved
communities that have been denied such treatment, such as Black,
Latino, and Indigenous and Native American persons, Asian Americans
and Pacific Islanders and other persons of color; members of
religious minorities; lesbian, gay, bisexual, transgender, and queer
(LGBTQ+) persons; persons with disabilities; persons who live in
rural areas; and persons otherwise adversely affected by persistent
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the
section 1332 waiver application must include analysis and supporting
data that establishes that the waiver satisfies this requirement. This
includes information on estimated individual out-of-pocket costs
(premium and out-of-pocket expenses for deductibles, co-payments, co-
insurance, co-payments and plan differences) by income, health
expenses, health insurance status, and age groups, absent the section
1332 waiver and with the waiver. The expected changes in premium
contributions and other out-of-pocket costs and the combined impact of
changes in these components should be identified separately. The
application should also describe any changes in employer contributions
to health coverage or in wages expected under the section 1332 waiver.
The application should identify any types of individuals for whom
affordability of coverage would be reduced by the section 1332 waiver.
[[Page 35188]]
As discussed previously in this section of this preamble, the
affordability guardrail interpretation outlined in the 2018 Guidance
and codified in part 1 of the 2022 Payment Notice final rule aimed to
increase consumer choice to allow states to provide access to health
insurance coverage at different prices points and benefits levels. The
Departments are of the view that this interpretation of the
affordability guardrail is inconsistent with the goal of E.O. 14009 to
reduce barriers for expanding comprehensive affordable coverage. The
current interpretation could allow for more individuals, including
potentially those with pre-existing conditions, to enroll in medically
underwritten plans that charge higher out-of-pocket costs, which is
inconsistent with the goal of the E.O. to reduce barriers for expanding
comprehensive affordable coverage. The proposed changes in this rule
are intended to align with the President's instruction in E.O. 14009 to
adopt policies to strengthen the implementation of the ACA and ensure
high-quality health care is accessible and affordable for every
American. The Departments are of the view that the proposals outlined
in this proposed rule would further support states providing consumers
with comprehensive, high-quality affordable health care coverage that
will better protect consumers with pre-existing conditions, and will
help protect consumers from unexpected and expected medical needs.
The Departments seek comment on these proposed policies and
interpretations related to the affordability guardrail. The Departments
are of the view this proposal would have minimal impact on both states
with section 1332 waivers under development and states with approved
waivers. The Departments solicit comment on the impact to stakeholders.
c. Coverage (31 CFR 33.108(f)(3)(iv)(C) and 45 CFR
155.1308(f)(3)(iv)(C))
The Departments are proposing to modify the regulations at 31 CFR
33.108(f)(3)(iv)(C) and 45 CFR 155.1308(f)(3)(iv)(C) to remove the
coverage guardrail interpretations codified in part 1 of the 2022
Payment Notice final rule. In addition, the Departments are proposing,
through preamble, policies and interpretations relating to the
requirements for the coverage guardrail that are similar to the
policies and interpretations outlined in the 2015 Guidance.
Specifically, the Departments are proposing to modify the regulations
at 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 155.1308(f)(3)(iv)(B) such
that to satisfy the scope of coverage requirement, the Departments, as
applicable, must determine that the section 1332 waiver would provide
coverage to a comparable number of state residents under the waiver as
would have coverage absent the waiver. The Departments' proposed
policies and interpretations related to the coverage guardrail are as
follows:
To meet the coverage guardrail, a comparable number of state
residents would be required to be forecast to have coverage under the
section 1332 waiver as would have had coverage absent the waiver.
Coverage refers to minimum essential coverage as defined in 26
U.S.C. 5000A(f). For this purpose, ``comparable'' would mean that the
forecast of the number of covered individuals is no less than the
forecast of the number of covered individuals absent the section 1332
waiver. This condition generally would be required to be forecast to be
met in each year that the section 1332 waiver would be in effect.
The impact on all state residents would be considered, regardless
of the type of coverage they would have had absent the section 1332
waiver. For example, while a section 1332 waiver may not change the
terms of a state's Medicaid coverage or change existing Medicaid
demonstration authority, changes in Medicaid enrollment--whether
increases or decreases--that result from a section 1332 waiver, holding
the state's Medicaid policies constant, would be considered in
evaluating the number of residents with coverage under a waiver.
Assessment of whether the section 1332 waiver application covers a
comparable number of individuals would also take into account the
effects across different groups of state residents, and, in particular,
effects on vulnerable or underserved residents, including low-income
individuals, older adults, those with serious health issues or who have
a greater risk of developing serious health issues, and people of color
and others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality.\120\ A section
1332 waiver would be highly unlikely to be approved by the Secretaries
if it would reduce coverage for these populations, even if the waiver
would provide coverage to a comparable number of residents overall.
Finally, analysis under the coverage requirement would need to take
into account whether the section 1332 waiver sufficiently prevents gaps
in or discontinuations of coverage.
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\120\ These groups include individuals who belong to underserved
communities that have been denied such treatment, such as Black,
Latino, and Indigenous and Native American persons, Asian Americans
and Pacific Islanders and other persons of color; members of
religious minorities; lesbian, gay, bisexual, transgender, and queer
(LGBTQ+) persons; persons with disabilities; persons who live in
rural areas; and persons otherwise adversely affected by persistent
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the
section 1332 waiver application must include analysis and supporting
data that establishes that the waiver satisfies this requirement,
including information on the number of individuals covered by income,
health expenses, health insurance status, and age groups, under current
law and under the waiver, including year-by-year estimates. The
application should identify any types of individuals, including
vulnerable and underserved individuals, who are more or less likely to
be covered under the waiver than under current law.
As discussed previously in this section of this preamble, under the
coverage guardrail interpretation outlined in the 2018 Guidance and
codified in part 1 of the 2022 Payment Notice final rule, the guardrail
is met if at least as many residents are enrolled in health coverage,
including both comprehensive and less comprehensive health plans, as
would be enrolled absent the waiver. That interpretation was intended
to promote choice among a wide range of plans to ensure that consumers
can enroll in coverage that is right for them. As such, the
interpretations set forth in the 2018 Guidance and codified in part 1
of the 2022 Payment Notice final rule permits states to provide access
to less comprehensive or less affordable coverage as an additional
option for their residents to choose. Under the current policy, as long
as a comparable number of residents are projected to be covered as
would have been covered absent the section 1332 waiver, the coverage
guardrail would be met. The Departments are of the view that this
interpretation of the coverage guardrail is inconsistent with the goal
of E.O. 14009 to reduce barriers for expanding comprehensive affordable
coverage. The current interpretation could allow for more individuals
to enroll in medically underwritten plans that offer limited benefits,
charge higher out-of-pocket costs, or both, which is inconsistent with
the goal of the E.O. to reduce barriers for expanding comprehensive,
[[Page 35189]]
high-quality, affordable coverage. The proposed changes in this rule
are intended to align with the President's instruction in E.O. 14009 to
adopt policies to strengthen the implementation of the ACA and ensure
high-quality health care is accessible and affordable for every
American. The Departments are of the view that the proposals outlined
in this proposed rule would further support states providing consumers
with comprehensive, high-quality affordable health care that will
better protect consumers with pre-existing conditions and will help
protect consumers from unexpected and expected medical costs.
The Departments seek comment on these proposed policies and
interpretations related to the coverage guardrail. The Departments are
of the view that this proposal would have minimal impact on both states
with section 1332 waivers under development and states with approved
waivers. The Departments solicit comment on the impact to stakeholders.
d. Deficit Neutrality (31 CFR 33.108(f)(3)(iv)(D) and 45 CFR
155.1308(f)(3)(iv)(D))
The Departments are not proposing to modify the regulations at 31
CFR 33.108(f)(3)(iv)(D) and 45 CFR 155.1308(f)(3)(iv)(D) for the
deficit neutrality guardrail, but are proposing, through preamble,
policies and interpretations relating to the requirements for the
deficit neutrality guardrail consistent with the policies outlined in
the 2015 and 2018 Guidance. The Departments' proposed policies and
interpretations related to the deficit neutrality guardrail are as
follows:
Under the deficit neutrality guardrail, the projected federal
spending net of federal revenues under the section 1332 waiver is
required to be equal to or lower than projected federal spending net of
federal revenues in the absence of the waiver.
The estimated effect on federal revenue would be required to
include all changes in income, payroll, or excise tax revenue, as well
as any other forms of revenue (including user fees), that would result
from the proposed section 1332 waiver. Estimated effects would include,
for example, changes in the amounts the federal government pays in PTC,
small business tax credits, or other health coverage tax credit;
changes in the amount of employer shared responsibility payments and-
excise taxes on high-cost employer-sponsored plans collected by the
federal government; and changes in income and payroll taxes resulting
from changes in tax exclusions for employer-sponsored insurance and in
deductions for medical expenses.
The effect on federal spending would include all changes in federal
financial assistance (PTC, small business tax credits, or CSRs) and
other direct spending, such as changes in Medicaid spending (while
holding the state's Medicaid policies constant) that would result from
the changes made through the proposed section 1332 waiver. Projected
federal spending under the section 1332 waiver proposal would also need
to include all administrative costs to the federal government,
including any changes in IRS administrative costs, federal Exchange
administrative costs, or other administrative costs associated with the
waiver or alleviated by the waiver.
Under the proposed policies and interpretations outlined in this
rule, section 1332 waivers must not increase the federal deficit over
the period of the waiver (which may not exceed 5 years unless renewed)
or in total over the 10-year budget plan submitted by the state as part
of the section 1332 waiver application. Consistent with the policies in
the 2015 Guidance and in the 2018 Guidance, the 10-year budget plan
would be required to describe for both the period of the waiver and for
the 10-year budget the projected federal spending and changes in
federal revenues under the section 1332 waiver and the projected
federal spending and changes in federal revenues in the absence of the
waiver for each year of the 10 years.
The 10-year budget plan should assume the section 1332 waiver would
continue permanently, but should not include federal spending or
savings attributable to any period outside of the 10-year budget
window. A variety of factors, including the likelihood and accuracy of
projected spending and revenue effects and the timing of these effects,
would be considered when evaluating the effect of the section 1332
waiver on the federal deficit. A section 1332 waiver that increases the
deficit in any given year is less likely to meet the proposed deficit
neutrality requirement than one that does not.
Upon consideration, the approach outlined in part 1 of the 2022
Payment Notice final rule is consistent with E.O. 14009 as it will not
reduce coverage or otherwise undermine the ACA and Medicaid.
The Departments seek comment on these proposed policies and
interpretations related to the deficit neutrality guardrail. The
Departments believe this proposal would have minimal impact on both
states with section 1332 waivers under development and states with
approved waivers. The Departments solicit comment on the impact to
stakeholders.
4. Section 1332 Application Procedures (31 CFR 33.108(f)(4) and 45 CFR
155.1308(f)(4))
a. Actuarial and Economic Analysis (31 CFR 33.108(f)(4)(i-iii) and 45
CFR 155.1308(f)(4)(i-iii))
As required under 31 CFR 33.108(f)(4)(i-iii) and 45 CFR
155.1308(f)(4)(i-iii), states must include actuarial analyses and
actuarial certifications, economic analyses, and the data and
assumptions used to demonstrate and support the state's estimates that
the proposed section 1332 waiver will comply with the statutory
guardrails. The Departments are not proposing any regulatory changes to
31 CFR 33.108(f)(4)(i-iii) and 45 CFR 155.1308(f)(4)(i-iii), but are
proposing, through preamble, policies relating to the requirements for
the actuarial and economic analyses that are similar to the policies
outlined in the 2015 and 2018 Guidance. We are proposing these policies
to help ensure that the Departments have the appropriate and necessary
information to measure the impact of waivers on the guardrails,
particularly related to coverage. This information is especially
important in light of the goal of E.O. 14009 to provide more
comprehensive affordable coverage to consumers. In addition, the
Departments encourage states to include in their analysis whether the
proposed section 1332 waiver would increase health equity in line with
E.O. 13985. The proposed policies are as follows:
Consistent with the 2015 and 2018 Guidance, the determination of
whether a proposed section 1332 waiver meets the requirements under
section 1332 and the calculation of the pass-through funding amount
would be made using generally accepted actuarial and economic analytic
methods, such as micro-simulation. The analysis would rely on
assumptions and methodologies that are similar to those used to produce
the baseline and policy projections included in the most recent
President's Budget (or Mid-Session Review), but adapted as appropriate
to reflect state-specific conditions. As provided in 31 CFR
33.108(f)(4)(i) and 45 CFR 155.1308(f)(4)(i), the state must include
actuarial analyses and actuarial certifications to support the state's
estimates that the proposed section 1332 waiver will comply with the
comprehensive coverage requirement, the affordability requirement, and
the scope of coverage requirement. In this
[[Page 35190]]
proposed rule, the Departments propose that, consistent with the 2018
Guidance, these actuarial analyses and certifications should be
conducted by a member of the American Academy of Actuaries.
The Departments' analysis of whether a proposed section 1332 waiver
meets the requirements under section 1332 would be based on state-
specific estimates of the current level and distribution of population
by the relevant economic and demographic characteristics, consistent
with the 2015 and 2018 Guidance, including income and source of health
coverage. It would generally use federal estimates of population
growth, and economic growth as published in the Analytical Perspectives
volume released as part of the President's Budget (https://www.whitehouse.gov/omb/budget/Analytical_Perspectives) and health care
cost growth (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index.html?redirect=/NationalHealthExpendData/) to project the initial
state variables through the 10-year budget plan window. However, in
limited circumstances where it is expected that a state will experience
substantially different trends than the nation as a whole in the
absence of a section 1332 waiver, the Secretaries may determine that
state-specific assumptions will be used.
Consistent with the 2018 Guidance and largely similar to the 2015
Guidance, estimates of the effect of the section 1332 waiver would
assume, in accordance with standard estimating conventions, that
macroeconomic variables like population, output, and labor supply are
not affected by the waiver. However, estimates would take into account,
as appropriate, other changes in the behavior of individuals,
employers, and other relevant entities induced by the section 1332
waiver where applicable, including employer decisions regarding what
coverage (and other compensation) they offer and individual decisions
regarding whether to take up coverage. The same state-specific and
federal data, assumptions, and model are used to calculate
comprehensiveness, affordability, and coverage, and relevant state
components of federal taxes and spending under the section 1332 waiver
and under current law.
The analysis and information submitted by the state as part of the
section 1332 waiver application would conform to these standards as
outlined in this proposed rule. Consistent with the 2015 and 2018
Guidance, the application would describe all modeling assumptions used,
sources of state-specific data, and the rationale for any deviation
from federal forecasts. A state may be required under 31 CFR
33.108(f)(4)(vii) and 45 CFR 155.1308(f)(4)(vii) to provide to the
Secretaries copies of any data used for their section 1332 waiver
analyses that are not publicly available so that the Secretaries can
independently verify the analysis produced by the state.
In this proposed rule, the Departments propose that, consistent
with the 2018 Guidance, for each of the guardrails, the state would
clearly explain its estimates with and without the section 1332 waiver.
The actuarial and economic analyses would be required to compare
comprehensiveness, affordability, coverage, and deficit neutrality with
and without the section 1332 waiver. The deficit neutrality analysis
would specifically examine net federal spending and revenues under the
section 1332 waiver to those measures absent the waiver (the baseline)
for each year of the waiver. If the state is submitting a section 1332
waiver application for less than a 5-year period, the actuarial
analysis could be submitted for the period of the waiver. The
Departments, in accordance with their regulations, could request
additional information or data in order to conduct their assessments.
The state should also provide a description of the models used to
produce these estimates, including data sources and quality of the
data, key assumptions, and parameters for the section 1332 waiver.
Consistent with the 2018 Guidance, the Departments are not proposing to
prescribe any particular method of actuarial analysis to estimate the
potential impact of a section 1332 waiver. However, the state should
explain its modeling in sufficient detail to allow the Secretaries to
evaluate the accuracy of the state's modeling and the comprehensiveness
and affordability of the coverage available under the state's section
1332 waiver proposal. As permitted under 31 CFR 33.108(g) and 45 CFR
155.1308(g), the state may be required to provide, upon request by the
Secretaries, data or other information that it used to make its
estimates, including an explanation of the assumptions used in the
actuarial analysis.
The Departments seek comment on these proposals.
b. Implementation Timeline and Operational Considerations (31 CFR
33.108(f)(4)(iv) and 45 CFR 155.1308(f)(4)(iv))
As required under 31 CFR 33.108(f)(4)(iv) and 45 CFR
155.1308(f)(4)(iv), states must include in their applications for
initial approval of a section 1332 waiver a detailed draft timeline for
the state's implementation of the proposed waiver. In this proposed
rule, the Departments are not proposing any regulatory changes to 31
CFR 33.108(f)(4)(iv) and 45 CFR 155.1308(f)(4)(iv). Rather, the
Departments are proposing the operational considerations in preamble
that states should take into account when developing their waiver
application, waiver plan, and implementation timeline. Specifically,
the Departments are proposing these operational considerations to
provide additional information regarding how HHS and the IRS may be
able to support a state in implementing a section 1332 waiver plan so
states can take this information into consideration as it relates to
their implementation timeline. These proposals would help to ensure
that the Departments have the appropriate and necessary information to
measure the impact of proposed waivers on the statutory guardrails,
particularly related to coverage. This information is especially
important in light of the goal of E.O. 14009 to provide more
comprehensive affordable coverage to consumers. In addition, the
Departments encourage states to include in their analysis whether the
proposed section 1332 waiver would increase health equity in line with
E.O. 13985. Upon consideration, the approach proposed with regard to
operational considerations is revised from the 2018 Guidance with
regard to the use of the Exchange information technology platform (the
federal platform) and IRS operational considerations to maintain smooth
operations of the Exchange consistent with E.O. 14009 and this
Administration's goals to protect and strengthen Medicaid and the ACA
and to make high-quality health care accessible and affordable for
every American.
The Departments seek comment on these proposals.
i. Use of Federal Platform Technology
HHS operates the Federal platform utilized by FFEs and by some
State Exchanges for eligibility and enrollment functions. For
technical, operational, and fiscal efficiency, the Federal platform is
generally designed to support uniform administration across
[[Page 35191]]
the states that utilize it. With that noted, HHS would be open to
inquiries and further discussion with states that are developing
section 1332 waiver proposals and are interested in potential technical
collaboration. For example, over the past few years HHS has offered
assistance to states implementing state-based reinsurance
programs.\121\ Currently, states can request that the federal
government assist with the calculation of issuers' eligible state
reinsurance payments based on the state reinsurance parameters as part
of the state's approved section 1332 waiver plan. Under this
arrangement, states are still responsible for making reinsurance
payments to issuers and otherwise administering and overseeing their
programs.
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\121\ As of plan year 2021, HHS is providing this support for
six states: Colorado, Delaware, Maryland, New Hampshire, North
Dakota, and Pennsylvania.
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States that are interested in this assistance should notify HHS
early in the process about the state's interest and the state's
parameters (that is, claims cost-based, conditions-based, or other) for
HHS to assess the feasibility of providing this support. Should a final
proposal involve any customized or specialized federal technical or
operational capabilities, states would be responsible for funding the
development and operation of these capabilities under the
Intergovernmental Cooperation Act (ICA).\122\ Under the ICA, a federal
agency generally may provide certain technical and specialized services
to state governments, so long as the state covers the full costs of
those services. Accordingly, where a state intends to rely on HHS for
technical services related to its section 1332 waiver proposal, the
state would be required to cover HHS's costs. For example, states
implementing state-based reinsurance programs that request technical or
specialized services from HHS with respect to calculating state
reinsurance payments are responsible for the federal costs associated
with providing this service, including development, implementation,
maintenance, operations, and customer support. For this reason, under
this proposal, should HHS and a state agree to such technical or
specialized services to support an approved section 1332 waiver plan,
the Departments would not consider costs for HHS services covered under
the ICA as an increase in federal spending resulting from the state's
waiver plan for purposes of the deficit neutrality analysis.
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\122\ Public Law 90-577 found here: https://www.govinfo.gov/content/pkg/STATUTE-82/pdf/STATUTE-82-Pg1098.pdf.
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As noted in the preamble of this proposed rule for the deficit
neutrality guardrail, costs associated with changes to federal
administrative processes that are not covered under the ICA would be
taken into account in determining whether a waiver application
satisfies the deficit neutrality requirement. Regulations at 31 CFR
33.108(f)(4) and 45 CFR 155.1308(f)(4), require that such costs be
included in the 10-year budget plan submitted by the state. As specific
section 1332 waiver proposals are submitted, HHS would work closely
with states to determine which federal costs are covered under the ICA
(and thus are not subject to deficit neutrality guardrail), and which
are not covered under the ICA (and thus are subject to the deficit
neutrality guardrail).
ii. IRS Functionality
Certain changes that affect IRS administrative processes may make a
section 1332 waiver proposal infeasible for the Departments to
accommodate. At this time, the IRS generally is not able to administer
different sets of federal tax rules for different states. As a result,
while a state may propose to entirely waive the application of one or
more of the federal tax provisions listed in section 1332 for taxpayers
in the state, it is generally not feasible to design a section 1332
waiver that would require the IRS to administer a program that alters
these provisions for taxpayers in the state.
In some limited circumstances, the IRS may be able to accommodate
small adjustments to the existing systems for administering federal tax
provisions. However, it is generally not feasible to have the IRS
administer a different set of PTC eligibility or PTC computation rules
for individuals in a particular state. Thus, states contemplating a
waiver proposal that includes a modified version of a federal tax
provision could consider waiving the provision entirely and creating a
subsidy program administered by the state as part of a section 1332
waiver proposal.
In addition, a section 1332 waiver proposal that partly or
completely waives one or more federal tax provisions in a state may
create administrative costs for the IRS. As noted in the preamble for
the deficit neutrality guardrail of this proposed rule, costs
associated with changes to federal administrative processes would be
taken into account in determining whether a waiver application
satisfies the deficit neutrality requirement. Regulations at 31 CFR
33.108(f)(4) and 45 CFR 155.1308(f)(4), require that such costs be
included in the 10-year budget plan submitted by the state. States
contemplating to waive any part of a federal tax provision should
engage with the Departments early in the section 1332 waiver
application process to assess whether the waiver proposal is feasible
for the IRS to implement, and, if applicable, to assess the
administrative costs to the IRS of implementing the waiver proposal.
5. Public Input on Waiver Proposals (31 CFR 33.112 and 45 CFR 155.1312)
Section 1332(a)(4)(B)(i) of the ACA, and regulations at 31 CFR
33.112 and 45 CFR 155.1312, require states to provide a public notice
and comment period for a section 1332 waiver application sufficient to
ensure a meaningful level of public input prior to submitting an
application. In this proposed rule, the Departments are not proposing
any regulatory changes to 31 CFR 33.112 and 45 CFR 155.1312. Under the
current requirements, as part of the state's public notice and comment
period, a state with one or more federally-recognized tribes must
conduct a separate process for meaningful consultation with such
tribes.\123\ In addition, a state must make available, at the beginning
of its public notice and comment period, through its website or other
effective means of communication, a public notice that includes all of
the information outlined in 31 CFR 33.112(b) and 45 CFR 155.1312(b).
The state must also update this information, as appropriate. After
issuance of this notice and prior to submission of a new section 1332
waiver application, the state must conduct public hearings and provide
interested parties an opportunity to learn about and comment on the
contents of the state's section 1332 waiver application.\124\ Because
section 1332 waiver applications may vary significantly in their
complexity and breadth, the regulations provide states with flexibility
in determining the length of the comment period required to allow for
meaningful and robust public engagement. Consistent with federal civil
rights law, including Section 1557 of the ACA, Section 504 of the
Rehabilitation Act of 1973, and Title II of the Americans with
Disabilities Act, section 1332 waiver applications must be posted
online in a manner that is accessible to individuals with disabilities.
To assist with ensuring website accessibility, states may look to
[[Page 35192]]
national standards issued by the Architectural and Transportation
Barriers Compliance Board (often referred to as ``section 508''
standards''),\125\ or alternatively, the World Wide Web Consortium's
Web Content Accessibility Guidelines (WCAG) \126\ 2.0 Level AA
standards.
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\123\ See 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2).
\124\ See 31 CFR 33.112(c) and 45 CFR 155.1312(c).
\125\ For more information on 508 standards see here: https://section508.gov/manage/program-roadmap.
\126\ For more information, see the WCAG website at http://www.w3.org/TR/WCAG20/.
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Through this preamble, the Departments are proposing policies and
interpretations for the state public notice requirements. More
specifically, the Departments propose to maintain the current standard
that the state comment period for a section 1332 waiver application
should generally be no less than 30 days.\127\ The Departments are of
the view that a general standard requiring a minimum 30 day comment
period will be sufficient to allow for meaningful and robust public
engagement on a state's waiver application and reiterate that a longer
period may be appropriate for complex proposed waiver plans.
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\127\ Notwithstanding this proposal, we clarify that states with
approved waivers and states seeking approval for proposed waivers
would continue to have flexibility to submit requests to the
Departments to modify certain public participation requirements
during the COVID-19 PHE. See 31 CFR 33.118 and 45 CFR 155.1318. Also
see the November 2020 IFC, 85 FR 71142. As detailed below, in this
rulemaking, the Departments propose to extend similar flexibilities
during future emergent situations.
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Section 1332(a)(4)(B)(iii) of the ACA and its implementing
regulations \128\ also require the federal government to provide a
public notice and comment period, once the Secretaries receive an
application. The period must be sufficient to ensure a meaningful level
of public input and must not impose requirements that are in addition
to, or duplicative of, requirements imposed under the Administrative
Procedure Act, or requirements that are unreasonable or unnecessarily
burdensome with respect to state compliance.\129\ Under existing
regulations, 31 CFR 33.108(f) and 45 CFR 155.1308(f), a submitted
section 1332 waiver application will not be deemed received until the
Secretaries have made the preliminary determination that the
application is complete. As with the comment period described in this
preamble, the length of the federal comment period should reflect the
complexity of the section 1332 waiver proposal and the Departments
similarly propose that the federal comment period should also generally
not be less than 30 days.\130\
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\128\ See 31 CFR 33.116 and 45 CFR 155.1316.
\129\ See section 1332(a)(4)(B)(iii) of the ACA, 31 CFR
33.116(b) and 45 CFR 155.1316(b).
\130\ Notwithstanding this proposal, the Departments clarify
that states with approved waivers and states seeking approval for
proposed waivers would continue to have flexibility to submit
requests to the Departments to modify certain public participation
requirements during the COVID-19 PHE. See 31 CFR 33.118 and 45 CFR
155.1318. Also see the November 2020 IFC, 85 FR 71142. As detailed
below, in this rulemaking, the Departments propose to extend similar
flexibilities during future emergent situations.
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The Departments seek comment on these proposals.
6. Modification From the Normal Public Notice Requirements (31 CFR
33.118, 31 CFR 33.120, 45 CFR 155.1318, and 45 CFR 155.1320)
In the November 2020 IFC,\131\ the Departments revised regulations
to set forth flexibilities in the public notice requirements and post
award public participation requirements for waivers under section 1332
during the COVID-19 PHE. In this proposed rule, the Departments are
proposing to extend these changes beyond the COVID-19 PHE to allow
similar flexibilities in the event of future natural disasters; PHEs;
or other emergent situations that threaten consumers' access to health
insurance coverage, consumers' access to health care, or human life.
The Departments propose to consider a situation to be ``emergent'' if
it is both unforeseen and urgent. The Departments are not proposing any
changes or soliciting further comments at this time with respect to the
flexibility made available in the November 2020 IFC during the COVID-19
PHE. The Departments further clarify that states with approved section
1332 waivers and states seeking approval for proposed waivers will
continue to have flexibility to submit requests to the Departments to
modify certain public participation requirements during the COVID-19
PHE.\132\
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\131\ 85 FR 71142 See https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
\132\ See 85 FR 71142.
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In the 2022 Payment Notice proposed rule,\133\ CMS similarly
proposed an extension of COVID-19 policy flexibilities, specifically
the calculation of plan average premium and state average premium
requirements for extending future premium credits (``temporary premium
credits''), which was originally published in the November 2020
IFC.\134\ In part 2 of the 2022 Payment Notice final rule, HHS
finalized these policies to extend beyond the COVID-19 PHE, to be
available, if permitted by HHS, during a future declared PHE.\135\ In
developing the policies in this rulemaking, the Departments considered
extending the section 1332 flexibilities adopted in the November 2020
IFC only to future declared PHEs, but are of the view that these
flexibilities, as proposed in this proposed rule to be available on a
broader basis in different times of emergent situations, will allow
states to use or modify their waivers to respond to state or local
emergent situations that may not rise to the level of a national
declared PHE. The Departments are of the view that this best aligns
with the overall statutory purpose and goals for section 1332 waivers,
which are meant to allow states to craft their own unique solutions to
respond to the specific health care needs in their respective markets.
If the Departments were to limit these flexibilities only to future
declared national PHEs, states may not be able to utilize or modify
their section 1332 waivers as a tool to address state or local emergent
situations or state designated emergencies which may similarly threaten
consumers' access to health insurance coverage, consumers' access to
health care, or human life.
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\133\ See 85 FR at 78597-78598 and 78608-78609.
\134\ 85 FR 54820.
\135\ 86 FR at 24182-24183 and 24202-24203.
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In addition, the flexibilities outlined in this proposed rule are
similar to those available under section 1115 demonstrations. Existing
regulations at 42 CFR 431.416(g), relating to demonstration programs
under section 1115 of the Act, provide that CMS may waive, in whole or
in part, the state and federal public notice requirements to expedite a
decision on a proposed 1115 demonstration or 1115 demonstration
extension request that addresses a natural disaster, PHE, or other
sudden emergency threat to human life. The Departments are of the view
that using a similar standard for section 1332 waivers will provide
states the necessary flexibility to enable them to quickly respond to
various emergent situations. For example, some states have used
flexibilities for section 1115 demonstrations in emergent situations to
address threats to human life such as mudslides and wildfires which
were state designated emergencies.
The Secretaries value the importance of the public input process,
but also intend to propose to provide reprieve from certain
requirements, where appropriate, in emergent situations. Allowing the
Secretaries to modify the public notice and post award requirements, as
proposed in this rule, would allow states to seek emergency relief in
support of the development of
[[Page 35193]]
quick and innovative ways to ensure consumers across the country have
access to health care coverage in the face of unforeseen threats to
that coverage. As was noted in November 2020 IFC, HHS and the
Department of the Treasury are concerned that past trends that threaten
the stability of the individual market risk pool may return, leading
some issuers to cease offering coverage on the Exchanges in some states
and counties and leading other issuers to increase their rates, leaving
some geographic areas with limited or no affordable Exchange coverage
options. Permitting the Secretary of HHS and the Secretary of the
Treasury to modify the public notice procedures, in part, will help
states seeking section 1332 waivers to address such circumstances more
quickly and develop innovative ways to ensure consumers have access to
affordable health care coverage. Specifically, in this proposed rule,
the Departments propose to modify 31 CFR 33.118 and 45 CFR 155.1318 to
broaden the Secretaries' authority to modify, in part, the otherwise
applicable public notice procedures to expedite a decision on a
proposed section 1332 waiver request that is submitted or would
otherwise become due during emergent situations, when a delay would
undermine or compromise the purpose of the proposed waiver request and
be contrary to the interests of consumers. The amendments to these
regulations further clarify that these proposed flexibilities would be
available in future natural disasters; PHEs; and other emergent
situations that threaten consumers' access to health insurance
coverage, consumers' access to health care, or human life, rather than
being limited to only the duration of the COVID-19 PHE. These
amendments could also allow states to better utilize section 1332
waivers in emergent situations.
The Departments also propose to modify 31 CFR 33.120(c)(2) and 45
CFR 155.1320(c)(2) to provide the Secretaries with similar authority to
modify, in part, otherwise applicable post award public notice
requirements for an approved waiver outlined in 31 CFR 33.120(c) and 45
CFR 155.1320(c) when the application of the post award public notice
procedures would be contrary to the interests of consumers during a
natural disaster; PHE; or other emergent situations that threaten
consumers' access to health insurance coverage, consumers' access to
health care, or human life, rather than limiting this flexibility only
to the duration of the COVID-19 PHE. These proposals expand on policies
published in the November 2020 IFC that are limited to the COVID-19
PHE.
a. Public Notice Procedures and Approval (31 CFR 33.118 and 45 CFR
155.1318)
Section 1332(a)(4)(B) of the ACA provides that the Secretaries
shall issue regulations providing a process for public notice and
comment at the state level, including public hearings, and a process
for providing public notice and comment at the federal level after the
section 1332 waiver application is received by the Secretaries, that
are both sufficient to ensure a meaningful level of public input.
Current regulations at 31 CFR 33.112 and 45 CFR 155.1312 specify state
public notice and participation requirements for proposed section 1332
waiver requests, and 31 CFR 33.116(b) and 45 CFR 155.1316(b) specify
the public notice and comment period requirements under the
accompanying federal process.
As explained in the November 2020 IFC, the Departments recognize
that the current section 1332 waiver regulations regarding state and
federal public notice procedures and comment period requirements may
impose barriers for states pursuing a proposed waiver request during an
emergent situation, such as the COVID-19 PHE or a future natural
disaster; PHE; or other emergent situation that threatens consumers'
access to health insurance coverage, consumers' access to health care,
or human life. It is the mission of the Departments to enhance and
protect the health and well-being of all Americans. As such, the
Departments are proposing to extend the existing flexibilities codified
in regulations to protect public health and access to health insurance
coverage and care during the COVID-19 PHE to also apply in the event of
a future emergent situation, such as a natural disaster; a PHE; or
other emergent situations that threaten consumers' access to health
insurance coverage, consumers' access to health care, or human life.
These flexibilities have been important during the COVID-19 PHE and
support efforts to prevent the spread of COVID-19 by limiting the need
for in-person gatherings related to section 1332 waivers during the
PHE. Extending these flexibilities beyond the COVID-19 PHE to future
emergent situations is important to similarly help states as they may
face uncertainty as to whether their waiver request will be approved in
time, given the otherwise applicable state and federal public notice
procedures or public participation requirements, to expeditiously
reform their health insurance markets and to protect consumers during a
future emergent situation. Some states may not consider more robust
changes because they are concerned that the current section 1332 waiver
application requirements are too time-consuming or burdensome to pursue
during a future emergency or other emergent situation. Therefore, the
Departments are of the view that providing similar flexibility to
modify certain public notice procedures and participation requirements
during a future emergent situation will protect public health and
health insurance markets, and will increase flexibility and reduce
burdens for states seeking to use section 1332 waivers as a means of
innovation for providing coverage, lowering premiums, and improving
their health care markets.
Permitting the Secretaries to modify the public notice procedures,
in part, when a delay would undermine or compromise the purpose of the
proposed section 1332 waiver request and be contrary to the interests
of consumers will help states seeking section 1332 waivers to address
such circumstances more quickly to ensure consumers have access to
affordable health care coverage throughout the emergent situation. As
such, the Departments are of the view that, if certain safeguards are
met, it is in the best interest of the public to provide states
applying for section 1332 waivers with the option to request to modify
public notice procedures during an emergent situation. Based on the
Departments' experience with the current COVID-19 PHE, the Departments
are of the view that it is appropriate and reasonable to propose to
make similar flexibilities available in future emergent situations.
The Departments are therefore proposing to modify 31 CFR 33.118(a)
and 45 CFR 155.1318(a) to provide that the Secretaries may modify, in
part, the state public notice requirements specified in 31 CFR
33.112(a)(1), (b), (c), and (d) and 45 CFR 155.1312(a)(1), (b), (c),
and (d) and the federal public notice requirements specified at 31 CFR
33.116(b) and 45 CFR 155.1316(b) to expedite a decision on a proposed
section 1332 waiver request during an emergent situation, when a delay
would undermine or compromise the purpose of the proposed waiver
request and would be contrary to the interests of consumers. The
proposed amendments to 33 CFR 33.118(a) and 45 CFR 155.1318(a) further
specify that these flexibilities would be limited to emergent
situations, including natural disasters; PHEs; or other emergent
situations that threaten consumers'
[[Page 35194]]
access to health insurance coverage, consumers' access to health care,
or human life.
As noted earlier in this section of the preamble, the existing
flexibility made available in the November 2020 IFC \136\ for the
COVID-19 PHE will continue to apply. The Departments also clarify that,
similar to the November 2020 IFC, this rule does not propose to allow
states to waive 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2), which
requires states to conduct a separate process for meaningful
consultation with federally-recognized tribes. The Departments note
that tribal consultation is subject to separate requirements in
accordance with Executive Order 13175,\137\ which mandates the
establishment of regular and meaningful consultation and collaboration
with tribal officials in the development of federal policies that have
tribal implications.
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\136\ See 85 FR 71142, https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
\137\ See 85 FR 71142, 71178.
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In addition, the Departments clarify that a state cannot use this
flexibility to request to eliminate public notice and participation
procedures. Instead, this is a targeted proposal intended to extend the
existing COVID-19 PHE flexibilities to future emergent situations to
remove potential barriers and allow both the federal government and
states flexibility to respond to emergent situations as they unfold. It
is limited to permitting states to request to modify, in part, certain
otherwise applicable public notice and participation requirements.
Examples of the public notice and participation procedures that
currently apply that, under this proposal, a state may seek to have
waived or modified during a future emergent situation include the
requirement that states notify the public and hold hearings prior to
submitting an application, that the state hold more than one public
hearing in more than one location, and that the Departments provide for
public notice and comment after an application is determined to be
complete. States may also seek to modify the state and/or federal
comment periods to be less than 30 days and to host public hearings
virtually rather than in-person.
In addition, the Departments are of the view that these
flexibilities are necessary to allow states flexibility to respond to
rapid changes in the event of a future emergent situation and note that
these proposals align with existing flexibilities available for public
health programs that do not apply to section 1332 waivers. For example,
when the President declares a disaster or emergency under the Stafford
Act or the National Emergencies Act and the Secretary of HHS declares a
PHE under section 319 of the Public Health Service Act, section 1135 of
the Act allows the Secretary of HHS to temporarily waive or modify
certain Medicare, Medicaid, and CHIP requirements to ensure: (1)
Sufficient health care items and services are available to meet the
needs of individuals enrolled in these programs in the emergency
area(s) and time periods; and (2) providers who give such services in
good faith can be reimbursed and exempted from sanctions (absent any
determination of fraud and abuse). However, section 1135 of the Act
does not apply to or otherwise provide the Departments with authority
to waive or modify requirements regarding section 1332 waivers when
similar events cause similar impacts in the private health insurance
markets. The proposed modifications to the Departments' section 1332
waiver regulations outlined in this rule are designed to generally
align with the section 1135 flexibilities, but would be available in
broader circumstances than emergencies or disasters declared under the
Stafford Act or the National Emergencies Act and public health
emergencies declared under section 319 of the Public Health Service
Act. The Departments are proposing to apply this flexibility to include
other emergencies at the state or local level to allow states to better
address all of the various emergent situations that may impact their
state health insurance markets and residents access to coverage and
care.
Consistent with the existing framework for state modification
requests related to the COVID-19 PHE, for a state request to modify the
state or federal public notice requirements to expedite a decision on a
proposed section 1332 waiver request during an emergent situation to be
approved, the state must meet the requirements outlined in 31 CFR
33.118(b) and 45 CFR 155.1318(b). Under this proposal, the Secretaries
could approve a state's request to modify the federal and/or state
public notice procedures, in part, in future emergent situations if the
state meets all of the following requirements:
The state requests a modification in the form and manner
specified by the Secretaries.
The state acted in good faith, and in a diligent, timely,
and prudent manner in the preparation of the request for the
modification for the section 1332 waiver, and the waiver application
request, as applicable.
The state details in its request for a modification, as
applicable, the justification for the requested modification from the
state public notice procedures, and the alternative public notice
procedures it proposes to implement at the state level, including
public hearings, that are designed to provide the greatest opportunity
and level of meaningful public input from impacted stakeholders that is
practicable given the emergency circumstances underlying the state's
request for a modification.
The state details in its request for a modification, as
applicable, the justification for the request and the alternative
public notice procedures it requests to be implemented at the federal
level.
The Departments also propose that the state, as applicable,
implements the alternative public notice procedures at the state level
if the state's modification request is approved and, if required,
amends the section 1332 waiver application to specify that it is the
state's intent to comply with those alternative public notice
procedures in the state's modification request. These are the same
requirements that apply under the existing framework for state
modification requests related to the COVID-19 PHE and are currently
captured in 31 CFR 33.118(b)(1) through (4) and (f) and 45 CFR
155.1318(b)(1) through (4) and (f).\138\
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\138\ To effectuate the extension of these flexibilities to
future emergent situations, the Departments propose to amend 31 CFR
33.118(b)(3) and 45 CFR 155.1318(b)(3) to replace the current
reference to ``public health emergency'' with ``the emergent
situation.'' This criterion otherwise remains the same.
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Any state submitting a proposed section 1332 waiver application
during a future emergent situation could submit a separate request to
the Secretaries to modify, in part, certain otherwise applicable state
and/or federal public notice and public participation requirements or
could include such a request in its section 1332 waiver application
request.
Consistent with the framework for COVID-19 PHE state modification
requests, the Secretaries' review and consideration of a modification
request for future emergent situations would vary based on the state's
circumstances, its modification request, and the complexity and breadth
of the state's proposed section 1332 waiver request. For example,
during the COVID-19 PHE, many states prohibited in-person public
gatherings or established stay-at-home orders due to the public health
[[Page 35195]]
threat.\139\ States seeking new section 1332 waiver(s) that had such
prohibitions in effect at the time they would have otherwise had to
conduct public notice were unable to hold two in-person public hearings
prior to submission of their section 1332 waiver applications. In
similar future emergent situations, this approach would allow the
Secretaries to grant the state's request to hold the two public
hearings virtually, rather than in-person, or to hold one public
hearing at the state level, rather than two public hearings at the
state level, if the state's request meets other applicable
requirements. As another example, the Secretaries may agree with a
state's determination that, due to emergent circumstances that have
arisen related to a natural disaster, there is insufficient time for
the state to provide public notice and hold any public hearings at the
state level prior to submitting its section 1332 waiver application as
would otherwise be required by 31 CFR 33.112(a) and 45 CFR 155.1312(a),
and grant the state's request to provide public notice and hold public
hearings at the state level after the state's submission of its
application if the state's request meets other applicable requirements.
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\139\ https://khn.org/morning-breakout/states-declare-emergencies-ban-large-gatherings-as-coronavirus-sweeps-the-nation/.
https://www.axios.com/states-shelter-in-place-coronavirus-66e9987a-a674-42bc-8d3f-070a1c0ee1a9.html.
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In situations where the Departments approve a state's modification
request to provide public notice and host the state-level hearings on a
different timeframe or setting, such as after the submission of a
state's waiver application request, the state would be required to
amend the application request as necessary to reflect public comments
or other relevant feedback received during the alternative state-level
public notice procedures. The Departments would evaluate a state's
request for a modification of the public participation requirements and
issue their modification determination within approximately 15 calendar
days after the request is received. In assessing whether a state acted
in good faith, and in a diligent, timely, and prudent manner in the
preparation of the modification request for the waiver, and for the
section 1332 waiver application, the Departments would evaluate whether
the relevant circumstances are sufficiently emergent. The Departments
propose in new proposed 31 CFR 33.118(g) and 45 CFR 155.1318(g) that
the Departments will consider circumstances to be emergent when they
could not have been reasonably foreseen. In addition, the Departments
propose to assess ``reasonable foreseeability'' based on the specific
issues that a section 1332 waiver proposes to address and other
relevant factors, and would not make this assessment based solely on
the number of days a state may have been aware of such issues. Other
relevant factors that the Departments would consider include the
specific circumstances involved, the nature and extent of the future
emergent situation, and whether the state could have predicted the
situation. To assist the Departments with making this assessment the
Departments also propose to capture a new requirement at 31 CFR
33.118(b)(5) and 45 CFR 155.1318(b)(5) to require a state submitting a
modification request must also explain in its request how the
circumstances underlying its request result from a natural disaster;
PHE; or other emergent situations that threaten consumers' access to
health insurance coverage, consumers' access to health care, or human
life could not be reasonably have been foreseen and how a delay would
undermine or compromise the purpose of the waiver and be contrary to
the interests of consumers.
The Departments remind states that any public participation
processes must continue to comply with applicable federal civil rights
laws,\140\ including taking reasonable steps to provide meaningful
access for individuals with limited English proficiency and taking
appropriate steps to ensure effective communication with individuals
with disabilities, including accessibility of information and
communication technology. It is also important for states to remember
that virtual meetings may present additional accessibility challenges
for people with communications and mobility disabilities, as well as to
those who lack broadband access. The Departments expect states to take
these considerations into account when seeking flexibility to modify
the public participation requirements as the overall statutory and
regulatory obligation to ensure a meaningful level of public input
during the public notice and comment period would continue to apply. By
way of example, ensuring effective communication during a future
emergent situation when the otherwise applicable public notice and
participation requirements are modified may include providing American
Sign Language interpretation and real-time captioning as part of a
virtual hearing, and ensuring that the platform used to host the
hearing is interoperable with assistive technology for those with
mobility difficulties. The Departments especially encourage states to
strive to obtain meaningful input from potentially affected
populations, including low-income residents, residents with high
expected health care costs, persons less likely to have access to care,
and members of federally-recognized tribes, if applicable, as part of
any alternative public participation process.
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\140\ The HHS Office for Civil Rights enforces applicable
federal civil rights laws that prohibit discrimination on the basis
of race, color, national origin, sex, age, or disability, as well as
laws protecting the exercise of conscience and religious freedom,
including the Religious Freedom Restoration Act (42 U.S.C. 2000bb
through 2000bb-4). HHS's requirements are subject to these laws, and
states may have obligations under these laws to protect conscience,
prohibit coercion, and to ensure the free exercise of religion. U.S.
Department of Health & Human Services, Office for Civil Rights,
Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
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Consistent with the framework for COVID-19 PHE state modification
requests, the Secretary of HHS would publish on the CMS website any
modification determinations within 15 calendar days of the Secretaries
making such a determination, as well as the approved revised timeline
for public comment at the state and federal level, as applicable.\141\
In addition, the state would be required to publish on its website any
modification requests and determinations within 15 calendar days of
receipt of the determination, as well as the approved revised timeline
for public comment at the state and Federal level, as applicable.\142\
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\141\ See 31 CFR 33.118(d) and 45 CFR 155.1318(d).
\142\ See 31 CFR 33.118(e) and 45 CFR 155.1318(e).
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The Departments seek comment on these proposals.
b. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
As section 1332 waivers are likely to a have a significant impact
on individuals, states, and the federal government, the 2012 Final Rule
established processes and methodologies to ensure that the Secretaries
receive adequate and appropriate information regarding section 1332
waivers (consistent with section 1332(a)(4)(B)(iv) of the ACA). As part
of the Departments' monitoring and oversight of approved section 1332
waivers, the Secretaries monitor the state's compliance with the
specific terms and conditions of the waiver, including, but not limited
to, compliance with the guardrails, reporting requirements, and the
post
[[Page 35196]]
award forum requirements.\143\ Under 31 CFR 33.120(c) and 45 CFR
155.1320(c), to ensure continued public input within at least six
months after the implementation date, and annually thereafter, states
are required to hold a public forum at which members of the public have
an opportunity to provide comments on the progress of the program
authorized by the section 1332 waiver and to provide a summary of this
forum to the Secretary of HHS for the Departments' review as part of
the quarterly and annual reports required under 31 CFR 33.124 and 45
CFR 155.1324. Under 31 CFR 33.120(c)(1) and 45 CFR 155.1320(c)(1),
states are required to publish the date, time, and location of the
public forum in a prominent location on the state's public website at
least 30 days prior to the date of the planned public forum. In the
November 2020 IFC, the Departments added 31 CFR 33.120(c)(2) and 45 CFR
155.1320(c)(2) to provide that the Secretaries may waive, in part, post
award public notice requirements during the COVID-19 PHE when certain
criteria were met.
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\143\ See section 1332(a)(4)(iv) and (v). Also see 31 CFR 33.120
and 45 CFR 155.1320.
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In this rulemaking, the Departments propose to modify 31 CFR
33.120(c)(2) and 45 CFR 155.1320(c)(2), to extend the flexibilities
currently provided during the COVID-19 PHE to permit the Secretaries to
modify in part, certain post award public notice requirements in 31 CFR
33.120(c) and 45 CFR 155.1320(c) for approved waivers during a future
emergent situation when the application of the post award public notice
procedures would be contrary to the interests of consumers. Extending
these flexibilities beyond the COVID-19 PHE to future emergent
situations is important to help states as they may face similar
uncertainty as to whether they are able to comply with the otherwise
applicable post award requirements in such situations. For example, the
state post award procedures generally require an in-person gathering.
Based on the Departments' experience with the current COVID-19 PHE, the
Departments are of the view that it is appropriate and reasonable to
propose to make similar flexibilities available in future emergent
situations as those circumstances may also limit the ability for the
state to host in-person gatherings. The Departments are not proposing
any changes or soliciting further comments at this time with respect to
the flexibility made available in the November 2020 IFC in response to
the COVID-19 PHE. States with approved section 1332 waivers will
continue to have flexibility to submit requests to the Departments to
modify certain post award public notice requirements during the COVID-
19 PHE.\144\
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\144\ See 85 FR 71142.
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Consistent with the framework for state modification requests
related to the COVID-19 PHE, under this proposal, the Secretaries could
similarly approve a state request to modify the post award public
notice procedures, in part, when the application of the post award
public notice requirements would be contrary to the interest of
consumers during the future emergent situation. The Departments propose
to amend the title in 31 CFR 33.120(c)(2) and 45 CFR 155.1320(c)(2) and
to amend the text at 31 CFR 33.120(c)(2)(i) and 45 CFR
155.1320(c)(2)(i) to replace the references to ``the public health
emergency'' with ``an emergent situation.'' Amendments are also
proposed to the last sentence of 31 CFR 33.120(c)(2)(i) and 45 CFR
155.1320(c)(2)(i) to replace the language that limits these
flexibilities to the COVID-19 PHE to reflect the broader proposed
applicability to emergent situations, including natural disasters;
PHEs; or other emergent situations that threaten consumers' access to
health insurance coverage, consumers' access to health care, or human
life. In addition, the Departments propose that the Secretaries could
approve a state's post award modification request if the state meets
all of the following requirements:
The state requests a modification in the form and manner
specified by the Secretaries.
The state acts in good faith, and in a diligent, timely,
and prudent manner to comply with the monitoring and compliance
requirements under the regulations and specific terms and conditions of
the section 1332 waiver and to submit and prepare the request for a
modification.
The state details in its request for a modification the
reason(s) for the alternative post award public notice procedures it
proposes to implement at the state level, including public hearings,
that are designed to provide the greatest opportunity and level of
meaningful public input from impacted stakeholders that is practicable
given the emergent circumstances underlying the state's request for a
modification.
These are the same requirements that apply under the existing
framework for state post award modification requests related to the
COVID-19 PHE currently captured in 31 CFR 33.120(c)(2)(ii)(A) through
(C) and 45 CFR 155.1320(c)(2)(ii)(A) through (C).
Under this proposal, a state may request to modify the otherwise
applicable public participation requirements to host the public forum
for an approved section 1332 waiver that would take place or become due
during an emergent situation virtually rather than as an in person
gathering. When reviewing state modification requests, the Departments
would remain focused on ensuring the public is informed about the
implementation of programs authorized by section 1332 waivers and has a
meaningful opportunity to comment on its implementation.
Consistent with the framework for COVID-19 state modification
requests, the Secretaries would evaluate a state's request for a
modification of certain post award public participation requirements
during a future emergent situation and issue their modification
determination within approximately 15 calendar days after the request
is received.\145\ The state would be required to publish on its website
any modification requests and determinations by the Departments within
15 calendar days of receipt of the determination, as well as
information on the approved revised timeline for the state's post award
public notice procedures, as applicable.\146\ Since the state is
already required to post materials as part of post award annual
reporting requirements, such as the notice for the public forum and
annual report, states would be responsible for ensuring that the public
is aware of the determination to modify the public notice procedures
and would be required to include this information along with the other
information required under 31 CFR 33.120(c)(1) and 45 CFR155.1320(c)(1)
for the alternative procedures in a prominent location on the state's
public website.
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\145\ See 31 CFR 33.120(c)(2)(ii)(D) and 45 CFR
155.1320(c)(2)(ii)(D).
\146\ See 31 CFR 33.120(c)(2)(ii)(E) and 45 CFR
155.1320(c)(2)(ii)(E).
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The Departments are of the view that post award public forums are
critical to ensure that the public has a regular opportunity to learn
about and comment on the progress of section 1332 waivers. Based on the
Departments' experience during COVID-19 PHE, the Departments believe it
is appropriate and reasonable to propose to provide similar
flexibilities and permit states to request to modify certain post award
public participation requirements in future emergent situations. States
that receive approval to modify, in part, these post award public
notice procedures would
[[Page 35197]]
still need to meet all other applicable requirements specified in 31
CFR 33.120(c) and 45 CFR 155.1320(c). For example, if the state
receives a modification approval that permits it to hold the post award
public forum virtually instead of in person, the state must still
publish the notice of its post award public notice on the state's
public website and use other effective means to communicate the
required information to the public. The public notice must include the
website, date, and time of the public forum that will be convened by
the state, information related to the timeframe for comments, and how
comments from the public on the section 1332 waiver must be submitted.
The Departments remind states that they still must also comply with
applicable federal civil rights requirements, including laws pertaining
to accessibility, if the Secretaries approve a modification from post
award public notice procedures. For example, a state that receives
approval to host the required public hearing(s) virtually would need to
ensure the hearings are accessible to individuals with disabilities and
individuals with limited English proficiency (LEP) so members of the
public can participate and submit comments. The state should also track
how many people are attending these forums, if possible.
In assessing whether a state acted in good faith, and in a
diligent, timely, and prudent manner when reviewing a state's post
award modification request, the Departments would evaluate whether the
relevant circumstances are sufficiently emergent. The Departments
propose in 31 CFR 33.120(c)(2)(iii) and 45 CFR 155.1320(c)(2)(iii) that
the Departments will consider circumstances to be emergent when they
could not have been reasonably foreseen. In addition, the Departments
propose that to assess ``reasonable foreseeability'' based on the
specific issues that a section 1332 waiver proposes to address and
other relevant factors, and would not make this assessment based solely
on the number of days a state may have been aware of such issues. Other
relevant factors that the Departments would consider include the
specific circumstances involved, the nature and extent of the emergent
situation, and whether the state could have predicted the situation. To
assist the Departments with making this assessment the Departments also
propose to capture a new requirement at 31 CFR 33.120(c)(2)(ii)(F) and
45 CFR 155.1320(c)(2)(ii)(F) to require a state submitting a post award
modification request must also explain in its request how the
circumstances underlying its request result from a natural disaster;
PHE; or other emergent situations that threaten consumers' access to
health insurance coverage, consumers' access to health care, or human
life and could not be reasonably have been foreseen and how application
of the post award public notice requirements would be contrary to the
interests of consumers.
The Departments seek comment on this proposal.
7. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
The Departments are proposing to modify 31 CFR 33.120(a)(1) and (2)
and 45 CFR 155.1320(a)(1) and (2) to remove the reference, as codified
under part 1 of the 2022 Payment Notice final rule, to interpretive
guidance published by the Departments. This proposal is in line with
the Departments efforts to provide supplementary information about the
requirements that must be met for the continued oversight and
monitoring of an approved section 1332 waiver. Because the Departments
are of the view that the 2018 Guidance and the incorporation of its
guardrail interpretations into regulations could result in the
Departments approving section 1332 waivers that would result in fewer
residents in those states enrolling in comprehensive and affordable
coverage, that those interpretations do not represent the best
fulfillment of congressional intent behind the statutory guardrails,
that they are inconsistent with the policy intentions of E.O. 14009 and
E.O. 13985, and that it is appropriate to address concerns raised by
commenters on the 2018 Guidance, the Departments propose to remove the
reference to the 2018 Guidance. Under this proposal the Departments
would rely upon the statute and regulations, as well as the
Departments' interpretive policy statements as outlined in the
applicable notice and comment rulemaking, in monitoring approved
section 1332 waivers.
8. Pass-Through Funding (31 CFR 33.122 and 45 CFR 155.1322)
Section 1332(a)(3) of the ACA directs the Secretaries to pay pass-
through funding to the state for the purpose of implementing the state
section 1332 waiver plan and outlines accompanying requirements for
making the pass-through funding determination. In this proposed rule,
the Departments propose new regulation text at 31 CFR 33.122 and 45 CFR
155.1322 to codify in regulation details regarding the Departments'
determination of pass-through funding for approved section 1332
waivers. More specifically, the Departments are proposing to codify in
regulation that, with respect to a State's approved section 1332
waiver, the amount of federal pass-through funding would equal the
amount, determined annually by the Secretaries, of the PTC under
section 36B of the Code, the small business tax credit (SBTC) under
section 45R of the Code, or cost-sharing reductions under ACA part I of
subtitle E (collectively referred to as federal financial assistance),
that individuals and small employers in the state would otherwise be
eligible for had the State not received approval for its section 1332
waiver. This would include any amount not paid due to an individual not
qualifying for federal financial assistance or qualifying for a reduced
level of such financial assistance. The pass-through amount would not
be increased to account for any savings other than the reduction in
federal financial assistance. The pass-through amount would be reduced
by any net increase in federal spending or net decrease in federal
revenue if necessary to ensure deficit neutrality. The pass-through
estimates take into account experience in the relevant state and the
experience of other states with respect to participation in an Exchange
and credits and reductions provided under such provisions to residents
of the other states. This amount would be calculated annually by the
Departments and could be updated by the Departments as necessary to
reflect applicable changes in Federal or State law. The proposed
regulations further state, consistent with the statute,\147\ that any
pass-through funding can only be used for purposes of implementing the
state's approved section 1332 waiver plan.
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\147\ See section 1332(a)(3) of the ACA.
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Consistent with the Departments' existing regulations at 31 CFR
33.108(f)(4) and 45 CFR 155.1308(f)(4), state section 1332 waiver
applications are required to provide analysis and supporting data to
inform the Department's estimate of the pass-through funding amount and
the waivers' predicted impact on the deficit neutrality guardrail. For
states that do not utilize a FFE, this includes information about
enrollment, premiums, and federal financial assistance in the state's
Exchange by age, income, and type of policy, and other information as
may be required by the Secretaries. Consistent with the Departments'
existing regulations at 31 CFR 33.124 and 45 CFR 155.1324, states with
approved section 1332 waivers must comply with state reporting
requirements in accordance with the
[[Page 35198]]
terms and conditions of the state's section 1332 waiver. If pass-
through funding is being sought as part of the state's section 1332
waiver plan, states may also be required to submit data as outlined in
the states terms and conditions for the Departments to calculate pass-
through funding. The Departments are not proposing any changes to these
waiver requirements.
In addition, these proposals do not change the existing
requirements codified in 31 CFR 33.108(f)(3)(iii) and 45 CFR
155.1308(f)(3)(iii) for the state's section 1332 waiver application to
include a description of the provisions for which the state seeks a
section 1332 waiver and how the waiver is necessary to facilitate the
state's waiver plan. Further, under this proposed rule, the Departments
propose that, as part of the state's waiver plan if the state is
seeking pass-through funding, the state waiver application should
include an explanation of how, due to the structure of the section 1332
state plan and the statutory provisions waived, the state anticipates
that individuals would no longer qualify for federal financial
assistance or would qualify for reduced federal financial assistance,
as a result of the section 1332 waiver.\148\ In addition, the
Departments propose the state would also need to explain in its
application how the state intends to use that funding for the purposes
of implementing its section 1332 state plan.
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\148\ While this rule generally proposes to supersede and
rescind the 2018 Guidance, the Departments are proposing these
standards which align with the approach outlined in the 2018
Guidance.
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The Departments seek comment on these proposals including the
proposed adoption of the new regulatory text on pass-through funding
for approved section 1332 waivers.
9. Periodic Evaluation Requirements (31 CFR 33.128 and 45 CFR 155.1328)
The Departments are proposing to modify 31 CFR 33.128(a) and 45 CFR
155.1328(a) to remove the reference, as codified under part 1 of the
2022 Payment Notice final rule, to interpretive guidance published by
the Departments. This proposal is in line with the Departments efforts
to provide supplementary information about the requirements that must
be met for the periodic evaluation requirements of an approved section
1332 waiver. Because the Departments are of the view that the 2018
Guidance and the incorporation of its guardrail interpretations into
regulations could result in the Departments approving section 1332
waivers that would result in fewer residents in those states enrolling
in comprehensive and affordable coverage, that those interpretations do
not represent the best fulfillment of congressional intent behind the
statutory guardrails, that they are inconsistent with the policy
intentions of E.O. 14009 and E.O. 13985, and that it is appropriate to
address concerns raised by commenters on the 2018 Guidance, the
Departments propose to remove the reference to the 2018 Guidance. Under
this proposal the Departments would rely upon the statute and
regulations, as well as the Departments' interpretive policy statements
as outlined in the applicable notice and comment rulemaking, in
conducting periodic evaluations of approved section 1332 waivers.
10. Waiver Amendment (31 CFR 33.130 and 45 CFR 155.1330)
The Departments are proposing new regulations at 31 CFR 33.130 and
45 CFR 155.1330 to delineate the process by which a state is permitted
to submit an amendment to an approved section 1332 waiver. The proposed
new regulations also capture a proposed definition of section 1332
waiver amendment. While the statute does not specifically mention
amendment requests, some states with approved section 1332 waivers have
indicated interest in amending their current approved waiver plans.
Further, in response to previously received comments on the 2012 final
rule, the Departments acknowledged that information regarding section
1332 waiver amendments and renewals would be needed in the future \149\
and the Departments have received several inquiries from states on
these topics. In addition, there may be situations where states
pursuing proposed section 1332 waiver plans are interested in amending
an application that has been submitted to the Departments for review.
The Departments propose that the framework outlined in this rule would
only apply to amendments to approved section 1332 waiver plans and
would not apply to changes to an initial section 1332 waiver
application submitted to the Departments but unapproved.\150\ A state
is not authorized to implement any aspect of the proposed amendment
without prior approval by the Departments.
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\149\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
\150\ In circumstances where a state wants to amend its waiver
application before the Departments have approved the waiver plan,
the Departments intend to work with the state to ensure there is an
adequate, meaningful opportunity for public notice and comment
taking into account the particular circumstances of the situation
and the state's waiver application (such as the changes to the
proposed waiver, timing, etc.).
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In this rule, the Departments set forth a proposed procedural
framework for submission and review of amendment requests for an
approved section 1332 waiver. The Departments are of the view that this
additional information will help states with approved section 1332
waiver plans better plan for and prepare for potential amendments to
their state waiver plans. The Departments also intend to continue
providing information and details regarding the section 1332 waiver
amendment process in the specific terms and conditions for an approved
waiver plan. The proposals outlined later in this section are intended
to align with the current amendment request process outlined in recent
specific terms and conditions (STCs) for states with approved
waivers.\151\
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\151\ For example, see STC 9 in New Hampshire's Approval Letter
and STCs: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
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a. Definition of Waiver Amendment
For purposes of these requirements, the Departments propose to
define the term ``section 1332 waiver amendment'' as a change to a
section 1332 waiver plan that is not otherwise allowable under the STCs
of an approved waiver, a change that could impact any of the section
1332 statutory guardrails or a change to the program design for an
approved waiver. Such potential changes include, but are not limited
to, changes to eligibility, coverage, benefits, premiums, out-of-pocket
spending, and cost sharing. The Departments propose to codify this
definition in new proposed 31 CFR 33.130(a) and 45 CFR 155.1330(a).
b. Waiver Amendment Process
To request a waiver amendment, the Departments propose that the
state must submit a letter in electronic format to the Departments to
notify them in writing of its intent to request an amendment to its
approved section 1332 waiver plan(s). The state would be required to
include a detailed description of all of the intended change(s),
including the proposed implementation date(s), in its letter of intent.
The state is encouraged to submit the letter of intent at least 15
months prior to the section 1332 waiver amendment's proposed
implementation date and to engage with the Departments early on in
their development of a potential waiver amendment. The state may want
to submit this letter of intent more than 15 months prior to the
section 1332 waiver
[[Page 35199]]
amendment's proposed implementation date, depending on the complexity
of the amendment request, the timeline for implementation, among other
factors.
The Departments would review the state's letter of intent request.
The Departments propose that, within approximately 30 days of the
Departments' receipt of the letter of intent, the Departments would
respond to the state and confirm whether the change requested is a
section 1332 waiver amendment, as well as identify the information the
state needs to submit in its waiver amendment request. This written
response would also include whether or not the proposed section 1332
waiver amendment(s) would be subject to any additional or different
requirements. For example, depending on the complexity of the section
1332 amendment request, scope of changes from the approved waiver plan,
operational/technical changes, or implementation considerations, the
Departments may impose requirements similar to those specified in 31
CFR 33.108(f) and 45 CFR 155.1308(f) for initial section 1332 waiver
applications. The preamble regarding section 1332 waiver amendment
content that follows further describes the proposed content
requirements for section 1332 waiver amendment requests.
Under the proposed section 1332 waiver amendment framework, the
state should generally plan to submit its waiver amendment request no
later than nine months prior to when the proposed amendment would take
effect in order to allow for sufficient time for review of the waiver
amendment request. Similar to the regulations at 31 CFR 33.108(a) and
45 CFR 155.1308(a) for new section 1332 waiver applications, the
Departments propose that applications for waiver amendments of a
section 1332 waiver must be submitted in electronic format to the
Departments. Similar to the regulations at 31 CFR 33.108(b) and 45 CFR
155.1308(b) for new section 1332 waiver applications, the Departments
propose that the state is required to submit the section 1332 waiver
amendment request sufficiently in advance of the requested waiver
implementation date, particularly when the waiver plan impacts premium
rates, to allow for an appropriate review and implementation timeframe.
Depending on the complexity of the section 1332 amendment request, the
state may want to submit the amendment application earlier than nine
months prior to implementation. In developing the implementation
timeframe for its section 1332 waiver amendment request, the
Departments propose that the state must maintain uninterrupted
operations of the Exchange in the state and provide adequate notice to
affected stakeholders and issuers of health insurance plans that would
be (or may be) affected by the amendment to take necessary action based
on approval of the section 1332 waiver amendment request. As detailed
later in this section of this preamble, these are operational details
that the state would be required to address as part of its waiver
amendment request. In addition, as reflected in the new proposed
regulations at 31 CFR 33.130(a) and 45 CFR 155.1330(a), a state would
not be authorized to implement any aspect of the proposed amendment
without prior approval from the Secretaries.
In this rule, the Departments are proposing a similar process for
section 1332 waiver amendment requests as is outlined for new section
1332 waiver applications in 31 CFR 33.108 and 45 CFR 155.1308. In line
with these requirements, the Departments are proposing to define the
type of information and what information a state is required to provide
to the public prior to the submission of a section 1332 waiver
amendment request to the Departments. Similar to new section 1332
waiver applications, the Departments propose to evaluate the state's
section 1332 waiver amendment request and may approve the request if
the waiver, as amended, meets the statutory guardrails as defined in
Section 1332(b)(1)(A)-(D) and other applicable requirements. In
general, states are permitted to have a waiver plan that consists of
different components or parts. Under this proposal, states would be
permitted to propose an amendment, which could build on an approved
section 1332 waiver plan. The Departments are proposing that a state's
approved section 1332 waiver plan and the proposed waiver amendment
request should be analyzed together, and the state would receive pass-
through funding for implementation of the amended waiver plan
(including the amendment, if approved) if the amended waiver plan
yields federal financial assistance savings, net of any reductions
necessary to ensure deficit neutrality. For example, if a state has an
approved reinsurance program for plan year 2021 through 2025, and is
seeking approval for a waiver amendment request to begin in 2023, the
analysis in the section 1332 waiver amendment request should
demonstrate that the reinsurance program combined with any proposed
amendments meets the guardrails. In comparing scenarios with and
without the section 1332 waiver, the Departments propose to consider
the without-waiver scenario to include neither the reinsurance program
nor the section 1332 waiver amendment request and the with-waiver
scenario to include the combined impact of the reinsurance program and
the section 1332 waiver amendment request. In terms of pass-through
funding, the Departments propose that, if the section 1332 waiver
amendment request described in the example above is approved and
determined to yield additional reductions in federal financial
assistance (in the form of PTC, CSR, or SBTC), the state would continue
to receive pass-through funding annually for combined reductions in
federal financial assistance for the entire section 1332 waiver plan,
rather than receiving a separate pass through funding amount for the
reinsurance component of the waiver and a separate pass-through funding
amount for the waiver amendment component. As noted in the above
preamble on pass-through funding, such amounts could be updated by the
Departments, as necessary, to reflect applicable changes in state or
federal law.
Similar to the requirements in 31 CFR 33.108 and 45 CFR 155.1308,
the Departments also propose that the public must have a meaningful
opportunity to provide input at the state and federal level on waiver
amendment requests. Section 1332(a)(4)(B) of the ACA requires the
Secretaries to issue regulations that provide a process for public
notice and comment at the State level, including public hearings, that
is sufficient to ensure a meaningful level of public input. The
Departments propose that a state pursuing a section 1332 waiver
amendment must conduct the state public notice process that is
specified for new applications at 31 CFR 33.112 and 45 CFR 155.1312. As
such, to ensure a meaningful level of public input the comment period
would generally need to be no less than 30 days. The Departments also
propose that it would be permissible for a state to use its annual
public forum required under 31 CFR 33.120(c) and 45 CFR 155.1320(c) for
the dual purpose of soliciting public input on a proposed section 1332
waiver amendment request and on the progress of its approved waiver
plan. This policy proposal is in line with the flexibility the
Departments permitted in the 2012 Final Rule section 1332 regulations
\152\ to allow for states to use Medicaid tribal consultation to also
satisfy the requirements as set forth in 31 CFR 33.112(a)(2) and 45 CFR
[[Page 35200]]
155.1312(a)(2), that require a State with one or more Federally-
recognized tribes within its borders to conduct a separate process for
meaningful consultation with the tribes as part of the State section
1332 waiver public notice and comment process. The Departments are of
the view that allowing states to use the annual public forum for the
dual purpose of soliciting public input on the state's proposed section
1332 waiver amendment request and on the progress of its approved
waiver plan would create a more efficient process for both the state
and the public to provide a meaningful level of input. Furthermore,
this proposal would allow a state to explain to the public how the
state's proposed section 1332 waiver amendment would interact with the
state's approved waiver plan, and thus would be beneficial to the
public in understanding the impact of the state's proposed waiver
amendment.
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\152\ See 77 FR at 11706.
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In this rule, the Departments are proposing a similar federal
public notice and approval process for section 1332 waiver amendment
requests as is outlined for new section 1332 waiver applications in 31
CFR 33.116 and 45 CFR 155.1316. In line with these requirements, the
Departments propose that following a determination that a state's
section 1332 waiver application request for a section 1332 waiver is
complete, the Secretaries will provide for a public notice and comment
period that is sufficient to ensure a meaningful level of public input
and the comment period would generally be no less than 30 days. The
Departments would make available through an HHS website the complete
section 1332 waiver amendment request, information relating to how and
where written comments may be submitted, and the timeframe during which
comments will be accepted. Additionally, the Departments will make
available public comments received on the section 1332 waiver amendment
request during the Federal public notice and comment period. The
Departments are of the view that these proposals would increase
transparency of the federal review process and create a clear path for
states and the Departments to determine if the information submitted is
sufficient to continue review and when to start a federal public
comment period on the state's proposed waiver amendment. In addition,
the Departments are of the view that these proposals provide the public
with a meaningful opportunity to provide input on a section 1332 waiver
request in line with the intent of the statute.
c. Waiver Amendment Content
The Departments propose that a state that wants to pursue a section
1332 waiver amendment request must furnish information and analysis
regarding the state's proposed waiver amendment that is necessary to
permit the Departments to evaluate the request. The proposed
information and analysis is similar to the existing requirements for
new section 1332 waiver applications.\153\ As such, the Departments
propose that a section 1332 waiver amendment request must include the
following:
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\153\ See 31 CFR 33.108 and 45 CFR 155.1308.
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(1) A detailed description of the requested amendment, including
the impact on the guardrails, and related changes to the section 1332
waiver program elements as applicable, including sufficient supporting
documentation;
(2) An explanation and evidence of the process used by the state to
ensure meaningful public input;
(3) Evidence of sufficient authority under state law(s) in order to
meet the ACA section 1332(b)(2)(A) requirement for purposes of pursuing
the section 1332 waiver amendment;
(4) An updated actuarial and/or economic analysis demonstrating how
the section 1332 waiver, as amended, will meet the section 1332
statutory guardrails;
(5) An explanation of the estimated impact, if any, of the section
1332 waiver amendment on pass-through funding; and
(6) Any further requested information and/or analysis that is
determined necessary by the Departments to evaluate the section 1332
waiver amendment.
For the required updated actuarial and/or economic analysis, the
Departments propose that such analysis must identify the ``with
waiver'' impact of the requested amendment on the statutory guardrails.
Such analysis would also be required to include a ``with waiver'' and
``without waiver'' status on both a summary and detailed level through
the current approval period using data from recent experience, as well
as a summary of and detailed projections of the change in the ``with
waiver'' scenario. In addition, as described above, the Departments
propose that the analysis submitted by the state with its section 1332
waiver amendment request must demonstrate how the state's approved
section 1332 waiver plan, combined with any proposed amendments,
impacts the guardrails.
The Departments solicit comments on these proposals, including
whether the proposed framework for section 1332 waiver amendment
requests should be codified in regulation.
11. Waiver Extension (31 CFR 33.132 and 45 CFR 155.1332)
Section 1332(e) of the ACA provides that no section 1332 waiver may
extend over a period of longer than 5 years unless the state requests
continuation of its waiver, and such request shall be deemed granted
unless the Departments, within 90 days after the date of its
submission, either deny such request in writing or inform the state in
writing with respect to any additional information which is needed in
order to make a final determination with respect to the request.
Recognizing that several of the existing section 1332 waivers were
approved in 2016 and 2017 to begin in plan years 2017 and 2018,
respectively, the Departments are proposing new regulations at 31 CFR
33.132 and 45 CFR 155.1332 to codify section 1332(e) of the ACA and are
also proposing, in preamble, the proposed framework for section 1332
waiver extensions. Further, in response to previously received
comments, the Departments acknowledged that information regarding
section 1332 waiver amendments and renewals would be needed in the
future \154\ and the Departments have received several inquiries from
states on these topics. As such, in this proposed rule the Departments
are proposing new regulations at 31 CFR 33.132 and 45 CFR 155.1332 to
permit, but not require, states to submit a section 1332 waiver
extension request to continue an approved waiver plan. These proposed
new regulations also provide that an extension request shall be deemed
granted unless the Secretaries, within 90 days after the date of the
state's submission of a complete section 1332 waiver extension request,
either deny such request in writing or inform the State in writing with
respect to any additional information needed to make a final
determination with respect to the request. This proposed rule also sets
forth, in preamble, a proposed procedural framework for submission and
review of extension requests for approved section 1332 waiver plans.
The Departments are of the view that this additional information will
help states with approved section 1332 waiver plans better plan for and
prepare for potential extensions to their waiver plans. The Departments
also intend to provide information and details regarding the section
1332 waiver
[[Page 35201]]
extension process in the STCs for an approved waiver plan. These
proposals are intended to align with the extension request process
outlined in recent STCs for states with approved section 1332
waivers.\155\
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\154\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
\155\ For example, see STC 10 in New Hampshire's Approval Letter
and STCs: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
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The Departments propose to define a section 1332 waiver extension
as an extension of an approved waiver under the existing waiver terms.
As detailed further later in this section of this preamble, if a state
wants to make changes to the existing terms of an approved section 1332
waiver, the proposed waiver amendment request framework outlined in
this rulemaking would apply. The Departments propose that states with
approved section 1332 waivers that want to pursue a waiver extension
would be required to inform the Departments if the state will apply for
extension of its waiver at least one year prior to the waiver's end
date. To request a section 1332 waiver extension, the Departments
propose that the state must submit a letter of intent in an electronic
format to the Departments to notify them in writing of its intent to
request a waiver extension of its approved waiver plan(s). The
Departments would then review the state's letter of intent request. The
Departments propose that, within approximately 30 days of the
Departments' receipt of the letter of intent, the Departments will
respond to the state and confirm whether the extension request will be
considered as an extension request or whether any changes requested
result in the need for a waiver amendment request instead. The
Departments will also identify the information the state needs to
submit in its section 1332 waiver extension request. The Departments
also propose that section 1332 waiver extension requests must also be
submitted in electronic format to the Departments, consistent with the
format and manner requirements applicable to initial waiver
applications under 31 CFR 33.108(a) and 45 CFR 155.1308(a).
Furthermore, the Departments propose that the Departments may
request an updated economic or actuarial analysis for the requested
extension period in a section 1332 waiver extension request. Given that
the Departments receive periodic reports from states with approved
section 1332 waivers under 31 CFR 33.124 and 45 CFR 155.1324, in some
circumstances the Departments may not need and therefore would not
require full new analysis (as required under 31 CFR 33.108(f)(4) and 45
CFR 155.1308(f)(4) for initial section 1332 waiver applications) and
instead may rely on the updated analyses provided as part of these
periodic reports. In other instances, depending on the complexity of
the section 1332 waiver and the extension request, the Departments may
require additional data and information to be submitted to review the
extension request.
The Departments propose to evaluate the state's section 1332 waiver
extension request and may approve the request if it meets the statutory
guardrails as defined in section 1332 (b)(1)(A)-(D) and meets other
applicable requirements. The Departments propose that a state waiver
extension request may be required to include the following information:
(1) Updated economic or actuarial analyses for the requested
extension period in a format and manner specified by the Departments;
(2) Preliminary evaluation data and analysis from the existing
section 1332 waiver program;
(3) Evidence of sufficient authority under state law(s) in order to
meet the ACA section 1332(b)(2)(A) requirement for purposes of pursuing
the requested extension;
(4) An explanation of the process followed by the state to ensure
meaningful public input on the extension request at the state-level;
and,
(5) Other information as requested by the Departments that is
necessary to reach a decision on the requested extension.
As noted above, the Departments would identify the specific
information a state needs to include as part of its section 1332 waiver
extension request in the response to the state's letter of intent.
Further, the Departments have proposed a requirement that the updated
economic or actuarial analyses for the requested extension period would
be in a format and manner specified by the Departments. The Departments
will also rely on available data, such as the analyses provided as part
of the periodic reports required under 31 CFR 33.124 and 45 CFR
155.1324, when evaluating a state's waiver extension request if
appropriate.
The Departments also propose that it would be permissible for a
state to use its annual public forum required under 31 CFR 33.120(c)
and 45 CFR 155.1320(c) for the dual purpose of soliciting public input
on a proposed section 1332 waiver extension request and on the progress
of its approved waiver plan. This policy proposal is in line with the
flexibility the Departments permitted in the 2012 section 1332
regulations \156\ to allow states to use Medicaid tribal consultation
to also satisfy the requirements as set forth in 31 CFR 33.112(a)(2)
and 45 CFR 155.1312(a)(2), that require a state with one or more
federally-recognized tribes within its borders to conduct a separate
process for meaningful consultation with such tribes as part of the
state section 1332 waiver public notice and comment process. The
Departments are of the view that allowing states to use the annual
public forum for the dual purpose of soliciting public input on an
extension request and on the progress of its approved section 1332
waiver would create a more efficient process for both the state and for
the public to provide a meaningful level of input.
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\156\ See 77 FR at 11706.
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In this rule, the Departments are proposing a similar federal
public notice and review process for a section 1332 waiver extension
request as is outlined for new section 1332 waiver applications in 31
CFR 33.116 and 45 CFR 155.1316. The Departments propose that the
Departments will review a state's section 1332 waiver extension request
and make a preliminary determination as to whether it is complete
within approximately 30 days after it is submitted. In line with these
requirements, the Departments propose that after determining that the
section 1332 waiver extension request is complete, the waiver extension
request would be made public through the CMS website, and a 30-day
federal public comment period would commence while the extension
request is under review. The Departments will make available through
the CMS website the information relating to how and where written
comments may be submitted and the timeframe during which comments will
be accepted. Additionally, the Departments will make available public
comments received on the section 1332 waiver amendment request during
the Federal public notice and comment period. The determination that
the section 1332 waiver extension request is complete would also mark
the beginning of the 90-day clock outlined in section 1332(e) of the
ACA for the Secretaries to deny or request more information regarding
the continuation, or extension, of the state's approved waiver plan.
If, after the extension request has been determined complete, the
Departments find that content is missing, additional information is
required, or the state needs to respond to public comments received
during the federal comment period, the Departments would notify
[[Page 35202]]
the state and an additional review period would begin once the
Departments have received the requested information from the state. The
Departments propose that this additional review period would be no
longer than 90 days. The Departments are of the view that these
proposals increase transparency of the federal review process and
creates a clear path for states and the Departments to determine if the
information submitted is sufficient to continue review and when to
start a federal public comment period. In addition, the Departments are
of the view that this proposal provides the public with a meaningful
opportunity to provide input on a section 1332 waiver extension request
in line with the intent of the statute.
The proposed section 1332 waiver extension request process would be
separate from the waiver amendment framework described earlier in this
rulemaking. A section 1332 waiver extension request under proposed 31
CFR 33.132 and 45 CFR 155.1332 would only be available for an extension
of the existing terms of an approved waiver plans and would not be
applicable if the state was seeking to make substantive changes to its
approved waiver plan beyond a continuation of the term of the waiver.
If a state also seeks to make substantive changes to its approved
section 1332 waiver plan along with seeking an extension, the
Departments would treat those changes as amendments and the framework
outlined in this preamble for waiver amendment requests would apply.
The Departments solicit comments on these proposals including
whether the proposed framework for section 1332 waiver extension
requests should be codified in regulation.
V. 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
OMB for review and approval. In order 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 document that contain information collection
requirements (ICRs).
A. ICRs Regarding Navigator Program Standards (Sec. 155.210)
The data collection requirements for FFE Navigator grantees are
currently approved under OMB control 0938-1215/Expiration date: October
31, 2023 (Cooperative Agreement to Support Navigators in Federally-
facilitated Exchanges). The proposal to once again require FFE
Navigators to provide consumers with information and assistance with
regard to certain post-enrollment topics does not increase the number
of reports that Navigator grantees are required to submit.
Additionally, we do not anticipate changes to the data elements related
to the proposed expansion of required Navigator duties to be
significant. We note that since the 2020 Payment Notice made assistance
with the topics at Sec. 155.210(e)(9) permissible, but no longer
required, many Navigator grantees have continued to report on these
activities as part of their weekly, monthly, and quarterly metric
reports to HHS. Therefore, we do not project the information collection
burden to increase.
B. ICRs Regarding Segregation of Funds for Abortion Services (Sec.
156.280)
We are proposing an amendment to Sec. 156.280(e)(2)(ii) to repeal
the separate billing requirement governing payments for QHPs that offer
coverage of abortion services for which federal funds are prohibited.
Specifically, we are proposing to revert to and codify in amended
regulatory text at Sec. 156.280(e)(2)(ii) the prior policy in the 2016
Payment Notice such that QHP issuers offering coverage of abortion
services for which federal funds are prohibited again have flexibility
in selecting a method to comply with the separate payment requirement
in section 1303 of the ACA. If finalized, acceptable methods for
satisfying the separate payment requirement would include sending the
policy holder a single monthly invoice or bill that separately itemizes
the premium amount for coverage of abortion services for which federal
funds are prohibited; sending the policy holder a separate monthly bill
for these services; or sending the policy holder a notice at or soon
after the time of enrollment that the monthly invoice or bill will
include a separate charge for such services and specify the charge. We
believe these proposals will remove the burden associated with the
separate billing regulation, as detailed below.
The 2019 Program Integrity Rule \157\ estimated that the total one-
time burden to implement the separate billing regulation for the 94
issuers that were offering coverage for abortion services for which
federal funds are prohibited at the time of finalization would be
2,961,000 hours for a total cost of approximately $385 million. We
anticipated the one-time burden for the 3 State Exchanges that
performed premium billing and payment processing and had QHP issuers
that offered coverage for abortion services for which federal funds are
prohibited to be 94,500 hours for a total cost of approximately $12.3
million. In the May 2020 IFC,\158\ we reaffirmed these one-time
estimates and anticipated that this one-time burden would still be
incurred primarily in 2020, despite the 60-day delay to the
implementation deadline.
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\157\ 84 FR 71674 (December 27, 2019).
\158\ 85 FR 27550 (May 8, 2020).
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The 2019 Program Integrity Rule also estimated ongoing annual costs
for implementing the separate billing regulation. We estimated the
total annual burden in 2020 for all 94 issuers would be 1,133,640 hours
with an equivalent cost of approximately $50.1 million. From 2021
onwards, we estimated the total annual burden for all 94 issuers to be
approximately 2,267,280 hours with an associated cost of approximately
$100.2 million. We estimated that for the 3 State Exchanges performing
premium billing and payment processing, the total annual burden would
be approximately 36,180 hours with an equivalent cost of approximately
$1.6 million in 2020 and 72,360 hours with an associated cost of
approximately $3.2 million starting in 2021. We predicted in the May
2020 IFC that delaying the implementation of the deadline for the
separate billing regulation by 60 days would result in a reduction to
this annual burden in 2020 of 389,940 hours with an equivalent cost
reduction of approximately $17.4 million for all 97 issuers and State
Exchanges performing premium billing and payment processing.
In addition, the Program Integrity Rule estimated that issuers and
State Exchanges performing premium billing and payment processing would
need to print and send approximately 1.82 million separate paper bills
per month in 2020, incurring monthly costs of approximately $91,200.
The Program
[[Page 35203]]
Integrity Rule estimated the total cost for all issuers and State
Exchanges to be approximately $547,225 in 2020. In 2021, we estimated
that the annual cost for all issuers and State Exchanges to send
separate paper bills would be approximately $1,070,129 and that, in
2022, the annual cost would be approximately $1,045,808. In the May
2020 IFC, we anticipated that delaying the implementation of the
deadline for the separate billing regulation by 60 days would reduce
the cost of printing separate bills in 2020 by approximately $182,400.
We are not aware of any issuers or State Exchanges performing
premium billing and payment processing that have incurred costs to
implement these requirements. Therefore, if finalized, repealing the
separate billing regulation would also remove the associated ICRs and
the anticipated burden on QHP issuers and State Exchanges that perform
premium billing and payment processing. Thus, if finalized as proposed,
we will request discontinuation of the ICRs associated with the
repealed separate billing regulation (OMB control number: 0938-1358
(Billing and Collection of the Separate Payment for Certain Abortion
Services (CMS-10681).
C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45 CFR Part
155)
In this proposed rule, the Departments propose modifications to the
section 1332 waiver implementing regulations, including changes related
to the interpretation of the statutory guardrails, section 1332 waiver
amendment and extension requests, and new language related to pass-
through funding for approved section 1332 waiver plans. As outlined in
this proposed rule, the policies and interpretations proposed in this
rule, if finalized, would supersede and replace prior finalized
policies and interpretations. The Departments also propose to modify
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
section 1332 waivers during emergent situations, building off of the
flexibilities provided during the COVID-19 PHE. However, this rule does
not propose to alter any of the requirements related to section 1332
waiver applications, compliance and monitoring, or evaluation in a way
that would impose any additional costs or burdens for states seeking
waiver approval or those states with approved waiver plans that have
not already been captured in prior burden estimates. The Departments
anticipate that implementing these provisions would not significantly
change the associated burden currently approved under OMB control
number: 0938-1389/Expiration date: February 29, 2024.
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection and recordkeeping
requirements. These requirements are not effective until they have been
approved by the OMB.
We invite public comments on these potential ICRs. If you comment
on these information collections, that is, reporting, recordkeeping or
third-party disclosure requirements, please submit your comments
electronically as specified in the ADDRESSES section of this proposed
rule.
Comments must be received on/by July 28, 2021.
VI. 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.
VII. Regulatory Impact Analysis
A. Statement of Need
This rule proposes revised FFE and SBE-FP user fees for the 2022
benefit year. It also proposes to repeal the Exchange DE option; and
includes proposed changes related to open enrollment; Navigator program
standards; and separate billing and segregation of funds for abortion
services. In addition, it clarifies a provision related to special
enrollment periods for enrollees that are newly eligible or ineligible
for APTC. Finally, relating to section 1332 waivers, it proposes
several changes, including the repeal of the incorporation of many
policies and interpretations from the 2018 Guidance into the section
1332 waiver implementing regulations. These policies are consistent
with providing more accessible and affordable health care through the
individual and small group markets.
HHS is proposing to extend the annual individual market open
enrollment period in order to provide individuals with a longer
opportunity to enroll in coverage, which will expand access to health
insurance coverage. Similarly, HHS is proposing to reinstitute prior
requirements that FFE Navigators provide information and assistance
with regard to certain post-enrollment topics and help consumers
understand basic concepts and rights related to health coverage and how
to use it in order to make coverage more accessible to consumers. In
addition, HHS is proposing to repeal the separate billing regulation at
Sec. 156.280(e)(2)(ii) that required individual market QHP issuers to
send a separate bill for that portion of a policy holder's premium that
is attributable to coverage for abortion services for which federal
funds are prohibited and to instruct such policy holders to pay for the
separate bill in a separate transaction. This proposal, if finalized,
would reduce administrative burden on issuers, states, Exchanges, and
consumers, as well as consumer confusion and unintended losses of
coverage.
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. 96354), section 1102(b) of the Act, 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), and the
Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 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
[[Page 35204]]
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). We estimate that this rulemaking is ``economically significant''
as measured by the $100 million threshold, and hence also a major rule
under the Congressional Review Act. Accordingly, we have prepared a
Regulatory Impact Analysis that to the best of our ability presents the
costs and benefits of the rulemaking.
The provisions in this proposed rule aim to expand consumer access
to affordable health care. They would extend the annual open enrollment
period, expand Navigator duties, repeal the Exchange DE option, provide
more funding for FFE Navigators and consumer outreach and education,
and reduce administrative burden and confusion for consumers. These
provisions would also reduce regulatory burden for states and
administrative costs for Exchanges and issuers. Through the
improvements in enrollment accessibility and increased affordability
for consumers, these proposed provisions are expected to increase
access to affordable health coverage.
The proposed user fee rates in this proposed rule are higher than
those previously finalized for 2022 in part 1 of the 2022 Payment
Notice final rule,\159\ which could increase premiums for consumers. In
accordance with Executive Order 12866, HHS believes that the benefits
of this regulatory action justify the costs.
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\159\ 85 FR 6138.
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C. Impact Estimates of the Proposed Rule Provisions and Accounting
Table
In accordance with OMB Circular A-4, Table 1 depicts an accounting
statement summarizing HHS's assessment of the benefits, costs, and
transfers associated with this regulatory action.
This proposed rule implements standards for programs that will have
numerous effects, including allowing consumers to have continued access
to coverage and health care and stabilizing premiums in the individual
and small group health insurance markets and in the Exchanges. We are
unable to quantify all benefits and costs of this proposed rule. The
effects in Table 1 reflect qualitative impacts and estimated direct
monetary costs and transfers resulting from the provisions of this
proposed rule for health insurance issuers and consumers.
[[Page 35205]]
[GRAPHIC] [TIFF OMITTED] TP01JY21.004
This RIA expands upon the impact analyses of previous rules and
utilizes the CBO analysis of the ACA's impact on federal spending,
revenue collection, and insurance enrollment. In addition to utilizing
CBO projections, HHS conducted an internal analysis of the effects of
its regulations on enrollment and premiums. Based on these internal
analyses, we anticipate that the quantitative effects of the provisions
proposed in this rule are consistent with our previous estimates in the
2021 Payment Notice for the impacts associated with APTC and FFE user
fee requirements.
1. Navigator Program Standards (Sec. 155.210)
We propose to amend Sec. 155.210(e)(9) to reinstitute the
requirement that FFE Navigators provide consumers with information and
assistance with regard to certain post-enrollment topics. In FFEs,
Navigators will continue to be permitted to undertake the Navigator
duties specified in Sec. 155.210(e)(9) until this proposal, if
finalized, becomes effective. If this proposal is finalized, FFE
Navigators would be required to perform the Navigator duties specified
in Sec. 155.210(e)(9) beginning with Navigator grants awarded after
the effective date of this rule, including non-competing continuation
awards. If this proposal is finalized prior to Navigator grant funding
being awarded in FY 2022, FY 2021 Navigator grantees will be required
to perform these duties beginning with the Navigator grant funding
awarded in FY 2022 for the second 12-month budget period of the 36-
month period of performance. To the extent Navigators awarded grant
[[Page 35206]]
funding in FY 2021 are not already performing these duties under their
year one project plans when this proposal, if finalized, becomes
effective, they can revise their project plans to incorporate
performance of the duties specified in Sec. 155.210(e)(9) as part of
their non-competing continuation application for their FY 2022 funding.
These duties were previously required of Navigators in all
Exchanges before the 2020 Payment Notice amended Sec. 155.210(e)(9)
and made assistance with these post-enrollment topics permissible for
FFE Navigators, but not required, beginning with FFE Navigator grants
awarded in 2019. Despite no longer being required, the majority of FFE
Navigators continue to provide information and assistance to consumers
and report metrics on the post-enrollment topics outlined in Sec.
155.210(e)(9) and we anticipate positive feedback from Navigators and
other stakeholders in response to this proposal. Additionally, by
reinstituting the requirements at Sec. 155.210(e)(9), we would be able
to both require applicants to include plans for performing these post-
enrollment activities as part of their annual applications for new or
continued Navigator grant funding, as well as include Navigator
assistance with these post-enrollment activities as part of their
performance evaluations. All costs associated with reaching these
consumers in FFEs would be considered allowable costs that would be
covered by the Navigator grants for the FFEs and that may be drawn down
as the grantee incurs such costs.
2. Exchange Direct Enrollment Option (Sec. 155.221(j))
We propose to remove Sec. 155.221(j) and repeal the Exchange DE
option, which allows states to use direct enrollment technology to
transition to private-sector-focused enrollment pathways operated by
QHP issuers, web-brokers, and agents and brokers, instead of or in
addition to a centralized eligibility and enrollment website operated
by an Exchange. We anticipate that repealing the Exchange DE option
would have minimal impact on stakeholders since no resources have been
expended by states or HHS on implementing it. Any potential costs and
burdens associated with the Exchange DE option would be eliminated.
These include costs to develop consumer-facing enrollment functionality
and meet eligibility application technical requirements, as well as to
maintain back-end eligibility determination functionality and other
back-end eligibility services; start-up and implementation costs to
develop the appropriate privacy and security infrastructure and
business controls; as well as costs related to ongoing oversight and
monitoring of DE entities and maintaining the individual interfaces and
transactions with each DE entity. We also anticipate that repealing the
Exchange DE option could mitigate potential negative downstream impacts
raised by commenters when it was proposed, including an increased
uninsured and underinsured population.
3. Open Enrollment Period Extension (Sec. 155.410(e))
We are proposing to extend the individual market annual open
enrollment period for all Exchanges from November 1 through January
15th for the 2022 coverage year and beyond. We do not anticipate a
significant impact on the Exchange risk pool to result from this
change. Consumers would benefit from a longer open enrollment period
without additional demand placed on them. A lengthened open enrollment
period may lead to increased enrollments which could impose additional
costs on Exchanges and enrollment assisters to conduct outreach and
assist new consumers. However, this change could also reduce outreach
costs on Exchanges and enrollment assisters by spreading out
enrollments over a greater length of time, resulting in opportunities
for efficiency and increased health coverage.
4. Monthly Special Enrollment Period for APTC-Eligible Qualified
Individuals With a Household Income No Greater Than 150 Percent of the
Federal Poverty Level (Sec. 155.420(d)(16))
We propose to codify a monthly special enrollment period for
qualified individuals or enrollees, or the dependents of a qualified
individual or enrollee, who are eligible for APTC, and whose household
income is expected to be no greater than 150 percent of the FPL. We
propose that this special enrollment period be available at the option
of the Exchange in order to allow State Exchanges to decide whether to
implement it based on their specific market dynamics, needs, and
priorities. We also propose that Exchanges on the Federal platform will
implement this special enrollment period by providing qualified
individuals who are eligible with a pathway to access it through the
HealthCare.gov application.
To provide Exchanges with flexibility to prioritize ensuring that
qualifying individuals are able to obtain coverage through this special
enrollment period quickly following plan selection, or to implement
this special enrollment period in keeping with their current
operations, we propose to add a new paragraph at Sec.
155.420(b)(2)(vii) to provide that the Exchange must ensure that
coverage is effective in accordance with paragraph (b)(1) of this
section or on the first day of the month following plan selection, at
the option of the Exchange. We also propose to include plan category
limitations by adding a new paragraph at Sec. 155.420(a)(4)(ii)(D) to
provide that an Exchange must permit eligible enrollees and their
dependents to use the special enrollment period to change to a silver
level plan; and to amend Sec. 155.420(a)(4)(iii), which provides other
plan category limitations for other special enrollment periods, to
provide that these other plan category limitations do not apply to
enrollees and dependents who qualify for the proposed special
enrollment period.\160\ Finally, we propose to add a new paragraph at
Sec. 147.104(b)(2)(i)(G) to specify that issuers are not required to
provide this special enrollment period in the individual market with
respect to coverage offered outside of an Exchange, because eligibility
for the special enrollment period is based on eligibility for APTC, and
APTC cannot be applied to coverage offered outside of an Exchange.
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\160\ This provision would not prevent enrollees who qualify for
the new special enrollment period from changing to a plan of any
category through a special enrollment period that provides this
flexibility, including the special enrollment periods at Sec.
155.420(d)(4), (8), (9), (10), (12), and (14).
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A monthly special enrollment period available through Exchanges for
APTC-eligible qualifying individuals whose household income does not
exceed 150 percent of the FPL would provide more opportunities for
certain low-income APTC and CSR-eligible consumers to take advantage of
the financial assistance available to them. As discussed in the
preamble for this rulemaking, we believe that the benefit to providing
these opportunities outweighs adverse selection concerns. Further, we
believe the risk of adverse selection is mitigated to some degree by
most qualifying individuals having access to a premium-free silver plan
after application of APTC with a 94 percent actuarial value, because
consumers eligible for a premium-free plan covering such a significant
portion of health care services would likely already be enrolled if
they were aware of their eligibility for such coverage. Additionally,
we believe that those for whom this is the case are not likely to move
in and out of coverage once they have enrolled, for example to end
[[Page 35207]]
coverage once an immediate health care need is met, which may also
limit some adverse selection risk. We also believe that applying plan
category limitations to this special enrollment period would help to
mitigate adverse selection because it would limit the ability of
enrollees to change to a higher metal level plan based on a new health
care need and then change back to a silver plan once the health issue
is resolved. We also believe that enrollees who are interested in
changing plans during the year through this special enrollment period
would likely be deterred because such a change would generally mean
they lose progress they have made toward meeting their deductibles and
other accumulators. However, enrollees may still choose to enroll in a
silver level plan that is more expensive than their zero dollar option,
and, with a monthly special enrollment period, could make this change
during the plan year based on a difference in provider network or
prescription drug formulary.
Therefore, we request comment on practices, including education and
outreach, that could help ensure that consumers who are eligible for
this special enrollment period enroll in the zero-dollar premium silver
plan that is available to them. We also seek comment on the remaining
risk for issuers; for example, on the extent to which there is risk
related to consumers who become aware of the availability of the
proposed special enrollment period after they become sick and seek to
enroll because they need medical care. Based on the possibility that
consumers could enroll through the special enrollment period only after
they need to use health care services, we seek comment on whether
issuers may account for this risk through premium increases. We
estimate a 0.5 to 2 percent increase in premiums when the enhanced APTC
provisions of the ARP are in effect in states where this special
enrollment period is implemented, due to increased adverse selection
risk, resulting in an estimated $250 million to $1 billion increase in
APTC/PTC outlays and decrease in income tax revenues nationwide, and we
seek comment on this estimate.
We also seek comment on potential risk that individuals, including
those who enroll in coverage due to a health event, later experience a
household income change or change their primary place of residence such
that they are no longer eligible for a silver plan with a zero dollar
premium, and that these individuals will end coverage at that point.
Because this special enrollment period has the potential to introduce
new adverse selection risk into the individual market, CMS also seeks
comment generally on the impact on premiums of this policy in Exchanges
where it is implemented, and potential regulatory tools that could
mitigate these risks.
For example, Exchanges that implement this special enrollment
period could try to mitigate some risks with a robust outreach and
education campaign to promote awareness of the special enrollment
period. However, because the proposed special enrollment period would
be based on projected annual household income level, and Exchanges rely
on applicants to report their most up to date household income
information, it may be difficult for Exchanges to assess which
individuals might be eligible for outreach and education purposes and
could make targeted marketing and outreach difficult. We therefore seek
comment on practices that could help mitigate this challenge, and ways
to improve outreach to low-income consumers more generally. Relatedly,
we seek comment on how Exchanges could help to mitigate potential
confusion on the part of stakeholders that provide enrollment
assistance, such as HHS Navigator grantees, and agents and brokers. We
seek comment on how Exchanges and stakeholders that provide enrollment
assistance could develop effective outreach and education campaigns to
target this population.
Finally, we request comment on level of effort for Exchanges to
implement this special enrollment period, especially within the amount
of time required to make it available to consumers during the 2022 plan
year.
5. Clarification of Special Enrollment Period for Enrollees Who Are
Newly Eligible or Newly Ineligible for Advance Payments of the Premium
Tax Credit (Sec. 155.420(f))
We are proposing new language to clarify, for purposes of the
special enrollment period rules at 45 CFR 155.420, that a qualified
individual, enrollee, or his or her dependent, who qualifies for APTC
because they meet the criteria at Sec. 155.305(f), but who qualifies
for a maximum APTC amount of zero dollars, is not considered APTC
eligible, even when they have previously been APTC ineligible for
another reason, such as having other MEC. We believe that the current
special enrollment period rules that reference APTC eligibility at
Sec. 155.420(d)(6) could permit inconsistent interpretations of what
it means to be newly eligible or ineligible for APTC when an individual
is found to be eligible generally to receive APTC, but for a specific
APTC amount of zero dollars. We believe that this clarification will
help ensure that the special enrollment periods at Sec. 155.420(d)(6)
are available to individuals as intended: those determined to be newly
eligible for an APTC amount greater than zero dollars.
We believe that this change will not be relevant to a significant
number of individuals in Exchanges on the Federal platform, but that
for the reasons described in preamble, it will be important in light of
the removal of the upper APTC eligibility limit on household income at
400 percent of the FPL for taxable years 2021 and 2022 under the
ARP.\161\ More specifically, this definition makes clear that an
individual who becomes newly eligible for a maximum APTC amount of zero
dollars, and who enrolls in Exchange coverage, for example, through the
2021 special enrollment period available to consumers in states on the
Federal platform, would qualify for a special enrollment period per
Sec. 155.420(d)(6)(i) or (ii) if, later in the plan year, they become
newly eligible for an APTC amount greater than zero dollars based on a
decrease in their household income. This clarification may be helpful
for any individual who experiences a decrease in household income that
makes them newly eligible for an APTC amount of greater than zero
dollars to understand.
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\161\ Public Law 117-2.
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As of March 1, 2021 (prior to the passage of the ARP),
approximately 7.25 million enrollees through Exchanges on the Federal
platform were APTC eligible, but only 36,000 (or 0.5 percent) were APTC
eligible with a maximum APTC amount of zero dollars. However, just
under 119,000 enrollees through Exchanges on the Federal platform
reported a household income that was greater than 400 percent of the
FPL. HHS analysis indicated that roughly 35,000 of this greater than
400 percent FPL population would automatically be considered APTC
eligible with a maximum APTC amount of zero dollars once the 400
percent FPL limit on household income had been removed and these
enrollees were no longer considered APTC ineligible simply by virtue of
exceeding that limit, doubling the number of potentially impacted
enrollees through Exchanges on the Federal platform even before to the
passage of the ARP. Additionally, as of March 1, 2021, HHS identified
roughly 501,000 enrollees that did not report any household income on
their application; some of these enrollees may
[[Page 35208]]
also be newly eligible for APTC under the new rules. Currently, after
passage of the ARP and CMS' removal of the 400 percent FPL limit on
household income regarding qualifying individuals applying for coverage
through an Exchange on the Federal platform, the number of enrollees
who did not provide household income has decreased slightly, to just
under 472,000, and the number of enrollees reporting a household income
greater than 400 percent of the FPL has increased to over 191,000. The
number of enrollees eligible for a maximum APTC amount of zero dollars
has also increased slightly, to just under 42,000 individuals.\162\ We
expect these trends continue during 2022 in Exchanges on the Federal
platform and likely in other State Exchanges, as well, making this
clarification especially relevant at that time.
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\162\ These figures are drawn from internal CMS analysis as of
late May, 2021, almost two months after CMS updated HealthCare.gov
to reflect the removal of the 400 percent FPL limit on household
income on applicants applying for coverage with APTC.
---------------------------------------------------------------------------
We seek comment on this proposal, including from State Exchanges
regarding whether this definition of APTC eligibility reflects their
current implementation of the special enrollment period qualifying
events per Sec. 155.420(d)(6), and if not, whether there are policy
concerns about this clarification, or concerns about the burden of
making related changes to State Exchanges' operations. We also seek
comment on whether any group of individuals who may qualify for one or
more of the special enrollment periods at Sec. 155.420(d)(6) could be
harmed by this clarification, and if so, how such harm could be
mitigated.
6. FFE and SBE-FP User Fees (Sec. 156.50)
We are proposing an increased FFE user fee rate of 2.75 percent for
the 2022 benefit year, which is higher than the 2.25 percent FFE user
fee rate finalized in part one of the 2022 Payment Notice. We also
propose to increase the SBE-FP user fee rate to 2.25 percent for the
2022 benefit year from the 1.75 percent SBE-FP user fee rate finalized
in part 1 of the 2022 Payment Notice final rule.\163\ Based on our
estimated costs, enrollment (including anticipated transitions of
states from the FFE and SBE-FP models to either the SBE-FP or State
Exchange models), premiums for the 2021 and 2022 benefit years, and
proposed user fee rates, we expect transfers from the issuers to
federal government to be increased by approximately $200 million in
plan year 2022.
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\163\ 85 FR 6138.
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We are proposing to repeal the 2023 benefit year user fee rate for
the Exchange DE option in FFE and SBE-FP states, which was finalized in
part 1 of the 2022 Payment Notice final rule. No state entity has
approached HHS to consider this option. Since this option has not been
implemented in any state, we do not expect any changes to user fee
transfers from issuers to the federal government due to this
rescission.
7. Segregation of Funds for Abortion Services (Sec. 156.280)
We propose to amend the separate billing regulation at Sec.
156.280(e)(2)(ii) that governs payments for QHPs that provide coverage
of abortion services for which federal funds are prohibited. Under this
proposal, we would revert to prior policy that allowed QHP issuers
offering coverage of such abortion services flexibility in selecting a
method to comply with the separate payment requirement in section 1303.
If finalized, acceptable methods for satisfying the separate payment
requirement would include sending the policy holder a single monthly
invoice or bill that separately itemizes the premium amount for
coverage of such abortion services; sending the policy holder a
separate monthly bill for these services; or sending the policy holder
a notice at or soon after the time of enrollment that the monthly
invoice or bill will include a separate charge for such services and
specify the charge.
The 2019 Program Integrity Rule extensively detailed the
anticipated financial and operational burdens from the separate billing
regulation. We believe these proposals will remove the significant
burden associated with the separate billing regulation. Those burdens
included costly estimates for issuer implementation of the technical
build to implement the necessary system changes to support separate
billing and receipt of separate payments, which would require
significant changes to current billing practice and pose increased
challenges for some states and issuers given the mid-plan year
implementation timeline. These activities included planning,
assessment, budgeting, contracting, building and testing their systems;
as well as one-time changes such as billing-related outreach and call
center training. The burdens also included ongoing costs related to
sending a separate bill, such as those related to identifying impacted
enrollees, ensuring billing accuracy, reconciliation, quality
assurance, record keeping, document retention, support for enrollees
who enter grace periods for non-payments, customer service, outreach,
and compliance. Issuers would also expected to assume annual materials
costs related to printing of and sending the separate bill. We
anticipated that State Exchanges would experience increased burden
associated with one-time technical changes such as updating online
payment portals to accept separate payments and updating enrollment
materials and notices that reference binder payments, and ongoing costs
related to increased customer service, outreach, and compliance.
We also stated in the 2019 Program Integrity Rule that QHP issuers
were likely to consider these new costs when setting actuarially sound
rates and that this would likely lead to higher premiums for enrollees.
Specifically, we estimated there would be an approximate premium impact
of up to 1.0 percent in plan year 2021 and each year thereafter states
with QHP issuers offering coverage of abortion services for which
federal funds are prohibited. We also estimated that enrollment would
be slightly reduced in the impacted states as a result of the increase
to premiums. In plan year 2021 and each year after, we estimated that
APTC amounts would increase up to $146 million when premium rates
reflect the projected additional administrative and operational expense
burdens.
We also projected in the 2019 Program Integrity Rule that the FFE
would incur additional costs due to one-time technical changes and
increased call volumes and additional customer services efforts. We
estimated that the FFE would incur a one-time cost of $750,000 in 2020
and ongoing annual costs of approximately $400,000 in 2020, $800,000 in
2021, $600,000 in 2022, and $400,000 in 2023 onwards to implement the
separate billing policy.
We also anticipated that all impacted State Exchanges would incur
one-time costs of $9 million in 2020 for necessary technical changes
such as updating online payment portals to accept separate payments and
updating enrollment materials. In addition, we estimated that State
Exchanges would incur ongoing annual costs associated with increased
customer service, outreach, and compliance totaling $2.4 million in
2020, $4.8 million in 2021, $3.6 million in 2022, and $2.4 million 2023
onwards for all impacted State Exchanges.
We also anticipated increased costs to consumers for the time
required to read and understand the separate bills and seek help from
customer service, and additional time to read and send separate
payments in subsequent
[[Page 35209]]
months. For the estimated 2 million policy holders in plans offering
coverage of abortion services for which federal funds are prohibited,
the Program Integrity Rule estimated a total annual cost for of 2.9
million hours in 2020 with an associated annual cost of $35.5 million.
We decreased this estimated burden slightly in the May 2020 IFC to
account for a burden reduction of approximately 337,793 hours with an
equivalent cost savings of approximately $4.2 million. For subsequent
years, we estimated in the 2019 Program Integrity Rule that the annual
enrollee burden would be approximately 2 million hours with an
associated annual cost of approximately $25.1 million.
In total, the projected burden to all issuers, states, State
Exchanges performing premium billing and payment processing, the FFE,
and consumers due to the separate billing policy regulation totaled
$546.1 million in 2020, $232.1 million in 2021, $230.7 million in 2022,
and $229.3 million annually in 2023 and onwards.
We also believe the consumer confusion and new logistical obstacles
due to the separate billing regulation would disproportionately harm
and burden communities who already face barriers to accessing care and
that any potential coverage losses caused by the separate billing
regulation could further exacerbate existing health disparities and
jeopardize health outcomes. Further, issuers dropping coverage of
abortion services for which federal funds are prohibited as a result of
the burden associated with the separate billing regulation could
transfer out-of-pocket costs for this coverage to enrollees, which may
disproportionately impact low-income women who already face barriers to
accessing quality health care.
Upon reassessing the separate billing policy and in light of the
legal developments, we no longer see a discernable benefit to requiring
separate billing that would be sufficient to outweigh its burdens. If
finalized, we anticipate repeal of the separate billing regulation
would remove the associated burdens to issuers, states, Exchanges, and
consumers by allowing issuers to continue the billing practices and
collection methods previously adopted and relied upon since publication
of the 2016 Payment Notice.
8. Section 1332 Waivers
In this proposed rule, the Departments propose modifications to the
section 1332 waiver implementing regulations, including new proposed
policies and interpretations of the guardrails. We also propose new
process and procedures for amendment and extension requests for
approved section 1332 waiver plans. As outlined in this proposed rule,
the policies and interpretations proposed in this rule, if finalized,
would supersede and replace prior finalized policies and
interpretations. The Departments also propose to modify these
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
section 1332 waivers during future emergent situations. However, this
rule does not propose to alter any of the requirements related to state
innovation waiver applications, compliance and monitoring, or
evaluation in a way that would create any additional costs or burdens
for states submitting proposed waiver applications or those states with
approved waiver plans that has not already been captured in prior
burden estimates. The Departments are of the view that both states with
approved section 1332 waivers and states that are considering section
1332 waivers would be minimally impacted by these proposed changes in
policy. The Departments anticipate that implementing these provisions
would not significantly change the associated burden currently approved
under OMB control number: 0938-1389/Expiration date: February 29, 2024.
The Departments are of the view that section 1332 waivers could help
increase state innovation, which in turn could lead to more affordable
health coverage for individuals and families in states that consider
implementing a section 1332 waiver program.
9. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed or final
rule, we should estimate the cost associated with regulatory review.
Due to the uncertainty involved with accurately quantifying the number
of entities that will review the rule, we assume that the total number
of unique commenters on the 2022 Payment Notice proposed rule will be
the number of reviewers of this proposed rule. We acknowledge that this
assumption may understate or overstate the costs of reviewing this
rule. It is possible that not all commenters reviewed the 2022 Payment
Notice proposed rule in detail, and it is also possible that some
reviewers chose not to comment on that proposed rule. For these
reasons, we thought that the number of past commenters on the 2022
Payment Notice proposed would be a fair estimate of the number of
reviewers of this rule. We welcome any comments on the approach in
estimating the number of entities which will review this proposed rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this proposed rule,
and therefore for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule. We seek comments
on this assumption.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health service managers (Code 11-9111), we
estimate that the cost of reviewing this rule is $114.24 per hour,
including overhead and fringe benefits.\164\ Assuming an average
reading speed, we estimate that it would take approximately 1 hour for
the staff to review half of this proposed rule. We assume 245 entities
will review this proposed rule. For each entity that reviews the rule,
the estimated cost is approximately $114.24 (1 hour x $114.24).
Therefore, we estimate that the total cost of reviewing this regulation
is approximately $27,989 ($114.24 x 245 reviewers).
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\164\ https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------
D. Regulatory Alternatives Considered
In developing the policies contained in this proposed rule, we
considered numerous alternatives to the presented proposals. Below we
discuss the key regulatory alternatives that we considered.
We considered taking no action related to our proposal to add a new
paragraph at Sec. 155.420(d)(16), to provide a monthly special
enrollment period for qualified individuals or enrollees, or the
dependent of a qualified individual or enrollee, who are eligible for
APTC, and whose household income is expected to be no greater than 150
percent of the FPL. However, we believe that many consumers will
benefit from having additional opportunities to enroll in low-cost
Exchange coverage, and that those who do not enroll during the open
enrollment period are likely to have been unaware of their option to
enroll in a plan with no monthly premium through the Exchange.
We also considered other strategies to help individuals who may
benefit from the proposed special enrollment period, some of whom
qualify for another, existing special enrollment period. For example,
consumers who do not receive timely notice of an event that triggers
eligibility for a special enrollment period, and otherwise were
reasonably unaware that a triggering event occurred under Sec.
155.420(d)(1) may be able to
[[Page 35210]]
benefit from a policy finalized at Sec. 155.420(c)(5) in the 2022
Payment Notice that requires the Exchange to provide 60 days from the
date that the consumer knew or reasonably should have known of the
occurrence of the triggering event.\165\ Exchanges could leverage this
provision to help enable consumers to maintain coverage after losing
Medicaid. We solicit comment regarding additional strategies to help
consumers maintain coverage.
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\165\ 86 FR 24140.
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We considered taking no action related to our proposal to clarify,
for purposes of the special enrollment period rules at Sec. 155.420,
that a qualified individual, enrollee, or his or her dependent who
qualifies for APTC because they meet the criteria at Sec. 155.305(f),
but who qualifies for a maximum APTC amount of zero dollars, is not
considered APTC eligible. However, we believe that consumers and other
stakeholders will benefit from clarity on this issue because it
improves transparency of Exchanges' implementation of the special
enrollment period qualifying events provided at Sec. 155.420(d)(6).
Increased transparency will allow consumers to better understand the
eligibility criteria for special enrollment periods provided by Sec.
155.420(d)(6) and may help Exchanges and other stakeholders to more
effectively message rules that determine eligibility. We also
considered applying this clarification only to some of the special
enrollment period qualifying events at Sec. 155.420(d)(6), such as
only to those at paragraphs (d)(6)(ii)-(ii), to permit some individuals
to access a special enrollment period based on newly becoming eligible
for a maximum APTC amount of zero dollars after previously having been
APTC ineligible for another reason. We believe that applying this
definition to all of the qualifying events in Sec. 155.420(d) is
simpler and makes sense based on the nature of the qualifying events.
However, we have solicited comment on whether Exchanges and other
stakeholders agree with this approach, or believe that another
definition of APTC eligibility should apply to certain qualifying
events at Sec. 155.420(d)(6).
We considered restoring user fee rates to their 2021 levels at 3
percent and 2.5 percent of total monthly premium for issuers in the FFE
and SBE-FPs, respectively. However, based on our analysis of estimated
2022 enrollment, premiums, and contract costs, we determined that this
increase would be unnecessary to finance the Exchange essential
functions.
Regarding the section 1332 waiver proposals in this rule, the
Departments considered rescinding the 2018 Guidance and the regulatory
updates and policies finalized in part 1 of the 2022 Payment Notice
final rule such that the Departments would rely on the statute for
review and approval of section 1332 waiver applications. The
Departments did not choose this option because not proposing policies,
interpretations and standards to help explain the program requirements
would lead to uncertainty for states considering section 1332 waiver
applications. The Departments also considered codifying the policies
and interpretations in the 2015 Guidance in regulation, but determined
proposing new policies and interpretations (some of which align with
previous guidance and rulemaking) was the clearest way to explain the
proposed requirements for submission and approval of section 1332
waivers.
E. Regulatory Flexibility Act (RFA)
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 will 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 considers a rule to have a significant economic
impact on a substantial number of small entities if at least 5 percent
of small entities experience a change in revenues of more than 3 to 5
percent.
In this proposed rule, we propose revised 2022 user fee rates,
which will impact issuer rate setting. We believe that health insurance
issuers and group health plans 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 $41.5 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 $35 million or less.\166\ 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 \167\ submissions for the 2019 MLR
reporting year, approximately 77 out of 479 issuers of health insurance
coverage nationwide had total premium revenue of $41.5 million or less.
This estimate may overstate the actual number of small health insurance
companies that may be affected, since over 67 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 will result in their revenues exceeding $41.5 million. The user
fee rates proposed in this rule are lower than the 2021 benefit year
user fee rates by 0.25 percent, and these new proposed rates are higher
than the previously finalized 2022 benefit year user fee rates by 0.5
percent. Therefore, these user fee rates would only impact premium
revenue for these issuers by approximately 0.25 percent, since no
issuer has effectuated payments under the previously finalized user fee
rates, and this impact is below HHS's 3 to 5 percent significance
threshold stated above.
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\166\ https://www.sba.gov/document/support-table-size-standards.
\166\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
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In this proposed rule, we also propose to codify a new monthly
special enrollment period for certain APTC-eligible individuals.
Because this special enrollment period has the potential to introduce
new adverse selection risk into the individual market, we seek comment
in the RIA on the impact on premiums of this policy in Exchanges where
it is implemented. We estimate that this policy could result in an
increase in premiums of 0.5 to 2 percent when the enhanced APTC
provisions of the ARP are in effect, and this impact is below HHS's 3
to 5 percent significance threshold stated earlier in this preamble.
In addition, the other proposals in this rule would either reduce
costs or have no cost impact. Therefore, we do not expect the proposed
provisions of this rule to affect a substantial number of small
entities. We do not believe that this threshold will be reached by the
requirements in this proposed rule or final rule. Therefore, the
Secretary has determined that this proposed rule will not have a
significant economic impact
[[Page 35211]]
on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. While this rule is not
subject to section 1102 of the Act, we have determined that this
proposed rule would not affect small rural hospitals. Therefore, the
Secretary has determined that this rule would not have a significant
impact on the operations of a substantial number of small rural
hospitals.
F. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2021, that
threshold is approximately $158 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 (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has federalism
implications. In our view, while this proposed rule would not impose
substantial direct requirement costs on state and local governments,
this regulation has federalism implications due to potential direct
effects on the distribution of power and responsibilities among the
state and federal governments relating to determining standards
relating to health insurance that is offered in the individual and
small group markets.
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, we
have engaged in efforts to consult with and work cooperatively with
affected states, including participating in conference calls with and
attending conferences of the NAIC, and consulting with state insurance
officials on an individual basis.
While developing this rule, we attempted to balance the states'
interests in regulating health insurance issuers with the need to
ensure market stability. By doing so, we complied with the requirements
of Executive Order 13132.
Because states have flexibility in designing their Exchange and
Exchange-related programs, state decisions will ultimately influence
both administrative expenses and overall premiums. States are not
required to establish an Exchange. For states that elected previously
to operate an Exchange, those states had the opportunity to use funds
under Exchange Planning and Establishment Grants to fund the
development of data. Accordingly, some of the initial cost of creating
programs was funded by Exchange Planning and Establishment Grants.
After establishment, Exchanges must be financially self-sustaining,
with revenue sources at the discretion of the state. A user fee is
assessed on issuers under all existing Exchange models, including State
Exchanges where the user fee is assessed by the state, SBE-FPs, and the
FFEs. We have solicited comment on the proposed user fee rate of 2.75
percent of monthly premiums for issuers in FFEs and 2.25 percent of
monthly premiums for issuers in SBE-FPs.
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 the Congress and the Comptroller for
review. This proposed rule, if finalized as proposed, is expected to be
a ``major rule'' as that term is defined in 5 U.S.C. 804(2), because it
is likely to result in an annual effect on the economy of $100 million
or more.
List of Subjects
31 CFR Part 33
Health care, Health insurance, Reporting and recordkeeping
requirements.
45 CFR Part 147
Age discrimination, Citizenship and naturalization, Civil rights,
Health care, Health insurance, Individuals with disabilities,
Intergovernmental relations, Reporting and recordkeeping requirements,
Sex discrimination.
45 CFR Part 155
Administrative practice and procedure, Advertising, Age
discrimination, Brokers, Civil rights, Citizenship and naturalization,
Conflict of interests, Consumer protection, Grant programs-health,
Grants administration, 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, Sex discrimination, State and local governments,
Technical assistance, Taxes, Women, Youth.
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory
committees, Age discrimination, Alaska, Brokers, Citizenship and
naturalization, Civil rights, Conflict of interests, Consumer
protection, Grant programs-health, Grants administration, Health care,
Health insurance, Health maintenance organization (HMO), Health
records, Hospitals, Indians, Individuals with disabilities,
Intergovernmental relations, Loan programs-health, Medicaid,
Organization and functions (Government agencies), Prescription drugs,
Public assistance programs, Reporting and recordkeeping requirements,
Sex discrimination, State and local governments, Sunshine Act,
Technical assistance, Women, Youth.
For the reasons set forth in the preamble, the Department of the
Treasury proposes to amend 31 CFR subtitle A as set forth below:
PART 33--WAIVERS FOR STATE INNOVATION
0
1. The authority citation for part 33 continues to read as follows:
Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119.
0
2. Amend Sec. 33.108 by revising paragraphs (f)(3)(iv) introductory
text and (f)(3)(iv)(A) through (C) to read as follows:
Sec. 33.108 Application procedures.
* * * * *
(f) * * *
(3) * * *
[[Page 35212]]
(iv) The analyses, actuarial certifications, data, assumptions,
targets, and other information set forth in paragraph (f)(4) of this
section sufficient to provide the Secretary and the Secretary of Health
and Human Services, as applicable, with the necessary data to determine
that the State's proposed waiver satisfies the general requirements for
approval under section 1332(b)(1) of the Affordable Care Act consistent
with the provisions of this paragraph (f)(3)(iv):
(A) As required under section 1332(b)(1)(A) of the Affordable Care
Act (the comprehensive coverage requirement), will provide coverage
that is at least as comprehensive as the coverage defined in section
1302(b) of the Affordable Care Act and offered through Exchanges
established under the Affordable Care Act as certified by the Office of
the Actuary of the Centers for Medicare & Medicaid Services based on
sufficient data from the State and from comparable States about their
experience with programs created by the Affordable Care Act and the
provisions of the Affordable Care Act that the State seeks to waive. To
satisfy the comprehensive coverage requirement, the Secretary and the
Secretary of Health and Human Services, as applicable, must determine
that the coverage under the State plan is forecasted to be at least as
comprehensive overall for residents of the state as coverage absent the
waiver;
(B) As required under section 1332(b)(1)(B) of the Affordable Care
Act (the affordability requirement), will provide coverage and cost
sharing protections against excessive out-of-pocket spending that are
at least as affordable as the provisions of Title I of the Affordable
Care Act would provide. To satisfy the affordability requirement, the
Secretary and the Secretary of Health and Human Services, as
applicable, must determine that the coverage under the State plan is
forecasted to be as affordable overall for state residents as coverage
absent the waiver;
(C) As required under section 1332(b)(1)(C) of the Affordable Care
Act (the scope of coverage requirement), will provide coverage to at
least a comparable number of its residents as the provisions of Title I
of the Affordable Care Act would provide. To satisfy the scope of
coverage requirement, the Secretary and the Secretary of the Health and
Human Services, as applicable, must determine that the State plan will
provide coverage to a comparable number of state residents under the
waiver as would have coverage absent the waiver; and
* * * * *
0
3. Amend Sec. 33.118 by--
0
a. Revising the section heading;
0
b. Revising paragraph (a);
0
c. Revising paragraph (b)(3);
0
d. Adding paragraph (b)(5);
0
e. Adding paragraph (g).
The revisions and additions read as follows:
Sec. 33.118 Modification from the normal public notice requirements
during an emergent situation.
(a) The Secretary and the Secretary of Health and Human Services
may modify, in part, the State public notice requirements under Sec.
33.112(a)(1), (b), (c), and (d) and the Federal public notice
procedures under Sec. 33.116(b) to expedite a decision on a proposed
section 1332 waiver request during an emergent situation, when a delay
would undermine or compromise the purpose of the proposed waiver
request and be contrary to the interests of consumers. These
flexibilities are limited to emergent situations, including natural
disasters; public health emergencies; or other emergent situations that
threaten consumers' access to health insurance coverage, consumers'
access to health care, or human life.
(b) * * *
(3) The State must, as applicable, detail in its request for a
modification from State-level notice procedures under paragraph (a) of
this section the justification for the request as it relates to the
emergent situation and the alternative public notice procedures it
proposes to implement at the State level, including public hearings,
that are designed to provide the greatest opportunity and level of
meaningful public input from impacted stakeholders that is practicable
given the emergency circumstances underlying the State's request for a
modification.
* * * * *
(5) The State must explain in its request for a modification from
State-level notice procedures under paragraph (a) of this section how
the emergent circumstances underlying its request results from a
natural disaster; public health emergency; or other emergent situations
that threaten consumers' access to health insurance coverage,
consumers' access to health care, or human life could not reasonably
have been foreseen and how a delay would undermine or compromise the
purpose of the waiver and be contrary to the interests of consumers.
* * * * *
(g) The Departments will consider circumstances to be emergent when
they could not have been reasonably foreseen. The Departments will
assess ``reasonable foreseeability'' based on the specific issues that
a section 1332 waiver proposes to address and other relevant factors,
and will not make this assessment based solely on the number of days a
State may have been aware of such issues.
0
4. Amend Sec. 33.120 by--
0
a. Revising paragraph (a);
0
b. Revising paragraph (c)(2)(i); and
0
c. Adding paragraphs (c)(2)(ii)(F) and (c)(2)(iii).
The revisions and additions read as follows:
Sec. 33.120 Monitoring and compliance.
(a) General. (1) Following the issuance of a final decision to
approve a section 1332 waiver by the Secretary and the Secretary of
Health and Human Services, as applicable, a State must comply with all
applicable Federal laws and regulations, unless expressly waived. A
State must, within the timeframes specified in law and regulation come
into compliance with any changes in Federal law and regulation
affecting section 1332 waivers, unless the provision being changed is
expressly waived.
(2) The Secretary and the Secretary of Health and Human Services
will examine compliance with Federal and regulatory requirements
consistent with Sec. 155.1308(f)(3)(iv) when conducting implementation
reviews under paragraph (b) of this section.
* * * * *
(c) * * *
(2) * * * (i) The Secretary and the Secretary of Health and Human
Services may modify, in part, State post award requirements under this
paragraph (c)(2) for an approved section 1332 waiver request during an
emergent situation, when the application of the post award public
notice requirements would be contrary to the interests of consumers.
These flexibilities are limited to emergent situations, including
natural disasters; public health emergencies; or other emergent
situations that threaten consumers' access to health insurance
coverage, consumers' access to health care, or human life.
(ii) * * *
(F) The State must explain in its request for modification under
this paragraph (c)(2) how the emergent circumstances underlying its
request results from a natural disaster; public health emergency; or
other emergent situations that threaten consumers' access to health
insurance coverage, consumers' access to health care, or
[[Page 35213]]
human life and could not reasonably have been foreseen and how the
application of the post-award public notice requirements would be
contrary to the interests of consumers.
(iii) The Secretary and the Secretary of Health and Human Services
will consider circumstances to be emergent when they could not have
been reasonably foreseen. The Secretary and the Secretary of Health and
Human Services will assess ``reasonable foreseeability'' based on the
specific issues that a section 1332 waiver proposes to address and
other relevant factors, and will not make this assessment based solely
on the number of days a State may have been aware of such issues.
* * * * *
0
5. Section 33.122 is added to read as follows:
Sec. 33.122 Pass-through Funding for Approved Waivers.
(a) Pass-through Funding. With respect to a State's approved
section 1332 waiver, under which, due to the structure of the approved
State waiver plan, individuals and small employers in the State would
not qualify for or would qualify for a reduced amount of premium tax
credit under section 36B of the Internal Revenue Code, small business
tax credit under section 45R of the Internal Revenue Code, or cost-
sharing reductions under ACA part I of subtitle E for which they would
otherwise be eligible, the Secretary and the Secretary of the Health
and Human Services shall provide for an alternative means by which the
aggregate amount of such credits or reductions that would have been
paid on behalf of participants in the Exchanges had the State not
received such waiver shall be paid to the State for purposes of
implementing the approved State waiver plan. Such amount shall be
determined annually by the Secretary and the Secretary of Health and
Human Services, taking into consideration the experience of other
States with respect to participation in an Exchange and credits and
reductions provided under such provisions to residents of the other
States. This amount can be updated to reflect applicable changes in
Federal or State law.
(b) [Reserved]
0
6. Amend Sec. 33.128 by revising paragraph (a) to read as follows:
Sec. 33.128 Periodic evaluation requirements.
(a) The Secretary and the Secretary of Health and Human Services,
as applicable, shall periodically evaluate the implementation of a
program under a section 1332 waiver consistent with Sec.
33.108(f)(3)(iv) and any terms and conditions governing the section
1332 waiver.
* * * * *
0
7. Section 33.130 is added to read as follows:
Sec. 33.130 Waiver Amendment.
(a) Amendment to an approved section 1332 waiver. A State may
request an amendment to an approved section 1332 waiver from the
Secretary and the Secretary of Health and Human Services. A section
1332 waiver amendment is considered a change to an approved section
1332 waiver plan that is not otherwise allowable under the terms and
conditions of an approved waiver, a change that could impact any of the
section 1332 statutory guardrails or a change to the program design for
an approved waiver. A state is not authorized to implement any aspect
of the proposed amendment without prior approval by the Secretary and
the Secretary of Health and Human Services.
(b) [Reserved]
0
8. Section 33.132 is added to read as follows:
Sec. 33.132 Waiver Extension.
(a) Extension. A State may request continuation of an approved
section 1332 waiver, and such request shall be deemed granted unless
the Secretary and the Secretary of Health and Human Services, within 90
days after the date of submission of a complete waiver extension
request to the Secretary and the Secretary of Health and Human
Services, either denies such request in writing or informs the State in
writing with respect to any additional information that is needed in
order to make a final determination with respect to the request.
(b) [Reserved]
For the reasons set forth in the preamble, under the authority at 5
U.S.C. 301, the Department of Health and Human Services proposes to
amend 45 CFR subtitle A, subchapter B, as set forth below.
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL INSURANCE MARKETS
0
9. The authority citation for part 147 continues to read as follows:
Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, and
300gg-92, as amended, and section 3203, Pub. L. 116-136, 134 Stat.
281.
0
10. Amend Sec. 147.104 by--
0
a. Revising paragraphs (b)(2)(i)(E) and (F); and
0
b. Adding paragraph (b)(2)(i)(G).
The revisions and addition read as follows:
Sec. 147.104 Guaranteed availability of coverage.
* * * * *
(b) * * *
(2) * * *
(i) * * *
(E) Section 155.420(d)(12) of this subchapter (concerning plan and
benefit display errors);
(F) Section 155.420(d)(13) of this subchapter (concerning
eligibility for insurance affordability programs or enrollment in the
Exchange); and
(G) Section 155.420(d)(16) of this subchapter (concerning
eligibility for advance payments of the premium tax credit and
household income, as defined in 26 CFR 1.36B-1(e), that is expected to
be no greater than 150 percent of the federal poverty level).
* * * * *
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
11. The authority citation for part 155 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042,
18051, 18054, 18071, and 18081-18083.
0
12. Amend Sec. 155.210 by revising paragraph (e)(9) to read as
follows:
Sec. 155.210 Navigator program standards.
* * * * *
(e) * * *
(9) The Exchange may require or authorize Navigators to provide
information and assistance with any of the following topics. In
Federally-facilitated Exchanges, Navigators are required to provide
information and assistance with all of the following topics:
(i) Understanding the process of filing Exchange eligibility
appeals;
(ii) Understanding and applying for exemptions from the requirement
to maintain minimum essential coverage granted through the Exchange;
(iii) The Exchange-related components of the premium tax credit
reconciliation process, and understanding the availability of IRS
resources on this process;
(iv) Understanding basic concepts and rights related to health
coverage and how to use it; and
(v) Referrals to licensed tax advisers, tax preparers, or other
resources for assistance with tax preparation and tax advice related to
consumer questions about the Exchange application and
[[Page 35214]]
enrollment process, and premium tax credit reconciliations.
* * * * *
Sec. 155.221 [Amended]
0
13. Amend Sec. 155.221 by removing paragraph (j).
0
14. Amend Sec. 155.410 by revising paragraph (e)(3) and adding
paragraph (e)(4).
The revision and addition read as follows:
Sec. 155.410 Initial and annual open enrollment periods.
* * * * *
(e) * * *
(3) For the benefit years beginning on January 1, 2018 to January
1, 2021, the annual open enrollment period begins on November 1 and
extends through December 15 of the calendar year preceding the benefit
year.
(4) For the benefit years beginning on or after January 1, 2022,
the annual open enrollment period begins on November 1 of the calendar
year preceding the benefit year and extends through January 15 of the
benefit year.
* * * * *
0
15. Amend Sec. 155.420 by--
0
a. Revising paragraph (a)(4)(ii)(C);
0
b. Adding paragraph (a)(4)(ii)(D);
0
c. Revising paragraph (a)(4)(iii) introductory text; and
0
d. Adding paragraphs (b)(2)(vii), (d)(16), and (f).
The revision and additions read as follows:
Sec. 155.420 Special enrollment periods.
* * * * *
(a) * * *
(4) * * *
(ii) * * *
(C) No later than January 1, 2024, if an enrollee or his or her
dependents become newly ineligible for advance payments of the premium
tax credit in accordance with paragraph (d)(6)(i) or (ii) of this
section, the Exchange must allow the enrollee or his or her dependents
to change to a QHP of any metal level, if they elect to change their
QHP enrollment; or
(D) If an enrollee or his or her dependents qualify for a special
enrollment period in accordance with paragraph (d)(16) of this section
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) For the other triggering events specified in paragraph (d) of
this section, except for paragraphs (d)(2)(i), (d)(4), and (d)(6)(i)
and (ii) of this section for becoming newly eligible or ineligible for
CSRs and paragraphs (d)(8), (9), (10), (12), (14), and (16) of this
section:
* * * * *
(b) * * *
(2) * * *
(vii) If a qualified individual or enrollee, or the dependent of a
qualified individual or enrollee, who is eligible for advance payments
of the premium tax credit, and whose household income, as defined in 26
CFR 1.36B-1(e), is expected to be no greater than 150 percent of the
federal poverty level, enrolls in a QHP or changes from one QHP to
another one time per month in accordance with paragraph (d)(16) of this
section, the Exchange must ensure that coverage is effective in
accordance with paragraph (b)(1) of this section or on the first day of
the month following plan selection, at the option of the Exchange.
* * * * *
(d) * * *
(16) At the option of the Exchange, a qualified individual or
enrollee, or the dependent of a qualified individual or enrollee, who
is eligible for advance payments of the premium tax credit, and whose
household income, as defined in 26 CFR 1.36B-1(e), is expected to be no
greater than 150 percent of the federal poverty level, may enroll in a
QHP or change from one QHP to another one time per month.
* * * * *
(f) For purposes of this section, references to eligibility for
advance payments of the premium tax credit refer to being eligible for
such advance payments in an amount greater than zero dollars per month.
References to ineligibility for advance payments of the premium tax
credit refer to being ineligible for such payments or being eligible
for such payments but being eligible for a maximum of zero dollars per
month of such payments.
* * * * *
0
16. Amend Sec. 155.1308 by revising paragraphs (f)(3)(iv) introductory
text and (f)(3)(iv)(A) through (C) to read as follows:
Sec. 155.1308 Application procedures.
* * * * *
(f) * * *
(3) * * *
(iv) The analyses, actuarial certifications, data, assumptions,
targets, and other information set forth in paragraph (f)(4) of this
section sufficient to provide the Secretary and the Secretary of the
Treasury, as applicable, with the necessary data to determine that the
State's proposed waiver satisfies the general requirements for approval
under section 1332(b)(1) of the Affordable Care Act consistent with the
provisions of this paragraph (f)(3)(iv);
(A) As required under section 1332(b)(1)(A) of the Affordable Care
Act (the comprehensive coverage requirement), will provide coverage
that is at least as comprehensive as the coverage defined in section
1302(b) of the Affordable Care Act and offered through Exchanges
established under the Affordable Care Act as certified by the Office of
the Actuary of the Centers for Medicare & Medicaid Services based on
sufficient data from the State and from comparable States about their
experience with programs created by the Affordable Care Act and the
provisions of the Affordable Care Act that the State seeks to waive. To
satisfy the comprehensive coverage requirement, the Secretary and the
Secretary of the Treasury, as applicable, must determine that the
coverage under the State plan is forecasted to be at least as
comprehensive overall for residents of the state as coverage absent the
waiver;
(B) As required under section 1332(b)(1)(B) of the Affordable Care
Act (the affordability requirement), will provide coverage and cost
sharing protections against excessive out-of-pocket spending that are
at least as affordable as the provisions of Title I of the Affordable
Care Act would provide. To satisfy the affordability requirement, the
Secretary and the Secretary of the Treasury, as applicable, must
determine that the coverage under the State plan is forecasted to be at
least as affordable overall for state residents as coverage absent the
waiver;
(C) As required under section 1332(b)(1)(C) of the Affordable Care
Act (the scope of coverage requirement), will provide coverage to at
least a comparable number of its residents as the provisions of Title I
of the Affordable Care Act would provide. To satisfy the scope of
coverage requirement, the Secretary and the Secretary of the Treasury,
as applicable, must determine that the State plan will provide coverage
to a comparable number of state residents under the waiver as would
have coverage absent the waiver; and
* * * * *
0
17. Amend Sec. 155.1318 by--
0
a. Revising the section heading;
0
b. Revising paragraphs (a) and (b)(3); and
0
c. Adding paragraphs (b)(5) and (g).
The revisions and addition read as follows:
[[Page 35215]]
Sec. 155.1318 Modification from the normal public notice requirements
during an emergent situation.
(a) The Secretary and the Secretary of the Treasury may modify, in
part, the State public notice requirements under Sec. 155.1312(a)(1),
(b), (c), and (d) and the Federal public notice procedures under Sec.
155.1316(b) to expedite a decision on a proposed section 1332 waiver
request during an emergent situation, when a delay would undermine or
compromise the purpose of the proposed waiver request and be contrary
to the interests of consumers. These flexibilities are limited to
emergent situations, including natural disasters; public health
emergencies; or other emergent situations that threaten consumers'
access to health insurance coverage, consumers' access to health care,
or human life.
(b) * * *
(3) The State must, as applicable, detail in its request for a
modification from State-level notice procedures under paragraph (a) of
this section the justification for the request as it relates to the
emergent situation and the alternative public notice procedures it
proposes to implement at the State level, including public hearings,
that are designed to provide the greatest opportunity and level of
meaningful public input from impacted stakeholders that is practicable
given the emergency circumstances underlying the State's request for a
modification.
* * * * *
(5) The State must explain in its request for a modification from
State-level notice procedures under paragraph (a) of this section how
the emergent circumstances underlying its request result from a natural
disaster; public health emergency; or other emergent situations that
threaten consumers' access to health insurance coverage, consumers'
access to health care, or human life could not reasonably have been
foreseen and how a delay would undermine or compromise the purpose of
the waiver and be contrary to the interests of consumers.
* * * * *
(g) The Secretary and the Secretary of the Treasury will consider
circumstances to be emergent when they could not have been reasonably
foreseen. The Secretary and the Secretary of the Treasury will assess
``reasonable foreseeability'' based on the specific issues that a
section 1332 waiver proposes to address and other relevant factors, and
will not make this assessment based solely on the number of days a
State may have been aware of such issues.
0
18. Amend Sec. 155.1320 by--
0
a. Revising paragraph (a);
0
b. Revising the paragraph heading for paragraph (c)(2);
0
c. Revising paragraph (c)(2)(i); and
0
d. Adding paragraphs (c)(2)(ii)(F) and (c)(2)(iii).
The revisions and additions read as follows:
Sec. 155.1320 Monitoring and compliance.
(a) General. (1) Following the issuance of a final decision to
approve a section 1332 waiver by the Secretary and the Secretary of the
Treasury, as applicable, a State must comply with all applicable
Federal laws and regulations, unless expressly waived. A State must,
within the timeframes specified in law and regulation come into
compliance with any changes in Federal law and regulation affecting
section 1332 waivers, unless the provision being changed is expressly
waived.
(2) The Secretary and the Secretary of the Treasury will examine
compliance with Federal and regulatory requirements consistent with
Sec. 155.1308(f)(3)(iv) when conducting implementation reviews under
paragraph (b) of this section.
* * * * *
(c) * * *
(2) Modification from the normal post award requirements during an
emergent situation. (i) The Secretary and the Secretary of the Treasury
may modify, in part, State post award requirements under this paragraph
(c)(2) for an approved section 1332 waiver request during an emergent
situation when the application of the post award public notice
requirements would be contrary to the interests of consumers. These
flexibilities are limited to emergent situations, including natural
disasters; public health emergencies; or other emergent situations that
threaten consumers' access to health insurance coverage, consumers'
access to health care, or human life.
(ii) * * *
(F) The State must explain in its request for a modification under
paragraph (c)(2) of this section how the emergent circumstances
underlying its request results from a natural disaster; public health
emergency; or other emergent situations that threaten consumers' access
to health insurance coverage, consumers' access to health care, or
human life and could not reasonably have been foreseen and how the
application of the post award public notice requirements would be
contrary to the interests of consumers.
(iii) The Secretary and the Secretary of the Treasury will consider
circumstances to be emergent when they could not have been reasonably
foreseen. The Secretary and the Secretary of the Treasury will assess
``reasonable foreseeability'' based on the specific issues that a
section 1332 waiver proposes to address and other relevant factors, and
will not make this assessment based solely on the number of days a
State may have been aware of such issues.
* * * * *
0
19. Section 155.1322 is added to subpart N to read as follows:
Sec. 155.1322 Pass-Through Funding for Approved Waivers.
(a) Pass-through Funding. With respect to a State's approved
section 1332 waiver, under which, due to the structure of the approved
State waiver plan, individuals and small employers in the State would
not qualify for or would qualify for a reduced amount of premium tax
credit under section 36B of the Internal Revenue Code, small business
tax credit under section 45R of the Internal Revenue Code, or cost-
sharing reductions under ACA part I of subtitle E for which they would
otherwise be eligible, the Secretary and the Secretary of the Treasury
shall provide for an alternative means by which the aggregate amount of
such credits or reductions that would have been paid on behalf of
participants in the Exchanges had the State not received such waiver
shall be paid to the State for purposes of implementing the approved
State waiver plan. Such amount shall be determined annually by the
Secretary and the Secretary of the Treasury, taking into consideration
the experience of other States with respect to participation in an
Exchange and credits and reductions provided under such provisions to
residents of the other States. This amount can be updated to reflect
applicable changes in Federal or State law.
(b) [Reserved]
0
20. Amend Sec. 155.1328 by revising paragraph (a) to read as follows:
Sec. 155.1328 Periodic evaluation requirements.
(a) The Secretary and the Secretary of the Treasury, as applicable,
shall periodically evaluate the implementation of a program under a
section 1332 waiver consistent with Sec. 155.1308(f)(3)(iv) and any
terms and conditions governing the section 1332 waiver.
* * * * *
0
21. Section 155.1330 is added to subpart N to read as follows:
[[Page 35216]]
Sec. 155.1330 Waiver Amendment.
(a) Amendment to an approved section 1332 waiver. A State may
request an amendment to an approved section 1332 waiver from the
Secretary and the Secretary of the Treasury. A section 1332 waiver
amendment is considered a change to a section 1332 waiver plan that is
not otherwise allowable under the terms and conditions of an approved
waiver, a change that could impact any of the section 1332 statutory
guardrails or a change to the program design for an approved waiver. A
state is not authorized to implement any aspect of the proposed
amendment without prior approval by the Secretary and the Secretary of
the Treasury.
(b) [Reserved]
0
22. Section 155.1332 is added to subpart N to read as follows:
Sec. 155.1332 Waiver Extension.
(a) Extension. A State may request continuation of an approved
section 1332 waiver, and such request shall be deemed granted unless
the Secretary and the Secretary of the Treasury, within 90 days after
the date of submission of a complete waiver extension request to the
Secretary and the Secretary of the Treasury, either denies such request
in writing or informs the State in writing with respect to any
additional information that is needed in order to make a final
determination with respect to the request.
(b) [Reserved]
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
23. The authority citation for part 156 is revised to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042,
18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.
0
24. Amend Sec. 156.115 by revising paragraph (a)(3) to read as
follows:
Sec. 156.115 Provision of EHB.
(a) * * *
(3) With respect to the mental health and substance use disorder
services, including behavioral health treatment services, required
under Sec. 156.110(a)(5) of this subpart, comply with the requirements
under section 2726 of the Public Health Service Act and its
implementing regulations.
* * * * *
0
25. Amend Sec. 156.280 by revising the heading and paragraph
(e)(2)(ii) to read as follows:
Sec. 156.280 Segregation of funds for abortion services.
* * * * *
(e) * * *
(2) * * *
(ii) An issuer will be considered to satisfy the obligation in
paragraph (e)(2)(i) of this section if it sends the policy holder a
single monthly invoice or bill that separately itemizes the premium
amount for coverage of abortion services described in paragraph (d)(1)
of this section; sends the policy holder a separate monthly bill for
these services; or sends the policy holder a notice at or soon after
the time of enrollment that the monthly invoice or bill will include a
separate charge for such services, and specifies the charge.
* * * * *
Xavier Becerra,
Secretary, Department of Health and Human Services.
Mark Mazur,
Deputy Assistant Secretary (Tax Policy), Department of the Treasury.
[FR Doc. 2021-13993 Filed 6-28-21; 4:15 pm]
BILLING CODE 4120-01-P