Final Rule: Patient Protection and Affordable Care Act

129 Pages·2015·0.95 MB·English

Vol. 80 Friday,
No. 39 February 27, 2015
Part II
Department of Health and Human Services
45 CFR Parts 144, 147, 153, et al.
Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2016; Final Rule
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10750 Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations
DEPARTMENT OF HEALTH AND standards for QHP issuers: Leigha c. Proposed Updates to Risk Adjustment
HUMAN SERVICES Basini, (301) 492–4380. Model (§153.320)
For matters related to the qualified d. List of Factors To Be Employed in the
45 CFR Parts 144, 147, 153, 154, 155, health plan good faith compliance Model (§153.320)
e. Cost-Sharing Reductions Adjustments
156 and 158 policy: Cindy Yen, (301) 492–5142.
(§153.320)
For matters related to the Small
[CMS–9944–F] f. Model Performance Statistics (§153.320)
Business Health Options Program: g. Overview of the Payment Transfer
RIN 0938–AS19 Christelle Jang, (410) 786–8438. Formula (§153.320)
For matters related to the Federally- h. HHS Risk Adjustment Methodology
Patient Protection and Affordable Care
facilitated Exchange user fee or Considerations (§153.320)
Act; HHS Notice of Benefit and minimum value: Krutika Amin, (301) i. State-Submitted Alternate Risk
Payment Parameters for 2016 492–5153. Adjustment Methodology (§153.330)
3. Provisions and Parameters for the
AGENCY: Centers for Medicare & For matters related to cost-sharing Transitional Reinsurance Program
Medicaid Services (CMS), HHS. reductions or the premium adjustment a. Common Ownership Clarification
ACTION: Final rule. percentage: Pat Meisol, (410) 786–1917. b. Reinsurance Contributing Entities and
For matters related to re-enrollment, Minimum Value
SUMMARY: This final rule sets forth open enrollment periods, or exemptions c. Self-Insured Expatriate Plans
payment parameters and provisions from the individual shared (§153.400(a)(1)(iii))
related to the risk adjustment, responsibility payment: Christine d. Determination of Debt (§153.400(c))
reinsurance, and risk corridors Hammer, (301) 492–4431. e. Reinsurance Contribution Submission
Process
programs; cost sharing parameters and For matters related to special
f. Consistency in Counting Methods for
cost-sharing reductions; and user fees enrollment periods: Rachel Arguello,
Health Insurance Issuers (§153.405(d))
for Federally-facilitated Exchanges. It (301) 492–4263. g. Snapshot Count and Snapshot Factor
also finalizes additional standards for For matters related to minimum Counting Methods (§§153.405(d)(2) and
the individual market annual open essential coverage: Cam Moultrie (e)(2))
enrollment period for the 2016 benefit Clemmons, (206) 615–2338. h. Uniform Reinsurance Contribution Rate
year, essential health benefits, qualified For matters related to quality for 2016
health plans, network adequacy, quality improvement strategies: Marsha Smith, i. Uniform Reinsurance Payment
improvement strategies, the Small (410) 786–6614. Parameters for 2016
Business Health Options Program, For matters related to the medical loss j. Uniform Reinsurance Payment
Parameters for 2015
guaranteed availability, guaranteed ratio program: Julie McCune, (301) 492–
k. Deducting Cost-Sharing Reduction
renewability, minimum essential 4196. Amounts From Reinsurance Payments
coverage, the rate review program, the For matters related to meaningful 4. Provisions for the Temporary Risk
medical loss ratio program, and other access to QHP information, consumer Corridors Program
related topics. assistance tools and programs of an a. Application of the Transitional Policy
DATES: These regulations are effective Exchange, or cost-sharing reduction Adjustment in Early Renewal States
notices: Tricia Beckmann, (301) 492– b. Risk Corridors Payments for 2016
on April 28, 2015 except the
4328. 5. Distributed Data Collection for the HHS-
amendments to §§156.235,
Operated Risk Adjustment and
156.285(d)(1)(ii), and 158.162 are SUPPLEMENTARYINFORMATION: Reinsurance Programs
effective on January 1, 2016. a. Good Faith Safe Harbor (§153.740(a))
Table of Contents
FORFURTHERINFORMATIONCONTACT: b. Default Risk Adjustment Charge
For general information: Jeff Wu, I. Executive Summary (§153.740(b))
(301) 492–4305. II. Background c. Information Sharing (§153.740(c))
A. Legislative and Regulatory Overview D. Part 154—Health Insurance Issuer Rate
For matters related to guaranteed
B. Stakeholder Consultation and Input Increases: Disclosure and Review
availability, guaranteed renewability,
III. Provisions of the Final Regulations and Requirements
rate review, or the applicability of Title
Analysis and Responses to Public 1. General Provisions
I of the Affordable Care Act in the U.S. Comments a. Definitions (§154.102)
Territories: Jacob Ackerman, (301) 492– A. Part 144—Requirements Relating to 2. Disclosure and Review Provisions
4179. Health Insurance Coverage a. Rate Increases Subject to Review
For matters related to risk adjustment 1. Definitions (§144.103) (§154.200)
or the methodology for determining the a. Plan b. Submission of Rate Filing Justification
reinsurance contribution rate and b. State (§154.215)
B. Part 147—Health Insurance Reform c. Timing of Providing the Rate Filing
payment parameters: Kelly Horney,
Requirements for the Group and Justification (§154.220)
(410) 786–0558.
Individual Health Insurance Markets d. CMS’s Determinations of Effective Rate
For matters related to reinsurance
1. Guaranteed Availability of Coverage Review Programs (§154.301)
generally, distributed data collection
(§147.104) E. Part 155—Exchange Establishment
good faith compliance policy, or 2. Guaranteed Renewability of Coverage Standards and Other Related Standards
administrative appeals: Adrianne (§147.106) Under the Affordable Care Act
Glasgow, (410) 786–0686. C. Part 153—Standards Related to 1. General Provisions
For matters related to the definition of Reinsurance, Risk Corridors, and Risk a. Definitions (§155.20)
common ownership for purposes of Adjustment Under the Affordable Care 2. General Functions of an Exchange
ES2 reinsurance contributions: Adam Shaw, 1. APrcot visions for the State Notice of Benefit a. PCroongsruammes ro Af assni sEtxacnhcaen Tgoeo (l§s 1a5n5d. 205)
RUL (410) 786–1019. and Payment Parameters (§153.100) b. Standards Applicable to Navigators and
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PR For matters related to essential health a. Risk Adjustment User Fee (§153.610(f)) Functions Under §§155.205(d) and (e)
VN1 benefits, network adequacy, essential b. Overview of the HHS Risk Adjustment and 155.210 in a Federally-Facilitated
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Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations 10751
Assistance Personnel Funded Through b. Transparency in Coverage (§156.220) FFE Federally-facilitated Exchange
an Exchange Establishment Grant c. Network Adequacy Standards FF–SHOP Federally-facilitated Small
(§155.215) (§156.230) Business Health Options Program
c. Ability of States To Permit Agents and d. Essential Community Providers FPL Federal Poverty Level
Brokers To Assist Qualified Individuals, (§156.235) FQHC Federally qualified health center
Qualified Employers, or Qualified e. Meaningful Access to Qualified Health HCC Hierarchical condition category
Employees Enrolling in QHPs (§155.220) Plan Information (§156.250) HHS United States Department of Health
d. Standards for HHS-Approved Vendors of f. Enrollment Process for Qualified and Human Services
Federally-Facilitated Exchange Training Individuals (§156.265) HIPAA Health Insurance Portability and
for Agents and Brokers (§155.222) g. Termination of Coverage or Enrollment Accountability Act of 1996 (Pub. L. 104–
3. Exchange Functions in the Individual for Qualified Individuals (§156.270) 191)
Market: Eligibility Determinations for h. Segregation of Funds for Abortion IRS Internal Revenue Service
Exchange Participation and Insurance Services (§156.280) LEP Limited English proficient/proficiency
Affordability Programs i. Non-Renewal and decertification of MLR Medical loss ratio
a. Annual Eligibility Redetermination QHPs (§156.290) MV Minimum value
(§155.335) 4. Health Insurance Issuer Responsibility NAIC National Association of Insurance
4. Exchange Functions in the Individual for Advance Payments of the Premium Commissioners
Market: Enrollment in Qualified Health Tax Credit and Cost-Sharing Reductions OMB Office of Management and Budget
Plans a. Plan Variations (§156.420) OPM United States Office of Personnel
a. Enrollment of Qualified Individuals Into b. Changes in Eligibility for Cost-Sharing Management
QHPs (§155.400) Reductions (§156.425) PHS Act Public Health Service Act
b. Annual Open Enrollment Period c. Cost-Sharing Reductions Reconciliation PRA Paperwork Reduction Act of 1995
(§155.410) (§156.430) P&T committee Pharmacy and therapeutics
c. Special Enrollment Periods (§155.420) 5. Minimum Essential Coverage
committee
d. Termination of Exchange Enrollment or a. Other Coverage That Qualifies as
QHP Qualified health plan
Coverage (§155.430) Minimum Essential Coverage (§156.602)
QIS Quality improvement strategy
5. Exchange Functions in the Individual 6. Enforcement Remedies in Federally-
SADP Stand-alone Dental Plan
Market: Eligibility Determinations for Facilitated Exchanges
SEP Special enrollment period
Exemptions a. Available Remedies; Scope (§156.800)
SHOP Small Business Health Options
a. Eligibility Standards for Exemptions b. Plan Suppression (§156.815)
Program
(§155.605) 7. Quality Standards
The Code Internal Revenue Code of 1986
b. Required Contribution Percentage a. Quality Improvement Strategy
TPA Third-party administrator
(§155.605) (§156.1130)
URL Uniform resource locator
6. Exchange Functions: Small Business 8. Qualified Health Plan Issuer
USP United States Pharmacopeia
Health Options Program (SHOP) Responsibilities
a. Standards for the Establishment of a a. Administrative Appeals (§156.1220(c)) I. Executive Summary
SHOP (§155.700) G. Part 158—Issuer Use of Premium
b. Functions of a SHOP (§155.705) Revenue: Reporting and Rebate Qualified individuals and qualified
c. Eligibility Standards for SHOP Requirements employers are now able to purchase
(§155.710) 1. Treatment of Cost-Sharing Reductions in private health insurance coverage
d. Enrollment of Employees Into QHPs MLR Calculation (§158.140) through competitive marketplaces
Under SHOP (§155.720 and §156.285) 2. Reporting of Federal and State Taxes called Affordable Insurance Exchanges,
e. Enrollment Periods Under SHOP (§158.162) or ‘‘Exchanges’’ (also called Health
(§155.725 and §156.285) 3. Distribution of Rebates to Group
Insurance Marketplaces, or
f. Termination of SHOP Enrollment or Enrollees in Non-Federal Governmental
Coverage (§155.735 and §156.285) Plans (§158.242) ‘‘Marketplaces’’). Individuals who enroll
7. Exchange Functions: Certification of IV. Collection of Information Requirements in qualified health plans (QHPs)
Qualified Health Plans V. Regulatory Impact Analysis through individual market Exchanges
a. Certification Standards for QHPs A. Statement of Need may be eligible to receive a premium tax
(§155.1000) B. Overall Impact credit to make health insurance more
b. Recertification of QHPs (§155.1075) C. Impact Estimates of the Payment Notice affordable and for cost-sharing
F. Part 156—Health Insurance Issuer Provisions and Accounting Table reductions to reduce out-of-pocket
Standards Under the Affordable Care D. Regulatory Alternatives Considered
expenses for health care services.
Act, Including Standards Related to E. Regulatory Flexibility Act
Exchanges F. Unfunded Mandates Additionally, in 2014, HHS began
1. General Provisions G. Federalism operationalizing the premium
a. Definitions (§156.20) H. Congressional Review Act Regulations stabilization programs established by
b. FFE User Fee for the 2016 Benefit Year Text the Affordable Care Act. These
(§156.50(c)) Acronyms programs—the risk adjustment,
2. Essential Health Benefits Package reinsurance, and risk corridors
a. State Selection of Benchmark (§156.100) Affordable Care Act The collective term for programs—are intended to mitigate the
b. Provision of EHB (§156.115) the Patient Protection and Affordable Care
potential impact of adverse selection
c. Collection of Data To Define Essential Act (Pub. L. 111–148) and the Health Care
and stabilize the price of health
Health Benefits (§156.120) and Education Reconciliation Act of 2010
insurance in the individual and small
d. Prescription Drug Benefits (§156.122) (Pub. L. 111–152), as amended
e. Prohibition on Discrimination AHFS American hospital formulary system group markets. These programs, together
(§156.125) AV Actuarial value with other reforms of the Affordable
f. Cost-Sharing Requirements (§156.130) CFR Code of Federal Regulations Care Act, are making high-quality health
g. Premium Adjustment Percentage CMS Centers for Medicare & Medicaid insurance affordable and accessible to
S2 (§156.130) Services millions of Americans.
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VN1 a. QHP Issuer Participation Standards ERISA Employee Retirement Income reductions, and premium stabilization
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10752 Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations
provisions and modifications related to under the policy set forth in our April Exchange to suppress a QHP from being
the implementation of the premium 11, 2014, FAQ on Risk Corridors and offered to new enrollees through an
stabilization programs, as well as key Budget Neutrality,1in the event that risk Exchange, and extends the good faith
payment parameters for the 2016 benefit corridors collections available in 2016 compliance policy for QHP issuers in
year. exceed risk corridors payment requests the FFEs through the 2015 calendar
The HHS Notice of Benefit and from QHP issuers. year.
Payment Parameters for 2014 (78 FR We also finalize several provisions In this final rule, we are finalizing a
15410) (2014 Payment Notice) finalized related to cost sharing. First, we number of standards relating to essential
the risk adjustment methodology that establish the premium adjustment health benefits (EHBs), including a
HHS will use when it operates the risk percentage for 2016, which is used to set definition of habilitative services,
adjustment program on behalf of a State. the rate of increase for several coverage of pediatric services, and
Risk adjustment factors reflect enrollee parameters detailed in the Affordable coverage of prescription drugs. This
health risk and the costs of a given Care Act, including the maximum final rule also provides examples of
disease relative to average spending. annual limitation on cost sharing for discriminatory plan designs and amends
This final rule recalibrates the HHS risk 2016. We establish the maximum requirements for essential community
adjustment models for the 2016 benefit annual limitations on cost sharing for providers (ECPs).
year by using 2011, 2012, and 2013 the 2016 benefit year for cost-sharing
II. Background
claims data from the Truven Health reduction plan variations. For
Analytics 2010 MarketScan® reconciliation of 2014 cost-sharing A. Legislative and Regulatory Overview
Commercial Claims and Encounters reductions, we are finalizing and
The Patient Protection and Affordable
database (MarketScan) to develop expanding our proposal to permit
Care Act (Pub. L. 111–148) was enacted
updated risk factors. issuers whose plan variations meet
on March 23, 2010. The Health Care and
Using the same methodology as set certain criteria to estimate the portion of
Education Reconciliation Act of 2010
forth in the 2014 Payment Notice and claims attributable to non-essential
(Pub. L. 111–152), which amended and
the HHS Notice of Benefit and Payment health benefits to calculate cost-sharing
Parameters for 2015 (79 FR 13744) (2015 reductions provided. revised several provisions of the Patient
Payment Notice), we finalize a 2016 For 2016, we finalize a Federally- Protection and Affordable Care Act, was
uniform reinsurance contribution rate of facilitated Exchange (FFE) user fee rate enacted on March 30, 2010. In this final
$27 annually per enrollee, and the 2016 of 3.5 percent of premium, the same rate rule, we refer to the two statutes
uniform reinsurance payment as for 2015. This rule also finalizes collectively as the ‘‘Affordable Care
parameters—a $90,000 attachment provisions to enhance the transparency Act.’’
point, a $250,000 reinsurance cap, and and effectiveness of the rate review Subtitles A and C of title I of the
a 50 percent coinsurance rate. We are program and standards related to Affordable Care Act reorganized,
decreasing the attachment point for the minimum essential coverage, the amended, and added to the provisions
2015 benefit year from $70,000 to individual market annual open of part A of title XXVII of the Public
$45,000, while retaining the $250,000 enrollment period for the 2016 benefit Health Service Act (PHS Act) relating to
reinsurance cap and a 50 percent year, and amendments to a number of group health plans and health insurance
coinsurance rate. In this rule, we also Small Business Health Options Program issuers in the group and individual
finalize the definition of ‘‘common (SHOP) provisions, including minimum markets.
ownership’’ for purposes of determining participation rates. This final rule Section 2701 of the PHS Act, as added
whether a contributing entity uses a amends the medical loss ratio (MLR) by the Affordable Care Act, restricts the
third-party administrator for core provisions relating to the treatment of variation in premium rates that may be
administrative functions. In addition, cost-sharing reductions and certain charged by a health insurance issuer for
this final rule discusses the reinsurance taxes in MLR and rebate calculations, as non-grandfathered health insurance
contribution payment schedule and well as the distribution of rebates by coverage in the individual or small
accompanying notifications. We also group health plans not subject to the group market to certain specified
extend the good faith safe harbor for Employee Retirement Income Security factors. The factors are: Family size,
non-compliance with the HHS-operated Act of 1974 (Pub. L. 93–406) (ERISA). rating area, age, and tobacco use (within
risk adjustment and reinsurance data This final rule provides more specificity specified limits).
requirements through the 2015 calendar about the meaningful access Section 2701 of the PHS Act operates
year. requirements applicable to Exchanges, in coordination with section 1312(c) of
We are finalizing a clarification and a the Affordable Care Act. Section 1312(c)
to QHP issuers, and to agents and
modification to the risk corridors of the Affordable Care Act generally
brokers subject to §155.220(c)(3)(i),
program. We clarify that the risk requires a health insurance issuer to
related to access for individuals with
corridors transitional adjustment policy consider all enrollees in all health plans
limited English proficiency (LEP). This
established in the 2015 Payment Notice, (except for grandfathered health plans)
final rule requires issuers to provide a
which makes an adjustment to a QHP offered by such issuer to be members of
summary of benefits and coverage (SBC)
issuer’s risk corridors calculation based a single risk pool for each of its
for each plan variation of the standard
on Statewide enrollment in transitional individual and small group markets.
QHP and to provide adequate notice to
plans, does not include in that States have the option to merge the
enrollees of changes in cost-sharing
calculation enrollment in so-called individual market and small group
reduction eligibility. This final rule also
‘‘early renewal plans’’ (plans that market risk pools under section
includes additional quality
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Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations 10753
and individual in the State that applies EHB in a manner that: (1) Reflects calendar years after the initial
for such coverage unless an exception appropriate balance among the 10 enrollment period.
applies. categories; (2) is not designed in such a Section 1301(a)(1)(B) of the
Section 2703 of the PHS Act, as added way as to discriminate based on age, Affordable Care Act directs all issuers of
by the Affordable Care Act, requires disability, or expected length of life; (3) QHPs to cover the EHB package
health insurance issuers that offer takes into account the health care needs described in section 1302(a) of the
health insurance coverage in the group of diverse segments of the population; Affordable Care Act, including the
or individual market to renew or and (4) does not allow denials of EHBs services described in section 1302(b) of
continue in force such coverage at the based on age, life expectancy, disability, the Affordable Care Act, to adhere to the
option of the plan sponsor or individual degree of medical dependency, or cost-sharing limits described in section
unless an exception applies. quality of life. 1302(c) of the Affordable Care Act, and
Section 2718 of the PHS Act, as added Section 1302(d) of the Affordable Care to meet the AV levels established in
by the Affordable Care Act, generally Act describes the various levels of section 1302(d) of the Affordable Care
requires health insurance issuers to coverage based on AV. Consistent with Act. Section 2707(a) of the PHS Act,
submit an annual MLR report to HHS section 1302(d)(2)(A) of the Affordable which is effective for plan or policy
and provide rebates to enrollees if they Care Act, AV is calculated based on the years beginning on or after January 1,
do not achieve specified MLR provision of EHB to a standard 2014, extends the coverage of the EHB
thresholds. population. Section 1302(d)(3) of the package to non-grandfathered
Section 2794 of the PHS Act, as added individual and small group coverage,
Affordable Care Act directs the
by the Affordable Care Act, directs the irrespective of whether such coverage is
Secretary to develop guidelines that
Secretary of HHS (the Secretary), in offered through an Exchange. In
allow for de minimis variation in AV
conjunction with the States, to establish addition, section 2707(b) of the PHS Act
calculations.
a process for the annual review of directs non-grandfathered group health
Section 1311(b)(1)(B) of the
‘‘unreasonable increases in premiums plans to ensure that cost sharing under
Affordable Care Act directs the SHOP to
for health insurance coverage.’’2The the plan does not exceed the limitations
assist qualified small employers in
law also requires health insurance described in sections 1302(c)(1) and (2)
facilitating the enrollment of their
issuers to submit justifications to the of the Affordable Care Act.
employees in QHPs offered in the small
Secretary and the applicable State Sections 1313 and 1321 of the
group market. Sections 1312(f)(1) and
entities for unreasonable premium Affordable Care Act provide the
(2) of the Affordable Care Act define
increases prior to the implementation of Secretary with the authority to oversee
qualified individuals and qualified
the increases. Section 2794(b)(2) of the the financial integrity of State
employers. Under section 1312(f)(2)(B)
PHS Act further specifies that, Exchanges, their compliance with HHS
of the Affordable Care Act, beginning in
beginning in 2014, the Secretary, in standards, and the efficient and non-
2017, States will have the option to
conjunction with the States, will discriminatory administration of State
allow issuers to offer QHPs in the large
monitor premium increases of health Exchange activities. Section 1321 of the
group market through the SHOP.3
insurance coverage offered through an Affordable Care Act provides for State
Section 1311(c)(1)(B) of the
Exchange and outside of an Exchange. flexibility in the operation and
Affordable Care Act requires the
Section 1302 of the Affordable Care enforcement of Exchanges and related
Act provides for the establishment of an Secretary to establish minimum criteria requirements.
essential health benefits (EHB) package for provider network adequacy that a Section 1321(a) of the Affordable Care
that includes coverage of EHB (as health plan must meet to be certified as Act provides the Secretary with broad
defined by the Secretary) and cost- a QHP. Section 1311(c)(1)(E) of the authority to establish standards and
sharing limits, and meets statutorily Affordable Care Act specifies that, to be regulations to implement statutory
defined actuarial value (AV) certified as a QHP participating in requirements related to Exchanges,
requirements. The law directs that EHBs Exchanges, each health plan must QHPs, and other components of title I of
be equal in scope to the benefits covered implement a quality improvement the Affordable Care Act. Under the
by a typical employer plan and that they strategy (QIS), which is described in authority established in section
cover at least the following 10 general section 1311(g)(1) of the Affordable Care 1321(a)(1) of the Affordable Care Act,
categories: Ambulatory patient services; Act. the Secretary promulgated the
emergency services; hospitalization; Section 1311(c)(5) of the Affordable regulations at §155.205(d) and (e).
maternity and newborn care; mental Care Act requires the Secretary to Section 155.205 authorizes Exchanges to
health and substance use disorder continue to operate, maintain, and perform certain consumer service
services, including behavioral health update the Internet portal developed functions. Section 155.205(d) provides
treatment; prescription drugs; under section 1103 of the Affordable that each Exchange must conduct
rehabilitative and habilitative services Care Act to provide information to consumer assistance activities,
and devices; laboratory services; consumers and small businesses on including the Navigator program
preventive and wellness services and affordable health insurance coverage described in §155.210, and §155.205(e)
chronic disease management; and options. provides that each Exchange must
pediatric services, including oral and Section 1311(c)(6)(B) of the conduct outreach and education
vision care. Affordable Care Act states that the activities to inform consumers about the
Sections 1302(b)(4)(A) through (D) Secretary is to set annual open Exchange and insurance affordability
establish that the Secretary must define enrollment periods for Exchanges for programs to encourage participation.
S2 Sections 155.205(d) and (e) also allow
ULE 2The implementing regulations in part 154 limit 3If a State elects to offer QHPs in the large group for the establishment of a non-Navigator
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RO health insurance coverage in the individual market regulations will apply to all coverage offered in Navigators and non-Navigator assistance
N1P or small group market. See Rate Increase Disclosure such State’s large group market (except for self- personnel in FFEs and for non-
V and Review; Final Rule, 76 FR 29964, 29966 (May insured group health plans) under section
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SP 23, 2011). 2701(a)(5) of the PHS Act. Navigator assistance personnel that are
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funded with Exchange establishment qualified low- and moderate-income rule that proposed certain program
grant funds under section 1311(a) of the enrollees in silver level health plans integrity standards related to Exchanges
Affordable Care Act. offered through the individual market and the premium stabilization programs
When operating an FFE under section Exchanges. These sections also provide (proposed Program Integrity Rule). The
1321(c)(1) of the Affordable Care Act, for reductions in cost sharing for provisions of that proposed rule were
HHS has the authority under sections Indians enrolled in Exchange plans at finalized in two rules, the ‘‘first Program
1321(c)(1) and 1311(d)(5)(A) of the any metal level. Integrity Rule’’ published in the August
Affordable Care Act to collect and spend Section 5000A of the Internal 30, 2013 Federal Register (78 FR 54070)
user fees. In addition, 31 U.S.C. 9701 Revenue Code (the Code), as added by and the ‘‘second Program Integrity
permits a Federal agency to establish a section 1501(b) of the Affordable Care Rule’’ published in the October 30, 2013
charge for a service provided by the Act, requires an individual to have Federal Register (78 FR 65046).
agency. Office of Management and minimum essential coverage for each
3. Exchanges
Budget (OMB) Circular No. A–25 month, qualify for an exemption, or
Revised establishes Federal policy make a shared responsibility payment We published a request for comment
regarding user fees and specifies that a with his or her Federal income tax relating to Exchanges in the August 3,
user charge will be assessed against return. Section 5000A(f) of the Code 2010 Federal Register (75 FR 45584).
each identifiable recipient for special defines minimum essential coverage as We issued initial guidance to States on
benefits derived from Federal activities any of the following: (1) Coverage under Exchanges on November 18, 2010. We
beyond those received by the general a specified government sponsored proposed a rule in the July 15, 2011
public. program; (2) coverage under an eligible Federal Register (76 FR 41866) to
Section 1321(c)(2) of the Affordable employer-sponsored plan; (3) coverage implement components of the
Care Act authorizes the Secretary to under a health plan offered in the Exchange, and a rule in the August 17,
enforce the Exchange standards using individual market within a State; or (4) 2011 Federal Register (76 FR 51202)
civil money penalties (CMPs) on the coverage under a grandfathered health regarding Exchange functions in the
same basis as detailed in section 2723(b) plan. Section 5000A(f)(1)(E) of the Code individual market, eligibility
of the PHS Act. Section 2723(b) of the authorizes the Secretary, in determinations, and Exchange standards
PHS Act authorizes the Secretary to coordination with the Secretary of the for employers. A final rule
impose CMPs as a means of enforcing Treasury, to designate other health implementing components of the
the individual and group market benefits coverage as minimum essential Exchanges and setting forth standards
reforms contained in Part A of title coverage. for eligibility for Exchanges was
XXVII of the PHS Act when a State fails published in the March 27, 2012
1. Premium Stabilization Programs
to substantially enforce these Federal Register (77 FR 18310)
provisions. In the July 15, 2011 Federal Register (Exchange Establishment Rule).
Section 1321(d) of the Affordable Care (76 FR 41930), we published a proposed We established standards for the
Act provides that nothing in title I of the rule outlining the framework for the administration and payment of cost-
Affordable Care Act should be premium stabilization programs. We sharing reductions and the SHOP in the
construed to preempt any State law that implemented the premium stabilization 2014 Payment Notice and in the
does not prevent the application of title programs in a final rule, published in Amendments to the HHS Notice of
I of the Affordable Care Act. Section the March 23, 2012 Federal Register (77 Benefit and Payment Parameters for
1311(k) of the Affordable Care Act FR 17220) (Premium Stabilization Rule). 2014 interim final rule, published in the
specifies that Exchanges may not In the December 7, 2012 Federal March 11, 2013 Federal Register (78 FR
establish rules that conflict with or Register (77 FR 73118), we published a 15541). The provisions established in
prevent the application of regulations proposed rule outlining the benefit and the interim final rule were finalized in
issued by the Secretary. payment parameters for the 2014 benefit the second Program Integrity Rule. We
Section 1341 of the Affordable Care year to expand the provisions related to also set forth standards related to
Act provides for the establishment of a the premium stabilization programs, Exchange user fees in the 2014 Payment
transitional reinsurance program in each and establish payment parameters for Notice. We also established an
State to help pay the cost of treating those programs (proposed 2014 Payment adjustment to the FFE user fee in the
high-cost enrollees in the individual Notice). We published the 2014 Coverage of Certain Preventive Services
market in the 2014 through 2016 benefit Payment Notice final rule in the March Under the Affordable Care Act final
years. Section 1342 of the Affordable 11, 2013 Federal Register (78 FR rule, published in the July 2, 2013
Care Act directs the Secretary to 15410). Federal Register (78 FR 39870)
establish a temporary risk corridors In the December 2, 2013 Federal (Preventive Services Rule).
program that protects against inaccurate Register (78 FR 72322), we published a In a final rule published in the July
rate setting in the 2014 through 2016 proposed rule outlining the benefit and 17, 2013 Federal Register (78 FR
benefit years. Section 1343 of the payment parameters for the 2015 benefit 42859), we established standards for
Affordable Care Act establishes a year to expand upon the provisions Navigators and non-Navigator assistance
permanent risk adjustment program that related to the premium stabilization personnel in FFEs and for non-
is intended to provide increased programs, setting forth certain oversight Navigator assistance personnel funded
payments to health insurance issuers provisions, and establishing the 2015 through an Exchange establishment
that attract higher-risk populations, payment parameters for those programs grant.
such as those with chronic conditions, (proposed 2015 Payment Notice). We
4. Essential Health Benefits and
ES2 funded by payments from those that published the 2015 Payment Notice Actuarial Value
UL attract lower-risk populations, thereby final rule in the March 11, 2014 Federal
D with R rheidghuecrin-rgis ikn ceennrotilvleeess f.o r issuers to avoid Register (79 FR 13744). relWatein ign ittoi aElHlyB ess taanbdli AshVesd irne qthueir ements
O 2. Program Integrity
R Sections 1402 and 1412 of the Standards Related to Essential Health
P
N1 Affordable Care Act provide for In the June 19, 2013 Federal Register Benefits, Actuarial Value, and
V
T
SP reductions in cost sharing for EHBs for (78 FR 37032), we published a proposed Accreditation Final Rule, which was
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Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations 10755
published in the February 25, 2013 premium stabilization programs. HHS Response: Many of the programs
Federal Register (78 FR 12834) (EHB has held a number of listening sessions covered by this final rule are closely
Rule). We established standards for with consumers, providers, employers, linked. To simplify the regulatory
updating the AV Calculator for future health plans, the actuarial community, process, facilitate public comment, and
plan years in the 2015 Payment Notice and State representatives to gather provide the information needed to meet
and established an expedited public input. HHS consulted with statutory deadlines, we elected to
prescription drug exception process stakeholders through regular meetings propose and finalize these regulatory
based on exigent circumstances for with the National Association of provisions in one rule.
plans providing EHB in the Exchange Insurance Commissioners (NAIC),
Comment: One commenter asked that
and Insurance Market Standards for regular contact with States through the
HHS allow States to continue their
2015 and Beyond Final Rule (2015 Exchange Establishment grant and
oversight of their insurance markets and
Market Standards Rule) that was Exchange Blueprint approval processes,
defer to the NAIC for the development
published in the May 27, 2014 Federal and meetings with Tribal leaders and
of important industry-wide, State-based
Register (79 FR 30240). representatives, health insurance
standards.
issuers, trade groups, consumer
5. Market Rules advocates, employers, and other Response: Title XXVII of the PHS Act
A proposed rule relating to the Health interested parties. We considered all of contemplates that States will exercise
Insurance Market Rules was published the public input as we developed the primary enforcement authority over
in the November 26, 2012 Federal policies in this final rule. health insurance issuers in the group
Register (77 FR 70584). A final rule and individual markets to ensure
III. Provisions of the Final Regulations
implementing the Health Insurance compliance with the Federal market
and Analysis and Responses to Public
Market Rules was published in the reforms. HHS has the responsibility to
Comments
February 27, 2013 Federal Register (78 enforce these provisions in the event
FR 13406) (2014 Market Rules). In the November 26, 2014 Federal that a State notifies HHS that it does not
A proposed rule relating to Exchanges Register (79 FR 70674), we published have the statutory authority to enforce
and Insurance Market Standards for the ‘‘Patient Protection and Affordable or that it is not otherwise enforcing, or
2015 and Beyond was published in the Care Act; HHS Notice of Benefit and if HHS determines that a State is not
March 21, 2014 Federal Register (79 FR Payment Parameters for 2016’’ proposed substantially enforcing, these
15808) (2015 Market Standards rule. We received 313 comments from requirements. This enforcement
Proposed Rule). The 2015 Market various stakeholders, including States, framework, in place since 1996, ensures
Standards Rule was published in the health insurance issuers, consumer that all consumers in all States have the
May 27, 2014 Federal Register (79 FR groups, labor entities, industry groups, protections of the Affordable Care Act
30240). provider groups, patient safety groups, and other parts of the PHS Act. We aim
national interest groups, and other
to establish Federal oversight standards
6. Rate Review stakeholders. The comments ranged
that complement State standards while
We published a proposed rule to from general support of or opposition to
meeting Federal obligations, and intend
establish the rate review program in the the proposed provisions to very specific
to continue to coordinate with State
December 23, 2010 Federal Register (75 questions or comments regarding
authorities to address compliance issues
FR 81004). We implemented the rate proposed changes. We received a
and to reduce the burden on
review program in a final rule published number of comments and suggestions
stakeholders.
in the May 23, 2011 Federal Register that were outside the scope of the
(76 FR 26694). We subsequently proposed rule and therefore will not be Comment: One commenter urged HHS
amended the rate review provisions in addressed in this final rule. to ensure that all regulatory information
a final rule published in the September In this final rule, we provide a related to the premium stabilization
6, 2011 Federal Register (76 FR 54969) summary of each proposed provision, a programs be presented in a transparent
and in the 2014 Market Rules. summary of the public comments and timely fashion.
received and our responses to them, and Response: We strive to publicize and
7. Medical Loss Ratio (MLR)
the provisions we are finalizing. present all information related to the
We published a request for comment Comment: We received a number of
premium stabilization programs in a
on section 2718 of the PHS Act in the comments requesting that the comment
transparent and timely fashion.
April 14, 2010 Federal Register (75 FR period be extended to 60 days. Several
19297), and published an interim final commenters asked that HHS develop a A. Part 144—Requirements Relating to
rule with a 60-day comment period standard timeline for issuance of the Health Insurance Coverage
relating to the MLR program on proposed and final Payment Notices,
1. Definitions (§144.103)
December 1, 2010 (75 FR 74864). A final one commenter asked that the final
rule with a 30-day comment period was Payment Notice be published by mid- Section 144.103 sets forth definitions
published in the December 7, 2011 January each year, and another asked of terms that are used throughout parts
Federal Register (76 FR 76574). An that it be published by February 1st 146 through 150. In the proposed rule,
interim final rule with a 60-day each year. we proposed to amend the definitions of
comment period was published in the Response: The timeline for ‘‘plan’’ and ‘‘State.’’
December 7, 2011 Federal Register (76 publication of this final rule
FR 76596). A final rule was published accommodates issuer filing deadlines a. Plan
S2 in the Federal Register on May 16, 2012 for the 2016 benefit year. We appreciate
E We proposed to make the definition of
UL (77 FR 28790). the deadlines that States, Exchanges,
R ‘‘plan’’ more specific by clarifying that
with B. Stakeholder Consultation and Input issuers, and other entities face in the term means the pairing of the health
D implementing these rules.
RO HHS has consulted with stakeholders Comment: We received one comment insurance coverage benefits under a
P
N1 on policies related to the operation of disapproving of the wide array of topics ‘‘product’’ with a particular cost-sharing
V
SPT Exchanges, including the SHOP and the covered in the rule. structure, provider network, and service
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10756 Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations
area.4The same definition would be tiering design—are represented by the to changes in cost or utilization of
used for purposes of part 154, rate plan’s benefits and cost-sharing medical care (that is, medical inflation
review, and part 156, health insurance structure. Further, we clarify that each or demand for services based on
issuer standards. plan variation of a standard QHP would inflationary increases in the cost of
We noted that issuers can modify the not constitute a ‘‘particular cost-sharing medical care), or is to maintain the same
health insurance coverage for a product structure’’ for purposes of the definition metal tier level described in sections
upon coverage renewal and sought and thus would not constitute a separate 1302(d) and (e) of the Affordable Care
comment on standards for determining plan. Act (that is, bronze, silver, gold,
when a plan that has been modified The final rule adopts the definition of platinum, or catastrophic).
should be considered to be the ‘‘same ‘‘plan’’ as proposed. We believe many • Continues to cover a majority of the
plan’’ for purposes of rate review, plan issuers already distinguish their plans same service area.
identification in the Health Insurance according to these characteristics, and • Continues to cover a majority of the
Oversight System (HIOS), and other we do not anticipate significant same provider network (as applicable).
programs. In particular, we sought downstream issues as a result of these We recognize that a plan’s provider
comment on whether these standards clarifications. Nevertheless, we will network may change throughout the
should be similar to those applicable at work with States and issuers to make plan year. Therefore, for purposes of
the product level under the uniform any necessary adjustments to plan determining whether a plan maintains a
modification provision at §147.106(e). identifiers in Federal systems. majority of the same provider network,
We are finalizing the amendments to Comment: We received some the plan’s provider network on the first
the definition of ‘‘plan’’ as proposed. comments addressing when a plan day of the plan year is compared with
We are also specifying standards for should be considered to be the ‘‘same the plan’s provider network on the first
determining when a plan that has been plan’’ following modifications at the day of the preceding plan year. If at least
modified will be considered to be the plan level. Several commenters agreed 50 percent of the contracted providers at
‘‘same plan.’’ with the option we presented in the the beginning of the plan year are still
Comment: Many commenters were preamble to the proposed rule of using contracted providers at the beginning of
supportive of the proposed definition of standards similar to those for uniform the next plan year, the plan will be
‘‘plan’’ stating it more closely aligns modification of a product for identifying considered to have maintained a
with issuer operations and consumer modifications to a plan that would majority of the same provider network.
result in the plan remaining the ‘‘same
expectations. However, some Furthermore, similar to the standard
plan.’’ Commenters stated that we
commenters believed that parts of the for uniform modification of a product, a
should permit changes to cost sharing
definition were too vague, such as the plan also will not fail to be treated as
designed to maintain the same metal
references to ‘‘cost-sharing structure’’ the same plan to the extent the changes
level and modifications attributable to
and ‘‘provider network.’’ For example, are made uniformly and solely pursuant
Federal or State legal requirements to
one commenter stated that the reference to applicable Federal or State
constitute the same plan. Two
to a ‘‘particular’’ cost-sharing structure requirements, provided that the changes
commenters recommended standards
could mean that each cost-sharing are made within a reasonable time
regarding provider network and service
reduction plan variation of the standard period after the imposition or
area.
QHP would constitute a separate Response: In this final rule, we modification of the Federal or State
‘‘plan.’’ One commenter recommended specify when a plan that has been requirement and are directly related to
adding the prescription drug formulary modified will be considered to be the the imposition or modification of the
as a distinct plan characteristic. Other ‘‘same plan.’’ Based on the comments Federal or State requirement.
commenters cautioned HHS to be received, the final rule generally adopts The cost-sharing provision under this
mindful of the operational impacts of the standards for uniform modification final rule is identical to the cost-sharing
changing the definition of ‘‘plan.’’ at the product level for changes made at provision under the uniform
Response: We believe the proposed
the plan level. These standards reflect modification standard. In the 2015
definition accurately reflects the key
characteristics relevant to the definition Market Standards Rule (79 FR 30251),
features of a plan: a package of benefits
of ‘‘plan,’’ including provider network, which established criteria for uniform
paired with a cost-sharing structure and
an additional characteristic not reflected modification, we stated that the cost-
provider network that operates within a
in the uniform modification provision. sharing provision is intended to
service area. By ‘‘provider network,’’ we
We specifically omit those standards at establish basic parameters around cost-
mean the defined set of providers under
§147.106(e)(3) related to issuer, product sharing modifications to protect
contract with the issuer for the delivery
network type, and covered benefits, consumers from extreme changes in
of medical care (including items and
which are relevant only at the product deductibles, copayments, and
services paid for as medical care), if
level. We note that modifications to coinsurance, while preserving issuer
applicable. We recognize that the
these characteristics in a manner that flexibility to make reasonable and
prescription drug formulary is an
exceeds the standards for uniform customary adjustments from year to
important element of plan coverage, but
modification would result in a new year.
do not specifically include it in the
product and, consequently, new plans Finally, as with the uniform
definition, because each aspect of the
within the product. modification provision, States have
formulary—the covered drugs and the
The final rule provides that a plan flexibility to broaden the definition of
that has been modified at the time of ‘‘same plan.’’ States may, at their option,
ULES2 dbeis4ncUerfenittdese ptrh a§act1k a4a g4he.e1 ao0lf3t hh, etihanelst uhter iranmnsc u‘e‘rp airsnoscdueue crc oto’v’f femerraesga eun ssi na g c§o1v4e7r.a1g0e6 r weniellw bael cionn ascicdoerrdeadn tcoe b we itthhe psterrumctiut rger,e oarte dr ecshigannagtees ato l ocwosetr- sthharerisnhgo ld
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RO health maintenance organization (HMO), preferred • Has the same cost-sharing structure network and service area, to constitute
N1P provider organization (PPO), exclusive provider as before the modification, or any the same plan. We intend to monitor
V organization (EPO), point of service (POS), and
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SP indemnity. variation in cost sharing is solely related issues around compliance with the
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categorization of ‘‘plans’’ and may insurance markets. One commenter Exchanges. We believe these provisions
provide future guidance as necessary. encouraged HHS to work with the will help consumers avoid gaps in
Territories to improve access to coverage when they experience certain
b. State
coverage for their residents. significant life changes without
We proposed to amend the definition Response: We are committed to resulting in adverse selection.
of ‘‘State’’ to exclude application of the partnering with the Territories to ensure
2. Guaranteed Renewability of Coverage
Affordable Care Act market reforms their markets are robust and
(§147.106)
under part 147 to issuers in the U.S. competitive, so that consumers have
Territories of Puerto Rico, the Virgin access to quality, affordable health Consistent with previous guidance,
Islands, Guam, American Samoa, and insurance. we proposed that an issuer will not
the Northern Mariana Islands. The satisfy the requirements for product
B. Part 147—Health Insurance Reform
change codifies HHS’s interpretation, discontinuation under the guaranteed
Requirements for the Group and
outlined in letters to the Territories on renewability regulations at
Individual Health Insurance Markets
July 16, 2014, that the new provisions §146.152(c)(2), §147.106(c)(2), or
of the PHS Act enacted in title I of the 1. Guaranteed Availability of Coverage §148.122(d)(2) if the issuer
Affordable Care Act are appropriately (§147.104) automatically enrolls a plan sponsor or
governed by the definition of ‘‘State’’ set individual (as applicable) into a product
We proposed several modifications to
forth in that title, and therefore do not of another licensed health insurance
the guaranteed availability requirements
apply to group or individual health issuer.6However, this would not
under §147.104. First, we proposed to
insurance issuers in the Territories.5 prevent an issuer that decides to
remove regulation text in §147.104(b)(2)
As explained in the July 16, 2014 withdraw from the market in a State
establishing a special enrollment period
letters and reiterated in the preamble to from mapping enrollees to a product of
(also referred to as a ‘‘limited open
the proposed rule (79 FR 70681), this another licensed issuer, to the extent
enrollment period’’) for individuals
interpretation applies only to health permitted by applicable State law, and
enrolled in non-calendar year
insurance that is governed by the PHS provided the issuer otherwise satisfies
individual market plans, because the
Act. It does not affect the PHS Act the requirements for market withdrawal.
requirement is incorporated through
requirements that were enacted in the We stated that allowing an issuer to
cross-reference in the same paragraph to
Affordable Care Act and incorporated transfer blocks of business to another
the Exchange rules at §155.420(d)(1)(ii).
into ERISA and the Code and apply to issuer could create opportunities for risk
Second, we proposed to add new
group health plans (whether insured or segmentation, but also recognized that
paragraph §147.104(f), which would
self-insured), because such applicability regulating these matters could have
move and recodify, with minor
does not rely upon the term ‘‘State’’ as implications for certain corporate
modifications for clarity, the
it is defined in either the PHS Act or reorganization practices. We sought
requirement under existing
Affordable Care Act. It also does not comment on how to interpret the
§147.104(b)(2) for non-grandfathered
affect the PHS Act requirements that guaranteed renewability provisions in
individual and merged market plans to
were enacted in the Affordable Care Act the context of various corporate
be offered on a calendar year basis.
and apply to non-Federal governmental transactions involving a change of
Third, we proposed to amend
plans. As a practical matter, therefore, ownership, such as acquisitions,
§147.104(b)(4) by adding a cross-
PHS Act, ERISA, and Code requirements mergers, or other corporate transactions;
reference to the advance availability of
applicable to group health plans how common such transactions are and
special enrollment periods under
continue to apply to such coverage, and how they are typically structured;
§155.420(c)(2). This would align with
issuers selling policies to both private whether auto-enrollment should be
the Exchange regulations and allow
sector and public sector employers in allowed into a product of the post-
individuals to make a plan selection 60
the Territories should ensure their transaction issuer; how the market
days before and after certain triggering
products comply with the relevant reforms such as the single risk pool
events when enrolling inside or outside
Affordable Care Act amendments to the provision should be applied; and what
the individual market Exchanges.
PHS Act applicable to group health protections should be provided to
Finally, we proposed amending
plans since their customers—the group consumers when their product is
§147.104(b)(1)(i)(C) to update the
health plans—are subject to those transferred.
citation to the SHOP regulations to
provisions. These include the Because ownership transfers have
conform with changes made in this
prohibition on lifetime and annual implications for the operational
rulemaking. The cross-reference is
limits (section 2711 of the PHS Act), the processes of HHS-administered
changed from §155.725(a)(2) to
prohibition on rescissions (section 2712 programs, such as advance payments of
§155.725.
of the PHS Act), coverage of preventive the premium tax credit, cost-sharing
We are finalizing these amendments
health services (section 2713 of the PHS reduction payments, FFE user fees, and
as proposed.
Act), and the revised internal and the premium stabilization programs, we
Comment: Most commenters
external appeals process (section 2719 proposed a notification requirement on
supported extending the 60-day advance
of the PHS Act).
availability provisions to ensure market-
We are finalizing these amendments 6See Insurance Standards Bulletin, Form and
wide consistency in special enrollment
Manner of Notices When Discontinuing or
as proposed.
periods. One commenter recommended Renewing a Product in the Group or Individual
Comment: Several commenters a 30-day special enrollment period. Market, section IV (September 2, 2014). Available
ULES2 sthuep pteorrmte d‘‘S tthaet ep’’r otop oasveodid a munednedrmmeinnitns gto Omtahienrt acionminmg ethnete 6rs0 -rdeacyo mspmeceinadl ed aRNteo: gthiuctlteapst:-i/9o/-wn3sw--1aw4n.-cdFm-IGNsuA.giLod.vaP/nDCcFCe./I IDSOeo/ewR anelslsoooau dPrcsae/tRise/ennte wal-
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D with enRroelslpmoennste p: Werieo adg. ree with commenters PErliogtiebcitliiotyn Raendde Atefrfmoridnaabtiloe nCsa froer A Ecxtc; hAannngue al
RO 5See for example, Letter to Virgin Islands on the who urged consistency in access to Participation and Insurance Affordability Programs;
N1P Definition of State (July 16, 2014). Available at: special enrollment periods inside and Health Insurance Issuer Standards Under the
V http://www.cms.gov/CCIIO/Resources/Letters/ Affordable Care Act, Including Standards Related to
T
SP Downloads/letter-to-Francis.pdf. outside the individual market Exchanges, 79 FR at 53000 (September 5, 2014).
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10758 Federal Register/Vol. 80, No. 39/Friday, February 27, 2015/Rules and Regulations
issuers of a QHP, a plan otherwise guidance is issued. In the interim, we we are finalizing the notice requirement
subject to risk corridors, or a will continue to apply our interpretation for an issuer of a QHP, a plan otherwise
reinsurance-eligible plan or a risk of the guaranteed renewability subject to risk corridors, a risk
adjustment covered plan, in cases of requirements, set forth in previous adjustment covered plan, or a
changes of ownership. We proposed that guidance,7to prohibit auto-enrollment reinsurance-eligible plan, as proposed.
the post-transaction issuer notify HHS into a product of another issuer in cases We intend to limit the information
of the transaction by the date the where the auto-enrollment does not collected to those elements necessary
transaction is entered into or the 30th occur in connection with a change of for HHS and issuers to determine how
day prior to the effective date of the ownership. the change of ownership affects
transaction, whichever is later. We Comment: Some commenters operations of HHS-administered
sought comments on all aspects of the recommended that HHS provide programs. These elements include the
notification, including what further flexibility to issuers to determine legal name, HIOS plan identifier, tax
notification requirements should apply liability of each party in a transaction identification number of the original
to ownership transfers, and whether the for advance payments of the premium and post-transaction issuers, the
notification requirement should apply tax credit, cost-sharing reductions effective date of the change of
to all plans subject to the guaranteed payments, and the premium ownership, and the summary
renewability requirements, including stabilization programs. description of transaction. Depending
grandfathered health plans. Response: We intend to take these on the nature of the transaction,
We are finalizing the notification comments into consideration as we additional information may be
requirement in cases of changes of consider whether guidance on liability necessary to ensure smooth operations
ownership as recognized by the State in is necessary as it relates to the HHS- of affected programs. We anticipate
which the issuer offers coverage. In light administered programs described above. addressing the need for additional
of the comments discussed below, we Comment: In response to the information on a case-by-case basis,
are not codifying the provision proposed notification requirement for through discussion with affected
prohibiting an issuer from automatically issuers experiencing a change of
issuers, with the participation of
enrolling plan sponsors or individuals ownership, some commenters
affected issuers.
(as applicable) into a product of another recommended that HHS defer to State Finally, we are sensitive to the fluid
licensed health insurance issuer. We definitions of change of ownership. One nature of change of ownership
intend to consult with the NAIC and commenter suggested notice is transactions, but believe that our
other stakeholders before releasing unnecessary, as QHP issuers in the FFEs proposed dates for notification
further guidance on this issue. must already provide HHS with notice accommodate most transactional
Comment: Many commenters of change of ownership under §156.330.
timelines. In addition, the information
encouraged HHS to defer to State One commenter recommended issuers
we intend to require from issuers is
determinations on matters regarding be required to provide notice only after
limited in scope and should not
change of ownership, including when it a transaction is completed, and sought
substantially burden either issuers or
is appropriate for an issuer to renew clarification that HHS will collect only
HHS, even if the transaction is not
coverage through another licensed the minimum information necessary to
ultimately consummated. To ensure
issuer. One commenter requested that facilitate operational processes and has
continuity of operations, particularly for
HHS expressly recognize an offer of no intention of collecting the
administration of monthly payments
coverage by an affiliated issuer as an information for purposes other than for
and charges for advance payments of the
exception to the prohibition on auto- continuity of operations.
premium tax credit and cost-sharing
enrollment. Several commenters Response: We are finalizing the
reductions, it is in the interest of both
emphasized the need for continuity of proposal to require notification when an
issuers and HHS to coordinate prior to
care and recommended that, in cases of issuer experiences a change of
the effective date of the transaction.
mid-year changes of ownership, the ownership, as recognized by the State in
acquiring issuer retain some or all of the which the issuer offers coverage. The C. Part 153—Standards Related to
characteristics of the original plan, such definition of change of ownership for Reinsurance, Risk Corridors, and Risk
as the same benefits, cost sharing, the purpose of notification is intended Adjustment Under the Affordable Care
formulary, and network. Conversely, simply to capture situations in which Act
another commenter noted that the same such a change may have operational
1. Provisions for the State Notice of
coverage features rarely remain in place implications for the above mentioned
Benefit and Payment Parameters
after an ownership transfer. Some programs. We recognize that States have
(§153.100)
commenters recommended HHS work existing regulatory processes for
with States and issuers before releasing reviewing changes of ownership. In §153.100(c), we established a
guidance on how corporate transactions We also recognize that FFE issuers are deadline of March 1 of the calendar year
should be handled. subject to a notification requirement prior to the applicable benefit year for
Response: After careful review of the under §156.330; however, changes of a State to publish a State notice of
comments submitted on this issue and ownership may have operational benefit and payment parameters if the
the relevant statutory language, we are implications for HHS-administered State is required to do so under
not codifying the prohibition on auto- programs beyond the FFEs. The HHS- §153.100(a) or (b)—that is, if the State
enrollment into a product of another administered programs described above is operating a risk adjustment program,
licensed issuer at this time. We intend affect QHP issuers in both the FFEs and or if the State is establishing a
S2 to consult with the NAIC and other State-based Exchanges, as well as reinsurance program and wishes to
ULE stakeholders to develop guidance on issuers offering plans outside of modify the data requirements for issuers
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PR will generally look to the applicable issues arising from such transactions, benefit and payment parameters for the
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