[Federal Register Volume 79, Number 126 (Tuesday, July 1, 2014)]
[Proposed Rules]
[Pages 37262-37269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-15362]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 155 and 156
[CMS-9941-P]
RIN 0938-AS32
Patient Protection and Affordable Care Act; Annual Eligibility
Redeterminations for Exchange Participation and Insurance Affordability
Programs; Health Insurance Issuer Standards Under the Affordable Care
Act, Including Standards Related to Exchanges
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would specify additional options for annual
eligibility redeterminations and renewal and re-enrollment notice
requirements for qualified health plans offered through the Exchange,
beginning with annual redeterminations for coverage for plan year 2015.
In particular, this proposed rule would provide additional flexibility
for Marketplaces, including the ability for Marketplaces to propose
unique approaches that meet the specific needs of their State, while
streamlining the consumer experience.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on July 28, 2014.
ADDRESSES: In commenting, please refer to file code CMS-9941-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9941-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
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-9941-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments only to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, call
telephone number (410) 786-7195 in advance to schedule your arrival
with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Benjamin Walker, (301) 492-4430.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to
view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the internet at http://www.gpo.gov/fdsys.
Table of Contents
I. Background
A. Legislative Overview
B. Stakeholder Consultation and Input
C. Structure of the Proposed Rule
II. Provisions of the Proposed Rule
A. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act; Subpart D--Exchange
Functions in the Individual Market: Eligibility Determinations for
Exchange Participation and Insurance Affordability Programs
B. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges;
Subpart M--Qualified Health Plan Issuer Responsibilities
III. Response to Comments
IV. Collection of Information Requirements
V. Regulatory Impact Statement
I. Background
A. Legislative Overview
The Patient Protection and Affordable Care Act (Pub. L. 111-148)
was enacted on March 23, 2010. The Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised
several provisions of the Patient Protection and Affordable Care Act,
was enacted on March 30, 2010. In this proposed rule, we refer to the
two statutes collectively as the ``Affordable Care Act.'' Subtitles A
and C of Title I of the Affordable Care Act reorganized, amended, and
added to the provisions of part A of Title XXVII of the Public Health
Service Act (PHS Act) relating to group health plans and health
insurance issuers in the group and individual markets.
Starting on October 1, 2013 for coverage starting as soon as
January 1, 2014, qualified individuals and qualified employers have
been able to purchase qualified health plans (QHPs)--private health
insurance that has been certified as meeting certain standards--through
competitive
[[Page 37263]]
marketplaces called Exchanges or Health Insurance Marketplaces. The
word ``Exchanges'' refers to both State Exchanges, also called State-
based Exchanges, and Federally-facilitated Exchanges (FFEs). In this
proposed rule, we use the terms ``State Exchange'' or ``FFE'' when we
are referring to a particular type of Exchange. When we refer to
``FFEs,'' we are also referring to State Partnership Exchanges, which
are a form of FFE.
Section 1411(f)(1)(B) of the Affordable Care Act directs the
Secretary of Health and Human Services (the Secretary) to establish
procedures to redetermine the eligibility of individuals on a periodic
basis in appropriate circumstances. Section 1321(a) of the Affordable
Care Act provides authority for the Secretary to establish standards
and regulations to implement the statutory requirements related to
Exchanges, QHPs and other components of title I of the Affordable Care
Act. Under section 2703 of the PHS Act, as added by the Affordable Care
Act, health insurance issuers in the group and individual markets must
guarantee the renewability of coverage unless an exception applies.
B. Stakeholder Consultation and Input
HHS has consulted with stakeholders on a number of polices related
to the operation of Exchanges, including eligibility redetermination.
HHS has held a number of listening sessions with consumers, providers,
employers, health plans, and State representatives to gather public
input. HHS consulted with stakeholders through regular meetings with
the National Association of Insurance Commissioners (NAIC), regular
contact with States through the Exchange grant process, and meetings
with tribal leaders and representatives, health insurance issuers,
trade groups, consumer advocates, employers, and other interested
parties. We considered all of the public input as we developed the
policies in this proposed rule.
C. Structure of the Proposed Rule
The regulations outlined in this proposed rule would be codified in
45 CFR parts 155 and 156. Part 155 specifies standards relative to the
establishment, operation, and minimum functionality of Exchanges,
including annual eligibility redeterminations. Part 156 specifies
standards for health insurance issuers with respect to participation in
an Exchange.
II. Provisions of the Proposed Regulations
A. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act; Subpart D--Exchange Functions
in the Individual Market: Eligibility Determinations for Exchange
Participation and Insurance Affordability Programs
Section 1411(f)(1)(B) of the Affordable Care Act directs the
Secretary to establish procedures to redetermine the eligibility of
individuals on a periodic basis in appropriate circumstances. Section
1321(a) of the Affordable Care Act provides authority for the Secretary
to establish standards and regulations to implement the statutory
requirements related to Exchanges, QHPs and other components of title I
of the Affordable Care Act.
On March 27, 2012, we published a final rule entitled Patient
Protection and Affordable Care Act; Establishment of Exchanges and
Qualified Health Plans; Exchange Standards for Employers (77 FR 18310).
The final rule added 45 CFR 155.335, which, together with the
provisions in 45 CFR 155.330 on eligibility redeterminations during a
benefit year, implements section 1411(f)(1)(B) of the Affordable Care
Act. On July 15, 2013, we amended Sec. 155.335 in a final rule
entitled Medicaid and Children's Health Insurance Programs: Essential
Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair
Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges:
Eligibility and Enrollment (78 FR 42160, 42319).
Under the process currently defined in Sec. 155.335, the Exchange
will provide a notice to all individuals who have been determined
eligible for enrollment in a QHP through the Exchange (qualified
individuals) in advance of the annual open enrollment period,
consistent with Sec. 155.335(c). For 2015, current regulations in
Sec. 155.335(d)(1) specify that this notice and the annual open
enrollment period notice described in Sec. 155.410(d) be provided as a
single, coordinated notice. For an individual who requested an
eligibility determination for insurance affordability programs and who
authorized the Exchange to obtain the most recent tax return
information available from the Secretary of the Treasury for the
purposes of annual redetermination, this notice will include a
projected eligibility determination for insurance affordability
programs for the following year that is computed based on the updated
income and family size information, all other eligibility information
currently on file with the Exchange, and plan premiums for the
following year. Specifically, if advance payments of the premium tax
credit (APTC) are being paid on such an enrollee's behalf and the tax
filer authorized the Exchange to obtain updated tax data for the
purposes of annual redetermination, the Exchange will recalculate
advance payments of the premium tax credit and cost-sharing reductions
(CSR) for the upcoming year in accordance with updated income and
family size information and premium data for the applicable benchmark
plan, as defined in 26 CFR 1.36B-3(f), calculated using premiums for
the upcoming year. Consistent with Sec. 155.335(e), the Exchange will
require qualified individuals to report changes. The process currently
established in regulation allows an individual who is enrolled in a QHP
through the Exchange and whose QHP remains available to renew coverage
for the following year without reapplying or having to take other
actions. This is a key element of the redetermination process, since it
enables a streamlined renewal process for enrollees and also reduces
administrative costs for States and the Federal government.
Based on the authority in sections 1411(f)(1)(B) and 1321(a) of the
Affordable Care Act, we propose to modify Sec. 155.335(a) to allow for
an Exchange to choose one of three methods for conducting annual
redeterminations. To accommodate proposed new paragraph (a)(2), we
propose to renumber existing paragraph (a) as paragraph (a)(1). Then,
in proposed paragraph (a)(2), we propose that the Exchange must conduct
annual redeterminations using one of the sets of procedures described
in proposed paragraphs (a)(2)(i), (a)(2)(ii), or (a)(2)(iii). First, in
proposed paragraph (a)(2)(i), we propose that the Exchange may utilize
the existing procedures described in Sec. 155.335(b) through (m).
Second, in paragraph (a)(2)(ii), we propose that the Exchange may
utilize alternative procedures specified by the Secretary for the
applicable plan year. We note that, contemporaneously with this
proposed rule, the Secretary is providing guidance describing
alternative procedures that would be available to Exchanges under
paragraph (a)(2)(ii) for annual redeterminations for coverage for plan
year 2015 if this proposal is finalized. We are providing this guidance
at the same time as this proposed rule given the limited amount of time
available for Exchanges and issuers to develop and test the systems and
processes that will be needed to
[[Page 37264]]
implement the annual redetermination process. If this proposal is
finalized, Federally-facilitated Exchanges will adopt the alternative
procedures specified in this guidance for plan year 2015. Also, if this
proposal is finalized, we expect that updated guidance under paragraph
(a)(2)(ii) may be provided on an annual basis. Third, in proposed
paragraph (a)(2)(iii), we propose that the Exchange may utilize
alternative procedures approved by the Secretary based on a showing by
the Exchange that the alternative procedures would facilitate continued
enrollment in coverage for which the enrollee remains eligible, provide
clear information about the process to the qualified individual or
enrollee (including any action by the qualified individual or enrollee
necessary to obtain the most accurate redetermination of eligibility),
and provide adequate program integrity protections. We note that
paragraph (a)(2)(iii) is designed to enable Exchanges to propose annual
redetermination procedures that would deliver on the key goals of the
annual redetermination process, including those specified in this
paragraph. We solicit comment regarding standards for approving
alternative procedures, and on other elements of the annual
redetermination process, as well as how it affects renewal for
individuals who are enrolled in a QHP through the Exchange. We also
note that special procedures may be needed for an Exchange that is
transitioning the eligibility and enrollment functions from Federal to
State operation, or vice versa. We will work closely with affected
States to facilitate these transitions.
In addition to the proposal to allow Exchanges to choose one of
three options for performing annual redeterminations, we propose to
make three amendments to the detailed procedures described in Sec.
155.335 and one corresponding amendment to Sec. 155.330, which governs
eligibility redetermination during a benefit year. First, in Sec.
155.335(e), we propose to revise the language regarding change
reporting to generally align with the standards in Sec. 155.330(b), so
that Sec. 155.335(e) would specify that, except as specified in
proposed paragraph (e), the Exchange must require a qualified
individual to report any change with respect to the eligibility
standards specified in Sec. 155.305 within 30 days of any such change.
Under proposed paragraph (e)(1), the Exchange would not be permitted to
require a qualified individual who did not request an eligibility
determination for insurance affordability programs to report changes
that affect eligibility for insurance affordability programs. Unlike
Sec. 155.330, we do not propose to allow the Exchange to establish a
reasonable threshold for changes in income, such that a qualified
individual who experiences a change in income that is below the
threshold would not be required to report such change, since we believe
that reporting of all income changes is important at the time of annual
redetermination. With this exception, the proposed standards are
identical to those currently established in 45 CFR Sec. 155.330(b). We
propose these changes to paragraph (e) because the existing text refers
to reporting changes with respect to the information included in the
annual redetermination notice, which is not required to include a
summary of the qualified individual's application information on file,
although an Exchange may opt to include this information. These
proposed changes would align reporting requirements with the notice and
ensure that Exchanges require relevant changes to be reported in a
timely manner, consistently throughout the year.
Second, in proposed Sec. 155.335(e)(2), we propose to amend the
existing provision which specifies that the Exchange must allow a
qualified individual, or an application filer, on behalf of the
qualified individual, to report changes via the channels available for
submission of an application, as described in Sec. 155.405(c)(2). We
propose that this requirement would continue to apply, except that the
Exchange would no longer be required to allow a qualified individual,
or an application filer, on behalf of the qualified individual, to
report changes via mail. We also propose the same change to Sec.
155.330(b)(4), which addresses the reporting of changes in the context
of eligibility redetermination during a benefit year. Accepting changes
via mail would frequently require follow-up telephone contact with
individuals attempting to report changes in order to obtain answers to
questions that may be triggered by the reported changes. We propose
this because of the dynamic nature of the eligibility process, under
which, for example, the Exchange should only ask questions about an
individual's access to qualifying coverage in an eligible employer-
sponsored plan for an individual who has a level of income for his or
her family size that would qualify him or her for advance payments of
the premium tax credit or cost-sharing reductions, if he or she is
otherwise eligible. With a paper process, under this example, it
frequently would not be possible to know in advance whether information
about an individual's access to qualifying coverage in an eligible
employer-sponsored plan would need to be collected based on a reported
change in income or family size. Since change reporting via mail would
frequently trigger subsequent telephone contact, we believe it would
promote administrative efficiency to eliminate the requirement to
accept change reporting via mail while encouraging use of the telephone
option, during which a call center representative can use the dynamic
application to ask the qualified individual any follow-up questions
that may arise from the change report. We note that our proposed policy
would continue to require that an Exchange must permit change reporting
online, via telephone, and in person with the assistance of Navigators,
certified application counselors, and other in-person assistance
personnel, and that an Exchange could choose to permit change reporting
via mail. If this proposal is finalized, we anticipate that the
Federally-facilitated Exchange would not accept changes reported via
mail for the foreseeable future. We also note that this rule does not
propose to modify 42 CFR 435.916(a)(3)(B) or (c), which specify that a
Medicaid agency must allow an individual to respond to an annual
redetermination or report changes via mail.
Third, we propose to modify the standards for re-enrollment in
coverage in paragraph (j). First, in paragraph (j)(1), we propose that
if an enrollee remains eligible for enrollment in a QHP through the
Exchange upon annual redetermination, and the product under which the
QHP in which he or she was enrolled remains available for renewal,
consistent with 45 CFR 147.106, such enrollee will have his or her
enrollment in a QHP under the product renewed unless he or she
terminates coverage, including termination of coverage in connection
with voluntarily selecting a different QHP, in accordance with Sec.
155.430. In this situation, we propose that the QHP in which the
enrollee will be renewed will be selected according to the following
order of priority: First, in the same plan as the enrollee's current
QHP, unless the current QHP is not available; second, if the enrollee's
current QHP is not available, the enrollee's coverage will be renewed
in a plan at the same metal level as the enrollee's current QHP; third,
if the enrollee's current QHP is not available and the enrollee's
product no longer
[[Page 37265]]
includes a plan at the same metal level as the enrollee's current QHP,
the enrollee's coverage will be renewed in a plan that is one metal
level higher or lower than the enrollee's current QHP; and fourth, if
the enrollee's current QHP is not available and the enrollee's product
no longer includes a plan that is at the same metal level as, or one
metal level higher or lower than the enrollee's current QHP, the
enrollee's coverage will be renewed in any other plan offered under the
product in which the enrollee's current QHP is offered in which the
enrollee is eligible to enroll.
In paragraph (j)(2), we propose standards to address re-enrollment
in situations in which the product under which an enrollee's QHP is
offered is not available through the Exchange for renewal, consistent
with 45 CFR 147.106. In this situation, the QHP issuer may still re-
enroll the enrollee in a different product offered by the same QHP
issuer, to the extent permitted by applicable State law, unless the
enrollee terminates coverage. To the extent that an issuer is re-
enrolling such an enrollee, we propose that the plan in which the
enrollee will be renewed will be selected according to the following
order of priority: First, in a plan through the Exchange at the same
metal level as the enrollee's current QHP in the product offered by the
issuer that is the most similar to the enrollee's current product;
second, if the issuer does not offer another plan through the Exchange
at the same metal level as the enrollee's current QHP, the enrollee
will be re-enrolled in a plan through the Exchange that is one metal
level higher or lower than the enrollee's current QHP in the product
offered by the issuer through the Exchange that is the most similar to
the enrollee's current product; third, if the issuer does not offer
another plan through the Exchange at the same metal level as, or one
metal level higher or lower than the enrollee's current QHP, the
enrollee will be re-enrolled in any other plan offered through the
Exchange by the QHP issuer in which the enrollee is eligible to enroll;
and fourth, if the issuer does not offer any plan through the Exchange
in which the enrollee is eligible to enroll, the enrollee may be re-
enrolled in a plan offered outside the Exchange by the QHP issuer under
the product that is the most similar to the enrollee's current product,
in which the enrollee is eligible to enroll. We note that the Exchange
would not send an enrollment transaction for an enrollment outside the
Exchange, and that premium tax credits and cost-sharing reductions are
not available for enrollment that is not through the Exchange.
The proposed changes to this provision include minor changes to
improve clarity, amendments to reflect that renewal of coverage in a
QHP through the Exchange intersects with Sec. 147.106, which provides
market-wide standards for guaranteed renewability of coverage offered
both through and outside the Exchange, and a specific order of priority
to ensure that renewal of and re-enrollment in coverage in a plan
through the Exchange occurs through the Exchange, and is in products
that are as similar to the enrollee's existing product as possible, in
order to minimize disruption, enable consumers to continue with advance
payments of the premium tax credit and cost-sharing reductions (which
are only available for enrollment through the Exchange) and limit
consumer confusion. Further, the current text of paragraph (j), if read
separately from Sec. 147.106, could give the incorrect impression that
a QHP enrollee would have his or her coverage in a QHP renewed even if
the product under which the QHP was offered was no longer available for
renewal, consistent with Sec. 147.106. Accordingly, the proposed
language is designed to clarify the dependency of renewal of coverage
in a QHP through the Exchange on the continuing availability of the
product under which the QHP is offered in accordance with market-wide
standards. We solicit comments on these proposed standards and on the
proposed order in which plans would be selected for renewal of and re-
enrollment in coverage. In particular, we solicit comment regarding
whether paragraphs (j)(1)(iii) and (j)(2)(ii) should only prioritize a
plan with a lower metal level, and whether in general, priority should
be placed on plans that have a premium that is closest to the plan in
which an enrollee is currently enrolled.
B. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges; Subpart M--
Qualified Health Plan Issuer Responsibilities
In 45 CFR 147.106(f)(1) of the final rule entitled, ``Patient
Protection and Affordable Care Act; Exchange and Insurance Market
Standards for 2015 and Beyond,'' published on May 27, 2014 (79 FR
30240) (Market Standards Rule), we specified that health insurance
issuers of non-grandfathered plans in the individual market will
provide written notice of renewals before the first day of the next
annual open enrollment period in a form and manner specified by the
Secretary. Under 45 CFR 147.106(c)(1), health insurance issuers of non-
grandfathered plans in the individual market also will provide written
notices of product discontinuances.
We propose adding to subpart M a new Sec. 156.1255, which would
require a health insurance issuer in the individual market that is
renewing an enrollment group's coverage in a qualified health plan
offered through the Exchange (including a renewal with modifications),
or that is discontinuing a product that includes plans offered through
the Exchange and automatically enrolling an enrollee in a QHP under a
different product offered by the same QHP issuer through the Exchange,
to include certain information in the renewal or discontinuation
notices, as applicable. We propose that the additional information
include the following: (1) Premium and premium tax credit information
sufficient to notify the enrollment group of its expected monthly
premium payment under the renewed coverage, in a form and manner
specified by the Exchange, provided that if the Exchange does not
provide this information to enrollees and does not require issuers to
provide this information to enrollees, consistent with this section,
such information must be provided in a form and manner specified by
HHS; (2) an explanation of the requirement to report changes to the
Exchange, the timeframe and channels through which changes can be
reported, and the implications of not reporting changes; (3) for an
enrollment group that includes an enrollee on whose behalf advance
payments of the premium tax credit are being provided, a description of
the reconciliation process for advance payments of the premium tax
credit; and (4) for an enrollment group that includes an enrollee whose
coverage includes cost-sharing reductions, if the enrollment group's
coverage is being renewed in a QHP at a different (non-silver) metal
level, an explanation that, unless the enrollment group changes its
enrollment to select a new silver-level plan, cost-sharing reductions
will not be provided for the upcoming year. In accordance with Sec.
147.106(f)(1), renewal notices would need to be provided no later than
the first day of the open enrollment period for the upcoming plan year.
An issuer also may provide this notice along with the applicable
summary of benefits and coverage notice that is provided at renewal in
accordance with 45 CFR 147.200. We seek comment on this proposal.
Contemporaneously with the issuance of this proposed rule, we are
specifying the form and manner of the notices
[[Page 37266]]
described in 45 CFR 146.152, 147.106, and 148.122 by providing standard
notices for issuers to use when discontinuing or renewing coverage.
These notices take into account the feedback we received on the draft
notices issued contemporaneously with the proposed Market Standards
Rule.\1\ We believe that adding the information that would be specified
pursuant to Sec. 156.1255 to the renewal notices required under Sec.
147.106 would best assure that qualified individuals receive, in a
single notice, the relevant information that they need to make informed
decisions about whether to keep their current plan or examine other QHP
options. Further, this approach potentially would reduce burden on
health insurance issuers. As noted above, the Market Standards Rule
requires that notices be provided in a form and manner specified by the
Secretary. The guidance accompanying the standard notices that we are
releasing for public comment contemporaneously with this proposed rule
specifies that the form and manner may consist of standard notices
developed by States that are enforcing the requirements of the
Affordable Care Act, provided the State-developed notices are at least
as protective as the standard Federal notices.
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\1\ CMS Insurance Standards Bulletin, Draft Notices When
Discontinuing or Renewing a Product in the Group or Individual
Market (March 14, 2014), http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/draft-discontinuance-renewal-notices-03-14-14.pdf.
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We recognize that the current notice requirements do not cover
every situation in which an issuer may non-renew or discontinue
coverage, consistent with the guaranteed renewability statute and
regulations. For example, an issuer whose product no longer covers the
service area of enrollees may non-renew those enrollees' coverage under
that product. But, as long as the issuer's product continues to cover a
majority of the same service area, the service area reduction would not
trigger a product discontinuation and corresponding notice to affected
enrollees under the current regulations. We also propose establishing a
notice requirement that would apply to all plans subject to the
guaranteed renewability requirements that non-renew coverage based on
continued coverage not being available in the enrollee's service area
as a result of changes that do not result in product discontinuances.
These notices would be provided in a form and manner specified by HHS.
We solicit comments on this proposal, including the appropriate
timeframe for providing the notice.
III. 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.
IV. Collection of Information Requirements
Emergency Clearance: Public Information Collection Requirements
Submitted to the Office of Management and Budget (OMB)
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction
Act of 1995, the Centers for Medicare & Medicaid Services (CMS),
Department of Health and Human Services, is publishing a summary of
this proposed information collection for public comment. Interested
persons are invited to send comments regarding this collection's
proposed burden estimates or any other aspect of this collection of
information, including any of the following subjects: (1) The necessity
and utility of the proposed information collection for the proper
performance of the agency's functions; (2) the accuracy of the
estimated burden; (3) ways to enhance the quality, utility, and clarity
of the information to be collected; and (4) the use of automated
collection techniques or other forms of information technology to
minimize the information collection burden.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction
Act of 1995, we have also submitted to the Office of Management and
Budget (OMB) the proposed information collection for their emergency
review. While the collection is necessary to ensure compliance with an
initiative of the Administration, we are requesting emergency review
under 5 CFR 1320(a)(2)(i) because public harm is reasonably likely to
result if the regular clearance procedures are followed. The approval
of this data collection process is essential to ensuring that renewal
notices associated with the 2015 plan year are provided to consumers in
a timely manner prior to the 2015 open enrollment period. Consumers
will need the information in these notices in order to make decisions
regarding their coverage for the 2015 plan year.
ICRs Regarding Renewal and Re-Enrollment Notice Requirements (Sec.
156.1255)
Proposed Sec. 156.1255 would require that a health insurance
issuer in the individual market that is renewing an enrollment group's
coverage in a qualified health plan offered through the Exchange
(including a renewal with modifications), or that is discontinuing a
product offered through the Exchange and automatically enrolling an
enrollee in a QHP under a different product offered by the same QHP
issuer through the Exchange include certain information in the written
notice specified in Sec. 147.106(c)(1) or (f)(1).
Since there are existing requirements for issuers to send renewal
and discontinuance notices, we only estimate the burden for QHP issuers
to revise current notices to comply with the proposed provisions of
this proposed rule. We estimate that there are 575 QHP issuers and
assume that they would all revise their existing notices to comply with
the requirements in this proposed rule.
For renewal notices, we estimate that, for each issuer, it would
require three hours of clerical labor (at a cost of $33.67 per hour) to
prepare the notice and one hour for a senior manager (at a cost of
$75.34 per hour) to review it. We also estimate that it would take a
computer programmer 20 hours (at a cost of $52.53 per hour) to write
and test a program to automate the notices. The total burden for each
issuer to prepare the notice would be 24 hours with an equivalent cost
of approximately $1,277. For all 575 QHP issuers, the total burden
would be 13,800 hours with an equivalent cost of approximately
$705,479.
For re-enrollment (or discontinuance) notices, which could also be
used in cases of other terminations or non-renewals, we estimate that,
for each issuer, it would require three hours of clerical labor (at a
cost of $33.67 per hour) to prepare the notice and one hour for a
senior manager (at a cost of $75.34 per hour) to review the notice. We
also estimate that it would take a computer programmer 9 hours (at a
cost of $52.53 per hour) to write and test a program to automate the
notices. The total annual burden for each issuer to prepare the notice
would be 13 hours with an equivalent cost of approximately $649. For
all 575 QHP issuers, the total annual burden would be 7,475 hours with
an equivalent cost of approximately $373,237.
States that are enforcing the Affordable Care Act may develop their
own standard notices. However, we
[[Page 37267]]
anticipate that fewer than 10 States would opt for this alternative.
Under 5 CFR 1320.3(c)(4), this requirement is not subject to the PRA as
it would affect fewer than 10 entities in a 12-month period.
We are requesting emergency OMB review with a 180-day approval
period. Written comments and recommendations for this emergency request
only will be considered from the public if received by the date and
address noted below.
The proposed information collection requirement at Sec. 156.1255
is but one component of a broader information collection request. We
are also soliciting comments for the aforementioned information
collection request in a notice published elsewhere in this issue of the
Federal Register. The notice provides the public with 30 days to submit
comments. Copies of the supporting statement for this information
collection request and any related forms can be found at: http://www.cms.hhs.gov/PaperworkReductionActof1995 or can be obtained by
emailing your request, including your address, phone number, OMB
number, and CMS document identifier, to: [email protected], or by
calling the Reports Clearance Office at: 410-786-1326.
When commenting on this proposed information collection, please
reference the CMS document identifier and the OMB control number. To be
assured consideration, comments and recommendations must be received in
one of the following ways by July 28, 2014:
1. Electronically. You may submit your comments electronically to
http://www.regulations.gov. Follow the instructions for ``Comment or
Submission'' or ``More Search Options'' to find the information
collection document(s) accepting comments.
2. By regular mail. You may mail written comments to the following
address:
CMS, Office of Strategic Operations and Regulatory Affairs, Division of
Regulations Development, Attention: Document Identifier (CMS-10527),
Room C4-26-05, 7500 Security Boulevard, Baltimore, Maryland 21244-1850;
and,
OMB Office of Information and Regulatory Affairs, Attention: CMS Desk
Officer, New Executive Office Building, Room 10235, Washington, DC
20503, Fax Number: 202-395-6974.
V. Regulatory Impact Statement
A. Summary
We are publishing this proposed rule to implement the protections
intended by the Congress in the most economically efficient manner
possible. We have examined the effects of this rule as required by
Executive Order 13563 (76 FR 3821, January 21, 2011), Executive Order
12866 (58 FR 51735, September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-
354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4),
Executive Order 13132 on Federalism, and the Congressional Review Act
(5 U.S.C. 804(2)).
B. Executive Orders 12866 and 13563
Executive Order 12866 (58 FR 51735) directs agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects; distributive impacts; and equity). Executive
Order 13563 (76 FR 3821, January 21, 2011) is supplemental to and
reaffirms the principles, structures, and definitions governing
regulatory review as established in Executive Order 12866.
Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as an action that is likely to result in a proposed
rule--(1) having an annual effect on the economy of $100 million or
more in any one year, or adversely and materially affecting a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or communities
(also referred to as ``economically significant''); (2) creating a
serious inconsistency or otherwise interfering with an action taken or
planned by another agency; (3) materially altering the budgetary
impacts of entitlement grants, user fees, or loan programs or the
rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for rules with
economically significant effects (for example, $100 million or more in
any 1 year), and a ``significant'' regulatory action is subject to
review by the OMB. We have concluded that this proposed rule is not
likely to have economic impacts of $100 million or more in any one
year, and therefore does not meet the definition of ``economically
significant rule'' under Executive Order 12866.
1. Need for Regulatory Action
This proposed rule specifies additional options for annual
eligibility redeterminations and renewal and re-enrollment notice
requirements for QHPs in the Exchange beginning with annual
redeterminations for coverage for plan year 2015.
2. Summary of Impacts
It is expected that Exchanges will adopt an alternative method for
annual eligibility redeterminations only if the related costs are no
more than those associated with the process currently defined in Sec.
155.335. Therefore, we do not expect that there would be additional
costs related to these provisions.
QHP issuers would incur costs to prepare and send renewal notices
to comply with the proposed provisions, as detailed in section IV.
States that choose to develop their own renewal notices would incur
costs to do so. Providing consumers with information such as benefit
changes and premium amounts will enable them to make decisions
regarding their coverage for the next plan year.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires agencies that issue a
regulation to analyze options for regulatory relief of small businesses
if a rule has a significant 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 nonprofit organization that is not dominant
in its field; or (3) a small government jurisdiction with a population
of less than 50,000 (States and individuals are not included in the
definition of ``small entity''). HHS uses as its measure of significant
economic impact on a substantial number of small entities a change in
revenues of more than 3 to 5 percent. We do not believe that this
threshold will be reached by the provisions of this proposed rule.
D. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires that agencies assess anticipated costs and benefits before
issuing any rule that includes a federal mandate that could result in
expenditure in any one year by State, local or tribal governments, in
the aggregate, or by the
[[Page 37268]]
private sector, of $100 million in 1995 dollars, updated annually for
inflation. In 2014, that threshold level is approximately $141 million.
UMRA does not address the total cost of a rule. Rather, it focuses
on certain categories of cost, mainly those ``Federal mandate'' costs
resulting from: (1) Imposing enforceable duties on State, local, or
tribal governments, or on the private sector; or (2) increasing the
stringency of conditions in, or decreasing the funding of, State,
local, or tribal governments under entitlement programs.
This proposed rule would allow States to choose one of three
methods for conducting annual redeterminations. We assume that States
would choose an alternative method only if it is less costly than the
current method. It would also require QHP issuers to include specific
information in renewal and re-enrollment notices sent to enrollees and
issuers would incur costs to comply with this requirement. States that
choose to develop their own notices would incur costs to do so.
Consistent with policy embodied in UMRA, this proposed rule has been
designed to be the least burdensome alternative for State, local and
tribal governments, and the private sector while achieving the
objectives of the Affordable Care Act.
E. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a rule that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications.
States are the primary regulators of health insurance coverage, and
State laws will continue to apply to health insurance coverage and the
business of insurance. However, if any State law or requirement
prevents the application of a Federal standard, then that particular
State law or requirement would be preempted. State requirements that
are more stringent than the Federal requirements would not be preempted
by this proposed rule. Accordingly, States have significant latitude to
impose requirements with respect to health insurance coverage that are
more restrictive than the Federal law.
F. Congressional Review Act
This proposed rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can
take effect, the federal agency promulgating the rule shall submit to
each House of the Congress and to the Comptroller General a report
containing a copy of the rule along with other specified information,
and has been transmitted to Congress and the Comptroller General for
review.
List of Subjects
45 CFR Part 155
Administrative practice and procedure, Health care access, Health
insurance, Reporting and recordkeeping requirements, State and local
governments, Cost-sharing reductions, Advance payments of premium tax
credit, Administration and calculation of advance payments of the
premium tax credit
45 CFR Part 156
Administrative practice and procedure, Health care, Health
insurance, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Department of Health
and Human Services proposes to amend 45 CFR parts 155 and 156 as set
forth below:
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
1. The authority citation for part 155 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301,
1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1332, 1334,
1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C.
18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and
18081-18083).
0
2. Amend Sec. 155.330 to revise paragraph (b)(4) as follows:
Sec. 155.330 Eligibility redetermination during a benefit year.
* * * * *
(b) * * *
(4) The Exchange must allow an enrollee, or an application filer on
behalf of the enrollee, to report changes via the channels available
for the submission of an application, as described in Sec.
155.405(c)(2), except that the Exchange is permitted but not required
to allow an enrollee, or an application filer, on behalf of the
enrollee, to report changes via mail.
* * * * *
0
3. Amend Sec. 155.335 to revise paragraphs (a), (e), and (j) as
follows:
Sec. 155.335 Annual eligibility redetermination.
(a) General requirement. (1) Except as specified in paragraphs (l)
and (m) of this section, the Exchange must redetermine the eligibility
of a qualified individual on an annual basis.
(2) The Exchange must conduct annual redeterminations required
under paragraph (a)(1) of this section using one of the following:
(i) The procedures described in paragraphs (b) through (m) of this
section;
(ii) Alternative procedures specified by the Secretary for the
applicable plan year; or
(iii) Alternative procedures approved by the Secretary based on a
showing by the Exchange that the alternative procedures would
facilitate continued enrollment in coverage for which the enrollee
remains eligible, provide clear information about the process to the
qualified individual or enrollee (including regarding any action by the
qualified individual or enrollee necessary to obtain the most accurate
redetermination of eligibility), and provide adequate program integrity
protections.
* * * * *
(e) Changes reported by qualified individuals. Except as specified
in paragraph (e)(1) of this section, the Exchange must require a
qualified individual to report any change with respect to the
eligibility standards specified in Sec. 155.305 within 30 days of such
change.
(1) The Exchange must not require a qualified individual who did
not request an eligibility determination for insurance affordability
programs to report changes that affect eligibility for insurance
affordability programs.
(2) The Exchange must allow a qualified individual, or an
application filer, on behalf of the qualified individual, to report
changes via the channels available for the submission of an
application, as described in Sec. 155.405(c)(2), except that the
Exchange is permitted but not required to allow a qualified individual,
or an application filer, on behalf of the qualified individual, to
report changes via mail.
* * * * *
(j) Re-enrollment. If an enrollee remains eligible for enrollment
in a QHP through the Exchange upon annual redetermination--
(1) And the product under which the QHP in which he or she is
enrolled remains available through the Exchange for renewal, consistent
with Sec. 147.106 of this subchapter, such enrollee will have his or
her enrollment through the Exchange in a QHP under that product
renewed, unless he or she terminates coverage, including termination of
coverage in connection with voluntarily
[[Page 37269]]
selecting a different QHP, in accordance with Sec. 155.430. The
Exchange will ensure that re-enrollment in coverage under this
paragraph (j)(1) occurs under the same product in which the enrollee
was enrolled, as follows:
(i) The enrollee's coverage will be renewed in the same plan as the
enrollee's current QHP, unless the current QHP is not available.
(ii) If the enrollee's current QHP is not available, the enrollee's
coverage will be renewed in a plan at the same metal level as the
enrollee's current QHP;
(iii) If the enrollee's current QHP is not available and the
enrollee's product no longer includes a plan at the same metal level as
the enrollee's current QHP, the enrollee's coverage will be renewed in
a plan that is one metal level higher or lower than the enrollee's
current QHP; or
(iv) If the enrollee's current QHP is not available and the
enrollee's product no longer includes a plan that is at the same metal
level as, or one metal level higher or lower than the enrollee's
current QHP, the enrollee's coverage will be renewed in any other plan
offered under the product in which the enrollee's current QHP is
offered in which the enrollee is eligible to enroll.
(2) And the product under which the QHP in which he or she is
enrolled is not available through the Exchange for renewal, consistent
with Sec. 147.106 of this subchapter, such enrollee may be enrolled in
a plan under a different product offered by the same QHP issuer, to the
extent permitted by applicable State law, unless he or she terminates
coverage, including termination of coverage in connection with
voluntarily selecting a different QHP, in accordance with Sec.
155.430. The Exchange will ensure that re-enrollment in coverage under
this paragraph (j)(2) occurs as follows:
(i) The enrollee will be re-enrolled in a plan through the Exchange
at the same metal level as the enrollee's current QHP in the product
offered by the issuer that is the most similar to the enrollee's
current product;
(ii) If the issuer does not offer another plan through the Exchange
at the same metal level as the enrollee's current QHP, the enrollee
will be re-enrolled in a plan through the Exchange that is one metal
level higher or lower than the enrollee's current QHP in the product
offered by the issuer through the Exchange that is the most similar to
the enrollee's current product;
(iii) If the issuer does not offer another plan through the
Exchange at the same metal level as, or one metal level higher or lower
than the enrollee's current QHP, the enrollee will be re-enrolled in
any other plan offered through the Exchange by the QHP issuer in which
the enrollee is eligible to enroll.
(iv) If the issuer does not offer any plan through the Exchange in
which the enrollee is eligible to enroll, the enrollee will be re-
enrolled in a plan offered outside the Exchange by the QHP issuer under
the product that is the most similar to the enrollee's current product,
in which the enrollee is eligible to enroll.
* * * * *
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
4. The authority citation for part 156 continues to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301-
1304, 1311-1313, 1321-1322, 1324, 1334, 1342-1343, 1401-1402, Pub.
L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18032,
18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C.
36B, and 31 U.S.C. 9701).
0
5. Add Sec. 156.1255 to read as follows:
Sec. 156.1255 Renewal and re-enrollment notices.
A health insurance issuer that is renewing an enrollment group's
coverage in an individual market QHP offered through the Exchange
(including a renewal with modifications) in accordance with Sec.
147.106 of this subchapter, or that is discontinuing a product offered
through the Exchange and automatically enrolling an enrollee in a QHP
under a different product offered by the same QHP issuer through the
Exchange in accordance with Sec. 155.335 of this subchapter, must
include the following information in the applicable notice described in
Sec. 147.106(c)(1) or (f)(1) of this subchapter:
(a) Premium and premium tax credit information sufficient to notify
the enrollment group of its expected monthly premium payment under the
renewed coverage, in a form and manner specified by the Exchange,
provided that if the Exchange does not provide this information to
enrollees and does not require issuers to provide this information to
enrollees, consistent with this section, such information must be
provided in a form and manner specified by HHS;
(b) An explanation of the requirement to report changes to the
Exchange, as specified in Sec. 155.335(e) of this subchapter, the
timeframe and channels through which changes can be reported, and the
implications of not reporting changes;
(c) For an enrollment group that includes an enrollee on whose
behalf advance payments of the premium tax credit are being provided,
an explanation of the reconciliation process for advance payments of
the premium tax credit established in accordance with 26 CFR 1.36B-4;
and
(d) For an enrollment group that includes an enrollee with cost-
sharing reductions, but for whom no QHP under the product remains
available for renewal at the silver level, an explanation that unless
the enrollment group selects a silver-level QHP through the Exchange,
no cost-sharing reductions will be provided.
Dated: June 19, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: June 24, 2014.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2014-15362 Filed 6-26-14; 4:15 pm]
BILLING CODE 4120-28-P