[Federal Register Volume 79, Number 172 (Friday, September 5, 2014)]
[Rules and Regulations]
[Pages 52994-53006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-21178]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 146, 147, 148, 155, and 156
[CMS-9941-F]
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: Final rule.
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SUMMARY: This final rule specifies 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 benefit year
2015. This final rule provides additional flexibility for Exchanges,
including the ability to propose unique approaches that meet the
specific needs of their state, while streamlining the consumer
experience.
DATES: These regulations are effective on October 6, 2014.
FOR FURTHER INFORMATION CONTACT: Jacob Ackerman, (301) 492-4179, for
questions regarding parts 146 through 148. Christine Hammer, (301) 492-
4431, for questions regarding part 155. Spencer Manasse, (301) 492-
5141, for questions regarding part 156.
SUPPLEMENTARY INFORMATION: 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 Final Rule
II. Provisions of the Proposed Regulations and Analysis and
Responses to Public Comments
A. Part 146--Requirements for the Group Health Insurance Market;
Subpart E--Provisions Applicable to Only Health Insurance Issuers
B. Part 147--Health Insurance Reform Requirements for the Group
and Individual Health Insurance Markets
C. Part 148--Requirements for the Individual Health Insurance
Market; Subpart B--Requirements Relating to Access and Renewability
of Coverage
D. 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
E. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges;
Subpart M--Qualified Health Plan Issuer Responsibilities
III. Collection of Information Requirements
IV. 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 final 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 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 final 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. Section 2703 of the PHS Act, as added by the Affordable Care Act,
and sections 2712 and 2741 of the PHS Act, as added by the Health
Insurance Portability and Accountability Act of 1996, require health
insurance issuers in the group and individual markets to guarantee the
renewability of coverage unless an exception applies.
B. Stakeholder Consultation and Input
The Department of Health and Human Services (HHS) has consulted
with stakeholders on a number of policies 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, meetings with the CMS Tribal
Technical Advisory Group and an All Tribes Call on July 21, 2014 with
tribal leaders and representatives, health insurance issuers, trade
groups, consumer advocates, employers, and
[[Page 52995]]
other interested parties. We considered all of the public input as we
developed the policies in this final rule.
C. Structure of the Final Rule
The regulations in this final rule will be codified in 45 CFR parts
146, 147, 148, 155, and 156. Part 146 specifies standards related to
the group health insurance market, including guaranteed renewability of
coverage for employers in the group market. Part 147 specifies
standards related to health insurance reforms for the group and
individual health insurance markets, including guaranteed renewability
of coverage. Part 148 specifies standards for the individual health
insurance market, including guaranteed renewability of individual
health insurance coverage. Part 155 specifies standards related 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 and Analysis and Responses
to Comments
On July 1, 2014, we published a proposed rule in the Federal
Register (79 FR 37262) entitled, 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. The July 1, 2014 proposed rule (hereinafter referred to as
the July 1, 2014 Annual Eligibility Redeterminations proposed rule)
proposed additional options for annual eligibility redeterminations and
renewal and re-enrollment notice requirements for QHPs offered through
the Exchange, beginning with annual redeterminations for the 2015
benefit year. In total, we received 36 comments on the July 1, 2014
Annual Eligibility Redeterminations proposed rule. Comments represented
a wide variety of stakeholders, including but not limited to states,
tribal organizations, health plans, healthcare providers, consumer
groups, and industry experts. We note that we received some public
comments that were outside the scope of the proposed rule and are not
addressed in this final rule. We have not provided explicit responses
to such comments.
In this final rule, we provide a summary of each proposed
provision, a summary of and responses to public comments received, and
the provisions we are finalizing.
A. Part 146--Requirements for the Group Health Insurance Market;
Subpart E--Provisions Applicable to Only Health Insurance Issuers
For a discussion of the provisions of this final rule related to
Part 146, see section II.B of this preamble.
B. Part 147--Health Insurance Reform Requirements for the Group and
Individual Health Insurance Markets
In the preamble to the July 1, 2014 Annual Eligibility
Redeterminations proposed rule, we proposed establishing a notice
requirement that would apply to all issuers subject to the guaranteed
renewability requirements that nonrenew 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. This proposal
was intended to ensure that enrollees receive notice when the product
(as defined in 45 CFR 144.103) that they purchased no longer covers
their location in its service area and their coverage will be
nonrenewed consistent with the guaranteed renewability provisions. We
sought comment on this proposal, including the appropriate timeframe
for providing the notice. We received no comments on this proposal.
In this final rule, we amend the guaranteed renewability
regulations at Sec. 146.152(b)(5), Sec. 147.106(b)(5), and Sec.
148.122(c)(4) to direct an issuer that nonrenews coverage based on
enrollees' movement outside the service area to provide notice in
writing to each plan sponsor or individual, as applicable, (and to all
participants and beneficiaries covered under the coverage) affected by
such nonrenewal. This notice must be provided in the form and manner
specified by the Secretary for notices of product discontinuances. This
requirement applies to grandfathered and non-grandfathered coverage in
the individual, small group, and large group markets offered through or
outside an Exchange.
Final Rule Action: We are amending the guaranteed renewability
regulations at Sec. 146.152, Sec. 147.106, and Sec. 148.122 to
establish a notice requirement for issuers that nonrenew coverage based
on an enrollee no longer being located within the product's service
area.
C. Part 148--Requirements for the Individual Health Insurance Market;
Subpart B--Requirements Relating to Access and Renewability of Coverage
For a discussion of the provisions of this final rule related to
Part 148, see section II.B of this preamble.
D. 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
In Sec. 155.330, we proposed to amend paragraph (b)(4), which
addresses reporting changes in the context of eligibility
redeterminations during a benefit year. Our proposal provided that 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; however, we proposed that the Exchange be
permitted, but not required, to allow an enrollee, or an application
filer, on behalf of the enrollee, to report changes via mail. We noted
that experience has shown that eligibility changes reported by mail are
often difficult to process because they frequently trigger telephone
contact to gather additional information needed to process the change.
We noted that, if finalized, we anticipate that the FFE would not
accept changes reported via mail for the foreseeable future.
Comment: We received several comments on the proposed changes to
Sec. 155.330(b)(4). Some comments requested that HHS retain the
requirement that Exchanges allow enrollees to use mail to report
changes during the benefit year. These commenters expressed concern
that finalizing the provision as proposed would place an undue burden
on vulnerable populations who may not have ready access to phones, the
Internet, or transportation to in-person assisters. A few commenters
recommended creating a paper change report form to elicit the correct
information to process changes reported by mail. In contrast, a few
commenters supported the flexibility the proposed provision provided to
Exchanges and viewed the proposal as administratively efficient.
Response: We are finalizing the provision as proposed, permitting
Exchanges flexibility to determine whether to provide a process to
report changes via mail and note that the FFE will be using this
flexibility to not provide such a process via mail. We agree that
vulnerable populations must have ready access to the Exchange to report
changes. However, as noted in the preamble to the proposed rule,
experience has shown that changes reported via mail often require
significant follow-up and can result in delays in processing pertinent
eligibility
[[Page 52996]]
information, often to the detriment of the consumer. Accordingly, while
Exchanges may allow for the reporting of changes by mail, they are not
required to do so. The FFE will elect not to allow changes by mail for
the foreseeable future.
Comment: One commenter asked whether the call center would be able
to inform the individual the result of reporting a change. Another
commenter questioned whether the Exchange would provide written
confirmation, including an explanation of any action taken, to the
enrollee who submits a change.
Response: In the FFE, we anticipate that the majority of enrollees
will know the outcome of the changes reported through the call center
during their call. As with all actions that result in a new eligibility
determination, the enrollees will receive an eligibility determination
notice (in the format--hard copy or electronic--that they have chosen).
Final Rule Action: We are finalizing the provision as proposed in
Sec. 155.330(b)(4).
In Sec. 155.335(a), we proposed amendments to the general
requirement for annual eligibility redetermination. Specifically, we
proposed in paragraph (a)(1) that, 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. In paragraph
(a)(2), we proposed the Exchange must conduct annual redeterminations
using one of three options: (1) The procedures described in Sec.
155.335(b) through (m); (2) alternative procedures specified by the
Secretary for the applicable plan year; or (3) 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.
Comment: We received many comments supporting the flexibility
provided by the three options for Exchanges to implement annual
redetermination procedures. These commenters believed that the proposal
would promote uninterrupted coverage for enrollees, as well as enhance
and streamline the redetermination process.
Response: We appreciate the support for the three options we
proposed for Exchanges to conduct annual eligibility redeterminations.
Comment: A few commenters supported moving Exchanges toward a
single standard for annual eligibility redeterminations, primarily in
accordance with Sec. 155.335(b) through (m).
Response: We anticipate that the flexibility offered to Exchanges
to select procedures for conducting annual redeterminations will
encourage innovation and best practices that will benefit both
Exchanges and stakeholders over time. We caution that no matter which
option an Exchange implements for annual redeterminations, the Exchange
will be held to applicable program integrity and oversight standards to
ensure an effective process.
Comment: Several commenters asked that a fully-automated
redetermination process be implemented. Specifically, these commenters
recommended that enrollees not be required to reapply at their Exchange
in order to maintain accurate subsidies and program eligibility by the
2016 benefit year. In contrast, one commenter requested that auto-
redeterminations not be implemented until 2016.
Response: We recognize the importance of a simple consumer
experience during the eligibility redetermination and re-enrollment
process as well as the potential benefits consumers may receive by
regularly updating their application information, or simply confirming
its accuracy.
Comment: We received a few comments from the issuer community
citing concern that the guidance released alongside the proposed rule,
specifying the alternative procedures that the FFE would use under
proposed Sec. 155.225(a)(2)(ii) (the Guidance on Annual
Redeterminations for 2015 \1\), is limited to the 2015 benefit year
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\1\ Guidance on Annual Redeterminations for Coverage for 2015,
available at http://www.coms.gov/cciio/resources/Regulations-and-Guidance/index.html.
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Response: We indicated in the July 1, 2014 Annual Eligibility
Redeterminations proposed rule that these are the procedures the FFE
would use for the 2015 benefit year, if the proposed option to select
these alternative procedures were finalized. The flexibility provided
for the Secretary to update the alternative procedures under Sec.
155.335(a)(2)(ii) is intended to ensure that HHS can learn from the
Exchanges' experience and improve the alternative procedures over time.
Although HHS may issue revised alternative procedures annually, we
intend to work with stakeholders to ensure there is sufficient lead
time in the event changes are made.
Comment: Commenters, particularly State-based Exchanges, were
supportive of the option proposed in Sec. 155.335(a)(2)(iii) allowing
Exchanges to propose alternative procedures, subject to approval by the
Secretary, for conducting annual redeterminations. In contrast, one
commenter encouraged HHS to standardize redetermination procedures
across all Exchanges to reduce administrative burden on the issuer
community.
Response: Although we understand the desire to create uniform
processes across Exchanges by permitting this flexibility, Exchanges
will be able to benefit from the experiences of one another and be able
to apply lessons-learned to improve their consumers' redetermination
experience.
Comment: We received a few comments regarding how HHS should
conduct reviews of alternative procedures proposed by Exchanges. One
commenter requested that reviews of alternative procedures be conducted
on an individualized basis, considering state-specific factors,
including operational structure, 2014 experience, and information
technology capabilities. Similarly, several commenters recommended
specifying additional standards that Exchanges' alternative procedures
must meet as part of the review process. Other commenters recommended
that alternative procedures must meet minimum federal standards, not be
burdensome for consumers, and be clear improvements from the process
implemented by the FFE. Finally, a commenter requested that alternative
procedures for redeterminations be publicly available.
Response: We appreciate the many suggestions for standards for
alternative redetermination procedures under Sec. 155.335(a)(2)(iii),
as well as recommendations for the approval process for those
procedures. We note that the alternative procedures we are finalizing
under Sec. 155.335(a)(2)(iii) must provide consumer and program
integrity protections to ensure a consistent, effective process that
safeguards public funds. We will work with Exchanges to develop and
provide guidance about the process for submitting alternative
procedures for approval under Sec. 155.335(a)(2)(iii).
Comment: Several commenters submitted comments regarding the
substance of the Guidance on Annual Redeterminations for 2015 released
contemporaneously with the July 1, 2014 Annual Eligibility
Redeterminations proposed rule.
[[Page 52997]]
Response: The substance of the Guidance on Annual Redeterminations
for 2015 is beyond the scope of the proposed rule and these comments
are not addressed in this final rule.
Final Rule Action: We are finalizing Sec. 155.335(a) with a minor
modification changing ``plan year'' to ``benefit year'' in Sec.
155.335(a)(2)(ii).
In Sec. 155.335(e), we proposed 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)(1), 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. In paragraph (e)(1), we proposed that 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. Finally,
in paragraph (e)(2), we proposed to amend the existing provision
requiring 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 proposed that this requirement
would continue to apply, except that the Exchange would be permitted
but not required to allow a qualified individual, or an application
filer, on behalf of the qualified individual, to report changes via
mail.
Comment: We received some comments regarding the proposed
provisions in paragraph (e). A few commenters recommended not revising
the provisions in paragraph (e) at all. Other commenters sought
clarification as to whether the changes reported at annual
redetermination should be based on current circumstances or could be
based on expected changes in the coming benefit year. Another commenter
supported the proposed provision in paragraph (e)(1), which would not
permit Exchanges 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. One commenter recommended that Exchanges be required to
inform people about the availability of financial assistance through
the Exchange even if they are not currently receiving it. Finally, one
commenter requested that Exchanges be required to include a summary of
the individual's application on file in the annual redetermination
notice and to ensure that this information is in plain language so it
is easily accessible for all consumers.
Response: We believe the amendments made to this paragraph are
necessary to generally align with the standards in Sec. 155.330,
including proposed Sec. 155.330(b)(4), which governs the corresponding
requirements for eligibility redeterminations during the benefit year.
We note that non-income related eligibility criteria, such as residency
changes must be reported within 30 days following the change in
accordance with Sec. 155.330(b)(1). However, we further clarify, in
response to comment, that eligibility for advance payments of the
premium tax credit and cost-sharing reductions is based on projected
annual household income and consumers may update that information at
any time throughout the year. We also note that Exchanges may, but are
not required, to remind consumers who do not currently receive advance
payments of the premium tax credit or cost-sharing reductions through
the Exchange that they may be eligible for this financial assistance.
Consistent with all applicable requirements, Exchanges can provide
additional information at their discretion.
Comment: Several commenters requested that paragraph (e) provide a
minimum threshold below which income changes would not be required to
be reported for annual redetermination. We also received a comment
asking that Exchanges use consistent messaging about reporting changes
in income to reduce consumer confusion.
Response: We note that the provision for reporting changes during
the benefit year at Sec. 155.330 does permit Exchanges to establish a
reasonable threshold for reporting changes in income. However, we have
declined to establish a threshold in this instance, in order to promote
the greatest possible accuracy of annual eligibility redeterminations.
Because all consumers will be subject to annual redeterminations, we
consider the accuracy of annual redeterminations to be a priority and a
significant way in which Exchanges can help reduce the risk that
consumers may have to pay back any amount of their advance payments of
the premium tax credit at tax filing time if, through the
reconciliation process, the IRS determines the advance payment of the
premium tax credit to be in excess of the premium tax credit for which
the consumer was actually eligible. We note that consumers who do not
have steady or predictable income have the same change reporting
options as all other consumers and are able to project income-related
changes for the year as part of their annual eligibility
redetermination, reducing the frequency with which they must report an
income-related change. Finally, Exchanges must adhere to the standards
in Sec. 155.330(b) requiring consumers to report changes during the
benefit year; however, Exchanges have flexibility to establish
reasonable thresholds below which changes in income do not have to be
reported for purposes of a mid-year redetermination. Given this
flexibility, we do not believe it is necessary to impose specific
requirements regarding change reporting messages across Exchanges.
Comment: We received several comments about the requirement in
proposed Sec. 155.335(e) that qualified individuals report any change
with respect to eligibility standards within 30 days of such a change.
One commenter questioned what the consequences were if an individual
fails to report a change within 30 days or reports the change more than
30 days after the change. Another commenter suggested clarifying that
individuals who report changes more than 30 days after they occur can
still receive an updated eligibility determination.
Response: The requirement to report changes within 30 days is
intended to ensure that eligibility determinations remain accurate in
view of qualified individuals' most current eligibility information,
and reduce the risk that consumers may have to repay advance payments
of the premium tax credit in excess of what they are eligible for,
through the reconciliation process. Individuals who report changes more
than 30 days after the change will still receive an updated eligibility
determination.
Comment: We received comments both supporting and opposing the
proposed change in paragraph (e)(2) to eliminate the requirement for
Exchanges to accept changes reported by mail, with many commenters
focusing on the potential lack of access vulnerable populations may
have to the methods Exchanges are required to provide for reporting
changes. We also received a few general recommendations related to this
provision. For example, one commenter recommended Exchanges establish
tiered support through the call center. Another comment emphasized the
need for a streamlined process for consumers to update their income and
eligibility information without having to go through the entire
application process.
Response: As noted in responses to the comments regarding the
proposed
[[Page 52998]]
changes to Sec. 155.330(b)(4), we agree that vulnerable populations
must have access to the Exchange to report changes. However, changes
reported by mail often require significant follow-up in order to obtain
enough information to process the change, which creates a burden on
both the Exchange and the consumer to complete the change reporting
process. The required methods for accepting reported changes should
only require a one-time interaction with the Exchange and we do not
believe they inappropriately limit the ability of consumers to
efficiently report changes. Therefore, we are finalizing the provision
as proposed, permitting Exchanges flexibility to determine whether to
accept reports of changes via mail.
Final Rule Action: We are finalizing Sec. 155.335(e) as proposed.
In Sec. 155.335(j), we proposed to modify the standards for re-
enrollment in coverage. First, in paragraph (j)(1), we proposed 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 proposed that the QHP in which the
enrollee will be renewed will be selected according to the following
order of priority: (1) In the same plan as the enrollee's current QHP;
(2) 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; (3) 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; and (4) 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.
Second, in paragraph (j)(2), we proposed 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 Sec. 147.106. In this situation, we proposed the
issuer may still re-enroll the enrollee in a different product offered
by the same 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 proposed that the plan in which
the enrollee will be renewed will be selected according to the
following order of priority: (1) 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; (2) 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; (3) 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 (4) 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 also solicited 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.
Comment: One commenter noted the importance of continuity of
coverage without gaps and suggested that consumers have full
transparency into the process and be informed why they are being
enrolled in a product and notified that some issuers who did not
participate in the Exchange in the 2014 benefit year may be offering
plans in the 2015 benefit year that consumers may want to consider.
Similarly, a commenter did not support the re-enrollment provisions,
believing they would steer members away from the shopping experience
and discourage incumbent issuers from creating new and innovative
products. A few commenters noted their general support for the
provisions in paragraph (j) and noted that they would cause the least
amount of disruption to the enrollee.
Response: We believe that the rule, as finalized, best furthers the
goal of creating continuity of coverage for consumers at annual
redetermination and enrollment. We agree that consumers should
understand why they are being enrolled into a new plan, if applicable,
and be reminded that, in all cases, after being redetermined to be
eligible for coverage through the Exchange, they can return to the
Exchange to shop for another plan, if they wish.
Comment: Some commenters suggested delaying the implementation of
the proposed auto-enrollment policy until the 2016 benefit year due to
concerns about operational readiness. A commenter asked that, if HHS
did proceed with 2015 implementation, the enrollment policy be
permitted only at the end of open enrollment after all enrollee
outreach has been conducted.
Response: We understand that QHP issuers, Exchanges, consumers, and
other stakeholders are concerned that they have time to prepare for the
redetermination and enrollment period for benefit year 2015 coverage.
We agree that encouraging aggressive outreach and enrollee engagement
are important. However, it is important for stakeholders to have
sufficient guidance to conduct redetermination and re-enrollment in
accordance with federal standards during the entire open enrollment
period for the 2015 benefit year. Postponing the implementation of
enrollment procedures until the end of the open enrollment period could
result in some consumers experiencing gaps in coverage. We believe that
the Exchange should complete the redetermination and re-enrollment
process early enough so that consumers have coverage (and financial
assistance, if applicable) effective January 1, 2015.
Comment: A few commenters provided general comments on and
alternatives to the proposed hierarchies in paragraphs (j)(1) and (2).
For instance, one commenter disagreed with the use of the hierarchy
because of the substantial differences in plans that a consumer may be
renewed or re-enrolled into at different metal levels and in different
product lines. Another commenter thought enrolling a consumer in a
product or plan other than the consumer's identical QHP would cause
confusion and interrupt established provider-patient care, and inflate
premiums. Similarly, a few commenters requested flexibility in applying
the hierarchy in cases where its application could harm consumers or
where the enrollee is in a unique
[[Page 52999]]
situation. For example, if the enrollee lives outside of the plan's
service area, is enrolled in a catastrophic plan, or has aged off a
parent's policy, the consumer may not have eligibility to re-enroll in
the same plan.
Response: We understand the complexities that may result when
consumers are placed in a different plan or product as the result of
renewal or re-enrollment. However, we note that placement into another
plan or product is not intended to be the usual result of the open
enrollment period. The hierarchy proposed in Sec. 155.335(j)(1) and
(2) is only intended for use when a consumer's plan is no longer
available or the product is discontinued, which we do not expect to be
the typical scenario. The hierarchy then provides a structured process
for renewal and re-enrollment which are intended to limit the
differences between the consumer's current plan and new plan. We are
finalizing the renewal and re-enrollment provisions with the
hierarchical structure to guide the renewal and re-enrollment process
while protecting the interests of the enrollee. Finally, we note that
we are reviewing the unique situations noted by commenters and intend
to issue guidance as to how to handle re-enrollment in these situations
in the future.
Comment: We received several comments regarding the issuer's role
in the re-enrollment process, particularly around the determination of
when a product is ``most similar'' to an enrollee's current product, as
stated in Sec. 155.335(j)(2)(i), (ii), and (iv). For example, a few
commenters suggested that the Exchange, not the QHP issuer, should
determine comparability of plans to ensure that these determinations
are objective and in a consumer's best interest. Commenters requested
that HHS define the criteria used in determining plan comparability and
to define how a product will be determined ``similar.'' Finally, one
commenter indicated support for allowing the issuer to determine which
product is most similar
Response: QHP issuers are in a unique position to understand both
the characteristics of enrollees' current products and the issuers'
other product offerings. As part of the QHP certification process QHP
issuers in the FFE will submit crosswalks, mapping similar plans and
products. Mapping enrollees in a given product to a similar product is
a common industry practice.
As noted earlier, a key priority during the open enrollment period
is to ensure that current enrollees have continuity of coverage and do
not experience a gap in that coverage or their financial assistance.
QHP issuers, coordinating with Exchanges to implement the re-enrollment
and renewals, can streamline the re-enrollment and renewal process
because they can easily determine whether a product will be available
and, if not, what product, in accordance with the hierarchy established
in this rule, would cause the least amount of disruption to the
enrollee for re-enrollment.
Finally, we note that a product (as defined in Sec. 144.103) means
a unique set of health insurance coverage benefits that an issuer
offers using a particular product network type (for example, HMO, PPO,
POS, EPO, or indemnity) within a service area. Accordingly, when
mapping individuals to a new product, we expect that QHP issuers will
select a product that most closely resembles the benefits, network
type, and service area of the enrollee's current product. Nonetheless,
we are not establishing a ``most similar'' standard in this final rule.
States, Exchanges, and QHP issuers may use a reasonable, good faith
interpretation to determine what constitutes the most similar product
for this purpose. Finally, we note that State-based Exchanges that opt
to implement an alternative approach to annual redeterminations, in
accordance with Sec. 155.335(a)(2)(ii) or (iii), may also choose to
establish a standard in this regard for renewal or re-enrollment.
Comment: A few commenters representing the issuer community
submitted questions regarding the link between stand-alone dental plans
and the renewal of medical coverage. For example, a commenter
questioned whether there is an impact on enrollment in a stand-alone
dental plan if an individual re-enrolls into a different medical plan.
We received one suggestion that re-enrollment for stand-alone dental
plans should emphasize maintaining the same plan type, such as high or
low coverage, and design, such as family or child-only coverage.
Response: As excepted benefits, dental plans are not subject to the
guaranteed renewability standards in Sec. 147.106 and, therefore, the
hierarchies in Sec. 155.335(j) do not need to apply to them in the
same way.
Nonetheless, to minimize disruptions in coverage for enrollees, in
the FFE, re-enrollment for stand-alone dental plan (SADP) enrollees
will follow the hierarchy in Sec. 155.335(j) if the enrollee does not
make any new SADP selections. We also note that SADPs are identified as
either high or low plans, rather than using metal levels like medical
plans. Therefore, the application of the hierarchy in the FFE for
renewal or re-enrollment will account for this difference. For example,
where a medical plan renewal will require, in accordance with Sec.
155.335(j)(1)(ii), renewal in a plan at the same metal level as the
enrollee's current QHP for medical coverage, application of this
standard to SADP will result in renewal in a plan at the same plan
level, either high or low, as the enrollee's current SADP QHP.
Similarly, where the hierarchy states at Sec. 155.335(j)(1)(iii) that
if a plan at the same metal level as the enrollee's current plan is no
longer available within the enrollee's current product, the enrollee
will be renewed in a plan that is one metal level higher or lower than
the enrollee's current QHP, in the SADP context, the FFE will renew or
re-enroll the enrollee into the plan within the product that is offered
at the permissible level other than the one of the enrollee's current
SAPD (e.g., if the enrollee is currently in a high SAPD, he or she will
be renewed into the low SADP).
We clarify that if an enrollee visits the FFE during the 2015 open
enrollment period to change his or her QHP enrollment, he or she will
need to re-select his or her SADP at the same time, because the FFE
requires that QHPs and SADPs be selected at the same time. If an
enrollee doesn't return to the FFE to affirmatively select plans by
December 15, 2014, the FFE will process the renewal or re-enrollment
plan indicated by SADP and QHP issuers on the 2015 Plan ID Crosswalk
Template in accordance with the hierarchies set forth in this rule. We
note that changes in medical QHP coverage during Open Enrollment are
independent of changes to SADP, and vice versa.
Comment: A few commenters requested that HHS clarify the meaning of
``a plan at the same metal level'' proposed at paragraph (j)(1)(ii).
One commenter suggested that this meant a plan with the same QHP
issuer.
Response: We clarify that the hierarchy in Sec. 155.335(j)(1) and
(2) only refer to plans and products offered by the enrollee's current
issuer. The hierarchy does not permit auto-enrollment into a product
offered by a different issuer; however, the enrollee always has the
option to shop for coverage with another issuer during the open
enrollment period. We have added the word ``same'' before the word
``issuer'' in Sec. 155.335(j)(2)(i), (ii), and (iii) to help clarify
the intent. We also note one technical addition to Sec.
155.335(j)(2)(ii) where we have added the word ``or'' at the end of the
paragraph.
Comment: We received a few comments regarding the proposed
[[Page 53000]]
requirement to re-enroll an enrollee in a plan that is one metal level
higher or lower than the enrollee's current QHP at Sec.
155.335(j)(1)(iii) and (j)(2)(ii). For example, one commenter noted
that the proposed rule did not specify whether the consumer or the QHP
issuer decides whether to enroll into a higher or lower plan if the QHP
issuer no longer offers the same level plan, and recommended that the
Exchange, not the QHP issuer, make the enrollment decision. Another
commenter recommended that QHP issuers must clearly inform the consumer
what metal level the new plan will be and whether it is a higher or
lower metal level than the consumer's existing plan.
A few commenters also addressed the request for comment regarding
whether the hierarchy should only prioritize a plan with a lower metal
level, or whether, in general, priority should be placed on plans that
have a premium that is closest to the premium of the plan in which an
enrollee is currently enrolled.
Response: We note that there was no consensus in favor of one
approach over the other. As noted before, these provisions are not
expected to be used frequently and are positioned in the hierarchy to
promote less-disruptive re-enrollment scenarios first. These provisions
are being finalized without substantive changes.
We also clarify, in response to the comments, that these provisions
impose requirements on the Exchange because, although the QHP issuers
will facilitate the enrollment by submitting plan crosswalks, the
Exchange is ultimately responsible for ensuring that enrollment is
effectuated according to the hierarchy. To reflect this, we are not
finalizing proposed Sec. 155.335(j)(2)(iv), because this provision
addresses enrollment outside the Exchange. In cases where an enrollee
cannot be re-enrolled in a plan within the Exchange in accordance with
Sec. 155.335(j)(2)(i)-(iii), the issuer will follow applicable
guaranteed renewability requirements and applicable state law to
complete re-enrollment outside the Exchange.
Comment: We also received comments from tribes regarding the
effects of proposed renewal and re-enrollment regulations on American
Indians and Alaska Natives (AI/ANs), noting that the zero and limited
cost-sharing plan variations available to AI/ANs cross the four metal
levels. The commenters recommended that the regulations be revised to
give QHP issuers the flexibility to keep AI/ANs in their current plan
or another bronze level plan. Finally, the commenters highlighted the
importance of addressing this special circumstance for AI/ANs because
they should always have an alternate zero or limited cost-sharing plan
at any level available to them and should never be moved to a higher
level plan if their zero or limited cost-sharing plan variation is
eliminated.
Response: All QHPs must offer zero and limited cost-sharing plan
variations at every metal level and, thus, if a particular QHP is no
longer offered, the AI/AN should be able to enroll in another zero or
limited cost-sharing plan variation at the same metal level, if a QHP
is offered at that metal level. However, if a QHP is not available at a
specific metal level, such as the bronze metal level, then no plan
variations will be available at that level. If a qualified individual
who is an Indian, as defined by section 4 of the Indian Health Care
Improvement Act is auto-enrolled in a higher level metal plan than
desired, pursuant to Sec. 155.420(d)(8), he or she can change his or
her enrollment once per month, mitigating any undesired outcome of
automatic enrollment.
Comment: One commenter urged HHS to adopt a mechanism to
accommodate auto-enrollment within an insurance holding company system.
Response: We disagree that a QHP issuer should be permitted to
auto-enroll individuals into a product of another licensed issuer.
Section 2703(c) of the Public Health Service (PHS) Act and Sec.
147.106(c) provide that, in any case in which a QHP issuer decides to
discontinue offering a particular product offered in the individual
market, that product may be discontinued by the issuer in accordance
with applicable state law in the applicable market only if certain
requirements are met. Among the requirements for product
discontinuation is that the issuer must offer to each individual
provided that particular product the option to purchase, on a
guaranteed availability basis, any other health insurance coverage
offered by the issuer in that market. An issuer does not satisfy the
requirement to offer other health insurance coverage currently being
offered ``by the issuer'' if it auto-enrolls qualified individuals into
a product of another issuer that is separately licensed to engage in
the business of insurance in a State. Nothing in the PHS Act or the
regulations under the PHS Act prevents an issuer that elects to
discontinue offering all health insurance coverage in a market (market
withdrawal under Sec. 147.106(d)) from auto-enrolling affected
individuals into a product of another licensed issuer, to the extent
permitted by applicable state law.
Comment: We received many comments concerning the possibility for
enrollees to be re-enrolled in a plan that prevents them from
continuing to receive financial assistance through the Exchange. Two
specific scenarios created concern for commenters. First, commenters
were concerned that enrollees might lose access to cost-sharing
reductions if they are re-enrolled into a non-silver level plan.
Second, commenters noted that enrollees who are re-enrolled into a
product outside the Exchange would lose eligibility for both advance
payments of the premium tax credit and cost-sharing reductions. We
received many recommendations regarding how to address these two
scenarios. Several commenters urged HHS to simply prevent issuers from
auto-enrolling qualified individuals into plans outside the Exchange if
the qualified individual is eligible for advance payments of the
premium tax credit, or into a non-silver level plan if the qualified
individual is eligible for cost-sharing reductions. Similarly, a few
commenters suggested that we add consideration of a plan's cost-sharing
structure as a factor in any auto-enrollment schema. Another commenter
suggested that if an individual is re-enrolled in a plan that results
in a negative impact on his or her financial assistance that the
Exchange should permit the individual to change plans during open
enrollment and for a 90-day period following open enrollment.
Response: We agree with commenters that losing access to advance
payments of the premium tax credit and/or cost-sharing reductions in
order to maintain coverage under a product that is no longer available
through an Exchange is not the preferable outcome for renewal and re-
enrollment. The hierarchy of renewal and re-enrollment options set out
in Sec. 155.335(j) was created in order to minimize such disruptions.
We contend that instances where an enrollee will be re-enrolled into
coverage that prevents the enrollee from taking advantage of advance
payments of the premium tax credit and/or cost-sharing reductions will
be rare. We note that Sec. 156.200(c)(1) requires all issuers offering
a QHP through the Exchange to offer at least one plan at the silver
level. Issuers generally have found that plans offered at this level
are their most popular plans, and they understand the role of advance
payments of the premium tax credit and/or cost-sharing reductions in
making coverage affordable to their enrollees. We also note that the
hierarchy is designed to prioritize options that generally do not
[[Page 53001]]
eliminate eligibility for advance payments of the premium tax credit
(or the premium tax credit) and/or cost-sharing reductions.
Section 155.335(j)(2) of this final rule specifically addresses re-
enrollment in Exchange coverage when an enrollee's current product is
not available for renewal ``through the Exchange.'' Nonetheless, the
product may continue to be available for renewal outside the Exchange.
We interpret the guaranteed renewability provisions of Sec. 147.106 to
mean that, if the product remains available for renewal, including
outside the Exchange, the issuer must renew the coverage within the
product in which the enrollee is currently enrolled at the option of
the enrollee, unless an exception to the guaranteed renewability
requirements applies. However, for the reasons stated above, to the
extent that the issuer is subject to 45 CFR 155.335(j) with regard to
an enrollee's coverage through the Exchange, the issuer must, subject
to applicable state law regarding automatic enrollments, automatically
enroll the enrollee in accordance with the re-enrollment hierarchy,
even where that results in re-enrollment in a plan under a different
product offered by the same QHP issuer through the Exchange.
Enrollments completed pursuant to Sec. 155.335(j) will be considered
to be a renewal of the enrollee's coverage, provided the enrollee also
is given the option to renew coverage within his or her current product
outside the Exchange. We intend to evaluate this policy and may provide
future guidance on how an issuer continuing to offer an enrollee's
product outside the Exchange can comply with the guaranteed
renewability provisions. We reiterate that enrollees have the
opportunity to shop for a new plan during the open enrollment period
regardless of whether they are automatically re-enrolled into plan that
does not meet their needs. We encourage Exchanges and QHP issuers to
remind enrollees of that option.
Final Rule Action: We are finalizing Sec. 155.335(j) with a few
modifications. First, we have added the word ``same'' before the word
``issuer'' in Sec. 155.335(j)(2)(i), (ii), and (iii). Second, we have
added the word ``or'' at the end of Sec. 155.335(j)(2)(ii). We are not
finalizing Sec. 155.335(j)(2)(iv).
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 Sec. 147.106(c)(1), health insurance issuers of non-
grandfathered plans in the individual market also will provide written
notices of product discontinuances.
We proposed adding 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 QHP 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 proposed that the additional information include premium and advance
payment of premium tax credit information, an explanation of the
requirement to report changes to the Exchange, a description of the
reconciliation process for advance payments of the premium tax credit,
and an explanation that if the enrollment group's coverage is being
renewed in a QHP at a different (non-silver) metal level, cost-sharing
reductions will not be provided for the upcoming year unless the
enrollment group changes its enrollment to select a new silver-level
plan.
Finally, we proposed establishing a notice requirement that would
apply to all plans subject to the guaranteed renewability requirements
that nonrenew 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. We sought comment on this proposal,
including the appropriate timeframe for providing the notice.
Comment: Commenters were generally supportive of the additional
required content proposed for the renewal and re-enrollment notices.
For example, commenters approved of the inclusion of information about
changes to the advance payment of the premium tax credit and the
reminders of the requirement to report changes, the reconciliation
process, and the availability of cost-sharing reductions. Two
commenters were concerned that the issuer notice content would not
encourage enrollees to take any action. A few commenters urged issuers
to ensure notices are provided in plain language and include
appropriate accessibility features. Finally, one commenter recommended
including language reminding enrollees to consider how changes in their
enrollment might affect their access to financial assistance for health
coverage and that they have the option to shop for other coverage.
Response: We appreciate the support received for the proposed
additional required content for the renewal and re-enrollment notices.
We note that, pursuant to Sec. 156.250, issuer notices must comply
with the standards for notices found at Sec. 155.230(b) (which also
cross-references Sec. 155.205(c)), which includes accessibility and
readability requirements.
We also note that issuers are required to provide enrollees a
Summary of Benefits and Coverage (SBC), a document that summarizes
benefits and cost-sharing under a plan. Issuers must provide the SBC at
various specific points in time, including annually upon renewal. At
renewal, the SBC must reflect any modified policy or plan terms that
will be effective on the first day of the new policy or benefit year.
If a written application is required for renewal or reissuance, the SBC
must be provided no later than the date written application materials
are distributed. If renewal or reissuance is automatic, the SBC
generally must be provided no later than 30 days prior to the first day
of the new policy or benefit year. 45 CFR 147.200(a)(1)(ii)(E)(2) and
(a)(1)(iv)(C)(2). This requirement also applies in the situation in
which an issuer nonrenews or discontinues coverage under an existing
health insurance product and, consistent with applicable Federal and
State law, automatically enrolls an individual or plan sponsor (and
participants and beneficiaries covered under such coverage) in a plan
under a different product offered by such issuer in which the
individuals are eligible to enroll. As such, the requirements to
provide an SBC in connection with an automatic renewal or reissuance of
coverage apply and the SBC generally is required to be provided no
later than 30 days prior to the first day of the new policy or benefit
year. An issuer is not prohibited from providing the SBC earlier than
30 days prior to the new policy or benefit year, and when possible
issuers are encouraged to provide SBCs by the first day of the open
enrollment period to allow individuals enough time to
[[Page 53002]]
consider their coverage options available with respect to the upcoming
policy or benefit year. If an issuer does provide the SBC earlier than
30 days prior to the new plan or policy year, and there are no changes
to the information reflected in the SBC prior to the first day of the
new plan or policy year, the issuer will have satisfied the requirement
to provide the renewal SBC.
Comment: Some commenters were concerned that the implementation of
Sec. 156.1255(a), which requires the inclusion of premium and advance
payments of the premium tax credit information, would not provide
useful information to the enrollee. Specifically, commenters noted that
the advance payments of the premium tax credit information could
reflect the enrollee's 2014 advance payment of the premium tax credit
while the premium information could reflect 2015 benefit year costs.
The commenters also suggested that if updated information regarding the
household size and income was not available, the Exchange should either
perform outreach encouraging the enrollee to obtain an updated
eligibility determination or the Exchange should provide advance
payment of the premium tax credit information reflecting the second
lowest-cost silver plan for that Exchange and enrollee-type.
Response: We agree that it is important to provide enrollees with
information that will help them make informed decisions about their
coverage for the upcoming benefit year. As part of that process, and as
discussed in the guidance issued alongside the July 1, 2014 Annual
Eligibility Redeterminations proposed rule, the FFE will encourage
enrollees to return to the Exchange to update their application
information and obtain an eligibility determination that will account
for updated FPL thresholds, household size, and income, as all
Exchanges must require enrollees to report changes with respect to
eligibility standards.
In the proposed rule, Sec. 156.1255(a) would have required QHP
issuers to provide the premium and premium tax credit information for
the enrollee's 2015 plan. In the final rule, we retain this requirement
but clarify that issuers must provide advance payment of the premium
tax credit information by adding the phrase ``advance payment of the''
before ``premium tax credit information[.]''
Comment: We received comments regarding providing specific notice
messages for re-enrollment options for American Indians and Alaskan
Natives (AI/ANs). For example, cost-sharing reductions for these
enrollees is implemented differently from how it is implemented for
other enrollees, and the information described in Sec. 156.1255(d) may
not be applicable for these enrollees, who may need a more targeted
explanation.
Response: We understand the concern that AI/ANs receive the
appropriate messaging regarding requirements specific to their
coverage. We have revised Sec. 156.1255(d) by adding a clarification
that in accordance with Sec. 155.305(g)(1)(ii), cost-sharing
reductions are only available to an individual who is not an Indian if
he or she is enrolled in a silver-level QHP. This reflects that AI/ANs
can continue to enroll or renew in a zero or limited cost-sharing plan
at any metal level and still qualify for cost-sharing reductions. The
FFE will continue to provide education and outreach to AI/ANs regarding
the cost-sharing reductions that may be available to them at any metal
level. We also are making a technical edit to remove the word ``with''
from Sec. 156.1255(d) and replace it with ``being provided[.]''
Final Rule Action: We are finalizing the provisions proposed in
Sec. 156.1255 with minor modifications. We are replacing the phrase
``discontinuing a product'' with ``nonrenewing coverage'' to clarify
that the additional notice content required by Sec. 156.1255 will be
included in notices required to be provided not only when issuers
discontinue a product, but also when issuers nonrenew coverage based on
enrollees' movement outside the service area, as set forth in Sec.
147.106(b)(5) of this final rule and discussed in more detail in
section II.B of this preamble. We are also adding a cross-reference to
Sec. 147.106(b)(5), accordingly. We are adding the phrase ``advance
payment of the'' before ``premium tax credit information'' in Sec.
156.1255(a). We clarified the reference to Sec. 155.305(g)(1)(ii) by
adding ``of this subchapter'' after the citation. Finally, we are
removing the word ``with'' from Sec. 156.1255(d) and replacing it with
``being provided[.]''
III. 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 (PRA), we have also submitted to the Office of Management
and Budget (OMB) the final information collection request for emergency
approval review for a 180-day period. While the collection is necessary
to ensure compliance with an initiative of the Administration, we are
requesting emergency review under 5 CFR 1320.13(a)(2)(i) because public
harm is reasonably likely to result if the regular clearance procedures
are followed.
In the July 1, 2014 Annual Eligibility Redeterminations proposed
rule (79 FR 37262), we solicited public comments on each of the
sections identified as containing information collection requirements
(ICRs), as required by section 3506(c)(2)(A) of the PRA. We received
several comments on the notice requirements, which have been addressed
earlier in the preamble. We generally used data from the Bureau of
Labor Statistics to derive average labor costs (including fringe
benefits) for estimating the burden associated with the ICRs.
The approval of this data collection process is essential to
ensuring that renewal and discontinuance notices associated with the
2015 benefit year are provided to consumers in a timely manner prior to
the open enrollment period for the 2015 benefit year. Consumers will
need the information in these notices in order to make decisions
regarding their coverage for the 2015 benefit year.
ICRs Regarding Renewal and Re-enrollment Notice Requirements (Sec.
156.1255)
As specified in Sec. 156.1255, a health insurance issuer that is
renewing an enrollment group's coverage in the individual market in a
QHP offered through the Exchange (including a renewal with
modifications), in accordance with Sec. 147.106, or that is
discontinuing a product 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, must include certain
information in the written notice required by Sec. 147.106(b)(5),
(c)(1), or (f)(1), as applicable. Contemporaneously with the issuance
of this final rule, we are issuing a bulletin specifying the form and
manner of the notices by providing standard notices that issuers
generally will use when discontinuing or renewing coverage in the
individual market.
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 provisions of this final
rule. We
[[Page 53003]]
estimate that there are 575 QHP issuers and assume that they would all
revise their existing notices to comply with the requirements in this
final rule.
For renewal notices, we estimate that, for each issuer, it will
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 will 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 will be 24 hours with an equivalent cost
of approximately $1,277. For all 575 QHP issuers, the total burden will
be 13,800 hours with an equivalent cost of approximately $705,479.
For re-enrollment (or nonrenewal) notices, we estimate that, for
each issuer, it will require two 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 will take a computer programmer six 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
will be nine hours with an equivalent cost of approximately $492. For
all 575 QHP issuers, the total annual burden will be 5,175 hours with
an equivalent cost of approximately $263,265. These burden estimates
are lower than those in the proposed rule, because we assume that
simplifications made to the form of the nonrenewal notices to reduce
variable text will reduce clerical and computer programming hours by
approximately one third.
The accompanying bulletin ``Form and Manner of Notices When
Discontinuing or Renewing a Product in the Group or Individual Market''
provides that states that are enforcing the Affordable Care Act may
develop their own standard notices, provided the State-developed
notices are at least as protective as the Federal standard notices.
However, we 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 have submitted an information collection request to OMB for
review and approval of the ICRs contained in this final rule. The
requirements are not effective until approved by OMB and assigned a
valid OMB control number.
IV. Regulatory Impact Statement
A. Summary
We are publishing this final 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 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 final 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 final 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 benefit year 2015.
2. Summary of Impacts
We do not expect that there will be additional costs related to the
additional options provided in this final rule for annual eligibility
redeterminations, because we believe Exchanges will implement an
alternative method only if doing so is less costly than the current
method.
QHP issuers will incur costs to prepare and send renewal notices to
comply with the final provisions, as detailed in section III of this
final rule. States that choose to develop their own notices will 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 benefit 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 final 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 private sector, of $100 million in 1995
dollars, updated annually for inflation.
[[Page 53004]]
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 final rule will allow Exchanges to choose one of three methods
for conducting annual eligibility redeterminations. We assume that
Exchanges will choose an alternative method only if it is less costly
than the current method. It will also require QHP issuers to include
specific information in renewal and nonrenewal notices sent to
enrollees and issuers will incur costs to comply with this requirement.
States that choose to develop their own notices will incur costs to do
so. Consistent with policy embodied in UMRA, this final 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 will be preempted. State requirements that are
more stringent than the Federal requirements will not be preempted by
this final 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 final 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.
This final rule will be transmitted to Congress and the Comptroller
General in accordance with such provisions.
List of Subjects
45 CFR Part 146
Health care, Health insurance, Reporting and recordkeeping
requirements.
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping
requirements, State regulation of health insurance.
45 CFR Part 148
Administrative practice and procedure, Health care, Health
insurance, Penalties, Reporting and recordkeeping requirements.
45 CFR Part 155
Administration and calculation of advance payments of the premium
tax credit, Administrative practice and procedure, Advance payments of
premium tax credit, Cost-sharing reductions, Health care access, Health
insurance, Reporting and recordkeeping requirements, State and local
governments.
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 amends 45 CFR parts 146, 147, 148, 155, and 156 as
set forth below:
PART 146--REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET
0
1. The authority citation for part 146 continues to read as follows:
Authority: Secs. 2702 through 2705, 2711 through 2723, 2791,
and 2792 of the PHS Act (42 U.S.C. 300gg-1 through 300gg-5, 300gg-11
through 300gg-23, 300gg-91, and 300gg-92).
0
2. Section 146.152 is amended by revising paragraph (b)(5) to read as
follows:
Sec. 146.152 Guaranteed renewability of coverage for employers in the
group market.
* * * * *
(b) * * *
(5) Enrollees' movement outside service area. For network plans,
there is no longer any enrollee under the group health plan who lives,
resides, or works in the service area of the issuer (or in the area for
which the issuer is authorized to do business); and in the case of the
small group market, the issuer applies the same criteria it would apply
in denying enrollment in the plan under Sec. 146.150(c); provided the
issuer provides notice in accordance with the requirements of paragraph
(c)(1) of this section.
* * * * *
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND
INDIVIDUAL HEALTH INSURANCE MARKETS
0
3. The authority citation for part 147 continues to read as follows:
Authority: Secs. 2701 through 2763, 2791, and 2792 of the Public
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and
300gg-92), as amended.
0
4. Section 147.106 is amended by revising paragraph (b)(5) to read as
follows:
Sec. 147.106 Guaranteed renewability of coverage.
* * * * *
(b) * * *
(5) Enrollees' movement outside service area. For network plans,
there is no longer any enrollee under the plan who lives, resides, or
works in the service area of the issuer (or in the area for which the
issuer is authorized to do business); and in the case of the small
group market, the issuer applies the same criteria it would apply in
denying enrollment in the plan under Sec. 147.104(c)(1)(i); provided
the issuer provides notice in accordance with the requirements of
paragraph (c)(1) of this section.
* * * * *
PART 148--REQUIREMENTS FOR THE INDIVIDUAL HEALTH INSURANCE MARKET
0
5. The authority citation for part 148 continues to reads as follows:
Authority: Secs. 2701 through 2763, 2791, and 2792 of the Public
Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and
300gg-92), as amended.
0
6. Section 148.122 is amended by revising paragraph (c)(4) to read as
follows:
Sec. 148.122 Guaranteed renewability of individual health insurance
coverage.
* * * * *
(c) * * *
(4) Movement outside the service area. For network plans, the
individual no longer resides, lives, or works in the service area of
the issuer, or area for which the issuer is authorized to do
[[Page 53005]]
business, but only if coverage is terminated uniformly without regard
to any health status-related factor of covered individuals; provided
the issuer provides notice in accordance with the requirements of
paragraph (d)(1) of this section.
* * * * *
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
7. 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
8. Section 155.330 is amended by revising paragraph (b)(4) to read 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
9. Section 155.335 is amended by revising paragraphs (a), (e), and (j)
to read 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 benefit 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 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 same 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 same issuer through the Exchange that is the most
similar to the enrollee's current product; or
(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 same issuer 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
10. 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,
[[Page 53006]]
18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31
U.S.C. 9701).
0
11. 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 nonrenewing coverage 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(b)(5), (c)(1), or (f)(1) of this subchapter:
(a) Premium and advance payment of the 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 being
provided cost-sharing reductions, but for whom no QHP under the product
remains available for renewal at the silver level, an explanation that
in accordance with Sec. 155.305(g)(1)(ii) of this subchapter, cost-
sharing reductions are only available to an individual who is not an
Indian if he or she is enrolled in a silver-level QHP.
Dated: August 15, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
Approved: August 27, 2014.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2014-21178 Filed 9-2-14; 4:15 pm]
BILLING CODE 4120-01-P