Patient Protection and Affordable Care Act

115 Pages·2015·0.82 MB·English

Vol. 79 Tuesday,
No. 101 May 27, 2014
Part II
Department of Health and Human Services
45 CFR Parts 144, 146, 147, et al.
Patient Protection and Affordable Care Act; Exchange and Insurance
Market Standards for 2015 and Beyond; Final Rule
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30240 Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations
DEPARTMENT OF HEALTH AND standards and coverage enrollment and For all other matters related to Parts
HUMAN SERVICES termination standards; and time-limited 155 and 156: Leigha Basini, (301) 492–
adjustments to the standards relating to 4380.
45 CFR Parts 144, 146, 147, 148, 153, the medical loss ratio (MLR) program. For matters related to the medical loss
154, 155, 156, and 158 The majority of the provisions in this ratio program, under Part 158: Julie
rule are being finalized as proposed. McCune, (301) 492–4196.
[CMS–9949–F]
DATES: This rule is effective July 28, SUPPLEMENTARYINFORMATION:
RIN 0938–AS02 2014 except for amendments to 45 CFR
Electronic Access
155.705 which are effective May 27,
Patient Protection and Affordable Care This Federal Register document is
2014.
Act; Exchange and Insurance Market also available from the Federal Register
Standards for 2015 and Beyond FORFURTHERINFORMATIONCONTACT: For online database through Federal Digital
general matters and matters related to System (FDsys), a service of the U.S.
AGENCY: Centers for Medicare & Parts 144, 146, 147, 148 and 154: Jacob Government Printing Office. This
Medicaid Services (CMS), Department Ackerman, (301) 492–4179. database can be accessed via the
of Health and Human Services (HHS). For matters related to reinsurance,
internet at http://www.gpo.gov/fdsys.
ACTION: Final rule. under Part 153: Adrianne Glasgow,
(410) 786–0686. Table of Contents
SUMMARY: This final rule addresses For matters related to risk corridors, I. Executive Summary
various requirements applicable to under Part 153: Jaya Ghildiyal, (301) II. Background
health insurance issuers, Affordable 492–5149. A. Legislative Overview
Insurance Exchanges (‘‘Exchanges’’), For matters related to non- B. Stakeholder Consultation and Input
Navigators, non-Navigator assistance interference with Federal law and non- C. Structure of Final Rule
personnel, and other entities under the discrimination standards, and III. Provisions of the Proposed Regulations
Patient Protection and Affordable Care Navigator, non-Navigator assistance and Analysis and Responses to Public
Act and the Health Care and Education personnel, and certified application Comments
A. Part 144—Requirements Relating to
Reconciliation Act of 2010 (collectively counselor program standards, under Health Insurance Coverage
referred to as the Affordable Care Act). Part 155, subparts B and C: Tricia B. Part 146—Requirements for the Group
Specifically, the rule establishes Beckmann, (301) 492–4328. Health Insurance Market
standards related to product For matters related to civil money C. Part 147—Health Insurance Reform
discontinuation and renewal, quality penalties for noncompliant consumer Requirements for the Group and
reporting, non-discrimination standards, assistance entities, under Part 155, Individual Health Insurance Markets
minimum certification standards and subpart C: Emily Ames, (301) 492–4246. Guaranteed Availability and Guaranteed
Renewability of Coverage (§§147.104
responsibilities of qualified health plan For matters related to enrollment of a
and 147.106)
(QHP) issuers, the Small Business qualified individual, under Part 155, a. No Effect on Other Laws
Health Options Program, and subpart E: Jack Lavelle, (410) 786–0639. b. Product Discontinuance and Uniform
enforcement remedies in Federally- For matters related to civil money Modification of Coverage Exceptions to
facilitated Exchanges. It also finalizes: A penalties for false or fraudulent Guaranteed Renewability Requirements
modification of HHS’s allocation of information or improper use of D. Part 148—Requirements for the
reinsurance collections if those information, under Part 155, subpart C; Individual Health Insurance Market
1. Conforming Changes to Individual
collections do not meet our projections; exemptions under Part 155, subparts D
Market Regulations (§§148.101 through
certain changes to allowable and G, and matters related to eligibility 148.128)
administrative expenses in the risk appeals, under Part 155, subparts F and 2. Fixed Indemnity Insurance in the
corridors calculation; modifications to H: Christine Hammer, (301) 492–4431. Individual Health Insurance Market
the way we calculate the annual limit For matters related to special (§148.220)
on cost sharing so that we round this enrollment periods under Part 155, E. Part 153—Standards Related to
parameter down to the nearest $50 Subpart E: Spencer Manasse, (301) 492– Reinsurance, Risk Corridors, and Risk
increment; an approach to index the 5141. Adjustment Under the Affordable Care
Act
required contribution used to determine For matters related to the Small
1. Provisions and Parameters for the
eligibility for an exemption from the Business Health Options Program, Permanent Risk Adjustment Program
shared responsibility payment under under Part 155, subpart H: Christelle 2. Provisions and Parameters for the
section 5000A of the Internal Revenue Jang, (410) 786–8438. Transitional Reinsurance Program
Code; grounds for imposing civil money For matters related to the required 3. Provisions for the Temporary Risk
penalties on persons who provide false contribution percentage for affordability Corridors Program (§153.500)
or fraudulent information to the exemptions, under Part 155, subpart G: F. Part 154—Health Insurance Issuer Rate
Exchange and on persons who Ariel Novick, (301) 492–4309. Increases: Disclosure and Review
Requirements
improperly use or disclose information; For matters related to cost sharing,
G. Part 155—Exchange Establishment
updated standards for the consumer under Part 156, subpart B: Pat Meisol,
Standards and Other Related Standards
assistance programs; standards related (410) 786–1917. Under the Affordable Care Act
to the opt-out provisions for self-funded, For matters related to quality 1. Subpart B—General Standards Related to
non-Federal governmental plans and standards, under Parts 155 and 156: the Establishment of the Exchange Non-
related to the individual market Nidhi Singh Shah, (301) 492–5110. Interference With Federal Law and Non-
S provisions under the Health Insurance For matters related to enforcement Discrimination Standards (§155.120)
E
RUL Portability and Accountability Act of remedies, under Part 156: Cindy Yen, 2. Subpart C—General Functions of an
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N1P request access to non-formulary drugs essential coverage, under Part 156, Consumer Assistance Entities in
TV under exigent circumstances; subpart G: Cam Clemmons, (410) 786– Federally-Facilitated Exchanges
P
K5S amendments to Exchange appeals 1565. (§155.206)
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Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations 30241
b. Navigator, Non-Navigator Assistance b. Requirements for Recognition as C. Regulatory Alternatives
Personnel, and Certified Application Minimum Essential Coverage for Types 1. Collecting ESS Data at the Product Level
Counselor Program Standards of Coverage Not Otherwise Designated Instead of Each Product Per Metal Tier
(§§155.210, 155.215, and 155.225) Minimum Essential Coverage in the 2. Using Medicaid CAHPS® As Is Instead
c. Payment of Premiums (§155.240) Statute or This Subpart (§156.604) of Adding Additional and New
d. Privacy and Security of Personally 4. Subpart I—Enforcement Remedies in Questions to the ESS
Identifiable Information (§155.260) Federally-Facilitated Exchanges 3. Collecting QRS Data for Each Product
e. Bases and Process for Imposing Civil a. Available Remedies; Scope (§156.800) Per Metal Tier Instead of at the Product
Money Penalties for Provision of False or b. Bases and Process for Imposing Civil Level
Fraudulent Information to an Exchange Money Penalties in Federally-Facilitated 4. Using the Medicare Advantage (MA)
or Improper Use or Disclosure of Exchanges (§156.805) CAHPS® Instrument and Star System
Information (§155.285) c. Notice of Non-compliance (§156.806) D. Regulatory Flexibility Act
3. Subpart D—Exchange Functions in the d. Bases and Process for Decertification of E. Unfunded Mandates Reform Act
Individual Market: Eligibility a QHP Offered by an Issuer Through a F. Federalism
Determinations for Exchange Federally-Facilitated Exchange G. Congressional Review Act
Participation and Insurance Affordability (§156.810) VIII. Regulations Text
Programs 5. Subpart L—Quality Standards
a. Verification Process Related to Eligibility a. Establishment of Standards for HHS- Abbreviations
for Insurance Affordability Programs Approved Enrollee Satisfaction Survey Affordable Care Act—The collective term for
(§155.320) Vendors for Use by QHP Issuers in the Patient Protection and Affordable Care
b. Eligibility Redetermination During a Exchanges (§156.1105) Act (Pub. L. 111–148) and the Health Care
Benefit Year (§155.330) b. Quality Rating System (§156.1120) and Education Reconciliation Act of 2010
4. Subpart E—Exchange Functions in the c. Enrollee Satisfaction Survey (§156.1125) (Pub. L. 111–152)
Individual Market: Enrollment in I. Part 158—Issuer Use of Premium AV—Actuarial Value
Qualified Health Plans Revenue: Reporting and Rebate CAHPS® —Consumer Assessment of
a. Enrollment of Qualified Individuals in a Requirements Healthcare Providers and Systems
QHP (§155.400) 1. Subpart A—Disclosure and Reporting CFR—Code of Federal Regulations
b. Initial and Annual Open Enrollment
a. ICD–10 Conversion Expenses (§158.150) CMP—Civil Money Penalty
Periods (§155.410)
2. Subpart B—Calculating and Providing CMS—Centers for Medicare & Medicaid
c. Special Enrollment Periods (§155.420)
the Rebate Services
d. Termination of Coverage (§155.430)
a. MLR and Rebate Calculations in States CSR—Cost-Sharing Reductions
5. Subpart F—Appeals of Eligibility
with Merged Individual and Small EHB—Essential Health Benefits
Determinations for Exchange
Group Markets (§§158.211, 158.220, ERISA—Employee Retirement Income
Participation and Insurance Affordability
158.231) Security Act of 1974 (Pub. L. 93–406)
Programs
b. Accounting for Special Circumstances ESS—Enrollee Satisfaction Survey
a. General Eligibility Appeals
(§158.221) FFE—Federally-facilitated Exchange
Requirements (§155.505)
c. Distribution of De Minimis Rebates FF–SHOP—Federally-facilitated Small
b. Dismissals (§155.530)
(§158.243) Business Health Options Program
c. Employer Appeals Process (§155.555)
IV. Provisions of Final Regulations HCC—Hierarchical Condition Category
6. Subpart G—Exchange Functions in the
V. Waiver of Delay in Effective Date HHS—United States Department of Health
Individual Market: Eligibility
VI. Collection of Information Requirements and Human Services
Determinations for Exemptions
A. ICRs Regarding Recertification for HIPAA—Health Insurance Portability and
a. Required Contribution Percentage
Certified Application Counselors Accountability Act of 1996 (Pub. L. 104–
b. Options for Conducting Eligibility
(§155.225) 191)
Determinations for Exemptions
B. ICRs Regarding Consumer Authorization IRS—Internal Revenue Service
(§155.625)
(§§155.210 and 155.215) MLR—Medical Loss Ratio
7. Subpart H—Exchange Functions: Small
C. ICRs Regarding Enrollee Satisfaction & NAIC—National Association of Insurance
Business Health Options Program
a. Functions of a SHOP (§155.705) Marketplace Surveys (§§155.1200, Commissioners
b. Enrollment Periods under SHOP 156.1105, and 156.1125) OMB—United States Office of Management
(§155.725) D. ICR Regarding Quality Rating System and Budget
c. SHOP Employer and Employee (§156.1120) OPM—United States Office of Personnel
Eligibility Appeals Requirements E. ICRs Regarding Quality Standards for Management
(§155.740) Exchanges (§§155.1400 and 155.1405) PHS—Act Public Health Service Act
8. Subpart O—Quality Reporting Standards F. ICR Regarding Medical Loss Ratio PRA—Paperwork Reduction Act of 1995
for Exchanges Requirements (§§158.150, 158.211, QHP—Qualified health plan
a. Quality Rating System (§155.1400) 158.220, 158.221, and 158.231) QRS—Quality Rating System
b. Enrollee Satisfaction Survey System G. ICRs Regarding Civil Money Penalties SHOP—Small Business Health Options
(§155.1405) (§§155.206 and 155.285) Program
H. Part 156—Health Insurance Issuer H. ICRs Regarding Fixed Indemnity Plans, The Code—Internal Revenue Code of 1986
Standards under the Affordable Care Act, Minimum Essential Coverage, I. Executive Summary
Including Standards Related to Certifications of Creditable Coverage and
Exchanges HIPAA Opt-Out Election Notice, Notice Since January 1, 2014, qualified
1. Subpart B—Essential Health Benefits of Discontinuation, Notice of Renewal individuals and small employers have
Package (§§146.152, 146.180, 147.106, 148.122, been able to obtain private health
a. Prescription Drug Benefits (§156.122) 148.220, and 156.602) insurance through Affordable Insurance
b. Cost-Sharing Requirements (§156.130) I. Emergency Clearance: Public Information Exchanges, or ‘‘Exchanges’’ (also known
2. Subpart C—General Functions of an Collection Requirements Submitted to as Health Insurance Marketplaces, or
Exchange the Office of Management and Budget
‘‘Marketplaces’’).1The Exchanges
S a. QHP Issuer Participation Standards (OMB)
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UL (§156.200) VII. Regulatory Impact Analysis
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N1 Coverage 2. Summary of Impacts when we are referring to a particular type of
PTV a. Other Coverage that Qualifies as 3. Anticipated Benefits, Costs and Exchange. When we refer to ‘‘FFEs,’’ we are also
K5S Minimum Essential Coverage (§156.602) Transfers Continued
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30242 Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations
provide competitive marketplaces Code; grounds for imposing CMPs on insurance market.2The amendments
where individuals and small employers persons who provide false or fraudulent eliminate the requirement that
can compare available private health information to the Exchange and on individual fixed indemnity insurance
insurance options on the basis of price, persons who improperly use or disclose must pay on a per-period basis (as
quality, and other factors. The information; updated standards for opposed to a per-service basis), and
Exchanges help enhance competition in Exchange consumer assistance require on a prospective basis, among
the health insurance market, improve programs; standards related to the opt- other things, that it be sold only to
choice of affordable health insurance, out provisions for self-funded, non- individuals who have other health
and give small businesses the same Federal governmental plans and related coverage that is minimum essential
purchasing power as large businesses. to the individual market provisions coverage to be considered an excepted
Individuals who enroll in QHPs under the Health Insurance Portability benefit.
through individual market Exchanges HIPAA Opt-Out for Self-Funded, Non-
and Accountability Act of 1996
may be eligible to receive premium tax Federal Governmental Plans: Prior to
(HIPAA); amendments to Exchange
credits to make health insurance enactment of the Affordable Care Act,
appeals standards and coverage
purchased through an Exchange more sponsors of self-funded, non-Federal
enrollment and termination standards;
affordable and cost-sharing reductions governmental plans were permitted to
and time-limited adjustments to the
(CSRs) that lower out-of-pocket elect to exempt those plans from (‘‘opt
standards relating to the MLR program.
expenses for health care services. The out of’’) certain provisions of title XXVII
premium tax credits, combined with the Product Discontinuance and Uniform of the PHS Act. Consistent with
new insurance reforms, have Modification of Coverage Exceptions to previously released guidance, we
significantly increased the number of Guaranteed Renewability Requirements: finalize amendments to the non-Federal
individuals with health insurance Under sections 2702 and 2703 of the governmental plan regulations (45 CFR
coverage. The premium stabilization Public Health Service Act (PHS Act), as 146.180) to reflect the amendments
programs—risk adjustment, reinsurance, added by the Affordable Care Act, made by the Affordable Care Act to
and risk corridors—protect against health insurance issuers in the group these provisions, with clarifications
adverse selection in the newly enrolled and individual markets must guarantee specifying that, in the case of a plan
population. These programs, in the availability and renewability of sponsor submitting opt-out elections for
combination with the MLR program and coverage unless an exception applies. In more than one collectively bargained
market reforms extending guaranteed this final rule, we establish criteria for health plan, each such plan must be
availability (also known as guaranteed determining when modifications made listed in the opt-out election, and in the
issue) protections, prohibiting the use of by an issuer to the health insurance case of a plan sponsor submitting opt-
factors such as health status, medical coverage for a product would and would out elections for group health plans that
history, gender, and industry of not constitute the discontinuation of an are not subject to a collective bargaining
employment to set premium rates, will
existing product and the creation of a agreement, the sponsor must submit
help to ensure that every American has
new product. The same criteria would separate election documents for each
access to high quality, affordable health
apply to determine whether the rate such plan.3
insurance. filing is subject to submission and Essential Health Benefits (EHB)
This final rule addresses various
review under 45 CFR part 154. We also Prescription Drug Coverage: Under 45
requirements applicable to health
direct that issuers use standard CFR 156.122(c), a plan providing EHB
insurance issuers, Exchanges,
consumer notices in a format designated must have procedures in place that
Navigators, non-Navigator assistance
by the Secretary when discontinuing or allow an enrollee to request and gain
personnel, and other entities under the
renewing a product in the group or access to a clinically appropriate drug
Affordable Care Act. Specifically, the
individual market. Additionally, we not covered by the plan. In this final
rule establishes standards related to
clarify that the guaranteed availability rule, we are revising paragraph (c) to
product discontinuation and renewal,
require that the plan’s procedures
and renewability requirements should
quality reporting, non-discrimination
include an expedited process for exigent
standards, minimum certification not be construed to supersede other
circumstances that requires the health
standards and responsibilities of QHP provisions of Federal law in certain
plan to make its coverage determination
issuers, the Small Business Health circumstances.
within no more than 24 hours after it
Options Program (SHOP), and Conforming Changes to Individual
receives the request and that requires
enforcement remedies in Federally- Market Provisions: Sections 2741
the health plan to provide the drug for
facilitated Exchanges (FFEs). It also through 2744 of the PHS Act were
the duration of the exigency.
finalizes: A modification of HHS’s added by HIPAA to improve the Premium Stabilization Programs: The
allocation of reinsurance collections if portability and continuity of coverage in Affordable Care Act establishes three
those collections do not meet our the individual health insurance market. premium stabilization programs—risk
projections; certain changes to allowable These provisions are implemented adjustment, reinsurance, and risk
administrative expenses in the risk through regulations in 45 CFR part 148.
corridors calculation; modifications to In this final rule, we amend the 2FAQs about Affordable Care Act
the way we calculate the annual limit individual market provisions in Part 148 Implementation (Part XVIII) and Mental Health
on cost sharing so that we round this to reflect the amendments made by the Parity Implementation, Q11 (January 9, 2014).
parameter down to the nearest $50 Affordable Care Act. These amendments AFavcati-lSahbelee tast-:a hntdtp-F:/A/wQws/wA.fcfmorsd.gaobvle/CCCarIeIOA/cRt_esources/
increment; an approach to indexing the are for clarity only. implementation_faqs18.html and http://
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with shared responsibility payment under Individual Market: Consistent with 3Amendments to the HIPAA opt-out provision
OD section 5000A of the Internal Revenue previously released guidance, we amend (formerly section 2721(b)(2) of the Public Health
PR the criteria for fixed indemnity Service Act) made by the Affordable Care Act
VN1 insurance to be treated as an excepted (September 21, 2010). Available at: http://
K5SPT rae ffoerrmrin ogf tFoF SEtsa.t e Partnership Exchanges, which are benefit in the individual health wopwt_wo.cumt_sm.geomv/oC.pCdIIfO. /Resources/Files/Downloads/
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Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations 30243
corridors—to protect against adverse explain that it is his or her expert non-Navigator assistance personnel, and
selection. The Affordable Care Act judgment, based on a documented certified application counselors that
directs that a permanent risk adjustment assessment of the full landscape of the HHS considers to prevent the
program be established in each State to small group market in his or her State, application of the provisions of title I of
mitigate the impacts of possible adverse that not implementing employee choice the Affordable Care Act within the
selection and stabilize premiums in the would be in the best interest of small meaning of section 1321(d) of the
individual and small group markets as employers and their employees and Affordable Care Act. We also make
and after insurance market reforms are dependents, given the likelihood that several changes to update the standards
implemented. The Affordable Care Act implementing employee choice would applicable to these consumer assistance
also directs that a transitional cause issuers to price products and entities and individuals, such as
reinsurance program be established in plans higher in 2015 due to the issuers’ prohibiting them from specified
each State to help stabilize premiums by beliefs about adverse selection. We marketing or solicitation activities. We
helping to pay the cost of treating high- allow the opportunity for a person require Navigators and non-Navigator
cost enrollees in the individual market appealing a determination of SHOP assistance personnel to obtain
from 2014 through 2016. The Affordable eligibility to withdraw an appeal by authorization before accessing a
Care Act directs the Secretary to telephone, if the appeals entity is consumer’s personally identifiable
establish and administer a temporary capable of accepting telephonic information and to prohibit them from
risk corridors program. In this final rule, signatures. charging consumers for their services.
we modify and finalize our proposal to Civil Money Penalties for False We also require that certified
allocate contributions collected under Information or Improper Use of application counselors be recertified on
that program in the event of a shortfall Information: The final rule specifies the at least an annual basis, and prohibit
in collections. In that event, we will grounds for imposing CMPs on persons certified application counselors and
allocate reinsurance contributions first who provide false or fraudulent certified application counselor
to the reinsurance payment pool, and information to the Exchange and on designated organizations from receiving
second to administrative expenses and persons who use or disclose information consideration, directly or indirectly,
the U.S. Treasury. We also finalize the in violation of section 1411(g) of the from health insurance issuers or stop
proposal, unchanged, to increase the Affordable Care Act. The grounds for loss insurance issuers in connection
ceiling on allowable administrative imposing a penalty include: Negligent with the enrollment of consumers in
costs and the floor on profits by 2 failure to provide correct information, QHPs or non-QHPs. We further provide
percent in the risk corridors calculation knowing and willful provision of false that, in specific circumstances, certified
to account for uncertainty and changes or fraudulent information, and knowing application counselor designated
in the market prior to and during benefit and willful use or disclosure of organizations can serve targeted
year 2015. information in violation of section populations without violating the broad
Exchange Establishment and QHP 1411(g). This section specifies the non-discrimination requirement related
Issuer Standards: The rule amends factors used to determine the amount of to Exchange functions.
oversight standards regarding QHP the CMP to be imposed against a person. Indexing of Cost-Sharing
decertification and CMPs. It also directs The section also provides for the Requirements: Under §§156.130(a) and
that QHP issuers provide enrollees with requirements for notices which must be 156.130(b), the annual limitation on cost
an annual notice of coverage changes. provided to a person if HHS proposes to sharing and the annual limitation on
This rule creates a process for survey impose a CMP, and the processes a deductibles in the small group market
vendors to appeal an HHS decision not person may follow should the person for years after 2014 are to be indexed by
to approve its application to become an wish to challenge HHS’ determination the premium adjustment percentage. We
enrollee satisfaction survey (ESS) that a CMP should be imposed, established our methodology for
vendor, as well as standards for including a process pursuant to which calculating the premium adjustment
revoking HHS-approval of ESS vendors. a person may request a hearing before percentage in the 2015 Payment Notice.
Finally, it establishes standards for the an administrative law judge. We also In this final rule, we provide for the
ESS and quality rating system (QRS) amend current privacy and security annual limitation on cost sharing to be
related to the display of such regulations at 45 CFR 155.260 to updated based on the premium
information by Exchanges and the reference the new CMP provisions adjustment percentage by rounding
submission of validated data by QHP associated with knowingly and willfully down to the nearest $50 increment. We
issuers. using or disclosing information in are eliminating the annual limit on
We align the start of employer violation of section 1411(g) of the deductibles for small group plans,
election periods in FF–SHOPs for plan Affordable Care Act. consistent with the Protecting Access to
years beginning in 2015 with the start of Civil Money Penalties for Consumer Medicare Act of 2014 (Pub. L. 113–93),
open enrollment in the corresponding Assistance Entities: The final rule which was signed into law on April 1,
individual market Exchange for the provides that HHS may impose CMPs 2014.
2015 benefit year and, in all SHOPs, against Navigators, non-Navigator Required Contribution Percentage:
eliminate the 30-day minimum time assistance personnel, certified Under section 5000A of the Code, an
frames for the employer and employee application counselor designated applicable individual must maintain
annual election periods. We also allow organizations, and certified application minimum essential coverage for each
State Insurance Commissioners the counselors in FFEs, if these entities and/ month, qualify for an exemption, or
opportunity to recommend that, in or individuals violate Federal make a shared responsibility payment.
ES 2015, a SHOP not provide employers requirements applicable to their An individual may qualify for an
RUL with the option of selecting a level of activities. exemption from the shared
with coverage as described in section Navigator, Non-Navigator Assistance responsibility payment if the amount
OD 1302(d)(1) of the Affordable Care Act Personnel, and Certified Application that he or she would be required to pay
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N1P and making all QHPs at that level of Counselor Program Standards: In this towards minimum essential coverage
TV coverage available to their employees if final rule, we specify certain types of (required contribution) exceeds a
P
K5S the commissioner can adequately State laws applicable to Navigators, particular percentage (the required
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30244 Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations
contribution percentage) of his or her group markets to be merged. We note and provide rebates to consumers if they
household income. Under section that the standards for ICD–10 do not achieve specified MLRs.
5000A of the Code, the required conversion costs and merged markets Sections 2722 and 2763 of the PHS
contribution percentage for 2014 is 8 also apply to the risk corridors program. Act, as implemented in 45 CFR
percent, and for each plan year Further, we modify the regulation to 146.145(b) and 148.220, provide that the
beginning in a calendar year after 2014, account for the special circumstances of requirements of parts A and B of title
the percentage, as determined by the the issuers affected by the HHS XXVII of the PHS Act shall not apply to
Secretary of Health and Human Services transitional policy and the issuers any individual coverage or any group
(the Secretary), that reflects the excess impacted by systems challenges during health plan (or group health insurance
of the rate of premium growth between the implementation of the Exchanges. coverage) in relation to its provision of
the preceding calendar year and 2013 excepted benefits. Excepted benefits are
II. Background
over the rate of income growth for the described in section 2791(c) of the PHS
same period. In the preamble to this A. Legislative Overview Act. One category of excepted benefits,
final rule, we establish a methodology called ‘‘noncoordinated excepted
The Patient Protection and Affordable
for determining the percentage benefits,’’ includes coverage for only a
Care Act (Pub. L. 111–148) was enacted
reflecting the excess of the rate of specified disease or illness, and hospital
on March 23, 2010. The Health Care and
premium growth over the rate of income indemnity or other fixed indemnity
Education Reconciliation Act of 2010
growth for plan years after 2014. We insurance. Benefits in this category are
(Pub. L. 111–152), which amended and
also establish a required contribution excepted only if they meet certain
revised several provisions of the Patient
percentage for 2015 of 8.05 percent. For conditions specified in the statute and
Protection and Affordable Care Act, was
calendar years after 2015, the required regulations.
contribution percentage will be enacted on March 30, 2010. In this final Section 1302(b) requires the Secretary
published in the annual HHS notice of rule, we refer to the two statutes to define EHB, including prescription
benefit and payment parameters. collectively as the ‘‘Affordable Care drugs.
Eligibility Appeals: The rule amends Act.’’ Section 1302(c) of the Affordable Care
standards related to eligibility appeals The Affordable Care Act reorganizes, Act establishes an annual limitation on
provisions in subparts F and H of Part amends, and adds to the provisions of cost sharing for 2014, and provides that
155. To facilitate the efficient title XXVII of the PHS Act relating to this limitation is to be increased for
conclusion of an appeal at the request group health plans and health insurance each year after 2014 by the percentage
of the appellant, we amend the issuers in the group and individual by which the average per capita
withdrawal procedure to permit markets. premium for health insurance coverage
withdrawals made via telephonic Section 1201 of the Affordable Care in the United States for the preceding
signature. Act added sections 2702 and 2703 of the year exceeds the average per capita
Minimum Essential Coverage: We PHS Act. Section 2702 of the PHS Act premium for 2013. Under section
clarify that entities other than plan generally requires an issuer that offers 1302(c), this limitation is to be rounded
sponsors (for example, issuers) can health insurance coverage in the to the next lowest multiple of $50.
apply for their coverage to be recognized individual or group market in a State to Section 1311(b) of the Affordable Care
as minimum essential coverage, offer coverage to and accept every Act provides that each State has the
pursuant to the process outlined in 45 individual or employer in the State that opportunity to establish an Exchange
CFR 156.604 and guidance thereunder. applies for such coverage. Section 2703 that: (1) Facilitates the purchase of
Medical Loss Ratio: The MLR program of the PHS Act generally requires an insurance coverage by qualified
created pursuant to the Affordable Care issuer to renew or continue in force individuals through QHPs; (2) provides
Act generally requires issuers to rebate coverage in the group or individual for the establishment of a SHOP
a portion of premiums if their MLR fails market at the option of the plan sponsor designed to assist qualified employers
to meet the applicable MLR standard in or the individual. in the enrollment of their qualified
a State and market for the applicable Prior to enactment of the Affordable employees in QHPs; and (3) meets other
reporting year. An issuer’s MLR is the Care Act, HIPAA amended the PHS Act requirements specified in the Affordable
ratio of claims plus quality to improve access to individual health Care Act.
improvement activities to premium insurance coverage for certain eligible Section 1311(c)(3) of the Affordable
revenue, with the premium adjusted by individuals who previously had group Care Act requires the Secretary to
the amounts paid for taxes, licensing coverage, and to guarantee the develop a rating system to rate QHPs
and regulatory fees, and the premium renewability of all coverage in the offered through an Exchange on the
stabilization programs. On December 1, individual market. These reforms were basis of quality and price. Section
2010, we published an interim final rule added as sections 2741 through 2744 of 1311(c)(4) of the Affordable Care Act
entitled ‘‘Health Insurance Issuers the PHS Act. directs the Secretary to establish an ESS
Implementing Medical Loss Ratio (MLR) HIPAA also added PHS Act system that would evaluate the level of
Requirements under the Patient provisions permitting sponsors of self- enrollee satisfaction of members in
Protection and Affordable Care Act’’ (75 funded, non-Federal governmental QHPs offered through an Exchange, for
FR 74864), which established standards plans to elect to exempt those plans each QHP with more than 500 enrollees
for the MLR program. Since then, we from (‘‘opt out of’’) certain provisions of in the previous year. Sections 1311(c)(3)
have made several revisions and title XXVII of the PHS Act. This election and 1311(c)(4) of the Affordable Care
technical corrections to those rules. In was authorized under section 2721(b)(2) Act further require an Exchange to
S this final rule, we modify the timeframe of the PHS Act, which is now provide information to individuals and
E
RUL for which issuers can include their ICD– designated as section 2722(a)(2) of the employers from the rating and ESS
with 10 conversion costs in their MLR PHS Act by the Affordable Care Act. systems on the Exchange’s Web site. We
OD calculation. We also modify the Section 2718 of the PHS Act, as added have already promulgated regulations in
R
N1P regulation to clarify how issuers would by the Affordable Care Act, generally 45 CFR 155.200(d) that direct Exchanges
TV calculate MLRs and rebates in States requires health insurance issuers to to oversee implementation of ESSs and
P
K5S that require the individual and small submit an annual MLR report to HHS ratings of health care quality and
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Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations 30245
outcomes, and 45 CFR 156.200(b)(5)4 apply to the enforcement under section it is not affordable coverage with respect
that directs QHP issuers that participate 1321(c)(1) of requirements of section to an employee.
in Exchanges to report health care 1321(a)(1), without regard to any Section 1411(h) of the Affordable Care
quality and outcomes information and limitation on the application of those Act sets forth CMPs to which any
to implement an ESS consistent with provisions to group health plans. person may be subject if that person
the Affordable Care Act. Section 2723(b) of the PHS Act provides inaccurate information as part
Sections 1311(d)(4)(K) and 1311(i) of authorizes the Secretary to impose of an Exchange application or
the Affordable Care Act direct all CMPs as a means of enforcing the improperly uses or discloses an
Exchanges to establish a Navigator individual and group market reforms applicant’s information.
program. contained in Part A of title XXVII of the Section 1501(b) of the Affordable Care
Section 1312(a)(2) of the Affordable PHS Act when, in the Secretary’s Act added section 5000A to the Code.
Care Act provides that a qualified That section, as amended by the
determination, a State fails to
employer may provide support for TRICARE Affirmation Act of 2010 (Pub.
substantially enforce these provisions.
coverage of employees under a QHP by L. 111–159, 124 Stat. 1123) and Public
Section 1341 of the Affordable Care
selecting any level of coverage under Law 111–173 (124 Stat. 1215), requires
Act requires the establishment of a
section 1302(d) to be made available to nonexempt individuals to either
transitional reinsurance program in each
employees through a SHOP. Section maintain minimum essential coverage
State to help pay the cost of treating
1312(a)(2) further provides that or make a shared responsibility payment
employees of an employer who makes high-cost enrollees in the individual for each month beginning in 2014. It
such an election may choose to enroll in market from 2014 through 2016. Section also describes categories of individuals
a QHP that offers coverage at that level. 1342 of the Affordable Care Act directs who may qualify for an exemption from
Section 1321(a) of the Affordable Care the Secretary to establish a temporary the individual shared responsibility
Act provides authority for the Secretary risk corridors program that provides for payment. Section 1311(d)(4)(H) of the
to establish standards and regulations to the sharing in gains or losses resulting Affordable Care Act specifies that the
implement the statutory requirements from inaccurate rate setting from 2014 Exchange will, subject to section 1411 of
related to Exchanges, QHPs and other through 2016 between the Federal the Affordable Care Act, grant
components of title I of the Affordable government and certain participating certifications of exemption from the
Care Act. Section 1321(a)(1) directs the health plans. Section 1343 of the individual shared responsibility
Secretary to issue regulations that set Affordable Care Act establishes a payment specified in section 5000A of
standards for meeting the requirements permanent risk adjustment program that the Code. Standards relating to these
of title I of the Affordable Care Act with provides for payments to health provisions were established in IRS
respect to, among other things, the insurance issuers that attract higher-risk regulations titled, ‘‘Shared
establishment and operation of populations, such as those with chronic Responsibility Payment for Not
Exchanges. Section 1321(a)(2) requires conditions, and charges issuers that Maintaining Minimum Essential
the Secretary to engage in consultation attract lower-risk populations thereby Coverage Final Rule,’’ published in the
to ensure balanced representation reducing incentives for issuers to avoid August 30, 2013 Federal Register (78 FR
among interested parties. higher-risk enrollees. 53646) and HHS regulations titled,
Section 1321 of the Affordable Care Section 1411(f)(1) of the Affordable ‘‘Exchange Functions: Eligibility for
Act provides for State flexibility in the Care Act provides that the Secretary, in Exemptions; Miscellaneous Minimum
operation and enforcement of Exchanges consultation with the Secretary of the Essential Coverage Provisions Final
and related requirements. Section Treasury, the Secretary of Homeland Rule,’’ published in the July 1, 2013
1321(d) provides that nothing in title I Security, and the Commissioner of Federal Register (78 FR 39494).
of the Affordable Care Act shall be Social Security, shall establish B. Stakeholder Consultation and Input
construed to preempt any State law that procedures by which the Secretary or
HHS has consulted with stakeholders
does not prevent the application of title one of such other Federal officers hears
on policies related to the operation of
I of the Affordable Care Act. Section and makes decisions with respect to
Exchanges, including the SHOP and the
1311(k) specifies that Exchanges may appeals of any determination under
premium stabilization programs. HHS
not establish rules that conflict with or subsection (e) and redetermines
has held a number of listening sessions
prevent the application of regulations eligibility on a periodic basis in
with consumers, providers, employers,
promulgated by the Secretary. appropriate circumstances. Section
Section 1321(c)(1) requires the 1411(f)(2) of the Affordable Care Act health plans, the actuarial community,
Secretary of HHS (referred to throughout provides that the Secretary shall and State representatives to gather
this rule as the Secretary) to establish establish a separate appeals process for public input. HHS consulted with
and operate an FFE within States that employers who are notified under stakeholders through regular meetings
either: (1) Did not elect to establish an section 1411(e)(4)(C) of the Affordable with the National Association of
Exchange; or (2) as determined by the Care Act that the employer may be Insurance Commissioners (NAIC),
Secretary, did not have any required liable for a tax imposed by section regular contact with States through the
Exchange operational by January 1, 4980H of the Internal Revenue Code of Exchange Establishment grant and
2014. 1986 (the Code) with respect to an Exchange Blueprint approval processes,
Section 1321(c)(2) of the Affordable employee because of a determination technical health care quality
Care Act provides that the provisions of that the employer does not provide measurement experts, health care
section 2723(b) of the PHS Act5shall minimum essential coverage through an survey development experts, and
S meetings with Tribal leaders and
with RULE Es4taPbaltiisehnmt ePnrot toefc Etixocnh aanndg eAs fafonrdd Qabulael Cifaierde AHceta;l th eemmppllooyyeerr- dspooesn sporroevdi dpel atnh aotr c tohvaetr tahgee but risespureersse,n ttraatdivee gsr,o huepasl,t hc oinnssuurmanerc e
OD Plans; Exchange Standards for Employers; Final advocates, employers, and other
N1PR Ratu 4le5, C7F7R F Rpa 1r8ts3 11505 (,M 1a5r6. ,2 &7 ,1 25071).2 ) (to be codified ian tsytpeaodgr oafp 2h7ic2a3l( ber) roofr ,t haen dP HwSe Ahacvt.e T ihnitse rwparest celde arly interested parties. In addition, HHS
PTV 5Section 1321(c) of the Affordable Care Act section 1321(c) of the Affordable Care Act to received public comment on various
K5S erroneously cites to section 2736(b) of the PHS Act incorporate section 2723(b) of the PHS Act. notices published in the Federal
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30246 Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations
Register relating to health care quality limit on cost-sharing for years after discussed nearly all of the proposed
in the Exchanges,6enrollee experience 2014; minimum certification standards; policies in the preamble to the HHS
measures and domains,7and the QRS, standards for recognition of certain Notice of Benefit and Payment
which provided valuable feedback on types of coverage as minimum essential Parameters for 2015 final rule published
quality reporting and quality rating coverage; quality standards for QHPs; on March 11, 2014 (79 FR 13744).9HHS
requirements.8We considered all of the and other QHP issuer responsibilities. believes that interested stakeholders had
public input as we developed the Part 158 outlines standards related to adequate opportunity to provide
policies in this final rule. the MLR program, including standards comment on the policies established in
related to treatment of ICD–10 this final rule.
C. Structure of Final Rule
conversion costs, standards related to
The regulations outlined in this final adjustments for issuers affected by the A. Part 144—Requirements Relating to
rule will be codified in 45 CFR parts HHS transitional policy and issuers that Health Insurance Coverage
144, 146, 147, 148, 153, 154, 155, 156, incurred costs due to the technical Definitions of Product and Plan
and 158. Part 144 outlines requirements issues during the implementation of the (§144.103)
relating to health insurance coverage. Exchanges, and standards related to
See the discussion in section III.C.1.b,
Part 146 outlines the group health MLR reporting and rebate calculations
‘‘Product Discontinuance and Uniform
insurance market requirements of the in States with merged individual and
Modification of Coverage Exceptions to
PHS Act added by HIPAA and other small group markets.
statutes, including opt-out provisions Guaranteed Renewability
for sponsors of self-funded, non-Federal III. Provisions of the Proposed Requirements.’’
Regulations and Analysis and
governmental plans. Part 147 outlines B. Part 146—Requirements for the
Responses to Public Comments
health insurance reform requirements Group Health Insurance Market
for the group and individual markets The proposed rule titled, ‘‘Patient
added by the Affordable Care Act, Protection and Affordable Care Act; 1. HIPAA Opt-Out Provisions for Plan
including standards related to Exchange and Insurance Market Sponsors of Self-Funded, Non-Federal
guaranteed availability and guaranteed Standards for 2015 and Beyond,’’ was Governmental Plans (§146.180)
renewability of coverage. Part 148 published in the Federal Register on We proposed to codify the
outlines the individual health insurance March 21, 2014 (79 FR 15808), with requirement that self-funded, non-
market requirements of the PHS Act comment period ending April 21, 2014 Federal governmental plans may no
added by HIPAA and other statutes, (referred to in this preamble as the longer elect to be exempt from (‘‘opt out
including standards related to ‘‘proposed rule’’). In total, we received of’’) requirements of title XXVII of the
guaranteed availability with respect to approximately 220 comments on the PHS Act related to limitations on
certain eligible individuals and proposed rule. Comments represented a preexisting condition exclusion periods;
guaranteed renewability for all wide variety of stakeholders, including requirements for special enrollment
individuals. Part 153 outlines standards but not limited to States, tribes, tribal periods; and prohibitions on health
related to the reinsurance and risk organizations, health plans, consumer status discrimination. Self-funded, non-
corridors programs. Part 154 outlines groups, employer groups, healthcare Federal governmental plans may,
standards related to the disclosure and providers, industry experts, and however, continue to opt-out of
review of rate increases. Part 155 members of the public. requirements related to benefits for
outlines standards related to the Some comments were general public newborns and mothers; parity in mental
operations and functions of an comments on the Affordable Care Act health and substance use disorder
Exchange, including standards related and the government’s role in health benefits; required coverage for
to non-discrimination, accessibility, and care, but not specific to the proposed reconstructive surgery following
enforcement remedies; standards rule. We have not addressed such mastectomies; and coverage of
applicable to the consumer assistance comments, and others that are not dependent students on a medically
functions performed by Navigators, non- directly related to the proposed rule, necessary leave of absence.
Navigator assistance personnel, and because they are outside the scope of We also proposed to streamline the
certified application counselors; this final rule. submission process by requiring that
standards related to eligibility appeals; In this final rule, we provide a opt-out elections be submitted
standards related to exemptions; summary of each proposed provision, a electronically in a format specified by
standards related to quality reporting; summary of and responses to the public the Secretary in guidance. We solicited
and standards related to SHOP. Part 156 comments received, and the provisions comment on these proposals, including
outlines health insurance issuer we are finalizing. ways to improve the electronic
Comment: Some commenters were
responsibilities, including EHB submission process.
concerned that the 30-day comment
prescription drug standards; the The proposed rule provided a special
period did not provided sufficient
methodology for calculating the annual effective date for self-funded, non-
opportunity for public review and
Federal governmental plans maintained
comment on the proposed rule. One
6Request for Information Regarding Health Care pursuant to a collective bargaining
Quality for Exchanges: http://www.gpo.gov/fdsys/ commenter stated that the proposed rule agreement ratified before March 23,
pkg/FR-2012-11-27/pdf/2012-28473.pdf. included many distinct policy issues,
2010 (the date of enactment of the
7Request for Domains, Instruments, and each of which should be addressed in
Affordable Care Act) that had opted out
Measures for Development of a Standardized separate rulemaking.
Instrument for Use in Public Reporting of Enrollee of the requirement categories which are
S Response: HHS provided a 30-day
OD with RULE SE06ax8t-ci2Phs1afaa/tnhicegttniemo:t nl hP/ 2tWrt0op1ti:et/2hc/-w t1Ti5owh1nwe6 ia.2rgn .pQhdotu mA.agflo.fi vofi/refdddas bHylsee/a pCltkahgr /ePF lARacn-2t ;a0 n1d2- cwaonimdth mt htheeen p tA opdleimcryiio nedis,st twarbahltiiiscvhhee iPdsr bcooycne tdshiuesr tee nAt ct nTcoohn eltosienn guceoerl t laoevc bateiivl eaexblyele mb faporrtg fearxionememd tp hpteiloa nn.s may
N1PR ERxactihnagn Sgyesst aenmd ( QQuRaSl)i fFieradm Heewalotrhk P, Mlaneas,s uQrueas laitnyd Assistant Secretary for Administration 9Patient Protection and Affordable Care Act; HHS
PTV Methodology; Notice with Comment, 78 FR 69418 (ASA) and the Office of Management Notice of Benefit and Payment Parameters for 2015,
K5S (Nov. 19, 2013). and Budget (OMB). Additionally, HHS 79 FR 13744 (March 11, 2014).
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Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations 30247
requirements until the first plan year submitted to determine that the election be prohibited under applicable Federal
following the expiration of such is timely filed. If the latest filing date law. We offered several examples of
agreement. falls on a Saturday, Sunday, or a State statutory exceptions to the guaranteed
The effect of the Affordable Care Act or Federal holiday, CMS accepts a availability and renewability
amendments on the HIPAA opt-out postmark or a fax on the next business requirements in the preamble to the
provisions was discussed in previous day. Questions regarding the opt-out proposed rule (78 FR 15815–6), and
CMS guidance released on September process can be submitted to CMS at noted that only Federal law, not State
21, 2010.10 [email protected]. CMS’s law, can create such exceptions. We
We noted that under the current Center for Consumer Information and solicited comment on these
regulations, plan sponsors of Insurance Oversight makes publicly clarifications, as well as other
collectively bargained plans may submit available on its Web site a list of self- clarifications that may be helpful.
one opt-out election for all group health funded, non-Federal governmental Additionally, we proposed a technical
plans subject to the same collective plans that have submitted an opt-out correction in §147.104(b)(1)(i) to delete
bargaining agreement. We solicited election and the PHS Act provisions duplicate regulatory text added in
comment on whether the plan sponsor subject to the election.11 earlier rulemaking.12We also proposed
in such circumstances should be other minor regulatory revisions in
Summary of Regulatory Changes
required to list all plans subject to the paragraph (b)(1)(i) for clarity.
agreement. We also solicited comment We are finalizing the revisions Comment: Some commenters
on whether a single opt-out submission proposed in §146.180 of the proposed recommended the final rule enumerate
should be permitted in the case of rule, with the following modifications. all current Federal prohibitions on the
multiple group health plans not subject In paragraph (b), we add paragraph sale of health insurance coverage that
to collective bargaining. (b)(1)(ix) to state that, in the case of plan would create exceptions to the
Comment: One commenter supported sponsor submitting one opt-out election guaranteed availability and renewability
a requirement that plan sponsors of for multiple group health plans subject requirements.
collectively bargained plans must list in to the same collective bargaining Response: We believe it is neither
their opt-out election all group health agreement, the opt-out election must list appropriate nor practical to outline
plans subject to the collective each group health plan subject to the every specific exception to the
bargaining agreement. agreement. Also in paragraph (b), we guaranteed availability and renewability
Response: We establish this add paragraph (b)(1)(x) to state that, in requirements and that a general rule of
requirement in new paragraph (b)(1)(ix) the case of a plan sponsor submitting construction provides sufficient
of §146.180. Sponsors of group health more than one opt-out election for plans guidance to stakeholders.
plans not subject to collective that are not collectively bargained, a Comment: One commenter sought
bargaining will continue to be required separate opt-out election must be clarification on situations where issuers
to file a separate election for each group submitted for each such plan. In offering coverage through an Exchange
health plan. paragraph (c)(3), we delete the special can sell coverage to individuals who are
We solicited comments on whether rule for timely filing with respect to opt enrolled in Medicare and recommended
the regulation should be modified to out elections submitted by U.S. mail, that HHS add additional questions
allow plan sponsors of multiple group and instead specify a special rule for within the eligibility application to
health plans not subject to collective timely filing that applies to electronic
prevent individuals from receiving
bargaining to submit one election for all filings. The special rule indicates that,
advance payments of the premium tax
of its group health plans. We did not if the latest filing date falls on a
credit (APTC) who are also enrolled in
receive any comments on this issue; Saturday, Sunday, or a State or Federal
Medicare.
accordingly, we are adding regulation holiday, CMS accepts filings submitted Response: Section 1882(d)(3) of the
text to clarify the current requirement the next business day. Social Security Act (the ‘‘Medicare anti-
that a separate election must be filed for
C. Part 147—Health Insurance Reform duplication provision’’) prohibits the
each group health plan not subject to
Requirements for the Group and sale of an individual market insurance
collective bargaining.
Individual Health Insurance Markets policy that duplicates Medicare benefits
We will continue to accept opt-out
to anyone known to be entitled to
elections via U.S. Mail or facsimile until Guaranteed Availability and Guaranteed
benefits under Part A (receiving free
December 31, 2014. During this time, Renewability of Coverage (§§147.104
Part A) or enrolled in Part B or Premium
opt-out elections will continue to be and 147.106)
Part A. This prohibition applies to
accepted by mail to: Centers for
a. No Effect on Other Laws individual health insurance coverage
Medicare & Medicaid Services (CMS),
sold both through and outside an
Center for Consumer Information and We proposed that nothing in the
Exchange. This final rule clarifies that
Insurance Oversight (CCIIO), Attn: guaranteed availability requirements
this prohibition creates an exception to
HIPAA Opt-Out, 200 Independence should be construed to require an issuer
the guaranteed availability provision
Avenue SW., Room 733H–02, to offer coverage where other Federal
where the prohibition would be violated
Washington, DC 20201. Elections may laws operate to prohibit the issuance of
by a sale.
also continue to be submitted via such coverage. Similarly, we proposed
While the Medicare anti-duplication
facsimile at 301–492–4462. For that nothing in the guaranteed
provision prohibits the sale or issuance
elections submitted via U.S. mail, CMS renewability requirements should be
of a policy, it does not provide for
will continue to use the postmark on the construed to require an issuer to renew
discontinuance or non-renewal of a
ULES envelope in which the election is ocor nctoinntuinedu ee liing ifboirlcitey c wovoeurladg eo tfhoer rwwhisiec h policy already issued, such as when an
OD with R (fo1r0mAemrleyn sdemcteionnts 2 t7o2 t1h(eb )H(2I)P oAfA th oep Pt-uobulti cp rHoevailstiho n 11See List of HIPAA Opt-Out Elections for Self- imnadrikveidt upaoll iccoyv beerecdom bye sa cno ivnedrievdi dbuya l
PR Service Act) made by the Affordable Care Act Funded Non-Federal Governmental Plans.
N1 (September 21, 2010). Available at: http:// Available at: http://www.cms.gov/CCIIO/Resources/ 12Patient Protection and Affordable Care Act;
V
PT www.cms.gov/CCIIO/Resources/Files/Downloads/ Forms-Reports-and-Other-Resources/Downloads/ Maximizing January 1, 2014 Coverage
K5S opt_out_memo.pdf. hipaa-optout-nfgp-list-05-06-2014.pdf. Opportunities, 78 FR 76212 (December 17, 2013).
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30248 Federal Register/Vol. 79, No. 101/Tuesday, May 27, 2014/Rules and Regulations
Medicare. As stated in the individual meaning of section 2791(b)(2) of the could not be modified in any way by the
market regulations at 45 CFR PHS Act); issuer.
148.122(b)(2), implementing the HIPAA • The product is offered as the same Finally, we stated that HHS or the
guaranteed renewability provision, product type (for example, preferred applicable State will review rate
Medicare eligibility or entitlement is not provider organization (PPO) or health increases for existing products that an
a basis for non-renewal or termination maintenance organization (HMO)); issuer withdrew and attempted to re-file
of individual health insurance coverage. • The product covers a majority of the within a 12-month period as new
For ease of reference we are adding same counties in its service area; products in order to avoid rate review
§147.106(g)(2) of this final rule, which • The product has the same cost- as if they were simply renewed, if the
repeats the regulatory language in sharing structure, except for variation in changes to the discontinued product do
§148.122(b)(2). We note, however, that cost sharing solely related to changes in not differ from the uniform modification
nothing in the Medicare anti- cost and utilization of medical care, or criteria outlined above. We indicated
duplication provision or the guaranteed to maintain the same level of coverage that the same criteria set forth under the
availability or renewability regulations described in sections 1302(d) and (e) of guaranteed renewability standards will
prohibits an issuer from coordinating the Affordable Care Act (for example, be used to determine whether the re-
benefits under an individual health bronze, silver, gold, platinum or filed product is considered to be the
insurance policy with Medicare benefits catastrophic); and same ‘‘product’’ for purposes of
in the case of a beneficiary. HHS will • The product provides the same determining whether the rate filing is
consider including questions in the FFE covered benefits, except for changes in subject to submission and review under
enrollment application to address this benefits that cumulatively impact the 45 CFR Part 154. We requested
issue. rate for the product by no more than 2 comment on whether this clarification,
percent (not including changes required or a reference to the uniform
Summary of Regulatory Changes by applicable Federal or State law). modification criteria, should be
We are finalizing the proposed These proposed criteria were intended incorporated into the rate review
provisions with the following to provide flexibility for issuers to make regulations.
Comment: Some commenters
modification. We add §147.106(g)(2) to reasonable adjustments to coverage,
recommended the proposed uniform
restate the standard under the HIPAA while ensuring predictability and
modification of coverage provisions and
guaranteed renewability regulations at continuity for consumers and
standard notice requirements not apply
§148.122(b)(2) that Medicare eligibility minimizing unnecessary terminations of
in the large group market. They noted
or entitlement is not a basis for non- coverage.
that large employers are sophisticated
renewal or termination of an We proposed that States have
purchasers that typically negotiate
individual’s health insurance coverage flexibility to apply additional criteria
customized products for their
in the individual market. that broaden the scope of what is
employees and that will receive little
b. Product Discontinuance and Uniform considered a uniform modification, but value from these protections. One
Modification of Coverage Exceptions to that narrower State standards would be commenter recommended the
Guaranteed Renewability Requirements preempted. requirements not apply to grandfathered
We also proposed to add a provision health plans, noting that grandfathered
We proposed standards to define in §147.106(e)(1) to restate the uniform plans are already, as part of the
whether certain modifications to modification of coverage provision for requirements related to maintaining
coverage constitute ‘‘uniform individual health insurance coverage grandfathered status, subject to
modifications’’ within the meaning of under §148.122(g). This was proposed restrictions on benefit changes that
the PHS Act. These provisions were for ease of reference and to facilitate make the proposed provisions
proposed in the guaranteed renewability issuer compliance. unnecessary.
regulations at 45 CFR 146.152, 147.106, To provide clear information to Response: We recognize that
and 148.122. Under the proposed rule, consumers and help ensure they purchasers in the large group market
they would apply to issuers offering understand the changes and choices have greater leverage than those in the
health insurance coverage in the group available to them in the individual and individual and small group markets.
and individual markets, including both group markets, we proposed that issuers The guaranteed renewability statute
grandfathered and non-grandfathered provide standard notices in a form and contemplates these market differences
health plans. manner prescribed by the Secretary by placing the requirement that
Specifically, we proposed that a when discontinuing or renewing modifications must be ‘‘consistent with
modification made by an issuer solely coverage. Contemporaneously with the State law and effective on a uniform
pursuant to applicable Federal or State proposed rule, we released draft basis’’ only on products in the
law would be considered a modification standard notices that issuers would be individual and small group markets, but
of the same product, and offered several required to use in each of these not on products in the large group
examples of changes in response to situations, and requested public market.14For these reasons, we do not
Federal law that would constitute a comment.13In the standard notices believe that the same interpretation,
modification of coverage. guidance, we noted that States would providing additional protection of
We further proposed that if an issuer have the option of developing State- renewability, is necessary in the large
makes changes to the health insurance required notices for issuers to use in
coverage for a product that are not place of the Federal notices, if approved 14The PHS Act guaranteed renewability sections
S pursuant to applicable Federal or State by CMS. State notices approved for use enacted under HIPAA, section 2712 for the group
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UL law, the modifications would also be market and 2742 for the individual market, both
with R considered a uniform modification of 13Standard Notices When Discontinuing or icnocvleurdaeg ee.x Wceep rteiocnosg nfoizre u tnhiafot rPmH Sm Aodcti fsiceacttiioonns 2 o7f0 3
OD coverage if the resulting product meets Renewing a Particular Product in the Group or excludes reference in some paragraphs to the
PR all of the following criteria: Individual Market (March 14, 2014). Available at: individual market. However, we note that the
PTVN1 • The product is offered by the same hanttdp-:G//uwiwdawn.ccme/sD.goowvn/CloCaIdIOs//dRreasfto-udricsceos/nRtienguualantcioe-ns- pwreo vbiesliioenves othf aPtH thSe A ucnti sfoercmtio mn o2d7i4fi2c asttiiloln a pexpclye,p atinodn
K5S health insurance issuer (within the renewal-notices-03-14-14.pdf. is still applicable in the individual market.
S
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