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Comment: A number of commenters expressed concern with HHS’s intention to implement the risk corridors program in a budget neutral manner, as described in the preamble to the proposed rule. These commenters were concerned that an approach that makes risk corridors payments only when sufficient risk corridors charges are received could result in reduced risk corridors payments to issuers. The commenters questioned how much the payment formula specified in the final rules for 2014 and 2015 may be relied upon in setting premiums, if payments might be reduced. Several commenters believed that an approach implementing the
the Affordable Care Act, which states that the Secretary of HHS will establish a risk corridors program that is similar to the Medicare Part D risk corridors program, which is not budget neutral. One commenter believed that implementing the risk corridors program in a budget neutral manner would result in issuers sharing in the gains and losses of other issuers, would unintentionally affect market dynamics, and could result in solvency problems for some issuers if risk corridors receipts are insufficient to fully fund risk corridors payments.
Response: We recognize the commenters’ concerns. To provide greater clarity on how 2014 and 2015 payments will be made, we issued a bulletin on April 11, 2014, titled “Risk Corridors and Budget Neutrality,” describing how we intend to administer risk corridors in a budget neutral way over the three-year life of the program, rather than annually. Specifically, if risk corridors collections in the first or second year are insufficient to make risk corridors payments as prescribed by the regulations, risk corridors collections received for the next year will first be used to pay off the payment reductions issuers experienced in the previous year in a proportional manner, up to the point where issuers are reimbursed in full for the previous year, and remaining funds will then be used to fund current year payments. If any risk corridors funds remain after prior and current year payment obligations have been met, they will be held to offset potential insufficiencies in risk corridors collections in the next year.
As we stated in the bulletin, we anticipate that risk corridors collections will be sufficient to pay for all risk corridors payments. That said, we appreciate that some commenters believe that there are uncertainties associated with rate setting, given their concerns that risk corridors collections may not be sufficient to fully fund risk corridors payments. In the unlikely event of a
Secretary to make full payments to issuers. In that event, HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.
Comment: One commenter asked that HHS apply this adjustment to all States for benefit year 2014. The commenter believed that this adjustment was necessary for the 2014 benefit year because of changes in the composition of the risk pools that were not anticipated when rates for the 2014 benefit year were developed.
Response: In the 2015 Payment Notice, we implemented an adjustment to the risk corridors formula for the 2014 benefit year that would help to further mitigate any unexpected losses for issuers of plans subject to risk corridors attributable to the effects of the transitional policy. In States that adopt the transitional policy, this adjustment would increase a QHP issuer’s risk corridors ratio and its risk corridors payment amount to help offset losses that might occur under the transitional policy as a result of increased claims costs and unanticipated changes in the risk pool that were not accounted for when setting 2014 premiums. For the reasons discussed in the 2015 Payment Notice, we believe that this adjustment will suitably offset any losses that QHP issuers may incur as a result of the transitional policy, and that no further risk corridors adjustments are necessary for the 2014 benefit year.
Comment: One commenter requested that HHS allow non-QHPs to participate in the risk corridors program, so that plans that comply with requirements of the Affordable Care Act could receive risk corridors protections that would help to ameliorate changes in the risk pool resulting from the transitional policy.
Response: We believe the risk corridors program is intended to share risk and stabilize premiums for QHPs (and certain substantially similar off-Exchange plans). Therefore, we
individual and small group market plans that comply with the Affordable Care Act market reforms will be included in a QHP issuer’s risk corridors calculation as described in 45 CFR 153 subpart F. However, consistent with our existing regulations set forth in subpart F of part 153, any risk corridors payment or charge amount, including any adjusted payment or charge amount resulting from the adjustment implemented in this final rule or the 2015 Payment Notice, will be calculated for a QHP issuer in proportion to the premium revenue that the issuer receives from its QHPs, as defined in §153.500.
Comment: One commenter requested clarification about whether HHS intends to implement risk corridors budget neutrality on a national or a State level. The commenter believed that budget neutrality should be applied on an individual State level, because applying budget neutrality on a national level would add uncertainty to the rate setting process.
Response: The risk corridors program is a Federally administered program that applies uniformly to all States.
Summary of Regulatory Changes We are finalizing our policy to increase the administrative cost ceiling and the profit margin floor by 2 percentage points, as proposed.
F. Part 154 – Health Insurance Issuer Rate Increases: Disclosure and Review Requirements Definition of Product (§154.102) See the discussion in section III.C.1.b, “Product Discontinuance and Uniform Modification of Coverage Exceptions to Guaranteed Renewability Requirements.” G. Part 155—Exchange Establishment Standards and Other Related Standards under the Affordable Care Act
Non-Interference with Federal Law and Non-Discrimination Standards (§155.120) Under 45 CFR 155.120(c), States and Exchanges, when carrying out the requirements of Part 155, must comply with any applicable non-discrimination statutes, and must not discriminate on the basis of race, color, national origin, disability, age, sex, gender identity or sexual orientation. The non-discrimination provisions of §155.120(c) apply not just to the Exchanges themselves, but to Exchange contractors and all Exchange activities (including but not limited to marketing, outreach and enrollment), Navigators, non-Navigator assistance personnel, certified application counselors, and organizations designated to certify their staff and volunteers as certified application counselors (78 FR 42829). Under 45 CFR 155.105(f) this non-discrimination requirement applies to the FFEs.
In the proposed rule, we proposed creating a limited exception to these nondiscrimination requirements for an organization receiving Federal funds to provide services to a defined population under the terms of Federal legal authorities (for example, a Ryan White HIV/AIDS Program or an Indian health provider) that participates in the certified application counselor program under 45 CFR 155.225, to permit that organization to limit its provision of certified application counselor services to the same defined population without violating the nondiscrimination provisions in existing §155.120(c). The intent of this proposal was to allow such organizations to provide certified application counselor services and assist their defined populations in enrolling in health coverage offered through the Exchanges consistent with the Federal legal authorities under which such organizations operate.
To the extent that one of these organizations decides to take advantage of this exception, but is approached for certified application counselor services by an individual who is not
must refer the individual to other Exchange-approved resources, such as the toll-free Exchange call center, a Navigator, non-Navigator assistance personnel, or another designated certified application counselor organization, that is able to provide assistance to the individual. However, to the extent that one of these organizations decides that it will not take advantage of this proposed exception, we proposed that the non-discrimination provisions in existing §155.120(c) would apply. Therefore, if an organization decides that it will provide certified application counselor services to individuals that are not included in the defined population that it serves, it must provide those services to all individuals consistent with the non-discrimination provisions in existing §155.120(c).
We also proposed to make a number of technical changes to existing §155.120(c) to accommodate this new limited exception.
Comment: Commenters generally supported the proposed exception to the nondiscrimination standards to allow an organization receiving Federal funds to limit their provision of assister services to that population. Several commenters requested that HHS clarify that these organizations are prohibited from discriminating against individuals who are within their defined population that the organization serves under the terms of Federal legal authorities.
Response: With respect to the clarification requested from commenters, we are revising paragraph (c)(2) of §155.120 to clarify that organizations that limit their provision of certified application counselor services to a defined population under this exception must still comply with the non-discrimination provisions in paragraph (c)(1) with respect to the provision of these services to that defined population. For example, a Ryan White organization that participates in the certified application counselor program and limits its provision of certified application
members of that target population on the basis of race, color, national origin, disability, age, sex, or any of the other prohibited factor in 45 CFR 155.120(c) when providing those certified application counselor services.
We are also making technical revisions to §155.120(c) to clarify here that paragraph (1)(i) is included to highlight to organizations their obligations under other laws. Each organization needs to determine what other non-discrimination laws, which may be Federal or State laws, apply to them. We note that the reference to statutes incorporates regulatory requirements issued pursuant to statute. Paragraph (1)(ii), on the other hand, references the nondiscrimination obligations that exist under this Rule.
Consistent with this technical revision, we have made a change to the text of §155.120(c) to clarify that the exception to the non-discrimination requirement at §155.120(c)(2) only applies in regard to the non-discrimination provisions created under this Rule. We cannot create exceptions in regard to requirements that exist under other laws.
Comment: One commenter recommended extending the exception to organizations that provide services to defined populations that speak languages other than English, regardless of receipt of Federal funds to provide services to these populations.
Response: We understand the desire for organizations interested in targeting specific populations to have flexibility to limit their provision of certified application counselor services to these populations. However, we believe it is appropriate to limit the exception to organizations that receive Federal funds to provide services to a defined population under Federal legal authorities because their beneficiaries are generally defined under Federal law.
Although other organizations may choose to target the services they generally provide to specific
organizations. If all organizations were allowed to target certified application counselor services to specific, defined populations, the situation could arise where a consumer may not be able to readily access certified application counselor services because the consumer is not a part of a target population being serviced through the organizations in their area.
Summary of Regulatory Changes We are finalizing our proposals to make technical changes to §155.120(c) and add a new limited exception to the non-discriminations provision in §155.120(c). We are also further revising new §155.120(c)(2) to clarify that organizations that limit their provision of certified application counselor services to a defined population under this exception must still comply with the non-discrimination provisions in paragraph (c)(1)(ii) with respect to the provision of these services to that defined population.
2. Subpart C—General Functions of an Exchange a. Civil Money Penalties for Violations of Applicable Exchange Standards by Consumer Assistance Entities in Federally-Facilitated Exchanges (§155.206) In §155.206, as part of HHS’s enforcement authority under section 1321(c)(2) of the Affordable Care Act, we proposed to provide for the imposition of CMPs on Navigators, nonNavigator assistance personnel, and certified application counselors and certified application counselor designated organizations in FFEs, including State Partnership Exchanges, that do not comply with applicable Federal requirements. We explained that this proposal was designed to deter these entities and individuals from failing to comply with the Federal requirements that apply to them, and to ensure that consumers interacting with the Exchange receive high-quality assistance and robust consumer protection. We noted that as a general principle, while HHS
continue to work collaboratively with consumer assistance entities and personnel to prevent noncompliance issues and address any that arise before they reach the level where CMPs might be assessed.