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This final rule addresses various requirements applicable to health insurance issuers, Exchanges, Navigators, non-Navigator assistance personnel, and other entities under the Affordable Care Act. Specifically, the rule establishes standards related to product discontinuation and renewal, quality reporting, non-discrimination standards, minimum certification standards and responsibilities of QHP issuers, the Small Business Health Options Program (SHOP), and enforcement remedies in Federally-facilitated Exchanges (FFEs). It also finalizes: a modification of HHS’s allocation of reinsurance collections if those collections do not meet our projections; certain changes to allowable administrative expenses in the risk corridors calculation; modifications to the way we calculate the annual limit on cost sharing so that we round this parameter down to the nearest $50 increment; an approach to indexing the required contribution used to determine eligibility for an exemption from the shared responsibility payment under section 5000A of the Internal Revenue Code; grounds for imposing CMPs on persons who provide false or fraudulent information to the Exchange and on persons who improperly use or disclose information; updated standards for Exchange consumer
governmental plans and related to the individual market provisions under the Health Insurance Portability and Accountability Act of 1996 (HIPAA); amendments to Exchange appeals standards and coverage enrollment and termination standards; and time-limited adjustments to the standards relating to the MLR program.
Product Discontinuance and Uniform Modification of Coverage Exceptions to Guaranteed Renewability Requirements: Under sections 2702 and 2703 of the Public Health Service Act (PHS Act), as added by the Affordable Care Act, health insurance issuers in the group and individual markets must guarantee the availability and renewability of coverage unless an exception applies. In this final rule, we establish criteria for determining when modifications made by an issuer to the health insurance coverage for a product would and would not constitute the discontinuation of an existing product and the creation of a new product. The same criteria would apply to determine whether the rate filing is subject to submission and review under 45 CFR Part 154. We also direct that issuers use standard consumer notices in a format designated by the Secretary when discontinuing or renewing a product in the group or individual market.
Additionally, we clarify that the guaranteed availability and renewability requirements should not be construed to supersede other provisions of Federal law in certain circumstances.
Conforming Changes to Individual Market Provisions: Sections 2741 through 2744 of the PHS Act were added by HIPAA to improve the portability and continuity of coverage in the individual health insurance market. These provisions are implemented through regulations in 45 CFR Part 148. In this final rule, we amend the individual market provisions in Part 148 to reflect the amendments made by the Affordable Care Act. These amendments are for clarity only.
Fixed Indemnity Insurance in the Individual Market: Consistent with previously released
benefit in the individual health insurance market.2 The amendments eliminate the requirement that individual fixed indemnity insurance must pay on a per-period basis (as opposed to a perservice basis), and require on a prospective basis, among other things, that it be sold only to individuals who have other health coverage that is minimum essential coverage to be considered an excepted benefit.
HIPAA Opt-Out for Self-Funded, Non-Federal Governmental Plans: Prior to enactment of the Affordable Care Act, sponsors of self-funded, non-Federal governmental plans were permitted to elect to exempt those plans from (“opt out of”) certain provisions of title XXVII of the PHS Act. Consistent with previously released guidance, we finalize amendments to the nonFederal governmental plan regulations (45 CFR 146.180) to reflect the amendments made by the Affordable Care Act to these provisions, with clarifications specifying that, in the case of a plan sponsor submitting opt-out elections for more than one collectively bargained health plan, each such plan must be listed in the opt-out election, and in the case of a plan sponsor submitting optout elections for group health plans that are not subject to a collective bargaining agreement, the sponsor must submit separate election documents for each such plan.3 Essential Health Benefits (EHB) Prescription Drug Coverage: Under 45 CFR 156.122(c), a plan providing EHB must have procedures in place that allow an enrollee to request and gain access to a clinically appropriate drug not covered by the plan. In this final rule, we are revising paragraph (c) to require that the plan’s procedures include an expedited process for exigent circumstances that requires the health plan to make its coverage determination within FAQs about Affordable Care Act Implementation (Part XVIII) and Mental Health Parity Implementation, Q11 (January 9, 2014). Available at: http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Affordable Care Act_implementation_faqs18.html and http://www.dol.gov/ebsa/faqs/faq-Affordable Care Act18.html.
Amendments to the HIPAA opt-out provision (formerly section 2721(b)(2) of the Public Health Service Act) made
by the Affordable Care Act (September 21, 2010). Available at:
CMS-9949-F 15 no more than 24 hours after it receives the request and that requires the health plan to provide the drug for the duration of the exigency.
Premium Stabilization Programs: The Affordable Care Act establishes three premium stabilization programs—risk adjustment, reinsurance, and risk corridors—to protect against adverse selection. The Affordable Care Act directs that a permanent risk adjustment program be established in each State to mitigate the impacts of possible adverse selection and stabilize premiums in the individual and small group markets as and after insurance market reforms are implemented. The Affordable Care Act also directs that a transitional reinsurance program be established in each State to help stabilize premiums by helping to pay the cost of treating highcost enrollees in the individual market from 2014 through 2016. The Affordable Care Act directs the Secretary to establish and administer a temporary risk corridors program. In this final rule, we modify and finalize our proposal to allocate contributions collected under that program in the event of a shortfall in collections. In that event, we will allocate reinsurance contributions first to the reinsurance payment pool, and second to administrative expenses and the U.S.
Treasury. We also finalize the proposal, unchanged, to increase the ceiling on allowable administrative costs and the floor on profits by 2 percent in the risk corridors calculation to account for uncertainty and changes in the market prior to and during benefit year 2015.
Exchange Establishment and QHP Issuer Standards: The rule amends oversight standards regarding QHP decertification and CMPs. It also directs that QHP issuers provide enrollees with an annual notice of coverage changes. This rule creates a process for survey vendors to appeal an HHS decision not to approve its application to become an enrollee satisfaction survey (ESS) vendor, as well as standards for revoking HHS-approval of ESS
the display of such information by Exchanges and the submission of validated data by QHP issuers.
We align the start of employer election periods in FF-SHOPs for plan years beginning in 2015 with the start of open enrollment in the corresponding individual market Exchange for the 2015 benefit year and, in all SHOPs, eliminate the 30-day minimum time frames for the employer and employee annual election periods. We also allow State Insurance Commissioners the opportunity to recommend that, in 2015, a SHOP not provide employers with the option of selecting a level of coverage as described in section 1302(d)(1) of the Affordable Care Act and making all QHPs at that level of coverage available to their employees if the commissioner can adequately explain that it is his or her expert judgment, based on a documented assessment of the full landscape of the small group market in his or her State, that not implementing employee choice would be in the best interest of small employers and their employees and dependents, given the likelihood that implementing employee choice would cause issuers to price products and plans higher in 2015 due to the issuers’ beliefs about adverse selection. We allow the opportunity for a person appealing a determination of SHOP eligibility to withdraw an appeal by telephone, if the appeals entity is capable of accepting telephonic signatures.
Civil Money Penalties for False Information or Improper Use of Information: The final rule specifies the grounds for imposing CMPs on persons who provide false or fraudulent information to the Exchange and on persons who use or disclose information in violation of
section 1411(g) of the Affordable Care Act. The grounds for imposing a penalty include:
negligent failure to provide correct information, knowing and willful provision of false or fraudulent information, and knowing and willful use or disclosure of information in violation of
be imposed against a person. The section also provides for the requirements for notices which must be provided to a person if HHS proposes to impose a CMP, and the processes a person may follow should the person wish to challenge HHS’ determination that a CMP should be imposed, including a process pursuant to which a person may request a hearing before an administrative law judge. We also amend current privacy and security regulations at 45 CFR 155.260 to reference the new CMP provisions associated with knowingly and willfully using or disclosing information in violation of section 1411(g) of the Affordable Care Act.
Civil Money Penalties for Consumer Assistance Entities: The final rule provides that HHS may impose CMPs against Navigators, non-Navigator assistance personnel, certified application counselor designated organizations, and certified application counselors in FFEs, if these entities and/or individuals violate Federal requirements applicable to their activities.
Navigator, Non-Navigator Assistance Personnel, and Certified Application Counselor Program Standards: In this final rule, we specify certain types of State laws applicable to Navigators, non-Navigator assistance personnel, and certified application counselors that HHS considers to prevent the application of the provisions of title I of the Affordable Care Act within the meaning of section 1321(d) of the Affordable Care Act. We also make several changes to update the standards applicable to these consumer assistance entities and individuals, such as prohibiting them from specified marketing or solicitation activities. We require Navigators and non-Navigator assistance personnel to obtain authorization before accessing a consumer’s personally identifiable information and to prohibit them from charging consumers for their services. We also require that certified application counselors be recertified on at least an annual basis, and prohibit certified application counselors and certified application counselor designated
or stop loss insurance issuers in connection with the enrollment of consumers in QHPs or nonQHPs. We further provide that, in specific circumstances, certified application counselor designated organizations can serve targeted populations without violating the broad nondiscrimination requirement related to Exchange functions.
Indexing of Cost-Sharing Requirements: Under §§156.130(a) and 156.130(b), the annual limitation on cost sharing and the annual limitation on deductibles in the small group market for years after 2014 are to be indexed by the premium adjustment percentage. We established our methodology for calculating the premium adjustment percentage in the 2015 Payment Notice.
In this final rule, we provide for the annual limitation on cost sharing to be updated based on the premium adjustment percentage by rounding down to the nearest $50 increment. We are eliminating the annual limit on deductibles for small group plans, consistent with the Protecting Access to Medicare Act of 2014 (Public Law No. 113-93), which was signed into law on April 1, 2014.
Required Contribution Percentage: Under section 5000A of the Code, an applicable individual must maintain minimum essential coverage for each month, qualify for an exemption, or make a shared responsibility payment. An individual may qualify for an exemption from the shared responsibility payment if the amount that he or she would be required to pay towards minimum essential coverage (required contribution) exceeds a particular percentage (the required contribution percentage) of his or her household income. Under section 5000A of the Code, the required contribution percentage for 2014 is 8 percent, and for each plan year beginning in a calendar year after 2014, the percentage, as determined by the Secretary of Health and Human Services (the Secretary), that reflects the excess of the rate of premium growth between the
preamble to this final rule, we establish a methodology for determining the percentage reflecting the excess of the rate of premium growth over the rate of income growth for plan years after
2014. We also establish a required contribution percentage for 2015 of 8.05 percent. For calendar years after 2015, the required contribution percentage will be published in the annual HHS notice of benefit and payment parameters.
Eligibility Appeals: The rule amends standards related to eligibility appeals provisions in subparts F and H of Part 155. To facilitate the efficient conclusion of an appeal at the request of the appellant, we amend the withdrawal procedure to permit withdrawals made via telephonic signature.
Minimum Essential Coverage: We clarify that entities other than plan sponsors (for example, issuers) can apply for their coverage to be recognized as minimum essential coverage, pursuant to the process outlined in 45 CFR 156.604 and guidance thereunder.