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3. Subpart D—Exchange Functions in the Individual Market: Eligibility Determinations for Exchange Participation and Insurance Affordability Programs a. Verification Process Related to Eligibility for Insurance Affordability Programs (§155.320) In §155.320(d)(4), we established an option under which a State Exchange could rely on HHS to conduct verifications of enrollment in an eligible employer-sponsored plan and eligibility for qualifying coverage in an eligible employer-sponsored plan for purposes of eligibility for advance payments of the premium tax credit. This option was made available for eligibility determinations that are effective on or after January 1, 2015. However, we have determined that the benefit gained by having HHS provide this function is outweighed by the information technology development and administrative and consumer complexity that would be introduced for a State through this approach. As such, we proposed to strike paragraph (d)(4).
Comment: We received comments from several State Exchanges urging HHS to retain the option of the employer-sponsored coverage verification process. Many of the comments focused on the need for State Exchanges to develop functionality and administrative capacity to verify employer-sponsored coverage in the absence of this Federally-managed service and the administrative and financial burden this would place on State Exchanges. One commenter suggested retaining the service at the Federal level would take advantage of economies of scale
builds and operating budgets could not accommodate this change in time for the 2015 benefit year and recommended that, if HHS does finalize the proposal, HHS postpone eliminating the service for an additional year.
Response: We appreciate the comments received from State Exchanges on this proposed rule change. We understand the administrative costs and development burden associated with providing verifications for Exchange determinations. However, even with the Federallymanaged service, State Exchanges and HHS would need to develop a way to send, receive, and process the information and provide dual customer service functionality to communicate with consumers. In addition, the State Exchange would need to modify systems to integrate the HHS verification response into what should be a near-real-time eligibility process. Therefore, we do not believe that there are significant efficiencies to be gained by providing this service to State Exchanges. However, we do understand the time and budget constraints some State Exchanges face in order to adjust their processes to accommodate this change and agree that additional time is needed for States to come into compliance with this requirement. Therefore, we are finalizing the provision as proposed, removing the original regulatory language at §155.320(d)(4), but extending the flexibility previously provided at 78 FR 42257 to permit State Exchanges to implement the sample-based reviews for employer-sponsored coverage for eligibility determinations for insurance affordability programs starting January 1, 2016.
Comment: Additionally, some commenters shared concern that employer coverage data currently available to States is insufficient to perform this verification and that a comprehensive national resource is needed to sufficiently perform the verification. Without such a source, the commenters noted that States would have to employ and administer an alternative data source,
suggested that HHS allow self-attestation to be sufficient verification until HHS can make available approved data sources for verification.
Response: Verification standards for employer-sponsored coverage are provided in 45 CFR 155.320(d)(2) and include: (1) Federal employment data from the Office of Personnel Management, which is currently provided to State Exchanges by HHS, (2) SHOP data that is available to the State Exchange, and (3) any electronic data sources that are available to the Exchange and which have been approved by HHS. We remain committed to working with State Exchanges to develop effective solutions for verifying enrollment in an eligible employersponsored plan and eligibility for qualifying coverage in an eligible employer-sponsored plan, and will work to make any additional electronic data sources that become available to HHS equally available to State Exchanges.
Summary of Regulatory Changes We are finalizing the changes to §155.320(d)(4) as proposed but note that we are extending the flexibility previously provided at 78 FR 42257 to permit State Exchanges to implement the sample-based reviews for employer-sponsored coverage for eligibility determinations for insurance affordability programs starting January 1, 2016.
b. Eligibility Redetermination During a Benefit Year (§155.330) In the proposed rule, we proposed a technical correction in paragraph (d)(2)(ii) of §155.330 to remove the reference to paragraph (e)(3) of this section. In the final rule, titled, “Medicaid and Children’s Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans Eligibility Notices, Fair Hearing and Appeal Processes and Premiums and Cost
(e)(3) from this section. As such, we clarified in the proposed rule that paragraph (d)(2)(ii) should only refer to the standards specified in paragraph (e)(2) of this section.
Summary of Regulatory Changes We did not receive any comments on this proposal and are finalizing the provision as proposed.
4. Subpart E—Exchange Functions in the Individual Market: Enrollment in Qualified Health Plans a. Enrollment of Qualified Individuals in a QHP (§155.400) In §155.400, we proposed to add paragraph (e) to establish that Exchanges may, and the FFE would, require payment of the first month’s premium to effectuate enrollments.
We also proposed to add paragraph (f), which would authorize Exchanges to provide requirements to QHP issuers regarding the instructions for processing electronic enrollmentrelated transactions.
Additionally, in §156.265 we proposed to establish a requirement for issuers in the FFEs to collect premiums no later than the day before the coverage effective date. Our intention was to give the Exchange the flexibility to establish policy and process rules regarding premium payment.
Comment: One commenter suggested that the Exchange should not provide instructions to issuers regarding payment of the first month’s premium for enrollments. The commenter recommended that the Exchange should allow issuers to establish their own business rules on first month’s premium for enrollments. However, another commenter supported establishing a date by which an enrollee must make a first premium payment to effectuate coverage creating
to pay in a timely manner. We also received a comment that urged us to amend the regulation to allow payment of the first premium up to the day before the coverage effective date, rather than allowing plans to set payment dates that are earlier than this day. The commenter also suggested that issuers should be required to provide timely invoicing for consumers, Response: We recognize that decisions regarding payment of the first month’s premium have traditionally been a business decisions made by issuers. Accordingly, we are not finalizing §156.265(d)(2) which would revise premium payment dates for first month’s premiums in the FFE, and are deleting current §156.265(d)(2). We will therefore redesignate §156.265(d)(1) as §156.265(d). However, because we appreciate the comment about giving consumers adequate time to pay their first month’s premium, we maintain the proposed §155.400(e) in the final rule to allow Exchanges to establish a consistent process throughout each Exchange regarding first month’s premium. In particular, each Exchange can determine how to handle first month’s premium payment dates for special enrollment periods that may occur close to or after the effective date. We believe giving each Exchange the flexibility to establish uniform guidance for all issuers for first month’s premium for enrollments will benefit the Exchange, issuers, and consumers by ensuring a consistent operational procedure. It is our expectation that QHP issuers will send consumers their bills within one to two business days after receiving enrollment transactions to accomplish the goal of timely effectuating coverage.
Comment: We received several comments that acknowledged establishing a payment due date the day before coverage is effective in most situations, but there are several scenarios that commonly occur today that make this approach challenging and in some cases, impossible to implement. For example, the birth of a child can cause retroactive coverage in which the
coverage and be given an effective date with only one day prior to coverage effectiveness in which to pay. There are also instances where the consumer does not receive the bill until after the due date. One commenter voiced concern that some States give 10 day grace periods and recommended that we should allow the FFE the same flexibility offered to SBEs when it comes to how the first premium payment effectuates coverage.
Response: For similar reasons given above, we are not finalizing §156.265(d)(2) which would establish premium payment dates for first month’s premiums and expect the FFE to address this in subregulatory guidance.
Summary of Regulatory Changes We are finalizing §155.400(e) and (f) of the proposed rule without modification.
Additionally, we are finalizing the provisions proposed in §156.265(d)(1) of the proposed rule as the entire paragraph (d), and we are not finalizing any §156.265(d)(2), allowing each Exchange to establish its own premium payment dates.
b. Initial and Annual Open Enrollment Periods (§155.410) In 45 CFR 155.410(d), we specified that starting in 2014, the Exchange must provide a written annual open enrollment notification to each enrollee no earlier than September 1, and no later than September 30. In 45 CFR 155.335(d), we specified that notice of annual redetermination for coverage effective January 1, 2015 be provided as a single, consolidated notice with the notice specified in 45 CFR 155.410(d). In the 2015 Payment Notice, we amended 45 CFR 155.410(e) to specify that for the benefit year beginning on January 1, 2015, the annual open enrollment period begins on November 15, 2014. Accordingly, we believe that it is appropriate to modify the timing of the notice of annual open enrollment and annual
the notice would be sent by a month, so that the notice would be sent no earlier than October 1, and no later than October 31, and (2) shifting the period during which the notice would be sent by a month and lengthening this period so that the notice would be sent no earlier than October 1, and no later than November 15, provided that electronic notices are available for any consumer who contacts the Exchange on November 15. We sought comment on which of these options we should implement, or if we should implement another option.
Comment: We received many comments from States, issuers, and consumer advocates about the timeline for issuing the notice of annual open enrollment and annual redetermination.
The majority of comments from States and the issuer community support the extended timeframe of October 1 to November 15. States noted the additional flexibility to decide when to send the notice as a benefit to the extended timeframe. Issuers also saw a benefit to extending the timeframe because it would allow for additional attempts to contact enrollees if the first contact was unsuccessful. Several consumer advocacy groups found the shorter timeframe of October 1 to October 31 preferable because it would permit consumers two weeks advance notice before open enrollment and additional time for consumers to contact enrollment assisters and assemble any documents needed for redetermination.
A limited number of commenters supported timeframes outside the two proposed options.
One supported keeping the original timeframe for sending the notice no earlier than September 1 and no later than September 30; another sought flexibility to send notices no earlier than August
1. We also received a comment expressing concern over shifting the timeframe either way due to misalignment between open enrollment notices, issuer 90-day renewal notices, and Exchange
Response: In order to best meet the needs of Exchanges, which are responsible for sending the notices, and consumers, who need enough information about open enrollment in a timely manner, we are finalizing §155.410(d) to state that, starting in 2014, the Exchange must provide a written notice of annual open enrollment and redetermination to each enrollee no earlier than the first day of the month before the open enrollment period begins and no later than the first day of the open enrollment period. This reflects the second of our proposed options.
Comment: We received one comment recommending that the notice be provided to existing enrollees as well as: (1) potential enrollees who submitted applications after the close of the last open enrollment period and were subsequently determined eligible for a QHP but unable to enroll, (2) individuals who had applied for a special enrollment period but were denied during the past year, (3) individuals who had requested enrollment information from the Exchange during the period between open enrollment periods, and (4) individuals who were terminated from a QHP during the period between open enrollments periods.
Response: This comment is outside the scope of the provisions included in the proposed rule; however, we note that §155.335(c) provides that the Exchange must provide every qualified individual with an annual redetermination notice that, for coverage effective January 1, 2015, must be provided as a single, coordinated notice including notice of the annual open enrollment period. Therefore, outreach will extend to individuals beyond current enrollees. We also note that Exchanges have the flexibility to conduct outreach beyond the individuals cited in the rule.
Comment: One commenter requested the addition of language clarifying that States may set an open enrollment period for the Exchange that is broader than the Federal open enrollment