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In a FF-SHOP, State Insurance Commissioners must submit to HHS the recommendation on or before June 2, 2014, and HHS will make a decision based on any recommendations submitted by that deadline before the close of the QHP certification application window. Only States interested in not implementing employee choice would need to make a recommendation.
State Insurance Commissioners making such recommendations should submit them via email to email@example.com. HHS expects that no later than June 10, 2014, the FF-SHOP will post the list of States approved for their transition of employee choice for one year, creating a public record. HHS will make publicly available the State’s recommendation to the FF-SHOP and the results of its review in a written decision explaining whether HHS agreed with the State’s recommendation. This timeline ensures that HHS’ decisions will be made prior to the close of the initial QHP certification application window for the FF-SHOPs, with sufficient time for
This timeline reduces uncertainty for issuers because issuers will know if employee choice is being offered in a SHOP prior to the end of the QHP application period. Issuers will be able to make a decision about SHOP participation based on final information about whether employee choice will be implemented and will be less likely to seek to modify their rates or withdraw their applications.
State-based SHOPs will be required to follow the same timeline as FF-SHOPs, but exact dates for State Insurance Commissioner recommendations and SHOP decisions may differ from the FF-SHOP.
Summary of Regulatory Changes We are finalizing the provision as proposed, with the modification that a SHOP’s decision not to implement employee choice in 2015 should be based on a written recommendation submitted by the State Insurance Commissioner adequately explaining that it is the Insurance Commissioner’s 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 interests 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. A State Insurance Commissioner’s recommendation must be based on concrete evidence, including but not limited to discussions with those issuers expected to participate in the SHOP in 2015. We clarify that this policy only applies in 2015 by adding the word “only.” We also changed in § 155.705(b)(3)(vi) the word options to be singular as one option is available for FF-SHOPs and another for State-based SHOPs. Finally, we have established in the final rule the first of two
b. Enrollment Periods under SHOP (§155.725) We proposed amendments to §155.725(c) and (e) to amend the dates for the annual open enrollment periods for qualified employers and qualified employees in all SHOPs, both State-based and Federally-facilitated. In proposed §§155.725(c)(1), we proposed to align the start of annual employer election periods in all SHOPs for plan years beginning in 2015 with the start of open enrollment in the corresponding individual market Exchange for the 2015 benefit year. Under the proposal, the annual employer and employee election periods would begin no sooner than November 15, 2014 with employers making selections first, followed by employees.
We are finalizing this proposal with one modification. Based on comments we received through the public comment period, we are modifying §155.725(c)(1) to limit this provision to FFSHOPs. State-based SHOPs may start their annual employer election periods earlier than November 15, 2014. We further clarify that nothing in this rule eliminates the rolling monthly enrollments in the SHOPs outlined at 45 CFR 155.725(b) and the requirement also outlined at 45 CFR 155.725(b) that a plan year in the SHOP be 12 months.
We note that pursuant to §147.104(b)(1)(i), group coverage purchased in the SHOP between November 15 and December 15 of each year is not subject to employer contribution or group participation rules. As explained in Chapter 5 of the 2015 Letter to Issuers published on March 14, 2014, FF-SHOPs do not enforce minimum participation requirements between November 15 and December 15 of each year, but they are enforced upon initial enrollment and at renewal outside of this window. Aligning the start of the annual employer election period in the FF-SHOPs with the start of the individual market Exchange such that the employer election period would begin no sooner than November 15, 2014, will provide qualified employers and
participation provisions are not enforced. State-based SHOPs wishing to begin annual employer election periods prior to November 15 may extend the window of time when employers are not subject to employer contribution or group participation rules. For example, a State-based SHOP may extend the window of time during which minimum contribution and participation rules are not applicable from October 15 through December 15, so long as November 15 through December 15 is included in the time period.
In §§155.725(c)(2) and 155.725(e), we proposed to remove the required minimum lengths of both the annual employer election period and the employee open enrollment period to provide additional flexibility to all SHOPs and qualified employers. The existing minimum standards may make it difficult for groups participating in the SHOP to renew coverage in a timely manner, as under those minimums, it might take 75 days or longer to complete a group renewal. This proposal will permit employers to expedite their enrollment timeline. Also, this proposal increases a qualified employer’s access to the most up-to-date rate information by permitting alignment with the quarterly rate update cycle. We are finalizing these provisions as proposed.
Comment: We received several comments on our proposal to align the start of the employer election periods for plan years beginning in 2015 with the start of open enrollment in the corresponding individual market Exchange for the 2015 plan year, as amended in the 2015 Payment Notice, so that the annual employer and employee election periods would begin no sooner than November 15, 2014. Some commenters supported having a uniform timeline for enrollment in the individual Exchange and SHOPs, to reduce confusion, improve efficiencies, and possibly bring about cost savings. Another commenter believed that there are too many
enrollment period be more spread out. One commenter recommended that employers be able to make decisions whether to participate in the SHOP prior to November 15 so that employees can shop in both Exchanges beginning November 15. We also received several comments recommending that State-based SHOPs should have the flexibility to maintain their own employer election periods to remain in alignment with the broader small group market in the State. Several commenters noted that aligning the timing of the SHOP employer election period for 2015 with the individual market annual open enrollment period may pose challenges for certain State-based SHOPs, and encouraged HHS to maintain the flexibility afforded to Statebased SHOPs discussed in the preamble to the Exchange Establishment final rule at 77 FR 18402–18403. For example, commenters observed that some State-based SHOPs see benefits from dedicating staff to separate enrollment periods for individuals and employees of qualified employers, rather than administering these enrollment periods concurrently.
Response: To ensure States have the flexibility to operate their State-based SHOPs in a manner that works in their small group markets, we are finalizing this provision as proposed, but limiting it to FF-SHOPs. State-based SHOPs will be able to begin their employer and employee election periods in a manner that works with their small group markets.
Comment: Some comments were received in support of the proposal to remove the 30day minimum timeframe for the employer and employee annual election period. However, several comments were also received stating that removing this minimum timeframe would cause system and human resource strain by forcing SHOP enrollment into a more compressed timeframe. Some commenters also stated that this approach does not compare favorably with
minimum of 30 days to evaluate their options, costs, and budget forecasts for the upcoming year and employees would then need a similar timeframe to make a decision by the 15th of the month.
Response: We believe that removing the 30-day minimum timeframe requirement provides the most flexibility to SHOPs, employers and employees, and allows consumers to obtain SHOP coverage in a quicker timeframe. This flexibility allows employers and employees to complete their shopping in a more condensed time, if desired. We note that nothing in this final rule removes the ability of a State-based SHOP or an employer to establish enrollment periods lasting at least 30 days.
Summary of Regulatory Changes We are finalizing the amendments proposed in §155.725 of the proposed rule with the modification that the provision aligning the annual employer election period with the start of the start of open enrollment in the corresponding individual market Exchange for the 2015 benefit year applies only in FF-SHOPs. State-based SHOPs may start their annual employer election periods earlier than November 15, 2014.
c. SHOP Employer and Employee Eligibility Appeals Requirements (§155.740) We proposed to amend §155.740(g) by redesignating paragraphs (g)(1) through (g)(3) to more clearly delineate the requirements associated with valid appeals separately from those associated with invalid appeals.
We proposed to amend §155.740(i)(1)(i) by cross-referencing the withdrawal standards proposed in the individual market at §155.530(a)(1). Under current rules, an appellant who wishes to withdraw his or her appeal request must do so in writing (hard copy or electronic).
The amended provision would allow an appellant to withdraw his or her appeal request in
Comment: We received a handful of comments regarding the proposed change to the SHOP appeals withdrawal procedure and all were supportive of the change. As with the individual market provision, commenters cited the benefits to having a telephonic withdrawal option, including increased efficiency for appellants to conclude the appeals process.
Commenters also noted with support the importance of recording the telephonic interaction and providing written confirmation of the withdrawal along with instructions on how to request to vacate a withdrawal in order to protect the appellant’s right to a hearing.
Response: We agree with commenters that incorporating this option for telephonic withdrawals for SHOP employer and employee appeals will assist appeals entities in maintaining an efficient process by providing a convenient method for appellants to end an appeal at their option. We also consider the requirements to record the appellant’s telephonic withdrawal and the telephonic signature under penalty of perjury in full along with sending written confirmation of the withdrawal to be critical safeguards for appellants and appreciate the support commenters expressed for these aspects of the process. We, therefore, finalize the provision for telephonic withdrawal as proposed.
Summary of Regulatory Changes We are finalizing the provisions proposed in §155.740 without modification.
8. Subpart O—Quality Reporting Standards for Exchanges In §155.1400, we proposed that the Exchange must prominently display on its website, in accordance with 45 CFR 155.205(b)(1)(v), quality rating information assigned for each QHP under the QRS, as calculated by HHS and in a form and manner specified by HHS, starting in
2016. We stated our intentions to have a beta testing period in 2015 to provide early feedback to
2016 open enrollment period for the 2017 coverage year. The standards for QHP issuers regarding the collection and submission of validated quality measures data for the QRS are described in Part 156, Subpart L of this final rule.
Comment: Many commenters agreed with the proposed provision and supported our approach for HHS to provide calculated quality rating information for display on an Exchange website on an annual basis for the open enrollment period. One commenter requested clarification as to whether HHS will select and calculate the QRS rating for both the FFE and State Exchanges, or whether the State Exchanges will be able to select and calculate their own QRS ratings independent of HHS. Commenters suggested that State Exchanges be allowed to calculate quality ratings using the same approach as the FFE but with data for plans operating within the State’s Exchange and that beta test data be used to compare QHP quality rating results from HHS with State Exchange results to determine relative comparability in national versus State approaches.
Response: We clarify that HHS will be obtaining data from all QHP issuers from all Exchanges consistent with §156.1120(a) and using a standardized methodology to calculate QHP quality ratings for display on the FFE website and to provide for display to State Exchanges on their websites. We believe that an approach where each Exchange displays quality ratings calculated by HHS based on a standard scoring methodology allows for reliable, uniform, and comparable QHP ratings across Exchanges. The HHS-calculated scores and rating information provided to a State Exchange by HHS will be for the QHPs offered on the Exchange in that State. We anticipate sharing the validated QRS summary measure level data with State Exchanges; however State Exchanges will be required to display the HHS-calculated quality
believe it is important that States have opportunity to build on this uniform strategy by displaying additional quality measures that reflect local priorities and we anticipate issuing future guidance that will include standards for States who wish to exercise this flexibility.
Comment: Many commenters urged HHS to require that State Exchanges display the data directly on their websites instead of linking to a Federal website.