On April 13, 2017, Health and Human Services (HHS) issued the final Market Stabilization rule intended to help lower premiums, stabilize individual and small group markets, and increase choices for consumers. The rule was published in the Federal Register on April 18, 2017. The effective date of the rule is June 19, 2017.
2018 open enrollment period – November 1 through December 15, 2017
The final rule reduces the annual open enrollment period to 45 days. For the 2018 plan year, open enrollment will begin on November 1, 2017 and end December 15, 2017. The open enrollment period applies to all non-grandfathered individual market plans, inside and outside the exchange. HHS does not provide State-Based Marketplaces (SBMs) flexibility to establish different enrollment dates. However, HHS recognizes SBMs have discretion as to Special Enrollment Periods and may elect to supplement the open enrollment period to account for the transition or any operational difficulties due to the shorter open enrollment.
Guaranteed availability – revised interpretation
HHS revised their interpretation of guaranteed availability. Under the new interpretation, an issuer is allowed to attribute new premium payments to past-due premiums for coverage under the same or a different product during the previous 12 months. An issuer can also refuse to provide further coverage until outstanding premiums are paid. The approach also permits issuers that are members of the same control group as the issuer owed the premium to deny coverage. Issuers are not required to apply this policy. Issuers seeking to apply this policy may accept installment payments or set a premium payment threshold that applies to payment of the outstanding debt.
This policy applies both inside and outside of the exchanges in the individual, small group, and large group markets, and during applicable open enrollment or special enrollment periods. This policy will not apply in the federally facilitated Small Business Health Options Program (FF-SHOP). HHS encourages states to adopt a similar approach. In addition, issuers adopting this premium payment policy, as well as any issuers that do not adopt the policy but are within an adopting issuer’s control group, must clearly describe in any enrollment application materials, and in any notice that is provided regarding non-payment of premiums, the consequences of non-payment on future enrollment.
Special Enrollment Periods (SEPs) – changes to rules
The final rule makes changes to Exchange SEP rules by taking a four-pronged approach:
- Pre-Enrollment Verification: Beginning in June 2017, HHS will require pre-enrollment verification of eligibility for all applicable SEP categories for all new applicants in the states served by the HealthCare.gov platform. Implementation will be phased in, beginning with loss of minimum essential coverage, permanent move, Medicaid/CHIP denial, marriage and adoption. Consumers will be able to pick a plan and submit an application, but the application will be pended until eligibility is verified. Consumers will be given 30 days to provide documentary verification. HHS will use automated electronic means where possible to verify eligibility. Once approved, coverage will be retroactive to the date of plan selection. If verification takes two or more months, an enrollee may chose not to pay for coverage for the first month, however, the enrollee must make a binder payment that consists of the premium for all months of retroactive coverage (except the 1 month delay) through the first month of prospective coverage to effectuate coverage. SBMs that do not already verify SEP eligibility are encouraged to do so but retain flexibility to determine how to implement a pre-enrollment verification process.
- Metal-Level Restrictions for Existing Enrollees: The final rule makes changes that would limit the ability for an existing enrollee to change plan metal levels during the benefit year by using an SEP. This change does not apply to the individual market outside the exchange or to the group market, including the FF-SHOP. These metal tier restrictions would apply to existing enrollees as follows:
- If an enrollee gains a dependent (through marriage, birth, adoption, foster care, or court order) the enrollee can add the dependent to their current plan. If the plan’s business rules do not allow dependent coverage, the enrollee and the new dependent can enroll in another plan with the same metal level (or an adjacent metal level if no other plan is available at the same level) or the enrollee may enroll the dependent in a separate plan at any metal level.
- If an existing enrollee and his/her dependents become newly eligible for cost-sharing reductions (CSRs) and are not enrolled in a silver metal level plan, they may enroll in a silver metal plan if they choose.
- Enrollees are prohibited from changing metal levels for most other SEPs, except for unintentional, erroneous, or inadvertent enrollment, the enrollee is newly eligible for APTC or CSRs, gains or maintains status as an Indian, exceptional circumstances, or is a victim or domestic abuse or spousal abandonment.
- Coverage Effective Dates: If a consumer’s enrollment is delayed two or more months due to verification issues, such that the enrollee would have to pay for two or more months of retroactive coverage, the enrollee may only delay coverage one month from the date when it otherwise would have been effective. To avoid cancellation, the enrollee must make a binder payment covering months of retroactive coverage and the first month or prospective coverage.
- Restrictions on Other SEPs – HHS finalizes several additional changes to the following existing SEPs:
- Loss of Minimum Essential Coverage: An issuer may reject an enrollment if the issuer has a record of termination due to non-payment of premium by the individual, unless the individual pays all outstanding premiums for previous coverage within the same issuer or controlled group.
- Marriage: Consumers must demonstrate that at least one spouse was enrolled in coverage for one or more days during the 60 days prior to the date of marriage. (Does not apply to the FF-SHOP).
- Permanent Move: Consumers will have to show coverage for one or more days during the previous 60 days preceding the permanent move. (Also applies to the FF-SHOP).
- Exceptional Circumstances: HHS will significantly limit the use of exceptional circumstance SEPs by applying a more rigorous test for its use and requiring documentary verification. HHS will provide further guidance on this restriction in the future.
- SEPs No Longer Available: The final rule formalizes previous guidance eliminating several SEPs based on temporary errors, processing delays or misinformation.
Continuous Coverage – requirement update
HHS has not taken action to finalize a continuous coverage requirement at this time but will continue to explore possibilities going forward.
Actuarial Value – new metal level ranges
The ACA requires insurers in the individual and small group market to issue plans that fit into four metal levels:platinum, gold, silver or bronze, which correspond to actuarial values of 90, 80, 70 and 60 percent, respectively.
The ACA allows insurers to issue plans that have actuarial values slightly higher or lower than these values; the difference is called the “de minimis” variation. De minimis has previously been defined as +2 or -2 percentage points, but the 2018 Payment Notice allows bronze plans that cover one major pre-deductible service or meet HDHP requirements to vary by -2 and +5 percentage points. The final rule changes the de minimis variation for silver, gold and platinum plans to -4 and +2 percentage points (except for bronze plans, which retain the -2 and +5 range outlined in the 2018 Payment Notice).
Therefore, the following AV ranges would be permitted for each metal level:
||AV de minimis range variation
- CSR variant #1 72-74%
- CSR variant #2 86-88%
- CSR variant #3 93-95%
(bronze plans that cover one major pre-deductible service or meet HDHP requirements: 56-65%)
Along with the final rule, HHS released a revised AV calculator and methodology.
Network Adequacy – state-driven reviews in MA, NH and ME
For the 2018 plan year, HHS will defer to the states’ review of network adequacy in states with authority that is at least equal to the “reasonable access standard” and the means to assess network adequacy. New Hampshire, Maine and Massachusetts have the means and authority to conduct these reviews. In states that do not have such authority and means, HHS will rely on an issuer’s commercial, Medicaid or Medicare accreditation from an HHS-recognized entity, such as the NCQA, URAC, and Accreditation Association for Ambulatory Health Care. If an issuer does not have accreditation from one of these entities, it would be required to submit an access plan as part of its QHP application demonstrating network adequacy standard and procedures.
Essential Community Providers – new standards for 2018
For the 2018 plan year, an issuer will be considered to meet the ECP standard if it contracts with at least 20 percent of available ECPs within each plan’s service area. HHS will continue to allow an issuer to write-in ECPs that do not appear on the HHS ECP list if the issuer arranges for the provider to submit an ECP petition to HHS by the deadline for QHP application changes (for PY2018, August 16, 2017).
QHP Certification – Final Templates and Instructions
On April 13, HHS also released final QHP filing templates and instructions for plan year 2018. The instructions incorporated the changes made by the market stabilization rule. Additionally, the compliance attestation section has been replaced with a single yes/no/not applicable question for each type of plan.
CMS also recently announced its redesigned QHP website, which features clear, easy-to-navigate headers. It includes all of the CMS templates, instructions and deadlines for QHP certification.
Additional Guidance Released
On April 13, HHS released FAQs announcing two additional policies for plan year 2018:
Good Faith Safe Harbor for Plan Year 2018
CMS is adopting a good faith safe harbor policy for plan year 2018 to encourage participation of issuers in the FFM and reduce regulatory burdens. As a result, CMS will not impose civil money penalties or decertify a QHP if the QHP issuer made a good faith effort to comply with applicable FFM standards.
Deference to States on Licensure and Good Standing of QHPs
In accordance with President Trump’s executive order on the ACA, HHS will defer to state regulators to determine licensure and good standing of QHPs. HHS will rely on states that have plan management responsibility (including Maine and New Hampshire) to review QHP service areas, prescription drug formularies and cost-sharing outliers for potential discriminatory plan design. CMS will review formularies and cost-sharing outliers in FFM states that do not have plan management responsibility.