Late in the afternoon on Friday, November 20 (just after we sent you the last issue of the Washington Update) the federal Department of Health and Human Services (HHS) gave us all a Thanksgiving present with the release of the proposed 2017 Notice of Benefit and Parameters. This 388-page proposed regulation is one that HHS proposes every fall, and while it does address the parameters required for qualified health plans and the payments required for the law’s risk stabilization programs, it also contains a lot more. Over the years this rule has become the place that HHS sticks all sorts of ACA market reforms and exchange-related items for consideration.
None of the proposals in this regulation are final or have the force of law. This document is essentially a rough draft outlining what they are thinking of doing, and HHS is accepting public comments on this proposal through December 21. HHS will then review the comments received, make changes and issue a final rule most likely in the first quarter of 2016. Sometimes there are provisions in an omnibus rule, such as this one that would then take effect immediately, but most of any market changes will apply effective January 1, 2017, or for the 2017 plan year. NAHU is in the process of preparing a detailed comment letter on the proposed rule and we are seeking member input on the comment letter. If you would like to participate in this process, we will have a webinar-based discussion on the proposed rule on December 9 at 1:00 p.m. Eastern. To sign up for the call, please contact Husni Abdelaziz at firstname.lastname@example.org.
While all of the many provisions in this rule are just proposed at this time, there are a number of items of interest to health insurance agents and brokers. Some of the most notable proposals include:
- HHS is suggesting that the 2017 open enrollment period run from November 1, 2016, to January 31, 2017, the same period as the 2016 open enrollment period.
- The maximum out-of-pocket limit would be $7,150 for an individual for 2017.
- The rule redefines large and small employers as required by the recently enacted Protecting Affordable Coverage for Employees (PACE) Act.
- The employer appeals/notification process for employees that get a subsidy in the exchange and therefore trigger an employer mandate penalty for their employer would be amended. The employer would only be notified if the employee actually enrolls in a QHP through an exchange (which is what would actually trigger the penalty) not when the employee applies and seeks subsidy eligibility determination.
- The current rules base the rating area for a business on the principal address of the place of business. The proposed rule would redefine the principal place of business for rating purposes as the area where the greatest number of employees work or reside. The SHOP marketplace will use the place of business address used to qualify the employer for SHOP coverage.
- The proposed rule would change the standards for income verification for people applying for subsidized exchange coverage. People generally use their tax returns, but since they are from the past year, they are not fully accurate for the current year. Currently if the income predicted various from 10% from the trusted data source (tax return) then income must be further verified. They are proposing changing this to 20% variation or $5,000.
- They are seeking comments on verifying the absence of employer coverage for applicants from current accurate data sources and how they should alert enrollees of their potential eligibility for Medicare when they reach age 65.
- The current rules allow for small group participation requirements except during an annual one-month open enrollment period from November 15 to December 15. HHS is seeking comments about what to do for the employers who have between 51 and 100 employees in states that choose to define these groups as small groups, since these groups are subject to the employer mandate.
- They propose standardizing the plan options for the federal exchange to six standard option plans. They would be bronze, gold, standard silver, and three other plan options at various actuarial values of 73%, 87%, and 94%. Carriers would not have to offer these, but the standard plans would be preferentially displayed on the FFM.
- The rule would require significant new enforcement requirements for brokers helping consumers in the exchange, including web-brokers in the exchange.
- The rule also contains new navigator requirements, including requirements for them to help individuals post-enrollment.
- New network adequacy standards for both QHPs and other plans are proposed. Plans will be given a choice of standards to pick from in the forthcoming letter to issuers and there will be a default standard for QHPs that don’t pick. They also propose requirements for continuity of care in the case of providers being excluded from networks.
- There would be a new category of state exchanges: the state-based marketplace using the federal platform (SBM-FP). The rule proposes keeping the exchange user fee of 3.5% of premiums on insurers in the FFM, but for the SBM-FM the state and the federal government would split the fee. Eventually HHS would take 3% for healthcare.gov functions but initially they could reduce the fee to 1.5 or 2%.
- The rule requests comments on rating factors allowed for the age of children and whether states should be able to define their own geographic rating areas and how many they may have.
- In the SHOP, employers could offer their employees a new “vertical choice,” which would be the choice of plans in any tier from a single insurer. Another proposed option would allow employees to choose plans within a single tier plus the plan above it.
- With regard to the MLR, HHS proposes the use of a 60-day run off period to calculate claims expenses as opposed to the current 30 days. They also ask for comments as to whether fraud expenses should be included in the quality/claims bucket of the MLR calculation, which is something NAHU has supported in our work with the NAIC on MLR quality initiatives.
Once again, if you would like to participate in our comment process on the proposed rule, you can join us on a webinar-based discussion on December 9, at 1:00 p.m. Eastern. To sign up for the call, please contact Husni Abdelaziz at email@example.com to receive the login information.