April 14, 2017

In This Issue
Trump Administration Finalizes Market Stability Rule
Did You Miss Janet’s Live from NAHU! Webinar? Watch it Now!
Cost-Sharing Subsidies Could be Key for ACA Reform
NAIC Holds Spring Meeting with Heavy Focus on Market Stability
Join us for Next Week’s Webinar on the Final Market Stability Rule and the Benefit and Payment Parameters Final Rule for 2018
The Washington Update Podcast Takes a Spring Break as Congress Continues its Recess Back in District
New Broker Resources
HUPAC Roundup
What We’re Reading
Tools
E-mail the Editor
Visit the NAHU Website
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Trump Administration Finalizes Market Stability Rule

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released the final market stability rule. The 139-page rule was largely unchanged from the proposal that was released in February and which NAHU submitted comments on in March. As proposed, the 2018 open enrollment period (OEP) will run from November 1, 2017, through December 15, 2017, which CMS has specifically designed to overlap with Medicare and most employer plan enrollments, even though NAHU has repeatedly noted the burden this places on agents. The rule also finalizes tighter restrictions on special enrollment period (SEP) eligibility, applies a more rigorous test for uses of the exceptional circumstances SEPs, and will now require these to be verified by supporting documentation.

Additionally, the final rule changes the actuarial value standard to allow a variation from -4 to +2 percentage points (except for bronze plans, which can vary -4 to +5 percentage points) and finalizes the proposal to rely on states for network adequacy reviews. It will reverse earlier guidance on the Essential Community Providers threshold requirement, and will now require that the network includes at least 20% as participating practitioners as it was for the 2014 plan year that was then increased to 30% for 2015. Finally, the rule will not impose continuous coverage requirements, such as imposing a 90-day waiting period, late enrollment penalty, or requiring 6-12 months of prior coverage; however, CMS will explore other policies to promote continuous coverage.

Notably, the rule did not address two critical issues that could have the greatest impact on the overall stability of the marketplace: whether the administration plans to fund the cost-sharing reduction (CSR) payment program, and whether the administration will enforce the individual mandate. However, neither of those provisions were included in the proposed rule.

Proposed Rule

NAHU Comments

Final Rule

Change the 2018 OEP from November 1, 2017-January 31, 2018, to November 1-December 15, 2017.

Noted issues with the overlap of the proposed OEP with the Medicare annual enrollment period and the OEP for many employer-sponsored plans that operate on a calendar-year basis.

Requested that in future years there should be three distinct open-enrollment windows.

Requested that state-based exchanges and all off-exchange individual-market issuers be required to align with the federal individual-market open-enrollment dates.

No change from proposal; the OEP will run from November 1, 2017, through December 15, 2017.

CMS noted that this was purposely done to more closely align with Medicare and the private market.

State-based exchanges (SBEs) that can’t meet the new OEP will be allowed to supplement with a special enrollment period as a transitional measure.

All new marketplace consumers during a SEP must complete expanded pre-enrollment verification. Applications would be "pended" and not released to the issuer until eligibility is confirmed. Consumers would have 30 days to provide documentation.

Supported the proposal to require appropriate documentation prior to the effectuation of coverage and the proposed 30-day timeframe for document submission.

Requested better verification standards on involuntary loss of eligibility for minimum essential coverage (MEC), such as if an individual who previously had access to group coverage through an employer but chose not to enroll, and then lost such eligibility mid-year due to a discontinuation of the employer group plan.

No changes from proposal; consumers will have 30 days from the date of qualified health plan (QHP) selection to provide documentation; enrollment will be delayed or “pended” until verification of eligibility is completed.

100% of new consumers enrolling in marketplace coverage through SEPs will need to complete pre-enrollment verification.

Will not require SBEs to conduct pre-enrollment verification, but recommend that SBEs that do not currently conduct pre-enrollment verification follow this approach.

Will begin pre-enrollment verification for SEPs in June 2017.

Tightening of SEP eligibility requirements relative to people who have a previous history of nonpayment of premiums, documentation of a move, and gaining a SEP for a marriage.

Requested that CMS change the 90-day grace period for recipients of advanced premium tax credits (APTCs) to make past-due premium payments prior to their insurance being terminated to 30 days to reflect exiting state policies for other coverage, and to prevent the risk-pool instability that results when individuals sign up for coverage, receive care and incur claims but do not ultimately make premium payments.

Suggested clarification that all special-circumstance cases are to be routed through the appeals process, including individuals who cannot obtain official documentation and individuals whose ability to obtain the documents eclipsed the 30 days allowed by the proposed rule.

Noted that the additional verification criteria of newly married couples is a different verification standard than what is used in the private individual market or employer-sponsored plans and requested consistency across markets.

Does not address changing the grace period from 90-days to 30-days.

Allows issuers to reject an enrollment for a record of termination due to non-payment of premiums by the individual, unless the individual fulfills obligations for premiums due for previous coverage.

Allows issuers to apply a premium payment to an individual’s past debt owed for coverage within the prior 12 months before applying the payment toward a new enrollment.

Verification criteria for newly married couples will be more stringent for exchange coverage because of the differences in the markets and the impacts on the risk pool warrant an approach in the individual market that diverges from long-standing rules and norms in the group market.

Medical Loss Ratio (not addressed in the proposed rule).

Requested that CMS allow for health insurance agent and broker commissions, as well as issuer fraud-prevention measures, be exempted from an issuer’s MLR calculation.

Not addressed in the final rule.

Age-Rating Bands (not addressed in the proposed rule).

Requested administrative action to expand the current age rating bands of 3:1 in the individual and small-group markets.

Requested CMS to rescind planned changes to the age rating rules for children age 15 and older finalized in the Notice of Benefit and Payment Parameters for 2018 and instead maintain the existing age-rating structure for children.

Requested that CMS grant state-based age-rating variations to allow for the return of small-group composite rates and more state-based variations.

Not addressed in the final rule.

Grandmothered Plans (not addressed in the proposed rule).

Recommended that CMS formally state that the federal transition policy will remain in effect until further notice and will not be rescinded until ACA statutory improvements are signed into law and can be fully implemented.

Not addressed in the final rule although guidance was released from CMS granting states the ability to determine whether to allow grandmothered plans through 2018.


 

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