Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Final Rule
In the Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond final rule, the Centers for Medicare & Medicaid Services (CMS) finalizes standards for issuers, Marketplaces, and Navigators. This rule is a continuation of the recent rulemaking process, as seen in parts 1 and 2 of the Notice of Benefit and Payment Parameters for 2022 final rule, published on January 19 and May 5, 2021, respectively.
Overall, the rule expands access to health insurance coverage through the Marketplaces by lengthening the annual Open Enrollment Period, restoring and expanding Navigator duties, and minimizing burden and confusion for consumers. These changes further the Biden-Harris Administration’s goals of providing greater access to coverage, improving affordability for consumers, and reducing burden for issuers and consumers.
Improving Access to Coverage
The Federally-facilitated Marketplace (FFM) Navigator Program reaches vulnerable and underserved populations. This program is important to increase awareness of coverage options available through the Marketplaces, help consumers find affordable coverage that meets their needs, and narrow health disparities. Through this final rule, CMS reinstates the requirement that FFM Navigators provide consumers with information and assistance on certain post-enrollment topics, such as the Marketplace eligibility appeals process, the Marketplace-related components of the premium tax credit reconciliation process, and the basic concepts and rights of health coverage and how to use it. In addition, the rule expands the interpretation of what activities are encompassed in the duty to provide consumers with information and assistance related to the basic concepts and rights of health coverage and how to use it.
FFM and State-based Marketplace on the Federal Platform (SBM-FP) User Fees
For the 2022 benefit year, we finalize an increase of the FFM user fee rate to 2.75% of premiums and the SBM-FP user fee rate to 2.25% of premiums. This is an increase from the rates previously finalized in part 1 of the 2022 Payment Notice – 2.25% and 1.75%, respectively. These rates account for funding for consumer information and outreach, including the FFM Navigator program. These rates are still lower than the current 2021 benefit year user fee rates.
2022 Open Enrollment
The rule extends the annual individual market Open Enrollment Period for 2022 and future benefit years to allow consumers more time to review plan choices, seek in-person assistance, and enroll in a plan that best meets their needs. The annual Open Enrollment Period for all individual-market Marketplaces using the federal eligibility and enrollment platform and off-Marketplace individual market plans in states with such Marketplaces for 2022 and future benefit years will be November 1 of the prior year through January 15 of the benefit year. State Marketplaces not using the federal eligibility and enrollment platform maintain flexibilities regarding effective date rules and Open Enrollment end dates, provided the Marketplace’s Open Enrollment end date is no earlier than December 15 of the calendar year preceding the relevant benefit year.
Monthly Special Enrollment Period (SEP) for Advance Payments of Premium Tax Credits (APTC)-Eligible Consumers with Household Income up to 150% of the Federal Poverty Level (FPL) whose Applicable Taxpayer has an Applicable Percentage of Zero
To provide more opportunities for certain low-income consumers to access coverage with low or no premiums after APTC, such as under the American Rescue Plan (ARP), Marketplaces will now have the option to provide a monthly SEP for APTC-eligible consumers with a projected annual household income no greater than 150% of the FPL. The rule will permit Marketplaces to provide a SEP for periods of time during which premium tax credits are available without the applicable taxpayer having to contribute toward their applicable portion of premiums before premium tax credits become available, such as those currently available under section 9661 of the ARP. Marketplaces on the federal platform will implement this SEP by providing eligible consumers with a pathway through the HealthCare.gov application during such periods of time.
To ensure consistent application of SEPs based on APTC eligibility across the Marketplaces, the final rule clarifies that, for purposes of the § 155.420 SEPs, references to ineligibility for APTC refer to being ineligible for such payments, or being eligible for such payments but for a maximum of $0 per month. That is, an enrollee with a maximum APTC amount of $0 is not considered APTC-eligible, and an enrollee is not considered newly APTC-eligible when they become eligible for $0 APTC after having previously been APTC-ineligible for another reason, such as having other minimum essential coverage. This clarification will mitigate the potential risk of inconsistent interpretation of this eligibility requirement across different Marketplaces. This clarification also ensures that SEP rules clearly reflect that enrollees who qualify for a maximum APTC amount of $0 are eligible for an SEP based on a change that makes them newly eligible for an APTC amount greater than $0 (based on a decrease in their household income, for example). This clarification is especially important in light of the removal of the upper APTC eligibility limit on household income at 400% of the FPL for taxable years 2021 and 2022 under the ARP. While the ARP policy is in place, this clarification will ensure that Marketplaces appropriately find households eligible for an SEP if they newly gain or lose access to APTC, because their maximum APTC amount changed from $0 to more than $0, or vice versa.
The rule repeals the separate billing regulation that required individual market qualified health plan (QHP) issuers to send a separate bill for that portion of a policyholder’s premium attributable to coverage for abortion services for which federal funding is prohibited. Specifically, we codify in its place the policy from the 2016 Payment Notice under which QHP issuers offering coverage of abortion services for which federal funding is prohibited have flexibility in selecting a method to comply with the separate payment requirement under section 1303 of the Affordable Care Act (ACA). We believe the changes offer issuers options for meaningful compliance with section 1303 of the ACA without imposing the operational and administrative burdens of the separate billing policy, and without causing additional consumer confusion and unintended losses of coverage. Reduced administrative burden and costs for issuers are also expected to result in lower premiums for consumers.
Exchange Direct Enrollment Option Repeal
The rule repeals the Exchange Direct Enrollment option. This option permitted a state Marketplace, SBM-FP, or an FFM state to facilitate enrollment of qualified individuals into individual market QHPs primarily through private-sector direct enrollment entities, including QHP issuers, web brokers, agents, and brokers, rather than the Marketplace’s centralized website. Repeal of the Exchange Direct Enrollment option ensures that all available resources can be dedicated to support implementation of the health care provisions of the ARP and other new federal health care legislation, such as the consumer protections in the No Surprises Act, and aligns with recent executive actions designed to strengthen the ACA, increase enrollment in comprehensive coverage, and advance equity. The repeal also addresses concerns that the Exchange Direct Enrollment Option would lead to consumer confusion about coverage options and the availability of financial assistance, resulting in fewer consumers enrolled in comprehensive coverage and disruptions to coordination with other insurance programs.
Section 1332 Waiver Policies
The Department of Health & Human Services (HHS) and the Department of the Treasury (collectively, the Departments) finalize modifications to regulations implementing section 1332 of the ACA governing waivers for state innovation (referred to as section 1332 waivers), including changes to many of the policies and interpretations of the statutory guardrails codified in part 1 of the 2022 Payment Notice final rule. The policies and interpretations in this rule supersede and replace those outlined in the October 2018 “State Relief and Empowerment Waivers” guidance (the 2018 guidance). This rule also repeals and replaces the previous codification of the 2018 guidance guardrail interpretations in part 1 of the 2022 Payment Notice final rule. The Departments also modify regulations to set forth flexibilities in the public notice requirements and post-award public participation requirements for section 1332 waivers under future emergent circumstances, if certain criteria are met. The rule also provides new information regarding the processes and procedures for amendments and extensions of approved section 1332 waivers.
The Departments are of the view that rescinding the 2018 guidance, repealing the codification of its statutory guardrail interpretations in part 1 of the 2022 Payment Notice, and finalizing new policies and interpretations align with the Biden-Harris Administration’s goals to strengthen the ACA and increase enrollment in comprehensive coverage. These policies further advance the Biden-Harris Administration’s goal to expand coverage by empowering states to develop innovative health coverage options that best fit a state’s individual needs, expand coverage to its residents, and lower costs. Assessing the effects of waiver proposals across different groups of state residents aligns with the Biden-Harris Administration’s commitment to ensuring that systemic barriers to opportunities for people of color and other underserved groups are not perpetuated, as well as its commitment to protect and expand access to comprehensive, affordable health care. In addition, these policies further support the Biden-Harris Administration’s efforts to build on the ACA to meet the health care needs created by the COVID-19 public health emergency, reduce individuals’ health care costs, and make our health care system less complex to navigate.