Patient Protection and Affordable Care Act; Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation
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Proposed rule.
CFR Part: "45 CFR Parts 147, 155, and 156"
RIN Number: "RIN 0938-AR03"
Citation: "77 FR 70644"
Document Number: "CMS-9980-P"
"Proposed Rules"
SUMMARY: This proposed rule details standards for health insurance issuers consistent with title I of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, referred to collectively as the Affordable Care Act. Specifically, this proposed rule outlines Exchange and issuer standards related to coverage of essential health benefits and actuarial value. This proposed rule also proposes a timeline for qualified health plans to be accredited in Federally-facilitated Exchanges and an amendment which provides an application process for the recognition of additional accrediting entities for purposes of certification of qualified health plans.
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Table of Contents
I. Background
A. Legislative Overview
B. Stakeholder Consultation and Input
C. Structure of the Proposed Rule
II. Provisions of the Proposed Regulation
A. Part 147--Health Insurance Reform Requirements for the Group and Individual Health Insurance Markets
1. Subpart B--Requirements Relating to Health Care Access
1. Subpart A--General Provisions
2. Subpart B--EHB Package
3. Subpart C--Accreditation
III. Collection of Information Requirements
IV. Regulatory Impact Analysis
V. Regulatory Flexibility Act
VI. Unfunded Mandates
VII. Federalism
VIII. Appendix A--List of Proposed EHB Benchmarks [List of Received Benchmarks: Partial]
IX. Appendix B--Largest FEDVIP Dental and Vision Plan Options, as of
Acronym List
Because of the many organizations and terms to which we refer by acronym in this proposed rule, we are listing these acronyms and their corresponding terms in alphabetical order below:
AV Actuarial Value
CHIP
EHB Essential Health Benefits
ERISA Employee Retirement Income Security Act (29 U.S.C. section
FEDVIP Federal Employee Dental and Vision Insurance Program
FEHBP Federal Employees Health Benefits Program
HEDIS Healthcare Effectiveness Data and Information Set
HIOS Health Insurance Oversight System
HSA Health Savings Account
HRA Health Reimbursement Account
IRS
MV Minimum Value
PHS Act Public Health Service Act
PRA Paperwork Reduction Act
QHP Qualified Health Plan
SSA
SHOP Small Business Health Options Program
The Act Social Security Act
The Code Internal Revenue Code of 1986
USP United States Pharmacopeia
Executive Summary: Beginning in 2014, all non-grandfathered health insurance coverage /1/ in the individual and small group markets,
FOOTNOTE 1 For more information on status as a grandfathered health plans under the Affordable Care Act, please see Interim Final Rule, "
FOOTNOTE 2 Available at: http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf. END FOOTNOTE
FOOTNOTE 3 "Essential Health Benefits: Balancing Coverage and Cost."
FOOTNOTE 4 Available at: http://cciio.cms.gov/resources/files/largest-smgroup-products-7-2-2012.pdf.PDF. END FOOTNOTE
FOOTNOTE 5 77 FR 42658 (
HHS also published a bulletin /6/ outlining an intended regulatory approach to calculations of AV and implementation of cost-sharing reductions on
FOOTNOTE 6 Available at: http://cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf. END FOOTNOTE
In addition, this rule proposes to amend 45 CFR 156.275, as published on
I. Background
A. Legislative Overview
Section 1302 of the Affordable Care Act provides for the establishment of an EHB package that includes coverage of EHB (as defined by the Secretary of the
Section 1301(a)(1)(B) of the Affordable Care Act directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the Affordable Care Act, including coverage of the services described in section 1302(b), adhering to the cost-sharing limits described in section 1302(c), and subject to 1302(e), meeting the AV levels established in section 1302(d). Section 2707(a) of the
Section 1302(d)(2) of the Affordable Care Act describes the levels of coverage that section 1302(a)(3) includes in the EHB package: 60 percent for a bronze plan, 70 percent for a silver plan, 80 percent for a gold plan, and 90 percent for a platinum plan. Section 1302(d)(3) directs the Secretary to develop guidelines that allow for de minimis variation in AV calculations.
Section 1311(c)(1)(D)(i) of the Affordable Care Act directs a health plan to "be accredited with respect to local performance on clinical quality measures * * * by any entity recognized by the Secretary for the accreditation of health insurance issuers or plans (so long as any such entity has transparent and rigorous methodological and scoring criteria)." Section 1311(c)(1)(D)(ii) requires that QHPs "receive such accreditation within a period established by an Exchange * * *." In a final rule published on
B. Stakeholder Consultation and Input
HHS has consulted with interested stakeholders on several policies related to EHB, AV, and Exchange functions. HHS held a number of listening sessions with consumers, providers, employers, health plans, and state representatives to gather public input, and released several documents for public review and comment. As described previously, HHS released two Bulletins that outlined our intended regulatory approach to defining EHB and calculating AV and sought public comment on the specific approaches.
In addition to the listening sessions, HHS considered the findings of an IOM study, as well as a report conducted by the DOL /7/ on typical benefits offered by employer-sponsored coverage before releasing the Bulletins.
FOOTNOTE 7 "Selected Medical Benefits: A Report from the
Finally, HHS consulted with stakeholders through regular meetings with the
HHS received approximately 11,000 comments in response to the EHB Bulletin. Commenters represented a wide variety of stakeholders, including health insurance issuers, consumers, health providers, states, employers, employees, and Members of
We considered all of these comments as we developed the policies in this proposed rule. Though we do not address each comment received, we discuss many of the comments throughout the proposed rule. In addition, HHS will be consulting with federally recognized tribes on the provisions of this proposed rule that impact tribes.
C. Structure of the Proposed Rule
The regulations outlined in this proposed rule would be codified in 45 CFR parts 147, 155, and 156. Part 147 outlines proposed standards for health insurance issuers in the small group and individual markets related to health insurance reforms. Part 155 outlines the proposed standards for states relative to the establishment of Exchanges and outlines the proposed standards for Exchanges related to minimum Exchange functions. Part 156 outlines the proposed standards for issuers of QHPs, including with respect to participation in an Exchange. The standards proposed to be codified in Part 156 as laid out in this NPRM apply only in the individual and small group markets, and not to
II. Provisions of the Proposed Regulation
A. Part 147--Health Insurance Reform Requirements for the Group and Individual Health Insurance Markets
1. Subpart B--Requirements Relating to Health Care Access
a. Coverage of EHB (
Section 2707(a) of the Public Health Service Act (PHS Act), as added by the Affordable Care Act, directs health insurance issuers that offer non-grandfathered health insurance coverage in the individual or small group market to ensure that such coverage includes the EHB package defined under section 1302(a) of the Affordable Care Act that includes the coverage of EHB, application of cost-sharing limitations, and AV requirements (plans must be a bronze, silver, gold, or platinum plan or a catastrophic plan).
Section 1255 of the Affordable Care Act provides that this EHB package standard applies starting the first plan year for the small group market or policy year for the individual market beginning on or after
PHS Act section 2707(b) provides that a group health plan shall ensure that any annual cost-sharing imposed under the plan does not exceed the limitations provided for under section 1302(c)(1) and (c)(2) of the Affordable Care Act. Section 715(a)(1) of the Employee Retirement Income Security Act (ERISA) and section 9815(a)(1) of the Internal Revenue Code (Code) incorporates section 2707(b) of the Public Health Service Act into ERISA and the Code. HHS, DOL, and the
In addition, section 2707(c) of the PHS Act provides that an issuer offering any level of coverage specified under section 1302(d) of the Affordable Care Act offer coverage in that level to individuals who have not attained the age of 21. We propose to codify this standard in
State Required Benefits
Section 1311(d)(3)(B) of the Affordable Care Act explicitly permits a state to require QHPs to offer benefits in addition to EHB, but requires the state to make payments, either to the individual enrollee or to the issuer on behalf of the enrollee, to defray the cost of these additional benefits. We propose that state-required benefits enacted on or before
HHS received many comments in response to the EHB Bulletin about how state-required benefits beyond EHB could be identified and how states would defray the cost of those benefits. In this proposed rule, we interpret state-required benefits to be specific to the care, treatment, and services that a state requires issuers to offer to its enrollees. Therefore, state rules related to provider types, cost-sharing, or reimbursement methods would not fall under our interpretation of state-required benefits. Even though plans must comply with those state requirements, there would be no federal obligation for states to defray the costs associated with those requirements. /8/
FOOTNOTE 8 For example, a state statute requiring issuers to pay the same for a physician consultation in the office and via telemedicine would not be a state-required benefit. The physician consultation is the service; the requirement to pay for telemedicine relates to payment for the service delivery method. Since the requirement addresses a specific delivery method, not the underlying care, treatment, or service being delivered, there is no requirement to defray the cost. END FOOTNOTE
Under the Affordable Care Act, state payment for state-required benefits only applies to QHPs. Since the Exchange is responsible for certifying QHPs, we propose that the Exchange identify which additional state-required benefits, if any, are in excess of the EHB. HHS intends to publish a list of state-required benefits for Exchanges to use as a reference tool.
After consideration of four possible entities to conduct the cost calculation for additional coverage (QHP issuers, the state, the Exchange, or HHS), we believe that the QHP issuer should conduct the calculation for the cost of additional benefits, because the QHP generates the necessary data regarding claims, utilization, trend, and other issuer-specific data typically used to calculate the cost of a benefit. Because QHP issuers will offer state-required benefits to every enrollee, the cost of the benefit will be built into the overall premium and spread across all enrollees. We believe that the best method to calculate the state's cost, if applicable, is to have the QHP issuer quantify the amount of premium attributable to each additional benefit.
We additionally propose that the calculations of the cost of additional benefits be made by a member of the
Accreditation Timeline (
FOOTNOTE 9 Section 36B1401(b)(3)(D) of the Code specifies that the portion of the premium allocable to required additional benefits shall not be taken into account in determining a premium tax credit. Likewise, section 1402(c) of the Affordable Care Act specifies that cost-sharing reductions do not apply to required additional benefits. END FOOTNOTE
HHS proposes to amend
The proposed accreditation timeline to be used in Federally-facilitated Exchanges is as follows:
* During certification for an issuer's initial year of QHP certification (for example, in 2013 for the 2014 coverage year), a QHP issuer without existing commercial,
* Prior to a QHP issuer's second year and third year of QHP certification (for example, in 2014 for the 2015 coverage year and 2015 for the 2016 coverage year), a QHP issuer must be accredited by a recognized accrediting entity on the policies and procedures that are applicable to their Exchange products or, a QHP issuer must have commercial or
* Prior to a QHP issuer's fourth year of QHP certification and in every subsequent year of certification (for example, in 2016 for the 2017 coverage year and forward), a QHP issuer must be accredited in accordance with 45 CFR 156.275.
1. Subpart A--General Provisions
In SEC 156.20, we propose to add definitions as follows:
Actuarial Value and Percentage of the Total Allowed Costs of Benefits
We propose to define "AV" as the percentage paid by a health plan of the total allowed costs of benefits (using the term "percentage of the total allowed costs of benefits" that we also propose to define here).
In general, AV can be considered a general summary measure of health plan generosity. We propose to define the "percentage of the total allowed costs of benefits" as the anticipated covered medical spending for EHB coverage (as defined in
Because section 1302(d)(2) of the Affordable Care Act refers to AV relative to coverage of the EHB for a standard population, we propose these definitions together in order to provide that AV is the percentage that represents the total allowed costs of benefits paid by the health plan, based on the provision of EHB as defined for that plan according to
Benchmark Plans
Under the benchmark selection and standards proposed in
We propose that "base-benchmark plan" means the plan that is selected by a state from the options described in
We propose that "EHB-benchmark plan" means the standardized set of EHB that must be met by a QHP or other issuer as required by
We propose that "EHB package" means the scope of covered benefits and associated limits of a health plan offered by an issuer, as set forth in section 1302(a) of the Affordable Care Act. The EHB package provides at least the ten statutory categories of benefits, as described in
2. Subpart B--EHB Package
a. State Selection of Benchmark (
In SEC 156.100, we propose criteria for the selection process if a state chooses to select a benchmark plan. As we note in
FOOTNOTE 10
Consistent with the approach outlined in the EHB Bulletin, we propose in
FOOTNOTE 11 http://cciio.cms.gov/resources/files/largest-smgroup-products-7-2-2012.pdf.PDF END FOOTNOTE
Proposed paragraph (a)(1) of
FOOTNOTE 12
We believe that our proposed approach and the benchmark options available to states for defining EHB best reflect the balance between comprehensiveness, affordability, and state flexibility as recommended by the IOM.
Because the PHS Act defines "state" to include the U.S. territories (
In Appendix A: List of Proposed EHB Benchmarks, we provide a list of proposed benchmarks either selected by states or, for states that have not selected, we propose what the default benchmark plan would look like if the benchmark was determined by the Secretary in accordance with
At SEC 156.100(b), we propose the standard for approval of a state-selected EHB-benchmark plan. Section 156.100(b) specifies that to become an EHB-benchmark plan, a base-benchmark plan must meet the specifications in
Sections 1302(b)(4)(G) and (H) of the Affordable Care Act direct the Secretary to periodically review the definition of EHB, report the findings of such review to the
We intend to use the enforcement processes and standards established in 45 CFR part 150 to ensure that plans adhere to the EHB standards incorporated under the PHS Act. Part 150 sets forth HHS's enforcement processes under sections 2723 and 2761 of the PHS Act, with respect to the requirements of title XXVII of the PHS Act. Section 2723 generally provides that states have primary enforcement authority over health insurance issuers, but allows HHS to take enforcement actions against issuers in a state if a state has notified HHS that it has not enacted legislation to enforce or that it is not otherwise enforcing, or when HHS has determined that a state is not substantially enforcing one or more provisions of part A of title XXVII of the PHS Act. HHS may also take direct enforcement action against issuers in a state if HHS determines, pursuant to the process set forth in45 CFR part 150, that a state is not substantially enforcing a provision of part A of title XXVII of the PHS Act. This enforcement authority is extended through section 1321(c)(2) of the Affordable Care Act to apply to enforcement of the requirements under title I of the Affordable Care Act, including section 1302.
In SEC 156.100(c), we propose that if a state does not make a selection using the process defined in this section, the default base-benchmark plan will be the largest plan by enrollment in the largest product in the state's small group market.
b. Determination of EHB for Multi-State Plans (
In SEC 156.105, we propose an alternative way of complying with the EHB requirement for multi-state plans offered under contract with
c. EHB Benchmark Plan Standards (
Many commenters urged HHS to establish standards or a process to ensure that an EHB-benchmark plan contains all 10 statutory EHB categories, reflects an appropriate balance among the categories, and is non-discriminatory. In addition, a number of commenters suggested factors for consideration in selecting an EHB-benchmark plan, including plan comprehensiveness, affordability, administrative simplicity, evidence-based practice, ethics, population health, inclusion of value-based insurance design, and continuity of coverage.
To clarify the relationship between the 10 statutory categories and the EHB-benchmark plan, in paragraph (a) we propose that the EHB-benchmark plan must provide coverage of at least the following categories of benefits described in section 1302(b)(1) of the Affordable Care Act: (1) Ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services, including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care.
With respect to the tenth category, we interpret "pediatric services" to mean services for individuals under the age of 19 years. Several states have asked HHS to define the age for coverage of "pediatric services" to ensure comprehensive and consistent treatment in every state. This interpretation is consistent with the age stated in the Affordable Care Act's prohibition on preexisting conditions for children, and the age limit for eligibility to enroll in the CHIP. While we recommend coverage of pediatric services up to age 19, states have the flexibility to extend pediatric coverage beyond the proposed 19 year age limit.
Since some base-benchmark plan options may not cover all 10 of the statutorily required EHB categories, in paragraph (b), we propose standards for supplementing a base-benchmark plan that does not provide coverage of one or more of the categories described in paragraph (a). In paragraph (b)(1), we propose that if a base-benchmark plan option does not cover any items and services within an EHB category, the base-benchmark plan must be supplemented by adding that particular category in its entirety from another base-benchmark plan option. The resulting plan, which would reflect a base-benchmark that covers all 10 EHB categories, would be required to meet standards for non-discrimination and balance defined in paragraphs (d) and (e) of this section. After meeting all of these requirements, it would be considered the EHB-benchmark plan.
In paragraphs (b)(2) and (b)(3), we discuss two categories of benefits that may not currently be included in some major medical benefit plans, but which will be included in the EHB defined in
In paragraph (b)(2), we provide states with two options for supplementing base-benchmark plans that do not include benefits for pediatric oral care coverage. The first option, described in paragraph (b)(2)(i), is to supplement with pediatric coverage included in the FEDVIP dental plan with the largest enrollment. The second option, described in paragraph (b)(2)(ii), is to supplement with the benefits available under that state's separate CHIP program, if applicable.
Similarly, in paragraph (b)(3), we propose that if the base-benchmark plan does not include pediatric vision services, then these benefits may be supplemented from one of two options. The first option, described in (b)(3)(i), is to supplement pediatric vision coverage included in the FEDVIP vision plan with the largest national enrollment offered to Federal employees under 5 U.S.C. 8982. The second option, described in (b)(3)(ii), is to supplement pediatric vision coverage with the state's separate CHIP plan, if applicable. We believe that this additional option--an expansion of the policy presented in the EHB Bulletin--will provide states with valuable flexibility as they select their EHB benchmark plans. HHS will make benefit data available to facilitate any supplementation by states of their base-benchmark plans with benefits from FEDVIP dental and vision plans prior to the publication of this final rule.
In paragraph (c), we propose the process by which HHS would supplement a default base-benchmark plan, if necessary. We clarify that to the extent that the default base-benchmark plan option does not cover any items and services within an EHB category, the category must be added by supplementing the base-benchmark plan with that particular category in its entirety from another base-benchmark plan option. Specifically, we propose that HHS would supplement the category of benefits in the default base-benchmark plan with the first of the following options that offer benefits in that particular EHB category: (1) The largest plan by enrollment in the second largest product in the state's small group market as defined in
In paragraph (d), we propose that the EHB-benchmark plan must not include discriminatory benefit designs. As set forth in
In paragraph (e), we propose implementing section 1302(b)(4) of the Affordable Care Act by proposing that the EHB-benchmark plan be required to ensure an appropriate balance among the categories of EHB so that benefits are not unduly weighted toward any category. We solicit comments on potential approaches to ensuring that the EHB-benchmark plans do not include discriminatory benefit designs and reflect an appropriate balance among the categories of EHB. In conducting research on employer-sponsored plan benefits and state-required benefits, HHS found that many health insurance plans do not identify habilitative services as a distinct group of services. /13/ Accordingly, we are proposing a transitional policy for coverage of habilitative services that would provide states with the opportunity to define these benefits if not included in the base-benchmark plan. Specifically, in paragraph (f), we propose that in order to define EHB, if the base-benchmark plan does not include coverage of habilitative services the state may determine the services included in the habilitative services category. We believe that this transitional policy--which provides states with additional flexibility beyond what was initially outlined in the EHB Bulletin will provide a valuable opportunity for states to lead the development of policy in this area and welcome comments on this proposed approach to providing habilitative services. If states choose not to define the habilitative services category, plans must provide these benefits as defined in
FOOTNOTE 13 ASPE Research Brief, "Essential Health Benefits: Comparing Benefits in Small Group Products and State and Federal Employee Plans."
Because states may propose benchmarks in formal comments on this proposed rule other than those tentatively proposed, HHS is requesting public comment on all possible EHB-benchmark plans, not just those included in Appendix A as proposed benchmarks. This would also include each potential base-benchmark plan available to a state for selection and all potential combinations of benefits used to supplement the base-benchmark plans to ensure coverage of at least the 10 statutory benefit categories as set forth in
d. Provision of EHB (
In paragraph (a)(1), we propose that plans may have limitations on coverage that differ from the EHB-benchmark plan, but covered benefits must remain substantially equal to those covered by the EHB-benchmark plan. This standard applies to the covered benefits, limitations on coverage (including limits on the amount, duration, and scope of covered benefits), and prescription drug benefits that meet the requirements of
As previously noted, the Affordable Care Act identifies coverage of mental health and substance use disorder benefits as one of the 10 statutory benefit categories, and therefore as an EHB for non-grandfathered health insurance coverage in both the individual and small group markets. In paragraph (a)(2), under our authority to define EHB, we propose that in order to satisfy the requirement to offer EHB, mental health and substance use disorder services, including behavioral health treatment services required under
In paragraph (a)(3), we further propose that a plan does not provide EHB unless it provides all preventive services described in section 2713 of the PHS Act, as added by section 1001 of the Affordable Care Act. As codified in
As an alternative to the transitional approach outlined in
We first introduced the concept of benefit substitution in the EHB Bulletin, which suggested that a plan offering the EHB could substitute a benefit or set of benefits for another benefit or set of similar benefits subject to certain constraints--for example, that the two sets of benefits be actuarially equivalent. In this proposed rule, we propose this policy for the substitution of benefits relative to the benefits defined by the EHB benchmark plan consistent with what HHS outlined in the EHB Bulletin. As outlined in paragraph (b)(1)(i), we propose that issuers may substitute benefits, or sets of benefits, that are actuarially equivalent to the benefits being replaced. We further propose in paragraph (b)(1)(ii) that substitution of benefits would be allowed in each of the 10 statutorily required benefit categories, meaning that substitution could only occur within benefit categories, not between different benefit categories. In paragraph (b)(1)(iii), we clarify that our proposed benefit substitution policy does not apply to prescription drug benefits. In paragraph (b)(2), we outline standards for an actuarial certification that must be submitted by an issuer to a state, which demonstrates that any substituted benefit, or group thereof, is actuarially equivalent to the original benefit or benefits contained in the EHB-benchmark for that state. Specifically, we propose that the report must: (i) Be conducted by a member of the
In response to our proposed approach to benefit substitution, we seek additional comment on the tradeoff between comparability of benefits and opportunities for plan innovation and benefit choice.
In paragraph (c), we propose to clarify that a plan does not fail to provide the EHB solely because it does not offer the services described in
In paragraph (d), we propose that an issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, and long-term/custodial nursing home care benefits as EHB. As previously noted, section 1302 of the Affordable Care Act requires that the EHB package include at least the 10 statutorily required categories of EHB, and be equal to the scope of benefits provided under a typical employer plan. In contrast with the benefits covered by a typical employer health plan, non-pediatric dental services, non-pediatric eye exam services, cosmetic orthodontia, and long-term/custodial nursing home care benefits often qualify as excepted benefits. /14/ Pursuant to the direction provided in section 1302 to define benefits equal in scope to a typical employer plan, we propose that issuers of plans offering EHB may not include these benefits as EHB. We solicit comment on the exclusion of these specific benefits from EHB coverage.
FOOTNOTE 14 For more information on excepted benefits, see 26 CFR 54.9831-1, 29 CFR 2590.732, 45 CFR 146.145, and 45 CFR 148.220. END FOOTNOTE
e. Prescription Drug Benefits (
In the EHB Bulletin, we indicated that we were considering an option under which, in order to be considered substantially equal to the EHB-benchmark plan, issuers would be required to cover at least one drug in each category and class in which the EHB-benchmark plan covered at least one drug. The specific drugs on each plan's drug list could vary under this approach, as long as a drug in each category and class was covered.
In response to the EHB Bulletin, a large number of commenters raised concerns about the comprehensiveness of prescription drug benefits under this potential approach. Specifically, many commenters indicated that a requirement to offer one drug per category and class could result in insufficient access to medications for individuals with certain conditions. Several commenters additionally recommended that the definition of EHB adopt the standards used in
FOOTNOTE 15 CMS has identified certain "protected categories and classes." In those protected categories and classes, Plan D formularies must include substantially all drugs that are
In paragraph (a)(1) we propose that in order to comply with the requirement to cover EHB, a plan would cover at least the greater of: (1) One drug in every category and class; or (2) the same number of drugs in each category and class as the EHB-benchmark plan. As such, if the EHB-benchmark drug list offers more than one drug in a category or class, then plans covering EHB would offer at least the number of drugs in the EHB-benchmark plan for that class. Research suggests that this is consistent with coverage in the small group market today: one study found that most existing small group plans cover more than one drug in each class. /16/ In paragraph (a)(2) we propose that a QHP must report its drug list to the Exchange, an EHB plan operating outside of the Exchange must report its drug list to the state, and a multi-state plan must report its drug list to OPM. In paragraph (b) we clarify that a health plan does not fail to provide EHB prescription drug benefits solely because it does not offer drugs that are
FOOTNOTE 16 Available at: http://www.avalerehealth.net/pdfs/Avalere_EHB_Formulary_Analysis.pdf. END FOOTNOTE
We are considering using the most recent version of the United States Pharmacopeia's (USP) classification system as a common organizational tool for plans to report drug coverage because it is publically available, widely used, and comprehensive. A classification system functions as an organizational tool, similar to an outline or taxonomy. Directing plans to submit their drug list using the same classification system would facilitate review, analysis, and comparison of the number of drugs on the QHP's list to the number of drugs on the EHB Benchmark Plan's list. If adopted in the final rule, we will continue to assess the need for and value of such a tool and intend to work with states and the NAIC to facilitate state use of the USP classification system as a comparison tool. /17/
FOOTNOTE 17 The requirement to use USP classification applies only to submission of formulary for review/certification. Plans may continue to use any classification system they choose in marketing and other plan materials. END FOOTNOTE
In general, each EHB plan would be able to cover different drugs than are covered by the EHB-benchmark plan, but those drugs must be presented using the USP classification system. This approach permits plan flexibility in the drug benefit design and the use of medical management tools, while ensuring that plans offer drug coverage consistent with that of the typical employer plan. An EHB plan would be able to cover any drugs subject to meeting the minimum number per category and class.
We also propose that drugs listed must be chemically distinct. /18/ For example, offering two dosage forms or strengths of the same drug would not be offering drugs that are chemically distinct. Offering a brand name drug and its generic equivalent is another example of drugs that are not chemically distinct.
FOOTNOTE 18 The concept of chemically distinct is also described in the Medicare Part D Manual, Chapter 6, Section 30.2.1. More information is available at: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/downloads//Chapter6.pdf. END FOOTNOTE
In paragraph (c), we propose that a plan offering EHB have procedures in place to ensure that enrollees have access to clinically appropriate drugs that are prescribed by a provider but are not included on the plan's drug list, which is consistent with private plan practice today. We solicit comments on this proposed requirement.
As discussed below,
f. Prohibition on Discrimination (
Section 1302(b)(4) of the Affordable Care Act directs the Secretary to address certain standards in defining EHB, including elements related to balance, discrimination, the needs of diverse sections of the population, and denial of benefits. Section 1302(b)(4)(B) of the Affordable Care Act provides that the Secretary ensure that in terms of the benefits covered, payment rates provided, or incentives built into the definition of EHB, there is no discrimination based on age, disability, or expected length of life. Similarly, section 1302(b)(4)(C) of the Affordable Care Act provides that the Secretary take into account the health care needs of diverse segments of the population, including women, children, persons with disabilities, and other groups. In addition, section 1302(b)(4)(D) of the Affordable Care Act provides that the Secretary ensure that the EHB not be subject to denial to individuals against their wishes on the basis of the individuals' age or expected length of life, or of the individuals' present or predicted disability, degree of medical dependency, or quality of life. Taken collectively, we interpret these provisions as a prohibition on discrimination by issuers. To inform the development of the policy on discrimination in the EHB, we sought stakeholder feedback, and considered guidance provided by the IOM. Many commenters expressed concern about the potential for benefit designs that might discriminate against certain populations or consumers with significant health needs. Commenters also recommended that HHS establish an explicit non-discrimination policy for benefit design. Based on this information, in
To address potentially discriminatory practices, based on the authority in section 1302(b)(4) of the Affordable Care Act, we propose in paragraph (a) that an issuer does not provide EHB if its benefit design, or the implementation of its benefit design, discriminates based on an individual's age, expected length of life, or present or predicted disability, degree of medical dependency, quality of life, or other health conditions. In paragraph (b), we reiterate that
This proposal is intended to develop the framework for analysis tools to facilitate testing for discriminatory plan benefits. The IOM, in its report on the EHB, suggests that states have an important role in monitoring to ensure that issuers' plans do not contain outlier practices that would undermine EHB coverage. We believe that discrimination analyses could include evaluations to identify significant deviation from typical plan offerings including unusual cost sharing and limitations for benefits with specific characteristics. We also note that Medicare Advantage Program cost-sharing designs are subjected to this type of analysis for potential discriminatory effects. We welcome comments on our proposed approach to prohibiting discriminatory benefit design.
g. Cost-Sharing Requirements (
Section 1302(c)(1) of the Affordable Care Act identifies an annual limitation on enrollee cost sharing. Section 1301(a)(1)(B) of the Affordable Care Act requires all qualified health plans to comply with these limits, and section 2707(a) of the Public Health Service Act requires compliance by issuers offering non-grandfathered health insurance coverage in the individual and small group markets. Standards proposed here, at
Cost sharing is defined in
In SEC 156.130(a), we codify the Affordable Care Act's annual limitation on cost sharing for 2014 and in subsequent years. Section 1302(c)(1)(A) of the Affordable Care Act identifies the limit on total enrollee cost-sharing that can be incurred. The annual limitation on cost sharing ensures that health plans pay for significant health expenses associated with EHB and the risk of medical debt or bankruptcy for individuals insured by such plans is limited. Once the limitation on cost sharing is reached for the year, the enrollee is not responsible for additional cost sharing for EHBs for the remainder of the plan year.
Section 156.130(a)(1) ties the annual limitation on cost sharing for plan years beginning on or after
FOOTNOTE 19 http://www.irs.gov/pub/irs-drop/rp-12-26.pdf. END FOOTNOTE
Sections 1302(c)(2)(A)(i) and 1302(c)(2)(A)(ii) of the Affordable Care Act define and
Section 1302(c)(2)(C) of the Affordable Care Act directs that the limit on deductibles described in section 1302(c)(2)(A) for a health plan offered in the small group market be applied so as to not affect the actuarial value of any health plan. We interpret and implement this provision through our proposal at
We propose to use a "reasonableness" standard and request comment on what evidence or factors should be required from an issuer and considered in determining whether this standard is met with respect to health insurance coverage subject to 2707(b) of the PHS Act. While it may be possible to develop plan designs to meet all of these constraints, we believe it could be difficult to develop plans with reasonable coinsurance or equivalent cost sharing rates in the future, for example in bronze plans. An alternative would be to use the actuarial value calculator described in
Section 1302(c)(2)(A) of the Affordable Care Act provides that in certain circumstances, the deductible maximums described in
In SEC 156.130(c), we propose a special rule for network plans. Under our proposal, cost- sharing requirements for benefits from a provider outside of a plan's network do not count towards the annual limitation on cost sharing, as defined in paragraph (a) of this section, or the annual limitation on deductibles, as defined in paragraph (b) of this section. We consider an out-of-network provider to be a provider with whom the issuer does not have a contractual arrangement with respect to the applicable plan. For example, if an issuer offers a three-tiered network plan, with the third tier considered to be "out-of-network" (that is, providers without contractual relationships for providing services), only the cost sharing that an enrollee pays for benefits provided under the first and second tiers would count towards the annual limitation on cost sharing (and, if the plan is one offered in the small group market, the annual limitation on deductibles). Therefore, an enrollee who utilizes many services could reach the annual limitation on cost sharing, but still be required to pay cost sharing if the enrollee chooses to purchase services outside of the plan's network that year. This policy aligns with the definition of the enrollee out-of-pocket limit for high deductible health plans, articulated in section 223(c)(2)(D) of the Code. We believe this policy would allow issuers greater flexibility to design innovative plan benefit structures. We note that nothing in this proposal explicitly prohibits an issuer from voluntarily establishing a maximum out-of-pocket limit applicable to out-of-network services, or a state from requiring that issuers do so. We welcome comment on this approach.
In SEC 156.130(d), we codify sections 1302(c)(1)(B) and 1302(c)(2)(B) of the Affordable Care Act by requiring that the annual limitation on cost sharing and the annual limitation on deductibles for a plan year beginning after calendar year 2014 only increase by multiples of
In paragraph (e), we codify section 1302(c)(4) of the Affordable Care Act, which specifies that the premium adjustment percentage is calculated as the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance for 2013. This ensures that the annual limitation on cost sharing and the annual limitation on deductibles change with health insurance market premiums over time. HHS will publish the methodology and annual premium adjustment percentage in the annual HHS notice of benefit and payment parameters. /20/
FOOTNOTE 20 The annual HHS notice of benefit and payment parameters will first be published this year, as discussed in the Standards Related to Reinsurance, Risk Corridors and Risk Adjustment, final rule (77 FR 17220 (
In paragraph (f), we codify section 1302(c)(2)(D) of the Affordable Care Act, which states that the annual deductibles do not apply to preventive care described in
Paragraph (h) would implement the requirements in section 1302(b)(4)(E) of the Affordable Care Act that (1) emergency department services will be provided out-of-network /21/ without imposing any requirement under the plan for prior authorization of services, or any limitation on coverage for the provision of services, that is more restrictive than the requirements or limitations that apply to emergency department services received from network providers, and (2) cost sharing in the form of a copayment or coinsurance for emergency department services amount for an out-of-network provider is the same as would apply to an in-network provider. Because we have already promulgated regulations at
FOOTNOTE 21 For consistency, we are using the term "out-of-network" here to refer to services where the "provider of services does not have a contractual relationship with the plan," as this phrase is used in section 1302(b)(4)(E). END FOOTNOTE
h. AV Calculation for Determining Level of Coverage (
As we stated previously in connection with
FOOTNOTE 22 Available at http://cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf. END FOOTNOTE
The AV calculator, as proposed here, has been developed using a set of claims data weighted to reflect the standard population projected to enroll in the individual and small group markets for the identified year of enrollment. Plans would input information on cost-sharing parameters. A methodology document including both the logic behind the calculator and a description of the development of the standard population, represented in the calculator as tables of aggregated data called continuance tables, is available and proposed at http://cciio.cms.gov/resources/regulations/index.html#pm to promote transparency. The document is part of the proposal for the use of the AV calculator in determining actuarial value of an applicable plan.
We solicit comment on the methodology for the development of the AV calculator and the continuance tables, which were developed based on the standard population. The consistent methodology in AV calculation ensures a consistent set of assumptions and methods in AV calculation for all health plans using the calculator, resulting in comparability for consumers since plans with the same cost-sharing design would have the same AV. Because empirically only a small percentage of total costs come from out-of-network utilization, the difference in a plan's AV resulting from the inclusion of out-of-network utilization in the AV calculation is small. Therefore, the proposal for determining AV and, thus, the calculator only considers in-network utilization. Comments from the
Under this proposal, the AV calculator will be available for both formal and informal calculations and could be used as a tool to assist in the design of health plans. The calculator will allow health plan issuers to devise a compliant plan without the burden of making the assumptions needed or paying for the analysis for an AV calculation. Thus, the calculator would reduce issuer burden in calculating AV. We solicit comment on this proposal to direct the use of the AV calculator and on the parameters described here for development of the AV calculator.
Consistent with section 1302(d)(2)(A) of the Affordable Care Act, that AV be calculated based on the provision of the EHB to a standard population, we propose that the AV calculator will use one or more sets of national claims data reflecting plans of various levels of generosity as the underlying standard population. We considered distributing a standard set of de-identified individual-level claims data to issuers as the standard population and allowing them to estimate the AV of their plans by comparing that standard set of claims against their plan designs. However, we are not aware at this time of a sufficiently robust person-level data set that could be made publicly available. As another alternative, we considered distributing only the continuance tables, representing the standard population and its utilization, to issuers to perform AV calculations. Under this method, the set of assumptions would be more uniform, but there would still be inconsistency and variation among issuers depending on the specific calculation method and logic used by each issuer. Comments on the AV/CSR Bulletin were generally supportive of the approach we propose here to develop a publicly available and transparent AV calculator based on a standard population represented through continuance tables.
In paragraph (b), we propose options for an issuer whose plan designs do not permit the calculator to provide an accurate summary of plan generosity. Although HHS anticipates that the vast majority of plans will be able to use the calculator in 2014 and beyond, no uniform calculator can accommodate the entire potential universe of plan designs. Therefore, there may be a small subset of plans whose design would not be compatible with the calculator. We intend to interpret this standard as dependent on whether the calculator takes into account or accommodates all material aspects of a plan's cost sharing structure. For example, we expect that the calculator will not be able to accommodate plan designs with multiple coinsurance rates as different levels of out-of-pocket spending are met or a multi-tier network with substantial amounts of utilization expected in tiers other than the lowest-priced tier. As proposed in paragraph (b)(1), these plans would need to submit to the appropriate entity (the state, HHS, the Exchange, or OPM) documentation in the form of actuarial certification that they have complied with one of the methods described below.
Paragraph (b)(2) proposes two options to accommodate plans with benefit designs that cannot be accommodated by the AV calculator. In paragraph (b)(2)(i), we propose that a health plan issuer be permitted to decide how to adjust the plan benefit design (for calculation purposes only) to fit the parameters of the calculator and then, pursuant to paragraph (b)(2)(ii), have an actuary who is a member of the
In paragraph (c), we propose a standard for the treatment of small group market HDHPs offered with a health savings account (HSA) or a health plan in the small group market integrated with a health reimbursement arrangement (HRA), so that HDHP and HSAs/HRAs are integrated. Recognizing that simply calculating the AV of the HDHP based on the insurance plan alone could understate the value of coverage if the values of the employer contribution to such accounts are not included, and that employer-provided HSAs and HRAs are generally the equivalent of first dollar coverage for any cost-sharing requirements encountered by the enrollee, in paragraph (c)(1), we propose that the annual employer contributions to HSAs and amounts newly made available under HRAs for the current year should count within the plan design. This treatment of HSA and HRA contributions is similar to how other employer contributions toward cost-sharing are treated within the plan design, such that a plan with a
Section 1302(d)(2)(B) of the Affordable Care Act directs the Secretary to issue regulations under which employer contributions to an HSA (within the meaning of section 223 of the Internal Revenue Code of 1986) may be taken into account in determining the level of coverage for a plan of the employer. HHS is interpreting the statute to allow for a similar treatment of HRAs because amounts newly made available under an HRA integrated with a small group market plan have a similar impact on AV calculation as employer contributions to an HSA when adjusted as described below in the discussion of paragraphs (c)(2)(i) and (c)(2)(ii). In paragraph (c)(2), we propose that these contributions be applied to the plan design to account for the fact that HSA and HRA contributions are the equivalent of first dollar coverage for any cost-sharing requirements encountered by the enrollee and similar to other employer cost-sharing contributions to plan design.
In paragraphs (c)(2)(i) and (c)(2)(ii), we propose that the AV calculator would include any current year HSA contributions or amounts newly made available under an HRA for the current year as an input into the calculator that can be used to determine the AV of an employer health benefit plan. We note that employee HSA contributions will not count towards AV, nor do these provisions apply to the coverage offered by issuers in the individual market because HSAs in the individual market are funded directly by the enrollee.
Paragraph (d) proposes that in years 2015 and after, a state-specific data set may be used as the standard population (i.e. in place of the HHS-issued continuance tables) for AV calculations if approved by HHS. Issuers in such a state would still use the AV calculator logic, but the underlying data used for generating the AV would be specific to the state. Paragraphs (d)(1) through (5) propose criteria for acceptable state claims data and their use. The proposed criteria are based on our review of a July, 2011
FOOTNOTE 23 Available at http://www.actuary.org/pdf/health/Actuarial_Value_Issue_Brief_072211.pdf. END FOOTNOTE
FOOTNOTE 24 http://cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf. END FOOTNOTE
In paragraph (e), HHS proposes that the default standard population provided by HHS, which is described in paragraph (f) and represented in the continuance tables incorporated into this regulatory proposal by reference, would be used unless the state submits its own standard population consistent with paragraphs (d) and (e). In paragraph (e), HHS proposes that the state data set be submitted in a format that can support the AV calculator described in paragraph (a). Because HHS will use continuance tables to support the development of the AV calculator, we anticipate that states will also submit any state-specific data sets in the form of continuance tables. HHS intends to provide a template and instructions for these submissions.
Several comments on the AV/CSR Bulletin requested additional guidance on the process and timeline for state submission of data. We remain open to comments on the use of state data for 2014, but given timing constraints, we propose that the option for states to submit a state-specific standard population will begin for plan years starting in 2015. We expect that submissions will be due in the second quarter of the year prior to the benefit year.
Paragraph (f) proposes that HHS will develop the standard population to be used to calculate AV in accordance with section 1302(d)(2)(A) of the Affordable Care Act, which requires that AV be calculated using a standard population. This standard population will be used for AV calculation under
i. Levels of Coverage (
This section describes standards for meeting the Affordable Care Act provisions that issuers offering QHPs or non-grandfathered health plans in the individual and small group markets offer plans that meet distinct levels of coverage; we note that an applicable issuer may offer a catastrophic plan, as described in section 1302(e) of the Affordable Care Act, in lieu of a health plan that meets one of these levels of coverage. Section 1302(d)(2) of the Affordable Care Act directs the Secretary to issue regulations on the calculation of AV and its application to the levels of coverage.
Paragraph (a) proposes the general requirement that the AV of a plan must be calculated according to
Paragraph (b) proposes to codify section 1302(d)(1) of the Affordable Care Act, which requires that a bronze plan has an AV of 60 percent; a silver plan, 70 percent; a gold plan, 80 percent; and a platinum plan, 90 percent.
Paragraph (c) proposes standards for de minimis variation. Section 1302(d)(3) of the Affordable Care Act authorizes the Secretary to determine a reasonable de minimis variation in the AVs used to determine levels of coverage. In paragraph (c), we propose a de minimis variation of +/- 2 percentage points for all non-grandfathered plans. For example, a silver plan could have an AV between 68 and 72 percent. We believe that a de minimis amount of +/- 2 percentage points strikes the right balance between ensuring comparability of plans within each metal level and allowing plans the flexibility to use convenient cost-sharing metrics. Comments on this proposal in the AV/CSR Bulletin were generally supportive of this approach.
j. Determination of Minimum Value (
Section 1302(d)(2)(C) of the Affordable Care Act sets forth the rules for calculating the percentage of the total allowed costs of benefits provided under a group health plan or health insurance coverage. Section 36B(c)(2)(C)(ii) of the Code provides that an employer-sponsored plan provides minimum value (MV) if this percentage is no less than 60 percent. For the purpose of determining that a given plan provides MV, we propose in paragraph (a) that the percentage of the total allowed cost of benefits will be determined using one of the main methodologies as described in Treasury Notice 2012-31, released on
In applying this approach to determining MV, in paragraph (a)(1), we propose that employer-sponsored self-insured and insured large group plans will be able to use the MV calculator, which will be made available by HHS and the
As an alternative to using the MV calculator, we propose in paragraph (a)(2) that an employer-sponsored plan would be able to use an array of design-based safe harbors published by HHS and the
Finally, if an employer-sponsored plan contains non-standard features that are not suitable for the use of the calculator and do not fit the safe harbor checklists, we propose in paragraph (a)(3) to permit MV to be determined through certification by an actuary without the use of the MV calculator. The actuary would make this determination based on the plan's benefits and coverage data and the standard population, utilization, and pricing tables available for purposes of the valuation of employer-sponsored plans. This final option would be available only when one of the other methodologies is not applicable to the employer-sponsored plan. We propose that the determination of MV must be made by a member of the
In the event that a plan uses the MV calculator and offers an EHB outside of the parameters of the MV calculator, we propose in paragraph (b)(1) that an actuary who is a member of the
We also propose, in paragraph (c), that MV determinations under
k. Application to Stand-alone Dental Plans inside the Exchange (
Section 1302 of the Affordable Care Act outlines the standards for health plans to cover the ten categories of the EHB. Section 1311(d)(2)(B)(ii) of the Affordable Care Act, as codified in
In paragraph (a), we propose that stand-alone dental plans would have a separate annual limitation on cost sharing from QHPs covering the remaining EHBs. While the annual limitation on cost-sharing for a QHP must be consistent with
We considered applying the full annual limitation on cost sharing described in section 1302(c) of the Affordable Care Act separately to stand-alone dental plans. However, if a person purchased pediatric dental benefits through a stand-alone plan, it would effectively double the potential out-of-pocket costs, putting individuals with similar coverage, but purchasing pediatric dental through a stand-alone plan, at much greater financial risk.
Another alternative would be to exclude the pediatric dental benefit entirely from the annual limitation on cost sharing, whether it is offered through a health plan or through a stand-alone dental plan. However, we were concerned that not applying any annual limitation on cost sharing to stand-alone dental plans would treat such benefits differently than plans offering an embedded pediatric dental benefit, which could create a price advantage over medical plans.
We also considered requiring that the combination of the annual limitations on cost-sharing in the QHP and the stand-alone dental plan must not exceed the limitations identified in
We request comment generally on whether this approach to applying the annual limitations on cost-sharing standard is appropriate for stand-alone dental plans.
In paragraph (b), we propose actuarial value standards for stand-alone dental plans. The calculator developed by HHS under
As an alternative, we considered requiring that a stand-alone dental plan meet at least a silver or gold level of coverage as certified by a member of the
3. Subpart C--Accreditation
Accreditation of QHP Issuers (
Recognition of Accrediting Entity by HHS (
This proposed rule would amend the current ("phase one") recognition process and provide additional accrediting entities the opportunity to apply and demonstrate how they meet the conditions for recognition articulated in section 1311(c)(1)(D) of the Affordable Care Act and 45 CFR 156.275(c)(2) through (c)(5). /25/ HHS intends, through future rulemaking, to establish a phase two recognition process which may establish additional criteria for recognized accrediting entities.
FOOTNOTE 25 Patient Protection and Affordable Care Act; Data Collection to Support Standards Related to Essential Health Benefits; Recognition of Entities for the Accreditation of Qualified Health Plans (CMS-9965-F), 77 FR 42,658 (
HHS's initial survey of the market showed that two entities, NCQA and URAC, met the statutory requirements for accreditation. During the public comment period for 45 CFR 156.275, additional accrediting entities indicated that they may soon meet the accreditation conditions specified in 45 CFR 156.275 (c)(2) and (c)(3). HHS believes that opening up the phase one recognition process to provide other entities an opportunity to apply would provide expanded choices regarding QHP accreditation for Exchanges, states and issuers.
Therefore, HHS proposes to amend
HHS is also amending
In a
III. Collection of Information
Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the
* The need for the information collection and its usefulness in carrying out the proper functions of our agency.
* The accuracy of our estimate of the information collection burden.
* The quality, utility, and clarity of the information to be collected.
* Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
Below is a summary of the proposed information collection requirements outlined in this regulation. Throughout this section we assume that each data collection will occur on an annual basis unless otherwise noted. We used the
A. ICRs Regarding Additional Required Benefits (
In SEC 155.170(c), we direct issuers to quantify and report to the Exchange the cost attributable to required benefits in addition to EHB. This is a third-party disclosure requirement. Issuers will use a uniform rate template in a revision to the Rate Increase Disclosure and Review Reporting Requirements PRA package (CMS-10379) (Rate Review PRA package) to report this information. The burden associated with meeting this data collection is included in the Rate Review PRA package. A
As noted in the Rate Review PRA package, we estimate that a total of 2,010 issuers in the individual market and 1,050 issuers in the small group market will offer products and that each issuer will have an average of 2.5 submissions per year. We anticipate that it will take an actuary a total of 11 hours to complete the uniform rate template, at
B. ICRs Regarding State Selection of Benchmark (
In SEC 156.100, we propose that a state may select a base-benchmark plan to serve as a reference plan to define EHB in that state. We also propose that if a state does not select a benchmark plan, its base-benchmark will be the largest plan by enrollment in the largest product in the state's small group market. In
We do not believe that this is a change to the information collection associated with state selection and submission of a benchmark plan and associated benefits and the data collection to establish default benchmark plans, including any required supplementing, which is already captured in the collection approved under OMB Control Number 0938-1174.
C. ICRs Regarding AV Calculation for Determining Level of Coverage (
In SEC 156.135(b), we propose to create an exception to using the AV calculator for issuers with health plans that are not designed in a way that is compatible with the AV calculator. To take advantage of this exception, issuers must submit an actuarial certification on their alternative method to the state, HHS, the Exchange, or OPM. This is a third-party disclosure requirement when the issuers submit to the state or the Exchange, and this is a reporting requirement when the issuers submit to HHS, OPM, or a Federally-facilitated Exchange. We account for this collection in the Initial Plan Data Collection to Support Qualified Health Plan Certification and Other Financial Management and Exchange Operations PRA package (CMS-10433) (QHP Certification PRA package). A
In the QHP Certification PRA package, we estimate that 1,200 issuers will each offer 15 potential QHPs, for a total of 18,000 potential QHPs, and that the per-issuer burden will be 175 hours. We estimate the cost per issuer in the first year of operations to be
In SEC 156.135(d), we propose that beginning in 2015, a state may submit a state-specific standard population, to be used for AV calculation, so long as the criteria described in
D. ICRs Regarding Stand-Alone Dental Plans Inside the Exchange (
In SEC 156.150(a), we propose that stand-alone dental plans covering the pediatric dental EHB under
We account for this collection in the QHP Certification PRA package, where we estimate that 40 issuers will each offer a stand-alone dental plan, and that the burden for certification will be 6 hours per issuer, at a total hourly billing rate of
E. ICRs Regarding Accreditation (
In SEC 156.275, HHS proposes an amendment to the phase one process by which accrediting entities can submit an application to be recognized by HHS for purposes of accrediting QHPs. HHS previously sought OMB approval for recognition of two specific entities under
1. Submit your comments electronically as specified in the ADDRESSES section of this proposed rule; or
2. Submit your comments to the
IV. Regulatory Impact Analysis
HHS has examined the impacts of this proposed regulation under Executive Order 12866 on Regulatory Planning and Review (
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866--emphasizing the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
A regulatory impact analysis (RIA) must be prepared for rules with economically significant effects (
A. Summary
As stated earlier in this preamble, this proposed regulation would implement the requirements related to EHB and AV levels of coverage, and establish the timeline according to which QHP issuers participating in FFEs must be accredited. We note that the Exchange regulation (45 CFR 156.200) established that QHPs will cover essential health benefits, as defined by the Secretary, and that QHPs be accredited on the basis of local performance. The cost to health plans of obtaining QHP certification and participating in Exchanges are already accounted for in the regulatory impact analysis that accompanies that regulation. /26/ Therefore, this analysis describes the incremental costs, benefits, and transfers associated with provisions in this proposed rule, for example that health plans cover the essential health benefits as specifically defined herein, and that health plans use the HHS-developed AV calculator.
FOOTNOTE 26 "Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans, Exchange Standards for Employers (CMS-9989-FWP) and Standards Related to Reinsurance, Risk Corridors and Risk Adjustment (CMS-9975-F): Regulatory Impact Analysis."
This proposed rule also contains details relating to the establishment of a timeline by which QHPs seeking certification by FFEs must be accredited. We do not believe that this results in incremental benefits, costs, or transfers.
HHS has proposed this regulation to implement the protections intended by the
B. Overview of Key Provisions in the Proposed Rule
As described earlier in this proposed rule, the Affordable Care Act directs the Secretary of the
In addition, the Affordable Care Act directs issuers offering non-grandfathered health in the individual and small group markets to ensure that any offered plan meets specific AVs. The proposed rule outlines a process for computing plan AV using an HHS-developed AV calculator, as well as standards and flexibility for issuers in meeting the metal tiers.
This rule proposes standards related to EHB and AV consistent with the Affordable Care Act. HHS believes that the provisions that are included in this proposed rule are necessary to fulfill the Secretary's obligations under sections 1302 and 1311 of the Affordable Care Act. Establishing specific approaches for defining EHB and calculating AV will bring needed clarity for states, issuers, and other stakeholders. Absent the provisions outlined in this proposed rule, states, issuers, and consumers would face significant uncertainty about how coverage of EHB should be defined and evaluated. Similarly, failing to specify a method for calculating AV could result in significant inconsistency across states and issuers. Finally, establishing a clear timeline for potential QHPs to become accredited is essential to successful issuer participation in FFEs.
D. Summary of Impacts and Accounting Table
In accordance with OMB Circular A-4, Table IV.1 below depicts an accounting statement summarizing HHS's assessment of the benefits, costs, and transfers associated with this regulatory action.
HHS anticipates that the provisions of this proposed rule will assure consumers that they will have health insurance coverage for essential health benefits, and significantly increase consumers' ability to compare health plans, make an informed selection by promoting consistency across covered benefits and levels of coverage, and more efficiently purchase coverage. This proposed rule ensures that consumers can shop on the basis of issues that are important to them such as price, network physicians, and quality, and be confident that the plan they choose does not include unexpected coverage gaps, like hidden benefit exclusions. It also allows for some flexibility for plans to promote innovation in benefit design.
Insurance contracts are extremely complicated documents; therefore, many consumers may not understand the content of the contracts they purchase. /27/ This complexity has two undesirable results. First, consumers may unknowingly purchase a product that does not meet their basic needs--the product may not cover benefits that the consumer needs to restore or maintain good health, or may result in more financial exposure than the consumer anticipated. Second, the complexity reduces competitive pressure on insurers, and blunts insurer incentives to improve the quality and value of the products they offer. As a result of complexity and information gaps, some consumers cannot purchase health insurance efficiently. This inefficiency may reduce incentives for insurers to improve the value of their products.
FOOTNOTE 27
The specific approach to defining EHB in this proposed rule realizes the benefits of simplicity and transparency by allowing each state to choose a benchmark from a set of plans that are typical of the benefits offered by employers in that state. The proposed rule allows that EHB in each state reflect the choices made by employers and employees in that state today, and minimizes disruption in existing coverage in the small group market. In addition, the proposed provisions addressing specific benefit categories, such as habilitative services and pediatric dental and vision services, will improve access to care for consumers who require these benefits.
The approach to defining AV in this proposed rule uses standard assumptions about utilization and prices, and, for most products, directs issuers to use an AV calculator created by the Department to compute AV. This approach will ensure that two plans with the same cost-sharing parameters (that is, deductibles, copayments, and coinsurance features) will have the same AVs. This approach is intended to lower consumer information costs and drive competition in the market by enabling consumers to easily compare the relative generosity of plans, knowing that the AV of each plan has been calculated in the same manner.
In accordance with Executive Order 12866, HHS believes that the benefits of this regulatory action justify the costs.
Table IV.1--Accounting Table Units Category Estimates Year Discount Period dollar rate covered (percent) Benefits: Annualized Monetized ( Not Estimated 2012 7 2012-2016 $millions/year) Qualitative: (1) Improved coverage in benefit categories less typically available. Expanded access to coverage of benefits, particularly in the individual market, including maternity and prescription drug coverage. (2) Alignment with current consumer and employer choices. Flexibility for states; limited market disruption; allowance for health plan innovation (e.g., substitution within benefit categories; de minimis variation for AV). (3) Efficiency due to greater transparency. Increased transparency and consumer ability to compare coverage. Costs: Annualized Monetized ( $1.7 * 2012 7 2012-2016 $millions/year) $1.5 * 2012 3 2012-2016 Qualitative (1) Administrative costs. Insurers will incur administrative costs associated with altering benefit packages to ensure compliance with the definition of EHB established in this proposed rule. Issuers may also incur minor administrative costs related to computing AV. (2) Costs due to higher service utilization. As consumers gain additional coverage for benefits that previously did not meet the standards outlined in this proposed rule (for example, pediatric dental or vision coverage), utilization, and thus costs, may increase. A portion of this increased utilization and costs will be economically inefficient, as insurance coverage creates a tendency to overuse health care. Further, there may be incremental costs to consumers associated with greater service utilization. Transfers: Federal Annualized Monetized ( Not Estimated 2012 7 2012-2016 $millions/year) Not Estimated 2012 3 2012-2016 * Note: Administrative costs include costs associated with Information Collection Requirements as described in section III of this proposed rule.
E. Methods and Limitations of Analysis
There are many provisions of the Affordable Care Act that are integral to the goal of expanding access to affordable insurance coverage, including the provisions of this proposed rule relating to EHB and AV. Because it is often difficult to isolate the effects associated with each particular provision of the Affordable Care Act, we discuss the evidence relating to the provisions of this proposed rule, as well as related provisions of the Affordable Care Act, in this regulatory impact analysis. We present quantitative evidence where it is possible and supplement with qualitative discussion.
F. Estimated Number of Affected Entities
As discussed elsewhere in the preamble, standards relating to EHB and AV will apply to all health insurance issuers offering non-grandfathered coverage in the individual and small group markets--both inside and outside of the Exchanges. The following sections summarize HHS's estimates of the number of entities that will be affected by this proposed regulation.
a. Issuers
For purposes of the regulatory impact analysis, we have estimated the total number of health insurance issuers that will be affected by this proposed regulation at the company level because this is the level at which issuers currently submit their annual financial reports to the
FOOTNOTE 28 The most complete source of data on the number of entities offering fully insured, private comprehensive major medical coverage in the individual and group markets is the
Table IV.2--Estimated Number of Issuers and Licensed Entities Affected by the EHB and AV Requirements by Market, 2011 Issuers *(1) Licensed entities offering *(2) offering comprehensive major comprehensive major medical medical coverage coverage Description Number Percent Number Percent of total of total Total Issuers Offering Comprehensive 446 100.0 2,107 100.0 Major Medical Coverage *(3) By Market: *(4) Individual Market 355 79.6 1,663 78.9 Small Group Market *(5) 366 82.1 1,039 49.3 Large Group Market 375 84.1 922 43.8 Individual and/or Small Group Markets 427 95.7 1,993 94.6 *(6) Individual Market Only 82 18.4 904 42.9 Small Group Market Only 39 8.7 117 5.6 Individual & Small Group Markets Only 29 6.5 164 7.8 All Three Markets 279 62.6 545 25.9 Notes: (1) Issuers represents companies (for example, NAIC company codes). (2) Licensed Entities represents company/state combinations. (3) Total issuers excludes data for companies that are regulated by theCalifornia Department of Managed Health Care . (4) To be counted as offering coverage in a particular comprehensive major medical market, the issuer must have reported non-zero premiums and claims and had at least$1,000 in total premiums per life year for at least one state. (5) Small group is defined based on the current definition in the PHS Act. (6) Subcategories do not add to the total because other categories are not shown separately such as those entities in the large group and small group markets, but not in the individual market. Source: ASPE analysis of 2011 NAIC Supplemental Health Care Exhibit data.
b. Individuals
Persons enrolled in non-grandfathered individual or small group market coverage inside or outside of the Exchanges beginning in 2014 will be affected by the provisions of this proposed rule. /29/
FOOTNOTE 29 As discussed earlier, the provisions in this proposed regulation could also potentially affect some enrollees with non-grandfathered large group market coverage in States that choose to give larger employers the option of purchasing coverage through the Exchange starting in 2017. However, the
In
FOOTNOTE 30 "Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the
FOOTNOTE 31
G. Anticipated Benefits
The Affordable Care Act ensures non-grandfathered health plans offered in the individual and small group markets offer a basic package of items and services. The benefits of health insurance coverage are well documented and discussed at length in previous RIAs, /32/ including improvement in clinical outcomes, financial security, and decreased uncompensated care. /33/ /34/ This proposed rule applies a definition to EHB and proposes other standards that are required of health plans, as directed under the statute.
FOOTNOTE 32 Available at: http://cciio.cms.gov/resources/files/Files2/03162012/hie3r-ria-032012.pdf. END FOOTNOTE
FOOTNOTE 33
FOOTNOTE 34
In the market today, it is difficult for consumers to make well-informed choices when choosing among competing health plans. The benefits offered are complicated and can vary widely across plans, making it difficult for consumers to understand which benefits are covered. /35/ Further, wide variation in deductibles, coinsurance, and other cost sharing features make it difficult for consumers to understand the relative levels of financial protection they will receive under competing plans. /36/ /37/
FOOTNOTE 35 Garnick, D.W. et al. (1993). "How well do Americans understand their health coverage?" Health Affairs, 12(3); 204-212. END FOOTNOTE
FOOTNOTE 36
FOOTNOTE 37
Under the provisions in this proposed rule, the EHB-benchmark plan will reflect both the scope of services and any limits offered by a "typical employer plan" in that state. This approach, applying for the 2014 and 2015 benefit years, will allow states to build on coverage that is already widely available, minimize market disruption, and provide consumers with familiar products. This should heighten consumer understanding of plan options and may facilitate consumers' abilities to make choices that better suit their needs. In addition, by ensuring that all plans cover a core set of benefits and services that will be compared against other plans that offer the same financial protection to the consumer, this proposed rule is expected to improve the quality and value of the coverage that is available for EHB.
Information on AV is expected to be used by consumers to compare non-grandfathered individual and small group market plans, and provides a method for consumers to understand relative plan value. Proposing standard pricing and utilization assumptions for AV calculations for QHPs and non-grandfathered health plans in the individual and small group markets will promote transparency and simplicity in the consumer shopping experience, as well as offer issuers the flexibility to set cost-sharing rates that are simple and competitive. Without this approach, plans with the same cost-sharing provisions could have different AVs making it difficult for consumers to compare and choose among health plans. It also fosters plan competition based on price, quality, and service--rather than variations in benefit design.
H. Anticipated Costs and Transfers
In addition to the administrative costs described in the Information Collection Requirements section of this proposed rule, HHS anticipates that the provisions of this proposed regulation will likely result in increased costs related to increased utilization of health care services by people receiving coverage for previously uncovered benefits.
States have primary enforcement authority over health insurance issuers and this proposed rule extends this primary enforcement authority for compliance with EHB and AV requirements defined in this rule. In addition, states must defray the cost of any state-required benefits in excess of the EHB that apply to QHPs and multi-state plans offered through Exchanges. As stated earlier, we expect that this will rarely occur, if at all, in 2014 and 2015, the period coverage by the benchmark policy.
The anticipated effects on enrollees in the individual market are expected to be larger than the effects on enrollees in the small group market. Coverage in the small group market is much more likely to include EHB and, in fact, is included in the choice of benchmark plans. /38/ Second, almost all products in the group market have AV above 60 percent, /39/ while there are likely to be changes to products in the individual market due to the provisions of this proposed rule.
FOOTNOTE 38 A study conducted by the Assistant Secretary for Planning and Evaluation (ASPE) found that commonly purchased products in the small group market, state employee plans, and federal employee plans do not differ significantly in the range of services they cover. Because one of these plans will be chosen as the reference plan for EHB, most small group plans will provide benefits that are similar to EHB. (ASPE Issue Brief (2011). "EHB: Comparing Benefits in Small Group Products and State and Federal Employee Plans,"
FOOTNOTE 39 ASPE Research Brief (2011). "
Impact on Issuers
Commonly purchased products in the small group market, state employee plans, and the
FOOTNOTE 40 ASPE Issue Brief (2011). "EHB: Comparing Benefits in Small Group Products and State and Federal Employee Plans,"
Notwithstanding this general conclusion, there are four types of benefits where changes are expected in the small group market: Mental health and substance use disorder, habilitative services, pediatric dental care, and pediatric vision services. In addition, individual health plans are less likely than small group health plans to cover all of the 10 categories of EHB. Below we discuss two categories of benefits and services that are less likely to be covered in the market today: Mental health and substance use disorder services, and habilitative services.
The coverage of additional benefits results in a transfer from out-of-pocket payments to premium payments. Increased access to insurance coverage for previously excluded benefits will make medical care for those benefit categories more affordable for consumers by covering a portion of the costs of those services. While out of pocket costs would decline, consumers could purchase benefits and services inefficiently--that is, purchase more than the efficient amount of the previously excluded benefits and services. However, studies of the
FOOTNOTE 41 Finkelstein A, McKnight R: "What Did Medicare Do (And Was It Worth It)?"
The statute requires that all plans covering EHB must offer mental health and substance use disorder service benefits, including behavioral health treatment and services. The preamble of this rule proposes that coverage must provide parity in treatment limitations between medical and surgical benefits and the mental health and substance use disorder benefits required to be covered as EHB in both the individual and small group markets. Many states /42/ /43/ have already added some form of mental health parity in some or all insured markets. /44/ About 95 percent of those with coverage through the three largest small group products in each state had substance use disorder and mental health benefits. /45/ Additionally, a study of implementation of parity in the FEHBP plans /46/ as well as research into state-passed mental health parity laws /47/ have shown little or no increase in utilization of mental health services, but found that parity reduced out-of-pocket spending among those who used mental health and substance abuse services.
FOOTNOTE 42 Kaiser State Health Facts. State mandated benefits in small group private health insurance: Mandated coverage in mental health, as of
FOOTNOTE 43 Health Insurance Mandates in the States 2010,
FOOTNOTE 44 Health Insurance Mandates in the States 2010,
FOOTNOTE 45 ASPE Issue Brief, "EHB: Comparing Benefits in Small Group Products and State and Federal Employee Plans,
FOOTNOTE 46 Goldman HH, et al. 2006. Behavioral health insurance parity for federal employees. New Engl J Med; 354 1378-86. END FOOTNOTE
FOOTNOTE 47 Barry CL, Busch SH. 2007. Effects of state parity laws on the family financial burden of children with mental health care needs. Health
As indicated in the preamble, many health insurance plans do not identify habilitative services as a distinct group of services. /48/ By proposing a transitional policy for coverage of habilitative services, this rule allows issuers time for review and development of policy in this area, and to gain experience to define these benefits. To the extent that states exercise the option to define habilitative services, small group market issuers may incur administrative and contracting costs associated with bringing their products into compliance with a state's definition. However, because it is not yet clear which states will exercise this option or how any such states will define habilitative services, HHS cannot estimate these costs at this time.
FOOTNOTE 48 ASPE Research Brief (2011). "EHB: Comparing Benefits in Small Group Products and State and Federal Employee Plans." Available at: http://aspe.hhs.gov/health/reports/2011/MarketComparison/rb.shtml. END FOOTNOTE
With respect to AV, research indicates that the overwhelming majority of employer-sponsored health plans meets and exceeds an AV of 60 percent. /49/ Combining both small group and large group, an estimated 1.6 percent to 2.0 percent of people covered by employer- sponsored insurance are enrolled in plans with an AV of less than 60 percent.
FOOTNOTE 49 ASPE Research Brief (2011). "
In the individual health insurance market, McKethan et al. estimated the percentage of individual market plans falling below 60 percent (the AV of a bronze plan), meaning that the health insurance coverage paid for less than 60 percent of benefit costs for the average enrollee, at between 9 percent and 11 percent. /50/ To keep premium costs low, the Affordable Care Act allows certain individuals (adults under age 30 and people who otherwise have unaffordable coverage) to purchase catastrophic coverage, which still guarantees first dollar coverage of preventive services and primary care check-ups but has higher deductibles and lower AVs.
FOOTNOTE 50 Aaron McKethan,
Costs to States
State governments are generally responsible for health insurance enforcement in the individual and small group markets, with the federal government assuming that role in connection with federal law requirements if a state does not do so. While HHS expects that states may need additional resources to enforce the requirements that non-grandfathered plans in the individual and small group market provide EHB, and that these plans offer coverage with an AV equal to one of the four metal levels, these costs will be relatively minor. We request comment on the burden states will incur in enforcing these requirements.
If a state requires issuers to cover benefits in excess of EHB, the Affordable Care Act directs the state to defray the costs of these benefits in QHPs. States may include as part of their benchmark plan state benefit requirements that were enacted before
Costs to Health Insurance Issuers
Issuers will incur administrative costs to modify existing offerings to meet EHB and AV standards as defined in this proposed rule. For example, issuers that do not currently meet the standards for prescription drug coverage will incur contracting and one-time administrative costs to bring their pharmacy benefits into compliance. Issuers may also incur minor administrative costs related to AV standards and computing AV. However, because EHB will be based on a benchmark plan that is typical of what is offered in the market in each state currently, the modifications in benefits are expected to be relatively minor for most issuers. Further, issuers have extensive experience in offering products with various levels of cost sharing, and HHS expects that following the process for computing AV outlined in this proposed rule will not demand many additional resources.
I. Regulatory Alternatives
In addition to the regulatory approach outlined in the Essential Health Bulletin issued on
Definition of EHBs
At the request of some commenters, HHS considered one national definition of EHB that would have applicable issuers offer a uniform list of benefits. However, this approach would not allow for state flexibility and issuer innovation in benefit design, would require a burdensome overhaul for issuers, and would disrupt the market.
HHS also considered codifying the 10 statutorily required categories without additional definition and allowing issuers to adjust their benefit packages accordingly. However, this approach would have allowed wide variation across plans in the benefits offered, would not have assured consumers that they would have coverage for basic benefits, and would not have improved the ability of consumers to make comparisons among plans.
HHS believes the benchmark approach best strikes the balance between comprehensiveness, affordability, and state flexibility. Additionally, HHS believes that the benchmark approach, supplemented when necessary, best addresses the statutory requirements that EHBs reflect a typical employer plan and encompass at least the 10 categories of items and services outlined in the statute.
Calculation of AV
In the calculation of AV, the statute specifies the use of a standard population. As described in the AV/CSR Bulletin, HHS considered allowing issuers to use their own utilization and pricing data in connection with an HHS-defined standard population (that is, HHS-set demographics for the standard population) to calculate a standard population. However, this would not have allowed for consumer transparency and would not have increased competition. The approach in this proposed rule instead reduces issuer burden while allowing consumers to compare more easily among plans.
VI. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C.
As discussed above, this proposed rule is necessary to implement standards related to the EHB, AV, cost-sharing limitations, and quality, as authorized by the Affordable Care Act. For purposes of the Regulatory Flexibility Analysis, we expect the following types of entities to be affected by this proposed rule: (1) Issuers; (2) employers; and (3) providers.
We believe that health insurers would be classified under the North American Industry Classification System (NAICS) Code 524114 (Direct Health and Medical Insurance Carriers). According to SBA size standards, entities with average annual receipts of
As discussed in the Web Portal interim final rule (75 FR 24481), HHS examined the health insurance industry in depth in the Regulatory Impact Analysis we prepared for the proposed rule on establishment of the
FOOTNOTE 51 `Table of Size Standards Matched to North American Industry Classification System Codes," effective
For purposes of this proposed rule, HHS used 2011
HHS estimates that 83 percent of these small issuers are subsidiaries of larger carriers, and 71 percent also offer large group or other types of A&H coverage. On average, HHS estimates that individual and small group CMM coverage accounts for approximately 45 percent of total A&H earned premiums for these small issuers. HHS estimates that 75 percent of these small issuers only offer individual and small group CMM coverage in a single state. Additionally, HHS estimates that approximately a third (11) of these small issuers only offer individual market CMM coverage.
Table IV.3--Description of Issuers Offering Individual orSmall Group Comprehensive Major Medical (CMM) Coverage by Size, 2011 Total earned Total Percent Average Percent Indivi- Percent Number premiums for issuers of number of dual & of of accident and offering issuers of issuers small issuers issuers health indivi- that are states only group also only coverage dual or part of in which offering CMM offering offering small larger indivi- indivi- premiums large indivi- group carriers dual or dual or as a group dual market small small percent CMM or market CMM group group of total other CMM coverage CMM CMM A&H A&H coverage coverage coverage premiums coverage is in a offered single state Less Than $7 35 82.9 2.3 74.3 45.0 71.4 11 Million $7 million to 93 68.8 4.5 62.4 37.2 66.7 6 $99 million $100 million 184 87.0 5.2 65.8 27.0 84.8 11 to $999 billion $1 billion or 115 87.8 4.8 69.6 24.0 93.9 1 more Total 427 82.9 4.7 66.7 24.5 82.2 29 Notes: (1) Issuers represents companies (for example, NAIC company codes). (2) Licensed Entities represents company/state combinations. (3) Total issuers excludes data for companies that are regulated by theCalifornia Department of Managed Health Care . (4) To be counted as offering coverage in a particular comprehensive major medical market, the issuer must have reported positive premiums, non-zero claims and had at least$1,000 in total premiums per life year for at least one state. (5) Small group is defined based on the current definition in the PHS Act. Sources: ASPE analysis of 2011 NAIC Supplemental Health Care Exhibit data.
This rule proposes standards related to EHBs, AV, and accreditation. These standards may impose some additional costs on issuers offering coverage that is affected by these provisions. For example, as discussed earlier, issuers are likely to experience some administrative costs associated with reconfiguring existing non-grandfathered plans to meet EHB and AV metal level standards as defined in this proposed rule. However, these costs will vary depending on a number of factors, including the extent to which an issuer offers coverage in multiple states or is a subsidiary of a larger carrier, and the variation between these standards and current practice. Further, some of the changes that standardize coverage may reduce administrative costs. Accordingly, we cannot estimate an effect on premiums with precision prior to final state selection of benchmarks.
As discussed in the regulatory impact analysis for the Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers final rule (77 FR 18310 (
This proposed rule also establishes standards that will affect employers participating in the small group market, including those that choose to participate in a SHOP. As discussed in the Summary of Regulatory Impact Analysis for the Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers final rule, the SHOP is limited by statute to employers with at least one but not more than 100 employees. For this reason, we expect that many affected employers would meet the SBA standard for small entities. However, the standards outlined in this proposed rule apply to issuers of small group market health insurance coverage, and not to any small employers that elect to purchase such coverage on behalf of their employees (that is, the proposed rule impacts what coverage is available to be purchased).We anticipate that the essential health benefits, coupled with the ability to compare plans based on metal level, will lead to greater transparency and reduce transaction costs for small employers.
HHS anticipates that the provisions in this proposed rule will have a positive effect on providers--particularly those offering services in areas where many individual market enrollees previously did not have coverage for these services, and those who serve a substantial share of the low-income population. HHS anticipates that small providers will also experience positive effects relating to the provisions of this proposed rule.
Therefore, the Secretary certifies that this proposed rule will not have a significant impact on a substantial number of small entities. We welcome comment on the analysis described in this section and on HHS's conclusion.
VII. Unfunded Mandates
Section 202 of the Unfunded Mandates Reform Act (UMRA) of 1995 requires that agencies assess anticipated costs and benefits before issuing any proposed rule that includes a federal mandate that could result in expenditure in any one year by state, local or tribal governments, in the aggregate, or by the private sector, of
UMRA does not address the total cost of a proposed rule. Rather, it focuses on certain categories of cost, mainly those "Federal mandate" costs resulting from: (1) Imposing enforceable duties on state, local, or tribal governments, or on the private sector; or (2) increasing the stringency of conditions in, or decreasing the funding of, state, local, or tribal governments under entitlement programs.
Because states are not required to set up an Exchange, and because grants are available for funding of the establishment of an Exchange by a state, we anticipate that this final rule would not impose costs above that threshold on state, local, or Tribal governments. In addition, because states largely already collect information on plan rates and benefits to license them, we believe that the burden on states is limited. However, because these costs have not been estimated, HHS seeks comments on any additional burdens.
Under the proposed rule, issuers will provide coverage of certain benefits. While some issuers may not currently offer benefit packages that meet the standards outlined in the proposed rule, we anticipate that the administrative costs associated with compliance will fall below the threshold. We anticipate that such administrative costs will be concentrated in the initial year, with costs significantly tapering off during subsequent years.
The benchmark-based approach to defining EHB ensures that EHB will reflect the scope of services offered by a "typical employer plan." Accordingly, we anticipate that many small group market plans meet or are close to meeting the coverage requirements for EHB and will not need to incur significant administrative costs to bring currently available plans into compliance. Individual market plans are somewhat less likely to cover all statutorily required benefits and services as described in this proposed rule; however, many such plans are offered by issuers with diverse portfolios that may include small and large group products or other individual market products that do include the required services. Accordingly, we do not anticipate that the provisions related to the EHB package outlined in the proposed rule impose costs greater than
Consistent with policy embodied in UMRA, this notice for proposed rulemaking has been designed to be the least burdensome alternative for state, local and tribal governments, and the private sector while achieving the objectives of the Affordable Care Act.
VIII. Federalism
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications.
States regulate health insurance coverage. States would continue to apply state laws regarding health insurance coverage. However, if any state law or requirement prevents the application of a Federal standard, then that particular state law or requirement would be preempted. State requirements that are more stringent than the Federal requirements would not be preempted by this proposed rule unless such requirements prevent the application of Federal law. Accordingly, states have significant latitude to impose requirements with respect to health insurance coverage that are more consumer-protective than the Federal law.
In the view of HHS, this proposed rule does not impose substantial direct costs on state and local governments. However, we believe that this proposed rule has Federalism implications due to direct effects on the distribution of power and responsibilities among the state and Federal governments relating to determining standards for health insurance coverage that is offered in the individual and small group markets. Each state would adhere to the federal standards outlined in the proposed rule for purposes of determining whether non-grandfathered individual and small group market health insurance coverage includes the EHB package, or have HHS enforce these policies.
HHS expects that the federalism implications, if any, are substantially mitigated for a number of reasons. First, the proposed rule affords discretion to states to select an EHB-benchmark plan. States also can choose to be responsible for evaluating the selected benchmark and making adjustments as needed, and for determining whether non-grandfathered individual and small group market health insurance coverage meets the standards outlined in the proposed rule. While the proposed rule establishes new federal standards for certain health insurance coverage, states will retain their traditional regulatory roles. Further, if a state elects not to substantially enforce the standards outlined in the final rule, the Federal government will assume responsibility for these standards.
In compliance with the requirement of Executive Order 13132 that agencies examine closely any policies that may have federalism implications or limit the policymaking discretion of the states, HHS has made efforts to consult with and work cooperatively with states as evidenced by continued communication through weekly calls and listening sessions.
HHS initiated weekly calls with key stakeholders from states in
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These calls, in addition to listening sessions specifically related to EHB, have helped HHS understand states' major concerns about implementation of the Affordable Care Act. Continuous communication with states allowed HHS to develop policy that addressed two central concerns: flexibility and state-required benefits. The benchmark approach allows states to select a benchmark option that offer benefit packages that reflect the needs of their populations and maintain state-required benefits that were enacted before
List of Subjects
45 CFR Part 147
Health care, Health insurance, Reporting and recordkeeping requirements, state regulation of health insurance.
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers, Conflict of interest, Consumer protection, Grant programs-health, Grants administration, Health care, Health insurance, Health maintenance organization (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Loan programs-health, Organization and functions (Government agencies),
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory Committees, Brokers, Conflict of interest, Consumer protection, Grant programs-health, Grants administration, Health care, Health insurance, Health maintenance organization (HMO), Health records, Hospitals, Indians, Individuals with disabilities, Loan programs-health, Organization and functions (Government agencies),
For the reasons set forth in the preamble, the
Subchapter B--Requirements Relating to Health Care Access
PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND INDIVIDUAL HEALTH INSURANCE MARKETS
1. The authority citation for part 147 continues to read as follows:
Authority: Secs 2701 through 2763, 2791, and 2792 of the Public Health Service Act (42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92), as amended.
2. Section 147.150 is added to read as follows:
(a) Requirement to cover the essential health benefits package. A health insurance issuer offering health insurance coverage in the individual or small group market must ensure that such coverage includes the essential health benefits package as defined in section 1302(a) of the Affordable Care Act effective for plan or policy years beginning on or after
(b) Cost-sharing under group health plans. [Reserved.]
(c) Child-only plans. If a health insurance issuer in the individual market offers health insurance coverage in any level of coverage specified under section 1302(d)(1) of the Affordable Care Act, the issuer must offer coverage in that level to individuals who, as of the beginning of a plan year, have not attained the age of 21.
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED STANDARDS UNDER THE AFFORDABLE CARE ACT
3. The authority citation for part 155 is revised to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301, 1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1334, 1402, 1411, 1412, 1413, Pub. L. 111-148, 124
4. Adding
(a) Additional required benefits. (1) A state may require a QHP to offer benefits in addition to the essential health benefits.
(2) A state-required benefit enacted on or before
(3) The Exchange shall identify which state-required benefits are in excess of EHB.
(b) Payments. The state must make payments to defray the cost of additional required benefits specified in paragraph (a) of this section to one of the following:
(1) To an individual enrollee, as defined in
(2) Directly to the QHP issuer on behalf of the individual described in paragraph (b)(1) of this section.
(c) Cost of additional required benefits. (1) Each QHP issuer in the state shall quantify cost attributable to each additional required benefit specified in paragraph (a) of this section.
(2) A QHP issuer's calculation shall be:
(i) Based on an analysis performed in accordance with generally accepted actuarial principles and methodologies;
(ii) Conducted by a member of the
(iii) Reported to the Exchange.
5. Revise
(a) Timeline. The Exchange must establish a uniform period following certification of a QHP within which a QHP issuer that is not already accredited must become accredited as required by
(b) Federally-facilitated Exchange. The accreditation timeline used in Federally-facilitated Exchanges follows:
(1) During certification for an issuer's initial year of QHP certification (for example, in 2013 for the 2014 coverage year), a QHP issuer without existing commercial,
(2) Prior to a QHP issuer's second year and third year of QHP certification (for example, in 2014 for the 2015 coverage year and 2015 for the 2016 coverage year), a QHP issuer must be accredited by a recognized accrediting entity on the policies and procedures that are applicable to their Exchange products or, a QHP issuer must have commercial or
(3) Prior to the QHP issuer's fourth year of QHP certification and in every subsequent year of certification (for example, in 2016 for the 2017 coverage year and forward), a QHP issuer must be accredited in accordance with
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
6. The authority citation for part 156 is revised to read as follows:
Authority: Title I of the Affordable Care Act, sections 1301-1304, 1311-1312, 1321-1322, 1324, 1334, 1342-1343, and 1401-1402, Pub. L. 111-148, 124
7. Amend
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Actuarial value (AV) means the percentage paid by a health plan of the percentage of the total allowed costs of benefits.
* * * * *
Base-benchmark plan means the plan that is selected by a state from the options described in
* * * * *
SEC 155.20 of this section, or other issuer as required by
EHB package means the scope of covered benefits and associated limits of a health plan offered by an issuer that provides at least the ten statutory categories of benefits, as described in
* * * * *
Percentage of the total allowed costs of benefits means the anticipated covered medical spending for EHB coverage (as defined in
* * * * *
8. Revise subpart B to read as follows:
Subpart B--Essential Health Benefits package
Sec.
156.100 State selection of benchmark.
156.105 Determination of EHB for multi-state plans.
156.110 EHB-benchmark plan standards.
156.115 Provision of EHB.
156.120 Prescription drug benefits.
156.125 Prohibition on discrimination.
156.130 Cost-sharing requirements.
156.135 AV calculation for determining level of coverage.
156.140 Levels of coverage.
156.145 Determination of minimum value
156.150 Application to stand-alone dental plans inside the Exchange.
Each state may identify a single EHB-benchmark plan according to the selection criteria described below:
(a) State-selection of base-benchmark plan. The options from which a base-benchmark plan may be selected by the state are the following:
(1) Small group market health plan. The largest health plan by enrollment in any of the three largest small group insurance products, as defined in
(2) State employee health benefit plan. Any of the largest three employee health benefit plan options by enrollment offered and generally available to state employees in the state involved.
(3) FEHBP plan. Any of the largest three national Federal Employees Health Benefits Program (FEHBP) plan options by aggregate enrollment that is offered to all health-benefits-eligible federal employees under 5 U.S.C. 8903.
(4) HMO. The coverage plan with the largest insured commercial non-
(b) EHB-benchmark selection standards. In order to become an EHB-benchmark plan as defined in
(c) Default base-benchmark plan. If a state does not make a selection using the process defined in
A Multi-State Plan must meet benchmark standards set by the
General requirements. An EHB-benchmark plan must meet the following standards:
(a) EHB coverage. Provide coverage of at least the following categories of benefits:
(1) Ambulatory patient services.
(2) Emergency services.
(3) Hospitalization.
(4) Maternity and newborn care.
(5) Mental health and substance use disorder services, including behavioral health treatment.
(6) Prescription drugs.
(7) Rehabilitative and habilitative services and devices.
(8) Laboratory services.
(9) Preventive and wellness services and chronic disease management.
(10) Pediatric services, including oral and vision care.
(b) Coverage in each benefit category. A base-benchmark plan not providing any coverage in one or more of the categories described in paragraph (a) of this section, must be supplemented as follows:
(1) General supplementation methodology. A base-benchmark plan that does not include items or services within one or more of the categories described in paragraph (a) of this section must be supplemented by the addition of the entire category of such benefits offered under any other benchmark plan option described in
(2) Supplementing pediatric oral services. A base-benchmark plan lacking the category of pediatric oral services must be supplemented by the addition of the entire category of benefits from one of the following:
(i) The FEDVIP dental plan with the largest national enrollment that is described in and offered to federal employees under 5 U.S.C. 8952; or
(ii) The benefits available under that state's separate CHIP plan, if a separate CHIP plan exists, to the eligibility group with the highest enrollment.
Supplementing pediatric vision services. A base-benchmark plan lacking the category of pediatric vision services must be supplemented by the addition of the entire category of such benefits from one of the following:
(i) The FEDVIP vision plan with the largest national enrollment that is offered to Federal employees under 5 U.S.C. 8982; or
(ii) The benefits available under the state's separate CHIP plan, if a separate CHIP plan exists, to the eligibility group with the highest enrollment.
(c) Supplementing the default base-benchmark plan. A default base-benchmark plan as defined in
(1) The largest plan by enrollment in the second largest product in the state's small group market, as defined in
(2) The largest plan by enrollment in the third largest product in the state's small group market, as defined in
(3) The largest national FEHBP plan by enrollment across states that is offered to federal employees under 5 U.S.C. 8903 (except for pediatric oral and vision benefits);
(4) The plan described in paragraph (b)(2)(i) of this section with respect to pediatric oral care benefits;
(5) The plan described in paragraph (b)(3)(i) of this section with respect to pediatric vision care benefits; and
(6) A habilitative benefit determined by the plan as described in
(d) Non-discrimination. Not include discriminatory benefit designs that contravene the non-discrimination standards defined in
(e) Balance. Ensure an appropriate balance among the EHB categories to ensure that benefits are not unduly weighted toward any category.
(f) Determining habilitative services. If the base-benchmark plan does not include coverage for habilitative services, the state may determine which services are included in that category.
(a) Provision of EHB means that a health plan provides benefits that--
(1) Are substantially equal to the EHB-benchmark plan including:
(i) Covered benefits;
(ii) Limitations on coverage including coverage of benefit amount, duration, and scope; and
(iii) Prescription drug benefits that meet the requirements of
(2) With respect to the mental health and substance use disorder services, including behavioral health treatment services, required under
(3) Include preventive health services described in
(4) If the EHB-benchmark plan does not include coverage for habilitative services, as described in
(i) Provide parity by covering habilitative services benefits that are similar in scope, amount, and duration to benefits covered for rehabilitative services; or
(ii) Are determined by the issuer and reported to HHS.
(b) Benefit substitution is allowed if the issuer of a plan offering EHB meets the following conditions--
(1) Substitutes a benefit that meets the following conditions:
(i) Is actuarially equivalent to the benefit that is being replaced as determined in paragraph (b)(3) of this section;
(ii) Is made only within the same essential health benefit category; and
(iii) Is not a prescription drug benefit.
(2) Submits evidence of actuarial equivalence of substituted benefits to the state. The certification must:
(i) Be conducted by a member of the
(ii) Be based on an analysis performed in accordance with generally accepted actuarial principles and methodologies; and
(iii) Use a standardized plan population;
(3) Actuarial equivalence of benefits is determined regardless of cost-sharing.
(c) A health plan does not fail to provide EHB solely because it does not offer the services described in
(d) An issuer of a plan offering EHB may not include routine non-pediatric dental services, routine non-pediatric eye exam services, or long-term/custodial nursing home care benefits, or cosmetic orthodontia as EHB.
(a) A health plan does not provide essential health benefits unless it:
(1) Subject to the exception in paragraph (b) of this section, covers at least the greater of:
(i) One drug in every United States Pharmacopeia (USP) category and class; or
(ii) The same number of prescription drugs in each category and class as the EHB-benchmark plan; and
(2) Submits its drug list to the Exchange, the state, or OPM.
(b) A health plan does not fail to provide EHB prescription drug benefits solely because it does not offer drugs for services described in
(c) A health plan providing essential health benefits must have procedures in place that allow an enrollee to request clinically appropriate drugs not covered by the health plan.
(a) An issuer does not provide EHB if its benefit design, or the implementation of its benefit design, discriminates based on an individual's age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions; and
(b) An issuer providing EHB must comply with the requirements of
(a) Annual limitation on cost sharing. (1) For a plan year beginning in the calendar year 2014, cost sharing may not exceed the following:
(i) For self-only coverage--the annual dollar limit as described in section 223(c)(2)(A)(ii)(I) of the Internal Revenue Code of 1986 as amended, for self-only coverage that is in effect for 2014; or
(ii) For other than self-only coverage--the annual dollar limit in section 223(c)(2)(A)(ii)(II) of the Internal Revenue Code of 1986 as amended, for non-self-only coverage that is in effect for 2014.
(2) For a plan year beginning in a calendar year after 2014, cost sharing may not exceed the following:
(i) For self-only coverage--the dollar limit for calendar year 2014 increased by an amount equal to the product of that amount and the premium adjustment percentage, as defined in paragraph (e) of this section.
(ii) For other than self-only coverage--twice the dollar limit for self-only coverage described in paragraph (a)(2)(i) of this section.
(b) Annual limitation on deductibles for plans in the small group market. (1) For a plan year beginning in calendar year 2014, the annual deductible for a health plan in the small group market may not exceed the following:
(i) For self-only coverage--
(ii) For coverage other than self-only--
(2) For a plan year beginning in a calendar year after 2014, the annual deductible for a health plan in the small group market may not exceed the following:
(i) For self-only coverage--the annual limitation on deductibles for calendar year 2014 increased by an amount equal to the product of that amount and the premium adjustment percentage as defined in paragraph (e) of this section; and
(ii) For other than self-only coverage--twice the annual deductible limit for self-only coverage described in paragraph (b)(2)(i) of this section.
(3) A health plan's annual deductible may exceed the annual deductible limit if that plan may not reasonably reach the actuarial value of a given level of coverage as defined in
(c) Special rule for network plans. In the case of a plan using a network of providers, cost-sharing paid by, or on behalf of, an enrollee for benefits provided outside of such network shall not count towards the annual limitation on cost sharing (as defined in paragraph (a) of this section), or the annual limitation on deductibles (as defined in paragraph (b) of this section).
(d) Increase annual dollar limits in multiples of 50. For a plan year beginning in a calendar year after 2014, any increase in the annual dollar limits described in paragraphs (a) and (b) of this section that do not result in a multiple of
(e) Premium adjustment percentage. The premium adjustment percentage is the percentage (if any) by which the average per capita premium for health insurance coverage for the preceding calendar year exceeds such average per capita premium for health insurance for 2013. HHS will publish the annual premium adjustment percentage in the annual HHS notice of benefits and payment parameters.
(f) Coordination with preventive limits. Nothing in this subpart is in derogation of the requirements of
(g) Prohibition of discriminatory cost sharing. The structure of cost sharing required under a plan must conform to the nondiscrimination requirements applicable to benefits set forth in
(h) Coverage of emergency department services. Emergency department services must be provided as follows:
(1) Without imposing any requirement under the plan for prior authorization of services or any limitation on coverage where the provider of services is out of network that is more restrictive than the requirements or limitations that apply to emergency department services received in network; and
(2) If such services are provided out-of-network, cost-sharing must be limited as provided in
(a) Calculation of AV. Subject to paragraph (b) of this section, to calculate the AV of a health plan, the issuer must use the AV calculator developed and made available by HHS.
(b) Exception to the use of the AV calculator. If a health plan's design is not compatible with the AV calculator, the issuer must meet the following:
(1) Submit the actuarial certification on the chosen methodology identified in paragraphs (b)(2) and (3) of this section:
(2) Calculate the plan's AV by:
(i) Estimating a fit of its plan design into the parameters of the AV calculator; and
(ii) Having an actuary, who is a member of the
(3) Use the AV calculator to determine the AV for the plan provisions that fit within the calculator parameters and have an actuary, who is a member of the
(4) The calculation methods described in (b)(2) or (3) of this section may include only in-network cost-sharing, including multi-tier networks.
(c) Employer contributions to health savings accounts and amounts made available under health reimbursement arrangements. In plans other than those in the individual market that are offered with an HSA or HRA, annual employer contributions to HSAs and amounts newly made available under HRAs for the current year in the small group market are:
(1) Counted towards the total anticipated medical spending of the standard population that is paid by the health plan; and
(2) Adjusted to reflect the expected spending for health care costs in a benefit year so that:
(i) Any current year HSA contributions are accounted for; and
(ii) The amounts newly made available under an HRA for the current year are accounted for.
(d) Use of state-specific standard population for the calculation of AV. Beginning in 2015, if submitted by the state and approved by HHS, a state-specific data set will be used as the standard population to calculate AV in accordance with paragraph (a) of this section. The data set may be approved by HHS if it is submitted in accordance with paragraph (e) of this section and:
(1) Supports the calculation of AVs for the full range of health plans available in the market;
(2) Is derived from a non-elderly population and estimates those likely to be covered by private health plans on or after
(3) Is large enough that:
(i) The demographic and spending patterns are stable over time; and
(ii) Includes a substantial majority of the state's insured population, subject to the requirement in paragraph (d)(2) of this section;
(4) Is a statistically reliable and stable basis for area-specific calculations; and
(5) Contains claims data on health care services typically offered in the then-current market.
(e) Submission of state-specific data. AV will be calculated using the default standard population described in paragraph (f) of this section, unless a data set in a format specified by HHS that can support the use of the AV calculator as described in paragraph (a) of this section is submitted by a state and approved by HHS consistent with paragraph (d) of this section by a date specified by HHS.
(f) Default standard population. The default standard population for AV calculation will be developed and summary statistics, such as in continuance tables, will be provided by HHS in a format that supports the calculation of AV as described in paragraph (a) of this section.
(a) General requirement for levels of coverage. AV, calculated as described in
(b) Levels of coverage. The levels of coverage are:
(1) A bronze health plan is a health plan that has an AV of 60 percent.
(2) A silver health plan is a health plan that has an AV of 70 percent.
(3) A gold health plan is a health plan that has an AV of 80 percent.
(4) A platinum health plan is a health plan that has as an AV of 90 percent.
(c) De minimis variation. The allowable variation in the AV of a health plan that does not result in a material difference in the true dollar value of the health plan is +/- 2 percentage points.
(a) Acceptable methods for determining MV. For the purposes of determining that an employer-sponsored plan provides MV, a group health plan may use the following methods to calculate the percentage of the total allowed costs of benefits provided under the plan or coverage:
(1) The MV calculator to be made available by HHS and the
(2) Any safe harbor established by HHS and the
(3) A group health plan may seek an appropriate certification by an actuary to determine MV if neither of the methods described in paragraphs (a)(1) or (2) of this section is appropriate. The determination of MV must be made by a member of the
(b) Benefits that may be counted towards the determination of MV. (1) In the event that a group health plan uses the MV calculator and offers an EHB outside of the parameters of the MV calculator, the plan may seek an actuary, who is a member of the
(2) For this purpose of the options described in this subsection in determining MV, a group health plan will be permitted to take into account all benefits provided by the plan that are included in any of the EHB benchmarks.
(c) Standard population. The standard population for MV determinations described in paragraph (a) of this section is the standard population developed by HHS for such use and described through summary statistics issued by HHS. The standard population for MV shall reflect the population covered by self-insured group health plans.
(a) Annual limitation on cost-sharing. A stand-alone dental plan covering the pediatric dental EHB under
(b) Calculation of AV. A stand-alone dental plan:
(1) May not use the AV calculator in
(2) Must demonstrate that the stand-alone dental plan offers the pediatric dental essential health benefit at either:
(i) A low level of coverage with an AV of 75 percent; or
(ii) A high level of coverage with an AV of 85 percent; and
(iii) Within a de minimis variation of +/- 2 percentage points of the level of coverage in paragraphs (b)(2)(i) or (ii) of this section.
(3) The level of coverage as defined in paragraph (b)(2) of this section must be certified by a member of the
9. In
* * * * *
(c) * * *
(1) Recognition of accrediting entity by HHS --(i) Application. An accrediting entity may apply to HHS for recognition. An application must include the documentation described in paragraph (c)(4) of this section and demonstrate, in a concise and organized fashion how the accrediting entity meets the requirements of paragraphs (c)(2) and (3) of this section.
(ii) Proposed notice. Within 60 days of receiving a complete application as described in paragraph (c)(1)(i) of this section, HHS will publish a notice in the <org>Federal Register identifying the accrediting entity making the request, summarizing HHS's analysis of whether the accrediting entity meets the criteria described in paragraphs (c)(2) and (3) of this section, and providing no less than a 30-day public comment period about whether HHS should recognize the accrediting entity.
(iii) Final notice. After the close of the comment period described in paragraph (c)(1)(ii) of this section, HHS will notify the public in the
(iv) Other recognition. Effective upon completion of conditions listed in paragraphs (c)(2), (3), and (4) of this section, HHS will notify the public in the
* * * * *
(4) Documentation. An accrediting entity applying to be recognized under the process described in (c)(1) of this section must provide the following documentation:
(i) To be recognized, an accrediting entity must provide current accreditation standards and requirements, processes and measure specifications for performance measures to demonstrate that it meets the conditions described in paragraphs (c)(2) and (3) of this section to HHS.
* * * * *
Dated:
Acting Administrator,
Approved:
Secretary.
Note: The following appendices will not appear in the Code of Federal Regulations:
Appendix A: List of Proposed Essential Health Benefits Benchmarks
The purpose of this appendix is to list the proposed EHB benchmark plans for the 50 states and the
FOOTNOTE 52 Non-grandfathered plans in the individual and small group markets both inside and outside of the Exchanges along with certain other types of plans must cover EHBs beginning in 2014. Self-insured group health plans, health insurance coverage offered in the large group market, and grandfathered health plans are not required to cover the essential health benefits. END FOOTNOTE
State Plan type Issuer and plan Supplemented Supplem- Habili- name categories entary tative plan type services Alabama Largest Blue Cross Blue Pediatric oral FEDVIP Yes. small group Shield of product Alabama PPO 320 Plan Pediatric FEDVIP vision Alaska Largest Premera Blue Mental health Largest Yes. small group Cross Blue and substance FEHBP product Shield of use disorder, Alaska Heritage including Select Envoy behavioral PPO health treatment Pediatric oral FEDVIP Pediatric FEDVIP vision Arizona Largest Arizona Benefit Pediatric oral FEDVCP. state Options EPO employee Plan, plan administered by United HealthCare Pediatric FEDVIP No. vision Arkansas Plan from HMO Partners, Mental health 2nd No. 3rd largest Inc. Open and substance largest small group Access POS, use disorder, FEHBP product 13262AR001 including behavioral health treatment Pediatric oral CHIP Pediatric FEDVIP vision California Plan from Kaiser Pediatric oral CHIP Yes. largest Foundation small group Health Plan, product Inc. Small Group HMO 30 ID 40513CA035 Colorado Plan from Kaiser Pediatric oral CHIP No. largest Foundation small group Health Plan of product Colorado Ded HMO 1200D Connecticut Largest ConnectiCare Pediatric oral CHIP No. state non- HMO Medicaid HMO Pediatric FEDVIP vision Delaware Plan from Highmark Blue Pediatric oral FEDVIP No. second Cross Blue largest Shield Delaware small group Simply Blue EPO product 100 500 Pediatric FEDVIP vision District of Plan from Group Pediatric oral FEDVIP Yes. Columbia largest Hospitalization small group and Medical product Services, Inc. BluePreferred PPO Pediatric FEDVIP vision Florida Plan from Blue Cross Blue Pediatric oral FEDVIP No. largest Shield of small group Florida, Inc. product BlueOptions PPO Pediatric FEDVIP vision Georgia Plan from Blue Cross Blue Pediatric oral FEDVIP Yes. largest Shield of small group Georgia HMO product Urgent Care 60 Copay Pediatric FEDVIP vision Hawaii Plan from Hawaii Medical Pediatric oral CHIP No. largest Service small group Association product Preferred Provider Plan 2010 Pediatric FEDVIP vision Idaho Plan from Blue Cross of Pediatric oral FEDVIP Yes. largest Idaho Health small group Service, Inc. product Preferred Blue PPO Pediatric FEDVIP vision Illinois Plan from Blue Cross and Pediatric oral CHIP No. largest Blue Shield of small group Illinois product BlueAdvantage PPO Pediatric FEDVIP vision Indiana Plan from Anthem Blue Pediatric oral FEDVIP Yes. largest Cross and Blue small group Shield of product Indiana Blue 5 Blue Access PPO Medical Option 6 Rx Option G Pediatric FEDVIP vision Iowa Plan from Wellmark Inc. Pediatric oral FEDVIP Yes. largest Alliance Select small group Copayment Plus product PPO Pediatric FEDVIP vision Kansas Plan from Blue Cross and Pediatric oral FEDVIP No. largest Blue Shield of small group Kansas product Comprehensive Major Medical Blue Choice PPO GF 500 deductible with Blue Rx card Pediatric FEDVIP vision Kentucky Plan from Anthem Health Pediatric oral CHIP Yes. largest Plans of small group Kentucky, Inc. product PPO Louisiana Plan from Blue Cross and Pediatric oral FEDVIP Yes. largest Blue Shield of small group Louisiana product GroupCare PPO Pediatric FEDVIP vision Maine Plan from Anthem Health Pediatric oral FEDVIP Yes. largest Plans of Maine small group Blue Choice 20 product PPO with RX 10 30 50 50 Maryland Largest CareFirst of Pediatric oral CHIP Yes. state Maryland, Inc. employee State of plan Maryland PPO Pediatric FEDVIP vision Massachusett Plan from Blue Cross Blue Pediatric oral CHIP Yes. s largest Shield of small group Massachusetts, product Inc. HMO Blue 2000 Deductible Michigan Largest Priority Health Pediatric oral CHIP No. state non- PriorityHMO 100 Medicaid HMO Percent Hospital Services Plan Pediatric FEDVIP vision Minnesota Plan from HealthPartners Pediatric oral FEDVIP Yes. largest 500 25 Open small group Access PPO product Pediatric FEDVIP vision Mississippi Plan from Blue Cross and Pediatric oral CHIP Yes. largest Blue Shield of small group Mississippi product Network Blue PPO Pediatric FEDVIP vision Missouri Plan from Healthy Pediatric oral FEDVIP Yes. largest Alliance Life small group Insurance Co. product (Anthem BCBS) Blue 5 Blue Access PPO Medical Option 4 Rx Option D Pediatric FEDVIP vision Montana Plan from Blue Cross and Pediatric oral FEDVIP Yes. largest Blue Shield of small group Montana Blue product Dimensions PPO Pediatric FEDVIP vision Nebraska Plan from Blue Cross and Pediatric oral FEDVIP Yes. largest Blue Shield of small group Nebraska product BluePride PPO Pediatric FEDVIP vision Nevada Plan from Rocky Mountain Pediatric oral FEDVIP Yes. largest Hospital & small group Medical product Service, Inc. (Anthem BCBS) GenRx PPO 45 Copay Pediatric FEDVIP vision New Plan from Matthew Pediatric oral FEDVIP Yes. Hampshire largest Thornton Health small group Plan (Anthem product BCBS) HMO Blue New England 25 50 WITH Rx 10 35 30 OOP 2500 Pediatric FEDVIP vision New Jersey Plan from Horizon HMO Pediatric oral FEDVIP Yes. largest Access HSA small group Compatible product Pediatric FEDVIP vision New Mexico Plan from Lovelace Pediatric oral CHIP Yes. largest Insurance small group Company Classic product PPO New York Plan from Oxford Health Pediatric oral CHIP Yes. largest Insurance, Inc. small group Oxford EPO product North Plan from Blue Cross and Pediatric oral FEDVIP No. Carolina largest Blue Shield of small group North Carolina product Blue Options PPO Pediatric FEDVIP vision North Dakota Largest Sanford Health Pediatric oral CHIP No. state non- Plan HMO Medicaid HMO Pediatric CHIP vision Ohio Plan from Community Pediatric oral FEDVIP Yes. largest Insurance small group Company (Anthem product BCBS) Blue 6 Blue Access PPO Medical Option D4 Rx Option G Pediatric FEDVIP vision Oklahoma Plan from Blue Cross and Pediatric oral FEDVIP Yes. largest Blue Shield of small group Oklahoma product BlueOptions PPO RYB05 Pediatric FEDVIP vision Oregon Plan from PacificSource Pediatric oral CHIP No. 3rd largest Health Plans small group PPO Preferred product CoDeduct Value 3000 35 70 Pediatric FEDVIP vision Pennsylvania Plan from Aetna Health, Pediatric oral FEDVIP No. largest Inc. PA POS small group Cost Sharing 34 product 1500 Ded Rhode Island Plan from Blue Cross and Pediatric oral FEDVIP No. largest Blue Shield of small group Rhode Island product Vantage Blue PPO Pediatric FEDVIP vision South Plan from Blue Cross Blue Pediatric oral FEDVIP No. Carolina largest Shield of South small group Carolina product Business Blue Complete PPO Pediatric FEDVIP vision South Dakota Plan from Wellmark of Pediatric oral FEDVIP Yes. largest South Dakota small group Blue Select PPO product Pediatric FEDVIP vision Tennessee Plan from Blue Cross Blue Pediatric oral FEDVIP Yes. largest Shield of small group Tennessee PPO product Pediatric FEDVIP vision Texas Plan from Blue Cross Blue Pediatric oral FEDVIP Yes. largest Shield of Texas small group BestChoice PPO product RS26 Pediatric FEDVIP vision Utah Plan from Public None None Yes. 3rd largest Employee's state Health Program employee Utah Basic Plus plan Vermont Plan from The Vermont Pediatric oral CHIP No. largest Health Plan, small group LLC, CDHP-HMO product Pediatric FEDVIP vision Virginia Plan from Anthem Health Pediatric oral FEDVIP Yes. largest Plans of VA PPO small group KeyCare 30 with product KC30 Rx plan 10 30 50 OR 20 Pediatric FEDVIP vision Washington Plan from Regence Pediatric oral CHIP Yes. largest BlueShield non- small group grandfathered product small group product Pediatric FEDVIP vision West Plan from Highmark Blue Pediatric oral FEDVIP No. Virginia largest Cross Blue small group Shield West product Virginia Super Blue PPO Plus 2000 1000 Ded Pediatric FEDVIP vision Wisconsin Plan from UnitedHealthcar Pediatric oral FEDVIP No. largest e Insurance small group Company Choice product Plus Definity HSA Plan A92NS Pediatric FEDVIP vision Wyoming Plan from Blue Cross Blue Pediatric oral FEDVIP No. largest Shield of small group Wyoming Blue product Choice Business 1000 80 20 Pediatric FEDVIP vision Note: If the base-benchmark plan does not include habilitative services, then states have the opportunity to define those benefits.
Appendix B: Largest FEDVIP Dental and Vision Plan Options, as of
Section 156.110(b)(2)-(3) directs States to supplement base-benchmark plans that lack pediatric oral or vision services with benefits drawn from either the Federal Employees Dental and Vision Program (FEDVIP) or a state's separate CHIP program. Specifically, states may select benefits from either: (1) The FEDVIP dental or vision plans with the largest national enrollments, or (2) the state's separate CHIP program's dental or vision benefits, where they exist, which offer benefits to the eligibility group with the highest enrollment. To assist states with this process, we collected information about the benefits provided in the FEDVIP dental and vision plans with the highest national enrollments, as issued by
Largest FEDVIP Dental and Vision Plan Options, as ofMarch 31, 2012 * Issuer name Plan name Additional information MetLife (dental) MetLife Federal 2012 Plan Benefit Brochure: Dental Plan--High http://www.opm.gov/insure/health/ planinfo/2012/brochures/MetLife.pdf. BCBS Association FEP BlueVision-- 2012 Plan Benefit Brochure: (vision) High http://www.opm.gov/insure/health/ planinfo/2012/brochures/FEPBlueVi.pdf .
[FR Doc. 2012-28362 Filed 11-20-12;
BILLING CODE 4120-01-P
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Wordcount: | 33452 |
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