Patient Protection and Affordable Care Act; Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation

SUMMARY: This final rule sets forth 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 final rule outlines Exchange and issuer standards related to coverage of essential health benefits and actuarial value. This rule also finalizes a timeline for qualified health plans to be accredited in Federally-facilitated Exchanges and amends regulations providing an application process for the recognition of additional accrediting entities for purposes of certification of qualified health plans.

EFFECTIVE DATE: Effective April 26, 2013.

FOR FURTHER INFORMATION CONTACT:

Leigha Basini at (301) 492-4307, for general information.

Adam Block at (410) 786-1698, for matters related to essential health benefits, actuarial value, and minimum value.

Tara Oakman at (301) 492-4253, for matters related to accreditation.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

A. Legislative Overview

B. Stakeholder Consultation and Input

II. Provisions of the Regulation and Analysis of and Responses to Public Comments

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 ( SEC 147.150)

B. Part 155--Exchange Establishment Standards and Other Related Standards Under the Affordable Care Act State-Required Benefits

C. Part 156--Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges

1. Subpart A--General Provisions

2. Subpart B--EHB Package

a. State Selection of Benchmark ( SEC 156.100)

b. Determination of EHB for Multi-State Plans ( SEC 156.105)

c. EHB-Benchmark Plan Standards ( SEC 156.110)

d. Provision of EHB ( SEC 156.115)

e. Prescription Drug Benefits ( SEC 156.122)

f. Prohibition on Discrimination ( SEC 156.125)

g. Cost-Sharing Requirements ( SEC 156.130)

h. AV Calculation for Determining Level of Coverage ( SEC 156.135)

i. Levels of Coverage ( SEC 156.140)

j. Determination of Minimum Value ( SEC 156.145)

k. Application to Stand-Alone Dental Plans Inside the Exchange ( SEC 156.150)

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 EHB Benchmarks

IX. Appendix B--Largest FEDVIP Dental and Vision Plan Options, as of March 31, 2012

Acronym List:

Because of the many organizations and terms to which we refer by acronym in this final rule, we are listing these acronyms and their corresponding terms in alphabetical order below:

AV Actuarial Value

CHIP Children's Health Insurance Program

CMS Centers for Medicare & Medicaid Services

DOL U.S. Department of Labor

EHB Essential Health Benefits

ERISA Employee Retirement Income Security Act (29 U.S.C. section 1001, et seq.)

FDA U.S. Food and Drug Administration

FEDVIP Federal Employees Dental and Vision Insurance Program

FEHBP Federal Employees Health Benefits Program

FSA Flexible Spending Arrangement

HEDIS Healthcare Effectiveness Data and Information Set

HHS U.S. Department of Health and Human Services

HIOS Health Insurance Oversight System

HMO Health Maintenance Organization

HRA Health Reimbursement Arrangement

HSA Health Savings Account

IOM Institute of Medicine

ICR Information Collection Requirements

IRS Internal Revenue Service

MV Minimum Value

NAIC National Association of Insurance Commissioners

OMB Office of Management and Budget

OPM U.S. Office of Personnel Management

PHSAct Public Health Service Act

PRA Paperwork Reduction Act

QHP Qualified Health Plan

SHOP Small Business Health Options Program

SSA Social Security Administration

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 in the individual and small group markets, Medicaid benchmark and benchmark-equivalent plans, and Basic Health Programs (if applicable) will cover essential health benefits (EHB), which include items and services in 10 statutory benefit categories, such as hospitalization, prescription drugs, and maternity and newborn care, and are equal in scope to a typical employer health plan. In addition to offering EHB, non-grandfathered health insurance plans will meet specific actuarial values (AVs): 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. These AVs, called "metal levels," will assist consumers in comparing and selecting health plans by allowing a potential enrollee to compare the relative payment generosity of available plans. Taken together, EHB and AV will significantly increase consumers' ability to compare and make an informed choice about health plans.

The Department of Health and Human Services (HHS) has provided information on EHB and AV standards in several phases. On December 16, 2011, HHS released a bulletin /1/ (the EHB Bulletin) following a report from the U.S. Department of Labor (DOL) /2/ describing the scope of benefits typically covered under employer-sponsored coverage and an HHS-commissioned study from the Institute of Medicine (IOM) /3/ recommending the criteria and methods for determining and updating the EHB. The EHB Bulletin outlined an intended regulatory approach for defining EHB, including a benchmark-based framework. Shortly thereafter, on January 25, 2012, HHS released an illustrative list of the largest three small group market products by state, which was updated on July 2, 2012. /4/ HHS further clarified the approach described in the EHB Bulletin through a series of Frequently Asked Questions (FAQs), /5/ released on February 17, 2012. On July 20, 2012, HHS published a final rule /6/ authorizing the collection of data to be used under the intended process for states to select from among several benchmark options to define EHB.

FOOTNOTE 1 "Essential Health Benefits Bulletin." December 16, 2011. Available at: http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf. END FOOTNOTE

FOOTNOTE 2 "Selected Medical Benefits: A report from the Department of Labor to the Department of Health and Human Services." April 15, 2011. Available at: http://www.bls.gov/ncs/ebs/sp/selmedbensreport.pdf. END FOOTNOTE

FOOTNOTE 3 Institute of Medicine, "Essential Health Benefits: Balancing Coverage and Cost." October 6, 2011. Available at: http://www.iom.edu/Reports/2011/Essential-Health-Benefits-Balancing-Coverage-and-Cost.aspx. END FOOTNOTE

FOOTNOTE 4 "Essential Health Benefits: List of the Largest Three Small Group Products by State." July 3, 2012. Available at: http://cciio.cms.gov/resources/files/largest-smgroup-products-7-2-2012.pdf.PDF. END FOOTNOTE

FOOTNOTE 5 "Frequently Asked Questions on Essential Health Benefits Bulletin." February 17, 2012. Available at: http://cciio.cms.gov/resources/files/Files2/02172012/ehb-faq-508.pdf. END FOOTNOTE

FOOTNOTE 6 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, Final Rule, 77 FR 42658-42672 (July 20, 2012) (to be codified at 45 CFR part 156). END FOOTNOTE

HHS also published a bulletin /7/ outlining an intended regulatory approach to calculations of AV and implementation of cost-sharing reductions on February 24, 2012 (the AV/CSR Bulletin). Specifically, HHS outlined an intended regulatory approach for the calculation of AV, de minimis variation standards, and silver plan variations for individuals eligible for cost-sharing reductions among other topics. As described in section IB of this preamble, "Stakeholder Consultation and Input," HHS reviewed and considered comments on both the EHB and AV/CSR bulletins in developing the notice of proposed rulemaking and this final rule.

FOOTNOTE 7 "Actuarial Value and Cost-Sharing Reductions Bulletin." February 24, 2012. Available at: http://cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf. END FOOTNOTE

--This is a summary of a Federal Register article originally published on the page number listed below--

Final rule.

<p>CFR Part: "45 CFR Parts 147, 155, and 156"

RIN Number: "RIN 0938-AR03"

Citation: "78 FR 12834"

Document Number: "CMS-9980-F"

Federal Register Page Number: "12834"

"Rules and Regulations"