Patient Protection and Affordable Care Act; Maximizing January 1, 2014 Coverage Opportunities, 76212-76218 [2013-29918]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 78, Number 242 (Tuesday, December 17, 2013)]
[Rules and Regulations]
[Pages 76212-76218]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29918]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 147, 155 and 156

[CMS-9945-IFC]
RIN 0938-AS17


Patient Protection and Affordable Care Act; Maximizing January 1, 
2014 Coverage Opportunities

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule amends the date by which a qualified 
individual must select a qualified health plan (QHP) through any 
Exchange for an effective coverage date of January 1, 2014. This rule 
generally allows consumers to select a QHP until December 23, 2013, 
which is a change from the previously stated regulatory date of 
December 15, 2013, but permits State Exchanges to select a different 
date. It also establishes a related policy regarding the date by which 
a consumer needs to pay any applicable initial premium to ensure timely 
effectuation of coverage. This rule pertains to the individual market 
and Small Business Health Options Program in both the Federally-
facilitated Exchanges and State Exchanges. This rule does not change 
the plan selection or premium payment dates for coverage offered 
outside of the Exchanges.

DATES: Effective date: These regulations are effective on December 15, 
2013.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on December 23, 2013.

ADDRESSES: In commenting, please refer to file code CMS-9945-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed)
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9945-IFC, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9945-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. Alternatively, you may deliver (by hand or 
courier) your written comments ONLY to the following addresses prior to 
the close of the comment period:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments erroneously mailed to the addresses indicated as 
appropriate for hand or courier delivery may be delayed and received 
after the comment period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Devon Trolley, (301) 492-4404, for 
questions related to this rule.

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: https://regulations.gov. Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will be also available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Table of Contents

I. Background
II. Provisions of the Interim Final Rule
III. Waiver of Proposed Rulemaking and Waiver of Delay in Effective 
Date
IV. Collection of Information Requirements
V. Regulatory Impact Analysis

I. Background

    The Patient Protection and Affordable Care Act (Pub. L. 111-148) 
was enacted on March 23, 2010. The Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised 
several provisions of the Patient Protection and Affordable Care Act, 
was enacted on March 30, 2010. In this interim final rule, we refer to 
the two statutes collectively as the ``Affordable Care Act.''
    As of October 2013, for coverage starting as soon as January 1, 
2014, qualified individuals and qualified employers have been able to 
enroll in QHPs--private health insurance that has been certified as 
meeting certain standards--through competitive marketplaces called 
``Exchanges'' or ``Health Insurance Marketplaces.'' The word 
``Exchanges'' refers to both State Exchanges, also called State-based

[[Page 76213]]

Exchanges, and Federally-facilitated Exchanges, or ``FFEs.'' In this 
interim final rule, we use the terms ``State Exchange'' or ``FFE'' when 
we are referring to a particular type of Exchange. When we refer to 
``FFEs,'' we are also referring to State Partnership Exchanges, which 
are a form of FFE. We use the term ``State-based SHOPs'' to refer to 
Small Business Health Options Programs (SHOPs) operated by a state and 
``FF-SHOPs'' to refer to a SHOP operated by CMS.
    On March 27, 2012, we published a final rule entitled Patient 
Protection and Affordable Care Act; Establishment of Exchanges and 
Qualified Health Plans; Exchange Standards for Employers (77 FR 
18310),\1\ hereinafter referred to as the Exchange Establishment Rule. 
Section 155.410(c) of the Exchange Establishment Rule established the 
effective coverage dates with respect to the date by which a qualified 
individual selects a QHP, and outlined basic enrollment processes for 
issuers. For a January 1, 2014 effective coverage date, Sec.  
155.410(c) provides that a qualified individual must select a QHP on or 
before December 15, 2013. Through cross references in Sec.  
155.725(a)(2) to Sec.  156.260(a)(1) to Sec.  155.410(c), the same 
coverage effective dates are applied to the SHOP. Through cross 
references in Sec.  147.104, the coverage effective dates are extended 
to all non-grandfathered health insurance coverage offered in the 
individual and small group markets.\2\ Section 156.265 establishes 
enrollment processes that QHP issuers must follow for qualified 
individuals, and requires QHP issuers to follow the premium payment 
process established by the Exchange. However, this section did not 
establish a date by which a premium must be paid to effectuate 
enrollment.
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    \1\ Patient Protection and Affordable Care Act; Establishment of 
Exchanges and Qualified Health Plans; Exchange Standards for 
Employers, 77 FR 18310 (March 27, 2012).
    \2\ Patient Protection and Affordable Care Act; Health Insurance 
Market Rules; Rate Review, 78 FR 13406 (February 27, 2013), 
hereinafter referred to as the Market Reform Rule.
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    We issued a draft guidance document titled ``Federally-facilitated 
Marketplace Enrollment Operational Policy and Guidance'' \3\ (``Draft 
Enrollment Guidance'') on October 3, 2013, that specifies procedural 
guidance for the FFE regarding the enrollment process, including the 
premium payment process, some of which is impacted by this interim 
final rule and is referenced as appropriate throughout the preamble.
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    \3\ Available at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/ENR_OperationsPolicyandGuidance_5CR_100313.pdf.
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    Since the publication of the Exchange Establishment Rule and the 
Draft Enrollment Guidance, there have been unforeseen barriers to 
enrollment in the Exchanges. This interim final rule includes policy 
changes aimed at allowing additional enrollment opportunities for 
qualified individuals and qualified employers seeking January 1 
coverage. Policy clarifications regarding premium payment are also 
included.

II. Provisions of the Interim Final Rule

A. Part 147--Health Insurance Reform Requirements for the Group and 
Individual Health Insurance Markets

    The Exchange Establishment Rule outlined an initial open enrollment 
period from October 1, 2013 through March 31, 2014 and coverage 
effective dates based on when a plan is selected. Through the Market 
Reform Rule, published in the February 27, 2013 Federal Register (78 FR 
13406), the coverage effective dates established in Sec.  155.410(c) of 
the Exchange Establishment Rule apply to the entire individual and 
small group health insurance markets (except for grandfathered health 
plans). Since the provisions of this interim final rule are 
specifically designed to address unforeseen barriers to enrollment in 
QHPs offered through the Exchange, we do not believe it is necessary to 
extend the plan selection date for coverage purchased outside of the 
Exchange.
    Accordingly, this rule adds regulatory text at Sec.  
147.104(b)(1)(iii) to make clear that, for coverage offered outside an 
Exchange or SHOP, for plan selections received on or before December 
15, 2013, coverage must take effect on January 1, 2014 and that for 
plan selections received between December 16th and December 31st, 2013, 
coverage generally must become effective February 1, 2014. These 
amendments maintain for individual and small group market coverage 
outside of an Exchange or SHOP the plan selection and coverage 
effective dates originally finalized in the Exchange Establishment 
Rule. However, we also permit issuers to align their plan selection and 
corresponding coverage effective dates with those in the applicable 
Exchange.
    We note that for ease of reference to the coverage effective dates 
in the SHOP, we have amended the cross reference in Sec.  
147.104(b)(1)(i) to refer to Sec.  155.725(a)(2) rather than Sec.  
155.725(h).

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

    Section 155.410(c) of the Exchange Establishment Rule specifically 
provides that an Exchange must ensure a January 1, 2014 effective date 
of coverage for any QHP selected by a qualified individual on or before 
December 15, 2013. As noted above, the reference in Sec.  155.725(a)(2) 
applies the same timeframe to QHPs selected in the SHOP. The following 
changes are made to paragraph (c) in this interim final rule to amend 
the dates by which a plan must be selected for the individual market 
Exchanges and the SHOPs for coverage to be effective January 1, 2014.
    In Sec.  155.410(c)(1)(i), this rule amends the regulation text to 
specify that an Exchange must ensure a January 1, 2014 coverage 
effective date for plan selections received on or before December 23, 
2013, in contrast to the previous regulatory date of December 15, 2013. 
This policy applies to the various types of plans sold through the 
Exchanges, including SHOP QHPs, multi-State plans, and stand-alone 
dental plans. While we do not expect to do so, we will consider moving 
this deadline to a later date should exceptional circumstances pose 
barriers to consumers enrolling on or before December 23, 2013. We note 
that, if a consumer is not able to enroll in a QHP with a coverage 
effective date of January 1, 2014 due to an error made by the Exchange, 
it would warrant a special enrollment period as previously stated in 
Sec.  155.420(d)(4).
    In Sec.  155.410(c)(1)(iii), a conforming amendment is made to the 
regulatory text so that standard coverage effective dates apply only to 
plan selections starting after January 16, instead of the previously 
stated December 16. This means that the schedule of coverage effective 
dates based on plan selection will generally resume as previously 
established in Sec.  155.410 in the Exchange Establishment Rule 
starting for plan selections made on December 24, 2013 or later. For 
example, if a plan selection is made between December 24, 2013 and 
January 15, 2014, the coverage effective date will be no later than 
February 1, 2014, unless the issuer elects to make the coverage 
effective earlier. If a plan selection is made between January 16 and 
January 31, of 2014, the coverage effective date will be March 1, 2014. 
We note that, generally, the dates by which an Exchange must ensure 
coverage based on the date of plan selection are considered the latest 
date for effectuation; nothing prohibits an issuer from establishing 
coverage effective

[[Page 76214]]

dates earlier than those listed in Sec.  155.410(c).
    In Sec.  155.410(c)(1)(iv), this interim final rule permits a State 
Exchange or a State-based SHOP to establish later plan selection dates 
for coverage that must be effective on January 1, 2014. Given the 
varying experiences of State Exchanges and SHOPs, we believe that this 
flexibility would avoid any inconsistencies with those states that may 
have already extended the plan selection date and that may have 
different procedural requirements regarding the consumer payment date 
from those applicable in the FFEs and FF-SHOPs. Section 
155.410(c)(1)(iv) also provides that a SHOP can require plan selection 
by as early as December 15, 2013 to ensure coverage effective January 
1, 2014, as we understand that some State-based SHOPs have already 
established their own deadlines for QHP selection or may wish to align 
plan selection dates with the rest of the small group market.
    The FF-SHOPs will require issuers to ensure a January 1, 2014 
coverage date for plan selections received on or before December 23, 
2013, which differs from date by which plan selections must be received 
in the small group market outside the FF-SHOPs to ensure a January 1, 
2014 coverage effective date. In states with an FF-SHOP, we expect 
issuers to allow a small employer to enroll employees in a SHOP QHP on 
or before December 23, 2013 for a January 1, 2014 coverage effective 
date if the employer has indicated that it is seeking SHOP coverage. If 
the employer indicates that it is seeking SHOP coverage, the employer 
would need to ensure that issuer has received all employee enrollment 
forms for those employees not waiving coverage on or before December 
23, 2013. Employers may indicate their desire to seek SHOP coverage by 
selecting a SHOP QHP, or by following any issuer guidance on how to 
make the indication.
    In Sec.  155.410(c)(1)(v), this rule states that the Exchange may 
allow issuers to provide for a coverage effective date of January 1, 
2014 for plan selections received after December 23,2013 but on or 
before January 31, 2014, if a QHP issuer is willing to accept such 
enrollments. We note that if the QHP issuer allows enrollment in 
January for a January 1 coverage effective date, any services provided 
to the enrollee in January would need to be covered retroactively as if 
the enrollee had been enrolled from January 1. QHP issuers in an FFE 
will have this option, and while we understand that late enrollment may 
create challenges for issuers in processing the premium payments and 
providing retroactive coverage, we urge issuers to consider a January 
1, 2014 coverage effective date for plan selections after December 23, 
2013 for this year, given the newness of the enrollment process.
    By moving the plan selection date later into December, we believe 
that clarifying the timing of a consumer's payment of premium becomes 
more critical. In the Draft Enrollment Guidance, we set forth a process 
for the FFEs that involved any applicable initial premium being paid on 
or before the day before the coverage effective date. However, given 
the shorter timeframe between plan selection and the coverage effective 
date established in this rule for coverage effective on January 1, 
2014, we desire to both provide more flexibility to consumers and 
issuers regarding the payment date and to more firmly establish the way 
in which a payment date is established in the FFEs.
    Accordingly, this interim final rule adds regulatory text at Sec.  
156.265(d)(2) to establish that a QHP issuer in an FFE must establish 
the date by which a qualified individual who has selected a QHP within 
the initial open enrollment period must make a premium payment in order 
to effectuate coverage by the applicable coverage effective date, 
provided that payment dates are no earlier than the last day before the 
coverage effective date and are consistently applied to all applicants 
in a non-discriminatory manner. We note that this payment date policy 
applies only for the initial open enrollment period; we intend to 
address payment policies applicable beyond the initial open enrollment 
period in future rulemaking. In addition, this policy applies 
specifically to the FFEs. State Exchanges can establish their own 
payment policies.
    We note that QHP issuers in an FFE may accept premium payments 
after January 1, 2014 for coverage that would be effectuated with a 
retroactive effective date of January 1, 2014, to the extent permitted 
by applicable state law. With a later plan selection date, we believe 
that this flexibility will allow issuers additional time to process a 
payment and to effectuate enrollments, which we think may be helpful if 
consumer activity increases as the plan selection date for coverage 
effective January 1, 2014 nears. State Exchanges can elect to have the 
same policy or set a different policy for payment cutoff dates.
    We recognize that, in the FFEs, the flexibility provided to issuers 
to establish premium payment dates and to accept payments after a 
coverage effective date of January 1, 2014 will require additional 
flexibility regarding the submission of enrollment confirmation 
transactions from QHP issuers to the FFEs. The Draft Enrollment 
Guidance outlines a procedural timeline that specifies that QHP issuers 
must send enrollment confirmation transactions to the FFE by the fifth 
calendar day of the effective month of coverage. Instead, the FFEs will 
accept enrollment confirmation transactions from QHP issuers for 
coverage beginning on January 1, 2014 throughout the month of January.
    We note that this interim final rule also does not require the full 
premium to be paid to effectuate coverage. For example, the Draft 
Enrollment Guidance stated that, in the individual market FFEs, QHP 
issuers could implement a premium payment threshold policy. QHP issuers 
electing to establish such a policy may effectuate enrollment when the 
enrollee pays an amount less than the total amount owed by the enrollee 
but greater than the threshold amount established by the issuer. This 
rule provides flexibility to QHP issuers in the FFEs to set payment 
dates, which can include a single payment date for the full premium or 
an initial payment date for a threshold amount of the premium with 
subsequent payment dates for the remaining amounts. Payment dates and 
other enrollment procedures would need to be consistently applied in a 
non-discriminatory manner for all FFE enrollees. We note that, while 
issuers may permit less than full payment of the applicable premium 
prior to effectuating coverage, the grace period described in Sec.  
156.270(d) for enrollees receiving advance payments of the premium tax 
credit still requires that at least one full month's premium has been 
paid.
    Even if an issuer sets a payment date for a January 1, 2014 
coverage effective date beyond December 31, 2013, the coverage must 
take effect January 1, 2014 as long as the plan selection is made by 
the applicable date, as set forth in Sec.  155.410(c) as amended by 
this interim final rule, and payment is made by the issuer-established 
date, regardless of when the enrollment confirmation transaction is 
sent to the FFE. For QHP issuers in the FFEs that accept payments after 
January 1 for a coverage effective date of January 1, 2014, we note 
that this rule does not establish specific standards related to the 
communication with consumers regarding the distribution of welcome 
materials and insurance cards and the way in which coverage for any 
services rendered before the enrollment is fully processed. However, we 
note that an

[[Page 76215]]

effective coverage date of January 1, 2014 means that the individual 
must receive coverage for any services received on or after that date, 
even if the payment and enrollment are not processed by that time.

C. Other Policies to Smooth Transitions

    In addition to the change in coverage effective dates outlined in 
this interim final rule, we also strongly encourage issuers to take 
other approaches to ease the transition to QHPs for consumers who may 
be switching from other coverage. Two areas of focus for a smooth 
transition are access to providers and prescription drug coverage.
    When shopping for coverage on an Exchange, prospective enrollees 
may base QHP selection decisions on whether their provider is 
considered in-network using the issuer's online provider directory. 
However, evolving provider networks may result in some issuer provider 
directories containing outdated information. As a result, an enrollee 
may later discover that his or her provider is considered out-of-
network. We are concerned that this could cause hardship to new QHP 
enrollees in the early months of coverage and could disrupt what could 
otherwise be a more seamless transition into a QHP. We strongly 
encourage QHP issuers to take any steps possible to ease this 
transition.
    In particular, we interpret the requirement at Sec.  156.230(b) 
that issuers make their provider directories for QHPs available to the 
Exchange for publication online to mean that issuers must make current 
provider directories for QHPs available to the Exchange for publication 
online. Accordingly, issuers should ensure that provider directories 
listed with for the QHPs on Exchanges contain the most current listing 
of in-network providers so that consumers are relying upon accurate 
information to make enrollment decisions.
    For those directories that cannot be maintained in a current 
status, we believe that it would be reasonable for issuers to consider 
services received out-of-network as having been received in-network 
(subject to in-network coverage and cost-sharing standards) with 
respect to any provider listed in the version of the provider directory 
as of the date of that enrollee's enrollment for the beginning months 
of coverage. We strongly encourage issuers to adopt this approach.
    We also encourage issuers to adopt policies in January to prevent 
disruptions in treatment of episodes of care (for example, considering 
a provider as in the plan's network for an acute episode of care at the 
start of the plan year). Some states like Arkansas have adopted 
policies like this. We are considering factoring into the QHP renewal 
process, as part of the determination regarding whether making a health 
plan available is in the interest of qualified individuals and 
qualified employers, whether consumers have up-to-date provider 
directories and how QHPs ensure continuity of care during transitions.
    Prescription drug coverage is another area where we strongly urge 
issuers to take steps to ensure a smooth transition for new QHP 
enrollees. In the Essential Health Benefits Final Rule \4\ at Sec.  
156.122(c), we established that issuers providing EHB must have in 
place procedures that allow enrollees to request and gain access to 
clinically appropriate drugs not covered by the health plan. We believe 
that the standard for issuers to have a drug exceptions process, as 
established in Sec.  156.122(c), will provide strong protections on an 
ongoing basis to enrollees with health needs that require drugs that 
are not on an issuer's formulary, particularly if issuers use the 
process outlined in the 2014 Letter to Issuers on Federally-facilitated 
and State Partnership Exchanges.\5\
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    \4\ Standards Related to Essential Health Benefits, Actuarial 
Value, and Accreditation Final Rule, published in the February 25, 
2013 Federal Register (78 FR 12834) (EHB Rule).
    \5\ Available at: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2014_letter_to_issuers_04052013.pdf.
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    However, we are also cognizant that new enrollees may be unfamiliar 
with what is covered in their new plan's formulary and the drug 
exceptions process. Also, some enrollees whose drugs are covered by a 
QHP issuer's formulary may need to obtain prior authorization or go 
through step therapy in order to have coverage for the drug. Since new 
QHP enrollees may need more immediate coverage for drugs they have been 
prescribed and are currently taking, we strongly urge QHP issuers to 
temporarily cover non-formulary drugs (including drugs that are on a 
QHP issuer's formulary but require prior authorization or step therapy) 
as if they were on formulary (or without imposing prior authorization 
or step therapy requirements) during the first 30 days of coverage, 
starting on January 1, 2014. While not required, we encourage this 
approach because this policy would accommodate the immediate needs of 
QHP enrollees, while allowing the issuer and/or the enrollee sufficient 
time to go through the prior authorization and/or drug exception 
processes.

III. Waiver of Proposed Rulemaking and Waiver of Delay in Effective 
Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comments on the proposed rule, 
typically for 30 days, before publishing a final rule that responds to 
comments and sets forth final regulations that generally take effect at 
least thirty days later. This procedure can be waived, however, if an 
agency finds good cause that a notice-and-comment procedure is 
impracticable, unnecessary, or contrary to the public interest and 
incorporates a statement of the finding and its reasons in the rule 
issued. CMS for good cause, under 5 U.S.C. 553(b)(B), finds that the 
notice-and-comment requirements of the Administrative Procedure Act 
(APA) would be impracticable and contrary to the public interest given 
the unforeseen nature of the barriers to enrollment in QHPs in the 
Exchanges and the time remaining for individuals to enroll in coverage 
that would be effective January 1, 2014, as further described below.
    Additionally, section 553(d) of the APA (5 U.S.C. 553(d)) 
ordinarily requires that a final rule be effective not less than 30 
days from the date of their publication in the Federal Register. This 
30-day delay in effective date can be waived, however, if otherwise 
provided by an agency for good cause found and published with the rule. 
For the reasons set forth below, we also find good cause to waive the 
30-day delay in effective date as unnecessary, impracticable and 
contrary to the public interest.
    In this case, given the short timeframe under which this change 
must be implemented, delaying the promulgation and effectiveness of 
these rules would inhibit the ability of Exchanges and QHP issuers to 
effectuate the extended opportunity to enroll in a QHP. Exchanges may 
need to make system and process adjustments immediately, to ensure that 
consumers have the additional flexibility to submit applications and 
select a plan. We consider providing additional time to enroll to be a 
benefit to consumers. The need to provide additional opportunities for 
consumers to enroll was not clear until a date by which a 30-day 
comment period and 30-day delay of the effective date would make it 
impossible to implement on time. If we were to open the policy for 30 
days of public comments and a 30-day delay of effective date, the 
policy would not be effective until well beyond January 1, 2014, which 
would be contrary to the public interest.

[[Page 76216]]

    We note that the Exchange Establishment Rule at Sec.  155.410(c)(2) 
provided that an Exchange could establish shorter coverage effective 
date timeframes (such as December 23 for coverage effective January 1) 
if, among other requirements, the Exchange can demonstrate that all 
participating QHP issuers agree to such timeframes. This condition 
would likely be an obstacle if CMS were seeking to establish the 
December 23, 2013 date under the current regulations. However, CMS has 
the legal authority to, by rulemaking, amend the regulation as 
necessary to impose the requirement that issuers accept enrollments as 
late as December 23 for coverage effective January 1. Further, this 
interim final rule does not introduce substantially different policies, 
but instead alters operational cutoff dates by about one week.
    Given the unusual circumstances and for the reasons outlined above, 
CMS finds good cause under the APA, 5 U.S.C. 553(b)(B), to waive the 30 
day comment period in notice-and-comment rulemaking and to waive the 
30-day delay in effective date and proceed directly with the issuance 
of an interim final rule with an immediate effective date.

IV. Collection of Information Requirements

    This rule does not impose new or alter existing information 
collection and recordkeeping requirements. Consequently, it need not be 
reviewed by the Office of Management and Budget under the authority of 
the Paperwork Reduction Act of 1995.

V. Regulatory Impact Analysis

    We have examined the impact of this interim final rule as required 
by Executive Order 12866 on Regulatory Planning and Review (September 
30, 1993) and Executive Order 13563 on Improving Regulation and 
Regulatory Review (January 18, 2011), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), section 202 of the Unfunded 
Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive 
Order 13132 on Federalism (August 4, 1999), and the Congressional 
Review Act (5 U.S.C. 804(2)).
    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). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
It is CMS's belief that this interim final rule does not reach this 
economic threshold and thus is not considered a major rule.
    Since the publication of the Exchange Establishment Rule, there 
have been unforeseen barriers to enrollment in Exchanges. This interim 
final rule provides flexibility to the regulations regarding plan 
selection and the effective date of coverage in order to allow 
additional opportunities for qualified individuals and qualified 
employers seeking coverage with an effective date of coverage on 
January 1, 2014. This rule also clarifies that QHP issuers in the FFEs 
can establish payment dates no earlier than the day before the 
effective date of coverage. We believe that this regulation will 
benefit potential enrollees by giving them more time to select a QHP 
and have their coverage become effective by January 1, 2014. We do not 
believe these actions would impose any significant new costs on 
issuers.

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) (RFA) 
requires agencies to prepare an initial regulatory flexibility analysis 
to describe the impact of the rule on small entities, unless the head 
of the agency can certify that the rule would not have a significant 
economic impact on a substantial number of small entities. The RFA 
generally defines a ``small entity'' as--(1) a proprietary firm meeting 
the size standards of the Small Business Administration (SBA); (2) a 
not-for-profit organization that is not dominant in its field; or (3) a 
small government jurisdiction with a population of less than 50,000. 
States and individuals are not included in the definition of ``small 
entity.'' CMS uses as its measure of significant economic impact on a 
substantial number of small entities a change in revenues of more than 
3 percent.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses, if a rule has a significant impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
government jurisdictions. Small businesses are those with sizes below 
thresholds established by the SBA. For the purposes of the regulatory 
flexibility analysis, we expect the following types of small entities 
to be affected by this interim final rule: (1) QHP issuers.
    As discussed in Health Insurance Issuers Implementing Medical Loss 
Ratio (MLR) Requirements Under the Patient Protection and Affordable 
Care Act; Interim Final Rule,\6\ few, if any, issuers are small enough 
to fall below the size thresholds for small business established by the 
SBA. In that rule, we used a data set created from 2009 NAIC Health and 
Life Blank annual financial statement data to develop an updated 
estimate of the number of small entities that offer comprehensive major 
medical coverage in the individual and group markets. For purposes of 
that analysis, CMS used total Accident and Health earned premiums as a 
proxy for annual receipts. We estimated that there are 28 small 
entities with less than $7 million in accident and health earned 
premiums offering individual or group comprehensive major medical 
coverage.\7\ However, this estimate may overstate the actual number of 
small health insurance issuers offering such coverage, since it does 
not include receipts from these companies' other lines of business.
---------------------------------------------------------------------------

    \6\ Health Insurance Issuers Implementing Medical Loss Ratio 
(MLR) Requirements Under the Patient Protection and Affordable Care 
Act; Interim Final Rule, 75 FR 74864, 74918-20 (December 1, 2010) 
(codified at 45 CFR part 158).
    \7\ According to SBA size standards, entities with average 
annual receipts of $7 million or less would be considered small 
entities for North American Industry Classification System (NAICS) 
Code 524114 (Direct Health and Medical Insurance Carriers). For more 
information, see ``Table of Size Standards Matched To North American 
Industry Classification System Codes,'' effective March 26, 2012, 
U.S. Small Business Administration, available at https://www.sba.gov.
---------------------------------------------------------------------------

    Therefore, we are not preparing an analysis for the RFA because we 
have determined, and the Secretary certifies, that this interim final 
rule will not have a significant economic impact on a substantial 
number of small entities.

B. Unfunded Mandates

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires that agencies assess anticipated costs and benefits and take 
certain other actions before issuing a proposed rule (and subsequent 
final rule) that includes any federal mandate that may result in 
expenditures in any one year by a state, local, or tribal governments, 
in the aggregate, or by the private sector, of $100 million in 1995 
dollars, updated annually for inflation. In 2013, that threshold is 
approximately $141 million. UMRA does not address the total cost of a 
rule. Rather, it focuses on certain categories of costs, 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

[[Page 76217]]

stringency of conditions in, or decreasing the funding of, State, 
local, or tribal governments under entitlement programs.
    This interim final rule amends the date by which a QHP must be 
selected for an effective date of coverage of January 1, 2014. There 
may be minor additional costs for Exchanges to make system and process 
adjustments before December 16, 2013, to ensure that consumers have the 
additional flexibility to submit applications and select a plan. CMS 
has concluded that this rule does not place any mandates on state, 
local, or tribal governments or the private sector that exceed the 
threshold for 2013.

C. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct costs on state and local 
governments, preempts state law, or otherwise has Federalism 
implications. There may be minor additional costs for States to make 
system and process adjustments before December 16, 2013, to ensure that 
consumers have the additional flexibility to submit applications and 
select a plan. This rule does not impose any costs on state or local 
governments not otherwise imposed by already-finalized provisions of 
the regulations implementing the Affordable Care Act.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have Federalism 
implications or limit the policy-making discretion of the states, CMS 
has engaged in efforts to consult with and work cooperatively with 
affected states, including participating in conference calls with and 
attending conferences of the NAIC, and consulting with state insurance 
officials on an individual basis. We believe that this rule does not 
impose substantial direct costs on state and local governments, preempt 
state law, or otherwise have federalism implications. We are amending 
the date by which a plan may be selected for coverage effective January 
1, 2014.
    Under the requirements set forth in section 8(a) of Executive Order 
13132, and by the signatures affixed to this regulation, the Department 
of Health and Human Services certifies that CMS has complied with the 
requirements of Executive Order 13132 for the attached interim final 
rule in a meaningful and timely manner.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

D. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801, et seq., as added by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. We will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. This interim 
final rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).

List of Subjects

45 CFR Part 147

    Health care, Health insurance, Reporting and recordkeeping 
requirements.

45 CFR Part 155

    Administrative practice and procedure, Health care access, Health 
insurance, Reporting and recordkeeping requirements, State and local 
governments, Cost-sharing reductions, Advance payments of premium tax 
credit, Administration and calculation of advance payments of the 
premium tax credit, Plan variations, Actuarial value.

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), Medicaid, Public 
assistance programs, Reporting and recordkeeping requirements, Safety, 
State and local governments, Sunshine Act, Technical Assistance, Women, 
and Youth.
    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 45 CFR parts 147, 155, and 156 as set forth 
below:

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
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.


0
2. Section 147.104 is amended by revising the last sentence of 
paragraphs (b)(1)(i) and (b)(1)(ii) and adding paragraph (b)(1)(iii) to 
read as follows:


Sec.  147.104  Guaranteed availability of coverage.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * * With respect to coverage in the small group market, and 
in the large group market if such coverage is offered in a Small 
Business Health Options Program (SHOP) in a state, coverage must become 
effective consistent with the dates described in Sec.  155.725(a)(2) of 
this subchapter, except as provided in paragraph (b)(1)(iii) of this 
section.
    (ii) * * * Coverage must become effective consistent with the dates 
described in Sec.  155.410(c) and (f) of this subchapter, except as 
provided in paragraph (b)(1)(iii) of this section.
    (iii) Exception in certain effective dates of coverage. Only with 
respect to coverage offered outside of an Exchange or SHOP, for a plan 
selection received by an issuer on or before December 15, 2013, the 
issuer must ensure a coverage effective date of January 1, 2014, and 
for a plan selection received by an issuer between the 16th and 31st of 
the month of December 2013, an issuer generally must ensure a coverage 
effective date of February 1, 2014. The preceding sentence does not 
prevent an issuer from aligning the plan selection and coverage 
effective dates with those required by the Exchange or SHOP, as 
applicable, in the applicable state, consistent with Sec.  155.410(c) 
of this subchapter.
* * * * *

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

0
3. The authority citation for part 155 continues to read as follows:

     Authority: Title I of the Affordable Care Act, sections 1301, 
1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1332, 1334, 
1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 
18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 
18081-18083).


[[Page 76218]]



0
4. Section 155.410 is amended by revising paragraph (c)(1) to read as 
follows:


Sec.  155.410  Initial and annual open enrollment periods.

* * * * *
    (c) * * *
    (1) Regular effective dates. For a QHP selection received by the 
Exchange from a qualified individual--
    (i) On or before December 23, 2013, the Exchange must ensure a 
coverage effective date of January 1, 2014.
    (ii) Between the first and fifteenth day of any subsequent month 
during the initial open enrollment period, the Exchange must ensure a 
coverage effective date of the first day of the following month.
    (iii) Between the sixteenth and last day of the month for any month 
between January 2014 and March 31, 2014 or between the twenty-fourth 
and the thirty-first of the month of December 2013, the Exchange must 
ensure a coverage effective date of the first day of the second 
following month.
    (iv) Notwithstanding the requirement of paragraph (c)(1)(i) of this 
section, an Exchange or SHOP operated by a State may require a January 
1, 2014 effective date for plan selection dates later than December 23, 
2013; a SHOP may also establish plan selection dates as early as 
December 15, 2013 for enrollment in SHOP QHPs for a January 1, 2014 
coverage effective date.
    (v) Notwithstanding the regular effective dates set forth in this 
section, an Exchange may allow issuers to provide for a coverage 
effective date of January 1, 2014 for plan selections received after 
December 23, 2013 and on or before January 31, 2014, if a QHP issuer is 
willing to accept such enrollments.
* * * * *

PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE 
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES

0
5. The authority citation for part 156 continues to read as follows:

    Authority:  Title I of the Affordable Care Act, Sections 1301-
1304, 1311-1312, 1321, 1322, 1324, 1334, 1341-1343, and 1401-1402, 
Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18042).


0
6. Section 156.265 is amended by revising paragraph (d) to read as 
follows:


Sec.  156.265  Enrollment process for qualified individuals.

* * * * *
    (d) Premium payment. Regarding premium payment, a QHP issuer--
    (1) Must, follow the premium payment process established by the 
Exchange in accordance with Sec.  155.240.
    (2) Must, for QHPs offered through a Federally-facilitated 
Exchange, establish the date by which a qualified individual that has 
selected a QHP within the enrollment period dates in Sec.  155.410(b) 
of this subchapter must make a premium payment in order to effectuate 
coverage by the applicable coverage effective date, provided that:
    (i) The payment date is no earlier than the day before the coverage 
effective date.
    (ii) The payment date policy is applied consistently to all 
applicants in a non-discriminatory manner.
* * * * *

    Dated: December 4, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: December 5, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2013-29918 Filed 12-12-13; 4:15 pm]
BILLING CODE 4120-01-P