Patient Protection and Affordable Care Act; Exchange Program Integrity, 71674-71711 [2019-27713]
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Federal Register / Vol. 84, No. 248 / Friday, December 27, 2019 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
45 CFR Parts 155 and 156
[CMS–9922–F]
RIN 0938–AT53
Patient Protection and Affordable Care
Act; Exchange Program Integrity
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Final rule.
AGENCY:
This final rule revises
standards relating to oversight of
Exchanges established by states and
periodic data matching frequency. This
final rule also includes new
requirements for certain issuers related
to the collection of a separate payment
for the portion of a plan’s premium
attributable to coverage for certain
abortion services.
DATES: This final rule is effective on
February 25, 2020.
FOR FURTHER INFORMATION CONTACT:
Emily Ames, (301) 492–4246 or Marisa
Beatley, (301) 492–4307.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
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A. Legislative and Regulatory Overview
Sections 1311(b) and 1321(b) of the
Patient Protection and Affordable Care
Act (PPACA) provide that each state has
the opportunity to establish an
Exchange. Section 1311(b)(1) of the
PPACA gives each state the opportunity
to establish an Exchange that facilitates
the purchase of qualified health
programs (QHPs) by individuals and
families, and provides for the
establishment of a Small Business
Health Options Program (SHOP) that is
designed to assist qualified small
employers in the state in facilitating the
enrollment of their employees in QHPs
offered in the small group market in the
state.
Section 1313 of the PPACA describes
the steps the Secretary of Health and
Human Services (the Secretary) may
take to oversee Exchanges’ compliance
with HHS standards related to title I of
the PPACA and ensure their financial
integrity, including conducting
investigations and annual audits.
Section 1321(a) of the PPACA
provides broad authority for the
Secretary to establish standards and
regulations to implement the statutory
standards related to Exchanges, QHPs,
and other identified standards of title I
of the PPACA.
Section 1321(c)(2) of the PPACA
authorizes the Secretary to enforce the
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Exchange standards using civil money
penalties (CMPs) on the same basis as
detailed in section 2723(b) of the Public
Health Service Act (PHS Act). Section
2723(b) of the PHS Act authorizes the
Secretary to impose CMPs as a means of
enforcing the individual and group
market reforms contained in Part A of
title XXVII of the PHS Act when a state
fails to substantially enforce these
provisions with respect to health
insurance issuers.
Section 1303 of the PPACA, as
implemented in 45 CFR 156.280,
specifies standards for issuers of
qualified health plans (QHPs) through
the Exchanges that cover abortion
services for which public funding is
prohibited (also referred to as non-Hyde
abortion services). The statute and
regulation establish that, unless
otherwise prohibited by state law, a
QHP issuer may elect to cover such nonHyde abortion services. If an issuer
elects to cover such services under a
QHP sold through an individual market
Exchange, the issuer must take certain
steps to ensure that no premium tax
credit (PTC) or cost-sharing reduction
(CSR) funds are used to pay for abortion
services for which public funding is
prohibited.
As specified in section 1303(b)(2), one
such step is that individual market
Exchange issuers must determine the
amount of, and collect, from each
enrollee, a separate payment for an
amount equal to the actuarial value of
the coverage for abortions for which
public funding is prohibited, which
must be no less than $1 per enrollee, per
month. QHP issuers must also segregate
funds for non-Hyde abortion services
collected through this payment into a
separate allocation account used to pay
for non-Hyde abortion services.
Section 1411(c) of the PPACA
requires the Secretary to submit certain
information provided by applicants
under section 1411(b) of the PPACA to
other federal officials for verification,
including income and family size
information to the Secretary of the
Treasury.
Section 1411(d) of the PPACA
provides that the Secretary must verify
the accuracy of information provided by
applicants under section 1411(b) of the
PPACA for which section 1411(c) does
not prescribe a specific verification
procedure, in such manner as the
Secretary determines appropriate.
Section 1411(f)(1)(B) of the PPACA
requires the Secretary to establish
procedures to redetermine eligibility on
a periodic basis, in appropriate
circumstances, including for eligibility
to purchase a QHP through the
Exchange and for advance payments of
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the premium tax credit (APTC) and
CSRs.
Section 1411(g) of the PPACA allows
the exchange of applicant information
only for the limited purposes of, and to
the extent necessary to, ensure the
efficient operation of the Exchange,
including by verifying eligibility to
enroll through the Exchange and for
APTC and CSRs.
On October 30, 2013, we published a
final rule entitled, ‘‘Patient Protection
and Affordable Care Act; Program
Integrity: Exchange, Premium
Stabilization Programs, and Market
Standards; Amendments to the HHS
Notice of Benefit and Payment
Parameters for 2014,’’ (78 FR 65046), to
implement certain program integrity
standards and oversight requirements
for State Exchanges.
On March 27, 2012, we published a
final rule entitled ‘‘Establishment of
Exchanges and Qualified Health Plans;
Exchange Standards for Employers,’’
(Exchange Establishment Rule (77 FR
18309), in which we codified the
statutory provisions of section 1303 of
the PPACA in regulation at 45 CFR
156.280, and established many
standards related to Exchanges. On
February 27, 2015, we published the
Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment
Parameters for 2016, final rule (80 FR
10750) (hereinafter referred to as the
2016 Payment Notice) providing
guidance regarding acceptable billing
and premium collection methods for the
portion of the policy holder’s total
premium attributable to non-Hyde
abortion coverage for purposes of
satisfying the statutory separate
payment requirement.
On March 8, 2016, we published the
Patient Protection and Affordable Care
Act; HHS Notice of Benefit and Payment
Parameters for 2017, final rule (81 FR
12204), in which we provided issuers
the option to adopt a premium payment
threshold policy to avoid situations in
which an enrollee who owes only a de
minimis amount of premium has his or
her enrollment terminated for nonpayment of premiums.
On November 9, 2018, we published
a proposed rule entitled ‘‘Patient
Protection and Affordable Care Act;
Exchange Program Integrity’’ (83 FR
56015), which proposed to revise
standards relating to oversight of
Exchanges established by states and
periodic data matching frequency and
authority. It also proposed new
requirements for certain issuers related
to the billing and collection of the
separate payment for the premium
portion attributable to coverage for
certain abortion services.
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B. Stakeholder Consultation and Input
HHS has consulted with stakeholders
on policies related to the operation of
Exchanges. We have held a number of
listening sessions with consumers,
providers, employers, health plans, the
actuarial community, and state
representatives to gather public input,
with a particular focus on risks to the
individual and small group markets,
and how we can alleviate burdens
facing patients and issuers. We
consulted with stakeholders through
regular meetings with the National
Association of Insurance
Commissioners, regular contact with
State Exchanges through the Exchange
Blueprint process and ongoing oversight
and technical assistance engagements,
and meetings with Tribal leaders and
representatives, health insurance
issuers, trade groups, consumer
advocates, employers, and other
interested parties.
II. Provisions of the Proposed Rule and
Analysis of and Responses to Public
Comments
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A. Exchange Establishment Standards
and Other Related Standards Under the
Affordable Care Act
1. Functions of an Exchange (§ 155.200)
We proposed to revise § 155.200 to
clarify that the Exchanges must perform
oversight functions generally, and
cooperate with oversight activities, in
accordance with section 1313 of the
PPACA and as required under 45 CFR
part 155. Section 155.200 describes the
functions that an Exchange must
perform. Section 155.200(c) specifies
that the Exchange must perform
functions related to oversight and
financial integrity in accordance with
section 1313 of the PPACA. HHS
interprets this requirement broadly to
include program integrity functions
related to protecting against fraud,
waste, and abuse, including functions
not explicitly identified in section 1313
of the PPACA. We believe State
Exchanges, including State Exchanges
on the Federal Platform (SBE–FPs), have
also generally interpreted this
requirement broadly, as evidenced by
their engagement in activities designed
to combat fraud and abuse.
However, questions about the breadth
of this function have arisen when
Exchanges have sought to understand
what uses and disclosures of personally
identifiable information (PII) are
permitted under § 155.260.1
1 Section 155.260 limits an Exchange’s use and
disclosure of PII when an Exchange creates or
collects personally identifiable information for the
purposes of determining eligibility for enrollment
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Specifically, we received questions
about whether Exchanges are permitted
under § 155.260 to disclose applicant PII
to government oversight entities, such
as state departments of insurance, when
investigating fraudulent behavior
related to Exchange enrollments on the
part of agents and brokers. As noted in
the proposed rule, we believe that use
and disclosure of PII related to
Exchange program integrity efforts, such
as combatting fraud, currently fall under
§ 155.200(c), but seek to make that
position more clear. Therefore, we
proposed to revise § 155.200(c) to clarify
that the Exchanges must perform
oversight functions generally, and
cooperate with oversight activities, in
accordance with section 1313 of the
PPACA and as required under 45 CFR
part 155, including overseeing its
Exchange programs, Navigators, agents,
brokers, and other non-Exchange
entities as defined in § 155.260(b). We
further explained that because this is a
clarification and not a new function, we
did not believe it would impose
additional burdens on Exchanges, but
instead would help resolve questions
about the available tools and authority
to enable Exchanges to effectively
oversee and combat potentially
fraudulent behavior.
After consideration of comments
received, we are finalizing this
provision as proposed, with one
technical modification to remove a
redundant term included in the
proposed regulation text. The comments
we received on this topic are
summarized below, along with our
responses.
Comment: All commenters on this
topic supported the proposed
amendment to § 155.200(c) as it clarifies
that oversight and transparency for all
Exchanges is required with respect to
determining eligibility for APTC and
combatting fraud. Two commenters
encouraged HHS to work closely with
states once the proposal is finalized to
ensure that individuals who are
assisting consumers receive proper
notice and training on the applicable
compliance requirements and standards
in their states. One commenter
suggested that HHS solicit stakeholder
feedback on the possibility of
incorporating an additional level of
collaborative issuer-Exchange oversight
and verification prior to enrollment
in a qualified health plan; determining eligibility
for other insurance affordability programs, as
defined in § 155.300; or determining eligibility for
exemptions from the individual shared
responsibility provisions in section 5000A of the
Internal Revenue Code. One of the permitted uses
and disclosures is for the Exchange to carry out the
functions described in § 155.200.
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when the applicant’s coverage has been
previously terminated for fraud.
Response: We remain committed to
improving Exchange program integrity,
including efforts related to combatting
fraud, and appreciate commenters’
support for our clarification that
Exchanges are permitted to use and
disclose applicant PII to certain entities
for these efforts. We agree that it is
important for agents, brokers,
Navigators, and other assisters to
understand the applicable standards in
their state, and plan to work closely
with states to ensure compliance. We
continue to explore other pathways for
combatting fraud in Exchanges and
appreciate commenters’
recommendations.
We are finalizing the amendment to
§ 155.200(c) as proposed, with one
modification. We are removing the
reference to assisters because it is
redundant of the reference to nonExchange entities. Non-Exchange
entities are defined in § 155.260(b) and
include Navigators, non-Navigator
assistance personnel, certified
application counselors, agents, brokers,
web-brokers and other individuals or
entities who gain access to PII submitted
to an Exchange or collect, use or
disclose PII gathered directly from
Exchange applicants or enrollees.
2. Verification Process Related to
Eligibility for Insurance Affordability
Programs (§ 155.320)
We requested comment on our
proposed plans to expand the current
scope of Medicare periodic data
matching (PDM), which only identifies
and notifies those dual enrollees
receiving financial assistance, to also
include the Exchange population not
receiving financial assistance.
Specifically, we proposed to add a new
authorization compliant with Health
Insurance Portability and
Accountability Act of 1996 (HIPAA)
(Pub. L. 104–191) standards to the single
streamlined application to permit
Exchanges using the federal platform to
collect PHI in order to determine
enrollees’ Medicare enrollment status.
We also proposed to leverage the
current attestation question on the
single, streamlined application, for
applicants to provide written consent
permitting the Exchange to terminate
their coverage if they are found later to
be dually enrolled in Medicare and a
QHP to expand the scope of Medicare
PDM to the population not receiving
financial assistance. We will not finalize
these proposed actions, but will
continue to identify and notify dual
enrollees receiving financial assistance
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as part of current Medicare PDM
operations.
Under § 155.330, Exchanges are
required to periodically examine
available data sources to identify
whether enrollees on whose behalf
APTC or CSRs are being paid have been
found eligible for or are enrolled in
Medicare, Medicaid, Children’s Health
Insurance Program (CHIP), or the Basic
Health Program (BHP), if a BHP is
operating in the service area of the
Exchange. Individuals identified as
enrolled both in Exchange coverage
(with or without APTC or CSRs) and
one of these other forms of coverage are
referred to as dually enrolled
consumers. Generally, if an individual
is eligible for or enrolled in such other
forms of coverage that qualify as
minimum essential coverage (MEC)
under section 5000A of the Code, the
individual is not eligible to receive
APTC or CSRs. For instance, if an
individual is eligible for premium-free
Medicare Part A or enrolled in Medicare
Part A or Part C (also known as
Medicare Advantage), all of which
qualify as MEC, he or she is not eligible
to receive APTC or CSRs to help pay for
an Exchange plan or covered services.
The Secretary has broad authority
under section 1321(a) of the PPACA to
establish regulations setting standards to
implement certain statutory
requirements under title I of the PPACA,
including with respect to the
establishment and operation of
Exchanges, the offering of QHPs through
the Exchanges, the establishment of the
risk adjustment and reinsurance
programs, and such other requirements
as the Secretary determines appropriate.
Additionally, section 1411(g) of the
PPACA allows the exchange of certain
applicant information as necessary to
ensure the efficient operation of the
Exchange, including verifying eligibility
to enroll in coverage through the
Exchange and to receive APTC or CSRs.
Furthermore, 45 CFR 155.430(b)(1)(ii)
requires an Exchange to provide an
opportunity at the time of plan selection
for enrollees receiving and not receiving
financial assistance to choose to remain
enrolled in a QHP if he or she becomes
eligible for other MEC, or to terminate
QHP coverage if the enrollee does not
choose to remain enrolled in the QHP
upon completion of the redetermination
process. As such, for plan year 2018 and
thereafter, we added language to the
existing single, streamlined application
to support compliance with this
requirement by all Exchanges using the
federal platform. This new language
allows all consumers, regardless of
whether they are seeking financial
assistance, to authorize the Exchange to
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obtain eligibility and enrollment data
and, if so desired by the consumer, to
end their QHP coverage if the Exchange
finds during its periodic eligibility
checks that the consumer has become
eligible for or enrolled in other MEC,
such as Medicare, Medicaid/CHIP, or
BHP.
In addition, for plan years beginning
with the 2020 plan year, we stated in
the proposed rule our intention to add
a new HIPAA authorization to the
single, streamlined application used by
Exchanges using the federal platform,
which would meet HIPAA standards
regarding how one’s protected health
information (PHI) is collected and used.
In the preamble to the proposed rule, we
discussed using this proposed new
HIPAA authorization to expand the
current scope of Medicare PDM to
individuals in the Exchange population
who are not receiving financial
assistance and who authorize the
Exchanges using the federal platform to
conduct certain PDM by requesting PHI
from HHS such as their name, Social
Security Number, Medicare eligibility or
enrollment status, and other data
elements the Exchange may determine
necessary, to allow the Exchange to
determine whether the consumer is
dually enrolled in Medicare and
Exchange coverage. This HIPAA
authorization would allow HHS to
check Medicare enrollment databases
for applicants regardless of whether
they seek or receive financial assistance.
As we discussed in the preamble to
the proposed rule, for consumers who
request voluntary termination upon a
finding of dual enrollment, the
Exchange would terminate coverage
after following the current PDM process
outlined in § 155.330(e)(2)(i), which
requires Exchanges to provide notice of
the updated information the Exchange
found, as well as a 30-day period for the
enrollee to respond to the notice. We
emphasize again, because the Exchange
cannot identify through this process
those consumers who are eligible for,
but not enrolled in premium-free Part A,
we encourage all consumers who are 65
and older to apply with the Social
Security Administration (SSA) to
receive an eligibility determination with
respect to Medicare.
We received multiple comments on
this discussion regarding expanding the
scope of Medicare PDM to the Exchange
population not receiving financial
assistance. After further consideration of
the technical complexity of
implementing a HIPAA authorization on
the single, streamlined application and
the potential burden on consumers to
read, decipher, and agree to legal
agreements many may find confusing,
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we will not pursue the addition of a
new authorization to the single
streamlined application. Instead, we
will explore other means through which
the Exchanges can expand the scope of
Medicare PDM to the Exchange
population that is not receiving
financial assistance. A summary of these
comments and our responses to those
comments follow:
Comment: Most commenters generally
supported HHS’s goal to reduce dual
enrollment in Medicare and Exchange
coverage, but cautioned HHS about the
consequences of terminating QHP
coverage for this population.
Commenters noted that terminating
Exchange coverage could: (1) Interfere
with the continuity of care, (2) create
gaps in coverage, especially for those
dual enrollees who have not yet
enrolled in Medicare Part B, (3) cause
other family members on the Medicare
beneficiary’s policy to lose coverage,
and (4) cause increased consumer
confusion over their coverage options.
Rather than terminating QHP coverage,
commenters recommended targeted
outreach and education to the Medicare
eligible population to ensure this
population fully understands the
consequences of dual enrollment, the
appropriate time to enroll in Medicare
Part B to avoid financial penalties for
delayed enrollment, and how access to
their Medicare eligibility information
intersects with QHP termination via
Medicare PDM. One commenter
recommended that we prevent all
individuals with Medicare from
enrolling in QHP coverage through
screening at initial application.
Response: Given the technical
complexity of implementing a HIPAA
authorization on the single streamlined
application and the potential burden it
would place on consumers as
consumers would be required to read,
decipher, and agree to complex legal
agreements that may be confusing for
consumers, we are reconsidering our
approach to expanding Medicare PDM
to the Exchange population not
receiving financial assistance. We are
exploring other options to identify and
notify this population of their dual
enrollment in Medicare and Exchange
coverage to ensure that this population
is able to enroll in Medicare Part B at
the appropriate time and without
financial penalty.
For enrollees in Exchanges using the
federal platform who are receiving
financial assistance, the Exchanges will
continue to end subsidies or QHP
coverage for those consumers who
permit the Exchange to do so in
accordance with § 155.330. For the
Exchange population receiving financial
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assistance, terminating QHP coverage as
part of Medicare PDM ensures that
consumers are not enrolled in
unnecessary duplicative coverage,
reduces the potential for taxpayer
financial liability related to possibly
having to repay APTC at the time of
federal income tax reconciliation, and
also protects the integrity of the
Exchange by ensuring enrollees no
longer eligible for financial assistance
do not receive these subsidies
inappropriately.
HHS is also aware of concerns from
stakeholders that consumers often do
not know when they should contact the
Exchange to end their QHP coverage
after enrolling in Medicare. We believe
this voluntary option to provide written
consent for the Exchange to end a
Medicare dual enrollee’s QHP coverage
will alleviate some of the confusion
consumers currently face when
transitioning from Exchange coverage to
Medicare as the Exchange provides
information in the intial warning notice
on how to end QHP coverage after
enrolling in Medicare. Furthermore, in
instances where the dual enrollee does
not take action, the Exchange will
automatically end coverage for the dual
enrollee; thus, saving the enrollee time
and reducing the risk of the consumer
having to pay back some or all of the
APTC received when they file their
federal income taxes.
In addition, in response to commenter
concerns about the consequences of
termination of dually enrolled
consumers’ coverage, we note that
enrollees receiving financial assistance
have 30 days to respond to their
Medicare PDM notice before the
Exchange takes action as specified in
§ 155.330(e)(2)(i)(D). As we noted in the
preamble to the proposed rule, upon
receiving the required notice, the
enrollee could (1) return to the
Exchange and terminate his or her QHP
coverage, (2) revoke the prior
authorization for the Exchange to
terminate his or her QHP coverage in
the event dual enrollment is found, so
that he or she would remain enrolled
both in the QHP and in Medicare, or (3)
notify the Exchange that he or she is not
eligible for, or enrolled in, Medicare.
For enrollees who revoke their prior
authorization for the Exchange to
terminate their QHP enrollment where
the Exchange finds the enrollee is
eligible for or enrolled in Medicare, or
who disagree that they are eligible for or
enrolled in Medicare, the Exchange
would only proceed to terminate the
enrollee’s APTC and CSRs, and not his
or her enrollment in QHP coverage
through the Exchange, using the process
specified in § 155.330(e)(2)(i). Therefore,
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we believe this operational change
mitigates adverse impacts on the
continuity of care and the risk of
coverage gaps because enrollees can
choose to opt out and remain in QHP
coverage without APTC, pursuant to the
current regulation.
We also appreciate the concerns
raised that non-Medicare family
members could potentially lose
coverage. We note that a special
enrollment period will be available for
family members of dual enrollees when
such family members lose their coverage
or their financial subsidies as a result of
the PDM process described here.
Additionally, we continue to
prioritize consumer and stakeholder
education regarding dual enrollment
and transitioning between coverage, and
to engage in various outreach activities
including distributing webinar,
newsletter, and fact sheet content for
assisters, agents, brokers, and issuers, as
well as direct consumer notification and
application help text. We also are
working to develop educational
materials to ensure that all Medicare
beneficiaries understand the
consequences of dual enrollment and
associated penalties for not enrolling in
Medicare Part B when first eligible. We
believe this will help reduce consumer
confusion over their coverage options
and the appropriate time to sign up for
Medicare. We appreciate the comments
and ideas for future education efforts for
this population and will consider these
suggestions as part of our Medicare
PDM stakeholder outreach moving
forward.
3. Eligibility Redetermination During a
Benefit Year (§ 155.330)
We proposed to add a new paragraph
(d)(3) to § 155.330, under which
Exchanges would be required to
conduct PDM at least twice each
calendar year beginning with calendar
year 2020. We are finalizing this
proposal. However, we have changed
the implementation date to the 2021
calendar year, and added clarifying
language regarding State Exchanges that
have fully integrated eligibility systems
with their respective Medicaid agencies.
In accordance with § 155.330(d),
Exchanges must periodically examine
available data sources to determine
whether enrollees in a QHP through an
Exchange with APTC or CSRs have been
determined eligible for or enrolled in
other qualifying coverage through
Medicare, Medicaid, CHIP, or the BHP,
if applicable. HHS has not previously
defined ‘‘periodically.’’ Currently,
Exchanges using the federal platform
conduct Medicare PDM and Medicaid/
CHIP PDM twice a year. To ensure that
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all Exchanges are taking adequate steps
to identify enrollees who have become
eligible for or enrolled in these other
forms of MEC, and to terminate APTC
and CSRs for those identified, we
proposed to add paragraph (d)(3) to
specify that Exchanges would be
required to conduct Medicare,
Medicaid/CHIP, and, if applicable, BHP
PDM at least twice a calendar year,
beginning with the 2020 calendar year.
We indicated that this timeframe would
likely give Exchanges that are not
already performing these PDM checks
twice a year sufficient time to
implement any business, operational,
and information technology changes
needed to comply with the proposed
new requirement.
We explained our belief that this
policy would reduce QHP premiums,
since Medicare and Medicaid/CHIP
beneficiaries tend to have a higher risk
profile than a typical Exchange enrollee
and, therefore, may have negative
impacts on the risk pool. Because this
population includes significant numbers
of older and disabled beneficiaries, or
persons that may have poorer health
outcomes generally associated with
lower income statuses, we expect that
these populations typically will utilize
health care services at a greater rate as
compared to other populations.2 So that
the Exchanges could prioritize the
implementation of the proposed
requirement to conduct PDM for
Medicare, Medicaid, CHIP, and, if
applicable, BHP eligibility or enrollment
at least twice yearly, we did not also
propose requiring Exchanges to perform
PDM for death at least twice in a
calendar year, and will consider this as
part of future rulemaking.
Since most State Exchanges that
operate their own eligibility and
enrollment platform have a single
shared, integrated eligibility system
with their respective Medicaid
programs, the Medicaid/CHIP PDM
requirements may be met differently by
State Exchanges. State Exchanges that
have fully integrated eligibility systems
generally have controls in place to
prevent concurrent or dual enrollment
of an individual in both a QHP through
the Exchange with APTC/CSRs, and
Modified Adjusted Gross Income
(MAGI)-based Medicaid/CHIP coverage,
at any given time. We proposed at
paragraph (d)(3) that we will deem these
State Exchanges to be in compliance
with the requirement to perform
2 For example, see Urban Institute and Center on
Society and Health, How Are Income and Wealth
Linked to Health and Longevity? (April 2015),
available at https://www.urban.org/sites/default/
files/publication/49116/2000178-How-are-Incomeand-Wealth-Linked-to-Health-and-Longevity.pdf.
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Medicaid/CHIP PDM or, if applicable,
BHP PDM. Thus, these State Exchanges
would not need to perform additional
Medicaid/CHIP PDM outside of the
controls that are currently in place to
prevent dual enrollment in their
integrated eligibility system. State
Exchanges that operate their own
eligibility and enrollment platform and
do not have fully integrated eligibility
systems for APTC/CSRs and Medicaid/
CHIP or BHP, if applicable, would be
required to perform Medicaid/CHIP
PDM at least twice a year.
We anticipate many State Exchanges
will meet or exceed the proposed
requirements for Medicare PDM,
Medicaid/CHIP PDM and, if applicable,
BHP PDM, based on operations reported
to us through the State-based
Marketplace Annual Reporting Tool
(SMART). This view is also supported
by information we have learned through
technical assistance engagements.
Furthermore, the new Medicaid/CHIP
PDM requirement would not result in a
significant administrative burden for
State Exchanges because we believe
most State Exchanges currently operate
an integrated eligibility system and
could be deemed to be in compliance
with the proposed Medicaid/CHIP PDM
requirements.
We did not propose specific penalties
if State Exchanges do not comply with
the proposed PDM requirements.
However, we noted that, under current
authority, HHS requires a State
Exchange to take corrective action if it
is not complying with applicable federal
requirements. We utilize specific
oversight tools (SMART, programmatic
audits, etc., as described in the
preamble to § 155.1200) to identify
issues with, and place corrective actions
on, the Exchanges, and to provide
technical assistance and ongoing
monitoring to track those actions until
the Exchange comes into compliance.
Additionally, under section 1313(a)(4)
of the PPACA, if HHS determines that
an Exchange has engaged in serious
misconduct with respect to compliance
with Exchange requirements, it has the
option to rescind up to 1 percent of
payments due to a state under any
program administered by HHS until it is
resolved. These existing authorities
would apply to the proposed periodic
data matching requirements in
§ 155.330(d). If HHS were to determine
that it is necessary to apply this
authority due to non-compliance by an
Exchange with § 155.330(d), HHS would
also determine the HHS-administered
program from which it would rescind
payments that are due to that state.
Lastly, we proposed to make a
technical correction in § 155.330(d)(1)
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by adding an additional reference to the
process and authority in § 155.320(b).
This reference was omitted previously,
but the requirements in § 155.320(b),
specifying that Exchanges must verify
whether an applicant is eligible for MEC
other than through an eligible employersponsored plan using information
obtained by transmitting identifying
information specified by HHS to HHS
for verification purposes, apply to the
PDM process in § 155.330.
We are finalizing this proposal to add
paragraph (d)(3) as proposed, but have
changed the implementation date to the
2021 calendar year, and have added
some clarifying language with regard to
fully integrated eligibility systems, as
described below. A summary of
comments received and our responses to
those comments appear below.
Comment: We received multiple
comments in support of PDM as an
effort to improve Exchange program
integrity. These commenters agreed that
the process helps inform consumers of
their enrollment in potentially
duplicative other MEC such as certain
Medicare and Medicaid coverage, CHIP,
or, if applicable, the BHP, and to help
consumers avoid a tax liability for
having to repay APTC received during
months of overlapping coverage when
reconciling at the time of annual federal
income tax filing. Many commenters
suggested improvements that could be
made to current PDM processes.
Some commenters suggested that
consumers, especially Medicare
beneficiaries, could benefit from
additional education or outreach from
assisters, Navigators, or call center
representatives to help these dually
enrolled consumers make informed
choices about their coverage options.
Another commenter recommended that
HHS work closely with SSA to identify
which Medicare beneficiaries are
approaching Medicare eligibility so that
notices can be sent during the
beneficiary’s initial enrollment period.
Another commenter recommended that,
in addition to periodic checks for other
qualifying coverage, HHS should
implement periodic checks for deceased
enrollees and that these checks should
occur before auto re-enrollment.
Response: We agree that the PDM
process is an important tool to ensure
that Exchange enrollees are enrolled in
the appropriate coverage that best meets
their needs and budget while reducing
the risk for potential tax liabilities for
having to repay APTC received during
months of overlapping coverage. We
also agree that outreach and education
is critical for dual enrollees and we
continue to work with Exchange
stakeholders on education and outreach
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strategies, especially for the Medicare
beneficiary population to ensure that
consumers can make well-informed
choices and sign up for Medicare
coverage during the appropriate
timeframes. In 2018, we added
additional resources to the Exchange
application that provided information
on the appropriate timeframes to enroll
in Medicare Parts A and B to help
consumers avoid incurring any late
enrollment penalties. We also believe
that periodic checks for deceased
enrollees are a critical aspect to
ensuring Exchange program integrity.
Beginning in late 2019, Exchanges using
the federal platform will conduct
periodic checks for deceased enrollees
in single member applications and
subsequently end deceased enrollees’
QHP coverage. As noted previously, to
ensure State Exchanges have
appropriate time to implement the
technical and operational changes
necessary to conduct Medicare,
Medicaid/CHIP, and, if applicable, BHP,
PDM, we are not requiring that State
Exchanges perform checks for deceased
enrollees twice yearly, and will be
considering changes as part of future
rulemaking.
Comment: We received mixed
comments regarding our proposal to
require Exchanges to conduct Medicare,
Medicaid/CHIP and, if applicable, BHP
PDM twice a year. Many commenters
stated that increasing the frequency of
PDM, particularly Medicare PDM, may
be burdensome on both consumers and
State Exchanges, and could lead to
increased consumer confusion,
diversion of resources from customer
service and outreach efforts, and
potential loss of APTC due to
potentially outdated data sources for
Medicare enrollment and Medicaid/
CHIP eligibility and enrollment. One
commenter recommended that
additional verification checks be
incorporated into the final rule to
ensure consumers are not removed from
coverage due to outdated data. Two
commenters noted that the twice yearly
frequency was too infrequent and would
not provide timely notice for those
consumers who are dually enrolled in
Medicare and Exchange coverage. One
commenter recommended requiring that
Exchanges only perform PDM checks
once yearly, which taken together with
the annual renewal process, would
allow a check every 6 months. Another
commenter expressed concerns that our
proposed language would allow State
Exchanges to perform PDM more than
twice a year, which could cause
consumers to lose coverage erroneously.
Response: We continue to believe that
conducting Medicare, Medicaid/CHIP
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and, if applicable, BHP PDM serves a
critical role in ensuring that consumers
are enrolled in the appropriate coverage
and ensures that APTC is paid
appropriately. We continue to work
with our partners throughout HHS to
ensure the accuracy of Medicare,
Medicaid, and CHIP data, and will
continue to provide guidance to State
Exchanges on notice language,
especially regarding the availability of
special enrollment periods for
consumers who erroneously lose APTC
or QHP coverage, as well as the
consumer’s right to appeal an
Exchanges’ determination. We disagree
that conducting PDM checks twice
yearly would cause consumer confusion
or divert resources away from customer
service and outreach because PDM
provides valuable information to
consumers regarding their dual
enrollment in Medicare and/or
Medicaid/CHIP and serves an important
program integrity function by ensuring
that only consumers eligible for APTC/
CSRs receive them. We continue to
prioritize consumer and stakeholder
education related to dual enrollment
and transitioning between coverage,
including webinar, newsletter, and fact
sheet content for assisters, agents,
brokers, and issuers, as well as direct
consumer notification and application
help text. We encourage State
Exchanges to prioritize these education
efforts as well.
We appreciate commenters’
suggestions regarding the frequency of
PDM checks, but we believe that
requiring these checks at least twice a
year strikes the appropriate balance
between providing timely notice for
dually enrolled consumers and not
overburdening Exchanges with
potentially costly system changes and
notice requirements. With respect to the
comment regarding Exchanges
conducting a Medicaid/CHIP or
Medicare PDM check during the annual
renewal process, this rule specifies the
frequency, and not the precise timing,
for when Exchanges must conduct the
Medicaid/CHIP and Medicare PDM
checks. Exchanges have the flexibility to
conduct one of the required PDM checks
during the annual renewal process.
Finally, we disagree that the changes
outlined to PDM would increase burden
on all Exchanges. We will deem State
Exchanges that have implemented fully
integrated eligibility systems with their
respective Medicaid programs to be in
compliance with the proposed
Medicaid/CHIP PDM requirement.
Thus, we anticipate the change to the
Medicaid/CHIP PDM requirement will
not increase burden for those State
Exchanges because they will not have to
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build new functionality to meet this
requirement. However, we do agree that
any significant burden on State
Exchanges would likely be on those that
currently do not perform any Medicare
PDM, or those that currently do not
operate integrated eligibility systems
and do not perform any Medicaid/CHIP
PDM and, therefore, are not already in
compliance with § 155.330(d). Those
Exchanges would likely be required to
engage in information technology (IT)
system development activities in order
to communicate with these programs
and act on enrollment data in a new
way.
Comment: We received multiple
comments that the proposed date of
January 1, 2020 for the implementation
of twice yearly Medicare, Medicaid/
CHIP, and, if applicable, BHP PDM
provides insufficient time for State
Exchanges to implement the required
technical changes. Commenters noted
that State Exchanges that do not
currently conduct Medicare PDM, or do
not have integrated eligibility systems
with their State Medicaid programs and
do not currently conduct Medicaid/
CHIP PDM, would have to make
significant changes to their eligibility
systems and processes to to confirm
enrollment in Medicare or to verify
Medicaid or CHIP eligibility,
respectively. One commenter suggested
2021 as an appropriate implementation
date. Two commenters also requested
that HHS finalize a clear and certain
definition of a fully integrated eligibility
system to mean eligibility systems that
have one eligibility rules engine, shared
between the State Exchange and its
respective Medicaid program, for MAGIbased Medicaid, CHIP, APTC, and if
applicable, BHP, eligibility
determinations.
Response: We agree with commenters
that requiring implementation by the
2020 calendar year may not provide
State Exchanges with a sufficient
timeframe to implement these changes,
especially for Exchanges without
integrated eligibility systems that do not
currently perform Medicaid/CHIP PDM
or those that currently do not perform
Medicare PDM. These Exchanges would
need to implement new interfaces with
their respective Medicaid programs and/
or a new connection to federal data to
confirm Medicare enrollment.
Therefore, we are finalizing the proposal
in § 155.330(d)(3) to take effect
beginning with the 2021 calendar year.
We also agree on the importance of
providing a clear and specific definition
of ‘‘fully integrated eligibility system.’’
As described in the preamble to the
proposed rule, by ‘‘fully integrated
eligibility system,’’ we mean one where
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71679
a State Exchange and its respective
Medicaid program shares a single
eligibility rules engine for determining
eligibility for MAGI-based Medicaid/
CHIP, APTC, and if applicable, BHP. We
are finalizing paragraph (d)(3) with
some additional language to codify this
meaning.
Comment: We received three
comments that were opposed to the
proposed requirement to conduct
Medicare, Medicaid/CHIP and, if
applicable, BHP PDM, cautioning us
that defining the precise frequency and
nature of PDM encroaches upon the
sovereignty of the State Exchanges. Two
commenters noted that HHS has not
provided enough evidence that there is
a significant problem with duplicative
enrollment in other qualifying coverage
such as Medicare, Medicaid/CHIP, and
BHP. One commenter expressed
concern that additional requirements on
State Exchanges could discourage
consumers from applying for coverage.
Response: Ensuring that consumers
are enrolled in the appropriate coverage
remains a top priority for HHS.
Additionally, ensuring that APTC is
paid appropriately is a requirement set
forth in § 155.330(d)(1)(ii). Several
Government Accountability Office
(GAO) reviews have underscored the
importance of continually re-verifying
enrollee eligibility for APTC through
PDM with other government entities.3
As such, we believe PDM plays a vital
role in ensuring the health and integrity
of all Exchanges by ensuring consumers
are enrolled in the appropriate coverage,
and reduces the risk that consumers will
have to pay back all or some of APTC
paid on their behalf during months of
overlapping coverage when they file
their annual federal income taxes. We
disagree that the twice yearly
requirement to conduct Medicare,
Medicaid/CHIP and, if applicable, BHP
PDM would discourage consumers from
applying for and enrolling in QHP
coverage, as the majority of consumers
become dually enrolled inadvertently,
such as by aging into Medicare or
experiencing fluctuations in household
income.
4. General Program Integrity and
Oversight Requirements (§ 155.1200)
As the Exchange Establishment grant
program established under section 1311
of the PPACA has come to a conclusion
and State Exchanges have become
financially self-sustaining, HHS
3 ‘‘Improper Payments: Improvements Needed in
CMS and IRS Controls over Health Insurance
Premium Tax Credit’’ (GAO 17–467); ‘‘Federal
Health-Insurance Marketplace: Analysis of Plan
Year 2015 Application, Enrollment, and EligibilityVerification Process’’ (GAO–18–169).
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continues to develop and refine its
mechanisms and tools for overseeing the
ongoing compliance of State Exchanges
and SBE–FPs with federal requirements
for Exchanges, including eligibility and
enrollment requirements under 45 CFR
part 155.
HHS approves or conditionally
approves a state to establish a State
Exchange based on an assessment of a
state’s attested compliance with
applicable statutory and regulatory
rules. Once approved or conditionally
approved, State Exchanges must meet
specific program integrity and oversight
requirements identified at section
1313(a) of the PPACA, and the
implementing regulations at §§ 155.1200
and 155.1210. These requirements
outline HHS’s authority to oversee the
Exchanges after their establishment.
Currently, annual reporting
requirements for State Exchanges at
§ 155.1200(b) include the annual
submission of (1) a financial statement
in accordance with generally accepted
accounting principles (GAAP); (2)
eligibility and enrollment reports; and
(3) performance monitoring data.
Additionally, under § 155.1200(c),
each State Exchange is required to
contract with an independent external
auditing entity that follows generally
accepted government auditing standards
(GAGAS) to perform annual
independent external financial and
programmatic audits. State Exchanges
are required to provide HHS with the
results of the annual external audits,
including corrective action plans to
address any material weaknesses or
significant deficiencies identified by the
auditor.4 All corrective action plans are
monitored by HHS until closed.
Currently, the audits must address
compliance with all Exchange
requirements under 45 CFR part 155.5
HHS designed and developed the
SMART in 2014 to assist State
Exchanges in conducting a defined set
of oversight activities. The SMART was
designed to facilitate State Exchanges’
reporting to HHS on how they are
meeting federal program and
operational requirements, including
State Exchanges reporting their
compliance with federal eligibility and
enrollment program requirements under
45 CFR part 155 subparts D and E. The
SMART, thus, enables HHS to evaluate
and monitor State Exchange progress in
coming into compliance with federal
requirements where needed. Since then,
HHS has come to utilize the SMART,
along with the annual programmatic
and financial audit reports, as primary
4 45
5 45
CFR 155.1200(c)(1) and (2).
CFR 155.1200(d)(2).
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oversight tools for identifying and
addressing State Exchange noncompliance issues. HHS requires State
Exchanges to take corrective actions to
address issues that are identified
through the SMART and annual audits,
and HHS monitors the implementation
of the corrective actions.
In the proposed rule, we proposed to
modify § 155.1200(b)(2) to reflect that
HHS requires State Exchanges to submit
annual compliance reports (such as the
SMART), that encompass eligibility and
enrollment reporting by State
Exchanges, and also include reporting
on compliance across other Exchange
program requirements under 45 CFR
part 155. We also proposed to modify
§ 155.1200(b)(1) to eliminate the April
1st date by which State Exchanges must
provide a financial statement to HHS, to
provide HHS the flexibility to align the
financial statement deadline with the
SMART deadline, which is set annually
by HHS. Because we proposed to
remove the April 1st date, but intend to
maintain the requirement that State
Exchanges submit the required reports
by a deadline, we also proposed to
modify the introductory text to
§ 155.1200(b) to specify that State
Exchanges must provide the required
annual reporting by deadlines to be set
by HHS.
We proposed to retain the
requirement at § 155.1200(c) that an
annual programmatic audit be
conducted by State Exchanges, but
proposed a minor change from ‘‘state’’
to ‘‘State Exchanges’’ to be consistent
and clear on the entities to which this
rule applies. We also proposed to add
specificity to the annual programmatic
audit requirement by proposing a
clarification of § 155.1200(d)(2) to make
clear that HHS may specify or target the
scope of a programmatic audit to
address compliance with particular
Exchange program areas or
requirements. We explained that this
would provide HHS with the ability to
specify those Exchange functions that
are most pertinent to a particular State
Exchange model (either a traditional
State Exchange that operates its own
eligibility and enrollment system or an
SBE–FP) and need to be regularly
included in the audit; target those
Exchange functions most likely to
impact program integrity, such as
eligibility verifications; and reduce
burden on State Exchanges where
possible. In addition, we proposed to
modify § 155.1200(d) by replacing
existing paragraph (d)(4) with new
paragraphs (d)(4) and (5). These
proposed new requirements specify that
State Exchanges must ensure that the
independent audits implement testing
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procedures or other auditing procedures
that assess whether a State Exchange is
conducting accurate eligibility
determinations and enrollment
transactions under 45 CFR part 155
subparts D and E. Such auditing
procedures can include the use of
statistically valid sampling methods in
the testing or auditing procedures.
We indicated that we believe these
proposed changes would strengthen our
programmatic oversight and the
program integrity of State Exchanges,
while providing flexibility for HHS in
the collection of information. We further
explained that, through the Paperwork
Reduction Act (PRA) process, we are
able to make updates and refinements to
the SMART reporting tool to align with
our program integrity priorities for
Exchanges as they evolve. In addition,
allowing HHS to specify the scope of the
programmatic audit at § 155.1200(d)(2)
would provide us the ability to target
our oversight to specific Exchange
program requirements based on the
particular State Exchange model, our
program integrity priorities, and the goal
of reducing burden on State Exchanges
where possible. We explained our belief
that this approach would provide HHS
and states with greater insight into State
Exchange compliance with federal
standards in a more cost-effective
manner.
We also noted our belief that this
approach would allow HHS to identify
State Exchange non-compliance issues
with more precision and efficacy. It
would allow HHS to provide more
effective, targeted technical assistance to
State Exchanges in developing
corrective action plans to address issues
that are identified. We discussed how
this approach could reduce
administrative burden on State
Exchanges while maintaining the
traditional role of State Exchanges in
managing and operating their
Exchanges, with HHS maintaining its
role of overseeing State Exchange
compliance with federal requirements
through structured reporting processes.
We sought comments on these
proposals. After consideration of
comments received, we are finalizing
the amendments to § 155.1200 as
proposed. A summary of comments
received and our responses to those
comments appear below:
Comment: Commenters generally
expressed support for some of the
proposed changes to the annual
reporting and programmatic audit
requirement. They expressed support
for removal of the April 1st financial
statement deadline as long as the new
deadline accommodates the state budget
cycles for all State Exchanges. Some
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commenters supported the proposal to
provide flexibility to specify the scope
of the programmatic audit, such as
focusing on eligibility and enrollment
requirements under 45 CFR part 155
subparts D and E, while two
commenters asked HHS to refrain from
expanding the scope of the
programmatic audit as it can divert
funding from other Exchange functions
and create administrative burden. Some
commenters expressed concern with the
timing and potential funding to
implement the changes. These
commenters urged HHS to provide State
Exchanges with over a year of advanced
notice to implement the changes, to
ensure proper planning and funding.
One commenter requested that HHS
clarify the proposed requirement for the
State Exchange’s independent external
auditor to use statistically valid
sampling in their review of the State
Exchange eligibility and enrollment
transactions, noting that statistically
significant sampling in the
programmatic audit can be larger in
scope and more costly in comparison to
random sampling which can also
identify programmatic issues. Another
commenter recommended that HHS
consider changing the frequency of the
programmatic audit to biennially unless
the programmatic audit shows
irregularities.
Another commenter urged HHS to
clarify that the proposed changes to the
programmatic audit specific to
eligibility and enrollment activities do
not pertain to SBE–FPs, since SBE–FPs
rely on HHS and the federal platform to
perform eligibility and enrollment
functions.
Response: We believe these proposed
changes will strengthen our
programmatic oversight and the
program integrity of State Exchanges
and thus are finalizing these
amendments as proposed. As detailed in
the proposed rule, these amendments
are intended to allow for more targeted
audits that focus HHS and State
Exchange resources on compliance with
particular Exchange program areas that
have higher program integrity risks in a
more consistent manner, rather than
covering all program areas. These
amendments are also intended to
address requirements that are applicable
only to a particular State Exchange
model, in a more standardized manner.
We are removing the April 1st deadline
from § 155.1200(b)(1) to allow HHS to
align the deadline for submission of the
financial statement to HHS with the
deadline for submission of SMART
reports, currently June 1. Going forward,
we anticipate establishing the deadline
for submission of the financial
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statement and SMART report on an
annual basis through guidance and
would seek to accommodate state
budget cycles to the maximum extent
practical when setting these dates. The
general scope of these audits remains
the same, that is, under the new
paragraph (d)(2), HHS may specify that
an audit focus on compliance with
subparts D and E of 45 CFR part 155, or
other requirements under 45 CFR part
155, as specified by HHS.6 However, we
appreciate and considered the
comments received. We understand that
most State Exchanges negotiate their
contracts with external auditing entities
a year or more in advance and would
need sufficient time to update their
contracts to reflect any changes in the
scope of the external programmatic
audits. We also recognize that State
Exchanges that operate their own
eligibility and enrollment platforms
would also need time to work with their
contracted auditors to implement new
procedures for testing the accuracy of
eligibility determinations if their
auditors have not previously employed
such procedures for this purpose. Thus,
subsequent to this rule, we will provide
State Exchanges with technical
operational guidance that will specify
the first plan year for which changes to
the scope of the programmatic audit
would apply, taking into account the
need to allow for a period of time for
State Exchanges to implement the
changes finalized in this rule.
In response to the comments
regarding use of a statisticallysignificant sampling methodology
versus a random sampling methodology,
we clarify that, in this rule, we are not
specifying a particular sampling
methology that must be used by all State
Exchanges for testing the accuracy of
eligibility determinations in the annual
programmatic audits. In addition to
State Exchanges and their contracted
auditors using the generally accepted
government auditing standards, CMS’s
technical operational guidance would
also outline procedures the independent
external auditor can chose to implement
to assess whether a State Exchange is
conducting accurate eligibility
determinations and enrollment
transactions under 45 CFR part 155
subparts D and E. Going forward we
intend to provide State Exchanges with
this technical operational guidance on
an annual basis to outline the deadline
for submission of the applicable year’s
6 This is consistent with the scope for audits in
the existing regulation at 45 CFR 155.1200(d)(2),
which currently requires State Exchanges to ensure
these audits address compliance with ‘‘the
requirements under this part.’’
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71681
reports, the scope of the applicable
year’s external programmatic audit, and
the requirements under 45 CFR part 155
that are applicable to each State
Exchange model. We intend to release
this guidance around April each year, to
align with our existing timeframe for
providing guidance to State Exchanges
on the annual SMART process, so that
State Exchanges have sufficient time to
prepare, and administrative burden is
minimized to the extent practical.
Lastly, we agree with the overall notion
of taking a risk-based approach towards
determining the frequency by which
State Exchanges are required to conduct
the external programmatic audit.
Specifically, we considered the
recommendation to change the
frequency of State Exchange
programmatic audits to biennially
unless the audit shows irregulatrities.
We decline to make this change at this
time because some State Exchanges
currently are addressing active findings
or corrective actions as a result of past
programmatic audits, which we believe
annual re-evaluations are still
appropriate. However, we will consider
this recommendation going forward and
may propose to decrease the frequency
of State Exchange audits in future rulemaking.
Comment: Some commenters
requested that certain regulatory
language remain unchanged or be
modified. One commenter urged HHS to
retain the language under
§§ 155.1200(b)(2) and 155.1200(d)(2)
because the proposed language is
broader and targeted auditing can create
administrative burden. Another
commenter requested that HHS limit the
scope of the programmatic audit under
§ 155.1200(d)(2) to solely cover the
eligibility and enrollment requirements
under 45 CFR part 155 subparts D and
E and remove the language that allows
HHS to include other Exchange
requirements under 45 CFR part 155 in
the scope of the programmatic audit.
Another commenter requested that
§ 155.1200(d)(2) remain unchanged
because the general reference to
compliance with 45 CFR part 155 is
consistent with the HHS’s stated intent
to specify the scope for programmatic
audits, and recommended that HHS
make clear that the proposed changes to
the review of State Exchange eligibility
determinations under § 155.1200(d)(4)
applies to eligibility determinations for
QHP/APTC only, and not to Medicaid
eligibility determinations.
Response: We believe the proposed
changes under § 155.1200(d) will
strengthen our programmatic oversight
and the program integrity of State
Exchanges and provide appropriate
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flexibility to target oversight and
enforcement activities, as well as HHS
and State Exchange resources, which, in
turn, will reduce burden. As State
Exchanges continue to evolve and
mature, HHS will be able to focus
oversight efforts, including making
refinements to annual compliance
reporting tools (such as the SMART), in
response to changes in federal policy, as
well as federal program integrity
priorities and processes. We further note
that, while these amendments provide
flexibility for HHS to target these audits,
they also retain the authority for HHS to
require the audits to address other
requirements under 45 CFR part 155, as
specified by HHS. As such, HHS can
still require audits with a broader scope
when deemed appropriate or necessary.
While we generally intend to focus
programmatic audits on those Exchange
functions most likely to impact program
integrity, such as eligibility
verifications, we do not agree with
commenters that these audits should
only focus on eligibility and enrollment
functions because there may be changes
to federal policy, priorities, or processes
that result in the need for HHS to focus
our oversight on other Exchange
functions besides eligibility and
enrollment. Also, not all State
Exchanges perform their own eligibility
and enrollment functions. For instance,
SBE–FPs rely on HHS and the federal
platform to perform their eligibility and
enrollment functions, and thus HHS’s
oversight of SBE–FPs would need to
focus on other Exchange functions that
are more relevant or critical to the SBE–
FP model. That is why HHS retains the
authority, and the flexibility, under the
amended § 155.1200(d)(2) to require the
audits to address other requirements
under 45 CFR part 155, as specified by
HHS. In addition, the amendments to
§ 155.1200(d)(2) finalized in this rule
give HHS flexibility to specify the
Exchange functions that are most
pertinent to the State Exchange model
and most likely to impact program
integrity. In response to comments, we
clarify that the changes to subparagraph
§ 155.1200(d)(4) apply to State Exchange
eligibility determinations for QHP/
APTC, and not to Medicaid eligibility
determinations. We recognize that not
all State Exchanges make Medicaid
eligibility determinations, but also wish
to clarify that in accordance with
§ 155.302, State Exchanges must
conduct a MAGI-based assessment or
determination of eligibility for Medicaid
as part of determining eligibility for
APTC. HHS will provide further
guidelines on the auditing of State
Exchange eligibility and enrollment
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transactions, and any other audit
requirements applicable in a given year,
in the annual technical operational
guidance. We further clarify that the
amendments to § 155.1200(b)(2) do not
reflect an expansion of State Exchange
reporting obligations and instead
capture the existing annual compliance
reports (such as the SMART), that
encompass eligibility and enrollment
reporting, as well as compliance across
other Exchange program requirements
under 45 CFR part 155, that State
Exchanges currently submit to HHS.
Comment: One commenter requested
transparency regarding HHS’s oversight
of the Federally-facilitated Exchanges’
(FFEs’) compliance with oversight
standards. The commenter
recommended that HHS publish a
comparison of compliance standards
and activities to ensure the FFEs and
State Exchanges are held to the same
oversight requirements. Another
commenter generally supported the
proposed changes as enhancing the
oversight and transparency of the State
Exchanges.
Response: We appreciate and strive
for transparency in the oversight of all
Exchanges and will consider these
suggestions. However, we note that the
oversight standards under § 155.1200,
including the proposed amendments,
are specific to State Exchanges.
Therefore, the comments related to FFE
oversight standards are outside the
scope of this rulemaking. We also note
that the FFEs are overseen through the
efforts of other federal entities such as
the Government Accountability Office
and the HHS Office of the Inspector
General.
Comment: Several commenters
opposed HHS’s proposed changes to the
annual reporting and programmatic
audit requirements for State Exchanges.
They stated that the proposed language
expands federal authority and can add
administrative burden to State
Exchanges. Some commenters disagreed
that the Federalism implications are
substantially mitigated since the
proposed changes only add specificity
to existing requirements, stating that the
proposed changes are open-ended and
remove specificity. Additionally, some
of these commenters expressed concern
that HHS is eliminating the requirement
of eligibility and enrollment reports
under § 155.1200(b)(2). These
commenters also raised concerns with
the disclosure of consumer information,
as well as negative consumer impacts,
due to the additional oversight on
eligibility determinations being
proposed.
Response: We believe these changes
will strengthen our programmatic
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oversight and the program integrity of
State Exchanges. Further, as detailed
above, the amendments do not represent
an expansion of HHS’s authority to
oversee and monitor compliance of
State Exchanges. Under the existing
language at § 155.1200(d)(2), State
Exchanges are currently required to
ensure their respective annual
programmatic audits address
compliance with ‘‘the requirements
under this part.’’ The changes to this
provision finalized in this rule provide
HHS with the flexibility to target the
scope of the audits to the requirements
applicable to each State Exchange
model under 45 CFR part 155 and that
most impact program integrity, which
should generally reduce the
administrative burdens associated with
these audits. For example, we anticipate
tailoring the requirements regarding
audit of eligibility and enrollment
activities by State Exchange model.
Since SBE–FPs rely on the federal
platform for eligibility and enrollment
functions, we believe that they should
not be subject to the same audit
requirements as State Exchanges that
perform all eligibility and enrollment
activities because they operate their
own technology platform for such
activities.
We also clarify that we are not
eliminating eligibility and enrollment
reporting under § 155.1200(b)(2). The
amendments finalized to that provision
reflect that HHS already requires State
Exchanges to submit annual reporting
(such as the SMART) that encompass
eligibility and enrollment reporting,
along with other information about
compliance with requirements in other
subparts under 45 CFR part 155. These
changes recognize that HHS has come to
utilize the SMART along with the
annual programmatic and financial
audit reports as the primary oversight
tools to oversee State Exchange
compliance with the applicable
requirements under 45 CFR part 155,
which includes compliance with
eligibility and enrollment requirements.
We further clarify that if we need
additional information about a State
Exchange’s compliance with applicable
requirements beyond what is reported
through SMART, we would leverage the
new flexibility under the new
§ 155.1200(d)(2) to conduct a targeted
audit.
Finally, in response to the comments
expressing concern about the increased
risk of disclosure of consumer
information as a result of the additional
oversight and auditor review of
individual eligibility determinations
made by State Exchanges that is
contemplated in this rule, we note that,
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as part of the responsibilities of State
Exchanges and their contracted entities
in handling individual consumer data
associated with core Exchange functions
such as eligibility, enrollment, and
consumer assistance, State Exchanges
and their contracted non-Exchange
entities must always comply with the
privacy and security requirements
under §§ 155.260 and 155.280 with
respect to the protection and disclosure
of personally identifiable information.
Additionally, under § 155.285, State
Exchanges and their contracted entities
are subject to civil monetary penalties
for improper use or disclosure of
personally identifiable information.
Finally, HHS has authority under
§ 155.280 to conduct audits and
investigations to ensure compliance
with Exchange privacy and security
standards, and may pursue civil,
criminal or adminstirative proceedings
or actions as determined necessary.
After considering the comments
received in response to the proposed
rule and for the reasons discussed
above, we are finalizing the
modifications to § 155.1200.
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B. Health Insurance Issuer Standards
Under the Affordable Care Act,
Including Standards Related to
Exchanges
1. Segregation of Funds for Abortion
Services (§ 156.280)
We proposed an amendment at
§ 156.280(e)(2) relating to billing and
payment of the policy holder’s portion
of the premium attributable to abortion
services for which appropriated funds
may not be used. Since 1976, Congress
has included language, commonly
known as the Hyde Amendment, in the
Labor, Health and Human Services,
Education and Related Agencies
appropriations legislation.7 The Hyde
Amendment, as currently in effect,
permits federal funds subject to its
funding limitations to be used for
abortion services only in the limited
cases of rape, incest, or if a woman
suffers from a physical disorder,
physical injury, or physical illness,
including a life-endangering physical
condition caused by or arising from the
pregnancy itself, that would, as certified
by a physician, place the woman in
danger of death unless an abortion is
performed (Hyde abortion services).
Generally, when appropriated funds are
subject to the Hyde Amendment’s
funding limitations, an agency is
prohibited, among other things, from
7 Accordingly, the Hyde Amendment is not
permanent Federal law, but applies only to the
extent reenacted by Congress from time to time in
appropriations legislation.
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using those funds to pay for coverage of
abortion beyond these specific limited
exceptions (non-Hyde abortion
services). Section 1303(b)(2) of the
PPACA prohibits the issuer of a QHP
offering coverage for abortion services
that are not exempt from the Hyde
Amendment’s ban on the use of federal
funds to pay for certain abortions, from
using any amount attributable to PTC
(including APTC) or CSRs (including
advance payments of those funds to an
issuer, if any) for abortions for which
federal funds are prohibited, ‘‘based on
the law as in effect as of the date that
is 6 months before the beginning of the
plan year involved.’’ 8
Section 1303 of the PPACA outlines
specific accounting and notice
requirements that QHPs covering nonHyde abortion services must follow to
ensure that no federal funding is used
to pay for services for which public
funds are prohibited. Under sections
1303(b)(2)(B) and (b)(2)(D) of the
PPACA, as implemented in
§ 156.280(e)(2)(i) and (e)(4), QHP issuers
must collect a separate payment from
each enrollee in such a plan without
regard to the enrollee’s age, sex, or
family status, for an amount equal to the
greater of the actuarial value of coverage
of abortion services for which public
funding is prohibited, or $1 per enrollee
per month.
Section 1303(b)(2)(D) of the PPACA
establishes certain requirements with
respect to a QHP issuer’s estimation of
the actuarial value of non-Hyde abortion
services. Under section 1303(b)(2)(D) of
the PPACA, the QHP issuer ‘‘may take
into account the impact on overall costs
of the inclusion of such coverage, but
may not take into account any cost
reduction estimated to result from such
services, including prenatal care,
delivery, or postnatal care.’’ The QHP
issuer is also required to estimate such
costs as if such coverage were included
for the entire population covered, and
may not estimate such a cost at less than
$1 per enrollee, per month. If an
enrollee’s premium is paid through
employee payroll processes, section
1303(b)(2)(B) of the PPACA requires that
the separate payments ‘‘shall each be
paid by a separate deposit.’’
Accordingly, issuers that offer QHPs
that provide coverage of non-Hyde
abortion services must collect a separate
payment of no less than $1 per enrollee
in the plan per month, regardless of the
actuarial value of coverage of non-Hyde
abortion services and regardless of
whether premiums are paid directly by
enrollees or through payroll deductions.
8 Section
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1303(b)(1)(B)(i) of the PPACA.
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In certain rare scenarios, the FFEs’
system allocated an amount of APTC to
a QHP such that the share of the
aggregate premium attributable to
coverage of non-Hyde abortion services
is less than $1, which falls below the
minimum requirement under section
1303 of the PPACA. We made system
changes for the open enrollment period
for plan year 2019 to ensure that the
minimum premium amount of $1 per
enrollee per month is assigned to all
enrollments into plans offering coverage
of non-Hyde abortion services, so that
issuers can separately collect this
amount directly from enrollees for the
portion of the total premium attributable
to coverage of non-Hyde abortion
services.
Pursuant to section 1303(b)(2)(C) of
the PPACA, as implemented at
§ 156.280(e)(3), QHP issuers must
segregate funds for coverage of nonHyde abortion services collected from
enrollees into a separate allocation
account that is to be used to pay for
non-Hyde abortion services. Thus, if a
QHP issuer disburses funds for a nonHyde abortion on behalf of an enrollee,
it must draw those funds from the
segregated allocation account. The
account cannot be used for any other
purpose.9
Section 1303 of the PPACA and
current implementing regulations at
§ 156.280 do not specify the method a
QHP issuer must use to comply with the
separate payment requirement under
section 1303(b)(2)(B)(i) of the PPACA
and § 156.280(e)(2)(i). In the 2016
Payment Notice, we provided guidance
with respect to acceptable methods that
a QHP issuer offering coverage of nonHyde abortion services on an individual
market Exchange may use to comply
with the separate payment requirement.
We stated that the QHP issuer could
satisfy the separate payment
requirement in one of several ways,
including by sending the enrollee a
single monthly invoice or bill that
separately itemizes the premium
amount for coverage of non-Hyde
abortion services; sending the enrollee a
separate monthly bill for these services;
or sending the enrollee a notice at or
soon after the time of enrollment that
9 This means that funds from the allocation
account into which premium amounts attributable
to the non-Hyde abortion service benefit must be
deposited are the only funds that may be used to
pay for non-Hyde abortion services. It should not
be read to suggest that the funds in the separate
allocation account may not be used to cover
administrative costs associated with coverage of
non-Hyde abortion services. See 42 U.S.C.
18023(b)(2)(D)(ii)(I) (when estimating per member,
per month cost of non-Hyde abortion services,
issuers may take into account the impact on overall
costs of the inclusion of such coverage).
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the monthly invoice or bill will include
a separate charge for such services and
specify the charge. In the 2016 Payment
Notice, we also stated that an enrollee
may make the payment for coverage of
non-Hyde abortion services and the
separate payment for coverage of all
other services in a single transaction. On
October 6, 2017, we released a bulletin
that discussed the statutory
requirements for separate payment, as
well as this previous guidance with
respect to the separate payment
requirement.10
As explained in the proposed rule,
HHS now believes that some of the
methods for billing and collection of the
separate payment for coverage of nonHyde abortion services described as
permissible in the preamble to the 2016
Payment Notice do not adequately
reflect Congress’s intent. We believe
Congress intended that QHP issuers
collect two distinct (that is, ‘‘separate’’)
payments, one for the coverage of nonHyde abortion services, and one for
coverage of all other services covered
under the policy, rather than simply
itemizing these two components in a
single bill, or notifying the enrollee that
the monthly invoice or bill will include
a separate charge for these services.
We proposed an amendment at
§ 156.280(e)(2) relating to billing and
payment of the policy holder’s portion
of the premium attributable to coverage
of non-Hyde abortion services to reflect
this interpretation of the statute.
Specifically, we proposed that, as of the
effective date of this final rule, QHP
issuers (1) send an entirely separate
monthly bill to the policy holder, the
individual who is the party legally
responsible for the payment of
premiums (which we refer to in this
final rule as the ‘‘policy holder’’) for
only the portion of premium attributable
to coverage of non-Hyde abortion
services, and (2) instruct the policy
holder to pay the portion of their
premium attributable to coverage of
non-Hyde abortion services in a separate
transaction from any payment the policy
holder makes for the portion of their
premium not attributable to coverage of
non-Hyde abortion services. We also
proposed that if a policy holder pays the
entire premium in a single transaction
(both the portion attributable to
coverage of non-Hyde abortion services,
as well as the portion attributable to
coverage for other services), the QHP
issuer would not be permitted to refuse
10 CMS Bulletin Addressing Enforcement of
Section 1303 of the Patient Protection and
Affordable Care Act (October 6, 2017), available at
https://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/Downloads/Section-1303-Bulletin10-6-2017-FINAL-508.pdf.
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to accept such a combined payment on
the basis that the policy holder did not
send payment in two separate
transactions as requested by the QHP
issuer, and to then terminate the policy,
subject to any applicable grace period,
for non-payment of premiums. We also
stated that the QHP issuer would be
expected to counsel enrollees to pay in
two separate transactions in the future.
Finally, we proposed a technical change
to § 156.280(e)(2)(iii), as redesignated, to
insert an appropriate cross reference to
the explanation of the separate
payments.
We are finalizing these policies at
§ 156.280(e)(2), but with several changes
explained below. We are also finalizing
the technical revision to
§ 156.280(e)(2)(iii) as redesignated, on
which we received no comments, and
are revising the heading of § 156.280 so
that it accurately describes the new
requirements we are finalizing in this
final rule.
Comment: Most commenters objected
to the proposed changes to issuer billing
for the portion of the premium
attributable to coverage of non-Hyde
abortion services, asking that we
withdraw the proposals altogether. A
minority of commenters summarily
supported the policy.
Nearly all commenters objecting to
the proposals stated that separately
billing for one specific service would be
an unnecessary change that would not
enhance program integrity with respect
to enrollee transparency or appropriate
use of federal funds. These commenters
noted that current requirements already
adequately comply with the statute and
ensure appropriate segregation of funds,
without imposing the operational and
administrative burdens of the proposed
approach. These commenters asserted
that the current regulatory structure
allows enrollees to make and issuers to
accept a single transfer of funds for the
full amount of an enrollee’s premium
payment including the amount
attributable to coverage of non-Hyde
abortion services, while still ensuring
that the funds are ultimately segregated
appropriately. Many commenters noted
that requiring a separate bill and
instructing enrollees to pay in separate
transactions would be against industry
practice, which permits one single bill
outlining charges and allows for
enrollees to make payments using a
single transfer of funds which can be
administratively separated by the
insurer after payment is received.
Some commenters who supported the
proposed changes stated that section
1303 of the PPACA contains an
unambiguous statutory command that
issuers separately bill and collect
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payments for the portion of a policy
holder’s premium attributable to
coverage of non-Hyde abortion services.
These commenters stated that the
proposals are necessary to remedy
incorrect methods for billing and
payment and will help to ensure issuer
compliance with the segregation of
funds and the requirement to collect
separate payments under section 1303
of the PPACA.
Nearly all objecting commenters
stated that the proposals would cause
considerable and unnecessary confusion
and frustration for enrollees that may
jeopardize their health insurance
coverage. Commenters expressed
concern that these billing changes
would make it more difficult for policy
holders to pay their premium bills, and
could result in coverage being
terminated for unintentional nonpayment. Commenters expressed
concerns that, despite issuer notices and
communications to explain the second
bill and separate payment requirement,
enrollees would likely not understand
this change in billing.
Among the many scenarios that
commenters asserted could result in
enrollees failing to pay the separate bill,
commenters noted that enrollees might
not realize or understand that there is a
separate bill covering different services
under their plan; enrollees may not
realize that such payment is mandatory
in order to fully satisfy their premium
liability each month and avoid
termination of coverage; or enrollees
may not notice a second bill since it
would be delivered in a separate
mailing with which they are unfamiliar.
Commenters expressed concern that in
any of these scenarios, the enrollee
would enter a grace period and, in most
cases, have 90 days from the date of the
missed payment to reconcile their
balance, resulting in enrollees who fail
to do so losing their health insurance
coverage. Commenters expressed
concern that such slight enrollee
confusion as a result of the proposal
could lead to the complete loss of
coverage.
Commenters also stated that the
proposal to allow enrollees to ‘‘not be
penalized’’ for sending back a combined
payment, would only send conflicting
messages to enrollees and add to their
confusion. Commenters stated that our
proposal that issuers could accept
combined payments from enrollees, but
would then be expected to counsel
enrollees to pay in two separate
payments in the future, requiring issuers
to repeatedly instruct enrollees to pay in
separate transactions for each bill
despite not being able to penalize
enrollees if they continuously fail to do
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so, adds additional burden on issuers
and will lead to increased calls from
confused enrollees.
Many commenters stated they
appreciated the enrollee protections
prohibiting QHP issuers from refusing to
accept a combined payment or
terminating an enrollee’s coverage on
this basis. However, commenters
expressed concerns that this protection
alone would not be enough for enrollees
who fail to pay the second bill entirely
and asked that HHS add protections to
the policy to avoid termination of
coverage for enrollees who
inadvertently fail to make the additional
payment due to confusion about the
separate bill.
Response: We continue to believe that
the statute contemplates issuers billing
separately for coverage of non-Hyde
abortion services, consistent with
Congress’s intent that issuers collect
separate payments for such services.
Requiring one bill for the portion of the
policy holder’s premium attributable to
coverage of non-Hyde abortion services
and a separate bill for the portion of the
policy holder’s premium attributable to
coverage of all other services covered
under the QHP will better align with the
intent of section 1303 of the PPACA.
HHS intentionally sought comment
on ways to mitigate possible enrollee
confusion from these proposals. After
considering these comments, we believe
there may be less confusing and less
burdensome ways to implement these
billing changes while also fulfilling
section 1303 of the PPACA’s statutory
mandates.
Therefore, we are finalizing, as
proposed in a new paragraph at
§ 156.280(e)(2)(ii)(A), the requirement
that QHP issuers must send an entirely
separate monthly bill to the policy
holder for only the portion of the
premium attributable to coverage of
non-Hyde abortion services. However,
in an effort to mitigate issuer burden
associated with added postage and
mailing costs, we will not require
separate mailings with separate postage,
as proposed. Rather, we are codifying
that the QHP issuer may include the
separate bill for coverage of non-Hyde
abortion services in the same envelope
or mailing as the bill for the portion of
the premium attributable to coverage of
all other services. As a result of
finalizing this proposal, and to more
accurately reflect the contents of
§ 156.280, we are making a technical
change to revise the section heading of
§ 156.280 to now read, ‘‘Separate billing
and segregation of funds for abortion
services.’’
We note that when issuers send a
separate paper bill for the portion of the
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premim attributable to coverage of nonHyde abortion services in the same
mailing as the bill for the other portion
of the policy holder’s premium, the bills
must remain distinct and separate, on
separate pieces of paper with separate
explanations of the charges to ensure
the policy holder understands the
distinction between the two bills and
understands that they are expected to
pay the separate bills in separate
transactions.
We are also codifying that issuers
transmitting bills through email or other
electronic means will still be required to
transmit the separate bill for coverage of
non-Hyde abortion services in a separate
email or electronic communication than
for the bill for the portion of the
premium attributable to coverage of all
other services. We assume that bills sent
electronically can be sent at minimal
cost such that requiring separate
electronic communications will not
significantly increase the burden this
requirement places on issuers. We also
believe policy holders are more likely to
make a separate payment for coverage of
non-Hyde abortion services when they
receive a separate bill for such amount,
and that receiving the separate bill in a
separate communication further bolsters
that likelihood. In deciding to finalize
that QHP issuers may send the separate
bill in a single mailing when sending
paper bills, but must send the separate
bill in a separate email or electronic
communication when sending bills
electronically, we weighed the goal of
separate payment with the competing
concern of issuer burden resulting from
sending separate paper bills, and the
comparatively low burden in sending
separate electronic bills.
We are also finalizing, as proposed in
a new paragraph at § 156.280(e)(2)(ii)(B)
the requirement that issuers must
instruct policy holders to pay the
separate bill in a separate transaction.
QHP issuers should make reasonable
efforts to collect the payment separately.
However, we continue to believe that
potential loss of coverage would be an
unreasonable result of an enrollee
paying in full, but failing to adhere to
the QHP issuer’s requested payment
procedure. Therefore, at
§ 156.280(e)(2)(ii)(B) we are also
codifying, with minor non-substantive
revisions, that the QHP issuer would not
be permitted to refuse a combined
payment on the basis that the policy
holder did not send two separate
payments as requested by the QHP
issuer, and to then terminate the policy
for non-payment of premiums. QHP
issuers that receive combined enrollee
premiums in a single payment must
treat the portion of the premium
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attributable to coverage of non-Hyde
abortion services as a separate payment
and must disaggregate the amounts into
the separate allocation accounts,
consistent with § 156.280(e)(2)(iii).
To mitigate enrollee confusion and
satisfy the requirement to instruct
policy holders to pay the separate bill in
a separate transaction, QHP issuers
should consider including—in the email
or electronic communication containing
the bill for the portion of the policy
holder’s premium not attributable to
coverage of non-Hyde abortion
services—language notifying policy
holders that they will be receiving a
second, separate email or electronic
communication containing a separate
bill for the portion of their premium
attributable to coverage of non-Hyde
abortion services that they should pay
in a separate transaction. Regardless of
whether the QHP issuer sends the bills
as paper copies in a mailing or sends the
bills through electronic
communications, the QHP issuer must
instruct their enrollees to pay the
separate bill in a separate transaction
and must still produce an invoice or bill
that is distinctly separate from the
invoice or bill for the other portion of
the policy holder’s premium that is not
attributable to coverage of non-Hyde
abortion coverage, whether in paper or
electronic format. We also suggest that
issuers state clearly for policy holders
on both bills that the policy holder is
receiving two bills to cover the total
amount of premium due for the
coverage period, that the policy holder’s
total premium due is inclusive of the
amount attributable to coverage of nonHyde abortion services, and that the
policy holder should make separate
payments for each bill. We believe
including these statements on each bill,
will help policy holders to understand
that they are receiving two bills for the
premiums due for the payment period,
the total amount of premium they owe,
and the need to make a separate
payment for each bill. We believe this
will help to ensure that policy holders
return the full monthly amount due,
thus preventing policy holders from
entering grace periods for non-payment
of the premium amounts for the nonHyde abortion coverage.
We believe these changes will assist
in managing enrollee confusion.
However, we also acknowledge that
additional outreach and education may
still be necessary on the part of issuers
and states to explain to enrollees why
they are receiving a separate bill for a
relatively small amount for which they
are expected to submit payment in a
separate transaction. As indicated
above, we believe that QHP issuers
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should explain to the policy holder in
layperson terms on the separate bill for
coverage non-Hyde abortion services, or
otherwise communicate to enrollees
through enrollee outreach and
education, that non-payment of any
premium due (including non-payment
of the portion of the policy holder’s
premium attributable to coverage of
non-Hyde abortion services) would
continue to be subject to state and
federal rules regarding grace periods
(unless the QHP issuer elects to take
advantage of the enforcement discretion
we outline later in this section),
clarifying for policy holders that failure
to pay the portion of the premium
attributable to coverage of non-Hyde
abortion services could ultimately result
in termination of coverage.
We believe that including explanatory
language on the bills as well as
additional outreach and education by
QHP issuers will decrease the likelihood
that policy holders would inadvertently
fail to pay the separate bill for the
portion of their premium attributable to
coverage of non-Hyde abortion services.
However, we acknowledge commenters’
concerns that, even with fulsome
outreach and education efforts to
explain the billing scheme to the policy
holder, consumer confusion could still
lead to inadvertent coverage losses. This
risk may be especially acute for
enrollees whose plan choices likely
were not motivated by the plan’s
coverage of non-Hyde abortion services,
such as men purchasing a QHP solely
for themselves, consumers buying
coverage for babies or toddlers, and
those who otherwise may be unaware
that the plan covers non-Hyde abortion
services. However, we note that this risk
is mitigated by the steps we have taken
to improve transparency regarding QHP
offerings, to make it easier for
consumers to select QHPs that they
believe are best suited to their needs
and preferences, such as information to
more readily identify QHPs that offer
coverage of non-Hyde abortion
services.11
To address the risk of terminations
related to inadvertent failure to pay the
separately billed amount for coverage of
non-Hyde abortion services, we intend
to propose further rulemaking to change
our regulations including, for example,
our regulations governing termination
11 ‘‘Frequently Asked Questions for Agents,
Brokers, and Assisters Providing Consumers with
Details on Plan Coverage of Certain Abortion
Services’’ (November 21, 2018), available at https://
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Downloads/FAQ-on-Providing-Consumerswith-Details-on-Plan-Coverage-of-Certain-AbortionServices.pdf.
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for non-payment of premiums.12
Although QHP issuers can implement
premium payment thresholds under
§ 155.400(g), those thresholds may not
be effective at preventing termination of
coverage for policy holders receiving
higher APTC amounts who would have
greater difficulty meeting the issuer’s
premium payment threshold pursuant
to § 155.400(g). Until we can finalize
regulatory changes through a separate
rulemaking, we will exercise
enforcement discretion as an interim
step. Specifically, HHS will not take
enforcement action against a QHP issuer
that adopts and implements a policy,
applied uniformly to all its QHP
enrollees, under which an issuer does
not place an enrollee into a grace period
and does not terminate QHP coverage
based solely on the policy holder’s
failure to pay the separate payment for
coverage of non-Hyde abortion services.
In accordance with non-discrimination
rules applicable to QHP issuers, we
would expect issuers to apply such a
policy uniformly to all of their enrollees
for the duration of the applicable plan
year. We also note that if a QHP issuer
chooses to take this approach, the QHP
issuer would still be prohibited from
using any federal funds for coverage of
non-Hyde abortion services. Moreover,
the QHP issuer would still be required
to collect the premium for the non-Hyde
abortion coverage, which means that the
QHP issuer cannot relieve the policy
holder of the duty to pay the amount of
the premium attributable to coverage for
non-Hyde abortion services. This
enforcement posture will take effect
upon the effective date of the separate
billing requirements under 45 CFR
156.280, which is 6 months after
publication of this final rule in the
Federal Register. We encourage states
and State Exchanges to take a similar
enforcement approach.
We acknowledge that the enforcement
posture described above may not
mitigate all concerns identified by
commenters. Some commenters
expressed concern that the lack of
transparency under current section 1303
billing requirements has contributed to
unknowing purchases of QHPs that
include coverage of non-Hyde abortion
services by consumers who object to
purchasing such coverage. As noted
12 CMS has yet to make determinations regarding
specific requirements or rule changes CMS will
propose to address the risk of terminations related
to inadvertent failures to pay the separately bill
amounts for coverage of non-Hyde abortion
services. Accordingly, although CMS will undertake
the described rulemaking, nothing in this preamble
discussion should be construed as a representation
or guarantee that CMS will propose changes to any
specific rule or requirement.
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above, this risk is mitigated by the steps
the FFEs have taken to improve
transparency of the coverage of nonHyde abortion services under FFE
QHPs.13 However, even where
consumers who hold religious or moral
objections to coverage of non-Hyde
abortion services may more easily detect
whether a QHP offers coverage to which
they object, they may still be deciding
between purchasing a QHP that covers
non-Hyde abortion services, or else
going without the coverage they need,
because there may not be a QHP
available on the Exchange that omits
coverage for non-Hyde abortion
services.
Until we are able to address these
concerns through future rulemaking or
other appropriate action, we also will
not take enforcement action against
QHP issuers that modify the benefits of
a plan either at the time of enrollment
or during a plan year to effectively allow
enrollees to opt out of coverage of nonHyde abortion services by not paying
the separate bill for such services. This
would result in the enrollees having a
modified plan that does not cover nonHyde abortion services, meaning that
they would no longer have an obligation
to pay the required premium for such
services. We recognize that a QHP
issuer’s ability to make changes to its
QHPs to implement a policy holder’s
opt out would be subject to applicable
state law. We encourage states and State
Exchanges to take an enforcement
approach that is consistent with the one
we intend to take, as described in this
section.
Where a QHP issuer allows an
enrollee to opt out of coverage of nonHyde abortion services by not paying
the separate bill for such services, the
user fee a QHP issuer in an FFE or SBE–
FP would pay would continue to be
based on the original premium, which
includes the portion of the premium
attributable to non-Hyde abortion
coverage. This is being done for
operational reasons and issuer
convenience, as making changes to the
user fee system for FFEs and SBE–FPs
to reflect a reduction in premium would
result in only a minimal reduction in
user fees owed. We do not believe the
minimal reduction justifies the
additional expense to FFEs and SBE–
FPs related to the development of
systems to receive and process such
13 ‘‘Frequently Asked Questions for Agents,
Brokers, and Assisters Providing Consumers with
Details on Plan Coverage of Certain Abortion
Services’’ (November 21, 2018), available at https://
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Downloads/FAQ-on-Providing-Consumerswith-Details-on-Plan-Coverage-of-Certain-AbortionServices.pdf.
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reports (which could then result in
higher user fees in the future) or the
additional cost to QHP issuers related to
reporting the minimal changes in
premiums.
We expect QHP issuers taking this
approach to take appropriate measures
to distinguish between a policy holder’s
inadvertent non-payment of the separate
bill for coverage of non-Hyde abortion
services and a policy holder’s
intentional nonpayment of the separate
bill. A policy holder who inadvertently
fails to pay the separate bill may have
failed to pay because of unfamiliarity
with receiving a separate bill for this
portion of their premium and may still
wish to retain coverage for non-Hyde
abortion services if provided the
opportunity to rectify nonpayment of
the separate bill. A policy holder who
intentionally does not pay the separate
bill is likely to have made the conscious
choice to opt-out of such coverage. To
help ensure any modifications made by
a QHP issuer under this enforcement
approach to a policy holder’s plan align
with the policy holder’s intent, the QHP
issuer could include on the separate bill
for coverage of non-Hyde abortion
services or separate electronic
communication an option (such as a
check box or option button) where the
policy holder can affirmatively indicate
their intent to opt-out of such coverage
by not paying the separate bill. We also
recommend including an explanation
for the policy holder that by
affirmatively opting out, the policy
holder would no longer have coverage
for non-Hyde abortion services and
would no longer have an obligation to
pay the required premium for such
services.
To be clear, we intend that a policy
holder’s opt-out would have to be
applied to all persons in the enrollment
group under the policy. For example, if
the policy holder does not pay the
separate bill for the portion of the
premium attributable to non-Hyde
abortion coverage and therefore opts out
of coverage for non-Hyde abortion, this
opt-out would be applicable to all
persons in the policy holder’s
enrollment group, such as the policy
holder’s spouse and/or family if they are
also covered under the policy holder’s
policy. Further, our exercise of
enforcement discretion would only
permit issuers to make one-time changes
to remove coverage of non-Hyde
abortion services from the QHP
coverage.
Accordingly, once a policy holder
opts out of coverage for non-Hyde
abortion services, the policy holder
would not be allowed to retract their
opt-out decision and reinstate coverage
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of non-Hyde abortion services for that
benefit year, by paying premiums that
could cover a portion of premium
attributable to coverage of non-Hyde
abortion services. Thus, an opt-out
would be effective for the remainder of
the benefit year.
Unlike the enforcement discretion
policy we announce above to mitigate
risk of inadvertent terminations, this
enforcement posture will become
effective on the effective date of this
final rule, which will be 60 days after
its publication in the Federal Register.
The separate billing requirements we
finalize here under 45 CFR 156.280 will
address, among other things,
stakeholder comments that the lack of
transparency under current section 1303
billing requirements has contributed to
unknowing purchases of QHPs that
include coverage of non-Hyde abortion
services by consumers who object to
purchasing such coverage. Because the
new billing requirements under these
final rules will not take effect upon
finalization of these rules, we believe it
is important to take this enforcement
posture as soon as possible to provide
relief for the lack of transparency under
current QHP billing requirements.
We are taking this approach to
maintain protections against adverse
selection, while mitigating the serious
negative risks of coverage loss by
enrollees who might experience
difficulties adjusting from the manner in
which enrollees are accustomed to
paying for insurance coverage or
services under a single plan or contract.
These interim policies will also provide
relief to persons who may unknowingly
purchase coverage to which they object
because of the lack of transparency
under current QHP billing requirements
that do not require separate bills for
non-Hyde abortion coverage. We believe
these interim enforcement policies
strike an appropriate balance between
honoring PPACA section 1303’s
requirement for collection of separate
payments, protecting enrollees against
inadvertent losses of coverage, and
ensuring all enrollees have access to
coverage that meets their needs and that
does not result in their supporting
coverage for non-Hyde abortion services
to which they object.
Comment: Commenters stated that
HHS greatly underestimated the burden
on issuers caused by these proposals.
Commenters stated that the proposed
rule’s analysis of the expected costs and
benefits was incomplete, such that HHS
cannot accurately determine whether
the benefits outweigh the quantitative
and qualitative costs to justify finalizing
the proposals. Many commenters stated
that the burden and costs far outweigh
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any benefit and, as such, the proposals
should not be finalized.
Commenters also stated that requiring
issuers to send the separate bill in a
different envelope or separate email
communication would cost QHPs
significantly more resources than HHS
estimated for the multiple mailings,
email communications, and personnel
hours spent managing enrollee
confusion, termination notices, and
multiple bills. For example, commenters
noted requiring a separate mailing
would double the mailing and postage
costs associated with current issuer
billing. Commenters also explained that
the technical build issuers would need
to implement to comply with these
proposals would be both complex and
time consuming, and would alone
require substantial new upfront and
annual costs for issuers that HHS did
not account for. In general, commenters
expressed concerns that requiring
separate billing and instructing
enrollees to make separate payments for
a single policy would create substantial
new operational administrative costs for
health insurance issuers and,
subsequently, for the enrollees they
serve.
Commenters also expressed concerns
with the burdens these changes would
impose on Exchanges. Commenters
noted Exchanges would need to make
time consuming and resource intensive
changes to their websites, enrollment
systems, and customer service and
outreach efforts to align with the
separate billing and payment
requirements, which would be costly
and disrupt Exchange efficiency.
Commenters also expressed concern
that HHS failed to address the adverse
impacts on enrollees resulting from how
issuers would react to being forced to
allocate additional significant
operational and administrative
resources towards issuing and
processing multiple bills and monthly
payments from each policy holder.
Many commenters stated that issuers
would be required to consider these
new costs when setting actuarially
sound rates, which would lead to higher
premiums for enrollees. Many
commenters stated that the costs and
requirements on QHP issuers that cover
non-Hyde abortion services will in
many cases be so high that it will result
in QHP issuers dropping coverage for
non-Hyde abortion services altogether,
even if their enrollees desire such
coverage. Commenters expressed
concern that, in such scenarios, this
would transfer the costs and burdens of
accessing non-Hyde abortion services to
enrollees who must seek coverage for
non-Hyde abortion services elsewhere
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or pay out-of-pocket. Other commenters
noted that issuers are likely to drop
coverage of non-Hyde abortion services
if the alternative is terminating coverage
for a substantial number of its enrollees
due to enrollee confusion resulting in
non-payment of miniscule amounts.
Many commenters stated that the
proposals would threaten the mental
and physical health, well-being, and
economic security of enrollees,
especially women, across the country.
Commenters stated that health
insurance should provide coverage for
the full range of reproductive health
care, including abortion, and that this
rule threatens to take such coverage
away by imposing burdensome
requirements on issuers. Commenters
also expressed concern that, should
these proposals result in issuers ceasing
to provide coverage of non-Hyde
abortion services, it could impede a
patient’s ability to make the best
medical decision for herself and her
family in consultation with her
physician given that many women
would be unable to pay privately for
such services due to high costs without
insurance. Commenters noted that
barriers to accessing affordable nonHyde abortion services could have longterm, devastating effects on a woman
and her family’s economic future.
Commenters noted that the proposals
would have a greater impact on
subsidized enrollees and might have a
discriminatory effect on enrollees
receiving higher APTC amounts who
would have greater difficulty meeting
the issuer’s premium payment threshold
pursuant to § 155.400(g). Commenters
also stated that it would have damaging
consequences on enrollees with specific
conditions (like patients with cancer or
chronic conditions), as any gaps in
coverage as a result of confusion over
billing may interrupt disease treatment
schedules and could jeopardize health
outcomes. Commenters also stated that
the proposals would threaten the
coverage gains made by the PPACA and
have a disproportionate impact on
enrollees who already face barriers to
care, such as low-income individuals
and marginalized communities. HHS
received many comments expressing
concern that when legal abortion
becomes inaccessible, women who seek
to end their pregnancy turn to unsafe
and illegal methods, risking arrest,
serious injury, or even death.
Commenters also expressed concern
that HHS did not propose any
requirements or guidelines for how
issuers should educate, inform, and
conduct outreach to enrollees regarding
these changes in billing and payment if
the proposed regulation is implemented
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as proposed. Commenters also
expressed concern that the proposals
didn’t address how individuals with
limited English proficiency (LEP) or
individuals with disabilities may
experience barriers in complying with
the proposed changes which
commenters found particularly
concerning, since individuals with LEP
and individuals with disabilities already
experience hardships in navigating and
accessing health care.
Response: As we acknowledged in the
proposed rule, we recognize that QHP
issuers that cover non-Hyde abortion
services may experience an increase in
burden as a result of the proposals. We
have carefully considered the comments
that shared information about how the
proposals would likely impact markets,
issuers, and enrollees.
We agree with commenters that
separately mailing the separate bill with
separate postage could cause
unintended additional burden and cost
for issuers. Therefore, we are not
finalizing the requirement that the
separate bills be mailed separately with
separate postage. However, we also
acknowledge that QHP issuers will
nevertheless still incur significant
burden and costs as a result of
implementing this new separate billing
policy. We agree with commenters that
QHP issuers are likely to consider these
new costs when setting actuarially
sound rates and that this will likely lead
to higher premiums for enrollees. The
potential premiums increases are
discussed in further detail in section III,
‘‘Collection of Information
Requirements,’’ and section IV,
‘‘Regulation Impact Analysis,’’ of this
rule. However, in spite of the potential
premium increases, we do not agree that
requiring issuers to send separate bills,
instruct policy holders to pay in two
separate transactions, and make
reasonable efforts to collect the
payments separately would be an
inefficient use of resources. Rather, this
instruction is important to achieving
better alignment of the regulatory
requirements for QHP issuer billing of
enrollee premiums with the separate
payment requirement in section 1303 of
the PPACA. We understand
commenters’ concerns that the issuer
burden associated with this policy may
result in issuers withdrawing coverage
of non-Hyde abortion services
altogether, requiring some enrollees to
pay for these services out-of-pocket.
Subject to applicable state law, it is
ultimately at the issuer’s discretion
whether to cover non-Hyde abortion
services in their QHPs, and thus to incur
any associated burden, and it is
ultimately the states’ and HHS’s duty to
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enforce the statutory provisions of the
PPACA as they are written. Although
section 1303 permits issuer flexibility in
abortion coverage choices, it also
requires that QHP issuers electing to
cover non-Hyde abortion services take
certain steps to ensure that no APTC or
CSR funds are used to pay for these
services, such as requiring the QHP
issuer to collect a separate payment for
these services. The finalized changes at
§ 156.280(e)(2)(ii) may add issuer
burden with regard to their payment
and billing operations. However, the
statute contemplates such burden in
section 1303(b)(2)(B)(i) of the PPACA
when it requires that issuers collect a
separate payment for the portion of the
premium attributable to coverage of
non-Hyde abortion services and in
section 1303(b)(2)(D) of PPACA when it
specifies how QHP issuers are to
calculate the basic per enrollee, per
month cost, determined on an average
actuarial basis, for including coverage of
non-Hyde abortions in QHPs. We
believe that finalizing the rule to allow
issuers to send both bills in a single
mailing will mitigate the issuer and
state burden that would be imposed if
we were finalizing the policy as
originally proposed, as well as any
initial confusion on the part of
enrollees. We estimate that these
changes would eliminate much of the
additional mailing costs for the second
bill since issuers would no longer need
to pay for additional postage and
envelopes. We believe the changes we
are finalizing at § 156.280(e)(2)(ii) strike
a balance between requiring the separate
bill that we believe is required for better
alignment with section 1303 of the
PPACA, while also avoiding
unnecessary enrollee confusion,
enrollee harm, and issuer burden.
We understand that non-Hyde
abortion services are services for which
some enrollees may desire coverage, as
they may be costly when not covered by
insurance. However, we believe that
requiring separate billing for the portion
of the premium attributable to coverage
of non-Hyde abortion services is a
necessary change to better align issuer
billing with the statutory requirements
specified in section 1303 of the PPACA,
which requires non-Hyde abortion
services be treated differently from other
covered services. We believe the
changes we are finalizing at
§ 156.280(e)(2)(ii) will impose less
burden on issuers to implement this
policy than if we were finalizing as
originally proposed, decreasing the
likelihood that issuers will drop this
coverage or significantly raise their
premiums. Although we acknowledge
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the changes we are finalizing will
increase the burden associated with
personnel hours spent managing
enrollee confusion, termination notices,
and multiple bills, we also believe the
changes we are finalizing at
§ 156.280(e)(2)(ii) minimize enrollee
confusion surrounding receiving a
separate bill, helping to prevent
situations where enrollees enter grace
periods and subsequently have their
coverage terminated for failing to
inadvertently pay the second bill. We
also believe policy holder confusion
regarding the separate bill may decrease
in future plan years as policy holders
acclimate to this billing structure and as
consumer education continues.
However, we acknowledge that a policy
holder enrolling for the first time after
this policy is finalized in a QHP
covering non-Hyde abortion services
may still experience confusion
regarding the separate bill. As finalized,
we believe the inclusion of a second
separate bill for these services in the
same mailing and requiring issuers to
instruct enrollees to pay in a separate
transaction for the separate bill (whether
sent electronically or by mail), but
allowing issuers to accept combined
payments if the enrollee fails to pay
separately, will allow QHP issuers to
continue providing coverage for nonHyde abortion services subject to state
and federal law and allow policy
holders to continue accessing such
coverage when available through their
QHPs.
We understand commenters’ concern
about how these proposals will impact
individuals with LEP and other policy
holders, especially those with
disabilities. We note that, under the
policy being finalized, issuers must still
comply with all applicable enrollee
assistance requirements for QHPs on the
Exchange, such as those requirements at
§ 155.205. In particular, we believe that
the requirements at § 155.205(c) will
help to ensure that issuers are providing
information regarding the separate bill
and payment options to individuals
with LEP and policy holders with
disabilities in plain language and in an
accessible manner as specified in
regulation. We also suggest that issuers
consider the needs of these enrollee
groups when conducting enrollee
education or outreach about the
finalized changes.
A more detailed summary of
comments discussing the potential
burden associated with the proposals
can be found in the sections III
‘‘Collection of Information
Requirements’’ and IV ‘‘Regulation
Impact Analysis’’ of this rule. In section
III ‘‘Collection of Information
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Requirements’’ of this final rule, a
detailed breakdown of the estimated
one-time burden per issuer and the
estimated one-time burden for all
issuers can be found in tables 2 and 3,
and a detailed breakdown of the
estimated annual burden per issuer and
the estimated annual burden for all
issuers can be found in tables 4 and 5.
Comment: Many commenters
expressed concern that the proposed
effective date would be administratively
and operationally infeasible. As
proposed, issuers would be required to
implement these proposals beginning on
the effective date of the final rule, which
is 60 days after the final rule is
published in the Federal Register.
Commenters explained that issuer
billing and payment requirements are
typically included in plan documents
that are approved by the state regulator
and provided to the enrollee at the time
of enrollment. Commenters noted that a
change in payment policies would mean
that issuers would need to re-file their
applications for all affected plans for
approval by state regulators and that
such a change could not be
implemented mid-plan year.
Commenters also stated that, given the
substantial investment required to
operationalize the new proposals and
the associated complexities, issuers
would need a minimum of 12 to 18
months to implement these changes.
Further, because implementation would
need to coincide with the beginning of
a new plan year, many commenters
stated that plan year 2021 would be the
earliest at which implementation could
occur given the likely publication
timeline for this final rule. Commenters
also stated that enrollees can more
easily adapt to new payment
arrangements at the beginning of a plan
year, when they expect premiums to be
different and other changes to their plan
to occur. Commenters also emphasized
that the earlier the effective date, the
more burdensome these proposals
become.
One commenter noted that although
state regulators are able to accept the
responsibility of primary enforcement of
this rule given appropriate lead time,
they will be ill-equipped to enforce it if
it is made effective immediately, since
regulators will need time to develop
enforcement policies in consultation
with state stakeholders. This commenter
also noted that, due to the small
amounts issuers would separately bill
for coverage of non-Hyde abortion
services, many issuers may choose to
revise their premium payment threshold
policies permitted under § 155.400, but
would not have time to do so if the rule
were made effective immediately.
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71689
Response: In response to comments
that implementation will take longer
than the proposed effective date would
allow, we are finalizing that QHP
issuers must be in compliance with the
policies being finalized at
§ 156.280(e)(2) on or before the day that
is 6 months after publication of the final
rule. If the date that is 6 months after
publication of the final rule falls in the
middle of a QHP issuer’s billing cycle
(in other words, after the QHP issuer has
already sent out bills to policy holders
for that month), the QHP issuer would
be expected to comply beginning with
the next billing cycle immediately
following that date. We acknowledge
that requiring QHP issuers to begin
complying mid-plan year may pose
implementation challenges for some
states and issuers. For example, as
discussed further later in this response,
QHP issuers offering coverage of nonHyde abortion services will already
have filed rates for the 2020 plan year
and would be unable to update those
rates until the following plan year to
reflect the added administrative costs
they may experience as a result of the
finalized separate billing policy. We
also acknowledge requiring QHP issuer
compliance mid-plan year would not
provide QHP issuers offering coverage
of non-Hyde abortion services an
opportunity, in their discretion, to
revise their plan and benefit designs,
such as to remove coverage of non-Hyde
abortion services, in order to avoid
requirements under the separate billing
policy.
We anticipate that State Exchanges
that perform premium billing and
payment processing that have QHP
issuers that offer coverage for non-Hyde
abortion services will face similar
challenges to comply with the separate
billing requirements within 6 months
after publication of this final rule as
QHP issuers that offer coverage for nonHyde abortion services. However, we
believe 6 months is sufficient for State
Exchanges performing premium billing
and payment processing and QHP
issuers to implement the administrative
and operational changes to billing
processes necessary to comply with this
policy. We also believe a 6-month
implementation timeline appropriately
prioritizes the goals of improved
statutory alignment with the additional
time State Exchanges and issuers may
need to implement this policy. For those
State Exchanges and QHP issuers that
may face uncommon or unexpected
impediments to timely compliance,
HHS will consider extending
enforcement discretion to an Exchange
or QHP issuer that fails to timely
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comply with the separate billing policy
as required under this final rule, if we
find that the Exchange or QHP issuer
attempted in good faith to timely meet
the requirements.
Although we do not believe that it is
necessary for state enforcement policies
to have been developed prior to the
effective and/or compliance date for the
separate billing requirements, we
believe this will offer state regulators
enough time to develop enforcement
policies in consultation with state
stakeholders. We also believe this
implementation timeline will provide
sufficient time for enrollee outreach and
education to help mitigate any enrollee
confusion resulting from the finalized
policies, and to explain to enrollees how
the QHP issuer’s previous payment
policies will be changing to comply
with these new billing requirements.
We believe it is important that QHP
issuers implement these policy changes
at the earliest date feasible to improve
statutory alignment with section 1303 of
the PPACA. Similarly, we do not believe
that potential implementation
challenges in connection with a midyear implementation date should
outweigh numerous commenters’
concerns regarding the lack of
transparency as to whether their QHP
covers non-Hyde abortion services,
transparency that would be delayed by
approximately a year if compliance
were required by the first day of the
2021 plan year. We believe that further
delaying implementation would be
imprudent given that we are now aware
of these consumer concerns and given
that we believe it is operationally and
administratively feasible for State
Exchanges and QHP issuers to comply
with the policy within 6 months after
publication of the final rule.
We acknowledge that if QHP issuers
are not able to take these additional
costs into consideration when setting
rates for the 2020 plan year, it is
possible that some issuers may seek to
exit the individual market in a state or
incur losses. We believe that any such
risk is small. QHP issuers will have the
opportunity to adjust their plan and
benefits design and rates in response to
the separate billing policy for their plan
year 2021 plan offerings. Moreover, we
are aware that the actuarial value of the
non-Hyde abortion coverage under
QHPs generally may be less than the
minimum $1 per enrollee, per month
QHP issuers must charge for such
services under section 1303 of the
PPACA; and we are not aware of any
reason QHP issuers could not use funds
from the allocation account into which
premium amounts attributable to the
non-Hyde abortion service benefit must
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be deposited to cover administrative
costs associated with coverage of nonHyde abortion services.14 This should
mitigate the financial consequences to
issuers of their not being able to update
individual market rates prior to the 2021
plan year to incorporate the costs of
implementing the processes required by
this rule. We therefore believe that
finalizing a longer, 6-month
implementation timeline sufficiently
mitigates the risk that some issuers
would seek to exit the individual market
to avoid the separate billing
requirements under this final rule.
We acknowledge that State
Exchanges’ and QHP issuers’ ability to
comply within 6 months may depend
on the current status of their billing
systems and operations, and that State
Exchanges and QHP issuers may be
confronted with unexpected
impediments to timely compliance. For
this reason, HHS will consider
extending enforcement discretion to an
Exchange or QHP issuer that fails to
timely comply with the separate billing
policy as required under this final rule,
if HHS finds that the Exchange or QHP
issuer attempted in good faith to timely
meet the requirements. Evidence of such
good faith efforts might include records
showing that planning for compliance
with this final rule’s requirements was
begun within a reasonable time
following the publication of the final
rule, but events outside the Exchange’s
or QHP issuer’s control caused
implementation delays. HHS will
consider exercising this enforcement
discretion based on the circumstances of
the particular Exchange or QHP issuer.
We do not anticipate that HHS would
exercise such discretion for an Exchange
or QHP issuer that fails to meet the
separate billing requirements after more
than 1 year following publication of this
final rule.
Comment: Many commenters who
supported the proposals stated that
these proposals would increase issuer
compliance with the segregation of
funds and separate payment
requirements under section 1303 of the
PPACA, and that the proposals would
clarify and correct the previous
administration’s interpretation of the
statute. Many supporting commenters
noted their dissatisfaction that abortion
coverage of any kind is offered at all in
the individual market, but expressed
support that the proposals would better
protect enrollees who object, based on
their religious or moral beliefs
14 See 42 U.S.C. 18023(b)(2)(D)(ii)(I) (when
estimating per member, per month cost of non-Hyde
abortion services, issuers may take into account the
impact on overall costs of the inclusion of such
coverage).
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(collectively, ‘‘conscience’’), to coverage
of non-Hyde abortion services.
Many commenters stated that it is a
direct violation of their conscience
rights to have to pay for abortion in any
form, including subsidizing it through
insurance coverage. Commenters stated
that these proposals would increase
transparency for enrollees as to what
their health insurance covers and would
allow enrollees to use this information
to seek a plan that does not cover nonHyde abortion services, consistent with
their conscience.
Although many commenters
expressed support for the proposals,
many also objected to being required to
pay this separate bill at all if they object
to coverage of non-Hyde abortion
services. Many commenters asked that
HHS accommodate individuals who
have conscience objections to these
services by allowing enrollees in plans
covering non-Hyde abortion to ‘‘opt
out’’ of this coverage by not paying the
separate bill attributable to coverage of
non-Hyde abortion services.
Many commenters stated they were
unconvinced by the stated justification
for the proposals (to better align the
regulatory requirements for QHP issuer
billing of enrollee premiums with the
separate payment requirement in
section 1303 of the PPACA) and instead
stated that the motivation was to
appease religious or political special
interests. Commenters stated that the
proposals would value the needs of
enrollees with conscience objections to
coverage of non-Hyde abortion services
more highly than the needs of enrollees
with a health interest in receiving
coverage for non-Hyde abortion
services. These commenters stated that
the proposals address conscience
objections of the few at the cost of the
many women who need and value
coverage of non-Hyde abortion services.
Many commenters asked that these
proposals be withdrawn because they
impose a narrow religious belief
opposing a legal medical service on
enrollees who do not share this
viewpoint and need or value this
coverage. Commenters also objected to
the proposal because it singles out
coverage of non-Hyde abortion services
as the only service for which separate
billing and payment is required,
questioning why other services are not
similarly subject to separate payment
and billing requirements based on
conscience objections. For example, one
commenter expressed that they object
based on their conscience to supporting
coverage of individuals who get sick
after refusing vaccinations for that
illness. Another commenter noted that
they object to having to pay for coverage
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of services for tobacco-related illnesses
as they believe persons who voluntarily
choose to use tobacco products should
not be subsidized by other enrollees for
their unhealthy behaviors.
Response: Although we understand
objecting commenters’ concerns, the
changes are primarily meant to better
align the regulatory requirements for
QHP issuer billing of enrollee premiums
with the statutory separate payment
requirement in section 1303 of the
PPACA. We acknowledge that the
finalized policy regarding separate
billing may increase transparency for
policy holders who object on the basis
of conscience to coverage of non-Hyde
abortion services in their QHPs. And
while it is true that this final rule treats
coverage of non-Hyde abortion services
differently from other covered services
for purposes of QHP billing and
payment, this differential treatment is
based on the statutory PPACA
requirement that non-Hyde abortion
services be treated differently for billing,
collection, payment, and federalsubsidy purposes; we are obligated to
enforce the statute. Section 1303 of the
PPACA has always required QHP
issuers to estimate the basic per enrollee
per month cost based on the average
actuarial basis of the QHP’s coverage of
non-Hyde abortion services, and
prohibited QHP issuers from estimating
that cost to be less than $1 per enrollee
per month. Under the statute, QHP
issuers must also collect a separate
payment for that portion of the
enrollee’s QHP premium attributable to
coverage of non-Hyde abortion services
and must segregate these payments in a
separate allocation account that is to be
used to pay for non-Hyde abortion
services. Furthermore, section 1303 of
the PPACA bars the use of PTCs or CSRs
for such coverage. The changes we are
finalizing at § 156.280(e)(2)(ii) would
strengthen regulatory alignment with
the existing statutory requirements for
QHP issuer billing of enrollee premiums
with the separate payment requirement
in section 1303 of the PPACA.
We further understand that policy
holders who object, based on their
conscience, to non-Hyde abortion
services may prefer to not pay the
separate bill attributable to coverage of
these services, and thereby opt out of
such coverage. We also acknowledge
there may be other services covered by
a plan that consumers object to or do
not intend to use. As previously stated,
the primary motivation for this rule is
to better align the regulatory
requirements for QHP issuer billing of
premiums with the statutory separate
payment requirement in section 1303 of
the PPACA.
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However, we agree that consumers are
best served by the Exchanges when they
can enroll in a QHP that meets their
needs, from a conscience, as well as a
care, perspective. In the Exchanges that
use the federal platform, we have taken
steps to improve transparency regarding
QHP offerings to make it easier for
consumers to select plans that they
believe are best suited to their needs,
preferences, and conscience concerns,
such as information to more readily
identify QHPs that offer coverage of
non-Hyde abortion services.15 State
Exchanges that operate their own
technology platforms have taken similar
steps. For example, State Exchanges
display different plan attributes to
enrollees to foster the decision-making
process, and allow consumers to view
plan offerings by selecting filters that
show plans with their desired plan
characteristics. In addition, Summary of
Benefits and Coverage (SBC)
requirements help ensure that
consumers have access to easy-tounderstand information about coverage.
Further, with regard to commenters that
stated their dissatisfaction that abortion
coverage is offered at all in the
individual market, we note that section
1303(a)(1) of the PPACA specifies that
states may enact laws prohibiting QHP
issuer coverage of abortion services on
the Exchange. We also note that section
1303(a)(2) of the PPACA provides that a
state may repeal such a law and provide
for the offering of abortion coverage
through the Exchange, and section
1303(b)(1)(A)(ii) of the PPACA allows
QHP issuers to decide whether or not to
offer coverage for abortion services,
consistent with applicable state law.
Comment: Some commenters objected
to HHS stating that it would enforce the
requirements of section 1303 of the
PPACA as codified at § 156.280 directly
in the event that State Exchanges do not
enforce these requirements, arguing that
it would be inconsistent with other HHS
efforts to ensure that states can operate
their programs with limited federal
interference. Commenters also
expressed concern that the proposed
enforcement structure overrides the
authority delegated to states in section
1303 of the PPACA over issuers that
operate in their states, and will disrupt
the nature of collaboration and
partnership that the PPACA meant to
create between the states and the federal
15 ‘‘Frequently Asked Questions for Agents,
Brokers, and Assisters Providing Consumers with
Details on Plan Coverage of Certain Abortion
Services’’ (November 21, 2018), available at https://
www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/Downloads/FAQ-on-Providing-Consumerswith-Details-on-Plan-Coverage-of-Certain-AbortionServices.pdf.
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71691
government. Commenters also stated
that the addition of new compliance
reviews are unnecessary, as HHS does
not articulate any facts or data
establishing the current landscape of
compliance—or lack of compliance—
with existing regulations.
Many commenters stated that the
2014 U.S. Government Accountability
Office report,16 which the proposed rule
cites as evidence of potential remaining
issuer compliance concerns, predates
the 2016 Payment Notice, which
clarified for issuers how to comply with
the separate payment requirement.
These commenters assert that HHS
offers no evidence that any compliance
problems remain over 4 years later.
Commenters also stated that the
research to inform that report was
conducted between February 2014 and
September 2014, less than 1-full year
after the Exchanges began operating
and, as such, issuers were less likely to
have fully implemented the compliance
standards required under the PPACA.
Other commenters stated that
compliance with section 1303 of the
PPACA has been inconsistent and were
supportive that the proposals would
require greater oversight and
transparency from State Exchanges and
require them to meet the standards of
section 1303 of the PPACA. Some
commenters cited to the 2014 U.S.
Government Accountability Office
report 17 as evidence of this
noncompliance, and others cited to a
letter sent prior to publication of the
proposed rule by 102 members of
Congress to HHS Secretary Alex Azar,
which requested that new regulations be
implemented ‘‘to remedy the severe
problems with the ACA in regard to
abortion coverage.’’ 18
Response: We agree that oversight of
issuer compliance with section 1303 of
the PPACA is important to achieving
greater transparency for consumers. We
acknowledge that section
1303(b)(2)(E)(i) of the PPACA, as
implemented at § 156.280(e)(5),
designates the state insurance
commissioners as responsible for
monitoring, overseeing, and enforcing
16 U.S. Government Accountability Office,
‘‘Health Insurance Exchanges: Coverage of Nonexcepted Abortion Services by Qualified Health
Plans,’’ (Sept. 15, 2014), available at http://
www.gao.gov/products/GAO-14-742R.
17 U.S. Government Accountability Office,
‘‘Health Insurance Exchanges: Coverage of Nonexcepted Abortion Services by Qualified Health
Plans,’’ (Sept. 15, 2014), available at http://
www.gao.gov/products/GAO-14-742R.
18 Letter from Chris Smith, Member of Congress,
to Alex Azar, Secretary, U.S. Department of Health
and Human Services (Aug. 6, 2018), available at
https://chrissmith.house.gov/uploadedfiles/201808-06_-_smith_letter_on_section_1303_-_abortion_
funding_transparency.pdf.
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the provisions in section 1303 of the
PPACA related to QHP segregation of
funds for non-Hyde abortion services.
That is different than assigning the
exclusive enforcement authority, with
respect to all provisions in section 1303,
to the states or to State Exchanges. As
is the case with many provisions in the
PPACA, states are generally the entities
primarily responsible for implementing
and enforcing the provisions in section
1303 of the PPACA related to individual
market QHP coverage of non-Hyde
abortion services.
However, where we are charged with
directly enforcing statutory
requirements in the FFE, we intend to
do so fully in instances of issuer noncompliance with the separate payment
requirement under section 1303 of the
PPACA. Moreover, to the extent a state
operating its own Exchange fails to
substantially enforce these
requirements, HHS is authorized to
enforce them directly. Pursuant to
section 1321(c)(2) of the PPACA, after
determining that a state (or State
Exchange) has failed to substantially
enforce a federal requirement related to
Exchanges and the offering of QHPs
through Exchanges, including section
1303 of the PPACA’s separate payments
requirement (or other requirements), the
Secretary may step in to enforce the
requirement against the non-compliant
issuer. This enforcement structure
strikes an appropriate balance between
federal oversight and state flexibility
with regard to the requirements of
section 1303. Accordingly, unless HHS
determines a state (or State Exchange)
has failed to substantially enforce
section 1303 of the PPACA
requirements, we intend to continue to
defer to states (or State Exchanges) that
enforce section 1303 of the PPACA
requirements. HHS disagrees that this
enforcement structure in a state
operating its own Exchange would
override the state’s exercise of authority
expressly delegated to states in section
1303 of the PPACA.
The compliance reviews governing
QHP issuers participating in the FFE
include reviews of compliance with
section 1303 of the PPACA and
§ 156.280. The compliance reviews for
future benefit years will include the
new requirements finalized in this rule
for separate billing of the portion of the
policy holder’s premium attributable to
coverage of non-Hyde abortion services,
as finalized at § 156.280(e)(2). We
continue to believe such compliance
reviews will help to address remaining
issuer compliance issues, if any,
previously identified by the 2014 U.S.
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GAO report.19 However, commenters
also expressed concern that the 2014
U.S. GAO report is outdated and that
there is no evidence of ongoing
compliance issues to support the
changes we are finalizing regarding
separate billing. But regardless of
whether there are ongoing compliance
issues, the changes we are finalize are
primarily meant to better align the
regulatory requirements for QHP issuer
billing of enrollee premiums with the
statutory separate payment requirement
in section 1303 of the PPACA. This goal
is related to overall compliance with
section 1303, but has a different
compliance focus than the compliance
issues cited in the 2014 U.S. GAO
report. Additionally, because we are
amending the acceptable methods for
issuers to comply with the separate
payment requirement, we believe
additional oversight during this
transition time will be necessary to
ensure that issuers are modifying their
billing procedures appropriately.
FFE issuers subject to compliance
reviews under § 156.715 must retain all
documents and records of compliance
with section 1303 of the PPACA and
these requirements in accordance with
§ 156.705, and should anticipate making
available to HHS the types of records
specified at § 156.715(b) that would be
necessary to establish their compliance
with these requirements. For example,
FFE issuers subject to compliance
reviews for § 156.280 should anticipate
supplying HHS with documentation of
their estimate of the basic per enrollee
per month cost, determined on an
average actuarial basis, for including
coverage of non-Hyde abortion services;
detailed invoice and billing records
demonstrating they are separately
billing for and instructing policy
holders to pay for in a separate
transaction the portion of the policy
holder’s premium attributable to
coverage of non-Hyde abortion services
as specified in this rule, the actuarial
value which must be estimated to be no
less than $1 per enrollee, per month;
and appropriately segregating the funds
collected from enrollees into a separate
allocation account that is used to pay for
non-Hyde abortion services.
We remind issuers that pursuant to
§ 156.280(e)(5)(ii), any issuer offering
coverage of non-Hyde abortion services
on the Exchange must submit a plan to
the relevant state insurance regulator
that details the issuer’s process and
methodology for meeting the
19 U.S. Government Accountability Office,
‘‘Health Insurance Exchanges: Coverage of Nonexcepted Abortion Services by Qualified Health
Plans,’’ (Sept. 15, 2014), available at http://
www.gao.gov/products/GAO-14-742R.
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requirements of section 1303(b)(2)(C),
(D), and (E) of the PPACA (hereinafter,
‘‘segregation plan’’).20 The segregation
plan should describe the QHP issuer’s
financial accounting systems, including
appropriate accounting documentation
and internal controls, that would ensure
the segregation of funds required by
section 1303(b)(2)(C), (D), and (E) of the
PPACA. Issuers should refer to
§ 156.280(e)(5)(ii) for more information
on precisely what issuers should
include in their segregation plans to
demonstrate compliance with these
requirements. We also remind QHP
issuers that pursuant to
§ 156.280(e)(5)(iii) each QHP issuer
participating in the Exchange must
provide to the state insurance
commissioner an annual assurance
statement attesting that the plan has
complied with section 1303 of the
PPACA and applicable regulations.
We also remind issuers offering
medical QHPs in the FFEs that they
already must attest to adhering to all
applicable requirements of 45 CFR part
156 as part of the QHP certification
application, including those
requirements related to the segregation
of funds for abortion services
implemented in § 156.280.21 As
finalized, issuers in the FFE completing
this attestation would also attest to
adhering to these new separate billing
and collection requirements. As part of
the QHP certification process, issuers in
states with FFEs where the states
perform plan management functions
must also complete similar program
attestations attesting to adherence with
§ 156.280.22 Issuers in states with State
Exchanges that offer QHPs that cover
non-Hyde abortion services should
contact their state regarding the QHP
certification process.
Comment: HHS received comments
expressing a variety of legal arguments
against the proposals. Many
commenters stated that the proposals
violate the Administrative Procedure
Act (APA) because the proposals
advance an unreasonable interpretation
20 While we included compliance with section
1303(b)(2)(D) in the segregation plan that QHP
issuers are required to submit to state insurance
commissioners under our regulations at 45 CFR
156.280(e)(5), we did not mean to suggest by that
inclusion that such provision is part of the
segregation requirements in the statutory subsection
that are subject to the jurisdiction of state health
insurance commissioners under section
1303(b)(2)(E).
21 2019 Qualified Health Plan Issuer Application
Instructions, available at: https://
www.qhpcertification.cms.gov/s/
2019QHPInstructionsVersion1.pdf?v=1.
22 State Partnership Exchange Issuer Program
Attestation Response Form, available at: https://
www.qhpcertification.cms.gov/s/SuppDoc_SPE_
Attestationsed._revised_508.pdf?v=1.
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of law, are arbitrary and capricious, fail
to provide adequate reasons or
satisfactory explanations why HHS
seeks to adopt a newly preferred
interpretation of the requirement, and
fail to adequately assess the costs and
harms. Commenters also stated the
proposals raise Federalism concerns
under the Tenth Amendment because
the proposals allegedly are designed to
penalize states that have laws requiring
QHPs to provide coverage of non-Hyde
abortion services by requiring states—
through their respective Exchanges and
the Department of Insurances (DOIs)—to
adopt new oversight responsibilities,
and make systemic changes to fit the
alterations the proposals require. For
these states, commenters stated that this
effectively requires states to either
divert extensive resources to implement
these changes or change their sovereign
laws to no longer require coverage of
non-Hyde abortion services.
Commenters also stated that the
proposals exceed the federal
government’s spending power by
implementing new reporting and
oversight obligations in the Exchanges
that impose post-acceptance or
retroactive conditions on states that
were not originally anticipated.
Commenters also stated that the
proposals serve as a tax penalty on
issuers for doing business in states with
non-Hyde abortion services coverage
requirements. One commenter stated
that HHS improperly excluded the
proposed changes to § 156.280 among
the rule changes with Federalism
implications.
Commenters also stated that requiring
QHP issuers to send a separate bill to
enrollees about the plan’s coverage of
non-Hyde abortion services constitutes a
second separate notice outside of the
notice included in the SBC indicating
whether the plan covers abortions
services and that, as such, these
proposals violate section 1303(b)(3)(A)
of the PPACA, which specifies that QHP
issuers covering these services ‘‘shall
provide a notice to enrollees, only as
part of the summary of benefits and
coverage explanation, at the time of
enrollment, of such coverage.’’
Commenters further assert that the
proposals violate section 1303(b)(3)(B),
which states that all advertising used by
issuers, any information provided by the
Exchange, and ‘‘any other information
specified by the Secretary’’ shall only
provide information with respect to the
total amount of the combined payments
for all services.
Commenters also stated that the
proposals violate section 1554 of the
PPACA because these proposals will
limit access to health care services,
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21:42 Dec 26, 2019
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conflict with section 1557 of the
PPACA, violate the Equal Protection
Clause because the proposals place a
heavy burden on a unique health care
service only applicable to women,
constitute an undue burden on a
woman’s right to procreative choice,
violate the unconstitutional conditions
doctrine by penalizing those who
choose to exercise a constitutionallyprotected right by imposing
unreasonable payment protocols to
access abortion services, and violate the
establishment clause of the First
Amendment.
HHS also received many comments
stating that the proposed interpretation
of section 1303 of the PPACA violates
congressional intent. Commenters stated
that section 1303 of the PPACA makes
clear that absent a state law to the
contrary, issuers offering Exchange
coverage can decide whether to cover
non-Hyde abortion services and that
these requirements effectively take that
decision away from issuers.
Commenters also stated that Congress
specifically enacted section 1303 of the
PPACA’s provisions after rejecting more
extreme and restrictive alternatives that
would have eliminated abortion
coverage in the Exchanges or prohibited
enrollees from using federal financial
assistance to purchase a plan including
abortion coverage, and that HHS is
ignoring that legislative history by
proposing changes that would have a
net effect of reducing abortion coverage
where issuers decide to eliminate
coverage due to the regulatory burden.
Commenters also noted that, although
Congress decided to treat abortion
differently when passing section 1303 of
the PPACA, it did so specifically to
ensure that private insurance plans
could continue to decide whether or not
to cover abortion in states that did not
ban such coverage, and that this rule
threatens that right. One commenter
also stated that HHS violated generally
accepted principles of statutory
interpretation and should have
construed ‘‘separate payment’’ in line
with industry practice.
Many commenters also stated that
these proposals conflict with the
Administration’s stated goals of
reducing economic and regulatory
burden, in conflict with several recently
issued Executive Orders. Specifically
commenters stated that the proposals
would undermine Executive Order
13765 because these proposals would
increase the administrative and
economic burden of the PPACA,
Executive Order 13813 which called for
rules and guidelines to improve access
to and the quality of information that
Americans need to make informed
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healthcare decisions, Executive Order
13777 which orders federal agencies to
alleviate unnecessary regulatory burden
placed on the American people, and
Executive Order 12866 because HHS did
not ‘‘assess both the costs and the
benefits of the intended regulation and
. . . propose or adopt a regulation only
upon a reasoned determination that the
benefits of the intended regulation
justify the costs,’’ as the Executive Order
directs. Commenters also stated that the
proposals would undermine CMS’s
‘‘Patients Over Paperwork’’ initiative
aimed at reducing administrative
burden on health plans and providers.
HHS also received comments arguing
that these changes advance the
congressional intent for the separate
payment requirement in section 1303 of
the PPACA, arguing that both the
congressional record and the statutory
language clearly demonstrate that
Congress intended that billing for
coverage of non-Hyde abortion services
be separate.
Response: HHS disagrees with
comments questioning its legal
authority to make these policy changes,
and disagrees that interpreting section
1303 of the PPACA to require issuers to
send a separate bill for the portion of the
premium attributable to coverage of
non-Hyde abortion services violates the
APA. Section 1303 of the PPACA and
regulations at § 156.280 do not specify
the method a QHP issuer must use to
comply with the separate payment
requirement under section
1303(b)(2)(B)(i) of the PPACA and
§ 156.280(e)(2)(i). Although we
recognized in the preamble to the
proposed rule that the previous methods
of itemizing or providing advance notice
about the amounts noted as permissible
in the preamble of the 2016 Payment
Notice arguably identifies two
‘‘separate’’ amounts for two separate
purposes, we continue to believe that
requiring issuers to bill for two separate
‘‘payments’’ of these two amounts better
aligns with, and better enables
compliance with, the separate payment
requirement in section 1303 of the
PPACA. We also believe that consumers
are more likely to make a separate
payment for the non-Hyde abortion
coverage when they receive a separate
bill for such amount.
In fact, among the previously
acceptable methods for QHP issuers to
comply with the separate payment
requirement outlined in the preamble to
the 2016 Payment Notice was sending a
separate monthly bill for these
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services.23 As such, amending the
policy to only permit this method of
complying with the separate payment
requirement does not wholly depart
from the previous interpretation, it
merely refines it to better reflect the
statute.
Additionally, we have carefully
considered the comments we received
estimating the burden the proposals
would impose on issuers, states,
enrollees, and other entities, and
agree—without accepting the estimates
provided by commenters—that, as
originally proposed, the actual burden
would have exceeded HHS’s estimates.
As such, we are finalizing several
changes described in responses to
comments earlier in this section of the
preamble with the specific intent of
mitigating the burden that would have
been imposed if we were finalizing as
originally proposed.
HHS disagrees that the policy as
originally proposed or as revised in the
final rule violates state sovereignty,
exceeds the federal government’s
spending power, or raises other
Federalism concerns. Because states are
the entities primarily responsible for
implementing and enforcing the
provisions in section 1303 of the
PPACA related to individual market
QHP coverage of non-Hyde abortion
services, we acknowledge that requiring
issuers to separately bill for the portion
of the premium attributable to these
services means that states will likely
adjust how they ensure issuer
compliance with these new
requirements. We also remind states
concerned about enforcement and
oversight of these requirements that,
under section 1321(c) of the PPACA,
states may elect not to establish and
operate an Exchange, thereby deferring
those responsibilities to HHS.
We are clarifying the existing
statutory requirement by adding
specificity to the regulatory
requirement, for issuers to collect a
separate payment for these services. As
such, these changes do not directly
impose new requirements on states
other than to adjust how they check for
compliance. We believe that any state
oversight responsibility modified
through these changes was already
contemplated by section 1303 of the
PPACA in identifying states as the
entities primarily, but not exclusively,
responsible for enforcing the provisions
in section 1303. Further, as noted above,
among the previously acceptable
methods for QHP issuers to comply with
23 Patient Protection and Affordable Care Act;
HHS Notice of Benefit and Payment Parameters for
2016 (80 FR 10750, 10840).
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the separate payment requirement was
sending a separate monthly bill for
coverage of non-Hyde abortion services.
Therefore, states should already have
developed mechanisms to confirm
compliance with separate monthly
billing and payment for these services
for any issuers that previously elected
this option.
Setting aside the question of whether
state laws requiring coverage of nonHyde abortion services on the Exchange
are consistent with statutory conditions
on federal funding from the Department
to the States, we acknowledge that some
states have such laws. However, the
changes we are finalizing do not
preempt state law regarding coverage of
non-Hyde abortion services or otherwise
attempt to coerce states into changing
these laws or to deny QHP issuers the
ability to offer plans on the Exchanges
that provide coverage of non-Hyde
abortion services. HHS is simply
refining the method by which issuers
comply with the separate payment
requirement.
HHS does not agree with commenters’
concerns that the proposals would
inhibit enrollee access to appropriate
and timely medical care in violation of
section 1554 of the PPACA. We
acknowledge that, as originally
proposed, the combination of issuer
burden and enrollee confusion could
have potentially led to a reduction in
the availability of coverage of non-Hyde
abortion services (either by issuers
choosing to drop this coverage to avoid
the additional costs or by enrollees
having their coverage terminated for
failure to pay the second bill), thereby
potentially increasing out-of-pocket
costs for some women seeking those
services. But such an effect of a separate
billing requirement would not
constitute a violation of section 1554.
Moreover, we believe the changes we
are finalizing will decrease the
likelihood of these outcomes.
Importantly, subject to state law, section
1303(b)(1)(A) of the PPACA makes it
clear that it is ultimately at the issuer’s
discretion whether to cover non-Hyde
abortion services in their QHP; requiring
a separate bill for these services does
not limit that right.
HHS also disagrees that the policy in
the proposed rule, as revised in this
final rule, is inconsistent with sections
1303(b)(3)(A) or 1303(b)(3)(B) of the
PPACA. Reading section 1303(b)(3)
alongside section 1303(b)(2), which
requires collection of separate
payments, suggests that section
1303(b)(3) pertaining to notices should
be read harmoniously with the separate
payment requirement, rather than in
conflict with those requirements, as
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commenters suggest. For example, the
separate bill for the portion of the policy
holder’s premium attributable to
coverage of non-Hyde abortion services
is primarily a means of ensuring
separate QHP issuer collection of that
portion of the policy holder’s premium,
as required under section 1303(b)(2).
This separate bill does not circumvent
or conflict with the independent
requirement in section 1303(b)(3)
pertaining to notices. Further, any
insight the policy holder gains from the
separate bill for coverage of non-Hyde
abortion services about the QHP’s
coverage of non-Hyde abortion services
is incidental to the primary purpose of
the bill, which is to help ensure separate
payment by the policy holder, and
separate QHP issuer collection on this
portion of the policy holder’s premium.
We also note that requiring a separate
bill for coverage of non-Hyde abortion
services is not a violation of section
1303(b)(3), just as the separate
itemization of the premium amount for
such coverage on a single bill (as was
previously one of the acceptable billing
and premium collection methods for
this amount) was not a violation of that
section. Therefore, we believe it is a
more reasonable interpretation of
section 1303 of the PPACA that section
1303(b)(2) and 1303(b)(3) of the PPACA
need not conflict when read in context
with one another.
Section 1557 of PPACA prohibits
discrimination on the basis of race,
color, national origin, sex, age, or
disability in certain health programs or
activities. HHS disagrees that the policy
in the proposed rule and as revised in
this final rule discriminates against
women or constitutes gender
discrimination in violation of section
1557 of the PPACA or of the Equal
Protection Clause. Although only
women access non-Hyde abortion
services, the separate bill for the portion
of the premium attributable to coverage
of these services, and any enrollee
burden associated with that bill, is
broadly applicable to any policy holder
in a plan that covers non-Hyde abortion
services. In other words, both men and
women in plans covering non-Hyde
abortion services will receive a separate
bill for the portion of the premium
attributable to coverage of these
services, not just the women who may
ultimately access such services.
Similarly, HHS disagrees that the
proposals violate the unconstitutional
conditions doctrine, given that QHP
issuers offering these services will be
required to send the separate bill to all
policy holders in their plan, not just
those who choose to access non-Hyde
abortion services. As such, although it
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may be true that enrollees who would
be most likely to need access to
coverage of non-Hyde abortion services
would be most likely to intentially
enroll in a QHP with such coverage, any
additional burden these enrollees
experience related to understanding and
paying the second bill is unrelated to
whether enrollees actually do access
coverage of non-Hyde abortion services.
Therefore, the finalized policy does not
penalize enrollees for accessing their
constitutionally protected right to
abortion. All policy holders would
receive the separate bill for the portion
of their premium attributable to
coverage of non-Hyde abortion services,
regardless of whether they could, intend
to, or do, access the coverage for these
services.
HHS also disagrees that the policy in
the proposed rule, or as revised in this
final rule, violates the Establishment
Clause or otherwise impedes the free
exercise of religion. Although it may be
a secondary impact that the billing
changes serve the interests of enrollees
who object to coverage of non-Hyde
abortion services based on their
conscience, the objective for this policy
change continues to be achieving better
alignment with the statutory
requirement for issuers to collect a
separate payment for coverage of nonHyde abortion services, as specified in
section 1303 of the PPACA. As such, we
reject commenter’s arguments that these
proposals are religiously motivated.
We also disagree with commenters
that this interpretation of section 1303
of the PPACA violates congressional
intent. We acknowledge that, in drafting
section 1303 of the PPACA, Congress
rejected language that would have
imposed more restrictive requirements
on QHP issuers offering coveage of nonHyde abortion services.24 However,
although the language in section 1303 of
the PPACA that Congress ultimately
enacted into law permits issuers to offer
coverage for non-Hyde abortion services
subject to state law, this flexibility is not
without limitations. As enacted, section
1303 of the PPACA requires that QHP
issuers offering non-Hyde abortion
coverage on the Exchanges follow
specific actuarial, accounting, and
notice requirements to ensure that
federal funds are not used to pay for the
costs of including coverage of these
services under the QHP. We believe that
by requiring issuers to collect separate
payments, section 1303 of the PPACA
contemplates sending to enrollees
24 See
Amendment to H.R. 3962, 111th Cong.
(2009) (offered by Rep. Stupak and Rep. Pitts), 155
Cong. Rec. H12,921 (Nov. 7, 2009); See 155 Cong.
Rec. S12,665 (2009).
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21:42 Dec 26, 2019
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separate bills for these services to help
ensure appropriate segregation of these
funds. Furthermore, HHS previously
listed ‘‘sending a separate monthly bill
for these services’’ as one of the
permissible methods for issuers to
comply with the separate payment
requirement in the 2016 Payment
Notice.
HHS also disagrees with claims that
the proposals impermissibly undermine
the Executive Orders mentioned in
comments. We interpret the proposals
and the policy as finalized in this rule
as consistent with Executive Order
13765 because the law is being
‘‘efficiently implemented’’ through
better aligning the issuer requirements
related to fulfilling section 1303 of the
PPACA’s separate payment
requirements with the statute. We also
believe Executive Order 13813 supports
the changes to the policy as finalized in
this rule, since providing a separate bill
to policy holders for the portion of the
premium attributable to coverage of
non-Hyde abortion services will
‘‘improve access to and the quality of
information that Americans need to
make informed healthcare decisions.’’ 25
We note that we also believe Executive
Order 13877 supports the policy
changes by enhancing the ability of
enrollees ‘‘to choose the healthcare that
is best for them’’ and to make ‘‘fully
informed decisions about their
healthcare.’’ Indeed, many commenters
highlighted that this would be one of
the positive impacts of the proposal—
that the separate bill would serve to
clarify for enrollees that their plan
covers non-Hyde abortion services and
at what cost, information which many
commenters would use to decide
whether to remain enrolled in that QHP
or seek a QHP without such coverage.
We also believe Executive Order 13777
supports the proposals and changes
being finalized in this rule, since
requiring a separate bill for coverage of
these services helps to ensure that HHS
is ‘‘prudent and financially responsible
in the expenditure of funds,’’ by better
aligning the requirements with the
statute in a manner that will help to
ensure that QHP issuers that offer
coverage for non-Hyde abortion services
collect a separate payment from policy
holders for the portion of their premium
attributable to non-Hyde abortion
coverage which also helps to ensure that
25 Executive Order on Improving Price and
Quality Transparency in American Healthcare to
Put Patients First (issued on June 24, 2019,
available at https://www.whitehouse.gov/
presidential-actions/executive-order-improvingprice-quality-transparency-american-healthcareput-patients-first/.
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71695
APTC or CSR funds are not used pay for
such services.
Additionally, HHS did ‘‘assess both
the costs and the benefits’’ of the
proposed rule. However, we note that
Executive Order 12866’s directive to
only issue net-beneficial regulations
applies only ‘‘to the extent permitted by
law.’’ Although we have since adjusted
the policy as well as the estimated
burden to reflect a larger burden
estimate, we continue to believe that
requiring QHP issuers to separately bill
the portion of the policy holder’s
premium attributable to coverage of
non-Hyde abortion services is a better
interpretation of the statutory
requirement for QHP issuers to collect a
separate payment for coverage of these
services, and, thus, justifies the costs.26
Lastly, although CMS’s ‘‘Patients Over
Paperwork’’ initiative does include the
goal of reducing unnecessary burden,
HHS believes these changes and the
added burdens associated with the
changes are necessary, as the changes
will better align issuer billing with the
statutory requirements of the PPACA.
Moreover, in line with this initiative, we
believe enrollees will benefit from the
additional clarity that the separate bill
provides about their plan’s coverage of
non-Hyde abortion services.
III. Collection of Information
Requirements
This final rule contains information
collection requirements as defined
under the Paperwork Reduction Act of
1995 (PRA). We proposed and solicited
comments on these information
collection requirements (ICRs) in the
notice of proposed rulemaking that
published on November 9, 2018 (84 FR
56015). The information collection
requirements and the reconciliation of
any comment received on the
requirements are discussed below.
In order to fairly evaluate whether an
information collection should be
approved by the Office of Management
and Budget (OMB), section
3506(c)(2)(A) of the PRA requires that
we solicit comment on the following
issues:
• 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
26 This rule has been subject to interagency
(including OMB) review under Executive Order
12866 and cleared by OMB for issuance and
publication, indicating that the rule is consistent
with Executive Orders.
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affected public, including automated
collection techniques.
In our November 9, 2018 (83 FR
56015) proposed rule, we solicited
public comment on each of the required
issues under section 3506(c)(2)(A) of the
PRA for the following ICRs.
A. Wage Estimates
To derive average costs, we generally
used data from the Bureau of Labor
Statistics to determine average labor
costs (including a 100 percent increase
for fringe benefits and overhead) for
estimating the burden associated with
the ICRs.27 Table 1 in this final rule
presents the mean hourly wage
(calculated at 100 percent of salary), the
cost of fringe benefits and overhead, and
the adjusted hourly wage.
As indicated, employee hourly wage
estimates have been adjusted by a factor
of 100 percent. This is necessarily a
rough adjustment, both because fringe
benefits and overhead costs vary
significantly across employers, and
because methods of estimating these
costs vary widely across studies.
However, we believe that doubling the
hourly wage to estimate total cost is a
reasonably accurate estimation method.
TABLE 1—ADJUSTED HOURLY WAGES USED IN BURDEN ESTIMATES
Occupational
code
Occupation title
General and Operations Manager ...................................................................
Computer and Information Systems Manager .................................................
Computer Programmer ....................................................................................
Computer System Analyst ...............................................................................
Business Operations Specialist .......................................................................
Secretaries and Administrative Assistants ......................................................
B. Information Collection Requirements
(ICRs)
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1. ICRs Regarding General Program
Integrity and Oversight Requirements
(§ 155.1200)
The burden associated with State
Exchanges meeting the program
integrity reporting requirements in
§ 155.1200 have already been assessed
and encompassed through SMART
currently approved under OMB control
number: 0938–1244 (CMS–10507).
While we are finalizing proposals in this
rule that would provide HHS the ability
to focus State Exchange oversight and
audit activities towards particular
Exchange functions that have higher
program integrity risks in a more
consistent manner, and require State
Exchanges and their auditors to employ
auditing techniques or procedures in a
more consistent manner, we do not
envision these changes to have a
material impact on the burden for State
Exchanges. As detailed in the proposed
rule and in the preamble of this rule,
these amendments are intended to allow
for more targeted oversight and audits of
State Exchanges that focus and direct
existing HHS and State Exchange
resources towards particular Exchange
program areas that have higher program
integrity risks, rather than having those
Federal and State Exchange resources
covering all program areas or covering
program areas that have lower program
integrity risks. Because existing
resources would be directed away from
certain program areas and towards
27 See May 2018 Bureau of Labor Statistics,
Occupational Employment Statistics, National
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11–1021
11–3021
15–1131
15–1121
13–1199
43–6014
program areas with higher program
integrity impact across all State
Exchanges, we believe the overall
burden on State Exchanges would not
change. Further, we are not specifying a
particular sampling methodology that
must be used by all State Exchanges for
testing the accuracy of eligibility
determinations in annual programmatic
audits. This final rule therefore does not
impose any new burden or revised
information collection requirements
pertaining to § 155.1200.
2. ICRs Regarding Rules Relating To
Segregation of Funds for Abortion
Services (§ 156.280)
In § 156.280(e)(2), we are finalizing
that QHP issuers must send an entirely
separate monthly bill to the policy
holder covering only the portion of
premium attributable to coverage of
non-Hyde abortion, and instruct the
policy holder to pay the portion of their
premium attributable to coverage of
non-Hyde abortion services in a separate
transaction from any payment the policy
holder makes for the portion of their
premium not attributable to coverage of
non-Hyde abortion services. Based on
2020 QHP certification data in the FFEs
and SBE–FPs, we estimate that 23 QHP
issuers will offer a total of 338 plans
with coverage of non-Hyde abortion
services in 9 FFE and SBE–FP states.
For the 12 State Exchanges that will
operate their own technology platforms
in 2020 and have QHPs that offer
coverage of non-Hyde abortion services,
we have updated our methodology for
Mean hourly
wage
($/hour)
$59.56
73.49
43.07
45.01
37.00
18.28
Frm 00024
Fmt 4701
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$59.56
73.49
43.07
45.01
37.00
18.28
Adjusted
hourly
wage
($/hour)
$119.12
146.98
86.14
90.02
74.00
36.56
identifying issuers with QHPs that offer
coverage of non-Hyde abortion services,
and now estimate that 71 QHP issuers
will offer a total of approximately 1,129
plans that include coverage for nonHyde abortions services. Three of those
State Exchanges perform premium
billing and payment processing, while
the other 9 have their issuers perform
premium billing and payment
processing. In total, we now estimate
that will be 94 QHP issuers offering a
total of 1,467 plans (representing
approximately 32 percent of individual
market, on-Exchange plans) covering
non-Hyde abortion services across 21
states in plan year 2020. As such, the
ICRs associated with these proposals
create a new burden on QHP issuers and
State Exchanges that perform premium
billing and payment processing, and
thus will be submitted to OMB for final
approval (OMB control number: 0938–
1358 (Billing and Collection of the
Separate Payment for Certain Abortion
Services (CMS–10681)).
Comment: We used the estimated
numbers of impacted issuers and plans
to estimate the costs associated with the
proposals regarding separate billing and
payment for coverage of non-Hyde
abortion services.
We received many comments from
issuers, issuer associations, states, State
Exchanges, state regulators, and other
organizations arguing that we greatly
underestimated the burden on issuers to
implement the original proposals. For
example, commenters stated that actual
one-time costs for issuers to implement
Occupational Employment and Wage Estimates at
https://www.bls.gov/oes/current/oes_stru.htm.
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Fringe
benefits and
overhead
($/hour)
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these proposals would be anywhere
from $50,000 to $7,500,000 per issuer.
Commenters also stated that annual
costs per issuer would be anywhere
from $40,000 to $10,800,000 annually.
One commenter stated that the
operational burden of a mid-size issuer
(serving approximately 70,000 Exchange
enrollees) would exceed HHS’s estimate
by approximately 2,666 times for the
first year alone. Commenters explained
that the proposals would require
changes to nearly every aspect of the
enrollment and billing processes to
identify impacted enrollees, generate
and send multiple accurate invoices,
collect multiple payments, and
reconcile payment amounts.
Some commenters noted that many
issuers do not have the ability to
generate two separate bills for one
policy and that, as such, the proposals
would require them to issue two
policies per policy holder (and enroll
every policy holder into two separate
policies to be able to bill them in the
required way). Commenters stated that
the proposals would consequently
require that many issuers create separate
member IDs in order to facilitate every
enrollee receiving two bills and making
two payments. Commenters stated that
this would be an extraordinarily costly
and difficult change for such issuers to
make.
Commenters also expressed concern
that requiring issuers to send the
separate bill in a separate mailing would
double an issuer’s postage and
associated mailing costs, costing issuers
an additional $15.6 to $31.2 million
nationally per year, and expressed
further concern that this cost was not
accounted for in the proposed rule’s
impact estimates. Many commenters
explained that it is unrealistic to assume
that issuers can save costs by enrollees
switching to electronic billing, since
many enrollees still elect to receive and
pay their health coverage bills through
the mail. Other commenters explained
that many enrollees have no choice but
to receive paper bills and send paper
checks, as many enrollees in rural areas
and many low-income individuals still
do not have access to the internet.
Response: We appreciate these
comments and after consideration, have
adjusted the estimated burden below. In
response to these comments, we have
updated the associated ICRs to reflect an
increase in burden and costs for issuers.
We believe that the original burden
estimate in the proposed rule would not
accurately reflect the actual costs issuers
would have incurred if we finalized the
provisions as proposed.
We estimate that allowing issuers to
send the separate bill in the same
mailing (though not in the same email
or electronic communication) as the bill
for other services would eliminate much
of the commenter estimated $15.6 to
$31.2 million that the second bill would
have cost annually if we had finalized
as proposed. By finalizing this policy to
allow for combined mailings when
sending paper bills, we ensure that
issuers will not be required to incur the
costs associated with additional postage
and envelopes.
Issuers will incur burden to complete
the one-time technical build to
implement the necessary changes,
which will involve activities such as
planning, assessment, budgeting,
contracting, building and testing their
systems; as well as one-time changes
such as billing-related outreach and call
center training. We assume that this
71697
one-time burden will be incurred
primarily in 2020. We estimate that, for
each issuer, on average, it will take
business operations specialists 2,500
hours (at $74 per hour), computer
system analysts 6,500 hours (at $90.02
per hour), computer programmers
22,000 hours (at $86.14 per hour),
computer and information systems
managers 200 hours (at $146.98 per
hour) and operations managers 300
hours (at $119.12 per hour) to complete
this task. The total burden for an issuer
will be approximately 31,500 hours on
average, with an equivalent cost of
approximately $2.7 million. We
anticipate that implementing these
changes within 6 months would result
in issuers incurring additional costs
such as higher contracting costs and
overtime payments, which will increase
the total cost for each issuer by 50
percent, to approximately $4.1 million.
For all 94 issuers, the total one-time
burden will be 2,961,000 hours for a
total cost of approximately $385
million.
We anticipate that the burden
incurred by State Exchanges that
perform premium billing and payment
processing and have QHP issuers that
offer coverage for non-Hyde abortion
services will be similar to the burden
incurred by QHP issuers offering
coverage for non-Hyde abortion
services. Therefore the total burden for
a State Exchange that performs premium
billing and payment processing will be
approximately 31,500 hours on average,
with a total cost of approximately $4.1
million. For all 3 State Exchanges that
perform premium billing and payment
processing, the total one-time burden
will be 94,500 hours for a total cost of
approximately $12.3 million.
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TABLE 2—ESTIMATED ONE-TIME BURDEN PER ISSUER OR STATE EXCHANGE PERFORMING PREMIUM BILLING AND
PAYMENT PROCESSING
Occupation
Burden
hours per
respondent
Labor cost
per hour
General and Operations Manager ...............................................................................................
Computer and Information Systems Manager ............................................................................
Computer Programmer ................................................................................................................
Computer System Analyst ...........................................................................................................
Business Operations Specialist ...................................................................................................
Total Burden and Labor Cost per respondent ............................................................................
Additional Costs due to Expedited Implementation ....................................................................
300
200
22,000
6,500
2,500
31,500
........................
$119.12
146.98
86.14
90.02
74.00
........................
........................
$35,736
29,396
1,895,080
585,130
185,000
2,730,342
1,365,171
Total per respondent ............................................................................................................
31,500
........................
4,095,513
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Total
cost per
respondent
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TABLE 3—ESTIMATED ONE-TIME BURDEN FOR ALL ISSUERS AND STATE EXCHANGES PERFORMING PREMIUM BILLING AND
PAYMENT PROCESSING
Burden hours
per respondent
Number of respondents
Number of responses
Issuer ...................................................................................
State Exchange ....................................................................
94
3
94
3
31,500
31,500
2,961,000
94,500
$384,978,222
12,286,539
Total ..............................................................................
97
97
31,500
3,055,500
397,264,761
Type of respondent
In addition to the one-time costs
estimated, issuers will incur ongoing
annual costs, such as those related to
identifying impacted enrollees, ensuring
billing accuracy, reconciliation, quality
assurance, printing, recordkeeping, and
document retention. We estimate that
for each issuer, on average, it will take
administrative assistants 20,000 hours
(at $36.56 per hour), business operations
specialists 2,000 hours (at $74 per hour),
computer programmers 2,000 hours (at
$86.14 per hour), and operations
managers 120 hours (at $119.12 per
hour) each year to perform these tasks.
The total annual burden for each issuer
will be 24,120 hours, with an equivalent
cost of approximately $1.07 million.
Assuming that issuers will start sending
separate bills in July, 2020, the total
burden for all 94 issuers for the 6
months in 2020 is estimated to be
1,133,640 hours with an equivalent cost
of approximately $50.1 million. From
2021 onwards, we estimate the total
annual burden for all 94 issuers will be
approximately 2,267,280 hours with an
associated cost of approximately $100.2
million.
We anticipate that State Exchanges
performing premium billing and
payment processing and which have
Total burden
hours
Total cost
QHP issuers that offer coverage for nonHyde abortion services will incur costs
similar to QHP issuers offering coverage
of non-Hyde abortion services.
Therefore, we estimate that for all 3
State Exchanges performing premium
billing and payment processing, the
total annual burden will be
approximately 36,180 hours with an
equivalent cost of approximately $1.6
million in 2020 and 72,360 hours with
an associated cost of approximately $3.2
million starting in 2021.
TABLE 4—ESTIMATED ANNUAL BURDEN PER ISSUER OR STATE EXCHANGE PERFORMING PREMIUM BILLING AND PAYMENT
PROCESSING
Burden hours
per
respondent
Occupation
Labor cost per
hour
Total cost per
respondent
Secretaries and Administrative Assistants ..................................................................................
General and Operations Manager ...............................................................................................
Business Operations Specialist ...................................................................................................
Computer Programmer ................................................................................................................
20,000
120
2,000
2,000
$36.56
119.12
74.00
86.14
$731,200
14,294
148,000
172,280
Total per Respondent ...........................................................................................................
24,120
........................
1,065,774
TABLE 5—ESTIMATED ANNUAL BURDEN FOR ALL ISSUERS AND STATE EXCHANGES PERFORMING PREMIUM BILLING AND
PAYMENT PROCESSING FOR 2020, 2021 AND 2022
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Type of respondent
Number of
respondents
Year
Number of
responses
Burden hours
per
respondent
Total burden
hours per year
Total labor
cost per year
Issuer .......................................................
State Exchange ........................................
Total .........................................................
Issuer .......................................................
State Exchange ........................................
2020
2020
2020
2021, 2022
2021, 2022
94
3
97
94
3
94
3
97
94
3
12,060
12,060
12,060
24,120
24,120
1,133,640
36,180
1,169,820
2,267,280
72,360
$50,091,397
1,598,662
51,690,058
100,182,794
3,197,323
Total ..................................................
2021, 2022
97
97
24,120
2,339,640
103,380,117
In response to comments, we
reviewed our original enrollee estimates
and have updated our estimates for
accuracy. Based on 2019 QHP
Certification Data in the FFEs and SBE–
FPs, we now estimate that there are
approximately 442,400 enrollees in
QHPs covering non-Hyde abortion
services. In the 11 State Exchanges that
operated their own technology platform
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and had issuers that offered coverage of
non-Hyde abortion services in 2019, we
estimate that there are approximately
2,597,700 enrollees in QHPs covering
non-Hyde abortion services. The total
number of enrollees in QHPs covering
non-Hyde abortion services is
approximately 3.04 million in 2019. The
number of QHPs covering non-Hyde
abortion services will be higher in 2020
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compared to 2019. Therefore, we are
using the number of enrollees in such
QHPs in 2019 as a lower bound for the
number of enrollees who will
experience an increase in burden as a
result of the finalized policies.
Assuming 1.5 enrollees per policy,
issuers and State Exchanges performing
premium billing and payment
processing will be required to send a
separate bill to approximately 2 million
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policy holders. We understand that,
although enrollees can often choose to
pay electronically or by phone, choose
to utilize automatic payment
deductions, and often opt out of
receiving paper bills, many enrollees
still opt to receive physical mail
detailing their coverage. We also
understand that many enrollees face
barriers to accessing the internet and
have little choice but to receive paper
bills. Because enrollees typically receive
paper bills and because many enrollees
already face barriers to accessing the
internet, issuers are likely to experience
an increased administrative cost in
having to print an additional monthly
bill for the majority of their policy
holders. According to one commenter,
issuers send paper bills to 92 percent of
Exchange customers. We anticipate that
the number of consumers opting for
electronic bills will increase over time.
Therefore, we assume that
approximately 90 percent of policy
holders will receive paper bills in 2020
and issuers and State Exchanges
performing premium billing and
payment processing will need to print
and send approximately 1.82 million
separate paper bills per month.
Assuming materials and printing cost of
$0.05 per page, issuers will incur
additional monthly costs of
approximately $91,200 to print separate
bills for impacted policy holders in
2020. Assuming that issuers start
sending separate bills in July 2020, for
the 6 months in 2020, total cost for all
issuers is estimated to be approximately
$547,225. Assuming that more
consumers will opt to receive electronic
bills over time, we estimate that
approximately 88 percent of
policyholders will receive paper bills in
2021, and the annual cost for all issuers
to send separate paper bills will be
approximately $1,070,129. We assume
that, in 2022, approximately 86 percent
of policyholders will receive paper bills,
and the annual cost for all issuers to
send separate paper bills will be
approximately $1,045,808. The average
annual materials and printing cost over
3 years (2020 to 2022) will be
approximately $887,721. Since issuers
and State Exchanges performing
premium billing and payment
processing will be permitted to send
both bills together when sending bills in
a physical mailing, they will not incur
any additional mailing costs. We
assume that bills sent electronically can
be sent at minimal cost and note that we
have incorporated any associated IT
changes to accommodate electronic
billing changes based on this rule above,
where we discussed premium billing
and payment processing costs to issuers
and State Exchanges.
FFE issuers are subject to future HHS
compliance reviews, requiring issuers in
the FFE to maintain and submit records
to HHS showing compliance with
separately billing for the portion of the
policy holder’s premium attributable to
non-Hyde abortion services as specified
in this rule. Commenters stated that
HHS excluded an evaluation of the
burden and cost for FFE issuers to
participate in the additional HHS
compliance reviews, ignoring the
potential for any new costs associated
with this requirement, such as
71699
documenting all efforts for audit
purposes. We have revised our burden
estimates to account for additional
recordkeeping costs not reflected in the
proposed rule’s estimates but reiterate
that the requirements associated with
compliance reviews were already
assessed and subsumed within issuer
burdens described in previously
finalized rules, including the
information collection currently
approved under OMB control number:
0938–1277 (Program Integrity:
Exchange, Premium Stabilization
Programs, and Market Standards;
Amendments to the HHS Notice of
Benefit and Payment Parameters for
2014 (CMS–10516)).
To show compliance with FFE
standards and program requirements, all
issuers seeking QHP certification in
FFEs are required to submit responses to
program attestations as part of their
QHP application. This response already
includes an attestation that the issuer
agrees to adhere to the requirements
related to the segregation of funds for
abortion services implemented in
§ 156.280. We have determined that the
requirements associated with QHP
certification have already been assessed
and encompassed by the information
collection currently approved under
OMB control number: 0938–1187
(Establishment of Exchanges and
Qualified Health Plans; Exchange
Standard for Employers (CMS–10433)).
C. Summary of Annual Burden
Estimates for Proposed Requirements
TABLE 6—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS
Regulation section(s)
OMB control
number
Number of
respondents
Burden per
response
(hours)
Total annual
burden
(hours)
Total labor
cost of
reporting
($)
Capital costs
(printing and
materials)
($)
Total cost
($)
§ 156.280 ...........................
0938–NEW
97
97
30,600
2,968,200
$218,571,684
$887,721
$219,459,405
Total ...........................
........................
97
97
30,600
2,968,200
218,571,684
887,721
219,459,405
D. Submission of PRA-Related
Comments
We have submitted a copy of this final
rule to OMB for its review of the rule’s
information collection and
recordkeeping requirements. The
requirements are not effective until they
have been approved by OMB.
jbell on DSKJLSW7X2PROD with RULES3
Number of
responses
IV. Regulatory Impact Analysis
A. Statement of Need
This final rule implements standards
to ensure enrollees receive the correct
amount of APTC and CSRs at the time
of enrollment or re-enrollment via
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periodic data matching requirements. In
addition, the provisions in this rule
strengthen the mechanisms and tools for
overseeing ongoing compliance by State
Exchanges with federal program
requirements. Finally, the provisions in
this rule refine some of the methods for
billing of the separate payment for the
portion of the policy holder’s premium
attributable to non-Hyde abortion
services to better align with
congressional intent regarding the
separate payments provision of section
1303 of the PPACA. The following
summary focuses on the benefits and
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Fmt 4701
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costs of the requirements in this final
rule.
B. Overall Impact
We have examined the impact of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), 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 1102(b) of the Act, section
202 of the Unfunded Mandates Reform
Act of 1995 (March 22, 1995; Pub. L.
104–4), Executive Order 13132 on
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Federal Register / Vol. 84, No. 248 / Friday, December 27, 2019 / Rules and Regulations
Federalism (August 4, 1999), the
Congressional Review Act (5 U.S.C.
804(2)), and Executive Order 13771 on
Reducing Regulation and Controlling
Regulatory Costs (January 30, 2017).
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), to the extent permitted by law.
Section 3(f) of Executive Order 12866
defines a ‘‘significant regulatory action’’
as an action that is likely to result in a
rule: (1) Having an annual effect on the
economy of $100 million or more in any
1 year, or adversely and materially
affecting a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
state, local or tribal governments or
communities (also referred to as
‘‘economically significant’’); (2) creating
a serious inconsistency or otherwise
interfering with an action taken or
planned by another agency; (3)
materially altering the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or (4)
raising novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
A regulatory impact analysis (RIA)
must be prepared for rules with
economically significant effects ($100
million or more in at least 1 year). This
final rule is economically significant
within the meaning of section 3(f)(1) of
the Executive Order. Therefore, OMB
has reviewed these regulations and HHS
has provided an assessment of the
potential costs, benefits, and transfers
associated with this rule. Accordingly,
we have prepared an RIA that presents
the costs and benefits of this final rule.
C. Impact Estimates of the Program
Integrity Provisions and Accounting
Table
In accordance with OMB Circular A–
4, Table 7 depicts an accounting
statement summarizing HHS’s
assessment of the benefits, costs, and
transfers associated with this regulatory
action. Table 8 includes a summary of
annualized values of costs, over a
perpetual time horizon at 7 percent
discount rate for Executive Order 13771
(E.O. 13771). This final rule implements
standards that will have numerous
effects, including ensuring that eligible
enrollees receive the correct amount of
APTC and CSR (as applicable);
improving alignment with the separate
payment requirement in section 1303 of
the PPACA by requiring QHP issuers to
send separate bills to policy holders for
the portion of their premium
attributable to non-Hyde abortion
services; conducting effective and
efficient monitoring and oversight of
State Exchanges to ensure that enrollees
are receiving the correct amount of
APTC and CSRs in State Exchanges, and
that State Exchanges are meeting the
standards of federal law in a transparent
manner; and protecting the interests of
taxpayers, and enrollees, and the
financial integrity of Exchanges through
oversight of health insurance issuers,
including ensuring compliance with the
requirements of section 1303 of the
PPACA. We are unable to quantify
certain benefits and costs of this final
rule—such as benefits to enrollees for
timely notification of their dual
enrollment in other qualifying coverage
such as Medicare, Medicaid/CHIP, and,
if applicable, the BHP, potential
increases in cost to states for increased
oversight activities and to establish
access to federal data systems to verify
eligibility for or enrollment in
Medicaid/CHIP or Medicare, and
potential costs to enrollees such as
increased out-of-pocket costs related to
billing changes due to the separate
payment requirements for non-Hyde
abortion services. The effects in Table 7
reflect qualitatively assessed impacts
and estimated direct monetary costs and
transfers resulting from the provisions
of this final rule for health insurance
issuers. States impacted by PDM
requirements will incur costs of up to
$6.9 million in 2020. In addition, we
estimate that issuers, State Exchanges,
FFEs, and consumers impacted by the
separate billing and payment
requirements will incur costs of
approximately $546.1 million in 2020,
$232.1 million in 2021, $230.7 million
in 2022, and $229.3 million 2023
onwards (see Table 10 below). We also
expect that transfers from the federal
government to consumers in the form of
premium tax credits will decrease as a
result of Exchanges conducting
Medicare, Medicaid/CHIP, and, if
applicable, BHP PDM, and increase as a
result of separate billing and payment
requirements. The net increase in
premium tax credits is estimated to be
approximately $106 million in 2021 and
$96 million in 2022 onwards.
TABLE 7—ACCOUNTING TABLE
Benefits:
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Qualitative:
• Better alignment of the regulatory requirements for QHP issuer billing of premiums with the separate payment requirement in section
1303 of the PPACA.
• Clearer regulatory requirements for how frequently Exchanges should be conducting periodic checks for dual enrollment in other qualifying coverage.
• Clearer regulatory requirements for State Exchanges around CMS’s oversight and reporting process that allows for more effective oversight of State Exchanges.
Costs:
Estimate (million).
Year Dollar .....
Discount Rate
(percent).
Period Covered
Annualized Monetized ($/year) .......................................................................
$304.09 ..........
$298.92 ..........
2019 ...............
2019 ...............
7 .....................
3 .....................
2020–2024
2020–2024
Quantitative:
• Burden incurred by issuers, states, federal government and enrollees to comply with provisions related to coverage of non-Hyde abortion
services and the segregation of premiums for such services.
• Costs for State Exchanges not in compliance with regulatory requirements to conduct Medicare, Medicaid/CHIP, and, if applicable, BHP
PDM.
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71701
TABLE 7—ACCOUNTING TABLE—Continued
Qualitative:
• Potential increase in costs to states for increased oversight of separate payment requirements.
• Potential increased costs incurred by enrollees who choose to make separate payments for coverage of non-Hyde abortion services.
• Potential increased burden and costs for State Exchanges to authorize access to federal data sources to verify Medicare and Medicaid/
CHIP eligibility and/or enrollment, notifying enrollees when dual enrollment is detected, and process QHP coverage terminations.
• Potential increased burden for assisters, agents and brokers to explain new billing process.
• Potential increase in public spending and out-of-pocket costs to enrollees if there is an increase in unplanned pregnancies due to loss of
abortion coverage and, with respect to public spending, if those unplanned pregnancies are experienced by individulas who would be eligible for public benefit programs.
• Potential decrease in broker and issuer revenue due to decrease in QHP enrollment.
Transfers:
Estimate (million).
Year Dollar
percent.
Discount Rate
Period Covered
Federal Annualized Monetized ($/year) .........................................................
....................................................................................................................
$76.2 ..............
$77.7 ..............
2019 ...............
2019 ...............
7 .....................
3 .....................
2020–2024
2020–2024
Quantitative:
• Total transfers from the federal government to enrollees due to an increase in premium tax credit payments.
Qualitative:
• Increase in premiums beginning in plan year 2021.
• Potential increase in out-of-pocket costs for enrollees who experience lapse in coverage for failing to make payments for coverage of
non-Hyde abortion services due to confusion with new billing system.
• Potential increase in out-of-pocket costs for individuals who lose health insurance coverage due to increase in premiums.
• Potential increase in uncompensated care costs for people who lose health insurance coverage.
TABLE 8—E.O. 13771 SUMMARY TABLE
[In $ millions 2016 dollars, over a perpetual time horizon]
Estimate
(7% discount rate)
Annualized Costs .....................................................................................................................................................................
Annualized Cost Savings .........................................................................................................................................................
Annualized Net Costs ..............................................................................................................................................................
1. Functions of an Exchange (§ 155.200)
Our revisions to § 155.200(c)
specifying that Exchanges must perform
oversight functions or cooperate with
activities related to oversight and
financial integrity requirements are a
clarification and not a new function.
Therefore, they will not impose
additional burdens on State Exchanges.
jbell on DSKJLSW7X2PROD with RULES3
2. Eligibility Redetermination During a
Benefit Year (§ 155.330)
Our requirement that Exchanges
conduct Medicare PDM, Medicaid/CHIP
PDM, and, if applicable, BHP PDM at
least twice a year beginning with the
2021 calendar year, adds specificity to
the existing requirement that Exchanges
must periodically examine available
data sources to determine whether
Exchange enrollees have been
determined eligible for or enrolled in
other qualifying coverage such as
Medicare, Medicaid, CHIP, or, if
applicable, the BHP. Therefore, we
expect the costs associated with this
requirement to be minimal. However,
State Exchanges that are not already
conducting PDM with the required
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frequency, or deemed in compliance
with the Medicaid, CHIP, and, if
applicable, BHP PDM requirements, will
be required to engage in IT system
development activity in order to
communicate with these programs and
act on enrollment data either in a new
way, or in the same way more
frequently. Thus, there may be
additional associated administrative
cost for these State Exchanges to
implement the proposed PDM
requirements. We anticipate a majority
(up to eight) of the twelve State
Exchanges that operate their own
technology platforms would be exempt
from the requirement to perform
Medicaid/CHIP, and, if applicable, BHP
PDM because they have shared,
integrated eligibility systems with their
respective Medicaid programs, as such
they would be deemed in compliance
with this requirement. However, we are
not able to confirm the exact number
because we have not yet set specific
criteria and process to assess and
confirm which State Exchanges would
be exempt, and would need additional
operational information from State
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$182.98
0
182.98
Exchanges to confirm our assessment.
We will establish and engage in that
process after finalization of the rule. For
a State Exchange not already conducting
Medicare, Medicaid/CHIP, and, if
applicable, BHP PDM at least twice a
year, and that does not already have a
shared, integrated eligibility system
with its respective Medicaid/CHIP, and,
if applicable, BHP programs, we
estimate that it will cost approximately
$1,740,000 per State Exchange (a total of
$6,960,000 for all 4 nonexempt State
Exchanges) to build such capabilities in
their system. We assume that this cost
will be incurred primarily in 2020.
These costs would be incurred by the
State Exchange as they are required to
be financially self-sustaining and do not
receive federal funding for their
establishment or operations.
We believe these changes will support
HHS’s program integrity efforts
regarding the Exchanges by helping
promote a balanced risk pool for the
individual market as Medicare and
Medicaid/CHIP beneficiaries tend to be
higher utilizers of medical services,
ensuring that consumers are accurately
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Federal Register / Vol. 84, No. 248 / Friday, December 27, 2019 / Rules and Regulations
determined eligible for APTC and
income-based CSRs, and safeguarding
consumers against enrollment in
unnecessary or duplicative coverage.
Such unnecessary or duplicative
coverage, coupled with typically higher
utilization, generally results in higher
premiums across the individual market,
leading to unnecessarily inflated
expenditures of federal funds on PTC
for taxpayers eligible for PTC in the
individual market. We estimate that
requiring State Exchanges to perform
Medicare PDM twice a year will result
in a reduction in PTC payments of
approximately $500 million over a 9year period (Table 9). We believe this
will not have any discernable impact on
premiums.
TABLE 9—MEDICARE PDM EFFECT ON PREMIUM TAX CREDIT OUTLAYS
Fiscal year
2021
2022
2023
2024
2025
2026
2027
2028
2029
Total
PTC ($ millions) .......
¥40
¥50
¥50
¥50
¥60
¥60
¥60
¥60
¥70
¥500
3. General Program Integrity Oversight
Requirements (§ 155.1200)
We do not anticipate the changes to
§ 155.1200(b)(2) will result in any
additional cost for State Exchanges
because the changes leverage an existing
reporting mechanism currently used by
all State Exchanges, the annual SMART,
for meeting eligibility and enrollment
reporting requirements. Additionally,
State Exchanges are already required to
annually contract with, and budget
accordingly for, an external
independent audit entity to perform an
annual financial and programmatic
audit as required under § 155.1200(c).
We believe the flexibility under the new
§ 155.1200(d)(2) to permit HHS to target
the scope of annual programmatic
audits to focus on the program areas that
are most pertinent to a State Exchange
model (including SBE–FPs), or have the
greatest program integrity implications,
would allow State Exchanges to utilize
the funds that they already allocate to
contracting with an external
independent audit entity in the most
cost-effective manner. We also believe
the flexibility we are providing to State
Exchanges in the sampling method
employed by their external independent
audit entities for testing the accuracy of
eligibility determinations in the annual
programmatic audits, along with the
flexibility for HHS to set the reporting
deadlines for State Exchanges under
§ 155.1200 on an annual basis, will also
allow State Exchanges to utilize the
funds that they have already allocated to
these activities in the most cost-effective
manner.
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4. Segregation of Funds for Abortion
Services (§ 156.280)
In § 156.280, we proposed to amend
billing and premium collection
requirements related to the separate
payment requirement for coverage of
abortions for which public funding is
prohibited pursuant to section 1303 of
the PPACA, as implemented at
§ 156.280. We originally proposed that
QHP issuers send an entirely separate
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monthly bill in a separate envelope to
the policy holder for only the portion of
premium attributable to coverage of
non-Hyde abortion services, and
instruct the policy holder to pay the
portion of their premium attributable to
coverage of non-Hyde abortion services
in a separate transaction from any
payment the policy holder makes for the
portion of their premium not
attributable to coverage of non-Hyde
abortion services. We are also finalizing
that QHP issuers must begin complying
with these billing changes on or before
the date that is 6 months after
publication of the final rule. If the date
that is 6 months after publication of the
final rule falls in the middle of the QHP
issuer’s billing cycle (in other words,
after the QHP issuer has already sent out
bills to policy holders for that month),
QHP issuers would be expected to begin
complying the next billing cycle
immediately following that date. We
will consider extending enforcement
discretion to an Exchange or QHP that
fails to timely comply with the separate
billing policy as required under this
final rule, if we find that the Exchange
or QHP issuers attempted in good faith
to timely meet the requirements. We
believe these changes to the proposed
policy will advance HHS’s goal of more
closely aligning the regulatory
requirements for QHP issuer billing of
premiums with the separate payment
requirement in section 1303 of the
PPACA, while also mitigating the
overall burden to affected issuers, states,
and enrollees.
HHS received many comments stating
that we greatly underestimated the
burden caused by these proposals.
Although we recognized in the
proposed rule that QHP issuers that
cover non-Hyde abortion services would
experience an increase in burden as a
result of finalizing these changes, we are
committed to mitigating issuer burden
where possible and, as such, are
finalizing changes to § 156.280(e)(2) that
we believe will result in a lower overall
regulatory burden than what issuers
would have incurred if the provisions
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were finalized as originally proposed.
Specifically, we are amending the
proposals at § 156.280(e)(2) to finalize in
a new paragraph at § 156.280(e)(2)(ii)(A)
that QHP issuers offering coverage of
non-Hyde abortion services through an
Exchange must send an entirely separate
monthly bill to the policy holder for the
portion of premium attributable to
coverage of non-Hyde abortion services,
but they will be permitted to send this
separate bill in the same mailing
(although not in the same email or
electronic communication) as the bill
for the portion of the policy holder’s
premium not attributable to coverage of
non-Hyde abortion services when
sending paper copies of bills to policy
holders. We are finalizing that, when
issuers sending or issuing bills
electronically, the issuer must send or
issue a separate bill for the portion of
the premium attributable to coverage of
non-Hyde abortion services in a separate
email or electronic communication from
the bill for the rest of the policy holder’s
premium. We are also finalizing at a
new paragraph § 156.280(e)(2)(ii)(B) the
requirement that, although the QHP
issuer would not be permitted to refuse
a combined payment on the basis that
the policy holder did not send two
separate payments as requested by the
QHP issuer, and to then terminate the
policy, subject to any applicable grace
period, for non-payment of premiums,
the QHP issuer must continue to
instruct the policy holder to pay the
portion of their premium attributable to
coverage of non-Hyde abortion services
in a separate transaction from any
payment the policy holder makes for the
portion of their premium not
attributable to coverage of non-Hyde
abortion services. We are also finalizing
that QHP issuers must begin complying
with these billing changes on or before
the date that is 6 months after
publication of the final rule. We believe
these changes to the proposed policy
will advance HHS’s goal of more closely
aligning the regulatory requirements for
QHP issuer billing of premiums with the
separate payment requirement in
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section 1303 of the PPACA, while also
mitigating the overall burden to affected
issuers, states, and enrollees.
However, we acknowledge that the
changes we are finalizing will still result
in additional burden for issuers. HHS
received many comments on the
original proposals arguing that the
burden imposed on issuers would
significantly exceed the estimated
burden included in the proposed rule.
Some commenters from the issuer
community conducted internal surveys,
providing detailed accounts to HHS of
the various ways in which they believe
HHS underestimated the burden and
detailing the various issuer and
Exchange activities that would be
necessary for implementation that HHS
failed to account for in estimating the
burden.
The following one-time changes are
issuer activities that commenters stated
HHS should account for in response to
the proposed policy, and that we expect
may still be necessary for issuers under
the amendments we are finalizing:
Planning, assessment, budgeting,
funding approval, and allocating funds
and resources for the actual technical
build (a process of 6 to 9 months);
changes to system architecture to allow
multiple billing statements per policy
holder; changes to enrollment systems
to identify enrollees subject to separate
billing and payment requirements;
automating the processes to send
separate invoices (mail or electronic
communication); adding electronic
communications and payment links (for
example, to issuer’s online payment
portal) for enrollees to pay separately for
the separate bill; changes to call center
training/scripting, response processes,
billing-related outreach, and interactive
voice response (IVR) technology;
changes to enrollee notifications related
to non-payment and the 3-month grace
period; updating Health Insurance
Casework System (HICS) and DOI
complaint processes, changes to
grievance/appeals processes; and testing
to ensure accuracy of separate billing
processes. Commenters also stated that
HHS should have accounted for the
development of new training materials.
Commenters explained that issuers
would need to develop additional
materials and training modules for
customer service representatives,
brokers, and agents, so that they could
address member questions and educate
them, particularly on the risk of losing
coverage should members fail to pay the
multiple bills.
We expect the following one-time
activities to add burden for issuers as
issuers must still make system changes
to accommodate policy holders paying
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separately, potential changes to binder
payment processing to collect two
separate payments to effectuate
enrollment; changes to processes to
intake payments, including automating
ability to match identity and match
multiple payments from a policy holder;
changes to pay-by-phone and online
payment portal to support dual invoices
and separate payments, while also
supporting combined payments for
enrollees who do not make separate
payments; changes to processes for
enrollment and payment reconciliation,
including 834 matching to effectuate
enrollments; and adding new processes
to address scenarios where an enrollee’s
payment is not processed because the
bank flags payment as potentially
fraudulent (expected to occur for
multiple payments in the same day or
$1 payments).
Commenters also noted several
activities issuers would have to
complete annually to effectively
implement these proposals would also
significantly raise the annual burden for
issuers. The following annual changes
are activities raised by commenters in
response to the proposed policy, but
that we expect will still be relevant
under the amendments we are
finalizing: Generating separate billing
statements (paper or electronic) and
additional member education materials
to explain separate billing;
administrative expenses in generating
twice as many bills; quality assurance to
ensure accuracy of separate billing
statements; additional customer service
resources, including additional staffing
and training, to address enrollee
questions, confusion, frustration, etc.;
increased resources for HICS/DOI case
resolution; system testing for billing
accuracy; identifying enrollees who did
not meet an issuer’s premium payment
threshold and enter a grace period for
non-payment of premium if they fail to
pay the second bill; managing the grace
period process for a higher volume of
enrollees who enter a non-payment
grace period (notices, termination,
appeals process, reinstatement), and
verification and reconciliation of the
two separate bills. Commenters also
stated that issuer costs should account
for additional staffing since issuers
would need to hire additional FTEs for
reconciliation and auditing of the
enrollment, billing, delinquency and
payment processes and to manage the
added complexity for the Exchange
back-end processes.
Because the policy as finalized will
require QHP issuers to instruct the
policy holder to pay the portion of their
premium attributable to coverage of
non-Hyde abortion services in a separate
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transaction from any payment the policy
holder makes for the portion of their
premium not attributable to coverage of
non-Hyde abortion services, we
anticipate that the burden associated
with the following annual activities
raised by commenters will still be
relevant: Budgeting for fees for
collecting and processing multiple
payments, such as bank processing fees;
processing and reconciling separate
payments (paper and electronic) sent by
enrollees; additional resources for
manual review where automated
processes are not able to reconcile
enrollments and payments; and
managing the grace period process for a
higher volume of enrollees who enter a
non-payment grace period (notices,
termination, appeals process,
reinstatement).
Comment: Many commenters
expressed concerns that these burdens
would fall hardest on those issuers in
states that require QHPs to cover nonHyde abortion services, and that if
issuers in these states find the
requirements overly burdensome they
would not have an option to eliminate
coverage of non-Hyde abortion services
and would thus have to absorb all
associated costs or pass those costs onto
enrollees. One commenter stated that
the proposals are also likely to have an
impact off-Exchange, as issuers offering
plans on the Exchange are also generally
required under guaranteed availability
to offer the plans off the Exchange, and
that because these administrative
processes are fixed investments across
all plans, it is likely that many plans
would simply change their systems to
apply to all plans even though the
proposals would only require QHPs to
comply.
Response: Setting aside the question
of whether state laws requiring coverage
of non-Hyde abortion services on the
Exchange are consistent with statutory
conditions on federal funding from the
Department to the States, we
acknowledge that some states have such
laws. The changes we are finalizing do
not preempt state law regarding
coverage of non-Hyde abortion services
or otherwise attempt to coerce states
into changing these laws. Although we
acknowledge that issuers in these states
would incur additional costs if they
choose to continue offering individual
market plans, HHS is refining the
method issuers use to comply with the
separate payment requirement, changes
that we believe are necessary to align
issuer billing with the separate payment
requirement in section 1303 of the
PPACA.
The burden and costs related to the
one-time technical changes have been
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previously estimated in section III
‘‘Collection of Information
Requirements’’ of this final rule. We
have also updated HHS’s estimates in
the Collection of Information
Requirements section to reflect some of
the increased annual burden to be
incurred by issuers. Additionally, based
on comments we received, we estimate
that issuers will incur ongoing annual
costs associated with activities such as
processing and reconciling separate
payments, support for enrollees who
enter grace period for non-payments,
customer service, outreach and
compliance. We estimate that each
issuer will incur additional annual costs
of approximately $1 million for these
activities. Assuming that issuers will
start sending separate bills in July 2020,
the total annual cost of for all 94 issuers
will be approximately $47 million for
the 6 months in 2020 and $94 million
for 2021 onwards. Since issuers will not
be able to take the costs incurred in
2020 into consideration when setting
rates for the 2020 plan year, it is
possible that some issuers will exit the
individual market or incur losses. We
acknowledge that QHP issuers may
choose to make similar billing changes
off-Exchange to maximize their
investment in making system changes to
comply with the separate billing policy
required for on-Exchange QHPs.
However, we note that the separate
billing policy we are finalizing only
requires QHP issuers to implement the
required changes for their on-Exchange
QHPs offering non-Hyde abortion
coverage.
Comment: Commenters also stated
that issuers would be required to
consider the added operational and
administrative costs when setting
actuarially sound rates, which would
lead to higher premiums for enrollees.
Commenters also expressed concern
that the additional administrative costs
would be so high that they would place
issuers at risk of not meeting the
required Medical Loss Ratio (MLR)
limits.
Response: We believe that the changes
we are finalizing to § 156.280(e)(2) will
result in a lower burden than the
provisions as originally proposed and as
such will lessen the degree to which
issuers have to raise enrollee premiums.
However, we acknowledge that issuers
will still incur significant burden and
costs as estimated above. Based on the
total premiums in the 21 states that have
QHP issuers offering non-Hyde abortion
coverage, we estimate that there will be
no premium impact in 2020 (as plan
year 2020 premium rates will already be
finalized), and an approximate premium
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impact of up to 1.0 percent in plan year
2021 and each year thereafter.
We also estimate that enrollment will
be reduced in the impacted states very
slightly as a result of the increase to
premiums. In plan year 2021 and each
year after, we estimate that APTC
amounts will be increased by up to $146
million when premium rates reflect the
projected additional administrative and
operational expense burdens. We do not
anticipate that the policies finalized at
§ 156.280(e)(2) will measurably increase
MLR rebates as we believe that QHP
issuers would either cease offering
coverage of non-Hyde abortion services
(unless state law requires QHP issuers to
offer coverage of non-Hyde abortion
services) in the plan year following the
effective date to avoid issuing additional
MLR rebates or would pay for the
increased administrative costs from a
different revenue source. Further, as
noted elsewhere in this rule, among the
previously acceptable methods for QHP
issuers to comply with the separate
payment requirement was sending a
separate monthly bill for these services.
Therefore, if any issuers already elected
this option, there should be no change
or impact on MLR rebates as a result of
the policies finalized at § 156.280(e)(2).
We believe these additional costs are
necessary to achieve better alignment of
issuer billing with the statute, and
strikes a better balance between burden
and benefit than if HHS were to require
issuers to send the separate bill in a
separate mailing.
Comment: Commenters also
expressed concerns with the burdens
these changes would impose on
Exchanges, which commenters noted
would need to make time consuming
and resource intensive changes to their
websites, enrollment systems, and
customer service and outreach efforts
(including the reallocation of marketing
funds that currently provide critical
enrollee outreach which drives
Exchange success) to align with the
separate billing and payment
requirements, which would be costly
and disrupt states’ Exchange efficiency.
Commenters noted a variety of changes
Exchanges would be required to make,
including communicating the new
separate billing and payment
requirement to enrollees during the
enrollment process; updating the online
payment portal (the ‘‘Pay Now’’ button
on HealthCare.gov) to collect the binder
payment through two separate
transactions; updating the enrollment
materials and notices that reference
binder payment requirements to
effectuate coverage, updating call center
scripting and customer service to
address questions related to separate
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billing and payment (since questions
related to payments should be referred
to the issuer, but that the call center
should be prepared to answer questions
about why enrollees are required to
make multiple payments); and update
complaint processes to address
complaints and questions related to
separate bills and payments.
One commenter estimated that the
proposed changes would cost $250,000
annually for its State Exchange
customer service center, $152,000
annually for customer outreach, and
$19,000 annually to resolve customer
complaints and appeals. Another
commenter estimated that the proposals
would cost its state Exchange an
additional $2.9 million annually in
customer service costs, $2.25–$2.75
million for IT system changes, and $3.6
million annually for outreach and
education, which reflects one-quarter of
that state Exchange’s annual advertising
and outreach budget. Commenters also
stated that, because the proposed
changes would lead to decreased QHP
enrollment, the proposed rule would
cause a corresponding loss of revenue to
the Exchange. Commenters also
highlighted how any lapse or loss of
enrollee coverage due to these proposals
would result in more individuals
turning to state-funded programs or
emergency care for their treatment
needs and that any loss of coverage
would decrease the size of the risk pool
and increase the cost of uncompensated
care, driving medical costs and health
insurance rates higher generally. For
example, one commenter estimated that
each one percentage point decline in the
uninsured rate is associated with a $167
million drop in uncompensated care.
Response: We acknowledge that these
provisions will impact Exchange
operations. Exchanges perform
important enrollee-facing functions that
could be integral to issuer and enrollee
compliance with the new requirements.
Ultimately, we believe the changes we
are finalizing will mitigate some of the
burden on Exchanges that would have
been incurred if we were finalizing as
proposed by decreasing potential
enrollee confusion and lessening
potential issuer burden.
We anticipate that State Exchanges
will incur additional one-time costs
associated with technical changes such
as updating online payment portals to
accept separate payments and updating
enrollment materials and notices that
reference binder payments. In addition,
State Exchanges will incur ongoing
annual costs associated with increased
customer service, outreach, and
compliance. Based on comments, we
estimate that each State Exchange will
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incur, on average, one-time costs of
$750,000 in 2020, and ongoing annual
costs of approximately $200,000 for the
6 months in 2020 and $400,000 in 2021.
We anticipate that ongoing annual costs
will decrease over time as consumers
become used to receiving and paying
separate bills. We estimate that ongoing
annual costs will be approximately
$300,000 for each State Exchange in
2022 and $200,00 in 2023 and after. The
total one-time cost for all 12 State
Exchanges affected by these
requirements will be approximately $9
million in 2020. Total ongoing costs for
all 12 State Exchanges is estimated to be
approximately $2.4 million in 2020,
$4.8 million in 2021, $3.6 million in
2022 and $2.4 million 2023 onwards. In
addition, we anticipate that the 3 State
Exchanges that perform premium billing
and payment processing will incur
annual ongoing costs similar to QHP
issuers that offer coverage of non-Hyde
abortion services, as discussed above.
We estimate that each State Exchange
that performs premium billing and
payment processing will incur
additional annual costs of
approximately $1 million. The total
annual cost for all 3 State Exchanges
performing premium billing and
payment processing will be
approximately $1.5 million in 2020 and
$3 million for 2021 onwards.
Comment: One commenter also stated
that the federal government will incur
additional expenses due to additional
personnel time and other resources
needed to ensure that QHPs on the FFEs
comply with the proposed rule’s
requirements and to ensure compliance
if a State Exchange is unable to do so,
costs that will be passed on to
consumers in the form of taxes.
Response: We acknowledge that the
FFEs will experience added burden as a
result of the final policy. However,
because federal government compliance
efforts will be covered primarily by
FFEs user fees, we disagree that the
added costs on the FFEs will be passed
on to consumers in the form of taxes
(though any increase in user fees may be
passed on to enrollees in the form of
increased premiums). We do, however,
anticipate that the FFEs will incur
additional costs due to one-time
technical changes and increased call
volumes and additional customer
services efforts. We do not anticipate
that the FFEs will need to make any
operational changes to comply with
these final policies. We estimate that the
FFEs will incur a one-time cost of
$750,000 in 2020 and ongoing annual
cost of approximately $400,000 in 2020
and $800,000 in 2021 to implement
these provisions. As consumers become
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used to receiving and paying separate
bills, the ongoing costs should decrease.
We estimate that ongoing costs will be
approximately $600,000 in 2022 and
$400,000 in 2023 onwards.
Comment: Commenters stated that
Navigators and in-person assisters will
also need to invest time and training
resources necessary to ensure that they
can provide support to enrollees
(especially populations who would be
disproportionately impacted by these
proposals, including the most
financially vulnerable and those with
limited English proficiency) as they
become acquainted with additional
steps needed to maintain coverage as a
result of the proposed changes.
Commenters also noted that any level of
QHP disenrollment resulting from the
proposed changes will result in
decreased broker revenue and potential
loss of broker participation in the
market.
Response: Although there also may be
an impact on Navigators, brokers, and
other assisters, we believe these entities
receive training and generally keep
abreast of policy changes as part of their
normal duties. As such, we believe
these requirements will not amount to
any additional burden above that
already experienced by Navigators,
brokers, and other assisters as a result of
providing support to enrollees who are
navigating these new billing
requirements.
Comment: Many commenters also
stated that enrollees would incur
ancillary costs that would further drive
up administrative costs and burden for
enrollees, including postage costs,
money order fees, or other banking fees
for the second bill and cautioned that
these costs will be felt most strongly by
low income enrollees.
Many commenters stated that these
proposals would transfer the costs and
burdens of accessing non-Hyde abortion
services to enrollees who must seek
coverage for abortion elsewhere or pay
out-of-pocket. Commenters estimated
that non-Hyde abortions can cost
between $400 and $1900. Commenters
noted that low-income women who lack
insurance coverage for abortion often
struggle to pay for the procedure out-ofpocket, causing financial hardship that
can drive families further into poverty.
Commenters also expressed concern
that when legal abortion is inaccessible,
people who seek to end their pregnancy
turn to unsafe and illegal methods,
risking arrest, serious injury, or even
death. Commenters also suggested that
the changes would have a
disproportionate effect on enrollee
groups who already face barriers to care
at higher rates such as low-income
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individuals, young people, people of
color, individuals with LEP, lesbian,
gay, bisexual, transgender and queer
enrollees, the Latinx community, people
with disabilities, rural residents,
individuals without access to the
internet, and American Indian/Alaskan
Native populations.
Response: We acknowledge that as
originally proposed, the combination of
issuer burden and enrollee confusion
could have potentially led to a
reduction in the availability of coverage
of non-Hyde abortion services in
insurance (either by issuers choosing to
drop this coverage to avoid the
additional costs or by enrollees having
their coverage terminated for failure to
pay the second bill), thereby increasing
out-of-pocket costs for those seeking
those services.
We understand that, even with the
changes we are finalizing, the increased
burden associated with issuers
complying with the separate billing
policy, could influence whether a QHP
issuer continues offering coverage of
non-Hyde abortion services in states
that do not require it. However, we
believe allowing the separate bill to be
included in the same mailing (although
not in the same email or other electronic
communication), and allowing issuers
to accept combined payments when
policy holders fail to pay separately for
the separate bill will mitigate some of
the potential issuer and Exchange
burden and consumer confusion
associated with the proposed policy,
thereby decreasing the likelihood that
issuers will drop coverage of non-Hyde
abortion services solely to avoid the
burden associated with these changes or
solely to avoid having to terminate
enrollees coverage for non-payment of
miniscule amounts.
We are also finalizing an enforcement
posture that will further mitigate the
risk of potential coverage loss. We
intend to propose further rulemaking to
change our regulations to mitigate this
risk. Until we can effectuate such
changes, we will exercise enforcement
discretion as an interim step.
Specifically, HHS will not take an
enforcement action against a QHP issuer
that adopts and implements a policy,
beginning on or after the effective date
for the separate billing policies, applied
uniformly to all its QHP enrollees,
under which an issuer does not place an
enrollee into a grace period and does
not terminate QHP coverage based
solely on the policy holder’s failure to
pay the separate payment for coverage
of non-Hyde abortion services. We note
that the QHP issuer would still be
required to collect the premium for the
non-Hyde abortion coverage. We also
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will not take enforcement action against
QHP issuers that, beginning upon the
effective date of the final rule, modify
the benefits of a plan either at the time
of enrollment or during a plan year to
effectively allow enrollees to opt out of
coverage of non-Hyde abortion services
by not paying the separate bill for such
services, resulting in the enrollee having
a modified plan that does not cover nonHyde abortion services and that no
longer obligates the enrollee to pay the
required premium for such services.
QHP issuers taking this approach
should implement appropriate measures
to distinguish between a policy holder’s
inadvertent non-payment of the separate
bill for non-Hyde abortion services and
a policy holder’s intentional
nonpayment of the separate bill.
Although both of these approaches
would be entirely optional for a QHP
issuer, we believe that offering this
enforcement discretion strikes an
appropriate balance between honoring
section 1303’s requirement for issuers to
calculate the actuarial cost of non-Hyde
abortion coverage and bill and collect
premiums for such coverage in separate
transactions, protecting enrollees
against inadvertent losses of coverage,
and ensuring all enrollees have access to
coverage that meets their needs and that
does not result in their supporting
coverage for non-Hyde abortion services
to which they object. We acknowledge
that QHP issuers that do not utilize this
available enforcement discretion may
subsequently experience a higher
number of enrollee terminations as a
result of delinquent premium payments,
which could influence whether a QHP
issuer continues offering coverage of
non-Hyde abortion services in states
that do not require it.
Because enrollees will be instructed
to make separate payments, those that
follow the instructions may need to pay
for additional postage, money order
fees, credit card fees, or other banking
fees for the second bill depending on
how the QHP issuer implements this
policy. For example, policy holders who
have funds automatically withdrawn
from their bank accounts may need to
arrange for a second withdrawal and
may encounter additional fees.
Additionally, because QHP issuers often
incur fees for credit card transactions
and these fees would double when a
policy holder is paying in two separate
transactions, QHP issuers may decide to
transfer the cost of those credit card
transaction fees onto policy holders
choosing to pay via credit card rather
than covering the cost of those
transactions themselves. Policy holders
that pay their premium bills via money
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order may need to pay an additional fee
for the additional money order they
submit for payment of the separate bill.
Comment: Many commenters stated
that the proposals would cause
considerable and unnecessary confusion
and frustration for enrollees that may
jeopardize their health insurance
coverage by making it more difficult for
policy holders to pay their premium
bills, which could potentially result in
their coverage being terminated for
unintentional non-payment.
Commenters also expressed concerns
that despite consumer education and
outreach, enrollees would likely not
understand this change in billing.
Many commenters also stated that we
underestimated the number of enrollees
who would be impacted by these
proposals. One commenter stated that
there are 2 million enrollees alone in
states where non-Hyde abortion
coverage is required in all plans.
Another commenter conducted an
internal member survey, to which ten
issuers responded, indicating that 2.4
million enrollees would be impacted
across these ten issuers. This
commenter noted that these ten issuers
do not represent all health insurance
issuers who would be required to
comply with the proposals and that,
thus, the number of affected enrollees
would be greater than 2.4 million.
Another commenter stated that the rule
would impact 3 million enrollees. As
such, commenters stated that we
underestimated how much it would cost
enrollees annually to comply with the
proposals. Commenters also objected
that we excluded the cost of enrollees
learning in our estimate.
Response: We based our initial
estimates on 2018 QHP Certification
data, and we acknowledge that the
estimates may not have captured the
exact number of enrollees that may be
impacted by this final rule. In response
to comments, we have reviewed our
methodology and have updated our
enrollee estimates accordingly. We also
acknowledge that enrollees may initially
be confused by receiving a separate bill
for the portion of their premium
attributable to coverage of non-Hyde
abortion services in the same envelope
as the bill for the rest of their premium.
We believe that the provisions as
finalized will minimize enrollee
confusion surrounding the second bill
for those receiving paper bills and will
help to ensure that policy holders pay
the entire premium due including the
portion attributable to non-Hyde
abortion services. There is still potential
for confusion and loss of coverage for
enrollees who receive electronic bills,
due to failure to pay the second bill sent
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through a separate electronic
communication, but the mechanisms by
which electronic bills are paid may
mitigate or lessen the potential for
confusion over separate bills. We
believe enrollee outreach and education
will assist in further mitigating this risk.
Based on 2019 QHP certification data
for the FFEs and SBE–FPs, we now
estimate that there are approximately
442,400 enrollees in QHPs covering
non-Hyde abortion services. In the 11
State Exchanges that operated their own
technology platforms and had issuers
that offered coverage of non-Hyde
abortion services in 2019, we estimate
that there are approximately 2,597,700
million enrollees enrolled in QHPs
offering coverage for non-Hyde abortion.
As noted previously in section III
‘‘Collection of Information
Requirements’’ of this final rule, we
estimate that there are approximately
3.04 million enrollees impacted by these
provisions. Assuming 1.5 enrollees per
policy, issuers will be required to send
a separate bill to approximately 2
million policy holders. We believe that
finalizing the policies to allow for the
separate bill to be sent in the same
mailing with the bill for the rest of the
policy holder’s premium will minimize
enrollee confusion and burden.
We acknowledge that some policy
holders will fail to pay in a separate
transaction for both bills, and
acknowledge that the burden may be
moderately higher for those policy
holders who follow instructions to pay
in separate transactions. We also
acknowledge that enrollees may
experience burden in receiving a
separate bill to which they are not yet
accustomed in the same mailing as for
the other portions of their premium or
in a separate electronic communication.
As such, using the May 2018 National
Occupational Employment and Wage
Estimates United States, Department of
Labor’s Bureau of Labor Statistics (BLS)
(https://www.bls.gov/oes/current/oes_
stru.htm), listed national mean hourly
wage for the 25th percentile,28 we
estimate that for the 2020 plan year each
policy holder will incur a burden of
approximately 1 hour (at a cost of
$12.37 per hour) to read and understand
the separate bills received the first time
and seek help from customer service if
necessary, and approximately 5 minutes
for each of the subsequent 5 months,
resulting in a total estimated annual
burden of 1.42 hours with an associated
annual cost of approximately $18. For
28 The 25th percentile mean hourly wage most
closely resembles the group of enrollees likely to be
affected by this change as most enrollees enrolled
in QHPs on the Exchange are between 100 percent
and 400 percent of the federal poverty level.
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all policy holders we estimate that the
initial 2020 burden will be
approximately 2.9 million hours with
and associated annual cost of $35.5
million. For subsequent years we
estimate that enrollees will require
approximately 5 minutes per month to
read and understand their statements,
resulting in an estimated annual burden
of 1 hour with an associated annual cost
of approximately $12. For all policy
holders, we estimate that the annual
enrollee burden will be approximately 2
million hours with an associated annual
cost of approximately $25.1 million.
We also note that, although policy
holders may experience burden related
to reading and understanding the
separate bills, there are non-quantifiable
benefits to policy holders in QHPs
covering non-Hyde abortion who hold
conscience objections to such coverage
or policy holders who seek a better
71707
understanding of what their health care
dollars are purchasing.
HHS continues to believe that,
although these changes will increase
enrollee burden, this burden is
reasonable and justified because it will
achieve better alignment of the
regulatory requirements for QHP issuer
billing of premiums with the separate
payment collection requirement in
section 1303 of the PPACA.
TABLE 10—SUMMARY OF COSTS RELATED TO SEPARATE BILLING AND PAYMENT REQUIREMENTS
2020
2022
2023
2024
Issuers ..................................................................................
States ...................................................................................
State Exchanges with payment portals ...............................
Consumers ...........................................................................
Federal Government ............................................................
$482,616,844
11,400,000
15,385,201
35,517,268
1,150,000
$195,252,923
4,800,000
6,197,323
25,071,013
800,000
$195,228,601
3,600,000
6,197,323
25,071,013
600,000
$195,216,441
2,400,000
6,197,323
25,071,013
400,000
$195,216,441
2,400,000
6,197,323
25,071,013
400,000
Total ..............................................................................
546,069,313
232,121,259
230,696,938
229,284,777
229,284,777
D. Regulatory Review Costs
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2021
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
final rule, we estimate the cost
associated with regulatory review. Due
to the uncertainty involved with
accurately quantifying the number of
entities that will review the rule, we
assume that the total number of unique
reviewers on similar Exchange-related
CMS rules will be the number of
reviewers of this final rule. We
acknowledge this assumption may
understate or overstate the costs of
reviewing this rule. It is possible that
not all reviewers will review the rule in
detail. For these reasons, we consider
the number of past reviewers on similar
CMS rules will be a fair estimate of the
number of reviewers of this rule.
We recognize that different types of
entities may be affected by only certain
provisions of this final rule, and
therefore, for the purposes of our
estimate, we assume that each reviewer
reads approximately 50 percent of the
rule.
Using the wage information from the
BLS for medical and health service
managers (Code 11–9111), we estimate
that the cost of reviewing this rule is
$109.36 per hour, including overhead
and fringe benefits.29 We estimate that
it would take approximately 1 hour for
each reviewer to review the relevant
portions of this final rule. We received
75,439 comments, including 70,396
comments that were substantially
similar to one of 13 different form
letters, resulting in 5,043 unique
29 https://www.bls.gov/oes/current/oes_nat.htm.
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comments on the proposed rule. We
further assume that for the form letters
received, only the staff at the
organization that arranged for those
letters will review the final rule.
Therefore, we estimate that there will be
5,056 individuals that review the final
rule resulting in an estimated total cost
of review of approximately $552,924
($109.36 × 5,056 reviewers).
E. Regulatory Alternatives Considered
In developing the policies contained
in this final rule, we considered
numerous alternatives. Below we
discuss the key regulatory alternatives
that we considered.
For the eligibility determination
during a benefit year, we considered not
defining ‘‘periodically’’ for the
frequency of Medicare, Medicaid/CHIP,
or BHP, if applicable, PDM as twice a
year in lieu of further outreach,
education, and coordination with State
Exchanges to identify and notice
consumers who may also be enrolled in
other qualifying coverage with APTC/
CSRs. However, we believe it is critical
that consumers receive timely
notification of their potential dual
enrollment in other qualifying coverage
to ensure that consumers are accurately
determined eligible for APTC and
income-based CSRs, and to ensure that
consumers are not enrolling in
unnecessary or duplicative coverage. As
previously discussed in the preamble of
the proposed rule, such unnecessary or
duplicative coverage, coupled with
typically higher utilization generally
results in higher premiums across the
individual market leading to
unnecessary expenditures of federal
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funds on PTC for taxpayers eligible for
PTC in the individual market.
In finalizing the proposed changes to
the general program integrity and
oversight requirements in § 155.1200,
we considered not taking any action.
However, because the existing
requirements under § 155.1200(b) did
not accurately reflect the current
structure of CMS’s oversight approach
and reporting requirements for State
Exchanges, not taking any action could
have prevented HHS from being able to
accurately describe our reporting
requirements and strengthen our
oversight processes for State Exchanges.
In particular, we needed to clarify that
the eligibility and enrollment reports
required under § 155.1200(b)(2) were
part of the annual compliance reports
that State Exchanges were submitting to
us, and did not require submission of a
separate report. Thus, the amendments
to § 155.1200(b) do not reflect an
expansion of State Exchange reporting
obligations but instead were intended to
capture the existing annual compliance
reports (such as the SMART) that
encompass eligibility and enrollment
reporting, as well as compliance across
other Exchange program reqirements
under 45 CFR part 155, that State
Exchanges currently submit to HHS.
Also, because the existing external
programmatic audit requirements under
§ 155.1200(d) did not specify how the
audits needed to verify the accuracy of
eligibility determinations made by State
Exchanges, not taking any action would
have prevented CMS from strengthening
oversight processes by identifying a
consistent procedure for these State
Exchanges and their auditors to
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implement in order to ensure accurate
eligibility determinations.
In finalizing the proposed changes to
§ 155.1200(c) and (d), we also
considered the alternative of narrowing
the focus of the external programmatic
audits to only 45 CFR part 155 subparts
D and E, which cover Exchange
eligibility and enrollment requirements.
This approach would have focused the
State Exchange’s auditing resources to
the areas with highest program integrity
impact. However, this approach would
essentially exclude SBE–FPs from the
external programmatic audit
requirements altogether because SBE–
FPs utilize the federal platform to carry
out their eligibility and enrollment
functions. Additionally, this approach
would have limited our oversight in
other program integrity areas that are
important for all State Exchanges, such
as consumer outreach and assistance.
Because the external audit requirements
under § 155.1200 is one of the only
oversight tools we have for State
Exchanges, we did not want to limit the
scope of the Exchange functions that the
external programmatic audits must
cover. Instead, the approach finalized in
this rulemaking allows us to specify the
Exchange functions that are applicable
to each State Exchange model through
annual technical operational guidance.
As State Exchanges continue to evolve
and mature, this approach also provides
HHS with the flexibility to focus the
audits on emerging issues that raise
program integrity concerns, while
minimizing burden on State Exchanges
to the extent possible.
In finalizing the requirement that
issuers separately bill for the portion of
the policy holder’s premium attributable
to the cost of including coverage of nonHyde abortion services in the QHP, and
permit policy holders to pay for these
amounts in a separate transaction if they
so choose, as described at
§ 156.280(e)(2), we considered
maintaining the current methods of
billing and collection without
modification. We acknowledge that
maintaining the current policy would
promote stability for issuers and
conserve administrative and operational
resources by allowing QHP issuers to
maintain their current process for
billing for and collecting these separate
payments. However, by requiring QHP
issuers to separately bill for the portion
of the policy holder’s premium
attributable to coverage of non-Hyde
abortion services, we believe we are
strengthening alignment of issuer billing
with the statutory requirements for
collecting a separate payment for these
services required under section 1303 of
the PPACA.
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We also considered finalizing the
changes as originally proposed.
However, we believe the changes we are
finalizing will help to maximize the net
benefit of achieving better statutory
alignment while also mitigating burden
where possible. For example, we
considered finalizing the proposed
requirement that issuers would be
required to send the separate bill in a
separate mailing or electronic
communication. This would have
resulted in additional mailing costs of
approximately $11 million in 2021 for
all issuers. However, we believe
allowing issuers to send the separate bill
in the same mailing (although not in the
same electronic communication) and
allowing issuers to accept combined
payments if a policy holder fails to pay
the separate bill in a separate
transaction will assist in mitigating the
burden associated with this policy
change by preventing unnecessary
postage and mailing related costs and
will mitigate issuer and Exchange
burden and enrollee confusion generally
associated with the proposed policy. We
also believe the separate bill could assist
in clarifying for enrollees that their plan
covers non-Hyde abortion services and
at what cost, increasing overall QHP
transparency. Furthermore, we believe
these changes will still better align
issuer billing with section 1303 of the
PPACA.
We also considered finalizing the rule
without a requirement that issuers
instruct policy holders to pay in a
separate transaction. We understand
that requiring issuers make this
instruction and make reasonable efforts
to collect the payment separately carries
up-front and annual costs for issuers.
However, we believe that instructing
policy holders to pay the separate bill in
a separate transaction is important to
achieving better alignment of the
regulatory requirements for QHP issuer
billing of enrollee premiums with the
separate payment requirement in
section 1303 of the PPACA.
In addition, we considered requiring
issuers to comply with the separate
billing requirements within 3 months
after the publication date of this final
rule. We rejected this option because we
estimated that one-time costs would
have increased by 100 percent due to
the shortened implementation period
and estimated that total costs for issuers,
State Exchanges, FFEs, and consumers
would have been approximately $740
million in 2020. We opted to finalize a
later effective date to avoid such a
burden increase.
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F. Regulatory Flexibility Act
The RFA requires agencies to prepare
an initial RFA to describe the impact of
the final rule on small entities, unless
the head of the agency can certify that
the rule will 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-forprofit 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.’’ HHS uses a change in revenue
of more than 3 to 5 percent as its
measure of significant economic impact
on a substantial number of small
entities.
In this final rule, we set standards for
certain issuers related to the collection
of a separate payment for the premium
portion attributable to coverage for
certain abortion services. Because we
believe that insurance firms offering
comprehensive health insurance
policies generally exceed the size
thresholds for ‘‘small entities’’
established by the SBA, we do not
believe that an initial regulatory
flexibility analysis is required for such
firms.
For the purposes of the RFA, we
expect health insurance issuers to be
affected by this final rule. We believe
that health insurance issuers would be
classified under the North American
Industry Classification System code
524114 (Direct Health and Medical
Insurance Carriers). According to SBA
size standards, entities with average
annual receipts of $38.5 million or less
would be considered small entities for
these North American Industry
Classification System codes. Issuers
could possibly be classified in 621491
(HMO Medical Centers) and, if this is
the case, the SBA size standard would
be $32.5 million or less.30 We believe
that few, if any, insurance companies
underwriting comprehensive health
insurance policies (in contrast, for
example, to travel insurance policies or
dental discount policies) fall below
these size thresholds.
Therefore, we are not preparing an
analysis for the RFA because we have
determined, and the Secretary certifies,
that this final rule will not have a
significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the
Social Security Act requires us to
30 https://www.sba.gov/document/support-tablesize-standards.
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prepare a regulatory impact analysis if
a rule may have a significant impact on
the operations of a substantial number
of small rural hospitals. This analysis
must conform to the provisions of
section 604 of the RFA. For purposes of
section 1102(b) of the Act, we define a
small rural hospital as a hospital that is
located outside of a metropolitan
statistical area and has fewer than 100
beds. This final rule will not have a
significant impact on small rural
hospitals. Therefore, the Secretary has
determined that this final rule will not
have a significant impact on the
operations of a substantial number of
small rural hospitals.
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G. 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 any rule that
includes any federal mandate that may
result in expenditures in any 1 year by
a state, local, or Tribal government, in
the aggregate, or by the private sector, of
$100 million in 1995 dollars, updated
annually for inflation. In 2019, that
threshold is approximately $154
million. We anticipate that costs
incurred by state, local, or tribal
governments and the private sector will
cross this threshold. States impacted by
the separate billing and payment
requirements at § 156.280 may incur
costs of approximately $26.8 million in
2020, 11 million in 2021, $9.8 million
in 2022 and $8.6 million in 2023 and
each year after. In addition, states
impacted by PDM requirements will
incur costs of up to $6.9 million in
2020. Issuers impacted by the separate
billing and payment requirements will
incur costs of approximately $482.6
million in 2020 and approximately
$195.3 million each year after.
H. 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
requirement costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
This final rule does not impose
substantial direct costs on state and
local governments or preempt state law.
However, we believe the rule has
Federalism implications.
In HHS’s view, this regulation has
Federalism implications due to our
requirements that Exchanges conduct
Medicare, Medicaid/CHIP, and, if
applicable, BHP PDM at least twice a
year, beginning with the 2021 calendar
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year. As discussed earlier in this final
rule, we received three comments that
were opposed to the requirement to
conduct Medicare, Medicaid/CHIP and,
if applicable, BHP PDM at least twice
yearly, cautioning us that defining the
exact precise frequency and nature of
PDM encroached upon the sovereignty
of the State Exchanges. However, HHS
believes that the Federalism
implications are substantially mitigated
because the requirement sets only a
minimum frequency with which
Exchanges must conduct Medicare,
Medicaid/CHIP, and, BHP, if applicable,
PDM, which is already required to be
conducted periodically; State Exchanges
continue to have the flexibility to
conduct PDM with greater frequency
and the best way they see fit to
implement the requirements set forth in
§ 155.330(d). Additionally, as discussed
earlier in this final rule, ensuring
consumers are enrolled in the
appropriate coverage remains a top
priority for HHS and ensuring that
APTC is paid appropriately is a
requirement set forth in
§ 155.330(d)(1)(ii) to mitigate the risk of
federal dollars incorrectly leaving the
federal Treasury in the form of APTC
during the year. HHS believes that PDM
plays a vital role in ensuring the health
of all Exchanges, ensuring all consumers
are enrolled in the appropriate coverage
and in the case of Medicare enrollment,
signing up at the appropriate time to
avoid late enrollment penalties, and
finally reduces the risk that consumers
have to pay back all or some of APTC
paid on their behalf during months of
overlapping coverage when they file
their federal income taxes.
Additionally, the changes to State
Exchange oversight and reporting
requirements in § 155.1200 have
Federalism implications since those
rules require State Exchanges to submit
certain reports to HHS and require them
to enter into contracts with an external
independent audit entity to perform
audits, and incur the associated costs.
However, HHS believes that the
Federalism implications are
substantially mitigated because the
changes do not impose new
requirements on State Exchanges, but
rather add specificity and flexibility
with respect to the existing
requirements. Therefore, HHS believes
it has balanced states’ interests in
operating State Exchanges with the need
to ensure proper federal oversight. By
doing so, it is HHS’s view that we have
complied with the requirements of
Executive Order 13132.
As discussed earlier in this final rule,
commenters stated that the separate
billing and payment proposals at
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71709
§ 156.280 raise Federalism concerns
under the Tenth Amendment because
the proposals are designed to penalize
states that have laws requiring QHPs to
provide coverage of non-Hyde abortion
services by requiring states—through
their respective Exchanges and DOIs—to
adopt new oversight responsibilities,
and make systemic changes to fit the
alterations the proposals require. As
explained previously, we disagree that
this policy raises Federalism concerns.
Setting aside the question of whether
state laws requiring coverage of nonHyde abortion services on the Exchange
are consistent with statutory conditions
on federal funding from the Department
to the States, we acknowledge that some
states have such laws. However, the
changes we are finalizing do not
preempt state law regarding coverage of
non-Hyde abortion services or otherwise
attempt to coerce states into changing
these laws. HHS is simply refining the
method with which issuers use to
comply with the separate payment
requirement. We refer readers to section
II.B of this final rule regarding the
discussion of § 156.280 for further
information.
I. Reducing Regulation and Controlling
Regulatory Costs
Executive Order 13771, entitled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
January 30, 2017 and requires that the
costs associated with significant new
regulations ‘‘shall, to the extent
permitted by law, be offset by the
elimination of existing costs associated
with at least two prior regulations.’’
This final rule is expected to be an
Executive Order 13771 regulatory
action. We estimate that this rule
generates $182.98 million in annualized
costs, discounted at 7 percent relative to
year 2016, over a perpetual time
horizon. Details on the estimated costs
of this rule can be found in the
preceding analyses.31
J. Congressional Review Act
This final rule is subject to the
Congressional Review Act provisions of
the Small Business Regulatory
Enforcement Fairness Act of 1996 (5
U.S.C. 801, et seq.), which specifies that
before a rule can take effect, the federal
agency promulgating the rule shall
submit to each House of the Congress
and to the Comptroller General a report
31 We estimate costs of approximately $553.6
million in 2020, approximately $232.1 million in
2021, approximately $230.7 million in 2022, and
annual costs of approximately $229.3 million
thereafter. Thus the annualized value of costs, as of
2016 and calculated over a perpetual time horizon
with a 7 percent discount rate, is $182.98 million.
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containing a copy of the rule along with
other specified information, and has
been transmitted to the Congress and
the Comptroller General for review.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
List of Subjects
45 CFR Part 155
Administrative practice and
procedure, Advertising, Brokers,
Conflict of interests, Consumer
protection, Grants administration, Grant
programs-health, Health care, Health
insurance, Health maintenance
organizations (HMO), Health records,
Hospitals, Indians, Individuals with
disabilities, Intergovernmental relations,
Loan programs-health, Medicaid,
Organization and functions
(Government agencies), Public
assistance programs, Reporting and
recordkeeping requirements, Technical
assistance, Women and youth.
45 CFR Part 156
Administrative practice and
procedure, Advertising, Advisory
committees, Brokers, Conflict of
interests, 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, Medicaid,
Organization and functions
(Government agencies), Public
assistance programs, Reporting and
recordkeeping requirements, State and
local governments, Sunshine Act,
Technical assistance, Women, Youth.
For the reasons set forth in the
preamble, the Departement of Health
and Human Servcies amends 45 CFR
parts 155 and 156 as set forth below:
PART 155—EXCHANGE
ESTABLISHMENT STANDARDS AND
OTHER RELATED STANDARDS
UNDER THE AFFORDABLE CARE ACT
1. The authority citation for part 155
continues to read as follows:
■
Authority: 42 U.S.C. 18021–18024, 18031–
18033, 18041–18042, 18051, 18054, 18071,
and 18081–18083.
2. Section 155.200 is amended by
revising paragraph (c) to read as follows:
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■
§ 155.200
Functions of an Exchange.
*
*
*
*
*
(c) Oversight and financial integrity.
The Exchange must perform required
functions and cooperate with activities
related to oversight and financial
integrity requirements in accordance
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with section 1313 of the Affordable Care
Act and as required under this part,
including overseeing its Exchange
programs and non-Exchange entities as
defined in § 155.260(b)(1).
*
*
*
*
*
■ 3. Section 155.330 is amended by
revising paragraph (d)(1) introductory
text and adding paragraph (d)(3) to read
as follows:
§ 155.330 Eligibility redetermination during
a benefit year.
*
*
*
*
*
(d) * * *
(1) General requirement. Subject to
paragraph (d)(3) of this section, the
Exchange must periodically examine
available data sources described in
§§ 155.315(b)(1) and 155.320(b) to
identify the following changes:
*
*
*
*
*
(3) Definition of periodically.
Beginning with the 2021 calendar year,
the Exchange must perform the periodic
examination of data sources described
in paragraph (d)(1)(ii) of this section at
least twice in a calendar year. State
Exchanges that have implemented a
fully integrated eligibility system with
their respective State Medicaid
programs, that have a single eligibility
rules engine that uses MAGI to
determine eligibility for advance
payments of the premium tax credit,
cost-sharing reductions, Medicaid,
CHIP, and the BHP, if a BHP is
operating in the service area of the
Exchange, will be deemed in
compliance with the Medicaid/CHIP
PDM requirements and, if applicable,
BHP PDM requirements, in paragraphs
(d)(1)(ii) and (d)(3) of this section.
*
*
*
*
*
■ 4. Section 155.1200 is amended by—
■ a. Revising paragraphs (b)
introductory text, (b)(1) and (2), and (c)
introductory text;
■ b. Revising paragraphs (d)(2) and (3);
■ c. Redesignating (d)(4) as paragraph
(d)(5);
■ d. Adding a new paragraph (d)(4); and
■ e. Revising newly redesignated
paragraph (d)(5).
The revisions and addition read as
follows:
§ 155.1200 General program integrity and
oversight requirements.
*
*
*
*
*
(b) Reporting. The State Exchange
must, at least annually, provide to HHS,
in a manner specified by HHS and by
applicable deadlines specified by HHS,
the following data and information:
(1) A financial statement presented in
accordance with GAAP,
(2) Information showing compliance
with Exchange requirements under this
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part 155 through submission of annual
reports,
*
*
*
*
*
(c) External audits. The State
Exchange must engage an independent
qualified auditing entity which follows
generally accepted government auditing
standards (GAGAS) to perform an
annual independent external financial
and programmatic audit and must make
such information available to HHS for
review. The State Exchange must:
*
*
*
*
*
(d) * * *
(2) Compliance with subparts D and E
of this part 155, or other requirements
under this part 155 as specified by HHS;
(3) Processes and procedures designed
to prevent improper eligibility
determinations and enrollment
transactions, as applicable;
(4) Compliance with eligibility and
enrollment standards through sampling,
testing, or other equivalent auditing
procedures that demonstrate the
accuracy of eligibility determinations
and enrollment transactions; and
(5) Identification of errors that have
resulted in incorrect eligibility
determinations, as applicable.
PART 156—HEALTH INSURANCE
ISSUER STANDARDS UNDER THE
AFFORDABLE CARE ACT, INCLUDING
STANDARDS RELATED TO
EXCHANGES
5. The authority citation for part 156
is revised to read as follows:
■
Authority: 42 U.S.C. 18021–18024, 18031–
18032, 18041–18042, 18044, 18054, 18061,
18063, 18071, 18082, 26 U.S.C. 36B, and 31
U.S.C. 9701.
6. Section 156.280 is amended by—
a. Revising the section heading;
b. Redesignating paragraph (e)(2)(ii) as
paragraph (e)(2)(iii);
■ c. Adding a new paragraph (e)(2)(ii);
and
■ d. Revising newly redesignated
paragraph (e)(2)(iii).
The addition and revision read as
follows:
■
■
■
§ 156.280 Separate billing and segregation
of funds for abortion services.
*
*
*
*
*
(e) * * *
(2) * * *
(ii) Beginning on or before the first
billing cycle following June 27, 2019, to
satisfy the obligation in paragraph
(e)(2)(i) of this section—
(A) Send to each policy holder of a
QHP monthly bills for each of the
amounts specified in paragraphs
(e)(2)(i)(A) and (B) of this section, either
by sending separate paper bills which
may be in the same envelope or mailing,
E:\FR\FM\27DER3.SGM
27DER3
Federal Register / Vol. 84, No. 248 / Friday, December 27, 2019 / Rules and Regulations
jbell on DSKJLSW7X2PROD with RULES3
or by sending separate bills
electronically, which must be in
separate emails or electronic
communications; and
(B) Instruct the policy holder to pay
each of the amounts specified in
paragraphs (e)(2)(i)(A) and (B) of this
section through separate transactions.
Notwithstanding this instruction, if the
policy holder fails to pay each of these
amounts in a separate transaction as
instructed by the issuer, the issuer may
not refuse the payment and initiate a
VerDate Sep<11>2014
21:42 Dec 26, 2019
Jkt 250001
grace period or terminate the policy
holder’s QHP coverage on this basis.
(iii) Deposit all such separate
payments into separate allocation
accounts as provided in paragraph (e)(3)
of this section. In the case of an enrollee
whose premium for coverage under the
QHP is paid through employee payroll
deposit, the separate payments required
under paragraph (e)(2)(i) of this section
shall each be paid by a separate deposit.
*
*
*
*
*
PO 00000
Frm 00039
Fmt 4701
Sfmt 9990
71711
Dated: December 16, 2019.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: December 18, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2019–27713 Filed 12–20–19; 8:45 am]
BILLING CODE 4120–01–P
E:\FR\FM\27DER3.SGM
27DER3
Agencies
[Federal Register Volume 84, Number 248 (Friday, December 27, 2019)]
[Rules and Regulations]
[Pages 71674-71711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27713]
[[Page 71673]]
Vol. 84
Friday,
No. 248
December 27, 2019
Part V
Department of Health and Human Services
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45 CFR Parts 155 and 156
Patient Protection and Affordable Care Act; Exchange Program
Integrity; Final Rule
Federal Register / Vol. 84 , No. 248 / Friday, December 27, 2019 /
Rules and Regulations
[[Page 71674]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 155 and 156
[CMS-9922-F]
RIN 0938-AT53
Patient Protection and Affordable Care Act; Exchange Program
Integrity
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule revises standards relating to oversight of
Exchanges established by states and periodic data matching frequency.
This final rule also includes new requirements for certain issuers
related to the collection of a separate payment for the portion of a
plan's premium attributable to coverage for certain abortion services.
DATES: This final rule is effective on February 25, 2020.
FOR FURTHER INFORMATION CONTACT: Emily Ames, (301) 492-4246 or Marisa
Beatley, (301) 492-4307.
SUPPLEMENTARY INFORMATION:
I. Background
A. Legislative and Regulatory Overview
Sections 1311(b) and 1321(b) of the Patient Protection and
Affordable Care Act (PPACA) provide that each state has the opportunity
to establish an Exchange. Section 1311(b)(1) of the PPACA gives each
state the opportunity to establish an Exchange that facilitates the
purchase of qualified health programs (QHPs) by individuals and
families, and provides for the establishment of a Small Business Health
Options Program (SHOP) that is designed to assist qualified small
employers in the state in facilitating the enrollment of their
employees in QHPs offered in the small group market in the state.
Section 1313 of the PPACA describes the steps the Secretary of
Health and Human Services (the Secretary) may take to oversee
Exchanges' compliance with HHS standards related to title I of the
PPACA and ensure their financial integrity, including conducting
investigations and annual audits.
Section 1321(a) of the PPACA provides broad authority for the
Secretary to establish standards and regulations to implement the
statutory standards related to Exchanges, QHPs, and other identified
standards of title I of the PPACA.
Section 1321(c)(2) of the PPACA authorizes the Secretary to enforce
the Exchange standards using civil money penalties (CMPs) on the same
basis as detailed in section 2723(b) of the Public Health Service Act
(PHS Act). Section 2723(b) of the PHS Act authorizes the Secretary to
impose CMPs as a means of enforcing the individual and group market
reforms contained in Part A of title XXVII of the PHS Act when a state
fails to substantially enforce these provisions with respect to health
insurance issuers.
Section 1303 of the PPACA, as implemented in 45 CFR 156.280,
specifies standards for issuers of qualified health plans (QHPs)
through the Exchanges that cover abortion services for which public
funding is prohibited (also referred to as non-Hyde abortion services).
The statute and regulation establish that, unless otherwise prohibited
by state law, a QHP issuer may elect to cover such non-Hyde abortion
services. If an issuer elects to cover such services under a QHP sold
through an individual market Exchange, the issuer must take certain
steps to ensure that no premium tax credit (PTC) or cost-sharing
reduction (CSR) funds are used to pay for abortion services for which
public funding is prohibited.
As specified in section 1303(b)(2), one such step is that
individual market Exchange issuers must determine the amount of, and
collect, from each enrollee, a separate payment for an amount equal to
the actuarial value of the coverage for abortions for which public
funding is prohibited, which must be no less than $1 per enrollee, per
month. QHP issuers must also segregate funds for non-Hyde abortion
services collected through this payment into a separate allocation
account used to pay for non-Hyde abortion services.
Section 1411(c) of the PPACA requires the Secretary to submit
certain information provided by applicants under section 1411(b) of the
PPACA to other federal officials for verification, including income and
family size information to the Secretary of the Treasury.
Section 1411(d) of the PPACA provides that the Secretary must
verify the accuracy of information provided by applicants under section
1411(b) of the PPACA for which section 1411(c) does not prescribe a
specific verification procedure, in such manner as the Secretary
determines appropriate.
Section 1411(f)(1)(B) of the PPACA requires the Secretary to
establish procedures to redetermine eligibility on a periodic basis, in
appropriate circumstances, including for eligibility to purchase a QHP
through the Exchange and for advance payments of the premium tax credit
(APTC) and CSRs.
Section 1411(g) of the PPACA allows the exchange of applicant
information only for the limited purposes of, and to the extent
necessary to, ensure the efficient operation of the Exchange, including
by verifying eligibility to enroll through the Exchange and for APTC
and CSRs.
On October 30, 2013, we published a final rule entitled, ``Patient
Protection and Affordable Care Act; Program Integrity: Exchange,
Premium Stabilization Programs, and Market Standards; Amendments to the
HHS Notice of Benefit and Payment Parameters for 2014,'' (78 FR 65046),
to implement certain program integrity standards and oversight
requirements for State Exchanges.
On March 27, 2012, we published a final rule entitled
``Establishment of Exchanges and Qualified Health Plans; Exchange
Standards for Employers,'' (Exchange Establishment Rule (77 FR 18309),
in which we codified the statutory provisions of section 1303 of the
PPACA in regulation at 45 CFR 156.280, and established many standards
related to Exchanges. On February 27, 2015, we published the Patient
Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2016, final rule (80 FR 10750) (hereinafter referred to
as the 2016 Payment Notice) providing guidance regarding acceptable
billing and premium collection methods for the portion of the policy
holder's total premium attributable to non-Hyde abortion coverage for
purposes of satisfying the statutory separate payment requirement.
On March 8, 2016, we published the Patient Protection and
Affordable Care Act; HHS Notice of Benefit and Payment Parameters for
2017, final rule (81 FR 12204), in which we provided issuers the option
to adopt a premium payment threshold policy to avoid situations in
which an enrollee who owes only a de minimis amount of premium has his
or her enrollment terminated for non-payment of premiums.
On November 9, 2018, we published a proposed rule entitled
``Patient Protection and Affordable Care Act; Exchange Program
Integrity'' (83 FR 56015), which proposed to revise standards relating
to oversight of Exchanges established by states and periodic data
matching frequency and authority. It also proposed new requirements for
certain issuers related to the billing and collection of the separate
payment for the premium portion attributable to coverage for certain
abortion services.
[[Page 71675]]
B. Stakeholder Consultation and Input
HHS has consulted with stakeholders on policies related to the
operation of Exchanges. We have held a number of listening sessions
with consumers, providers, employers, health plans, the actuarial
community, and state representatives to gather public input, with a
particular focus on risks to the individual and small group markets,
and how we can alleviate burdens facing patients and issuers. We
consulted with stakeholders through regular meetings with the National
Association of Insurance Commissioners, regular contact with State
Exchanges through the Exchange Blueprint process and ongoing oversight
and technical assistance engagements, and meetings with Tribal leaders
and representatives, health insurance issuers, trade groups, consumer
advocates, employers, and other interested parties.
II. Provisions of the Proposed Rule and Analysis of and Responses to
Public Comments
A. Exchange Establishment Standards and Other Related Standards Under
the Affordable Care Act
1. Functions of an Exchange (Sec. 155.200)
We proposed to revise Sec. 155.200 to clarify that the Exchanges
must perform oversight functions generally, and cooperate with
oversight activities, in accordance with section 1313 of the PPACA and
as required under 45 CFR part 155. Section 155.200 describes the
functions that an Exchange must perform. Section 155.200(c) specifies
that the Exchange must perform functions related to oversight and
financial integrity in accordance with section 1313 of the PPACA. HHS
interprets this requirement broadly to include program integrity
functions related to protecting against fraud, waste, and abuse,
including functions not explicitly identified in section 1313 of the
PPACA. We believe State Exchanges, including State Exchanges on the
Federal Platform (SBE-FPs), have also generally interpreted this
requirement broadly, as evidenced by their engagement in activities
designed to combat fraud and abuse.
However, questions about the breadth of this function have arisen
when Exchanges have sought to understand what uses and disclosures of
personally identifiable information (PII) are permitted under Sec.
155.260.\1\ Specifically, we received questions about whether Exchanges
are permitted under Sec. 155.260 to disclose applicant PII to
government oversight entities, such as state departments of insurance,
when investigating fraudulent behavior related to Exchange enrollments
on the part of agents and brokers. As noted in the proposed rule, we
believe that use and disclosure of PII related to Exchange program
integrity efforts, such as combatting fraud, currently fall under Sec.
155.200(c), but seek to make that position more clear. Therefore, we
proposed to revise Sec. 155.200(c) to clarify that the Exchanges must
perform oversight functions generally, and cooperate with oversight
activities, in accordance with section 1313 of the PPACA and as
required under 45 CFR part 155, including overseeing its Exchange
programs, Navigators, agents, brokers, and other non-Exchange entities
as defined in Sec. 155.260(b). We further explained that because this
is a clarification and not a new function, we did not believe it would
impose additional burdens on Exchanges, but instead would help resolve
questions about the available tools and authority to enable Exchanges
to effectively oversee and combat potentially fraudulent behavior.
---------------------------------------------------------------------------
\1\ Section 155.260 limits an Exchange's use and disclosure of
PII when an Exchange creates or collects personally identifiable
information for the purposes of determining eligibility for
enrollment in a qualified health plan; determining eligibility for
other insurance affordability programs, as defined in Sec. 155.300;
or determining eligibility for exemptions from the individual shared
responsibility provisions in section 5000A of the Internal Revenue
Code. One of the permitted uses and disclosures is for the Exchange
to carry out the functions described in Sec. 155.200.
---------------------------------------------------------------------------
After consideration of comments received, we are finalizing this
provision as proposed, with one technical modification to remove a
redundant term included in the proposed regulation text. The comments
we received on this topic are summarized below, along with our
responses.
Comment: All commenters on this topic supported the proposed
amendment to Sec. 155.200(c) as it clarifies that oversight and
transparency for all Exchanges is required with respect to determining
eligibility for APTC and combatting fraud. Two commenters encouraged
HHS to work closely with states once the proposal is finalized to
ensure that individuals who are assisting consumers receive proper
notice and training on the applicable compliance requirements and
standards in their states. One commenter suggested that HHS solicit
stakeholder feedback on the possibility of incorporating an additional
level of collaborative issuer-Exchange oversight and verification prior
to enrollment when the applicant's coverage has been previously
terminated for fraud.
Response: We remain committed to improving Exchange program
integrity, including efforts related to combatting fraud, and
appreciate commenters' support for our clarification that Exchanges are
permitted to use and disclose applicant PII to certain entities for
these efforts. We agree that it is important for agents, brokers,
Navigators, and other assisters to understand the applicable standards
in their state, and plan to work closely with states to ensure
compliance. We continue to explore other pathways for combatting fraud
in Exchanges and appreciate commenters' recommendations.
We are finalizing the amendment to Sec. 155.200(c) as proposed,
with one modification. We are removing the reference to assisters
because it is redundant of the reference to non-Exchange entities. Non-
Exchange entities are defined in Sec. 155.260(b) and include
Navigators, non-Navigator assistance personnel, certified application
counselors, agents, brokers, web-brokers and other individuals or
entities who gain access to PII submitted to an Exchange or collect,
use or disclose PII gathered directly from Exchange applicants or
enrollees.
2. Verification Process Related to Eligibility for Insurance
Affordability Programs (Sec. 155.320)
We requested comment on our proposed plans to expand the current
scope of Medicare periodic data matching (PDM), which only identifies
and notifies those dual enrollees receiving financial assistance, to
also include the Exchange population not receiving financial
assistance. Specifically, we proposed to add a new authorization
compliant with Health Insurance Portability and Accountability Act of
1996 (HIPAA) (Pub. L. 104-191) standards to the single streamlined
application to permit Exchanges using the federal platform to collect
PHI in order to determine enrollees' Medicare enrollment status. We
also proposed to leverage the current attestation question on the
single, streamlined application, for applicants to provide written
consent permitting the Exchange to terminate their coverage if they are
found later to be dually enrolled in Medicare and a QHP to expand the
scope of Medicare PDM to the population not receiving financial
assistance. We will not finalize these proposed actions, but will
continue to identify and notify dual enrollees receiving financial
assistance
[[Page 71676]]
as part of current Medicare PDM operations.
Under Sec. 155.330, Exchanges are required to periodically examine
available data sources to identify whether enrollees on whose behalf
APTC or CSRs are being paid have been found eligible for or are
enrolled in Medicare, Medicaid, Children's Health Insurance Program
(CHIP), or the Basic Health Program (BHP), if a BHP is operating in the
service area of the Exchange. Individuals identified as enrolled both
in Exchange coverage (with or without APTC or CSRs) and one of these
other forms of coverage are referred to as dually enrolled consumers.
Generally, if an individual is eligible for or enrolled in such other
forms of coverage that qualify as minimum essential coverage (MEC)
under section 5000A of the Code, the individual is not eligible to
receive APTC or CSRs. For instance, if an individual is eligible for
premium-free Medicare Part A or enrolled in Medicare Part A or Part C
(also known as Medicare Advantage), all of which qualify as MEC, he or
she is not eligible to receive APTC or CSRs to help pay for an Exchange
plan or covered services.
The Secretary has broad authority under section 1321(a) of the
PPACA to establish regulations setting standards to implement certain
statutory requirements under title I of the PPACA, including with
respect to the establishment and operation of Exchanges, the offering
of QHPs through the Exchanges, the establishment of the risk adjustment
and reinsurance programs, and such other requirements as the Secretary
determines appropriate. Additionally, section 1411(g) of the PPACA
allows the exchange of certain applicant information as necessary to
ensure the efficient operation of the Exchange, including verifying
eligibility to enroll in coverage through the Exchange and to receive
APTC or CSRs.
Furthermore, 45 CFR 155.430(b)(1)(ii) requires an Exchange to
provide an opportunity at the time of plan selection for enrollees
receiving and not receiving financial assistance to choose to remain
enrolled in a QHP if he or she becomes eligible for other MEC, or to
terminate QHP coverage if the enrollee does not choose to remain
enrolled in the QHP upon completion of the redetermination process. As
such, for plan year 2018 and thereafter, we added language to the
existing single, streamlined application to support compliance with
this requirement by all Exchanges using the federal platform. This new
language allows all consumers, regardless of whether they are seeking
financial assistance, to authorize the Exchange to obtain eligibility
and enrollment data and, if so desired by the consumer, to end their
QHP coverage if the Exchange finds during its periodic eligibility
checks that the consumer has become eligible for or enrolled in other
MEC, such as Medicare, Medicaid/CHIP, or BHP.
In addition, for plan years beginning with the 2020 plan year, we
stated in the proposed rule our intention to add a new HIPAA
authorization to the single, streamlined application used by Exchanges
using the federal platform, which would meet HIPAA standards regarding
how one's protected health information (PHI) is collected and used. In
the preamble to the proposed rule, we discussed using this proposed new
HIPAA authorization to expand the current scope of Medicare PDM to
individuals in the Exchange population who are not receiving financial
assistance and who authorize the Exchanges using the federal platform
to conduct certain PDM by requesting PHI from HHS such as their name,
Social Security Number, Medicare eligibility or enrollment status, and
other data elements the Exchange may determine necessary, to allow the
Exchange to determine whether the consumer is dually enrolled in
Medicare and Exchange coverage. This HIPAA authorization would allow
HHS to check Medicare enrollment databases for applicants regardless of
whether they seek or receive financial assistance.
As we discussed in the preamble to the proposed rule, for consumers
who request voluntary termination upon a finding of dual enrollment,
the Exchange would terminate coverage after following the current PDM
process outlined in Sec. 155.330(e)(2)(i), which requires Exchanges to
provide notice of the updated information the Exchange found, as well
as a 30-day period for the enrollee to respond to the notice. We
emphasize again, because the Exchange cannot identify through this
process those consumers who are eligible for, but not enrolled in
premium-free Part A, we encourage all consumers who are 65 and older to
apply with the Social Security Administration (SSA) to receive an
eligibility determination with respect to Medicare.
We received multiple comments on this discussion regarding
expanding the scope of Medicare PDM to the Exchange population not
receiving financial assistance. After further consideration of the
technical complexity of implementing a HIPAA authorization on the
single, streamlined application and the potential burden on consumers
to read, decipher, and agree to legal agreements many may find
confusing, we will not pursue the addition of a new authorization to
the single streamlined application. Instead, we will explore other
means through which the Exchanges can expand the scope of Medicare PDM
to the Exchange population that is not receiving financial assistance.
A summary of these comments and our responses to those comments follow:
Comment: Most commenters generally supported HHS's goal to reduce
dual enrollment in Medicare and Exchange coverage, but cautioned HHS
about the consequences of terminating QHP coverage for this population.
Commenters noted that terminating Exchange coverage could: (1)
Interfere with the continuity of care, (2) create gaps in coverage,
especially for those dual enrollees who have not yet enrolled in
Medicare Part B, (3) cause other family members on the Medicare
beneficiary's policy to lose coverage, and (4) cause increased consumer
confusion over their coverage options. Rather than terminating QHP
coverage, commenters recommended targeted outreach and education to the
Medicare eligible population to ensure this population fully
understands the consequences of dual enrollment, the appropriate time
to enroll in Medicare Part B to avoid financial penalties for delayed
enrollment, and how access to their Medicare eligibility information
intersects with QHP termination via Medicare PDM. One commenter
recommended that we prevent all individuals with Medicare from
enrolling in QHP coverage through screening at initial application.
Response: Given the technical complexity of implementing a HIPAA
authorization on the single streamlined application and the potential
burden it would place on consumers as consumers would be required to
read, decipher, and agree to complex legal agreements that may be
confusing for consumers, we are reconsidering our approach to expanding
Medicare PDM to the Exchange population not receiving financial
assistance. We are exploring other options to identify and notify this
population of their dual enrollment in Medicare and Exchange coverage
to ensure that this population is able to enroll in Medicare Part B at
the appropriate time and without financial penalty.
For enrollees in Exchanges using the federal platform who are
receiving financial assistance, the Exchanges will continue to end
subsidies or QHP coverage for those consumers who permit the Exchange
to do so in accordance with Sec. 155.330. For the Exchange population
receiving financial
[[Page 71677]]
assistance, terminating QHP coverage as part of Medicare PDM ensures
that consumers are not enrolled in unnecessary duplicative coverage,
reduces the potential for taxpayer financial liability related to
possibly having to repay APTC at the time of federal income tax
reconciliation, and also protects the integrity of the Exchange by
ensuring enrollees no longer eligible for financial assistance do not
receive these subsidies inappropriately.
HHS is also aware of concerns from stakeholders that consumers
often do not know when they should contact the Exchange to end their
QHP coverage after enrolling in Medicare. We believe this voluntary
option to provide written consent for the Exchange to end a Medicare
dual enrollee's QHP coverage will alleviate some of the confusion
consumers currently face when transitioning from Exchange coverage to
Medicare as the Exchange provides information in the intial warning
notice on how to end QHP coverage after enrolling in Medicare.
Furthermore, in instances where the dual enrollee does not take action,
the Exchange will automatically end coverage for the dual enrollee;
thus, saving the enrollee time and reducing the risk of the consumer
having to pay back some or all of the APTC received when they file
their federal income taxes.
In addition, in response to commenter concerns about the
consequences of termination of dually enrolled consumers' coverage, we
note that enrollees receiving financial assistance have 30 days to
respond to their Medicare PDM notice before the Exchange takes action
as specified in Sec. 155.330(e)(2)(i)(D). As we noted in the preamble
to the proposed rule, upon receiving the required notice, the enrollee
could (1) return to the Exchange and terminate his or her QHP coverage,
(2) revoke the prior authorization for the Exchange to terminate his or
her QHP coverage in the event dual enrollment is found, so that he or
she would remain enrolled both in the QHP and in Medicare, or (3)
notify the Exchange that he or she is not eligible for, or enrolled in,
Medicare. For enrollees who revoke their prior authorization for the
Exchange to terminate their QHP enrollment where the Exchange finds the
enrollee is eligible for or enrolled in Medicare, or who disagree that
they are eligible for or enrolled in Medicare, the Exchange would only
proceed to terminate the enrollee's APTC and CSRs, and not his or her
enrollment in QHP coverage through the Exchange, using the process
specified in Sec. 155.330(e)(2)(i). Therefore, we believe this
operational change mitigates adverse impacts on the continuity of care
and the risk of coverage gaps because enrollees can choose to opt out
and remain in QHP coverage without APTC, pursuant to the current
regulation.
We also appreciate the concerns raised that non-Medicare family
members could potentially lose coverage. We note that a special
enrollment period will be available for family members of dual
enrollees when such family members lose their coverage or their
financial subsidies as a result of the PDM process described here.
Additionally, we continue to prioritize consumer and stakeholder
education regarding dual enrollment and transitioning between coverage,
and to engage in various outreach activities including distributing
webinar, newsletter, and fact sheet content for assisters, agents,
brokers, and issuers, as well as direct consumer notification and
application help text. We also are working to develop educational
materials to ensure that all Medicare beneficiaries understand the
consequences of dual enrollment and associated penalties for not
enrolling in Medicare Part B when first eligible. We believe this will
help reduce consumer confusion over their coverage options and the
appropriate time to sign up for Medicare. We appreciate the comments
and ideas for future education efforts for this population and will
consider these suggestions as part of our Medicare PDM stakeholder
outreach moving forward.
3. Eligibility Redetermination During a Benefit Year (Sec. 155.330)
We proposed to add a new paragraph (d)(3) to Sec. 155.330, under
which Exchanges would be required to conduct PDM at least twice each
calendar year beginning with calendar year 2020. We are finalizing this
proposal. However, we have changed the implementation date to the 2021
calendar year, and added clarifying language regarding State Exchanges
that have fully integrated eligibility systems with their respective
Medicaid agencies.
In accordance with Sec. 155.330(d), Exchanges must periodically
examine available data sources to determine whether enrollees in a QHP
through an Exchange with APTC or CSRs have been determined eligible for
or enrolled in other qualifying coverage through Medicare, Medicaid,
CHIP, or the BHP, if applicable. HHS has not previously defined
``periodically.'' Currently, Exchanges using the federal platform
conduct Medicare PDM and Medicaid/CHIP PDM twice a year. To ensure that
all Exchanges are taking adequate steps to identify enrollees who have
become eligible for or enrolled in these other forms of MEC, and to
terminate APTC and CSRs for those identified, we proposed to add
paragraph (d)(3) to specify that Exchanges would be required to conduct
Medicare, Medicaid/CHIP, and, if applicable, BHP PDM at least twice a
calendar year, beginning with the 2020 calendar year. We indicated that
this timeframe would likely give Exchanges that are not already
performing these PDM checks twice a year sufficient time to implement
any business, operational, and information technology changes needed to
comply with the proposed new requirement.
We explained our belief that this policy would reduce QHP premiums,
since Medicare and Medicaid/CHIP beneficiaries tend to have a higher
risk profile than a typical Exchange enrollee and, therefore, may have
negative impacts on the risk pool. Because this population includes
significant numbers of older and disabled beneficiaries, or persons
that may have poorer health outcomes generally associated with lower
income statuses, we expect that these populations typically will
utilize health care services at a greater rate as compared to other
populations.\2\ So that the Exchanges could prioritize the
implementation of the proposed requirement to conduct PDM for Medicare,
Medicaid, CHIP, and, if applicable, BHP eligibility or enrollment at
least twice yearly, we did not also propose requiring Exchanges to
perform PDM for death at least twice in a calendar year, and will
consider this as part of future rulemaking.
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\2\ For example, see Urban Institute and Center on Society and
Health, How Are Income and Wealth Linked to Health and Longevity?
(April 2015), available at https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-and-Wealth-Linked-to-Health-and-Longevity.pdf.
---------------------------------------------------------------------------
Since most State Exchanges that operate their own eligibility and
enrollment platform have a single shared, integrated eligibility system
with their respective Medicaid programs, the Medicaid/CHIP PDM
requirements may be met differently by State Exchanges. State Exchanges
that have fully integrated eligibility systems generally have controls
in place to prevent concurrent or dual enrollment of an individual in
both a QHP through the Exchange with APTC/CSRs, and Modified Adjusted
Gross Income (MAGI)-based Medicaid/CHIP coverage, at any given time. We
proposed at paragraph (d)(3) that we will deem these State Exchanges to
be in compliance with the requirement to perform
[[Page 71678]]
Medicaid/CHIP PDM or, if applicable, BHP PDM. Thus, these State
Exchanges would not need to perform additional Medicaid/CHIP PDM
outside of the controls that are currently in place to prevent dual
enrollment in their integrated eligibility system. State Exchanges that
operate their own eligibility and enrollment platform and do not have
fully integrated eligibility systems for APTC/CSRs and Medicaid/CHIP or
BHP, if applicable, would be required to perform Medicaid/CHIP PDM at
least twice a year.
We anticipate many State Exchanges will meet or exceed the proposed
requirements for Medicare PDM, Medicaid/CHIP PDM and, if applicable,
BHP PDM, based on operations reported to us through the State-based
Marketplace Annual Reporting Tool (SMART). This view is also supported
by information we have learned through technical assistance
engagements. Furthermore, the new Medicaid/CHIP PDM requirement would
not result in a significant administrative burden for State Exchanges
because we believe most State Exchanges currently operate an integrated
eligibility system and could be deemed to be in compliance with the
proposed Medicaid/CHIP PDM requirements.
We did not propose specific penalties if State Exchanges do not
comply with the proposed PDM requirements. However, we noted that,
under current authority, HHS requires a State Exchange to take
corrective action if it is not complying with applicable federal
requirements. We utilize specific oversight tools (SMART, programmatic
audits, etc., as described in the preamble to Sec. 155.1200) to
identify issues with, and place corrective actions on, the Exchanges,
and to provide technical assistance and ongoing monitoring to track
those actions until the Exchange comes into compliance.
Additionally, under section 1313(a)(4) of the PPACA, if HHS
determines that an Exchange has engaged in serious misconduct with
respect to compliance with Exchange requirements, it has the option to
rescind up to 1 percent of payments due to a state under any program
administered by HHS until it is resolved. These existing authorities
would apply to the proposed periodic data matching requirements in
Sec. 155.330(d). If HHS were to determine that it is necessary to
apply this authority due to non-compliance by an Exchange with Sec.
155.330(d), HHS would also determine the HHS-administered program from
which it would rescind payments that are due to that state.
Lastly, we proposed to make a technical correction in Sec.
155.330(d)(1) by adding an additional reference to the process and
authority in Sec. 155.320(b). This reference was omitted previously,
but the requirements in Sec. 155.320(b), specifying that Exchanges
must verify whether an applicant is eligible for MEC other than through
an eligible employer-sponsored plan using information obtained by
transmitting identifying information specified by HHS to HHS for
verification purposes, apply to the PDM process in Sec. 155.330.
We are finalizing this proposal to add paragraph (d)(3) as
proposed, but have changed the implementation date to the 2021 calendar
year, and have added some clarifying language with regard to fully
integrated eligibility systems, as described below. A summary of
comments received and our responses to those comments appear below.
Comment: We received multiple comments in support of PDM as an
effort to improve Exchange program integrity. These commenters agreed
that the process helps inform consumers of their enrollment in
potentially duplicative other MEC such as certain Medicare and Medicaid
coverage, CHIP, or, if applicable, the BHP, and to help consumers avoid
a tax liability for having to repay APTC received during months of
overlapping coverage when reconciling at the time of annual federal
income tax filing. Many commenters suggested improvements that could be
made to current PDM processes.
Some commenters suggested that consumers, especially Medicare
beneficiaries, could benefit from additional education or outreach from
assisters, Navigators, or call center representatives to help these
dually enrolled consumers make informed choices about their coverage
options. Another commenter recommended that HHS work closely with SSA
to identify which Medicare beneficiaries are approaching Medicare
eligibility so that notices can be sent during the beneficiary's
initial enrollment period. Another commenter recommended that, in
addition to periodic checks for other qualifying coverage, HHS should
implement periodic checks for deceased enrollees and that these checks
should occur before auto re-enrollment.
Response: We agree that the PDM process is an important tool to
ensure that Exchange enrollees are enrolled in the appropriate coverage
that best meets their needs and budget while reducing the risk for
potential tax liabilities for having to repay APTC received during
months of overlapping coverage. We also agree that outreach and
education is critical for dual enrollees and we continue to work with
Exchange stakeholders on education and outreach strategies, especially
for the Medicare beneficiary population to ensure that consumers can
make well-informed choices and sign up for Medicare coverage during the
appropriate timeframes. In 2018, we added additional resources to the
Exchange application that provided information on the appropriate
timeframes to enroll in Medicare Parts A and B to help consumers avoid
incurring any late enrollment penalties. We also believe that periodic
checks for deceased enrollees are a critical aspect to ensuring
Exchange program integrity. Beginning in late 2019, Exchanges using the
federal platform will conduct periodic checks for deceased enrollees in
single member applications and subsequently end deceased enrollees' QHP
coverage. As noted previously, to ensure State Exchanges have
appropriate time to implement the technical and operational changes
necessary to conduct Medicare, Medicaid/CHIP, and, if applicable, BHP,
PDM, we are not requiring that State Exchanges perform checks for
deceased enrollees twice yearly, and will be considering changes as
part of future rulemaking.
Comment: We received mixed comments regarding our proposal to
require Exchanges to conduct Medicare, Medicaid/CHIP and, if
applicable, BHP PDM twice a year. Many commenters stated that
increasing the frequency of PDM, particularly Medicare PDM, may be
burdensome on both consumers and State Exchanges, and could lead to
increased consumer confusion, diversion of resources from customer
service and outreach efforts, and potential loss of APTC due to
potentially outdated data sources for Medicare enrollment and Medicaid/
CHIP eligibility and enrollment. One commenter recommended that
additional verification checks be incorporated into the final rule to
ensure consumers are not removed from coverage due to outdated data.
Two commenters noted that the twice yearly frequency was too infrequent
and would not provide timely notice for those consumers who are dually
enrolled in Medicare and Exchange coverage. One commenter recommended
requiring that Exchanges only perform PDM checks once yearly, which
taken together with the annual renewal process, would allow a check
every 6 months. Another commenter expressed concerns that our proposed
language would allow State Exchanges to perform PDM more than twice a
year, which could cause consumers to lose coverage erroneously.
Response: We continue to believe that conducting Medicare,
Medicaid/CHIP
[[Page 71679]]
and, if applicable, BHP PDM serves a critical role in ensuring that
consumers are enrolled in the appropriate coverage and ensures that
APTC is paid appropriately. We continue to work with our partners
throughout HHS to ensure the accuracy of Medicare, Medicaid, and CHIP
data, and will continue to provide guidance to State Exchanges on
notice language, especially regarding the availability of special
enrollment periods for consumers who erroneously lose APTC or QHP
coverage, as well as the consumer's right to appeal an Exchanges'
determination. We disagree that conducting PDM checks twice yearly
would cause consumer confusion or divert resources away from customer
service and outreach because PDM provides valuable information to
consumers regarding their dual enrollment in Medicare and/or Medicaid/
CHIP and serves an important program integrity function by ensuring
that only consumers eligible for APTC/CSRs receive them. We continue to
prioritize consumer and stakeholder education related to dual
enrollment and transitioning between coverage, including webinar,
newsletter, and fact sheet content for assisters, agents, brokers, and
issuers, as well as direct consumer notification and application help
text. We encourage State Exchanges to prioritize these education
efforts as well.
We appreciate commenters' suggestions regarding the frequency of
PDM checks, but we believe that requiring these checks at least twice a
year strikes the appropriate balance between providing timely notice
for dually enrolled consumers and not overburdening Exchanges with
potentially costly system changes and notice requirements. With respect
to the comment regarding Exchanges conducting a Medicaid/CHIP or
Medicare PDM check during the annual renewal process, this rule
specifies the frequency, and not the precise timing, for when Exchanges
must conduct the Medicaid/CHIP and Medicare PDM checks. Exchanges have
the flexibility to conduct one of the required PDM checks during the
annual renewal process.
Finally, we disagree that the changes outlined to PDM would
increase burden on all Exchanges. We will deem State Exchanges that
have implemented fully integrated eligibility systems with their
respective Medicaid programs to be in compliance with the proposed
Medicaid/CHIP PDM requirement. Thus, we anticipate the change to the
Medicaid/CHIP PDM requirement will not increase burden for those State
Exchanges because they will not have to build new functionality to meet
this requirement. However, we do agree that any significant burden on
State Exchanges would likely be on those that currently do not perform
any Medicare PDM, or those that currently do not operate integrated
eligibility systems and do not perform any Medicaid/CHIP PDM and,
therefore, are not already in compliance with Sec. 155.330(d). Those
Exchanges would likely be required to engage in information technology
(IT) system development activities in order to communicate with these
programs and act on enrollment data in a new way.
Comment: We received multiple comments that the proposed date of
January 1, 2020 for the implementation of twice yearly Medicare,
Medicaid/CHIP, and, if applicable, BHP PDM provides insufficient time
for State Exchanges to implement the required technical changes.
Commenters noted that State Exchanges that do not currently conduct
Medicare PDM, or do not have integrated eligibility systems with their
State Medicaid programs and do not currently conduct Medicaid/CHIP PDM,
would have to make significant changes to their eligibility systems and
processes to to confirm enrollment in Medicare or to verify Medicaid or
CHIP eligibility, respectively. One commenter suggested 2021 as an
appropriate implementation date. Two commenters also requested that HHS
finalize a clear and certain definition of a fully integrated
eligibility system to mean eligibility systems that have one
eligibility rules engine, shared between the State Exchange and its
respective Medicaid program, for MAGI-based Medicaid, CHIP, APTC, and
if applicable, BHP, eligibility determinations.
Response: We agree with commenters that requiring implementation by
the 2020 calendar year may not provide State Exchanges with a
sufficient timeframe to implement these changes, especially for
Exchanges without integrated eligibility systems that do not currently
perform Medicaid/CHIP PDM or those that currently do not perform
Medicare PDM. These Exchanges would need to implement new interfaces
with their respective Medicaid programs and/or a new connection to
federal data to confirm Medicare enrollment. Therefore, we are
finalizing the proposal in Sec. 155.330(d)(3) to take effect beginning
with the 2021 calendar year. We also agree on the importance of
providing a clear and specific definition of ``fully integrated
eligibility system.'' As described in the preamble to the proposed
rule, by ``fully integrated eligibility system,'' we mean one where a
State Exchange and its respective Medicaid program shares a single
eligibility rules engine for determining eligibility for MAGI-based
Medicaid/CHIP, APTC, and if applicable, BHP. We are finalizing
paragraph (d)(3) with some additional language to codify this meaning.
Comment: We received three comments that were opposed to the
proposed requirement to conduct Medicare, Medicaid/CHIP and, if
applicable, BHP PDM, cautioning us that defining the precise frequency
and nature of PDM encroaches upon the sovereignty of the State
Exchanges. Two commenters noted that HHS has not provided enough
evidence that there is a significant problem with duplicative
enrollment in other qualifying coverage such as Medicare, Medicaid/
CHIP, and BHP. One commenter expressed concern that additional
requirements on State Exchanges could discourage consumers from
applying for coverage.
Response: Ensuring that consumers are enrolled in the appropriate
coverage remains a top priority for HHS. Additionally, ensuring that
APTC is paid appropriately is a requirement set forth in Sec.
155.330(d)(1)(ii). Several Government Accountability Office (GAO)
reviews have underscored the importance of continually re-verifying
enrollee eligibility for APTC through PDM with other government
entities.\3\ As such, we believe PDM plays a vital role in ensuring the
health and integrity of all Exchanges by ensuring consumers are
enrolled in the appropriate coverage, and reduces the risk that
consumers will have to pay back all or some of APTC paid on their
behalf during months of overlapping coverage when they file their
annual federal income taxes. We disagree that the twice yearly
requirement to conduct Medicare, Medicaid/CHIP and, if applicable, BHP
PDM would discourage consumers from applying for and enrolling in QHP
coverage, as the majority of consumers become dually enrolled
inadvertently, such as by aging into Medicare or experiencing
fluctuations in household income.
---------------------------------------------------------------------------
\3\ ``Improper Payments: Improvements Needed in CMS and IRS
Controls over Health Insurance Premium Tax Credit'' (GAO 17-467);
``Federal Health-Insurance Marketplace: Analysis of Plan Year 2015
Application, Enrollment, and Eligibility-Verification Process''
(GAO-18-169).
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4. General Program Integrity and Oversight Requirements (Sec.
155.1200)
As the Exchange Establishment grant program established under
section 1311 of the PPACA has come to a conclusion and State Exchanges
have become financially self-sustaining, HHS
[[Page 71680]]
continues to develop and refine its mechanisms and tools for overseeing
the ongoing compliance of State Exchanges and SBE-FPs with federal
requirements for Exchanges, including eligibility and enrollment
requirements under 45 CFR part 155.
HHS approves or conditionally approves a state to establish a State
Exchange based on an assessment of a state's attested compliance with
applicable statutory and regulatory rules. Once approved or
conditionally approved, State Exchanges must meet specific program
integrity and oversight requirements identified at section 1313(a) of
the PPACA, and the implementing regulations at Sec. Sec. 155.1200 and
155.1210. These requirements outline HHS's authority to oversee the
Exchanges after their establishment. Currently, annual reporting
requirements for State Exchanges at Sec. 155.1200(b) include the
annual submission of (1) a financial statement in accordance with
generally accepted accounting principles (GAAP); (2) eligibility and
enrollment reports; and (3) performance monitoring data.
Additionally, under Sec. 155.1200(c), each State Exchange is
required to contract with an independent external auditing entity that
follows generally accepted government auditing standards (GAGAS) to
perform annual independent external financial and programmatic audits.
State Exchanges are required to provide HHS with the results of the
annual external audits, including corrective action plans to address
any material weaknesses or significant deficiencies identified by the
auditor.\4\ All corrective action plans are monitored by HHS until
closed. Currently, the audits must address compliance with all Exchange
requirements under 45 CFR part 155.\5\
---------------------------------------------------------------------------
\4\ 45 CFR 155.1200(c)(1) and (2).
\5\ 45 CFR 155.1200(d)(2).
---------------------------------------------------------------------------
HHS designed and developed the SMART in 2014 to assist State
Exchanges in conducting a defined set of oversight activities. The
SMART was designed to facilitate State Exchanges' reporting to HHS on
how they are meeting federal program and operational requirements,
including State Exchanges reporting their compliance with federal
eligibility and enrollment program requirements under 45 CFR part 155
subparts D and E. The SMART, thus, enables HHS to evaluate and monitor
State Exchange progress in coming into compliance with federal
requirements where needed. Since then, HHS has come to utilize the
SMART, along with the annual programmatic and financial audit reports,
as primary oversight tools for identifying and addressing State
Exchange non-compliance issues. HHS requires State Exchanges to take
corrective actions to address issues that are identified through the
SMART and annual audits, and HHS monitors the implementation of the
corrective actions.
In the proposed rule, we proposed to modify Sec. 155.1200(b)(2) to
reflect that HHS requires State Exchanges to submit annual compliance
reports (such as the SMART), that encompass eligibility and enrollment
reporting by State Exchanges, and also include reporting on compliance
across other Exchange program requirements under 45 CFR part 155. We
also proposed to modify Sec. 155.1200(b)(1) to eliminate the April 1st
date by which State Exchanges must provide a financial statement to
HHS, to provide HHS the flexibility to align the financial statement
deadline with the SMART deadline, which is set annually by HHS. Because
we proposed to remove the April 1st date, but intend to maintain the
requirement that State Exchanges submit the required reports by a
deadline, we also proposed to modify the introductory text to Sec.
155.1200(b) to specify that State Exchanges must provide the required
annual reporting by deadlines to be set by HHS.
We proposed to retain the requirement at Sec. 155.1200(c) that an
annual programmatic audit be conducted by State Exchanges, but proposed
a minor change from ``state'' to ``State Exchanges'' to be consistent
and clear on the entities to which this rule applies. We also proposed
to add specificity to the annual programmatic audit requirement by
proposing a clarification of Sec. 155.1200(d)(2) to make clear that
HHS may specify or target the scope of a programmatic audit to address
compliance with particular Exchange program areas or requirements. We
explained that this would provide HHS with the ability to specify those
Exchange functions that are most pertinent to a particular State
Exchange model (either a traditional State Exchange that operates its
own eligibility and enrollment system or an SBE-FP) and need to be
regularly included in the audit; target those Exchange functions most
likely to impact program integrity, such as eligibility verifications;
and reduce burden on State Exchanges where possible. In addition, we
proposed to modify Sec. 155.1200(d) by replacing existing paragraph
(d)(4) with new paragraphs (d)(4) and (5). These proposed new
requirements specify that State Exchanges must ensure that the
independent audits implement testing procedures or other auditing
procedures that assess whether a State Exchange is conducting accurate
eligibility determinations and enrollment transactions under 45 CFR
part 155 subparts D and E. Such auditing procedures can include the use
of statistically valid sampling methods in the testing or auditing
procedures.
We indicated that we believe these proposed changes would
strengthen our programmatic oversight and the program integrity of
State Exchanges, while providing flexibility for HHS in the collection
of information. We further explained that, through the Paperwork
Reduction Act (PRA) process, we are able to make updates and
refinements to the SMART reporting tool to align with our program
integrity priorities for Exchanges as they evolve. In addition,
allowing HHS to specify the scope of the programmatic audit at Sec.
155.1200(d)(2) would provide us the ability to target our oversight to
specific Exchange program requirements based on the particular State
Exchange model, our program integrity priorities, and the goal of
reducing burden on State Exchanges where possible. We explained our
belief that this approach would provide HHS and states with greater
insight into State Exchange compliance with federal standards in a more
cost-effective manner.
We also noted our belief that this approach would allow HHS to
identify State Exchange non-compliance issues with more precision and
efficacy. It would allow HHS to provide more effective, targeted
technical assistance to State Exchanges in developing corrective action
plans to address issues that are identified. We discussed how this
approach could reduce administrative burden on State Exchanges while
maintaining the traditional role of State Exchanges in managing and
operating their Exchanges, with HHS maintaining its role of overseeing
State Exchange compliance with federal requirements through structured
reporting processes. We sought comments on these proposals. After
consideration of comments received, we are finalizing the amendments to
Sec. 155.1200 as proposed. A summary of comments received and our
responses to those comments appear below:
Comment: Commenters generally expressed support for some of the
proposed changes to the annual reporting and programmatic audit
requirement. They expressed support for removal of the April 1st
financial statement deadline as long as the new deadline accommodates
the state budget cycles for all State Exchanges. Some
[[Page 71681]]
commenters supported the proposal to provide flexibility to specify the
scope of the programmatic audit, such as focusing on eligibility and
enrollment requirements under 45 CFR part 155 subparts D and E, while
two commenters asked HHS to refrain from expanding the scope of the
programmatic audit as it can divert funding from other Exchange
functions and create administrative burden. Some commenters expressed
concern with the timing and potential funding to implement the changes.
These commenters urged HHS to provide State Exchanges with over a year
of advanced notice to implement the changes, to ensure proper planning
and funding.
One commenter requested that HHS clarify the proposed requirement
for the State Exchange's independent external auditor to use
statistically valid sampling in their review of the State Exchange
eligibility and enrollment transactions, noting that statistically
significant sampling in the programmatic audit can be larger in scope
and more costly in comparison to random sampling which can also
identify programmatic issues. Another commenter recommended that HHS
consider changing the frequency of the programmatic audit to biennially
unless the programmatic audit shows irregularities.
Another commenter urged HHS to clarify that the proposed changes to
the programmatic audit specific to eligibility and enrollment
activities do not pertain to SBE-FPs, since SBE-FPs rely on HHS and the
federal platform to perform eligibility and enrollment functions.
Response: We believe these proposed changes will strengthen our
programmatic oversight and the program integrity of State Exchanges and
thus are finalizing these amendments as proposed. As detailed in the
proposed rule, these amendments are intended to allow for more targeted
audits that focus HHS and State Exchange resources on compliance with
particular Exchange program areas that have higher program integrity
risks in a more consistent manner, rather than covering all program
areas. These amendments are also intended to address requirements that
are applicable only to a particular State Exchange model, in a more
standardized manner. We are removing the April 1st deadline from Sec.
155.1200(b)(1) to allow HHS to align the deadline for submission of the
financial statement to HHS with the deadline for submission of SMART
reports, currently June 1. Going forward, we anticipate establishing
the deadline for submission of the financial statement and SMART report
on an annual basis through guidance and would seek to accommodate state
budget cycles to the maximum extent practical when setting these dates.
The general scope of these audits remains the same, that is, under the
new paragraph (d)(2), HHS may specify that an audit focus on compliance
with subparts D and E of 45 CFR part 155, or other requirements under
45 CFR part 155, as specified by HHS.\6\ However, we appreciate and
considered the comments received. We understand that most State
Exchanges negotiate their contracts with external auditing entities a
year or more in advance and would need sufficient time to update their
contracts to reflect any changes in the scope of the external
programmatic audits. We also recognize that State Exchanges that
operate their own eligibility and enrollment platforms would also need
time to work with their contracted auditors to implement new procedures
for testing the accuracy of eligibility determinations if their
auditors have not previously employed such procedures for this purpose.
Thus, subsequent to this rule, we will provide State Exchanges with
technical operational guidance that will specify the first plan year
for which changes to the scope of the programmatic audit would apply,
taking into account the need to allow for a period of time for State
Exchanges to implement the changes finalized in this rule.
---------------------------------------------------------------------------
\6\ This is consistent with the scope for audits in the existing
regulation at 45 CFR 155.1200(d)(2), which currently requires State
Exchanges to ensure these audits address compliance with ``the
requirements under this part.''
---------------------------------------------------------------------------
In response to the comments regarding use of a statistically-
significant sampling methodology versus a random sampling methodology,
we clarify that, in this rule, we are not specifying a particular
sampling methology that must be used by all State Exchanges for testing
the accuracy of eligibility determinations in the annual programmatic
audits. In addition to State Exchanges and their contracted auditors
using the generally accepted government auditing standards, CMS's
technical operational guidance would also outline procedures the
independent external auditor can chose to implement to assess whether a
State Exchange is conducting accurate eligibility determinations and
enrollment transactions under 45 CFR part 155 subparts D and E. Going
forward we intend to provide State Exchanges with this technical
operational guidance on an annual basis to outline the deadline for
submission of the applicable year's reports, the scope of the
applicable year's external programmatic audit, and the requirements
under 45 CFR part 155 that are applicable to each State Exchange model.
We intend to release this guidance around April each year, to align
with our existing timeframe for providing guidance to State Exchanges
on the annual SMART process, so that State Exchanges have sufficient
time to prepare, and administrative burden is minimized to the extent
practical. Lastly, we agree with the overall notion of taking a risk-
based approach towards determining the frequency by which State
Exchanges are required to conduct the external programmatic audit.
Specifically, we considered the recommendation to change the frequency
of State Exchange programmatic audits to biennially unless the audit
shows irregulatrities. We decline to make this change at this time
because some State Exchanges currently are addressing active findings
or corrective actions as a result of past programmatic audits, which we
believe annual re-evaluations are still appropriate. However, we will
consider this recommendation going forward and may propose to decrease
the frequency of State Exchange audits in future rule-making.
Comment: Some commenters requested that certain regulatory language
remain unchanged or be modified. One commenter urged HHS to retain the
language under Sec. Sec. 155.1200(b)(2) and 155.1200(d)(2) because the
proposed language is broader and targeted auditing can create
administrative burden. Another commenter requested that HHS limit the
scope of the programmatic audit under Sec. 155.1200(d)(2) to solely
cover the eligibility and enrollment requirements under 45 CFR part 155
subparts D and E and remove the language that allows HHS to include
other Exchange requirements under 45 CFR part 155 in the scope of the
programmatic audit. Another commenter requested that Sec.
155.1200(d)(2) remain unchanged because the general reference to
compliance with 45 CFR part 155 is consistent with the HHS's stated
intent to specify the scope for programmatic audits, and recommended
that HHS make clear that the proposed changes to the review of State
Exchange eligibility determinations under Sec. 155.1200(d)(4) applies
to eligibility determinations for QHP/APTC only, and not to Medicaid
eligibility determinations.
Response: We believe the proposed changes under Sec. 155.1200(d)
will strengthen our programmatic oversight and the program integrity of
State Exchanges and provide appropriate
[[Page 71682]]
flexibility to target oversight and enforcement activities, as well as
HHS and State Exchange resources, which, in turn, will reduce burden.
As State Exchanges continue to evolve and mature, HHS will be able to
focus oversight efforts, including making refinements to annual
compliance reporting tools (such as the SMART), in response to changes
in federal policy, as well as federal program integrity priorities and
processes. We further note that, while these amendments provide
flexibility for HHS to target these audits, they also retain the
authority for HHS to require the audits to address other requirements
under 45 CFR part 155, as specified by HHS. As such, HHS can still
require audits with a broader scope when deemed appropriate or
necessary. While we generally intend to focus programmatic audits on
those Exchange functions most likely to impact program integrity, such
as eligibility verifications, we do not agree with commenters that
these audits should only focus on eligibility and enrollment functions
because there may be changes to federal policy, priorities, or
processes that result in the need for HHS to focus our oversight on
other Exchange functions besides eligibility and enrollment. Also, not
all State Exchanges perform their own eligibility and enrollment
functions. For instance, SBE-FPs rely on HHS and the federal platform
to perform their eligibility and enrollment functions, and thus HHS's
oversight of SBE-FPs would need to focus on other Exchange functions
that are more relevant or critical to the SBE-FP model. That is why HHS
retains the authority, and the flexibility, under the amended Sec.
155.1200(d)(2) to require the audits to address other requirements
under 45 CFR part 155, as specified by HHS. In addition, the amendments
to Sec. 155.1200(d)(2) finalized in this rule give HHS flexibility to
specify the Exchange functions that are most pertinent to the State
Exchange model and most likely to impact program integrity. In response
to comments, we clarify that the changes to subparagraph Sec.
155.1200(d)(4) apply to State Exchange eligibility determinations for
QHP/APTC, and not to Medicaid eligibility determinations. We recognize
that not all State Exchanges make Medicaid eligibility determinations,
but also wish to clarify that in accordance with Sec. 155.302, State
Exchanges must conduct a MAGI-based assessment or determination of
eligibility for Medicaid as part of determining eligibility for APTC.
HHS will provide further guidelines on the auditing of State Exchange
eligibility and enrollment transactions, and any other audit
requirements applicable in a given year, in the annual technical
operational guidance. We further clarify that the amendments to Sec.
155.1200(b)(2) do not reflect an expansion of State Exchange reporting
obligations and instead capture the existing annual compliance reports
(such as the SMART), that encompass eligibility and enrollment
reporting, as well as compliance across other Exchange program
requirements under 45 CFR part 155, that State Exchanges currently
submit to HHS.
Comment: One commenter requested transparency regarding HHS's
oversight of the Federally-facilitated Exchanges' (FFEs') compliance
with oversight standards. The commenter recommended that HHS publish a
comparison of compliance standards and activities to ensure the FFEs
and State Exchanges are held to the same oversight requirements.
Another commenter generally supported the proposed changes as enhancing
the oversight and transparency of the State Exchanges.
Response: We appreciate and strive for transparency in the
oversight of all Exchanges and will consider these suggestions.
However, we note that the oversight standards under Sec. 155.1200,
including the proposed amendments, are specific to State Exchanges.
Therefore, the comments related to FFE oversight standards are outside
the scope of this rulemaking. We also note that the FFEs are overseen
through the efforts of other federal entities such as the Government
Accountability Office and the HHS Office of the Inspector General.
Comment: Several commenters opposed HHS's proposed changes to the
annual reporting and programmatic audit requirements for State
Exchanges. They stated that the proposed language expands federal
authority and can add administrative burden to State Exchanges. Some
commenters disagreed that the Federalism implications are substantially
mitigated since the proposed changes only add specificity to existing
requirements, stating that the proposed changes are open-ended and
remove specificity. Additionally, some of these commenters expressed
concern that HHS is eliminating the requirement of eligibility and
enrollment reports under Sec. 155.1200(b)(2). These commenters also
raised concerns with the disclosure of consumer information, as well as
negative consumer impacts, due to the additional oversight on
eligibility determinations being proposed.
Response: We believe these changes will strengthen our programmatic
oversight and the program integrity of State Exchanges. Further, as
detailed above, the amendments do not represent an expansion of HHS's
authority to oversee and monitor compliance of State Exchanges. Under
the existing language at Sec. 155.1200(d)(2), State Exchanges are
currently required to ensure their respective annual programmatic
audits address compliance with ``the requirements under this part.''
The changes to this provision finalized in this rule provide HHS with
the flexibility to target the scope of the audits to the requirements
applicable to each State Exchange model under 45 CFR part 155 and that
most impact program integrity, which should generally reduce the
administrative burdens associated with these audits. For example, we
anticipate tailoring the requirements regarding audit of eligibility
and enrollment activities by State Exchange model. Since SBE-FPs rely
on the federal platform for eligibility and enrollment functions, we
believe that they should not be subject to the same audit requirements
as State Exchanges that perform all eligibility and enrollment
activities because they operate their own technology platform for such
activities.
We also clarify that we are not eliminating eligibility and
enrollment reporting under Sec. 155.1200(b)(2). The amendments
finalized to that provision reflect that HHS already requires State
Exchanges to submit annual reporting (such as the SMART) that encompass
eligibility and enrollment reporting, along with other information
about compliance with requirements in other subparts under 45 CFR part
155. These changes recognize that HHS has come to utilize the SMART
along with the annual programmatic and financial audit reports as the
primary oversight tools to oversee State Exchange compliance with the
applicable requirements under 45 CFR part 155, which includes
compliance with eligibility and enrollment requirements. We further
clarify that if we need additional information about a State Exchange's
compliance with applicable requirements beyond what is reported through
SMART, we would leverage the new flexibility under the new Sec.
155.1200(d)(2) to conduct a targeted audit.
Finally, in response to the comments expressing concern about the
increased risk of disclosure of consumer information as a result of the
additional oversight and auditor review of individual eligibility
determinations made by State Exchanges that is contemplated in this
rule, we note that,
[[Page 71683]]
as part of the responsibilities of State Exchanges and their contracted
entities in handling individual consumer data associated with core
Exchange functions such as eligibility, enrollment, and consumer
assistance, State Exchanges and their contracted non-Exchange entities
must always comply with the privacy and security requirements under
Sec. Sec. 155.260 and 155.280 with respect to the protection and
disclosure of personally identifiable information. Additionally, under
Sec. 155.285, State Exchanges and their contracted entities are
subject to civil monetary penalties for improper use or disclosure of
personally identifiable information. Finally, HHS has authority under
Sec. 155.280 to conduct audits and investigations to ensure compliance
with Exchange privacy and security standards, and may pursue civil,
criminal or adminstirative proceedings or actions as determined
necessary.
After considering the comments received in response to the proposed
rule and for the reasons discussed above, we are finalizing the
modifications to Sec. 155.1200.
B. Health Insurance Issuer Standards Under the Affordable Care Act,
Including Standards Related to Exchanges
1. Segregation of Funds for Abortion Services (Sec. 156.280)
We proposed an amendment at Sec. 156.280(e)(2) relating to billing
and payment of the policy holder's portion of the premium attributable
to abortion services for which appropriated funds may not be used.
Since 1976, Congress has included language, commonly known as the Hyde
Amendment, in the Labor, Health and Human Services, Education and
Related Agencies appropriations legislation.\7\ The Hyde Amendment, as
currently in effect, permits federal funds subject to its funding
limitations to be used for abortion services only in the limited cases
of rape, incest, or if a woman suffers from a physical disorder,
physical injury, or physical illness, including a life-endangering
physical condition caused by or arising from the pregnancy itself, that
would, as certified by a physician, place the woman in danger of death
unless an abortion is performed (Hyde abortion services). Generally,
when appropriated funds are subject to the Hyde Amendment's funding
limitations, an agency is prohibited, among other things, from using
those funds to pay for coverage of abortion beyond these specific
limited exceptions (non-Hyde abortion services). Section 1303(b)(2) of
the PPACA prohibits the issuer of a QHP offering coverage for abortion
services that are not exempt from the Hyde Amendment's ban on the use
of federal funds to pay for certain abortions, from using any amount
attributable to PTC (including APTC) or CSRs (including advance
payments of those funds to an issuer, if any) for abortions for which
federal funds are prohibited, ``based on the law as in effect as of the
date that is 6 months before the beginning of the plan year involved.''
\8\
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\7\ Accordingly, the Hyde Amendment is not permanent Federal
law, but applies only to the extent reenacted by Congress from time
to time in appropriations legislation.
\8\ Section 1303(b)(1)(B)(i) of the PPACA.
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Section 1303 of the PPACA outlines specific accounting and notice
requirements that QHPs covering non-Hyde abortion services must follow
to ensure that no federal funding is used to pay for services for which
public funds are prohibited. Under sections 1303(b)(2)(B) and (b)(2)(D)
of the PPACA, as implemented in Sec. 156.280(e)(2)(i) and (e)(4), QHP
issuers must collect a separate payment from each enrollee in such a
plan without regard to the enrollee's age, sex, or family status, for
an amount equal to the greater of the actuarial value of coverage of
abortion services for which public funding is prohibited, or $1 per
enrollee per month.
Section 1303(b)(2)(D) of the PPACA establishes certain requirements
with respect to a QHP issuer's estimation of the actuarial value of
non-Hyde abortion services. Under section 1303(b)(2)(D) of the PPACA,
the QHP issuer ``may take into account the impact on overall costs of
the inclusion of such coverage, but may not take into account any cost
reduction estimated to result from such services, including prenatal
care, delivery, or postnatal care.'' The QHP issuer is also required to
estimate such costs as if such coverage were included for the entire
population covered, and may not estimate such a cost at less than $1
per enrollee, per month. If an enrollee's premium is paid through
employee payroll processes, section 1303(b)(2)(B) of the PPACA requires
that the separate payments ``shall each be paid by a separate
deposit.'' Accordingly, issuers that offer QHPs that provide coverage
of non-Hyde abortion services must collect a separate payment of no
less than $1 per enrollee in the plan per month, regardless of the
actuarial value of coverage of non-Hyde abortion services and
regardless of whether premiums are paid directly by enrollees or
through payroll deductions.
In certain rare scenarios, the FFEs' system allocated an amount of
APTC to a QHP such that the share of the aggregate premium attributable
to coverage of non-Hyde abortion services is less than $1, which falls
below the minimum requirement under section 1303 of the PPACA. We made
system changes for the open enrollment period for plan year 2019 to
ensure that the minimum premium amount of $1 per enrollee per month is
assigned to all enrollments into plans offering coverage of non-Hyde
abortion services, so that issuers can separately collect this amount
directly from enrollees for the portion of the total premium
attributable to coverage of non-Hyde abortion services.
Pursuant to section 1303(b)(2)(C) of the PPACA, as implemented at
Sec. 156.280(e)(3), QHP issuers must segregate funds for coverage of
non-Hyde abortion services collected from enrollees into a separate
allocation account that is to be used to pay for non-Hyde abortion
services. Thus, if a QHP issuer disburses funds for a non-Hyde abortion
on behalf of an enrollee, it must draw those funds from the segregated
allocation account. The account cannot be used for any other
purpose.\9\
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\9\ This means that funds from the allocation account into which
premium amounts attributable to the non-Hyde abortion service
benefit must be deposited are the only funds that may be used to pay
for non-Hyde abortion services. It should not be read to suggest
that the funds in the separate allocation account may not be used to
cover administrative costs associated with coverage of non-Hyde
abortion services. See 42 U.S.C. 18023(b)(2)(D)(ii)(I) (when
estimating per member, per month cost of non-Hyde abortion services,
issuers may take into account the impact on overall costs of the
inclusion of such coverage).
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Section 1303 of the PPACA and current implementing regulations at
Sec. 156.280 do not specify the method a QHP issuer must use to comply
with the separate payment requirement under section 1303(b)(2)(B)(i) of
the PPACA and Sec. 156.280(e)(2)(i). In the 2016 Payment Notice, we
provided guidance with respect to acceptable methods that a QHP issuer
offering coverage of non-Hyde abortion services on an individual market
Exchange may use to comply with the separate payment requirement. We
stated that the QHP issuer could satisfy the separate payment
requirement in one of several ways, including by sending the enrollee a
single monthly invoice or bill that separately itemizes the premium
amount for coverage of non-Hyde abortion services; sending the enrollee
a separate monthly bill for these services; or sending the enrollee a
notice at or soon after the time of enrollment that
[[Page 71684]]
the monthly invoice or bill will include a separate charge for such
services and specify the charge. In the 2016 Payment Notice, we also
stated that an enrollee may make the payment for coverage of non-Hyde
abortion services and the separate payment for coverage of all other
services in a single transaction. On October 6, 2017, we released a
bulletin that discussed the statutory requirements for separate
payment, as well as this previous guidance with respect to the separate
payment requirement.\10\
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\10\ CMS Bulletin Addressing Enforcement of Section 1303 of the
Patient Protection and Affordable Care Act (October 6, 2017),
available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Section-1303-Bulletin-10-6-2017-FINAL-508.pdf.
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As explained in the proposed rule, HHS now believes that some of
the methods for billing and collection of the separate payment for
coverage of non-Hyde abortion services described as permissible in the
preamble to the 2016 Payment Notice do not adequately reflect
Congress's intent. We believe Congress intended that QHP issuers
collect two distinct (that is, ``separate'') payments, one for the
coverage of non-Hyde abortion services, and one for coverage of all
other services covered under the policy, rather than simply itemizing
these two components in a single bill, or notifying the enrollee that
the monthly invoice or bill will include a separate charge for these
services.
We proposed an amendment at Sec. 156.280(e)(2) relating to billing
and payment of the policy holder's portion of the premium attributable
to coverage of non-Hyde abortion services to reflect this
interpretation of the statute. Specifically, we proposed that, as of
the effective date of this final rule, QHP issuers (1) send an entirely
separate monthly bill to the policy holder, the individual who is the
party legally responsible for the payment of premiums (which we refer
to in this final rule as the ``policy holder'') for only the portion of
premium attributable to coverage of non-Hyde abortion services, and (2)
instruct the policy holder to pay the portion of their premium
attributable to coverage of non-Hyde abortion services in a separate
transaction from any payment the policy holder makes for the portion of
their premium not attributable to coverage of non-Hyde abortion
services. We also proposed that if a policy holder pays the entire
premium in a single transaction (both the portion attributable to
coverage of non-Hyde abortion services, as well as the portion
attributable to coverage for other services), the QHP issuer would not
be permitted to refuse to accept such a combined payment on the basis
that the policy holder did not send payment in two separate
transactions as requested by the QHP issuer, and to then terminate the
policy, subject to any applicable grace period, for non-payment of
premiums. We also stated that the QHP issuer would be expected to
counsel enrollees to pay in two separate transactions in the future.
Finally, we proposed a technical change to Sec. 156.280(e)(2)(iii), as
redesignated, to insert an appropriate cross reference to the
explanation of the separate payments.
We are finalizing these policies at Sec. 156.280(e)(2), but with
several changes explained below. We are also finalizing the technical
revision to Sec. 156.280(e)(2)(iii) as redesignated, on which we
received no comments, and are revising the heading of Sec. 156.280 so
that it accurately describes the new requirements we are finalizing in
this final rule.
Comment: Most commenters objected to the proposed changes to issuer
billing for the portion of the premium attributable to coverage of non-
Hyde abortion services, asking that we withdraw the proposals
altogether. A minority of commenters summarily supported the policy.
Nearly all commenters objecting to the proposals stated that
separately billing for one specific service would be an unnecessary
change that would not enhance program integrity with respect to
enrollee transparency or appropriate use of federal funds. These
commenters noted that current requirements already adequately comply
with the statute and ensure appropriate segregation of funds, without
imposing the operational and administrative burdens of the proposed
approach. These commenters asserted that the current regulatory
structure allows enrollees to make and issuers to accept a single
transfer of funds for the full amount of an enrollee's premium payment
including the amount attributable to coverage of non-Hyde abortion
services, while still ensuring that the funds are ultimately segregated
appropriately. Many commenters noted that requiring a separate bill and
instructing enrollees to pay in separate transactions would be against
industry practice, which permits one single bill outlining charges and
allows for enrollees to make payments using a single transfer of funds
which can be administratively separated by the insurer after payment is
received.
Some commenters who supported the proposed changes stated that
section 1303 of the PPACA contains an unambiguous statutory command
that issuers separately bill and collect payments for the portion of a
policy holder's premium attributable to coverage of non-Hyde abortion
services. These commenters stated that the proposals are necessary to
remedy incorrect methods for billing and payment and will help to
ensure issuer compliance with the segregation of funds and the
requirement to collect separate payments under section 1303 of the
PPACA.
Nearly all objecting commenters stated that the proposals would
cause considerable and unnecessary confusion and frustration for
enrollees that may jeopardize their health insurance coverage.
Commenters expressed concern that these billing changes would make it
more difficult for policy holders to pay their premium bills, and could
result in coverage being terminated for unintentional non-payment.
Commenters expressed concerns that, despite issuer notices and
communications to explain the second bill and separate payment
requirement, enrollees would likely not understand this change in
billing.
Among the many scenarios that commenters asserted could result in
enrollees failing to pay the separate bill, commenters noted that
enrollees might not realize or understand that there is a separate bill
covering different services under their plan; enrollees may not realize
that such payment is mandatory in order to fully satisfy their premium
liability each month and avoid termination of coverage; or enrollees
may not notice a second bill since it would be delivered in a separate
mailing with which they are unfamiliar. Commenters expressed concern
that in any of these scenarios, the enrollee would enter a grace period
and, in most cases, have 90 days from the date of the missed payment to
reconcile their balance, resulting in enrollees who fail to do so
losing their health insurance coverage. Commenters expressed concern
that such slight enrollee confusion as a result of the proposal could
lead to the complete loss of coverage.
Commenters also stated that the proposal to allow enrollees to
``not be penalized'' for sending back a combined payment, would only
send conflicting messages to enrollees and add to their confusion.
Commenters stated that our proposal that issuers could accept combined
payments from enrollees, but would then be expected to counsel
enrollees to pay in two separate payments in the future, requiring
issuers to repeatedly instruct enrollees to pay in separate
transactions for each bill despite not being able to penalize enrollees
if they continuously fail to do
[[Page 71685]]
so, adds additional burden on issuers and will lead to increased calls
from confused enrollees.
Many commenters stated they appreciated the enrollee protections
prohibiting QHP issuers from refusing to accept a combined payment or
terminating an enrollee's coverage on this basis. However, commenters
expressed concerns that this protection alone would not be enough for
enrollees who fail to pay the second bill entirely and asked that HHS
add protections to the policy to avoid termination of coverage for
enrollees who inadvertently fail to make the additional payment due to
confusion about the separate bill.
Response: We continue to believe that the statute contemplates
issuers billing separately for coverage of non-Hyde abortion services,
consistent with Congress's intent that issuers collect separate
payments for such services. Requiring one bill for the portion of the
policy holder's premium attributable to coverage of non-Hyde abortion
services and a separate bill for the portion of the policy holder's
premium attributable to coverage of all other services covered under
the QHP will better align with the intent of section 1303 of the PPACA.
HHS intentionally sought comment on ways to mitigate possible
enrollee confusion from these proposals. After considering these
comments, we believe there may be less confusing and less burdensome
ways to implement these billing changes while also fulfilling section
1303 of the PPACA's statutory mandates.
Therefore, we are finalizing, as proposed in a new paragraph at
Sec. 156.280(e)(2)(ii)(A), the requirement that QHP issuers must send
an entirely separate monthly bill to the policy holder for only the
portion of the premium attributable to coverage of non-Hyde abortion
services. However, in an effort to mitigate issuer burden associated
with added postage and mailing costs, we will not require separate
mailings with separate postage, as proposed. Rather, we are codifying
that the QHP issuer may include the separate bill for coverage of non-
Hyde abortion services in the same envelope or mailing as the bill for
the portion of the premium attributable to coverage of all other
services. As a result of finalizing this proposal, and to more
accurately reflect the contents of Sec. 156.280, we are making a
technical change to revise the section heading of Sec. 156.280 to now
read, ``Separate billing and segregation of funds for abortion
services.''
We note that when issuers send a separate paper bill for the
portion of the premim attributable to coverage of non-Hyde abortion
services in the same mailing as the bill for the other portion of the
policy holder's premium, the bills must remain distinct and separate,
on separate pieces of paper with separate explanations of the charges
to ensure the policy holder understands the distinction between the two
bills and understands that they are expected to pay the separate bills
in separate transactions.
We are also codifying that issuers transmitting bills through email
or other electronic means will still be required to transmit the
separate bill for coverage of non-Hyde abortion services in a separate
email or electronic communication than for the bill for the portion of
the premium attributable to coverage of all other services. We assume
that bills sent electronically can be sent at minimal cost such that
requiring separate electronic communications will not significantly
increase the burden this requirement places on issuers. We also believe
policy holders are more likely to make a separate payment for coverage
of non-Hyde abortion services when they receive a separate bill for
such amount, and that receiving the separate bill in a separate
communication further bolsters that likelihood. In deciding to finalize
that QHP issuers may send the separate bill in a single mailing when
sending paper bills, but must send the separate bill in a separate
email or electronic communication when sending bills electronically, we
weighed the goal of separate payment with the competing concern of
issuer burden resulting from sending separate paper bills, and the
comparatively low burden in sending separate electronic bills.
We are also finalizing, as proposed in a new paragraph at Sec.
156.280(e)(2)(ii)(B) the requirement that issuers must instruct policy
holders to pay the separate bill in a separate transaction. QHP issuers
should make reasonable efforts to collect the payment separately.
However, we continue to believe that potential loss of coverage would
be an unreasonable result of an enrollee paying in full, but failing to
adhere to the QHP issuer's requested payment procedure. Therefore, at
Sec. 156.280(e)(2)(ii)(B) we are also codifying, with minor non-
substantive revisions, that the QHP issuer would not be permitted to
refuse a combined payment on the basis that the policy holder did not
send two separate payments as requested by the QHP issuer, and to then
terminate the policy for non-payment of premiums. QHP issuers that
receive combined enrollee premiums in a single payment must treat the
portion of the premium attributable to coverage of non-Hyde abortion
services as a separate payment and must disaggregate the amounts into
the separate allocation accounts, consistent with Sec.
156.280(e)(2)(iii).
To mitigate enrollee confusion and satisfy the requirement to
instruct policy holders to pay the separate bill in a separate
transaction, QHP issuers should consider including--in the email or
electronic communication containing the bill for the portion of the
policy holder's premium not attributable to coverage of non-Hyde
abortion services--language notifying policy holders that they will be
receiving a second, separate email or electronic communication
containing a separate bill for the portion of their premium
attributable to coverage of non-Hyde abortion services that they should
pay in a separate transaction. Regardless of whether the QHP issuer
sends the bills as paper copies in a mailing or sends the bills through
electronic communications, the QHP issuer must instruct their enrollees
to pay the separate bill in a separate transaction and must still
produce an invoice or bill that is distinctly separate from the invoice
or bill for the other portion of the policy holder's premium that is
not attributable to coverage of non-Hyde abortion coverage, whether in
paper or electronic format. We also suggest that issuers state clearly
for policy holders on both bills that the policy holder is receiving
two bills to cover the total amount of premium due for the coverage
period, that the policy holder's total premium due is inclusive of the
amount attributable to coverage of non-Hyde abortion services, and that
the policy holder should make separate payments for each bill. We
believe including these statements on each bill, will help policy
holders to understand that they are receiving two bills for the
premiums due for the payment period, the total amount of premium they
owe, and the need to make a separate payment for each bill. We believe
this will help to ensure that policy holders return the full monthly
amount due, thus preventing policy holders from entering grace periods
for non-payment of the premium amounts for the non-Hyde abortion
coverage.
We believe these changes will assist in managing enrollee
confusion. However, we also acknowledge that additional outreach and
education may still be necessary on the part of issuers and states to
explain to enrollees why they are receiving a separate bill for a
relatively small amount for which they are expected to submit payment
in a separate transaction. As indicated above, we believe that QHP
issuers
[[Page 71686]]
should explain to the policy holder in layperson terms on the separate
bill for coverage non-Hyde abortion services, or otherwise communicate
to enrollees through enrollee outreach and education, that non-payment
of any premium due (including non-payment of the portion of the policy
holder's premium attributable to coverage of non-Hyde abortion
services) would continue to be subject to state and federal rules
regarding grace periods (unless the QHP issuer elects to take advantage
of the enforcement discretion we outline later in this section),
clarifying for policy holders that failure to pay the portion of the
premium attributable to coverage of non-Hyde abortion services could
ultimately result in termination of coverage.
We believe that including explanatory language on the bills as well
as additional outreach and education by QHP issuers will decrease the
likelihood that policy holders would inadvertently fail to pay the
separate bill for the portion of their premium attributable to coverage
of non-Hyde abortion services. However, we acknowledge commenters'
concerns that, even with fulsome outreach and education efforts to
explain the billing scheme to the policy holder, consumer confusion
could still lead to inadvertent coverage losses. This risk may be
especially acute for enrollees whose plan choices likely were not
motivated by the plan's coverage of non-Hyde abortion services, such as
men purchasing a QHP solely for themselves, consumers buying coverage
for babies or toddlers, and those who otherwise may be unaware that the
plan covers non-Hyde abortion services. However, we note that this risk
is mitigated by the steps we have taken to improve transparency
regarding QHP offerings, to make it easier for consumers to select QHPs
that they believe are best suited to their needs and preferences, such
as information to more readily identify QHPs that offer coverage of
non-Hyde abortion services.\11\
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\11\ ``Frequently Asked Questions for Agents, Brokers, and
Assisters Providing Consumers with Details on Plan Coverage of
Certain Abortion Services'' (November 21, 2018), available at
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf.
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To address the risk of terminations related to inadvertent failure
to pay the separately billed amount for coverage of non-Hyde abortion
services, we intend to propose further rulemaking to change our
regulations including, for example, our regulations governing
termination for non-payment of premiums.\12\ Although QHP issuers can
implement premium payment thresholds under Sec. 155.400(g), those
thresholds may not be effective at preventing termination of coverage
for policy holders receiving higher APTC amounts who would have greater
difficulty meeting the issuer's premium payment threshold pursuant to
Sec. 155.400(g). Until we can finalize regulatory changes through a
separate rulemaking, we will exercise enforcement discretion as an
interim step. Specifically, HHS will not take enforcement action
against a QHP issuer that adopts and implements a policy, applied
uniformly to all its QHP enrollees, under which an issuer does not
place an enrollee into a grace period and does not terminate QHP
coverage based solely on the policy holder's failure to pay the
separate payment for coverage of non-Hyde abortion services. In
accordance with non-discrimination rules applicable to QHP issuers, we
would expect issuers to apply such a policy uniformly to all of their
enrollees for the duration of the applicable plan year. We also note
that if a QHP issuer chooses to take this approach, the QHP issuer
would still be prohibited from using any federal funds for coverage of
non-Hyde abortion services. Moreover, the QHP issuer would still be
required to collect the premium for the non-Hyde abortion coverage,
which means that the QHP issuer cannot relieve the policy holder of the
duty to pay the amount of the premium attributable to coverage for non-
Hyde abortion services. This enforcement posture will take effect upon
the effective date of the separate billing requirements under 45 CFR
156.280, which is 6 months after publication of this final rule in the
Federal Register. We encourage states and State Exchanges to take a
similar enforcement approach.
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\12\ CMS has yet to make determinations regarding specific
requirements or rule changes CMS will propose to address the risk of
terminations related to inadvertent failures to pay the separately
bill amounts for coverage of non-Hyde abortion services.
Accordingly, although CMS will undertake the described rulemaking,
nothing in this preamble discussion should be construed as a
representation or guarantee that CMS will propose changes to any
specific rule or requirement.
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We acknowledge that the enforcement posture described above may not
mitigate all concerns identified by commenters. Some commenters
expressed concern that the lack of transparency under current section
1303 billing requirements has contributed to unknowing purchases of
QHPs that include coverage of non-Hyde abortion services by consumers
who object to purchasing such coverage. As noted above, this risk is
mitigated by the steps the FFEs have taken to improve transparency of
the coverage of non-Hyde abortion services under FFE QHPs.\13\ However,
even where consumers who hold religious or moral objections to coverage
of non-Hyde abortion services may more easily detect whether a QHP
offers coverage to which they object, they may still be deciding
between purchasing a QHP that covers non-Hyde abortion services, or
else going without the coverage they need, because there may not be a
QHP available on the Exchange that omits coverage for non-Hyde abortion
services.
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\13\ ``Frequently Asked Questions for Agents, Brokers, and
Assisters Providing Consumers with Details on Plan Coverage of
Certain Abortion Services'' (November 21, 2018), available at
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf.
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Until we are able to address these concerns through future
rulemaking or other appropriate action, we also will not take
enforcement action against QHP issuers that modify the benefits of a
plan either at the time of enrollment or during a plan year to
effectively allow enrollees to opt out of coverage of non-Hyde abortion
services by not paying the separate bill for such services. This would
result in the enrollees having a modified plan that does not cover non-
Hyde abortion services, meaning that they would no longer have an
obligation to pay the required premium for such services. We recognize
that a QHP issuer's ability to make changes to its QHPs to implement a
policy holder's opt out would be subject to applicable state law. We
encourage states and State Exchanges to take an enforcement approach
that is consistent with the one we intend to take, as described in this
section.
Where a QHP issuer allows an enrollee to opt out of coverage of
non-Hyde abortion services by not paying the separate bill for such
services, the user fee a QHP issuer in an FFE or SBE-FP would pay would
continue to be based on the original premium, which includes the
portion of the premium attributable to non-Hyde abortion coverage. This
is being done for operational reasons and issuer convenience, as making
changes to the user fee system for FFEs and SBE-FPs to reflect a
reduction in premium would result in only a minimal reduction in user
fees owed. We do not believe the minimal reduction justifies the
additional expense to FFEs and SBE-FPs related to the development of
systems to receive and process such
[[Page 71687]]
reports (which could then result in higher user fees in the future) or
the additional cost to QHP issuers related to reporting the minimal
changes in premiums.
We expect QHP issuers taking this approach to take appropriate
measures to distinguish between a policy holder's inadvertent non-
payment of the separate bill for coverage of non-Hyde abortion services
and a policy holder's intentional nonpayment of the separate bill. A
policy holder who inadvertently fails to pay the separate bill may have
failed to pay because of unfamiliarity with receiving a separate bill
for this portion of their premium and may still wish to retain coverage
for non-Hyde abortion services if provided the opportunity to rectify
nonpayment of the separate bill. A policy holder who intentionally does
not pay the separate bill is likely to have made the conscious choice
to opt-out of such coverage. To help ensure any modifications made by a
QHP issuer under this enforcement approach to a policy holder's plan
align with the policy holder's intent, the QHP issuer could include on
the separate bill for coverage of non-Hyde abortion services or
separate electronic communication an option (such as a check box or
option button) where the policy holder can affirmatively indicate their
intent to opt-out of such coverage by not paying the separate bill. We
also recommend including an explanation for the policy holder that by
affirmatively opting out, the policy holder would no longer have
coverage for non-Hyde abortion services and would no longer have an
obligation to pay the required premium for such services.
To be clear, we intend that a policy holder's opt-out would have to
be applied to all persons in the enrollment group under the policy. For
example, if the policy holder does not pay the separate bill for the
portion of the premium attributable to non-Hyde abortion coverage and
therefore opts out of coverage for non-Hyde abortion, this opt-out
would be applicable to all persons in the policy holder's enrollment
group, such as the policy holder's spouse and/or family if they are
also covered under the policy holder's policy. Further, our exercise of
enforcement discretion would only permit issuers to make one-time
changes to remove coverage of non-Hyde abortion services from the QHP
coverage.
Accordingly, once a policy holder opts out of coverage for non-Hyde
abortion services, the policy holder would not be allowed to retract
their opt-out decision and reinstate coverage of non-Hyde abortion
services for that benefit year, by paying premiums that could cover a
portion of premium attributable to coverage of non-Hyde abortion
services. Thus, an opt-out would be effective for the remainder of the
benefit year.
Unlike the enforcement discretion policy we announce above to
mitigate risk of inadvertent terminations, this enforcement posture
will become effective on the effective date of this final rule, which
will be 60 days after its publication in the Federal Register. The
separate billing requirements we finalize here under 45 CFR 156.280
will address, among other things, stakeholder comments that the lack of
transparency under current section 1303 billing requirements has
contributed to unknowing purchases of QHPs that include coverage of
non-Hyde abortion services by consumers who object to purchasing such
coverage. Because the new billing requirements under these final rules
will not take effect upon finalization of these rules, we believe it is
important to take this enforcement posture as soon as possible to
provide relief for the lack of transparency under current QHP billing
requirements.
We are taking this approach to maintain protections against adverse
selection, while mitigating the serious negative risks of coverage loss
by enrollees who might experience difficulties adjusting from the
manner in which enrollees are accustomed to paying for insurance
coverage or services under a single plan or contract. These interim
policies will also provide relief to persons who may unknowingly
purchase coverage to which they object because of the lack of
transparency under current QHP billing requirements that do not require
separate bills for non-Hyde abortion coverage. We believe these interim
enforcement policies strike an appropriate balance between honoring
PPACA section 1303's requirement for collection of separate payments,
protecting enrollees against inadvertent losses of coverage, and
ensuring all enrollees have access to coverage that meets their needs
and that does not result in their supporting coverage for non-Hyde
abortion services to which they object.
Comment: Commenters stated that HHS greatly underestimated the
burden on issuers caused by these proposals. Commenters stated that the
proposed rule's analysis of the expected costs and benefits was
incomplete, such that HHS cannot accurately determine whether the
benefits outweigh the quantitative and qualitative costs to justify
finalizing the proposals. Many commenters stated that the burden and
costs far outweigh any benefit and, as such, the proposals should not
be finalized.
Commenters also stated that requiring issuers to send the separate
bill in a different envelope or separate email communication would cost
QHPs significantly more resources than HHS estimated for the multiple
mailings, email communications, and personnel hours spent managing
enrollee confusion, termination notices, and multiple bills. For
example, commenters noted requiring a separate mailing would double the
mailing and postage costs associated with current issuer billing.
Commenters also explained that the technical build issuers would need
to implement to comply with these proposals would be both complex and
time consuming, and would alone require substantial new upfront and
annual costs for issuers that HHS did not account for. In general,
commenters expressed concerns that requiring separate billing and
instructing enrollees to make separate payments for a single policy
would create substantial new operational administrative costs for
health insurance issuers and, subsequently, for the enrollees they
serve.
Commenters also expressed concerns with the burdens these changes
would impose on Exchanges. Commenters noted Exchanges would need to
make time consuming and resource intensive changes to their websites,
enrollment systems, and customer service and outreach efforts to align
with the separate billing and payment requirements, which would be
costly and disrupt Exchange efficiency.
Commenters also expressed concern that HHS failed to address the
adverse impacts on enrollees resulting from how issuers would react to
being forced to allocate additional significant operational and
administrative resources towards issuing and processing multiple bills
and monthly payments from each policy holder. Many commenters stated
that issuers would be required to consider these new costs when setting
actuarially sound rates, which would lead to higher premiums for
enrollees. Many commenters stated that the costs and requirements on
QHP issuers that cover non-Hyde abortion services will in many cases be
so high that it will result in QHP issuers dropping coverage for non-
Hyde abortion services altogether, even if their enrollees desire such
coverage. Commenters expressed concern that, in such scenarios, this
would transfer the costs and burdens of accessing non-Hyde abortion
services to enrollees who must seek coverage for non-Hyde abortion
services elsewhere
[[Page 71688]]
or pay out-of-pocket. Other commenters noted that issuers are likely to
drop coverage of non-Hyde abortion services if the alternative is
terminating coverage for a substantial number of its enrollees due to
enrollee confusion resulting in non-payment of miniscule amounts.
Many commenters stated that the proposals would threaten the mental
and physical health, well-being, and economic security of enrollees,
especially women, across the country. Commenters stated that health
insurance should provide coverage for the full range of reproductive
health care, including abortion, and that this rule threatens to take
such coverage away by imposing burdensome requirements on issuers.
Commenters also expressed concern that, should these proposals result
in issuers ceasing to provide coverage of non-Hyde abortion services,
it could impede a patient's ability to make the best medical decision
for herself and her family in consultation with her physician given
that many women would be unable to pay privately for such services due
to high costs without insurance. Commenters noted that barriers to
accessing affordable non-Hyde abortion services could have long-term,
devastating effects on a woman and her family's economic future.
Commenters noted that the proposals would have a greater impact on
subsidized enrollees and might have a discriminatory effect on
enrollees receiving higher APTC amounts who would have greater
difficulty meeting the issuer's premium payment threshold pursuant to
Sec. 155.400(g). Commenters also stated that it would have damaging
consequences on enrollees with specific conditions (like patients with
cancer or chronic conditions), as any gaps in coverage as a result of
confusion over billing may interrupt disease treatment schedules and
could jeopardize health outcomes. Commenters also stated that the
proposals would threaten the coverage gains made by the PPACA and have
a disproportionate impact on enrollees who already face barriers to
care, such as low-income individuals and marginalized communities. HHS
received many comments expressing concern that when legal abortion
becomes inaccessible, women who seek to end their pregnancy turn to
unsafe and illegal methods, risking arrest, serious injury, or even
death. Commenters also expressed concern that HHS did not propose any
requirements or guidelines for how issuers should educate, inform, and
conduct outreach to enrollees regarding these changes in billing and
payment if the proposed regulation is implemented as proposed.
Commenters also expressed concern that the proposals didn't address how
individuals with limited English proficiency (LEP) or individuals with
disabilities may experience barriers in complying with the proposed
changes which commenters found particularly concerning, since
individuals with LEP and individuals with disabilities already
experience hardships in navigating and accessing health care.
Response: As we acknowledged in the proposed rule, we recognize
that QHP issuers that cover non-Hyde abortion services may experience
an increase in burden as a result of the proposals. We have carefully
considered the comments that shared information about how the proposals
would likely impact markets, issuers, and enrollees.
We agree with commenters that separately mailing the separate bill
with separate postage could cause unintended additional burden and cost
for issuers. Therefore, we are not finalizing the requirement that the
separate bills be mailed separately with separate postage. However, we
also acknowledge that QHP issuers will nevertheless still incur
significant burden and costs as a result of implementing this new
separate billing policy. We agree with commenters that QHP issuers are
likely to consider these new costs when setting actuarially sound rates
and that this will likely lead to higher premiums for enrollees. The
potential premiums increases are discussed in further detail in section
III, ``Collection of Information Requirements,'' and section IV,
``Regulation Impact Analysis,'' of this rule. However, in spite of the
potential premium increases, we do not agree that requiring issuers to
send separate bills, instruct policy holders to pay in two separate
transactions, and make reasonable efforts to collect the payments
separately would be an inefficient use of resources. Rather, this
instruction is important to achieving better alignment of the
regulatory requirements for QHP issuer billing of enrollee premiums
with the separate payment requirement in section 1303 of the PPACA. We
understand commenters' concerns that the issuer burden associated with
this policy may result in issuers withdrawing coverage of non-Hyde
abortion services altogether, requiring some enrollees to pay for these
services out-of-pocket.
Subject to applicable state law, it is ultimately at the issuer's
discretion whether to cover non-Hyde abortion services in their QHPs,
and thus to incur any associated burden, and it is ultimately the
states' and HHS's duty to enforce the statutory provisions of the PPACA
as they are written. Although section 1303 permits issuer flexibility
in abortion coverage choices, it also requires that QHP issuers
electing to cover non-Hyde abortion services take certain steps to
ensure that no APTC or CSR funds are used to pay for these services,
such as requiring the QHP issuer to collect a separate payment for
these services. The finalized changes at Sec. 156.280(e)(2)(ii) may
add issuer burden with regard to their payment and billing operations.
However, the statute contemplates such burden in section
1303(b)(2)(B)(i) of the PPACA when it requires that issuers collect a
separate payment for the portion of the premium attributable to
coverage of non-Hyde abortion services and in section 1303(b)(2)(D) of
PPACA when it specifies how QHP issuers are to calculate the basic per
enrollee, per month cost, determined on an average actuarial basis, for
including coverage of non-Hyde abortions in QHPs. We believe that
finalizing the rule to allow issuers to send both bills in a single
mailing will mitigate the issuer and state burden that would be imposed
if we were finalizing the policy as originally proposed, as well as any
initial confusion on the part of enrollees. We estimate that these
changes would eliminate much of the additional mailing costs for the
second bill since issuers would no longer need to pay for additional
postage and envelopes. We believe the changes we are finalizing at
Sec. 156.280(e)(2)(ii) strike a balance between requiring the separate
bill that we believe is required for better alignment with section 1303
of the PPACA, while also avoiding unnecessary enrollee confusion,
enrollee harm, and issuer burden.
We understand that non-Hyde abortion services are services for
which some enrollees may desire coverage, as they may be costly when
not covered by insurance. However, we believe that requiring separate
billing for the portion of the premium attributable to coverage of non-
Hyde abortion services is a necessary change to better align issuer
billing with the statutory requirements specified in section 1303 of
the PPACA, which requires non-Hyde abortion services be treated
differently from other covered services. We believe the changes we are
finalizing at Sec. 156.280(e)(2)(ii) will impose less burden on
issuers to implement this policy than if we were finalizing as
originally proposed, decreasing the likelihood that issuers will drop
this coverage or significantly raise their premiums. Although we
acknowledge
[[Page 71689]]
the changes we are finalizing will increase the burden associated with
personnel hours spent managing enrollee confusion, termination notices,
and multiple bills, we also believe the changes we are finalizing at
Sec. 156.280(e)(2)(ii) minimize enrollee confusion surrounding
receiving a separate bill, helping to prevent situations where
enrollees enter grace periods and subsequently have their coverage
terminated for failing to inadvertently pay the second bill. We also
believe policy holder confusion regarding the separate bill may
decrease in future plan years as policy holders acclimate to this
billing structure and as consumer education continues. However, we
acknowledge that a policy holder enrolling for the first time after
this policy is finalized in a QHP covering non-Hyde abortion services
may still experience confusion regarding the separate bill. As
finalized, we believe the inclusion of a second separate bill for these
services in the same mailing and requiring issuers to instruct
enrollees to pay in a separate transaction for the separate bill
(whether sent electronically or by mail), but allowing issuers to
accept combined payments if the enrollee fails to pay separately, will
allow QHP issuers to continue providing coverage for non-Hyde abortion
services subject to state and federal law and allow policy holders to
continue accessing such coverage when available through their QHPs.
We understand commenters' concern about how these proposals will
impact individuals with LEP and other policy holders, especially those
with disabilities. We note that, under the policy being finalized,
issuers must still comply with all applicable enrollee assistance
requirements for QHPs on the Exchange, such as those requirements at
Sec. 155.205. In particular, we believe that the requirements at Sec.
155.205(c) will help to ensure that issuers are providing information
regarding the separate bill and payment options to individuals with LEP
and policy holders with disabilities in plain language and in an
accessible manner as specified in regulation. We also suggest that
issuers consider the needs of these enrollee groups when conducting
enrollee education or outreach about the finalized changes.
A more detailed summary of comments discussing the potential burden
associated with the proposals can be found in the sections III
``Collection of Information Requirements'' and IV ``Regulation Impact
Analysis'' of this rule. In section III ``Collection of Information
Requirements'' of this final rule, a detailed breakdown of the
estimated one-time burden per issuer and the estimated one-time burden
for all issuers can be found in tables 2 and 3, and a detailed
breakdown of the estimated annual burden per issuer and the estimated
annual burden for all issuers can be found in tables 4 and 5.
Comment: Many commenters expressed concern that the proposed
effective date would be administratively and operationally infeasible.
As proposed, issuers would be required to implement these proposals
beginning on the effective date of the final rule, which is 60 days
after the final rule is published in the Federal Register. Commenters
explained that issuer billing and payment requirements are typically
included in plan documents that are approved by the state regulator and
provided to the enrollee at the time of enrollment. Commenters noted
that a change in payment policies would mean that issuers would need to
re-file their applications for all affected plans for approval by state
regulators and that such a change could not be implemented mid-plan
year. Commenters also stated that, given the substantial investment
required to operationalize the new proposals and the associated
complexities, issuers would need a minimum of 12 to 18 months to
implement these changes. Further, because implementation would need to
coincide with the beginning of a new plan year, many commenters stated
that plan year 2021 would be the earliest at which implementation could
occur given the likely publication timeline for this final rule.
Commenters also stated that enrollees can more easily adapt to new
payment arrangements at the beginning of a plan year, when they expect
premiums to be different and other changes to their plan to occur.
Commenters also emphasized that the earlier the effective date, the
more burdensome these proposals become.
One commenter noted that although state regulators are able to
accept the responsibility of primary enforcement of this rule given
appropriate lead time, they will be ill-equipped to enforce it if it is
made effective immediately, since regulators will need time to develop
enforcement policies in consultation with state stakeholders. This
commenter also noted that, due to the small amounts issuers would
separately bill for coverage of non-Hyde abortion services, many
issuers may choose to revise their premium payment threshold policies
permitted under Sec. 155.400, but would not have time to do so if the
rule were made effective immediately.
Response: In response to comments that implementation will take
longer than the proposed effective date would allow, we are finalizing
that QHP issuers must be in compliance with the policies being
finalized at Sec. 156.280(e)(2) on or before the day that is 6 months
after publication of the final rule. If the date that is 6 months after
publication of the final rule falls in the middle of a QHP issuer's
billing cycle (in other words, after the QHP issuer has already sent
out bills to policy holders for that month), the QHP issuer would be
expected to comply beginning with the next billing cycle immediately
following that date. We acknowledge that requiring QHP issuers to begin
complying mid-plan year may pose implementation challenges for some
states and issuers. For example, as discussed further later in this
response, QHP issuers offering coverage of non-Hyde abortion services
will already have filed rates for the 2020 plan year and would be
unable to update those rates until the following plan year to reflect
the added administrative costs they may experience as a result of the
finalized separate billing policy. We also acknowledge requiring QHP
issuer compliance mid-plan year would not provide QHP issuers offering
coverage of non-Hyde abortion services an opportunity, in their
discretion, to revise their plan and benefit designs, such as to remove
coverage of non-Hyde abortion services, in order to avoid requirements
under the separate billing policy.
We anticipate that State Exchanges that perform premium billing and
payment processing that have QHP issuers that offer coverage for non-
Hyde abortion services will face similar challenges to comply with the
separate billing requirements within 6 months after publication of this
final rule as QHP issuers that offer coverage for non-Hyde abortion
services. However, we believe 6 months is sufficient for State
Exchanges performing premium billing and payment processing and QHP
issuers to implement the administrative and operational changes to
billing processes necessary to comply with this policy. We also believe
a 6-month implementation timeline appropriately prioritizes the goals
of improved statutory alignment with the additional time State
Exchanges and issuers may need to implement this policy. For those
State Exchanges and QHP issuers that may face uncommon or unexpected
impediments to timely compliance, HHS will consider extending
enforcement discretion to an Exchange or QHP issuer that fails to
timely
[[Page 71690]]
comply with the separate billing policy as required under this final
rule, if we find that the Exchange or QHP issuer attempted in good
faith to timely meet the requirements.
Although we do not believe that it is necessary for state
enforcement policies to have been developed prior to the effective and/
or compliance date for the separate billing requirements, we believe
this will offer state regulators enough time to develop enforcement
policies in consultation with state stakeholders. We also believe this
implementation timeline will provide sufficient time for enrollee
outreach and education to help mitigate any enrollee confusion
resulting from the finalized policies, and to explain to enrollees how
the QHP issuer's previous payment policies will be changing to comply
with these new billing requirements.
We believe it is important that QHP issuers implement these policy
changes at the earliest date feasible to improve statutory alignment
with section 1303 of the PPACA. Similarly, we do not believe that
potential implementation challenges in connection with a mid-year
implementation date should outweigh numerous commenters' concerns
regarding the lack of transparency as to whether their QHP covers non-
Hyde abortion services, transparency that would be delayed by
approximately a year if compliance were required by the first day of
the 2021 plan year. We believe that further delaying implementation
would be imprudent given that we are now aware of these consumer
concerns and given that we believe it is operationally and
administratively feasible for State Exchanges and QHP issuers to comply
with the policy within 6 months after publication of the final rule.
We acknowledge that if QHP issuers are not able to take these
additional costs into consideration when setting rates for the 2020
plan year, it is possible that some issuers may seek to exit the
individual market in a state or incur losses. We believe that any such
risk is small. QHP issuers will have the opportunity to adjust their
plan and benefits design and rates in response to the separate billing
policy for their plan year 2021 plan offerings. Moreover, we are aware
that the actuarial value of the non-Hyde abortion coverage under QHPs
generally may be less than the minimum $1 per enrollee, per month QHP
issuers must charge for such services under section 1303 of the PPACA;
and we are not aware of any reason QHP issuers could not use funds from
the allocation account into which premium amounts attributable to the
non-Hyde abortion service benefit must be deposited to cover
administrative costs associated with coverage of non-Hyde abortion
services.\14\ This should mitigate the financial consequences to
issuers of their not being able to update individual market rates prior
to the 2021 plan year to incorporate the costs of implementing the
processes required by this rule. We therefore believe that finalizing a
longer, 6-month implementation timeline sufficiently mitigates the risk
that some issuers would seek to exit the individual market to avoid the
separate billing requirements under this final rule.
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\14\ See 42 U.S.C. 18023(b)(2)(D)(ii)(I) (when estimating per
member, per month cost of non-Hyde abortion services, issuers may
take into account the impact on overall costs of the inclusion of
such coverage).
---------------------------------------------------------------------------
We acknowledge that State Exchanges' and QHP issuers' ability to
comply within 6 months may depend on the current status of their
billing systems and operations, and that State Exchanges and QHP
issuers may be confronted with unexpected impediments to timely
compliance. For this reason, HHS will consider extending enforcement
discretion to an Exchange or QHP issuer that fails to timely comply
with the separate billing policy as required under this final rule, if
HHS finds that the Exchange or QHP issuer attempted in good faith to
timely meet the requirements. Evidence of such good faith efforts might
include records showing that planning for compliance with this final
rule's requirements was begun within a reasonable time following the
publication of the final rule, but events outside the Exchange's or QHP
issuer's control caused implementation delays. HHS will consider
exercising this enforcement discretion based on the circumstances of
the particular Exchange or QHP issuer. We do not anticipate that HHS
would exercise such discretion for an Exchange or QHP issuer that fails
to meet the separate billing requirements after more than 1 year
following publication of this final rule.
Comment: Many commenters who supported the proposals stated that
these proposals would increase issuer compliance with the segregation
of funds and separate payment requirements under section 1303 of the
PPACA, and that the proposals would clarify and correct the previous
administration's interpretation of the statute. Many supporting
commenters noted their dissatisfaction that abortion coverage of any
kind is offered at all in the individual market, but expressed support
that the proposals would better protect enrollees who object, based on
their religious or moral beliefs (collectively, ``conscience''), to
coverage of non-Hyde abortion services.
Many commenters stated that it is a direct violation of their
conscience rights to have to pay for abortion in any form, including
subsidizing it through insurance coverage. Commenters stated that these
proposals would increase transparency for enrollees as to what their
health insurance covers and would allow enrollees to use this
information to seek a plan that does not cover non-Hyde abortion
services, consistent with their conscience.
Although many commenters expressed support for the proposals, many
also objected to being required to pay this separate bill at all if
they object to coverage of non-Hyde abortion services. Many commenters
asked that HHS accommodate individuals who have conscience objections
to these services by allowing enrollees in plans covering non-Hyde
abortion to ``opt out'' of this coverage by not paying the separate
bill attributable to coverage of non-Hyde abortion services.
Many commenters stated they were unconvinced by the stated
justification for the proposals (to better align the regulatory
requirements for QHP issuer billing of enrollee premiums with the
separate payment requirement in section 1303 of the PPACA) and instead
stated that the motivation was to appease religious or political
special interests. Commenters stated that the proposals would value the
needs of enrollees with conscience objections to coverage of non-Hyde
abortion services more highly than the needs of enrollees with a health
interest in receiving coverage for non-Hyde abortion services. These
commenters stated that the proposals address conscience objections of
the few at the cost of the many women who need and value coverage of
non-Hyde abortion services.
Many commenters asked that these proposals be withdrawn because
they impose a narrow religious belief opposing a legal medical service
on enrollees who do not share this viewpoint and need or value this
coverage. Commenters also objected to the proposal because it singles
out coverage of non-Hyde abortion services as the only service for
which separate billing and payment is required, questioning why other
services are not similarly subject to separate payment and billing
requirements based on conscience objections. For example, one commenter
expressed that they object based on their conscience to supporting
coverage of individuals who get sick after refusing vaccinations for
that illness. Another commenter noted that they object to having to pay
for coverage
[[Page 71691]]
of services for tobacco-related illnesses as they believe persons who
voluntarily choose to use tobacco products should not be subsidized by
other enrollees for their unhealthy behaviors.
Response: Although we understand objecting commenters' concerns,
the changes are primarily meant to better align the regulatory
requirements for QHP issuer billing of enrollee premiums with the
statutory separate payment requirement in section 1303 of the PPACA. We
acknowledge that the finalized policy regarding separate billing may
increase transparency for policy holders who object on the basis of
conscience to coverage of non-Hyde abortion services in their QHPs. And
while it is true that this final rule treats coverage of non-Hyde
abortion services differently from other covered services for purposes
of QHP billing and payment, this differential treatment is based on the
statutory PPACA requirement that non-Hyde abortion services be treated
differently for billing, collection, payment, and federal-subsidy
purposes; we are obligated to enforce the statute. Section 1303 of the
PPACA has always required QHP issuers to estimate the basic per
enrollee per month cost based on the average actuarial basis of the
QHP's coverage of non-Hyde abortion services, and prohibited QHP
issuers from estimating that cost to be less than $1 per enrollee per
month. Under the statute, QHP issuers must also collect a separate
payment for that portion of the enrollee's QHP premium attributable to
coverage of non-Hyde abortion services and must segregate these
payments in a separate allocation account that is to be used to pay for
non-Hyde abortion services. Furthermore, section 1303 of the PPACA bars
the use of PTCs or CSRs for such coverage. The changes we are
finalizing at Sec. 156.280(e)(2)(ii) would strengthen regulatory
alignment with the existing statutory requirements for QHP issuer
billing of enrollee premiums with the separate payment requirement in
section 1303 of the PPACA.
We further understand that policy holders who object, based on
their conscience, to non-Hyde abortion services may prefer to not pay
the separate bill attributable to coverage of these services, and
thereby opt out of such coverage. We also acknowledge there may be
other services covered by a plan that consumers object to or do not
intend to use. As previously stated, the primary motivation for this
rule is to better align the regulatory requirements for QHP issuer
billing of premiums with the statutory separate payment requirement in
section 1303 of the PPACA.
However, we agree that consumers are best served by the Exchanges
when they can enroll in a QHP that meets their needs, from a
conscience, as well as a care, perspective. In the Exchanges that use
the federal platform, we have taken steps to improve transparency
regarding QHP offerings to make it easier for consumers to select plans
that they believe are best suited to their needs, preferences, and
conscience concerns, such as information to more readily identify QHPs
that offer coverage of non-Hyde abortion services.\15\ State Exchanges
that operate their own technology platforms have taken similar steps.
For example, State Exchanges display different plan attributes to
enrollees to foster the decision-making process, and allow consumers to
view plan offerings by selecting filters that show plans with their
desired plan characteristics. In addition, Summary of Benefits and
Coverage (SBC) requirements help ensure that consumers have access to
easy-to-understand information about coverage. Further, with regard to
commenters that stated their dissatisfaction that abortion coverage is
offered at all in the individual market, we note that section
1303(a)(1) of the PPACA specifies that states may enact laws
prohibiting QHP issuer coverage of abortion services on the Exchange.
We also note that section 1303(a)(2) of the PPACA provides that a state
may repeal such a law and provide for the offering of abortion coverage
through the Exchange, and section 1303(b)(1)(A)(ii) of the PPACA allows
QHP issuers to decide whether or not to offer coverage for abortion
services, consistent with applicable state law.
---------------------------------------------------------------------------
\15\ ``Frequently Asked Questions for Agents, Brokers, and
Assisters Providing Consumers with Details on Plan Coverage of
Certain Abortion Services'' (November 21, 2018), available at
https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf.
---------------------------------------------------------------------------
Comment: Some commenters objected to HHS stating that it would
enforce the requirements of section 1303 of the PPACA as codified at
Sec. 156.280 directly in the event that State Exchanges do not enforce
these requirements, arguing that it would be inconsistent with other
HHS efforts to ensure that states can operate their programs with
limited federal interference. Commenters also expressed concern that
the proposed enforcement structure overrides the authority delegated to
states in section 1303 of the PPACA over issuers that operate in their
states, and will disrupt the nature of collaboration and partnership
that the PPACA meant to create between the states and the federal
government. Commenters also stated that the addition of new compliance
reviews are unnecessary, as HHS does not articulate any facts or data
establishing the current landscape of compliance--or lack of
compliance--with existing regulations.
Many commenters stated that the 2014 U.S. Government Accountability
Office report,\16\ which the proposed rule cites as evidence of
potential remaining issuer compliance concerns, predates the 2016
Payment Notice, which clarified for issuers how to comply with the
separate payment requirement. These commenters assert that HHS offers
no evidence that any compliance problems remain over 4 years later.
Commenters also stated that the research to inform that report was
conducted between February 2014 and September 2014, less than 1-full
year after the Exchanges began operating and, as such, issuers were
less likely to have fully implemented the compliance standards required
under the PPACA.
---------------------------------------------------------------------------
\16\ U.S. Government Accountability Office, ``Health Insurance
Exchanges: Coverage of Non-excepted Abortion Services by Qualified
Health Plans,'' (Sept. 15, 2014), available at http://www.gao.gov/products/GAO-14-742R.
---------------------------------------------------------------------------
Other commenters stated that compliance with section 1303 of the
PPACA has been inconsistent and were supportive that the proposals
would require greater oversight and transparency from State Exchanges
and require them to meet the standards of section 1303 of the PPACA.
Some commenters cited to the 2014 U.S. Government Accountability Office
report \17\ as evidence of this noncompliance, and others cited to a
letter sent prior to publication of the proposed rule by 102 members of
Congress to HHS Secretary Alex Azar, which requested that new
regulations be implemented ``to remedy the severe problems with the ACA
in regard to abortion coverage.'' \18\
---------------------------------------------------------------------------
\17\ U.S. Government Accountability Office, ``Health Insurance
Exchanges: Coverage of Non-excepted Abortion Services by Qualified
Health Plans,'' (Sept. 15, 2014), available at http://www.gao.gov/products/GAO-14-742R.
\18\ Letter from Chris Smith, Member of Congress, to Alex Azar,
Secretary, U.S. Department of Health and Human Services (Aug. 6,
2018), available at https://chrissmith.house.gov/uploadedfiles/2018-08-06_-_smith_letter_on_section_1303_-_abortion_funding_transparency.pdf.
---------------------------------------------------------------------------
Response: We agree that oversight of issuer compliance with section
1303 of the PPACA is important to achieving greater transparency for
consumers. We acknowledge that section 1303(b)(2)(E)(i) of the PPACA,
as implemented at Sec. 156.280(e)(5), designates the state insurance
commissioners as responsible for monitoring, overseeing, and enforcing
[[Page 71692]]
the provisions in section 1303 of the PPACA related to QHP segregation
of funds for non-Hyde abortion services. That is different than
assigning the exclusive enforcement authority, with respect to all
provisions in section 1303, to the states or to State Exchanges. As is
the case with many provisions in the PPACA, states are generally the
entities primarily responsible for implementing and enforcing the
provisions in section 1303 of the PPACA related to individual market
QHP coverage of non-Hyde abortion services.
However, where we are charged with directly enforcing statutory
requirements in the FFE, we intend to do so fully in instances of
issuer non-compliance with the separate payment requirement under
section 1303 of the PPACA. Moreover, to the extent a state operating
its own Exchange fails to substantially enforce these requirements, HHS
is authorized to enforce them directly. Pursuant to section 1321(c)(2)
of the PPACA, after determining that a state (or State Exchange) has
failed to substantially enforce a federal requirement related to
Exchanges and the offering of QHPs through Exchanges, including section
1303 of the PPACA's separate payments requirement (or other
requirements), the Secretary may step in to enforce the requirement
against the non-compliant issuer. This enforcement structure strikes an
appropriate balance between federal oversight and state flexibility
with regard to the requirements of section 1303. Accordingly, unless
HHS determines a state (or State Exchange) has failed to substantially
enforce section 1303 of the PPACA requirements, we intend to continue
to defer to states (or State Exchanges) that enforce section 1303 of
the PPACA requirements. HHS disagrees that this enforcement structure
in a state operating its own Exchange would override the state's
exercise of authority expressly delegated to states in section 1303 of
the PPACA.
The compliance reviews governing QHP issuers participating in the
FFE include reviews of compliance with section 1303 of the PPACA and
Sec. 156.280. The compliance reviews for future benefit years will
include the new requirements finalized in this rule for separate
billing of the portion of the policy holder's premium attributable to
coverage of non-Hyde abortion services, as finalized at Sec.
156.280(e)(2). We continue to believe such compliance reviews will help
to address remaining issuer compliance issues, if any, previously
identified by the 2014 U.S. GAO report.\19\ However, commenters also
expressed concern that the 2014 U.S. GAO report is outdated and that
there is no evidence of ongoing compliance issues to support the
changes we are finalizing regarding separate billing. But regardless of
whether there are ongoing compliance issues, the changes we are
finalize are primarily meant to better align the regulatory
requirements for QHP issuer billing of enrollee premiums with the
statutory separate payment requirement in section 1303 of the PPACA.
This goal is related to overall compliance with section 1303, but has a
different compliance focus than the compliance issues cited in the 2014
U.S. GAO report. Additionally, because we are amending the acceptable
methods for issuers to comply with the separate payment requirement, we
believe additional oversight during this transition time will be
necessary to ensure that issuers are modifying their billing procedures
appropriately.
---------------------------------------------------------------------------
\19\ U.S. Government Accountability Office, ``Health Insurance
Exchanges: Coverage of Non-excepted Abortion Services by Qualified
Health Plans,'' (Sept. 15, 2014), available at http://www.gao.gov/products/GAO-14-742R.
---------------------------------------------------------------------------
FFE issuers subject to compliance reviews under Sec. 156.715 must
retain all documents and records of compliance with section 1303 of the
PPACA and these requirements in accordance with Sec. 156.705, and
should anticipate making available to HHS the types of records
specified at Sec. 156.715(b) that would be necessary to establish
their compliance with these requirements. For example, FFE issuers
subject to compliance reviews for Sec. 156.280 should anticipate
supplying HHS with documentation of their estimate of the basic per
enrollee per month cost, determined on an average actuarial basis, for
including coverage of non-Hyde abortion services; detailed invoice and
billing records demonstrating they are separately billing for and
instructing policy holders to pay for in a separate transaction the
portion of the policy holder's premium attributable to coverage of non-
Hyde abortion services as specified in this rule, the actuarial value
which must be estimated to be no less than $1 per enrollee, per month;
and appropriately segregating the funds collected from enrollees into a
separate allocation account that is used to pay for non-Hyde abortion
services.
We remind issuers that pursuant to Sec. 156.280(e)(5)(ii), any
issuer offering coverage of non-Hyde abortion services on the Exchange
must submit a plan to the relevant state insurance regulator that
details the issuer's process and methodology for meeting the
requirements of section 1303(b)(2)(C), (D), and (E) of the PPACA
(hereinafter, ``segregation plan'').\20\ The segregation plan should
describe the QHP issuer's financial accounting systems, including
appropriate accounting documentation and internal controls, that would
ensure the segregation of funds required by section 1303(b)(2)(C), (D),
and (E) of the PPACA. Issuers should refer to Sec. 156.280(e)(5)(ii)
for more information on precisely what issuers should include in their
segregation plans to demonstrate compliance with these requirements. We
also remind QHP issuers that pursuant to Sec. 156.280(e)(5)(iii) each
QHP issuer participating in the Exchange must provide to the state
insurance commissioner an annual assurance statement attesting that the
plan has complied with section 1303 of the PPACA and applicable
regulations.
---------------------------------------------------------------------------
\20\ While we included compliance with section 1303(b)(2)(D) in
the segregation plan that QHP issuers are required to submit to
state insurance commissioners under our regulations at 45 CFR
156.280(e)(5), we did not mean to suggest by that inclusion that
such provision is part of the segregation requirements in the
statutory subsection that are subject to the jurisdiction of state
health insurance commissioners under section 1303(b)(2)(E).
---------------------------------------------------------------------------
We also remind issuers offering medical QHPs in the FFEs that they
already must attest to adhering to all applicable requirements of 45
CFR part 156 as part of the QHP certification application, including
those requirements related to the segregation of funds for abortion
services implemented in Sec. 156.280.\21\ As finalized, issuers in the
FFE completing this attestation would also attest to adhering to these
new separate billing and collection requirements. As part of the QHP
certification process, issuers in states with FFEs where the states
perform plan management functions must also complete similar program
attestations attesting to adherence with Sec. 156.280.\22\ Issuers in
states with State Exchanges that offer QHPs that cover non-Hyde
abortion services should contact their state regarding the QHP
certification process.
---------------------------------------------------------------------------
\21\ 2019 Qualified Health Plan Issuer Application Instructions,
available at: https://www.qhpcertification.cms.gov/s/2019QHPInstructionsVersion1.pdf?v=1.
\22\ State Partnership Exchange Issuer Program Attestation
Response Form, available at: https://www.qhpcertification.cms.gov/s/SuppDoc_SPE_Attestationsed._revised_508.pdf?v=1.
---------------------------------------------------------------------------
Comment: HHS received comments expressing a variety of legal
arguments against the proposals. Many commenters stated that the
proposals violate the Administrative Procedure Act (APA) because the
proposals advance an unreasonable interpretation
[[Page 71693]]
of law, are arbitrary and capricious, fail to provide adequate reasons
or satisfactory explanations why HHS seeks to adopt a newly preferred
interpretation of the requirement, and fail to adequately assess the
costs and harms. Commenters also stated the proposals raise Federalism
concerns under the Tenth Amendment because the proposals allegedly are
designed to penalize states that have laws requiring QHPs to provide
coverage of non-Hyde abortion services by requiring states--through
their respective Exchanges and the Department of Insurances (DOIs)--to
adopt new oversight responsibilities, and make systemic changes to fit
the alterations the proposals require. For these states, commenters
stated that this effectively requires states to either divert extensive
resources to implement these changes or change their sovereign laws to
no longer require coverage of non-Hyde abortion services. Commenters
also stated that the proposals exceed the federal government's spending
power by implementing new reporting and oversight obligations in the
Exchanges that impose post-acceptance or retroactive conditions on
states that were not originally anticipated. Commenters also stated
that the proposals serve as a tax penalty on issuers for doing business
in states with non-Hyde abortion services coverage requirements. One
commenter stated that HHS improperly excluded the proposed changes to
Sec. 156.280 among the rule changes with Federalism implications.
Commenters also stated that requiring QHP issuers to send a
separate bill to enrollees about the plan's coverage of non-Hyde
abortion services constitutes a second separate notice outside of the
notice included in the SBC indicating whether the plan covers abortions
services and that, as such, these proposals violate section
1303(b)(3)(A) of the PPACA, which specifies that QHP issuers covering
these services ``shall provide a notice to enrollees, only as part of
the summary of benefits and coverage explanation, at the time of
enrollment, of such coverage.'' Commenters further assert that the
proposals violate section 1303(b)(3)(B), which states that all
advertising used by issuers, any information provided by the Exchange,
and ``any other information specified by the Secretary'' shall only
provide information with respect to the total amount of the combined
payments for all services.
Commenters also stated that the proposals violate section 1554 of
the PPACA because these proposals will limit access to health care
services, conflict with section 1557 of the PPACA, violate the Equal
Protection Clause because the proposals place a heavy burden on a
unique health care service only applicable to women, constitute an
undue burden on a woman's right to procreative choice, violate the
unconstitutional conditions doctrine by penalizing those who choose to
exercise a constitutionally-protected right by imposing unreasonable
payment protocols to access abortion services, and violate the
establishment clause of the First Amendment.
HHS also received many comments stating that the proposed
interpretation of section 1303 of the PPACA violates congressional
intent. Commenters stated that section 1303 of the PPACA makes clear
that absent a state law to the contrary, issuers offering Exchange
coverage can decide whether to cover non-Hyde abortion services and
that these requirements effectively take that decision away from
issuers. Commenters also stated that Congress specifically enacted
section 1303 of the PPACA's provisions after rejecting more extreme and
restrictive alternatives that would have eliminated abortion coverage
in the Exchanges or prohibited enrollees from using federal financial
assistance to purchase a plan including abortion coverage, and that HHS
is ignoring that legislative history by proposing changes that would
have a net effect of reducing abortion coverage where issuers decide to
eliminate coverage due to the regulatory burden. Commenters also noted
that, although Congress decided to treat abortion differently when
passing section 1303 of the PPACA, it did so specifically to ensure
that private insurance plans could continue to decide whether or not to
cover abortion in states that did not ban such coverage, and that this
rule threatens that right. One commenter also stated that HHS violated
generally accepted principles of statutory interpretation and should
have construed ``separate payment'' in line with industry practice.
Many commenters also stated that these proposals conflict with the
Administration's stated goals of reducing economic and regulatory
burden, in conflict with several recently issued Executive Orders.
Specifically commenters stated that the proposals would undermine
Executive Order 13765 because these proposals would increase the
administrative and economic burden of the PPACA, Executive Order 13813
which called for rules and guidelines to improve access to and the
quality of information that Americans need to make informed healthcare
decisions, Executive Order 13777 which orders federal agencies to
alleviate unnecessary regulatory burden placed on the American people,
and Executive Order 12866 because HHS did not ``assess both the costs
and the benefits of the intended regulation and . . . propose or adopt
a regulation only upon a reasoned determination that the benefits of
the intended regulation justify the costs,'' as the Executive Order
directs. Commenters also stated that the proposals would undermine
CMS's ``Patients Over Paperwork'' initiative aimed at reducing
administrative burden on health plans and providers.
HHS also received comments arguing that these changes advance the
congressional intent for the separate payment requirement in section
1303 of the PPACA, arguing that both the congressional record and the
statutory language clearly demonstrate that Congress intended that
billing for coverage of non-Hyde abortion services be separate.
Response: HHS disagrees with comments questioning its legal
authority to make these policy changes, and disagrees that interpreting
section 1303 of the PPACA to require issuers to send a separate bill
for the portion of the premium attributable to coverage of non-Hyde
abortion services violates the APA. Section 1303 of the PPACA and
regulations at Sec. 156.280 do not specify the method a QHP issuer
must use to comply with the separate payment requirement under section
1303(b)(2)(B)(i) of the PPACA and Sec. 156.280(e)(2)(i). Although we
recognized in the preamble to the proposed rule that the previous
methods of itemizing or providing advance notice about the amounts
noted as permissible in the preamble of the 2016 Payment Notice
arguably identifies two ``separate'' amounts for two separate purposes,
we continue to believe that requiring issuers to bill for two separate
``payments'' of these two amounts better aligns with, and better
enables compliance with, the separate payment requirement in section
1303 of the PPACA. We also believe that consumers are more likely to
make a separate payment for the non-Hyde abortion coverage when they
receive a separate bill for such amount.
In fact, among the previously acceptable methods for QHP issuers to
comply with the separate payment requirement outlined in the preamble
to the 2016 Payment Notice was sending a separate monthly bill for
these
[[Page 71694]]
services.\23\ As such, amending the policy to only permit this method
of complying with the separate payment requirement does not wholly
depart from the previous interpretation, it merely refines it to better
reflect the statute.
---------------------------------------------------------------------------
\23\ Patient Protection and Affordable Care Act; HHS Notice of
Benefit and Payment Parameters for 2016 (80 FR 10750, 10840).
---------------------------------------------------------------------------
Additionally, we have carefully considered the comments we received
estimating the burden the proposals would impose on issuers, states,
enrollees, and other entities, and agree--without accepting the
estimates provided by commenters--that, as originally proposed, the
actual burden would have exceeded HHS's estimates. As such, we are
finalizing several changes described in responses to comments earlier
in this section of the preamble with the specific intent of mitigating
the burden that would have been imposed if we were finalizing as
originally proposed.
HHS disagrees that the policy as originally proposed or as revised
in the final rule violates state sovereignty, exceeds the federal
government's spending power, or raises other Federalism concerns.
Because states are the entities primarily responsible for implementing
and enforcing the provisions in section 1303 of the PPACA related to
individual market QHP coverage of non-Hyde abortion services, we
acknowledge that requiring issuers to separately bill for the portion
of the premium attributable to these services means that states will
likely adjust how they ensure issuer compliance with these new
requirements. We also remind states concerned about enforcement and
oversight of these requirements that, under section 1321(c) of the
PPACA, states may elect not to establish and operate an Exchange,
thereby deferring those responsibilities to HHS.
We are clarifying the existing statutory requirement by adding
specificity to the regulatory requirement, for issuers to collect a
separate payment for these services. As such, these changes do not
directly impose new requirements on states other than to adjust how
they check for compliance. We believe that any state oversight
responsibility modified through these changes was already contemplated
by section 1303 of the PPACA in identifying states as the entities
primarily, but not exclusively, responsible for enforcing the
provisions in section 1303. Further, as noted above, among the
previously acceptable methods for QHP issuers to comply with the
separate payment requirement was sending a separate monthly bill for
coverage of non-Hyde abortion services. Therefore, states should
already have developed mechanisms to confirm compliance with separate
monthly billing and payment for these services for any issuers that
previously elected this option.
Setting aside the question of whether state laws requiring coverage
of non-Hyde abortion services on the Exchange are consistent with
statutory conditions on federal funding from the Department to the
States, we acknowledge that some states have such laws. However, the
changes we are finalizing do not preempt state law regarding coverage
of non-Hyde abortion services or otherwise attempt to coerce states
into changing these laws or to deny QHP issuers the ability to offer
plans on the Exchanges that provide coverage of non-Hyde abortion
services. HHS is simply refining the method by which issuers comply
with the separate payment requirement.
HHS does not agree with commenters' concerns that the proposals
would inhibit enrollee access to appropriate and timely medical care in
violation of section 1554 of the PPACA. We acknowledge that, as
originally proposed, the combination of issuer burden and enrollee
confusion could have potentially led to a reduction in the availability
of coverage of non-Hyde abortion services (either by issuers choosing
to drop this coverage to avoid the additional costs or by enrollees
having their coverage terminated for failure to pay the second bill),
thereby potentially increasing out-of-pocket costs for some women
seeking those services. But such an effect of a separate billing
requirement would not constitute a violation of section 1554. Moreover,
we believe the changes we are finalizing will decrease the likelihood
of these outcomes. Importantly, subject to state law, section
1303(b)(1)(A) of the PPACA makes it clear that it is ultimately at the
issuer's discretion whether to cover non-Hyde abortion services in
their QHP; requiring a separate bill for these services does not limit
that right.
HHS also disagrees that the policy in the proposed rule, as revised
in this final rule, is inconsistent with sections 1303(b)(3)(A) or
1303(b)(3)(B) of the PPACA. Reading section 1303(b)(3) alongside
section 1303(b)(2), which requires collection of separate payments,
suggests that section 1303(b)(3) pertaining to notices should be read
harmoniously with the separate payment requirement, rather than in
conflict with those requirements, as commenters suggest. For example,
the separate bill for the portion of the policy holder's premium
attributable to coverage of non-Hyde abortion services is primarily a
means of ensuring separate QHP issuer collection of that portion of the
policy holder's premium, as required under section 1303(b)(2). This
separate bill does not circumvent or conflict with the independent
requirement in section 1303(b)(3) pertaining to notices. Further, any
insight the policy holder gains from the separate bill for coverage of
non-Hyde abortion services about the QHP's coverage of non-Hyde
abortion services is incidental to the primary purpose of the bill,
which is to help ensure separate payment by the policy holder, and
separate QHP issuer collection on this portion of the policy holder's
premium. We also note that requiring a separate bill for coverage of
non-Hyde abortion services is not a violation of section 1303(b)(3),
just as the separate itemization of the premium amount for such
coverage on a single bill (as was previously one of the acceptable
billing and premium collection methods for this amount) was not a
violation of that section. Therefore, we believe it is a more
reasonable interpretation of section 1303 of the PPACA that section
1303(b)(2) and 1303(b)(3) of the PPACA need not conflict when read in
context with one another.
Section 1557 of PPACA prohibits discrimination on the basis of
race, color, national origin, sex, age, or disability in certain health
programs or activities. HHS disagrees that the policy in the proposed
rule and as revised in this final rule discriminates against women or
constitutes gender discrimination in violation of section 1557 of the
PPACA or of the Equal Protection Clause. Although only women access
non-Hyde abortion services, the separate bill for the portion of the
premium attributable to coverage of these services, and any enrollee
burden associated with that bill, is broadly applicable to any policy
holder in a plan that covers non-Hyde abortion services. In other
words, both men and women in plans covering non-Hyde abortion services
will receive a separate bill for the portion of the premium
attributable to coverage of these services, not just the women who may
ultimately access such services.
Similarly, HHS disagrees that the proposals violate the
unconstitutional conditions doctrine, given that QHP issuers offering
these services will be required to send the separate bill to all policy
holders in their plan, not just those who choose to access non-Hyde
abortion services. As such, although it
[[Page 71695]]
may be true that enrollees who would be most likely to need access to
coverage of non-Hyde abortion services would be most likely to
intentially enroll in a QHP with such coverage, any additional burden
these enrollees experience related to understanding and paying the
second bill is unrelated to whether enrollees actually do access
coverage of non-Hyde abortion services. Therefore, the finalized policy
does not penalize enrollees for accessing their constitutionally
protected right to abortion. All policy holders would receive the
separate bill for the portion of their premium attributable to coverage
of non-Hyde abortion services, regardless of whether they could, intend
to, or do, access the coverage for these services.
HHS also disagrees that the policy in the proposed rule, or as
revised in this final rule, violates the Establishment Clause or
otherwise impedes the free exercise of religion. Although it may be a
secondary impact that the billing changes serve the interests of
enrollees who object to coverage of non-Hyde abortion services based on
their conscience, the objective for this policy change continues to be
achieving better alignment with the statutory requirement for issuers
to collect a separate payment for coverage of non-Hyde abortion
services, as specified in section 1303 of the PPACA. As such, we reject
commenter's arguments that these proposals are religiously motivated.
We also disagree with commenters that this interpretation of
section 1303 of the PPACA violates congressional intent. We acknowledge
that, in drafting section 1303 of the PPACA, Congress rejected language
that would have imposed more restrictive requirements on QHP issuers
offering coveage of non-Hyde abortion services.\24\ However, although
the language in section 1303 of the PPACA that Congress ultimately
enacted into law permits issuers to offer coverage for non-Hyde
abortion services subject to state law, this flexibility is not without
limitations. As enacted, section 1303 of the PPACA requires that QHP
issuers offering non-Hyde abortion coverage on the Exchanges follow
specific actuarial, accounting, and notice requirements to ensure that
federal funds are not used to pay for the costs of including coverage
of these services under the QHP. We believe that by requiring issuers
to collect separate payments, section 1303 of the PPACA contemplates
sending to enrollees separate bills for these services to help ensure
appropriate segregation of these funds. Furthermore, HHS previously
listed ``sending a separate monthly bill for these services'' as one of
the permissible methods for issuers to comply with the separate payment
requirement in the 2016 Payment Notice.
---------------------------------------------------------------------------
\24\ See Amendment to H.R. 3962, 111th Cong. (2009) (offered by
Rep. Stupak and Rep. Pitts), 155 Cong. Rec. H12,921 (Nov. 7, 2009);
See 155 Cong. Rec. S12,665 (2009).
---------------------------------------------------------------------------
HHS also disagrees with claims that the proposals impermissibly
undermine the Executive Orders mentioned in comments. We interpret the
proposals and the policy as finalized in this rule as consistent with
Executive Order 13765 because the law is being ``efficiently
implemented'' through better aligning the issuer requirements related
to fulfilling section 1303 of the PPACA's separate payment requirements
with the statute. We also believe Executive Order 13813 supports the
changes to the policy as finalized in this rule, since providing a
separate bill to policy holders for the portion of the premium
attributable to coverage of non-Hyde abortion services will ``improve
access to and the quality of information that Americans need to make
informed healthcare decisions.'' \25\ We note that we also believe
Executive Order 13877 supports the policy changes by enhancing the
ability of enrollees ``to choose the healthcare that is best for them''
and to make ``fully informed decisions about their healthcare.''
Indeed, many commenters highlighted that this would be one of the
positive impacts of the proposal--that the separate bill would serve to
clarify for enrollees that their plan covers non-Hyde abortion services
and at what cost, information which many commenters would use to decide
whether to remain enrolled in that QHP or seek a QHP without such
coverage. We also believe Executive Order 13777 supports the proposals
and changes being finalized in this rule, since requiring a separate
bill for coverage of these services helps to ensure that HHS is
``prudent and financially responsible in the expenditure of funds,'' by
better aligning the requirements with the statute in a manner that will
help to ensure that QHP issuers that offer coverage for non-Hyde
abortion services collect a separate payment from policy holders for
the portion of their premium attributable to non-Hyde abortion coverage
which also helps to ensure that APTC or CSR funds are not used pay for
such services.
---------------------------------------------------------------------------
\25\ Executive Order on Improving Price and Quality Transparency
in American Healthcare to Put Patients First (issued on June 24,
2019, available at https://www.whitehouse.gov/presidential-actions/executive-order-improving-price-quality-transparency-american-healthcare-put-patients-first/.
---------------------------------------------------------------------------
Additionally, HHS did ``assess both the costs and the benefits'' of
the proposed rule. However, we note that Executive Order 12866's
directive to only issue net-beneficial regulations applies only ``to
the extent permitted by law.'' Although we have since adjusted the
policy as well as the estimated burden to reflect a larger burden
estimate, we continue to believe that requiring QHP issuers to
separately bill the portion of the policy holder's premium attributable
to coverage of non-Hyde abortion services is a better interpretation of
the statutory requirement for QHP issuers to collect a separate payment
for coverage of these services, and, thus, justifies the costs.\26\
---------------------------------------------------------------------------
\26\ This rule has been subject to interagency (including OMB)
review under Executive Order 12866 and cleared by OMB for issuance
and publication, indicating that the rule is consistent with
Executive Orders.
---------------------------------------------------------------------------
Lastly, although CMS's ``Patients Over Paperwork'' initiative does
include the goal of reducing unnecessary burden, HHS believes these
changes and the added burdens associated with the changes are
necessary, as the changes will better align issuer billing with the
statutory requirements of the PPACA. Moreover, in line with this
initiative, we believe enrollees will benefit from the additional
clarity that the separate bill provides about their plan's coverage of
non-Hyde abortion services.
III. Collection of Information Requirements
This final rule contains information collection requirements as
defined under the Paperwork Reduction Act of 1995 (PRA). We proposed
and solicited comments on these information collection requirements
(ICRs) in the notice of proposed rulemaking that published on November
9, 2018 (84 FR 56015). The information collection requirements and the
reconciliation of any comment received on the requirements are
discussed below.
In order to fairly evaluate whether an information collection
should be approved by the Office of Management and Budget (OMB),
section 3506(c)(2)(A) of the PRA requires that we solicit comment on
the following issues:
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
[[Page 71696]]
affected public, including automated collection techniques.
In our November 9, 2018 (83 FR 56015) proposed rule, we solicited
public comment on each of the required issues under section
3506(c)(2)(A) of the PRA for the following ICRs.
A. Wage Estimates
To derive average costs, we generally used data from the Bureau of
Labor Statistics to determine average labor costs (including a 100
percent increase for fringe benefits and overhead) for estimating the
burden associated with the ICRs.\27\ Table 1 in this final rule
presents the mean hourly wage (calculated at 100 percent of salary),
the cost of fringe benefits and overhead, and the adjusted hourly wage.
---------------------------------------------------------------------------
\27\ See May 2018 Bureau of Labor Statistics, Occupational
Employment Statistics, National Occupational Employment and Wage
Estimates at https://www.bls.gov/oes/current/oes_stru.htm.
---------------------------------------------------------------------------
As indicated, employee hourly wage estimates have been adjusted by
a factor of 100 percent. This is necessarily a rough adjustment, both
because fringe benefits and overhead costs vary significantly across
employers, and because methods of estimating these costs vary widely
across studies. However, we believe that doubling the hourly wage to
estimate total cost is a reasonably accurate estimation method.
Table 1--Adjusted Hourly Wages Used in Burden Estimates
----------------------------------------------------------------------------------------------------------------
Fringe
Occupational Mean hourly benefits and Adjusted
Occupation title code wage ($/hour) overhead ($/ hourly wage
hour) ($/hour)
----------------------------------------------------------------------------------------------------------------
General and Operations Manager.................. 11-1021 $59.56 $59.56 $119.12
Computer and Information Systems Manager........ 11-3021 73.49 73.49 146.98
Computer Programmer............................. 15-1131 43.07 43.07 86.14
Computer System Analyst......................... 15-1121 45.01 45.01 90.02
Business Operations Specialist.................. 13-1199 37.00 37.00 74.00
Secretaries and Administrative Assistants....... 43-6014 18.28 18.28 36.56
----------------------------------------------------------------------------------------------------------------
B. Information Collection Requirements (ICRs)
1. ICRs Regarding General Program Integrity and Oversight Requirements
(Sec. 155.1200)
The burden associated with State Exchanges meeting the program
integrity reporting requirements in Sec. 155.1200 have already been
assessed and encompassed through SMART currently approved under OMB
control number: 0938-1244 (CMS-10507). While we are finalizing
proposals in this rule that would provide HHS the ability to focus
State Exchange oversight and audit activities towards particular
Exchange functions that have higher program integrity risks in a more
consistent manner, and require State Exchanges and their auditors to
employ auditing techniques or procedures in a more consistent manner,
we do not envision these changes to have a material impact on the
burden for State Exchanges. As detailed in the proposed rule and in the
preamble of this rule, these amendments are intended to allow for more
targeted oversight and audits of State Exchanges that focus and direct
existing HHS and State Exchange resources towards particular Exchange
program areas that have higher program integrity risks, rather than
having those Federal and State Exchange resources covering all program
areas or covering program areas that have lower program integrity
risks. Because existing resources would be directed away from certain
program areas and towards program areas with higher program integrity
impact across all State Exchanges, we believe the overall burden on
State Exchanges would not change. Further, we are not specifying a
particular sampling methodology that must be used by all State
Exchanges for testing the accuracy of eligibility determinations in
annual programmatic audits. This final rule therefore does not impose
any new burden or revised information collection requirements
pertaining to Sec. 155.1200.
2. ICRs Regarding Rules Relating To Segregation of Funds for Abortion
Services (Sec. 156.280)
In Sec. 156.280(e)(2), we are finalizing that QHP issuers must
send an entirely separate monthly bill to the policy holder covering
only the portion of premium attributable to coverage of non-Hyde
abortion, and instruct the policy holder to pay the portion of their
premium attributable to coverage of non-Hyde abortion services in a
separate transaction from any payment the policy holder makes for the
portion of their premium not attributable to coverage of non-Hyde
abortion services. Based on 2020 QHP certification data in the FFEs and
SBE-FPs, we estimate that 23 QHP issuers will offer a total of 338
plans with coverage of non-Hyde abortion services in 9 FFE and SBE-FP
states. For the 12 State Exchanges that will operate their own
technology platforms in 2020 and have QHPs that offer coverage of non-
Hyde abortion services, we have updated our methodology for identifying
issuers with QHPs that offer coverage of non-Hyde abortion services,
and now estimate that 71 QHP issuers will offer a total of
approximately 1,129 plans that include coverage for non-Hyde abortions
services. Three of those State Exchanges perform premium billing and
payment processing, while the other 9 have their issuers perform
premium billing and payment processing. In total, we now estimate that
will be 94 QHP issuers offering a total of 1,467 plans (representing
approximately 32 percent of individual market, on-Exchange plans)
covering non-Hyde abortion services across 21 states in plan year 2020.
As such, the ICRs associated with these proposals create a new burden
on QHP issuers and State Exchanges that perform premium billing and
payment processing, and thus will be submitted to OMB for final
approval (OMB control number: 0938-1358 (Billing and Collection of the
Separate Payment for Certain Abortion Services (CMS-10681)).
Comment: We used the estimated numbers of impacted issuers and
plans to estimate the costs associated with the proposals regarding
separate billing and payment for coverage of non-Hyde abortion
services.
We received many comments from issuers, issuer associations,
states, State Exchanges, state regulators, and other organizations
arguing that we greatly underestimated the burden on issuers to
implement the original proposals. For example, commenters stated that
actual one-time costs for issuers to implement
[[Page 71697]]
these proposals would be anywhere from $50,000 to $7,500,000 per
issuer. Commenters also stated that annual costs per issuer would be
anywhere from $40,000 to $10,800,000 annually. One commenter stated
that the operational burden of a mid-size issuer (serving approximately
70,000 Exchange enrollees) would exceed HHS's estimate by approximately
2,666 times for the first year alone. Commenters explained that the
proposals would require changes to nearly every aspect of the
enrollment and billing processes to identify impacted enrollees,
generate and send multiple accurate invoices, collect multiple
payments, and reconcile payment amounts.
Some commenters noted that many issuers do not have the ability to
generate two separate bills for one policy and that, as such, the
proposals would require them to issue two policies per policy holder
(and enroll every policy holder into two separate policies to be able
to bill them in the required way). Commenters stated that the proposals
would consequently require that many issuers create separate member IDs
in order to facilitate every enrollee receiving two bills and making
two payments. Commenters stated that this would be an extraordinarily
costly and difficult change for such issuers to make.
Commenters also expressed concern that requiring issuers to send
the separate bill in a separate mailing would double an issuer's
postage and associated mailing costs, costing issuers an additional
$15.6 to $31.2 million nationally per year, and expressed further
concern that this cost was not accounted for in the proposed rule's
impact estimates. Many commenters explained that it is unrealistic to
assume that issuers can save costs by enrollees switching to electronic
billing, since many enrollees still elect to receive and pay their
health coverage bills through the mail. Other commenters explained that
many enrollees have no choice but to receive paper bills and send paper
checks, as many enrollees in rural areas and many low-income
individuals still do not have access to the internet.
Response: We appreciate these comments and after consideration,
have adjusted the estimated burden below. In response to these
comments, we have updated the associated ICRs to reflect an increase in
burden and costs for issuers. We believe that the original burden
estimate in the proposed rule would not accurately reflect the actual
costs issuers would have incurred if we finalized the provisions as
proposed.
We estimate that allowing issuers to send the separate bill in the
same mailing (though not in the same email or electronic communication)
as the bill for other services would eliminate much of the commenter
estimated $15.6 to $31.2 million that the second bill would have cost
annually if we had finalized as proposed. By finalizing this policy to
allow for combined mailings when sending paper bills, we ensure that
issuers will not be required to incur the costs associated with
additional postage and envelopes.
Issuers will incur burden to complete the one-time technical build
to implement the necessary changes, which will involve activities such
as planning, assessment, budgeting, contracting, building and testing
their systems; as well as one-time changes such as billing-related
outreach and call center training. We assume that this one-time burden
will be incurred primarily in 2020. We estimate that, for each issuer,
on average, it will take business operations specialists 2,500 hours
(at $74 per hour), computer system analysts 6,500 hours (at $90.02 per
hour), computer programmers 22,000 hours (at $86.14 per hour), computer
and information systems managers 200 hours (at $146.98 per hour) and
operations managers 300 hours (at $119.12 per hour) to complete this
task. The total burden for an issuer will be approximately 31,500 hours
on average, with an equivalent cost of approximately $2.7 million. We
anticipate that implementing these changes within 6 months would result
in issuers incurring additional costs such as higher contracting costs
and overtime payments, which will increase the total cost for each
issuer by 50 percent, to approximately $4.1 million. For all 94
issuers, the total one-time burden will be 2,961,000 hours for a total
cost of approximately $385 million.
We anticipate that the burden incurred by State Exchanges that
perform premium billing and payment processing and have QHP issuers
that offer coverage for non-Hyde abortion services will be similar to
the burden incurred by QHP issuers offering coverage for non-Hyde
abortion services. Therefore the total burden for a State Exchange that
performs premium billing and payment processing will be approximately
31,500 hours on average, with a total cost of approximately $4.1
million. For all 3 State Exchanges that perform premium billing and
payment processing, the total one-time burden will be 94,500 hours for
a total cost of approximately $12.3 million.
Table 2--Estimated One-time Burden per Issuer or State Exchange Performing Premium Billing and Payment
Processing
----------------------------------------------------------------------------------------------------------------
Burden hours Total cost
Occupation per Labor cost per
respondent per hour respondent
----------------------------------------------------------------------------------------------------------------
General and Operations Manager.................................. 300 $119.12 $35,736
Computer and Information Systems Manager........................ 200 146.98 29,396
Computer Programmer............................................. 22,000 86.14 1,895,080
Computer System Analyst......................................... 6,500 90.02 585,130
Business Operations Specialist.................................. 2,500 74.00 185,000
Total Burden and Labor Cost per respondent...................... 31,500 .............. 2,730,342
Additional Costs due to Expedited Implementation................ .............. .............. 1,365,171
-----------------------------------------------
Total per respondent........................................ 31,500 .............. 4,095,513
----------------------------------------------------------------------------------------------------------------
[[Page 71698]]
Table 3--Estimated One-Time Burden for All Issuers and State Exchanges Performing Premium Billing and Payment
Processing
----------------------------------------------------------------------------------------------------------------
Number of Number of Burden hours Total burden
Type of respondent respondents responses per respondent hours Total cost
----------------------------------------------------------------------------------------------------------------
Issuer.......................... 94 94 31,500 2,961,000 $384,978,222
State Exchange.................. 3 3 31,500 94,500 12,286,539
-------------------------------------------------------------------------------
Total....................... 97 97 31,500 3,055,500 397,264,761
----------------------------------------------------------------------------------------------------------------
In addition to the one-time costs estimated, issuers will incur
ongoing annual costs, such as those related to identifying impacted
enrollees, ensuring billing accuracy, reconciliation, quality
assurance, printing, recordkeeping, and document retention. We estimate
that for each issuer, on average, it will take administrative
assistants 20,000 hours (at $36.56 per hour), business operations
specialists 2,000 hours (at $74 per hour), computer programmers 2,000
hours (at $86.14 per hour), and operations managers 120 hours (at
$119.12 per hour) each year to perform these tasks. The total annual
burden for each issuer will be 24,120 hours, with an equivalent cost of
approximately $1.07 million. Assuming that issuers will start sending
separate bills in July, 2020, the total burden for all 94 issuers for
the 6 months in 2020 is estimated to be 1,133,640 hours with an
equivalent cost of approximately $50.1 million. From 2021 onwards, we
estimate the total annual burden for all 94 issuers will be
approximately 2,267,280 hours with an associated cost of approximately
$100.2 million.
We anticipate that State Exchanges performing premium billing and
payment processing and which have QHP issuers that offer coverage for
non-Hyde abortion services will incur costs similar to QHP issuers
offering coverage of non-Hyde abortion services. Therefore, we estimate
that for all 3 State Exchanges performing premium billing and payment
processing, the total annual burden will be approximately 36,180 hours
with an equivalent cost of approximately $1.6 million in 2020 and
72,360 hours with an associated cost of approximately $3.2 million
starting in 2021.
Table 4--Estimated Annual Burden per Issuer or State Exchange Performing Premium Billing and Payment Processing
----------------------------------------------------------------------------------------------------------------
Burden hours
Occupation per Labor cost per Total cost per
respondent hour respondent
----------------------------------------------------------------------------------------------------------------
Secretaries and Administrative Assistants....................... 20,000 $36.56 $731,200
General and Operations Manager.................................. 120 119.12 14,294
Business Operations Specialist.................................. 2,000 74.00 148,000
Computer Programmer............................................. 2,000 86.14 172,280
-----------------------------------------------
Total per Respondent........................................ 24,120 .............. 1,065,774
----------------------------------------------------------------------------------------------------------------
Table 5--Estimated Annual Burden for All Issuers and State Exchanges Performing Premium Billing and Payment Processing for 2020, 2021 and 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Burden hours
Type of respondent Year Number of Number of per Total burden Total labor
respondents responses respondent hours per year cost per year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issuer.................................................. 2020 94 94 12,060 1,133,640 $50,091,397
State Exchange.......................................... 2020 3 3 12,060 36,180 1,598,662
Total................................................... 2020 97 97 12,060 1,169,820 51,690,058
Issuer.................................................. 2021, 2022 94 94 24,120 2,267,280 100,182,794
State Exchange.......................................... 2021, 2022 3 3 24,120 72,360 3,197,323
-----------------------------------------------------------------------------------------------
Total............................................... 2021, 2022 97 97 24,120 2,339,640 103,380,117
--------------------------------------------------------------------------------------------------------------------------------------------------------
In response to comments, we reviewed our original enrollee
estimates and have updated our estimates for accuracy. Based on 2019
QHP Certification Data in the FFEs and SBE-FPs, we now estimate that
there are approximately 442,400 enrollees in QHPs covering non-Hyde
abortion services. In the 11 State Exchanges that operated their own
technology platform and had issuers that offered coverage of non-Hyde
abortion services in 2019, we estimate that there are approximately
2,597,700 enrollees in QHPs covering non-Hyde abortion services. The
total number of enrollees in QHPs covering non-Hyde abortion services
is approximately 3.04 million in 2019. The number of QHPs covering non-
Hyde abortion services will be higher in 2020 compared to 2019.
Therefore, we are using the number of enrollees in such QHPs in 2019 as
a lower bound for the number of enrollees who will experience an
increase in burden as a result of the finalized policies.
Assuming 1.5 enrollees per policy, issuers and State Exchanges
performing premium billing and payment processing will be required to
send a separate bill to approximately 2 million
[[Page 71699]]
policy holders. We understand that, although enrollees can often choose
to pay electronically or by phone, choose to utilize automatic payment
deductions, and often opt out of receiving paper bills, many enrollees
still opt to receive physical mail detailing their coverage. We also
understand that many enrollees face barriers to accessing the internet
and have little choice but to receive paper bills. Because enrollees
typically receive paper bills and because many enrollees already face
barriers to accessing the internet, issuers are likely to experience an
increased administrative cost in having to print an additional monthly
bill for the majority of their policy holders. According to one
commenter, issuers send paper bills to 92 percent of Exchange
customers. We anticipate that the number of consumers opting for
electronic bills will increase over time. Therefore, we assume that
approximately 90 percent of policy holders will receive paper bills in
2020 and issuers and State Exchanges performing premium billing and
payment processing will need to print and send approximately 1.82
million separate paper bills per month. Assuming materials and printing
cost of $0.05 per page, issuers will incur additional monthly costs of
approximately $91,200 to print separate bills for impacted policy
holders in 2020. Assuming that issuers start sending separate bills in
July 2020, for the 6 months in 2020, total cost for all issuers is
estimated to be approximately $547,225. Assuming that more consumers
will opt to receive electronic bills over time, we estimate that
approximately 88 percent of policyholders will receive paper bills in
2021, and the annual cost for all issuers to send separate paper bills
will be approximately $1,070,129. We assume that, in 2022,
approximately 86 percent of policyholders will receive paper bills, and
the annual cost for all issuers to send separate paper bills will be
approximately $1,045,808. The average annual materials and printing
cost over 3 years (2020 to 2022) will be approximately $887,721. Since
issuers and State Exchanges performing premium billing and payment
processing will be permitted to send both bills together when sending
bills in a physical mailing, they will not incur any additional mailing
costs. We assume that bills sent electronically can be sent at minimal
cost and note that we have incorporated any associated IT changes to
accommodate electronic billing changes based on this rule above, where
we discussed premium billing and payment processing costs to issuers
and State Exchanges.
FFE issuers are subject to future HHS compliance reviews, requiring
issuers in the FFE to maintain and submit records to HHS showing
compliance with separately billing for the portion of the policy
holder's premium attributable to non-Hyde abortion services as
specified in this rule. Commenters stated that HHS excluded an
evaluation of the burden and cost for FFE issuers to participate in the
additional HHS compliance reviews, ignoring the potential for any new
costs associated with this requirement, such as documenting all efforts
for audit purposes. We have revised our burden estimates to account for
additional recordkeeping costs not reflected in the proposed rule's
estimates but reiterate that the requirements associated with
compliance reviews were already assessed and subsumed within issuer
burdens described in previously finalized rules, including the
information collection currently approved under OMB control number:
0938-1277 (Program Integrity: Exchange, Premium Stabilization Programs,
and Market Standards; Amendments to the HHS Notice of Benefit and
Payment Parameters for 2014 (CMS-10516)).
To show compliance with FFE standards and program requirements, all
issuers seeking QHP certification in FFEs are required to submit
responses to program attestations as part of their QHP application.
This response already includes an attestation that the issuer agrees to
adhere to the requirements related to the segregation of funds for
abortion services implemented in Sec. 156.280. We have determined that
the requirements associated with QHP certification have already been
assessed and encompassed by the information collection currently
approved under OMB control number: 0938-1187 (Establishment of
Exchanges and Qualified Health Plans; Exchange Standard for Employers
(CMS-10433)).
C. Summary of Annual Burden Estimates for Proposed Requirements
Table 6--Annual Recordkeeping and Reporting Requirements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Capital costs
OMB control Number of Number of Burden per Total annual Total labor (printing and
Regulation section(s) number respondents responses response burden cost of materials) Total cost ($)
(hours) (hours) reporting ($) ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sec. 156.280.................................................. 0938-NEW 97 97 30,600 2,968,200 $218,571,684 $887,721 $219,459,405
-------------------------------------------------------------------------------------------------------------------------------
Total....................................................... .............. 97 97 30,600 2,968,200 218,571,684 887,721 219,459,405
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
D. Submission of PRA-Related Comments
We have submitted a copy of this final rule to OMB for its review
of the rule's information collection and recordkeeping requirements.
The requirements are not effective until they have been approved by
OMB.
IV. Regulatory Impact Analysis
A. Statement of Need
This final rule implements standards to ensure enrollees receive
the correct amount of APTC and CSRs at the time of enrollment or re-
enrollment via periodic data matching requirements. In addition, the
provisions in this rule strengthen the mechanisms and tools for
overseeing ongoing compliance by State Exchanges with federal program
requirements. Finally, the provisions in this rule refine some of the
methods for billing of the separate payment for the portion of the
policy holder's premium attributable to non-Hyde abortion services to
better align with congressional intent regarding the separate payments
provision of section 1303 of the PPACA. The following summary focuses
on the benefits and costs of the requirements in this final rule.
B. Overall Impact
We have examined the impact of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
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 1102(b) of the Act, section 202 of the
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4),
Executive Order 13132 on
[[Page 71700]]
Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C.
804(2)), and Executive Order 13771 on Reducing Regulation and
Controlling Regulatory Costs (January 30, 2017).
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), to the
extent permitted by law. Section 3(f) of Executive Order 12866 defines
a ``significant regulatory action'' as an action that is likely to
result in a rule: (1) Having an annual effect on the economy of $100
million or more in any 1 year, or adversely and materially affecting a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local or tribal
governments or communities (also referred to as ``economically
significant''); (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set forth
in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for rules with
economically significant effects ($100 million or more in at least 1
year). This final rule is economically significant within the meaning
of section 3(f)(1) of the Executive Order. Therefore, OMB has reviewed
these regulations and HHS has provided an assessment of the potential
costs, benefits, and transfers associated with this rule. Accordingly,
we have prepared an RIA that presents the costs and benefits of this
final rule.
C. Impact Estimates of the Program Integrity Provisions and Accounting
Table
In accordance with OMB Circular A-4, Table 7 depicts an accounting
statement summarizing HHS's assessment of the benefits, costs, and
transfers associated with this regulatory action. Table 8 includes a
summary of annualized values of costs, over a perpetual time horizon at
7 percent discount rate for Executive Order 13771 (E.O. 13771). This
final rule implements standards that will have numerous effects,
including ensuring that eligible enrollees receive the correct amount
of APTC and CSR (as applicable); improving alignment with the separate
payment requirement in section 1303 of the PPACA by requiring QHP
issuers to send separate bills to policy holders for the portion of
their premium attributable to non-Hyde abortion services; conducting
effective and efficient monitoring and oversight of State Exchanges to
ensure that enrollees are receiving the correct amount of APTC and CSRs
in State Exchanges, and that State Exchanges are meeting the standards
of federal law in a transparent manner; and protecting the interests of
taxpayers, and enrollees, and the financial integrity of Exchanges
through oversight of health insurance issuers, including ensuring
compliance with the requirements of section 1303 of the PPACA. We are
unable to quantify certain benefits and costs of this final rule--such
as benefits to enrollees for timely notification of their dual
enrollment in other qualifying coverage such as Medicare, Medicaid/
CHIP, and, if applicable, the BHP, potential increases in cost to
states for increased oversight activities and to establish access to
federal data systems to verify eligibility for or enrollment in
Medicaid/CHIP or Medicare, and potential costs to enrollees such as
increased out-of-pocket costs related to billing changes due to the
separate payment requirements for non-Hyde abortion services. The
effects in Table 7 reflect qualitatively assessed impacts and estimated
direct monetary costs and transfers resulting from the provisions of
this final rule for health insurance issuers. States impacted by PDM
requirements will incur costs of up to $6.9 million in 2020. In
addition, we estimate that issuers, State Exchanges, FFEs, and
consumers impacted by the separate billing and payment requirements
will incur costs of approximately $546.1 million in 2020, $232.1
million in 2021, $230.7 million in 2022, and $229.3 million 2023
onwards (see Table 10 below). We also expect that transfers from the
federal government to consumers in the form of premium tax credits will
decrease as a result of Exchanges conducting Medicare, Medicaid/CHIP,
and, if applicable, BHP PDM, and increase as a result of separate
billing and payment requirements. The net increase in premium tax
credits is estimated to be approximately $106 million in 2021 and $96
million in 2022 onwards.
Table 7--Accounting Table
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Benefits:
----------------------------------------------------------------------------------------------------------------
Qualitative:
Better alignment of the regulatory requirements for QHP issuer billing of premiums with the
separate payment requirement in section 1303 of the PPACA..
Clearer regulatory requirements for how frequently Exchanges should be conducting periodic checks
for dual enrollment in other qualifying coverage..
Clearer regulatory requirements for State Exchanges around CMS's oversight and reporting process
that allows for more effective oversight of State Exchanges..
----------------------------------------------------------------------------------------------------------------
Costs: Estimate (million). Year Dollar........ Discount Rate Period Covered
(percent).
----------------------------------------------------------------------------------------------------------------
Annualized Monetized ($/year) $304.09............ 2019............... 7.................. 2020-2024
$298.92............ 2019............... 3.................. 2020-2024
----------------------------------------------------------------------------------------------------------------
Quantitative:
----------------------------------------------------------------------------------------------------------------
Burden incurred by issuers, states, federal government and enrollees to comply with provisions
related to coverage of non-Hyde abortion services and the segregation of premiums for such services..
Costs for State Exchanges not in compliance with regulatory requirements to conduct Medicare,
Medicaid/CHIP, and, if applicable, BHP PDM..
----------------------------------------------------------------------------------------------------------------
[[Page 71701]]
Qualitative:
----------------------------------------------------------------------------------------------------------------
Potential increase in costs to states for increased oversight of separate payment requirements.....
Potential increased costs incurred by enrollees who choose to make separate payments for coverage
of non-Hyde abortion services..
Potential increased burden and costs for State Exchanges to authorize access to federal data
sources to verify Medicare and Medicaid/CHIP eligibility and/or enrollment, notifying enrollees when dual
enrollment is detected, and process QHP coverage terminations..
Potential increased burden for assisters, agents and brokers to explain new billing process........
Potential increase in public spending and out-of-pocket costs to enrollees if there is an increase
in unplanned pregnancies due to loss of abortion coverage and, with respect to public spending, if those
unplanned pregnancies are experienced by individulas who would be eligible for public benefit programs..
----------------------------------------------------------------------------------------------------------------
Potential decrease in broker and issuer revenue due to decrease in QHP enrollment.
----------------------------------------------------------------------------------------------------------------
Transfers: Estimate (million). Year Dollar percent Discount Rate...... Period Covered
----------------------------------------------------------------------------------------------------------------
Federal Annualized Monetized $76.2.............. 2019............... 7.................. 2020-2024
($/year).
$77.7.............. 2019............... 3.................. 2020-2024
----------------------------------------------------------------------------------------------------------------
Quantitative:
Total transfers from the federal government to enrollees due to an increase in premium tax credit
payments..
----------------------------------------------------------------------------------------------------------------
Qualitative:
Increase in premiums beginning in plan year 2021...................................................
Potential increase in out-of-pocket costs for enrollees who experience lapse in coverage for
failing to make payments for coverage of non-Hyde abortion services due to confusion with new billing
system..
Potential increase in out-of-pocket costs for individuals who lose health insurance coverage due to
increase in premiums..
Potential increase in uncompensated care costs for people who lose health insurance coverage.......
----------------------------------------------------------------------------------------------------------------
Table 8--E.O. 13771 Summary Table
[In $ millions 2016 dollars, over a perpetual time horizon]
------------------------------------------------------------------------
Estimate (7%
discount rate)
------------------------------------------------------------------------
Annualized Costs.................................. $182.98
Annualized Cost Savings........................... 0
Annualized Net Costs.............................. 182.98
------------------------------------------------------------------------
1. Functions of an Exchange (Sec. 155.200)
Our revisions to Sec. 155.200(c) specifying that Exchanges must
perform oversight functions or cooperate with activities related to
oversight and financial integrity requirements are a clarification and
not a new function. Therefore, they will not impose additional burdens
on State Exchanges.
2. Eligibility Redetermination During a Benefit Year (Sec. 155.330)
Our requirement that Exchanges conduct Medicare PDM, Medicaid/CHIP
PDM, and, if applicable, BHP PDM at least twice a year beginning with
the 2021 calendar year, adds specificity to the existing requirement
that Exchanges must periodically examine available data sources to
determine whether Exchange enrollees have been determined eligible for
or enrolled in other qualifying coverage such as Medicare, Medicaid,
CHIP, or, if applicable, the BHP. Therefore, we expect the costs
associated with this requirement to be minimal. However, State
Exchanges that are not already conducting PDM with the required
frequency, or deemed in compliance with the Medicaid, CHIP, and, if
applicable, BHP PDM requirements, will be required to engage in IT
system development activity in order to communicate with these programs
and act on enrollment data either in a new way, or in the same way more
frequently. Thus, there may be additional associated administrative
cost for these State Exchanges to implement the proposed PDM
requirements. We anticipate a majority (up to eight) of the twelve
State Exchanges that operate their own technology platforms would be
exempt from the requirement to perform Medicaid/CHIP, and, if
applicable, BHP PDM because they have shared, integrated eligibility
systems with their respective Medicaid programs, as such they would be
deemed in compliance with this requirement. However, we are not able to
confirm the exact number because we have not yet set specific criteria
and process to assess and confirm which State Exchanges would be
exempt, and would need additional operational information from State
Exchanges to confirm our assessment. We will establish and engage in
that process after finalization of the rule. For a State Exchange not
already conducting Medicare, Medicaid/CHIP, and, if applicable, BHP PDM
at least twice a year, and that does not already have a shared,
integrated eligibility system with its respective Medicaid/CHIP, and,
if applicable, BHP programs, we estimate that it will cost
approximately $1,740,000 per State Exchange (a total of $6,960,000 for
all 4 nonexempt State Exchanges) to build such capabilities in their
system. We assume that this cost will be incurred primarily in 2020.
These costs would be incurred by the State Exchange as they are
required to be financially self-sustaining and do not receive federal
funding for their establishment or operations.
We believe these changes will support HHS's program integrity
efforts regarding the Exchanges by helping promote a balanced risk pool
for the individual market as Medicare and Medicaid/CHIP beneficiaries
tend to be higher utilizers of medical services, ensuring that
consumers are accurately
[[Page 71702]]
determined eligible for APTC and income-based CSRs, and safeguarding
consumers against enrollment in unnecessary or duplicative coverage.
Such unnecessary or duplicative coverage, coupled with typically higher
utilization, generally results in higher premiums across the individual
market, leading to unnecessarily inflated expenditures of federal funds
on PTC for taxpayers eligible for PTC in the individual market. We
estimate that requiring State Exchanges to perform Medicare PDM twice a
year will result in a reduction in PTC payments of approximately $500
million over a 9-year period (Table 9). We believe this will not have
any discernable impact on premiums.
Table 9--Medicare PDM Effect on Premium Tax Credit Outlays
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
PTC ($ millions)................ -40 -50 -50 -50 -60 -60 -60 -60 -70 -500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3. General Program Integrity Oversight Requirements (Sec. 155.1200)
We do not anticipate the changes to Sec. 155.1200(b)(2) will
result in any additional cost for State Exchanges because the changes
leverage an existing reporting mechanism currently used by all State
Exchanges, the annual SMART, for meeting eligibility and enrollment
reporting requirements. Additionally, State Exchanges are already
required to annually contract with, and budget accordingly for, an
external independent audit entity to perform an annual financial and
programmatic audit as required under Sec. 155.1200(c). We believe the
flexibility under the new Sec. 155.1200(d)(2) to permit HHS to target
the scope of annual programmatic audits to focus on the program areas
that are most pertinent to a State Exchange model (including SBE-FPs),
or have the greatest program integrity implications, would allow State
Exchanges to utilize the funds that they already allocate to
contracting with an external independent audit entity in the most cost-
effective manner. We also believe the flexibility we are providing to
State Exchanges in the sampling method employed by their external
independent audit entities for testing the accuracy of eligibility
determinations in the annual programmatic audits, along with the
flexibility for HHS to set the reporting deadlines for State Exchanges
under Sec. 155.1200 on an annual basis, will also allow State
Exchanges to utilize the funds that they have already allocated to
these activities in the most cost-effective manner.
4. Segregation of Funds for Abortion Services (Sec. 156.280)
In Sec. 156.280, we proposed to amend billing and premium
collection requirements related to the separate payment requirement for
coverage of abortions for which public funding is prohibited pursuant
to section 1303 of the PPACA, as implemented at Sec. 156.280. We
originally proposed that QHP issuers send an entirely separate monthly
bill in a separate envelope to the policy holder for only the portion
of premium attributable to coverage of non-Hyde abortion services, and
instruct the policy holder to pay the portion of their premium
attributable to coverage of non-Hyde abortion services in a separate
transaction from any payment the policy holder makes for the portion of
their premium not attributable to coverage of non-Hyde abortion
services. We are also finalizing that QHP issuers must begin complying
with these billing changes on or before the date that is 6 months after
publication of the final rule. If the date that is 6 months after
publication of the final rule falls in the middle of the QHP issuer's
billing cycle (in other words, after the QHP issuer has already sent
out bills to policy holders for that month), QHP issuers would be
expected to begin complying the next billing cycle immediately
following that date. We will consider extending enforcement discretion
to an Exchange or QHP that fails to timely comply with the separate
billing policy as required under this final rule, if we find that the
Exchange or QHP issuers attempted in good faith to timely meet the
requirements. We believe these changes to the proposed policy will
advance HHS's goal of more closely aligning the regulatory requirements
for QHP issuer billing of premiums with the separate payment
requirement in section 1303 of the PPACA, while also mitigating the
overall burden to affected issuers, states, and enrollees.
HHS received many comments stating that we greatly underestimated
the burden caused by these proposals. Although we recognized in the
proposed rule that QHP issuers that cover non-Hyde abortion services
would experience an increase in burden as a result of finalizing these
changes, we are committed to mitigating issuer burden where possible
and, as such, are finalizing changes to Sec. 156.280(e)(2) that we
believe will result in a lower overall regulatory burden than what
issuers would have incurred if the provisions were finalized as
originally proposed. Specifically, we are amending the proposals at
Sec. 156.280(e)(2) to finalize in a new paragraph at Sec.
156.280(e)(2)(ii)(A) that QHP issuers offering coverage of non-Hyde
abortion services through an Exchange must send an entirely separate
monthly bill to the policy holder for the portion of premium
attributable to coverage of non-Hyde abortion services, but they will
be permitted to send this separate bill in the same mailing (although
not in the same email or electronic communication) as the bill for the
portion of the policy holder's premium not attributable to coverage of
non-Hyde abortion services when sending paper copies of bills to policy
holders. We are finalizing that, when issuers sending or issuing bills
electronically, the issuer must send or issue a separate bill for the
portion of the premium attributable to coverage of non-Hyde abortion
services in a separate email or electronic communication from the bill
for the rest of the policy holder's premium. We are also finalizing at
a new paragraph Sec. 156.280(e)(2)(ii)(B) the requirement that,
although the QHP issuer would not be permitted to refuse a combined
payment on the basis that the policy holder did not send two separate
payments as requested by the QHP issuer, and to then terminate the
policy, subject to any applicable grace period, for non-payment of
premiums, the QHP issuer must continue to instruct the policy holder to
pay the portion of their premium attributable to coverage of non-Hyde
abortion services in a separate transaction from any payment the policy
holder makes for the portion of their premium not attributable to
coverage of non-Hyde abortion services. We are also finalizing that QHP
issuers must begin complying with these billing changes on or before
the date that is 6 months after publication of the final rule. We
believe these changes to the proposed policy will advance HHS's goal of
more closely aligning the regulatory requirements for QHP issuer
billing of premiums with the separate payment requirement in
[[Page 71703]]
section 1303 of the PPACA, while also mitigating the overall burden to
affected issuers, states, and enrollees.
However, we acknowledge that the changes we are finalizing will
still result in additional burden for issuers. HHS received many
comments on the original proposals arguing that the burden imposed on
issuers would significantly exceed the estimated burden included in the
proposed rule. Some commenters from the issuer community conducted
internal surveys, providing detailed accounts to HHS of the various
ways in which they believe HHS underestimated the burden and detailing
the various issuer and Exchange activities that would be necessary for
implementation that HHS failed to account for in estimating the burden.
The following one-time changes are issuer activities that
commenters stated HHS should account for in response to the proposed
policy, and that we expect may still be necessary for issuers under the
amendments we are finalizing: Planning, assessment, budgeting, funding
approval, and allocating funds and resources for the actual technical
build (a process of 6 to 9 months); changes to system architecture to
allow multiple billing statements per policy holder; changes to
enrollment systems to identify enrollees subject to separate billing
and payment requirements; automating the processes to send separate
invoices (mail or electronic communication); adding electronic
communications and payment links (for example, to issuer's online
payment portal) for enrollees to pay separately for the separate bill;
changes to call center training/scripting, response processes, billing-
related outreach, and interactive voice response (IVR) technology;
changes to enrollee notifications related to non-payment and the 3-
month grace period; updating Health Insurance Casework System (HICS)
and DOI complaint processes, changes to grievance/appeals processes;
and testing to ensure accuracy of separate billing processes.
Commenters also stated that HHS should have accounted for the
development of new training materials. Commenters explained that
issuers would need to develop additional materials and training modules
for customer service representatives, brokers, and agents, so that they
could address member questions and educate them, particularly on the
risk of losing coverage should members fail to pay the multiple bills.
We expect the following one-time activities to add burden for
issuers as issuers must still make system changes to accommodate policy
holders paying separately, potential changes to binder payment
processing to collect two separate payments to effectuate enrollment;
changes to processes to intake payments, including automating ability
to match identity and match multiple payments from a policy holder;
changes to pay-by-phone and online payment portal to support dual
invoices and separate payments, while also supporting combined payments
for enrollees who do not make separate payments; changes to processes
for enrollment and payment reconciliation, including 834 matching to
effectuate enrollments; and adding new processes to address scenarios
where an enrollee's payment is not processed because the bank flags
payment as potentially fraudulent (expected to occur for multiple
payments in the same day or $1 payments).
Commenters also noted several activities issuers would have to
complete annually to effectively implement these proposals would also
significantly raise the annual burden for issuers. The following annual
changes are activities raised by commenters in response to the proposed
policy, but that we expect will still be relevant under the amendments
we are finalizing: Generating separate billing statements (paper or
electronic) and additional member education materials to explain
separate billing; administrative expenses in generating twice as many
bills; quality assurance to ensure accuracy of separate billing
statements; additional customer service resources, including additional
staffing and training, to address enrollee questions, confusion,
frustration, etc.; increased resources for HICS/DOI case resolution;
system testing for billing accuracy; identifying enrollees who did not
meet an issuer's premium payment threshold and enter a grace period for
non-payment of premium if they fail to pay the second bill; managing
the grace period process for a higher volume of enrollees who enter a
non-payment grace period (notices, termination, appeals process,
reinstatement), and verification and reconciliation of the two separate
bills. Commenters also stated that issuer costs should account for
additional staffing since issuers would need to hire additional FTEs
for reconciliation and auditing of the enrollment, billing, delinquency
and payment processes and to manage the added complexity for the
Exchange back-end processes.
Because the policy as finalized will require QHP issuers to
instruct the policy holder to pay the portion of their premium
attributable to coverage of non-Hyde abortion services in a separate
transaction from any payment the policy holder makes for the portion of
their premium not attributable to coverage of non-Hyde abortion
services, we anticipate that the burden associated with the following
annual activities raised by commenters will still be relevant:
Budgeting for fees for collecting and processing multiple payments,
such as bank processing fees; processing and reconciling separate
payments (paper and electronic) sent by enrollees; additional resources
for manual review where automated processes are not able to reconcile
enrollments and payments; and managing the grace period process for a
higher volume of enrollees who enter a non-payment grace period
(notices, termination, appeals process, reinstatement).
Comment: Many commenters expressed concerns that these burdens
would fall hardest on those issuers in states that require QHPs to
cover non-Hyde abortion services, and that if issuers in these states
find the requirements overly burdensome they would not have an option
to eliminate coverage of non-Hyde abortion services and would thus have
to absorb all associated costs or pass those costs onto enrollees. One
commenter stated that the proposals are also likely to have an impact
off-Exchange, as issuers offering plans on the Exchange are also
generally required under guaranteed availability to offer the plans off
the Exchange, and that because these administrative processes are fixed
investments across all plans, it is likely that many plans would simply
change their systems to apply to all plans even though the proposals
would only require QHPs to comply.
Response: Setting aside the question of whether state laws
requiring coverage of non-Hyde abortion services on the Exchange are
consistent with statutory conditions on federal funding from the
Department to the States, we acknowledge that some states have such
laws. The changes we are finalizing do not preempt state law regarding
coverage of non-Hyde abortion services or otherwise attempt to coerce
states into changing these laws. Although we acknowledge that issuers
in these states would incur additional costs if they choose to continue
offering individual market plans, HHS is refining the method issuers
use to comply with the separate payment requirement, changes that we
believe are necessary to align issuer billing with the separate payment
requirement in section 1303 of the PPACA.
The burden and costs related to the one-time technical changes have
been
[[Page 71704]]
previously estimated in section III ``Collection of Information
Requirements'' of this final rule. We have also updated HHS's estimates
in the Collection of Information Requirements section to reflect some
of the increased annual burden to be incurred by issuers. Additionally,
based on comments we received, we estimate that issuers will incur
ongoing annual costs associated with activities such as processing and
reconciling separate payments, support for enrollees who enter grace
period for non-payments, customer service, outreach and compliance. We
estimate that each issuer will incur additional annual costs of
approximately $1 million for these activities. Assuming that issuers
will start sending separate bills in July 2020, the total annual cost
of for all 94 issuers will be approximately $47 million for the 6
months in 2020 and $94 million for 2021 onwards. Since issuers will not
be able to take the costs incurred in 2020 into consideration when
setting rates for the 2020 plan year, it is possible that some issuers
will exit the individual market or incur losses. We acknowledge that
QHP issuers may choose to make similar billing changes off-Exchange to
maximize their investment in making system changes to comply with the
separate billing policy required for on-Exchange QHPs. However, we note
that the separate billing policy we are finalizing only requires QHP
issuers to implement the required changes for their on-Exchange QHPs
offering non-Hyde abortion coverage.
Comment: Commenters also stated that issuers would be required to
consider the added operational and administrative costs when setting
actuarially sound rates, which would lead to higher premiums for
enrollees. Commenters also expressed concern that the additional
administrative costs would be so high that they would place issuers at
risk of not meeting the required Medical Loss Ratio (MLR) limits.
Response: We believe that the changes we are finalizing to Sec.
156.280(e)(2) will result in a lower burden than the provisions as
originally proposed and as such will lessen the degree to which issuers
have to raise enrollee premiums. However, we acknowledge that issuers
will still incur significant burden and costs as estimated above. Based
on the total premiums in the 21 states that have QHP issuers offering
non-Hyde abortion coverage, we estimate that there will be no premium
impact in 2020 (as plan year 2020 premium rates will already be
finalized), and an approximate premium impact of up to 1.0 percent in
plan year 2021 and each year thereafter.
We also estimate that enrollment will be reduced in the impacted
states very slightly as a result of the increase to premiums. In plan
year 2021 and each year after, we estimate that APTC amounts will be
increased by up to $146 million when premium rates reflect the
projected additional administrative and operational expense burdens. We
do not anticipate that the policies finalized at Sec. 156.280(e)(2)
will measurably increase MLR rebates as we believe that QHP issuers
would either cease offering coverage of non-Hyde abortion services
(unless state law requires QHP issuers to offer coverage of non-Hyde
abortion services) in the plan year following the effective date to
avoid issuing additional MLR rebates or would pay for the increased
administrative costs from a different revenue source. Further, as noted
elsewhere in this rule, among the previously acceptable methods for QHP
issuers to comply with the separate payment requirement was sending a
separate monthly bill for these services. Therefore, if any issuers
already elected this option, there should be no change or impact on MLR
rebates as a result of the policies finalized at Sec. 156.280(e)(2).
We believe these additional costs are necessary to achieve better
alignment of issuer billing with the statute, and strikes a better
balance between burden and benefit than if HHS were to require issuers
to send the separate bill in a separate mailing.
Comment: Commenters also expressed concerns with the burdens these
changes would impose on Exchanges, which commenters noted would need to
make time consuming and resource intensive changes to their websites,
enrollment systems, and customer service and outreach efforts
(including the reallocation of marketing funds that currently provide
critical enrollee outreach which drives Exchange success) to align with
the separate billing and payment requirements, which would be costly
and disrupt states' Exchange efficiency. Commenters noted a variety of
changes Exchanges would be required to make, including communicating
the new separate billing and payment requirement to enrollees during
the enrollment process; updating the online payment portal (the ``Pay
Now'' button on HealthCare.gov) to collect the binder payment through
two separate transactions; updating the enrollment materials and
notices that reference binder payment requirements to effectuate
coverage, updating call center scripting and customer service to
address questions related to separate billing and payment (since
questions related to payments should be referred to the issuer, but
that the call center should be prepared to answer questions about why
enrollees are required to make multiple payments); and update complaint
processes to address complaints and questions related to separate bills
and payments.
One commenter estimated that the proposed changes would cost
$250,000 annually for its State Exchange customer service center,
$152,000 annually for customer outreach, and $19,000 annually to
resolve customer complaints and appeals. Another commenter estimated
that the proposals would cost its state Exchange an additional $2.9
million annually in customer service costs, $2.25-$2.75 million for IT
system changes, and $3.6 million annually for outreach and education,
which reflects one-quarter of that state Exchange's annual advertising
and outreach budget. Commenters also stated that, because the proposed
changes would lead to decreased QHP enrollment, the proposed rule would
cause a corresponding loss of revenue to the Exchange. Commenters also
highlighted how any lapse or loss of enrollee coverage due to these
proposals would result in more individuals turning to state-funded
programs or emergency care for their treatment needs and that any loss
of coverage would decrease the size of the risk pool and increase the
cost of uncompensated care, driving medical costs and health insurance
rates higher generally. For example, one commenter estimated that each
one percentage point decline in the uninsured rate is associated with a
$167 million drop in uncompensated care.
Response: We acknowledge that these provisions will impact Exchange
operations. Exchanges perform important enrollee-facing functions that
could be integral to issuer and enrollee compliance with the new
requirements. Ultimately, we believe the changes we are finalizing will
mitigate some of the burden on Exchanges that would have been incurred
if we were finalizing as proposed by decreasing potential enrollee
confusion and lessening potential issuer burden.
We anticipate that State Exchanges will incur additional one-time
costs associated with technical changes such as updating online payment
portals to accept separate payments and updating enrollment materials
and notices that reference binder payments. In addition, State
Exchanges will incur ongoing annual costs associated with increased
customer service, outreach, and compliance. Based on comments, we
estimate that each State Exchange will
[[Page 71705]]
incur, on average, one-time costs of $750,000 in 2020, and ongoing
annual costs of approximately $200,000 for the 6 months in 2020 and
$400,000 in 2021. We anticipate that ongoing annual costs will decrease
over time as consumers become used to receiving and paying separate
bills. We estimate that ongoing annual costs will be approximately
$300,000 for each State Exchange in 2022 and $200,00 in 2023 and after.
The total one-time cost for all 12 State Exchanges affected by these
requirements will be approximately $9 million in 2020. Total ongoing
costs for all 12 State Exchanges is estimated to be approximately $2.4
million in 2020, $4.8 million in 2021, $3.6 million in 2022 and $2.4
million 2023 onwards. In addition, we anticipate that the 3 State
Exchanges that perform premium billing and payment processing will
incur annual ongoing costs similar to QHP issuers that offer coverage
of non-Hyde abortion services, as discussed above. We estimate that
each State Exchange that performs premium billing and payment
processing will incur additional annual costs of approximately $1
million. The total annual cost for all 3 State Exchanges performing
premium billing and payment processing will be approximately $1.5
million in 2020 and $3 million for 2021 onwards.
Comment: One commenter also stated that the federal government will
incur additional expenses due to additional personnel time and other
resources needed to ensure that QHPs on the FFEs comply with the
proposed rule's requirements and to ensure compliance if a State
Exchange is unable to do so, costs that will be passed on to consumers
in the form of taxes.
Response: We acknowledge that the FFEs will experience added burden
as a result of the final policy. However, because federal government
compliance efforts will be covered primarily by FFEs user fees, we
disagree that the added costs on the FFEs will be passed on to
consumers in the form of taxes (though any increase in user fees may be
passed on to enrollees in the form of increased premiums). We do,
however, anticipate that the FFEs will incur additional costs due to
one-time technical changes and increased call volumes and additional
customer services efforts. We do not anticipate that the FFEs will need
to make any operational changes to comply with these final policies. We
estimate that the FFEs will incur a one-time cost of $750,000 in 2020
and ongoing annual cost of approximately $400,000 in 2020 and $800,000
in 2021 to implement these provisions. As consumers become used to
receiving and paying separate bills, the ongoing costs should decrease.
We estimate that ongoing costs will be approximately $600,000 in 2022
and $400,000 in 2023 onwards.
Comment: Commenters stated that Navigators and in-person assisters
will also need to invest time and training resources necessary to
ensure that they can provide support to enrollees (especially
populations who would be disproportionately impacted by these
proposals, including the most financially vulnerable and those with
limited English proficiency) as they become acquainted with additional
steps needed to maintain coverage as a result of the proposed changes.
Commenters also noted that any level of QHP disenrollment resulting
from the proposed changes will result in decreased broker revenue and
potential loss of broker participation in the market.
Response: Although there also may be an impact on Navigators,
brokers, and other assisters, we believe these entities receive
training and generally keep abreast of policy changes as part of their
normal duties. As such, we believe these requirements will not amount
to any additional burden above that already experienced by Navigators,
brokers, and other assisters as a result of providing support to
enrollees who are navigating these new billing requirements.
Comment: Many commenters also stated that enrollees would incur
ancillary costs that would further drive up administrative costs and
burden for enrollees, including postage costs, money order fees, or
other banking fees for the second bill and cautioned that these costs
will be felt most strongly by low income enrollees.
Many commenters stated that these proposals would transfer the
costs and burdens of accessing non-Hyde abortion services to enrollees
who must seek coverage for abortion elsewhere or pay out-of-pocket.
Commenters estimated that non-Hyde abortions can cost between $400 and
$1900. Commenters noted that low-income women who lack insurance
coverage for abortion often struggle to pay for the procedure out-of-
pocket, causing financial hardship that can drive families further into
poverty. Commenters also expressed concern that when legal abortion is
inaccessible, people who seek to end their pregnancy turn to unsafe and
illegal methods, risking arrest, serious injury, or even death.
Commenters also suggested that the changes would have a
disproportionate effect on enrollee groups who already face barriers to
care at higher rates such as low-income individuals, young people,
people of color, individuals with LEP, lesbian, gay, bisexual,
transgender and queer enrollees, the Latinx community, people with
disabilities, rural residents, individuals without access to the
internet, and American Indian/Alaskan Native populations.
Response: We acknowledge that as originally proposed, the
combination of issuer burden and enrollee confusion could have
potentially led to a reduction in the availability of coverage of non-
Hyde abortion services in insurance (either by issuers choosing to drop
this coverage to avoid the additional costs or by enrollees having
their coverage terminated for failure to pay the second bill), thereby
increasing out-of-pocket costs for those seeking those services.
We understand that, even with the changes we are finalizing, the
increased burden associated with issuers complying with the separate
billing policy, could influence whether a QHP issuer continues offering
coverage of non-Hyde abortion services in states that do not require
it. However, we believe allowing the separate bill to be included in
the same mailing (although not in the same email or other electronic
communication), and allowing issuers to accept combined payments when
policy holders fail to pay separately for the separate bill will
mitigate some of the potential issuer and Exchange burden and consumer
confusion associated with the proposed policy, thereby decreasing the
likelihood that issuers will drop coverage of non-Hyde abortion
services solely to avoid the burden associated with these changes or
solely to avoid having to terminate enrollees coverage for non-payment
of miniscule amounts.
We are also finalizing an enforcement posture that will further
mitigate the risk of potential coverage loss. We intend to propose
further rulemaking to change our regulations to mitigate this risk.
Until we can effectuate such changes, we will exercise enforcement
discretion as an interim step. Specifically, HHS will not take an
enforcement action against a QHP issuer that adopts and implements a
policy, beginning on or after the effective date for the separate
billing policies, applied uniformly to all its QHP enrollees, under
which an issuer does not place an enrollee into a grace period and does
not terminate QHP coverage based solely on the policy holder's failure
to pay the separate payment for coverage of non-Hyde abortion services.
We note that the QHP issuer would still be required to collect the
premium for the non-Hyde abortion coverage. We also
[[Page 71706]]
will not take enforcement action against QHP issuers that, beginning
upon the effective date of the final rule, modify the benefits of a
plan either at the time of enrollment or during a plan year to
effectively allow enrollees to opt out of coverage of non-Hyde abortion
services by not paying the separate bill for such services, resulting
in the enrollee having a modified plan that does not cover non-Hyde
abortion services and that no longer obligates the enrollee to pay the
required premium for such services. QHP issuers taking this approach
should implement appropriate measures to distinguish between a policy
holder's inadvertent non-payment of the separate bill for non-Hyde
abortion services and a policy holder's intentional nonpayment of the
separate bill. Although both of these approaches would be entirely
optional for a QHP issuer, we believe that offering this enforcement
discretion strikes an appropriate balance between honoring section
1303's requirement for issuers to calculate the actuarial cost of non-
Hyde abortion coverage and bill and collect premiums for such coverage
in separate transactions, protecting enrollees against inadvertent
losses of coverage, and ensuring all enrollees have access to coverage
that meets their needs and that does not result in their supporting
coverage for non-Hyde abortion services to which they object. We
acknowledge that QHP issuers that do not utilize this available
enforcement discretion may subsequently experience a higher number of
enrollee terminations as a result of delinquent premium payments, which
could influence whether a QHP issuer continues offering coverage of
non-Hyde abortion services in states that do not require it.
Because enrollees will be instructed to make separate payments,
those that follow the instructions may need to pay for additional
postage, money order fees, credit card fees, or other banking fees for
the second bill depending on how the QHP issuer implements this policy.
For example, policy holders who have funds automatically withdrawn from
their bank accounts may need to arrange for a second withdrawal and may
encounter additional fees. Additionally, because QHP issuers often
incur fees for credit card transactions and these fees would double
when a policy holder is paying in two separate transactions, QHP
issuers may decide to transfer the cost of those credit card
transaction fees onto policy holders choosing to pay via credit card
rather than covering the cost of those transactions themselves. Policy
holders that pay their premium bills via money order may need to pay an
additional fee for the additional money order they submit for payment
of the separate bill.
Comment: Many commenters stated that the proposals would cause
considerable and unnecessary confusion and frustration for enrollees
that may jeopardize their health insurance coverage by making it more
difficult for policy holders to pay their premium bills, which could
potentially result in their coverage being terminated for unintentional
non-payment. Commenters also expressed concerns that despite consumer
education and outreach, enrollees would likely not understand this
change in billing.
Many commenters also stated that we underestimated the number of
enrollees who would be impacted by these proposals. One commenter
stated that there are 2 million enrollees alone in states where non-
Hyde abortion coverage is required in all plans. Another commenter
conducted an internal member survey, to which ten issuers responded,
indicating that 2.4 million enrollees would be impacted across these
ten issuers. This commenter noted that these ten issuers do not
represent all health insurance issuers who would be required to comply
with the proposals and that, thus, the number of affected enrollees
would be greater than 2.4 million. Another commenter stated that the
rule would impact 3 million enrollees. As such, commenters stated that
we underestimated how much it would cost enrollees annually to comply
with the proposals. Commenters also objected that we excluded the cost
of enrollees learning in our estimate.
Response: We based our initial estimates on 2018 QHP Certification
data, and we acknowledge that the estimates may not have captured the
exact number of enrollees that may be impacted by this final rule. In
response to comments, we have reviewed our methodology and have updated
our enrollee estimates accordingly. We also acknowledge that enrollees
may initially be confused by receiving a separate bill for the portion
of their premium attributable to coverage of non-Hyde abortion services
in the same envelope as the bill for the rest of their premium. We
believe that the provisions as finalized will minimize enrollee
confusion surrounding the second bill for those receiving paper bills
and will help to ensure that policy holders pay the entire premium due
including the portion attributable to non-Hyde abortion services. There
is still potential for confusion and loss of coverage for enrollees who
receive electronic bills, due to failure to pay the second bill sent
through a separate electronic communication, but the mechanisms by
which electronic bills are paid may mitigate or lessen the potential
for confusion over separate bills. We believe enrollee outreach and
education will assist in further mitigating this risk.
Based on 2019 QHP certification data for the FFEs and SBE-FPs, we
now estimate that there are approximately 442,400 enrollees in QHPs
covering non-Hyde abortion services. In the 11 State Exchanges that
operated their own technology platforms and had issuers that offered
coverage of non-Hyde abortion services in 2019, we estimate that there
are approximately 2,597,700 million enrollees enrolled in QHPs offering
coverage for non-Hyde abortion. As noted previously in section III
``Collection of Information Requirements'' of this final rule, we
estimate that there are approximately 3.04 million enrollees impacted
by these provisions. Assuming 1.5 enrollees per policy, issuers will be
required to send a separate bill to approximately 2 million policy
holders. We believe that finalizing the policies to allow for the
separate bill to be sent in the same mailing with the bill for the rest
of the policy holder's premium will minimize enrollee confusion and
burden.
We acknowledge that some policy holders will fail to pay in a
separate transaction for both bills, and acknowledge that the burden
may be moderately higher for those policy holders who follow
instructions to pay in separate transactions. We also acknowledge that
enrollees may experience burden in receiving a separate bill to which
they are not yet accustomed in the same mailing as for the other
portions of their premium or in a separate electronic communication. As
such, using the May 2018 National Occupational Employment and Wage
Estimates United States, Department of Labor's Bureau of Labor
Statistics (BLS) (https://www.bls.gov/oes/current/oes_stru.htm), listed
national mean hourly wage for the 25th percentile,\28\ we estimate that
for the 2020 plan year each policy holder will incur a burden of
approximately 1 hour (at a cost of $12.37 per hour) to read and
understand the separate bills received the first time and seek help
from customer service if necessary, and approximately 5 minutes for
each of the subsequent 5 months, resulting in a total estimated annual
burden of 1.42 hours with an associated annual cost of approximately
$18. For
[[Page 71707]]
all policy holders we estimate that the initial 2020 burden will be
approximately 2.9 million hours with and associated annual cost of
$35.5 million. For subsequent years we estimate that enrollees will
require approximately 5 minutes per month to read and understand their
statements, resulting in an estimated annual burden of 1 hour with an
associated annual cost of approximately $12. For all policy holders, we
estimate that the annual enrollee burden will be approximately 2
million hours with an associated annual cost of approximately $25.1
million.
---------------------------------------------------------------------------
\28\ The 25th percentile mean hourly wage most closely resembles
the group of enrollees likely to be affected by this change as most
enrollees enrolled in QHPs on the Exchange are between 100 percent
and 400 percent of the federal poverty level.
---------------------------------------------------------------------------
We also note that, although policy holders may experience burden
related to reading and understanding the separate bills, there are non-
quantifiable benefits to policy holders in QHPs covering non-Hyde
abortion who hold conscience objections to such coverage or policy
holders who seek a better understanding of what their health care
dollars are purchasing.
HHS continues to believe that, although these changes will increase
enrollee burden, this burden is reasonable and justified because it
will achieve better alignment of the regulatory requirements for QHP
issuer billing of premiums with the separate payment collection
requirement in section 1303 of the PPACA.
Table 10--Summary of Costs Related to Separate Billing and Payment Requirements
----------------------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024
----------------------------------------------------------------------------------------------------------------
Issuers......................... $482,616,844 $195,252,923 $195,228,601 $195,216,441 $195,216,441
States.......................... 11,400,000 4,800,000 3,600,000 2,400,000 2,400,000
State Exchanges with payment 15,385,201 6,197,323 6,197,323 6,197,323 6,197,323
portals........................
Consumers....................... 35,517,268 25,071,013 25,071,013 25,071,013 25,071,013
Federal Government.............. 1,150,000 800,000 600,000 400,000 400,000
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
Total....................... 546,069,313 232,121,259 230,696,938 229,284,777 229,284,777
----------------------------------------------------------------------------------------------------------------
D. Regulatory Review Costs
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
reviewers on similar Exchange-related CMS rules will be the number of
reviewers of this final rule. We acknowledge this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that not all reviewers will review the rule in detail. For
these reasons, we consider the number of past reviewers on similar CMS
rules will be a fair estimate of the number of reviewers of this rule.
We recognize that different types of entities may be affected by
only certain provisions of this final rule, and therefore, for the
purposes of our estimate, we assume that each reviewer reads
approximately 50 percent of the rule.
Using the wage information from the BLS for medical and health
service managers (Code 11-9111), we estimate that the cost of reviewing
this rule is $109.36 per hour, including overhead and fringe
benefits.\29\ We estimate that it would take approximately 1 hour for
each reviewer to review the relevant portions of this final rule. We
received 75,439 comments, including 70,396 comments that were
substantially similar to one of 13 different form letters, resulting in
5,043 unique comments on the proposed rule. We further assume that for
the form letters received, only the staff at the organization that
arranged for those letters will review the final rule. Therefore, we
estimate that there will be 5,056 individuals that review the final
rule resulting in an estimated total cost of review of approximately
$552,924 ($109.36 x 5,056 reviewers).
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\29\ https://www.bls.gov/oes/current/oes_nat.htm.
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E. Regulatory Alternatives Considered
In developing the policies contained in this final rule, we
considered numerous alternatives. Below we discuss the key regulatory
alternatives that we considered.
For the eligibility determination during a benefit year, we
considered not defining ``periodically'' for the frequency of Medicare,
Medicaid/CHIP, or BHP, if applicable, PDM as twice a year in lieu of
further outreach, education, and coordination with State Exchanges to
identify and notice consumers who may also be enrolled in other
qualifying coverage with APTC/CSRs. However, we believe it is critical
that consumers receive timely notification of their potential dual
enrollment in other qualifying coverage to ensure that consumers are
accurately determined eligible for APTC and income-based CSRs, and to
ensure that consumers are not enrolling in unnecessary or duplicative
coverage. As previously discussed in the preamble of the proposed rule,
such unnecessary or duplicative coverage, coupled with typically higher
utilization generally results in higher premiums across the individual
market leading to unnecessary expenditures of federal funds on PTC for
taxpayers eligible for PTC in the individual market.
In finalizing the proposed changes to the general program integrity
and oversight requirements in Sec. 155.1200, we considered not taking
any action. However, because the existing requirements under Sec.
155.1200(b) did not accurately reflect the current structure of CMS's
oversight approach and reporting requirements for State Exchanges, not
taking any action could have prevented HHS from being able to
accurately describe our reporting requirements and strengthen our
oversight processes for State Exchanges. In particular, we needed to
clarify that the eligibility and enrollment reports required under
Sec. 155.1200(b)(2) were part of the annual compliance reports that
State Exchanges were submitting to us, and did not require submission
of a separate report. Thus, the amendments to Sec. 155.1200(b) do not
reflect an expansion of State Exchange reporting obligations but
instead were intended to capture the existing annual compliance reports
(such as the SMART) that encompass eligibility and enrollment
reporting, as well as compliance across other Exchange program
reqirements under 45 CFR part 155, that State Exchanges currently
submit to HHS. Also, because the existing external programmatic audit
requirements under Sec. 155.1200(d) did not specify how the audits
needed to verify the accuracy of eligibility determinations made by
State Exchanges, not taking any action would have prevented CMS from
strengthening oversight processes by identifying a consistent procedure
for these State Exchanges and their auditors to
[[Page 71708]]
implement in order to ensure accurate eligibility determinations.
In finalizing the proposed changes to Sec. 155.1200(c) and (d), we
also considered the alternative of narrowing the focus of the external
programmatic audits to only 45 CFR part 155 subparts D and E, which
cover Exchange eligibility and enrollment requirements. This approach
would have focused the State Exchange's auditing resources to the areas
with highest program integrity impact. However, this approach would
essentially exclude SBE-FPs from the external programmatic audit
requirements altogether because SBE-FPs utilize the federal platform to
carry out their eligibility and enrollment functions. Additionally,
this approach would have limited our oversight in other program
integrity areas that are important for all State Exchanges, such as
consumer outreach and assistance. Because the external audit
requirements under Sec. 155.1200 is one of the only oversight tools we
have for State Exchanges, we did not want to limit the scope of the
Exchange functions that the external programmatic audits must cover.
Instead, the approach finalized in this rulemaking allows us to specify
the Exchange functions that are applicable to each State Exchange model
through annual technical operational guidance. As State Exchanges
continue to evolve and mature, this approach also provides HHS with the
flexibility to focus the audits on emerging issues that raise program
integrity concerns, while minimizing burden on State Exchanges to the
extent possible.
In finalizing the requirement that issuers separately bill for the
portion of the policy holder's premium attributable to the cost of
including coverage of non-Hyde abortion services in the QHP, and permit
policy holders to pay for these amounts in a separate transaction if
they so choose, as described at Sec. 156.280(e)(2), we considered
maintaining the current methods of billing and collection without
modification. We acknowledge that maintaining the current policy would
promote stability for issuers and conserve administrative and
operational resources by allowing QHP issuers to maintain their current
process for billing for and collecting these separate payments.
However, by requiring QHP issuers to separately bill for the portion of
the policy holder's premium attributable to coverage of non-Hyde
abortion services, we believe we are strengthening alignment of issuer
billing with the statutory requirements for collecting a separate
payment for these services required under section 1303 of the PPACA.
We also considered finalizing the changes as originally proposed.
However, we believe the changes we are finalizing will help to maximize
the net benefit of achieving better statutory alignment while also
mitigating burden where possible. For example, we considered finalizing
the proposed requirement that issuers would be required to send the
separate bill in a separate mailing or electronic communication. This
would have resulted in additional mailing costs of approximately $11
million in 2021 for all issuers. However, we believe allowing issuers
to send the separate bill in the same mailing (although not in the same
electronic communication) and allowing issuers to accept combined
payments if a policy holder fails to pay the separate bill in a
separate transaction will assist in mitigating the burden associated
with this policy change by preventing unnecessary postage and mailing
related costs and will mitigate issuer and Exchange burden and enrollee
confusion generally associated with the proposed policy. We also
believe the separate bill could assist in clarifying for enrollees that
their plan covers non-Hyde abortion services and at what cost,
increasing overall QHP transparency. Furthermore, we believe these
changes will still better align issuer billing with section 1303 of the
PPACA.
We also considered finalizing the rule without a requirement that
issuers instruct policy holders to pay in a separate transaction. We
understand that requiring issuers make this instruction and make
reasonable efforts to collect the payment separately carries up-front
and annual costs for issuers. However, we believe that instructing
policy holders to pay the separate bill in a separate transaction is
important to achieving better alignment of the regulatory requirements
for QHP issuer billing of enrollee premiums with the separate payment
requirement in section 1303 of the PPACA.
In addition, we considered requiring issuers to comply with the
separate billing requirements within 3 months after the publication
date of this final rule. We rejected this option because we estimated
that one-time costs would have increased by 100 percent due to the
shortened implementation period and estimated that total costs for
issuers, State Exchanges, FFEs, and consumers would have been
approximately $740 million in 2020. We opted to finalize a later
effective date to avoid such a burden increase.
F. Regulatory Flexibility Act
The RFA requires agencies to prepare an initial RFA to describe the
impact of the final rule on small entities, unless the head of the
agency can certify that the rule will 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.''
HHS uses a change in revenue of more than 3 to 5 percent as its measure
of significant economic impact on a substantial number of small
entities.
In this final rule, we set standards for certain issuers related to
the collection of a separate payment for the premium portion
attributable to coverage for certain abortion services. Because we
believe that insurance firms offering comprehensive health insurance
policies generally exceed the size thresholds for ``small entities''
established by the SBA, we do not believe that an initial regulatory
flexibility analysis is required for such firms.
For the purposes of the RFA, we expect health insurance issuers to
be affected by this final rule. We believe that health insurance
issuers would be classified under the North American Industry
Classification System code 524114 (Direct Health and Medical Insurance
Carriers). According to SBA size standards, entities with average
annual receipts of $38.5 million or less would be considered small
entities for these North American Industry Classification System codes.
Issuers could possibly be classified in 621491 (HMO Medical Centers)
and, if this is the case, the SBA size standard would be $32.5 million
or less.\30\ We believe that few, if any, insurance companies
underwriting comprehensive health insurance policies (in contrast, for
example, to travel insurance policies or dental discount policies) fall
below these size thresholds.
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\30\ https://www.sba.gov/document/support-table-size-standards.
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Therefore, we are not preparing an analysis for the RFA because we
have determined, and the Secretary certifies, that this final rule will
not have a significant economic impact on a substantial number of small
entities.
In addition, section 1102(b) of the Social Security Act requires us
to
[[Page 71709]]
prepare a regulatory impact analysis if a rule may have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 604
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
metropolitan statistical area and has fewer than 100 beds. This final
rule will not have a significant impact on small rural hospitals.
Therefore, the Secretary has determined that this final rule will not
have a significant impact on the operations of a substantial number of
small rural hospitals.
G. 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 any rule that includes any federal
mandate that may result in expenditures in any 1 year by a state,
local, or Tribal government, in the aggregate, or by the private
sector, of $100 million in 1995 dollars, updated annually for
inflation. In 2019, that threshold is approximately $154 million. We
anticipate that costs incurred by state, local, or tribal governments
and the private sector will cross this threshold. States impacted by
the separate billing and payment requirements at Sec. 156.280 may
incur costs of approximately $26.8 million in 2020, 11 million in 2021,
$9.8 million in 2022 and $8.6 million in 2023 and each year after. In
addition, states impacted by PDM requirements will incur costs of up to
$6.9 million in 2020. Issuers impacted by the separate billing and
payment requirements will incur costs of approximately $482.6 million
in 2020 and approximately $195.3 million each year after.
H. 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 requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. This final rule does not impose substantial direct costs
on state and local governments or preempt state law. However, we
believe the rule has Federalism implications.
In HHS's view, this regulation has Federalism implications due to
our requirements that Exchanges conduct Medicare, Medicaid/CHIP, and,
if applicable, BHP PDM at least twice a year, beginning with the 2021
calendar year. As discussed earlier in this final rule, we received
three comments that were opposed to the requirement to conduct
Medicare, Medicaid/CHIP and, if applicable, BHP PDM at least twice
yearly, cautioning us that defining the exact precise frequency and
nature of PDM encroached upon the sovereignty of the State Exchanges.
However, HHS believes that the Federalism implications are
substantially mitigated because the requirement sets only a minimum
frequency with which Exchanges must conduct Medicare, Medicaid/CHIP,
and, BHP, if applicable, PDM, which is already required to be conducted
periodically; State Exchanges continue to have the flexibility to
conduct PDM with greater frequency and the best way they see fit to
implement the requirements set forth in Sec. 155.330(d). Additionally,
as discussed earlier in this final rule, ensuring consumers are
enrolled in the appropriate coverage remains a top priority for HHS and
ensuring that APTC is paid appropriately is a requirement set forth in
Sec. 155.330(d)(1)(ii) to mitigate the risk of federal dollars
incorrectly leaving the federal Treasury in the form of APTC during the
year. HHS believes that PDM plays a vital role in ensuring the health
of all Exchanges, ensuring all consumers are enrolled in the
appropriate coverage and in the case of Medicare enrollment, signing up
at the appropriate time to avoid late enrollment penalties, and finally
reduces the risk that consumers have to pay back all or some of APTC
paid on their behalf during months of overlapping coverage when they
file their federal income taxes.
Additionally, the changes to State Exchange oversight and reporting
requirements in Sec. 155.1200 have Federalism implications since those
rules require State Exchanges to submit certain reports to HHS and
require them to enter into contracts with an external independent audit
entity to perform audits, and incur the associated costs. However, HHS
believes that the Federalism implications are substantially mitigated
because the changes do not impose new requirements on State Exchanges,
but rather add specificity and flexibility with respect to the existing
requirements. Therefore, HHS believes it has balanced states' interests
in operating State Exchanges with the need to ensure proper federal
oversight. By doing so, it is HHS's view that we have complied with the
requirements of Executive Order 13132.
As discussed earlier in this final rule, commenters stated that the
separate billing and payment proposals at Sec. 156.280 raise
Federalism concerns under the Tenth Amendment because the proposals are
designed to penalize states that have laws requiring QHPs to provide
coverage of non-Hyde abortion services by requiring states--through
their respective Exchanges and DOIs--to adopt new oversight
responsibilities, and make systemic changes to fit the alterations the
proposals require. As explained previously, we disagree that this
policy raises Federalism concerns. Setting aside the question of
whether state laws requiring coverage of non-Hyde abortion services on
the Exchange are consistent with statutory conditions on federal
funding from the Department to the States, we acknowledge that some
states have such laws. However, the changes we are finalizing do not
preempt state law regarding coverage of non-Hyde abortion services or
otherwise attempt to coerce states into changing these laws. HHS is
simply refining the method with which issuers use to comply with the
separate payment requirement. We refer readers to section II.B of this
final rule regarding the discussion of Sec. 156.280 for further
information.
I. Reducing Regulation and Controlling Regulatory Costs
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017 and
requires that the costs associated with significant new regulations
``shall, to the extent permitted by law, be offset by the elimination
of existing costs associated with at least two prior regulations.''
This final rule is expected to be an Executive Order 13771 regulatory
action. We estimate that this rule generates $182.98 million in
annualized costs, discounted at 7 percent relative to year 2016, over a
perpetual time horizon. Details on the estimated costs of this rule can
be found in the preceding analyses.\31\
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\31\ We estimate costs of approximately $553.6 million in 2020,
approximately $232.1 million in 2021, approximately $230.7 million
in 2022, and annual costs of approximately $229.3 million
thereafter. Thus the annualized value of costs, as of 2016 and
calculated over a perpetual time horizon with a 7 percent discount
rate, is $182.98 million.
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J. Congressional Review Act
This final rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can
take effect, the federal agency promulgating the rule shall submit to
each House of the Congress and to the Comptroller General a report
[[Page 71710]]
containing a copy of the rule along with other specified information,
and has been transmitted to the Congress and the Comptroller General
for review.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects
45 CFR Part 155
Administrative practice and procedure, Advertising, Brokers,
Conflict of interests, Consumer protection, Grants administration,
Grant programs-health, Health care, Health insurance, Health
maintenance organizations (HMO), Health records, Hospitals, Indians,
Individuals with disabilities, Intergovernmental relations, Loan
programs-health, Medicaid, Organization and functions (Government
agencies), Public assistance programs, Reporting and recordkeeping
requirements, Technical assistance, Women and youth.
45 CFR Part 156
Administrative practice and procedure, Advertising, Advisory
committees, Brokers, Conflict of interests, 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, Medicaid,
Organization and functions (Government agencies), Public assistance
programs, Reporting and recordkeeping requirements, State and local
governments, Sunshine Act, Technical assistance, Women, Youth.
For the reasons set forth in the preamble, the Departement of
Health and Human Servcies amends 45 CFR parts 155 and 156 as set forth
below:
PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT
0
1. The authority citation for part 155 continues to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042,
18051, 18054, 18071, and 18081-18083.
0
2. Section 155.200 is amended by revising paragraph (c) to read as
follows:
Sec. 155.200 Functions of an Exchange.
* * * * *
(c) Oversight and financial integrity. The Exchange must perform
required functions and cooperate with activities related to oversight
and financial integrity requirements in accordance with section 1313 of
the Affordable Care Act and as required under this part, including
overseeing its Exchange programs and non-Exchange entities as defined
in Sec. 155.260(b)(1).
* * * * *
0
3. Section 155.330 is amended by revising paragraph (d)(1) introductory
text and adding paragraph (d)(3) to read as follows:
Sec. 155.330 Eligibility redetermination during a benefit year.
* * * * *
(d) * * *
(1) General requirement. Subject to paragraph (d)(3) of this
section, the Exchange must periodically examine available data sources
described in Sec. Sec. 155.315(b)(1) and 155.320(b) to identify the
following changes:
* * * * *
(3) Definition of periodically. Beginning with the 2021 calendar
year, the Exchange must perform the periodic examination of data
sources described in paragraph (d)(1)(ii) of this section at least
twice in a calendar year. State Exchanges that have implemented a fully
integrated eligibility system with their respective State Medicaid
programs, that have a single eligibility rules engine that uses MAGI to
determine eligibility for advance payments of the premium tax credit,
cost-sharing reductions, Medicaid, CHIP, and the BHP, if a BHP is
operating in the service area of the Exchange, will be deemed in
compliance with the Medicaid/CHIP PDM requirements and, if applicable,
BHP PDM requirements, in paragraphs (d)(1)(ii) and (d)(3) of this
section.
* * * * *
0
4. Section 155.1200 is amended by--
0
a. Revising paragraphs (b) introductory text, (b)(1) and (2), and (c)
introductory text;
0
b. Revising paragraphs (d)(2) and (3);
0
c. Redesignating (d)(4) as paragraph (d)(5);
0
d. Adding a new paragraph (d)(4); and
0
e. Revising newly redesignated paragraph (d)(5).
The revisions and addition read as follows:
Sec. 155.1200 General program integrity and oversight requirements.
* * * * *
(b) Reporting. The State Exchange must, at least annually, provide
to HHS, in a manner specified by HHS and by applicable deadlines
specified by HHS, the following data and information:
(1) A financial statement presented in accordance with GAAP,
(2) Information showing compliance with Exchange requirements under
this part 155 through submission of annual reports,
* * * * *
(c) External audits. The State Exchange must engage an independent
qualified auditing entity which follows generally accepted government
auditing standards (GAGAS) to perform an annual independent external
financial and programmatic audit and must make such information
available to HHS for review. The State Exchange must:
* * * * *
(d) * * *
(2) Compliance with subparts D and E of this part 155, or other
requirements under this part 155 as specified by HHS;
(3) Processes and procedures designed to prevent improper
eligibility determinations and enrollment transactions, as applicable;
(4) Compliance with eligibility and enrollment standards through
sampling, testing, or other equivalent auditing procedures that
demonstrate the accuracy of eligibility determinations and enrollment
transactions; and
(5) Identification of errors that have resulted in incorrect
eligibility determinations, as applicable.
PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES
0
5. The authority citation for part 156 is revised to read as follows:
Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042,
18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31
U.S.C. 9701.
0
6. Section 156.280 is amended by--
0
a. Revising the section heading;
0
b. Redesignating paragraph (e)(2)(ii) as paragraph (e)(2)(iii);
0
c. Adding a new paragraph (e)(2)(ii); and
0
d. Revising newly redesignated paragraph (e)(2)(iii).
The addition and revision read as follows:
Sec. 156.280 Separate billing and segregation of funds for abortion
services.
* * * * *
(e) * * *
(2) * * *
(ii) Beginning on or before the first billing cycle following June
27, 2019, to satisfy the obligation in paragraph (e)(2)(i) of this
section--
(A) Send to each policy holder of a QHP monthly bills for each of
the amounts specified in paragraphs (e)(2)(i)(A) and (B) of this
section, either by sending separate paper bills which may be in the
same envelope or mailing,
[[Page 71711]]
or by sending separate bills electronically, which must be in separate
emails or electronic communications; and
(B) Instruct the policy holder to pay each of the amounts specified
in paragraphs (e)(2)(i)(A) and (B) of this section through separate
transactions. Notwithstanding this instruction, if the policy holder
fails to pay each of these amounts in a separate transaction as
instructed by the issuer, the issuer may not refuse the payment and
initiate a grace period or terminate the policy holder's QHP coverage
on this basis.
(iii) Deposit all such separate payments into separate allocation
accounts as provided in paragraph (e)(3) of this section. In the case
of an enrollee whose premium for coverage under the QHP is paid through
employee payroll deposit, the separate payments required under
paragraph (e)(2)(i) of this section shall each be paid by a separate
deposit.
* * * * *
Dated: December 16, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: December 18, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-27713 Filed 12-20-19; 8:45 am]
BILLING CODE 4120-01-P