Details of Health Insurance Exchanges: Health and Human Services (HHS) Releases Proposed Rule
On Wednesday, June 19, 2013, the U.S. Department of Health and Human Services (HHS) published a proposed rule that sets forth several new polices related to implementation of the Affordable Care Act’s (ACA) health insurance exchanges (Exchanges) (also known as Health Insurance Marketplaces).
The proposed rule focuses in large part on program integrity with respect to qualified health plans (QHPs) offered through state-run Exchanges and federally-facilitated Exchanges (FFE). The proposed rule also addresses the resolution of certain QHP-related grievances and correction of improperly allocated premium tax credits and cost-sharing reductions, provides states with new flexibility to operate only a Small Business Health Options Program (SHOP) Exchange, and makes certain notable technical corrections. Significant changes proposed by the rule are:
State Exchanges: The proposed rule establishes oversight and financial integrity standards for state exchanges, including reporting and auditing requirements aimed at ensuring that consumers are properly given their choices of available coverage, qualified consumers correctly receive advance payments of the premium tax credit or cost-sharing reductions, and Exchanges otherwise meet the standards of the ACA.
FFE: The proposed rule provides details regarding oversight functions of the FFE, including records retention requirements and compliance reviews to be conducted by HHS and proposes the bases and processes for imposing civil monetary penalties in the FFE, as well as for decertifying plans from participation.
Resolution of Grievances
The proposed rule establishes a process for resolving “cases” received by a QHP issuer operating in an FFE (i.e., grievances regarding the operation of the plan, other than advance benefit determinations). While such cases generally must be resolved within 15 days, “cases involving the need for urgent medical care” must be resolved no more than 72 hours after they are received by the QHP, unless a stricter state standard applies. A determination regarding benefit tiers or plan design may fall within HHS’ proposed definition of a “case” for these purposes, so long as it is not a claim denial, which is subject to a different process.
Correcting Improper Allocation of Premium Tax Credits and Cost-Sharing Reductions
The proposed rule specifies the actions a QHP must take if it does not provide the appropriate premium tax credit payments or cost-sharing reductions. The proposed rule prohibits QHPs from recouping excess funds paid on behalf of a consumer or to a provider and requires QHPs to refund any excess payments made by enrollees within certain, specified timeframes.
State Flexibility to Operate Only a SHOP Exchange
The proposed rule allows states to operate only a SHOP exchange, leaving the operation of the Exchange serving the individual and small group markets to the federal government. To implement this change, HHS proposes to allow states that have received conditional approval to operate a state-based Exchange to modify their proposal to offer solely the SHOP Exchange.
States that have not received conditional approval do not have the option of operating only a SHOP in the 2014 plan year. However, for plan years 2015 and beyond, HHS will consider new proposals from states wanting to operate only the SHOP.
The proposed rule also amends the applicable definitions of “small employer” and “large employer” for purposes of the Exchanges to those that with an average of at least one, but not more than 100 employees and those with an average of at least 101 employees, respectively.