HHS Happenings: 2019 Parameters And Noncompliant Policy Extension
The Department of Health and Human Services (HHS), via the Centers for Medicare and Medicaid Services (CMS), released some important final regulations earlier this year. Most address benefit and payment parameters for 2019, which modify insurance market rules under the Affordable Care Act (ACA). But the regs also pertain to certain insurance policies that otherwise may have been canceled.
Here are the highlights of interest for group health plans regarding benefit and payment parameters:
Increased annual cost-sharing limits. The CMS finalized an increase in the maximum annual limitation on cost-sharing for 2019 to $7,900 for self-only coverage and $15,800 for other than self-only coverage (compared to $7,350 and $14,700, respectively, for 2018). Responding to commenters’ objections to the size of the increase, the agency noted that the indexing calculation is required by statute.
Revised essential health benefits (EHB) options. States will have more flexibility in designating EHB-benchmark plans beginning with the 2020 benefit year — one year later than the proposed effective date. States will also be able to select a new EHB-benchmark plan annually and will have more options to choose from. Specifically, a state may:
- Choose an EHB-benchmark plan used by any state for the 2017 benefit year,
- Construct an EHB-benchmark plan that incorporates the 10 required EHB categories by replacing any category with the comparable category in another state’s benchmark plan, taking different categories from different states, as desired, or
- Select a set of benefits to become the state’s EHB-benchmark plan.
Complex rules are intended to ensure that the EHB-benchmark plan provides a scope of benefits that’s at least equal to a typical, insured employer plan providing minimum value — but doesn’t exceed the “most generous” comparison plan.
Criteria are established for selecting a comparison plan, which could be, for example, the state’s EHB-benchmark plan for the 2017 plan year. The HHS has issued a memorandum with an example of an acceptable method to demonstrate compliance with the scope-of-benefits requirements. The deadline for states to select a 2020 EHB-benchmark plan is July 2, 2018.
Remember that although self-insured health plans and insured large group health plans aren’t required to offer EHB, they cannot impose annual or lifetime dollar limits on EHBs they do offer. Because these plans generally must define EHBs by choosing an EHB-benchmark plan selected by a state, they could be affected by this rule change.
New rules for Small Business Health Options Programs (SHOPs). For plan years beginning on or after January 1, 2018, SHOPs are no longer required to provide employee eligibility determinations (or appeals), premium aggregation or online enrollment. SHOPs will still be required to determine employer eligibility for the SHOP (including employer eligibility appeals) and certify each qualified health plan (QHP) available through the SHOP. But enrollment will be handled by SHOP-registered agents or brokers, or the insurer offering the QHP.
The Small Business Health Care credit remains available to qualifying employers using this enrollment process. SHOPs also will feature a website providing QHP information, a premium calculator with estimated QHP prices (but disregarding any employer contributions), and a call center to answer questions about the SHOP. Federal regulations won’t require SHOP insurers to offer group health plans the option to pay premiums based on average enrollee premiums, but rather will defer to state law.
The “rolling enrollment” rule permitting purchase of SHOP coverage at any point during the year continues to apply — subject to minimum participation rules outside the November 15 to December 15 annual enrollment period. The minimum participation rate will still be determined at the employer level, but SHOPs won’t be required to calculate it.
The origin of these changes may lie in the fact that SHOP enrollment hasn’t met expectations, leading the HHS to conclude that it’s not cost-effective for the federal government to perform administrative functions not expressly required by the ACA. However, state-based SHOPs retain the flexibility to maintain current operations. In federal SHOPs and state SHOPs adopting the scaled-back model, employers, brokers and insurers will play a larger role in determining employee eligibility, conducting enrollment and collecting premiums.
Default threshold for rate increase review. The ACA requires an automatic reasonableness review of annual rate increases above a certain threshold in the small group or individual insurance markets. The default threshold will increase from 10% to 15% for rate filings submitted for plan years beginning on or after January 1, 2019. States may request approval from the CMS for higher state-specific thresholds. Other administrative changes are made to the rate review program.
Policy about policies
Separately, the CMS has announced another extension of the transitional policy allowing states to permit insurers in the individual and small group markets to renew health insurance policies they’d otherwise have to cancel because of noncompliance with certain insurance market reforms under the ACA. The CMS generally continues the terms and conditions applicable to last year’s extension of the transitional policy first announced in 2013, but with date adjustments.
Thus, under the latest guidance, states may permit insurers that have continually renewed eligible nongrandfathered individual and small group policies since January 1, 2014, to again renew such coverage for a policy year beginning on or before October 1, 2019. But they may do so only provided that the policies end by December 31, 2019. Insurers relying on the transitional policy must send an informational notice — the content of which hasn’t changed from last year — to affected individuals and employers.
Issues of interest
These final regulations address a wide range of ACA-related issues. For example, a lengthy discussion in their preamble explains the ongoing challenges of Health Insurance Marketplaces (commonly known as exchanges) in developing a reliable database to verify availability of employer-sponsored coverage for individuals seeking advance payment of premium tax credits. (This is a topic of great interest to employers subject to the “play or pay” provision.)
The HHS also received a wide range of comments in response to its request for input on ways to incentivize value-based and consumer-driven health plans, including encouraging insurers to offer High-Deductible Health Plans that would be eligible to augment with a Health Savings Account. But the agency took no specific action to promote these plan designs.