Final Rule Issued on Exchanges, Premium Stabilization Programs and Market Standards

On Oct. 24, 2013, the Department of Health and Human Services (HHS) released a rule that finalizes a number of policies related to the implementation of the Affordable Care Act (ACA), including provisions regarding the ACA's Exchanges (also known as Health Insurance Marketplaces). The final rule addresses issues included in prior proposed rules and other guidance documents without making major changes.

This article summarizes key issues addressed in the final rule. A copy of the final rule is available on the Federal Register's website.

OVERVIEW

The final rule focuses on program integrity standards for advance payments of the premium tax credit and cost-sharing reductions, the premium stabilization programs and state-operated Exchanges, oversight of issuers offering coverage in the federally-facilitated Exchange (FFE) and standards for HHS-approved enrollee satisfaction survey vendors. The rule also finalizes standards related to risk corridors calculations and cost-sharing reduction reconciliations.

According to HHS, the goal of the final rule's guidance is to safeguard federal funds and to make certain that issuers, Exchanges and other entities comply with federal standards meant to ensure consumers have access to quality, affordable health insurance.

KEY POLICIES

Premium Stabilization Programs and Reinsurance Fees

The final rule establishes standards for the oversight of states that operate risk adjustment or reinsurance programs under the ACA. The rule requires states to keep an accurate accounting for the programs, submit to HHS and make public reports on operations and take other steps to ensure the soundness and transparency of the programs.

In the preamble to the final rule, HHS indicates that it will issue a proposed rule to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for 2015 and 2016 and change the collection deadline for the reinsurance fees to reduce the upfront burden on issuers and plan sponsors.

Advance Payments of Premium Tax Credit and Cost-sharing Reductions

The final rule establishes timeframes for refunds to eligible enrollees and providers when an issuer or Exchange incorrectly applies advance payments of the premium tax credit or cost-sharing reductions, or incorrectly assigns an individual to a plan variation (or a standard plan without cost-sharing reductions). The final rule also includes general standards for these payments, including guidelines for the maintenance of records, annual reporting of summary statistics and audits.

For example, the final rule provides that if an Exchange discovers that it did not reduce an enrollee's premium by the amount of the advance payment of the premium tax credit, then (if requested by or for the enrollee) the Exchange must refund any excess premium paid by or for the enrollee within 45 days of the request. If the enrollee does not request a refund, the final rule provides that the Exchange may refund the excess premium paid by applying the excess to the enrollee's portion of the premium each month for the remainder of the period of enrollment or benefit year until the premium is fully refunded. Any excess amounts not refunded at the end of the period of enrollment or benefit year would have to be refunded within 45 days of the end of the period.

State Exchanges and Oversight of FFE Issuers

For 2014, 17 states and the District of Columbia will operate their own Exchanges, instead of using the FFE. The final rule includes standards for the oversight of state-operated Exchanges through monitoring, reporting and oversight of financial activities and Exchange functions. According to HHS, the reforms are intended to ensure that consumers are provided with the correct coverage choices and receive the advance payments of premium tax credit and cost-sharing reductions for which they qualify and that the Exchanges are meeting the ACA's standards in a transparent manner.

In addition, the final rule provides for oversight of qualified health plan (QHP) issuers participating in the FFE to ensure compliance with Exchange requirements, including maintenance of records and participation in investigations and compliance reviews.

Enrollee Satisfaction Survey

The ACA provides for the development of an enrollee satisfaction survey that will be available to the public and will allow for the comparison of enrollee satisfaction levels among comparable plans in the Exchange. The final rule sets forth a process for approving and overseeing survey vendors to administer the survey on behalf of QHP issuers in the Exchange.

Source: Department of Health and Human Services

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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