CMS releases 2nd half of #NBPP2022 rule; will save #ACA enrollees $400 in out of pocket costs; COBRA SEP & more!

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This just in from the Centers for Medicare & Medicaid:

CMS to Adopt Rules to Lower Health Care Costs in 2022 Federal Health Insurance Marketplace Plans

The Centers for Medicare & Medicaid Services (CMS) today adopted new provisions to lower maximum out-of-pocket costs to consumers by $400, while increasing competition and improving the consumer experience for millions of Americans who will rely on the Federal Health Insurance Marketplaces in plan year 2022. These actions demonstrate a strong commitment by the Biden-Harris Administration to protect and build on the Affordable Care Act (ACA), reduce health care costs, and make our health care system easier to navigate and more equitable.

The second 2022 Notice of Benefit and Payment Parameters final rule (also known as the “2022 payment notice”) includes several provisions to help consumers more easily distinguish between plan options and increase opportunities to qualify for future special enrollment periods (SEPs), when consumers are eligible to enroll in marketplace plans outside annual open enrollment. These SEP policies will offer greater flexibility for those who need coverage—particularly those communities hardest hit by COVID-19. Already, an additional 800,000 Americans have enrolled in the ACA under the SEP enacted by the Administration.

There's still no formal press release regarding the 800K SEP enrollees, so I don't know what the end date of this figure is. The prior press release put the total at 528,000 via HealthCare.Gov states as of March 31st, so the additional 272,000 signed up between April 1st and April 27th at the latest...presumably also via HealthCare.Gov only.

Today's April 30th, so they'll likely post an official SEP enrollment report early next week running through the 30th.

“Families deserve to have access to health care coverage that doesn’t break the bank. That’s why today we’re acting to lower consumers’ maximum out-of-pocket costs by $400 and why President Biden has a plan to reduce families’ health care costs for the long run,” said U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra. “ Health care access is personal to me as it is for families across the country. The Department of Health and Human Services is committed to building on the ACA to make sure our health care system is more accessible for every American.”

“The ACA and the American Rescue Plan offer a lifeline to coverage for millions who might otherwise be uninsured,” said Jeff Wu, CMS acting principal deputy administrator and the deputy director for policy in the CMS Center for Consumer Information & Insurance Oversight. “Those groundbreaking legislative actions are lowering health insurance premiums for millions of Americans, and the regulatory steps we’re taking today build upon those actions. They will ensure that next year, Americans will continue to find affordable, quality coverage through the marketplaces. Consumers and insurers alike will benefit from improvements in the 2022 payment notice.”

The annual payment notice makes regulatory changes in the individual and small-group health insurance markets, and outlines parameters and requirements issuers need to design plans and set rates for the upcoming plan year. The notice also includes regulatory standards to help states, the marketplaces, and insurance issuers in the individual and small-group markets better serve consumer needs.

This year, CMS is finalizing the payment notice in multiple phases. The first 2022 payment notice final rule was released in January 2021, as outlined in a fact sheet available here. The second 2022 payment notice final rule, released today, continues CMS’s trend toward stabilizing the insurance market, promoting program integrity, and reducing regulatory burden.

(sigh) As I noted a few weeks ago, the first half of the NBPP 2022 rule was already given final approval by the Trump Administration just days before they left office. I'm not sure how much the Biden Administration will be able to change it--Amy Lotven of Inside Health Policy said that it was "under review" but I'm not sure how much they'd be able to change it right now.

As for the second half of the rule, this is good news:

For consumers, the second phase of the 2022 payment notice expands options for accessing coverage. It also breaks down barriers—like high costs—that too often have put health care out of reach, particularly in underserved communities. The rule finalizes a maximum annual limitation on cost-sharing that is $400 below what CMS proposed in November 2020.

There's a modifier used which changes both the ACA's subsidy formula as well as the maximum out-of-pocket (MOOP) limit for ACA exchange enrollees every year (that is, the most enrollees have to pay in deductibles, co-pays and coinsurance for in-network care). Up until 2020, the modifier was based on the average change in premiums for employer-sponsored health insurance premiums. Starting in 2021, the Trump Administration changed the modifier to also include individual market premiums, which in turn made ACA subsidies less generous and increased the MOOP limit by several hundred dollars.

The Biden Administration is saying that they're reverting back to the prior formula, which means the MOOP limit will drop by $400 next year vs. what it otherwise would have been:

...the final required contribution percentage for 2022 is 8.09%, and the final maximum annual limitation on cost sharing for 2022 is $8,700 for self-only coverage and $17,400 for other-than-self-only coverage. The final 2022 reduced annual limitation on cost sharing for eligible enrollees with incomes between 100% and 200% of the federal poverty level (FPL) is $2,900 for self-only coverage and $5,800 for other-than-self-only coverage. The 2022 reduced annual limitation on cost sharing for eligible enrollees with incomes above 200% and through 250% FPL is $6,950 for self-only coverage and $13,900 for other-than-self-only coverage. The rule finalizes a maximum annual limitation on cost sharing that is $400 below what CMS proposed in November 2020.

This is a Very Good Thing, though it won't impact anything until next year.

The new SEP policies, for example, will expand the opportunities consumers have to sign-up for health coverage outside the annual open enrollment period. This includes offering consumers an SEP when they have not received timely notice (and were reasonably unaware) of events that would allow them to qualify, and when they no longer receive employer contributions or government subsidies (such as those provided under the American Rescue Plan Act of 2021) for continued employer health coverage under the Consolidated Omnibus Budget Reconciliation Act (or “COBRA”).

BOOM. One of the provisions of the American Rescue Plan includes the federal government covering 100% of the cost of premiums for COBRA enrollees from April - September 2021. While this is obviously welcome news to millions of people who've lost their jobs, it also raised a lot of confusion about what those folks are supposed to do for the last three months of 2021.

The official Open Enrollment Period doesn't start until November 1st, and coverage enrolled in during that doesn't start until January, which would have meant COBRA enrollees would have to either pay the full price of their employer coverage for 3 months (which effectively means paying the equivalent of around 9 months of the amount they'd have to pay if they were still employed) or going without ACA-compliant coverage for 3 months. This has led to lots of people debating whether to enroll in an ACA plan now with the expanded subsidies vs. going on COBRA.

With this announcement, CMS is telling these folks that they can go ahead and enroll in COBRA now, then switch to an ACA plan via a Special Enrollment Period for October - December of this year.

Additionally, revised measures establishing parameters for determining insurance affordability and cost sharing will allow consumers to purchase lower-priced plans. These allow those age 30 and over to apply for catastrophic coverage (coverage that generally offers lower-priced plans to protect someone from high medical costs). The calculations will slow the growth rate for cost-sharing, which might otherwise place an undue burden on sicker and lower-income enrollees, and when adopted by the Internal Revenue Service, will also expand eligibility for tax credits to reduce the cost of health insurance premiums for lower-income enrollees.

It sounds like the stuff above all refers to changes in the Risk Adjustment (RA) model specifications, which get insanely wonky, but which basically deal with stabilizing the issue of some insurance carriers getting "stuck" with really sick/expensive enrollees and others ending up with healthy/inexpensive enrollees within a given market:

HHS is not finalizing many of the proposed updates to the RA model specifications that we proposed in the 2022 payment notice proposed rule. Specifically, we proposed changes to the RA models to include a two-stage specification in the adult and child models, to replace the existing severity illness indicators in the adult models with new severity and transplant indicators with hierarchical condition category (HCC) counts factors in the adult and child models, and modify the enrollment duration factors in the adult models. We are not finalizing these changes at this time, and instead intend to release a technical paper in the future with more data and analysis on the impact of the proposed model specification changes on transfers. However, we are finalizing the continuation of the pricing adjustment for hepatitis C drugs that has been in place since the 2020 benefit year.

The Trump Administration tried to rush through the NBPP 2022 rule last winter, including some extremely complex items related to Risk Adjustment. Normally the NBPP rule is approved all at once; Trump's CMS Administrator, Seema Verma, got around the normally time-intensive review process by simply splitting the larger rule in half and giving final approval to the first half of it before she left town.

New HHS Secretary Xavier Becerra (or perhaps Acting CMS Administrator Liz Richter?) is basically saying that they're putting most of Verma's RA changes on ice so they can go back and do it properly.

A number of other provisions will make it easier for consumers to comparison shop for plans, as well as improve support for the Federal Health Insurance Marketplaces, health insurance issuers, and other stakeholders who facilitate access to coverage.

Here's the main things this refers to:

Special Enrollment Period (SEP) Verification
HHS is not finalizing the provision to require all exchanges to conduct SEP verification for at least 75% of new enrollments for consumers not already enrolled in coverage through the relevant exchange. HHS agreed with commenters’ concerns around imposing additional administrative burden on consumers, and administrative and financial burden on states at this time.

Generally, if you want to enroll in an ACA plan outside of the official annual Open Enrollment Period, you can only do so via a 60-day Special Enrollment Period (SEP). In order to qualify for an SEP, you have to have had a Qualifying Life Experience (QLE), such as losing your existing employer-sponsored health insurance; getting married/divorced; giving birth/adopting a child; moving to a different rating area; getting out of prison and so forth.

Officially, you're supposed to provide some sort of documentation to verify your QLE...uploading a termination notice, marriage certificate, birth certificate or whatever. The Obama Administration was fairly lax about this the first few years, leaving it mostly up to the honor system (it's still a federal crime to lie on your application, after all), but insurance carriers kept screaming at them to crack down on the issue, certain that lots of people were trying to game the system. In response, started doing spot verification on random SEP applicants (like a conductor checking random tickets on a train).

The Trump Administration, of course, cracked down very hard on SEP verification, requiring everyone to upload documentation via a process which can be cumbersome for many people, especially if they're low-income, rural and/or don't have proper internet access.

The state-based exchanges, meanwhile, have had more flexibility; I could be wrong, but I think they're only required to document 50% of SEP enrollees. Verma wanted to up this to 75%, but Biden's HHS is vetoing that.

It's worth noting that the COVID pandemic has turned the entire philosophy behind SEPs upside down (as witnessed by the fact that we're in the middle of a completely open SEP right most states you don't have to provide "loss of coverage" documentation at all through August 15th, and the insurance lobby has gone from strongly opposing this to strongly supporting it.

Speaking of which:

We are finalizing a policy to permit exchange enrollees who qualify for an SEP because they lose advance payment of premium tax credit (APTC) eligibility to change to a new plan at any metal level, and a policy to allow an individual who did not receive timely notice of an SEP triggering event, and was otherwise reasonably unaware that a triggering event occurred, to select a new qualified health plan (QHP) within 60 days of the date that he or she knew, or reasonably should have known, of the occurrence of the triggering event.

Also, we are finalizing a policy to codify that individuals with COBRA coverage may qualify for an SEP to enroll in individual health insurance coverage on- or off-exchange based on the cessation of employer contributions or government subsidies (such as those provided for under the American Rescue Plan Act of 2021) to COBRA continuation coverage. Finally, we are finalizing a minor clarifying amendment related to the market-wide application of the SEP that is triggered upon an error of an exchange.

  • In other words, let's say you enroll in a subsidized Gold plan, but a few months later it turns out you no longer qualify for the subsidies for some reason (perhaps your income ends up being higher than you expected; perhaps there was a misunderstanding about the #FamilyGlitch; perhaps there's a screw-up with your Legally-Present Immigrant status). Suddenly you have to pay full price and can't afford to do so. Until now, you'd be stuck with the Gold plan until the end of the year unless you drop coverage altogether.

    With this change, you can at least downgrade to a Bronze or Silver plan instead to tide you over through the end of the year.

  • The second change means that if you're enrolled in a plan and have a QLE without realizing that you now qualify for an SEP (ie, someone loses their coverage due to getting divorced but doesn't realize that's a QLE for more than 60 days after the divorce is final), you get to reset the clock when you do find out.
  • The third one I noted above: COBRA subsidies being cut off now qualify you for an SEP

Web Broker Display Requirements
HHS is not finalizing the proposal to create an exception to existing requirements related to the QHP comparative information
that web broker non-exchange websites are required to display. We agreed with commenters that the display of more QHP comparative information on web broker non-exchange websites is in the best interest of consumers to aid them in comparing QHP options without having to potentially navigate to multiple websites. Instead, we communicated our intention to clarify these display requirements in future rulemaking and limit our current use of enforcement discretion that permits web brokers to only display issuer marketing name, plan marketing name, plan type, and metal level for all available QHPs so that web broker non-exchange websites will be required to display all QHP information consistent with § 155.205(b)(1) and (c), with the exception of medical loss ratio information and transparency of coverage measures under § 155.205(b)(1)(vi) and (vii), for all available QHPs beginning with the start of the 2022 open enrollment period.

We explained that this interim enforcement approach applicable beginning with the start of the plan year 2022 open enrollment period does not establish new requirements and instead represents a change in the exercise of enforcement discretion, and that the effect of this approach is that web broker non-exchange websites will be required to display QHP comparative information consistent with existing rules (which will align the QHP information displayed on web broker websites with the QHP information displayed on We believe this approach is reasonable, given that QHP information has been more readily accessible for some time, both through public use files and the marketplace application programming interface.

Besides HealthCare.Gov and the official state-based ACA exchanges, there's also a bunch of 3rd-party online brokers which are authorized to sell Qualified Health Plans (QHPs...that is, ACA-compliant health insurance policies), such as Health Sherpa, eHealth Insurance and so forth.

Until now, some of these 3rd-party sites have gotten away with not displaying most of the details regarding QHPs (or with only displaying info about some policies, not others) even though they're really supposed to do so.

The Trump Administration wanted to give HHS's blessing to not displaying all of the information on these sites. The Biden Administration is letting them know there's a new sheriff in town who plans on enforcing the rules regarding displaying QHP information starting with the next Open Enrollment Period. (It sounds like they're cutting them some slack until November, however).

Direct Enrollment (DE) Entity Plan Display Requirements
HHS is finalizing the policy to update website display requirements for DE entities. Specifically, DE entity websites will be required to display and market the following three categories of plans or products across at least three distinct website pages, with certain narrow exceptions: QHPs offered through the exchange, individual health insurance coverage subject to Affordable Care Act (ACA) market-wide rules offered outside the exchange (including QHPs and non-QHPs other than excepted benefits), and all other products, such as excepted benefits not subject to ACA market-wide rules.

The first exception to these requirements allows plans from the first two categories (all of which are subject to ACA market-wide rules) to be displayed on the same website page when a consumer has received an offer of an individual coverage health reimbursement arrangement (HRA), subject to certain conditions.

The second exception to these requirements allows DE entities to display and market stand-alone dental plans certified by an exchange but offered outside the exchange and non-certified stand-alone dental plans on the same off-exchange dental plan shopping website pages.

Similar to the above: Many "DE" sites (authorized 3rd-party web brokers) also have a nasty habit of mixing together ACA plans with #ShortAssPlans (i.e., so-called "Short-Term, Limited Duration" plans, Indemnity Plans, Association Plans, Farm Bureau Plans, etc.), which confuses the hell out of some people and leads them to buying junk plans instead of ACA-compliant plans.

Again, the Trump Admin wanted to give this practice their blessing. Instead, the Biden Administration is clarifying the rules for how non-ACA plans can be displayed...although they're actually still being more lenient than I'd prefer. They're letting them offer junk plans as long as they do so on a "distinct website page", though I'm not sure how far that goes.

QHP Enrollee Experience Survey Results and Quality Rating System (QRS) Framework
HHS is finalizing the proposal to post an annual QHP enrollee experience survey public use file (PUF) to further support transparency of QHP quality data and provide consumers, states, issuers, and researchers with valuable enrollee experience data. In addition, we are finalizing the removal of the composite and domain levels of the QRS hierarchy to simplify the QRS framework, to align with other CMS quality reporting programs, and to help improve balancing the influence of individual measures on the overall quality score.

Short Version: Yelp for ACA plans (or perhaps Angie's List?). Basically, they're gonna start posting a database of enrollee experience data so prospective enrollees know whether a given plan/carrier sucks or is awesome.

Employer-sponsored Coverage (ESC) Verification
We will not take enforcement action against exchanges that do not perform random sampling as required by 45 CFR 155.320(d)(4) for plan years 2020 and 2021, and extend this to plan year 2022. HHS will exercise such discretion in anticipation of finalizing its evaluation of the results of the employer verification study to (1) determine the unique characteristics of the population with offers of employer-sponsored coverage that meets minimum value and affordability standards, (2) compare premium and out-of-pocket costs for consumers enrolled in affordable employer-sponsored coverage to exchange coverage, and (3) identify the incentives, if any, that drive consumers to enroll in exchange coverage rather than coverage offered through their current employer.

This COULD be huge. This soulds like it's mostly about the #FamilyGlitch and the Biden Administration's attempts to fix it via regulatory changes instead of legislation.

If I'm reading this right, it basically means they're gonna look the other way if a state-based exchange doesn't verify whether or not someone who claims they don't have an offer of qualifying employer-sponsored coverage really does or not. While this doesn't mean much for 2020, the non-enforcement statement has huge implications for this year and next, and it paves the way for hopefully fixing the family glitch long-term.

Pharmacy Benefit Management (PBM) Transparency
HHS is finalizing a rule to provide for collecting prescription drug data directly from PBMs. The data will be used to enhance our understanding of the true cost of prescription drugs provided in exchange plans, and shed light on the role that PBMs play in their cost. The data collected is required to be kept confidential and may only be disclosed for limited purposes outlined in statute.

This is about increasing data transparency.

States’ Essential Health Benefit (EHB) Benchmark Plan Options
HHS is finalizing May 6, 2022 as the deadline for states submitting EHB benchmark plan selections for the 2024 plan year and for states reporting whether they will permit between-category substitution for the 2024 plan year.

The ACA requires all ACA-compliant plans to cover 10 Essential Health Benefits (hospitalization,

HHS Audits, Compliance Reviews, and Civil Money Penalties (CMPs) Authority

HHS is finalizing the proposals related to its audit and compliance review authority to further protect the integrity of federal funds. Specifically, HHS finalizes several amendments to provide more clarity on HHS’s audit procedures regarding the APTC, cost-sharing reduction (CSR), and user fee programs.

We also finalize regulations to provide HHS authority to conduct compliance review to ensure compliance with federal APTC, CSR, and user fee requirements. Additionally, we finalize the extension of these authorities to QHP issuers in state-based exchanges using the federal platform to align with our existing authority over issuers in federally facilitated exchange and state-exchange states. HHS also finalizes the proposals to codify similar audit processes and compliance review authority for the transitional reinsurance program operated by HHS from 2014-2016 benefit years, as well as the HHS-operated risk adjustment program (including high-cost risk pool audits). In addition, HHS finalizes the amendments to clarify that HHS has the ability to impose CMPs when it is enforcing the applicable federal APTC, CSR, and user-fee requirements in any exchange, regardless of whether the exchange is established and operated by HHS or a state. Additionally, HHS is finalizing minor procedural changes to the requirements for administrative appeals of CMPs by health insurance issuers and non-federal governmental plans to align with current practices for the Departmental Appeals Board.

It sounds like HHS was pretty lax about keeping tabs on various programs, including state-based ACA exchanges; they're letting everyone know in no uncertain terms that they'll be keeping a much closer eye on everything.

Annual Reporting of State-required Benefits

HHS is finalizing July 1, 2022 as the deadline for states to submit to HHS their annual reports for 2022 on state-required benefits pursuant to 45 CFR 156.111(d) and (f). However, we are also announcing that we intend to exercise enforcement discretion with regard to the first annual reporting submission deadline of July 1, 2021 under current regulation. Pursuant to this enforcement posture, we will not take enforcement action against states that do not submit an annual report in 2021. As such, states are required to notify HHS of their state-required benefits in the manner specified at § 156.111(d) and (f) by July 1, 2022.

It sounds like this is basically another COVID pandemic backlog issue; they're taking it easy on states which don't submit their TPS reports on time.

Whew! That's it...

...but there's one more REALLY important item:

CMS anticipates additional rulemaking for the 2022 payment notice later this year.

Why is this such a big deal?

Remember earlier when I said I was worried about the first half of the NBPP 2022 rule which was rammed through in record time by Seema Verma just days before Trump left office? Remember how I said that this was supposedly "under review" by the Biden Admin but I didn't know the status of that?

Well, let's take a closer look at the actual full NBPP 2022 rule itself:

Future Rulemaking on Benefit and Payment Parameters for the 2022 Plan Year

In the December 4, 2020 Federal Register, we published the “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Updates to State Innovation Waiver (Section 1332 Waiver) Implementing Regulations” proposed rule (85 FR 78572) (hereinafter referred to as the “proposed rule” or “proposed 2022 Payment Notice”) that proposed to reduce fiscal and regulatory burdens across different program areas and to provide stakeholders with greater flexibility.

In the January 19, 2021 Federal Register (86 FR 6138), we published a final rule that addressed a subset of the policies proposed in the proposed rule. That final rule, among other things, finalized the user fee rates for issuers offering qualified health plans through the Federally-facilitated Exchanges (FFEs) at 2.25 percent of total monthly premiums, and the user fee rate for issuers offering qualified health plans (QHPs) through State-based Exchanges on the Federal platform ((SBE-FPs) at 1.75 percent of total monthly premiums.

The final rule also codified a new direct enrollment option for states served by any Exchange model to use direct enrollment technology and non-Exchange websites developed by approved web brokers, issuers and other direct enrollment partners to enroll qualified individuals in QHPs offered through the Exchange. The final rule also finalized changes to regulations governing State Innovation Waivers under section 1332 of the Affordable Care Act (ACA) that specifically incorporate policies announced in guidance in 2018.

In other words, the parts of NBPP 2022 which Seema Verma rammed through included:

  • Dramatically reducing's user fees (which reduces how much money has to market & educate people);
  • Allowing states to opt out of using any ACA exchange whatsoever--that is, not just switching to their own state-based exchange, but dropping an official site entirely; and...

Needless to say, I was deeply concerned about the second and third of these last fall (I was also opposed to cutting the fees so dramatically, though that wasn't as big of a deal as the others), and I've been worried that it's too late to reverse them now.

Well, lo and behold:

On January 28, 2021, President Biden issued Executive Order 14009, “Strengthening Medicaid and the Affordable Care Act,”1 directing HHS, and the heads of all other executive departments and agencies with authorities and responsibilities related to the ACA, to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions to determine whether such agency actions are inconsistent with this Administration’s policy to protect and strengthen the ACA and to make high-quality health care accessible and affordable for every American.

As part of this review, HHS examined policies and requirements under the proposed 2022 Payment Notice and the January 19, 2021 final 2022 Payment Notice to analyze whether the policies under these rulemakings might undermine the Health Benefits Exchanges or the health insurance markets, and whether they may present unnecessary barriers to individuals and families attempting to access health coverage.

HHS also considered whether to suspend, revise, or rescind any such actions through appropriate administrative action. In compliance with Executive Order (E.O.) 14009 and as a result of HHS’s review of the proposed 2022 Payment Notice and the January 19, 2021 final 2022 Payment Notice, HHS intends to issue rulemaking this spring to address policies finalized in the final 2022 Payment Notice published on January 19, 2021. Specifically, in future rulemaking, HHS intends to propose new QHP issuer user fees rates for the 2022 plan year: a new FFE user fee rate of 2.75 percent of total monthly premiums; and a new SBE-FP user fee rate of 2.25 percent of monthly premiums.

We also intend to revisit the Exchange Direct Enrollment (DE) option for states and the changes to regulations governing State Innovation Waivers under section 1332 of the ACA. HHS is of the view that pursuit of these proposals is consistent with E.O. 14009, and this Administration’s goal of protecting and strengthening the ACA and making high-quality health care accessible and affordable for every American.

BOOM! There you have it: Assuming it's within their authority to do so (which, apparently, they are thanks to Biden's executive order, just as Trump's HHS felt they were entitled to gut ACA rules thanks to Trump's executive order four years earlier), the HHS Dept. will be "revisiting" the exchange opt-out and Section 1332 changes later this spring (it's already April 30th, so that has to be soon...), and while they're still dropping the user fees, they're doing so much less-dramatically than originally proposed (from 3.0% to 2.75% instead of 2.25%, and from 2.5% to 2.25% instead of 1.75%).