Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule

Federal RegisterJul 1, 2021

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DEPARTMENT OF THE TREASURY

31 CFR Part 33

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

45 CFR Parts 147, 155 and 156

[CMS-9906-P]

RIN 0938-AU60

Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS. Department of the Treasury.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule sets forth proposed revised 2022 user fee rates for issuers offering qualified health plans (QHPs) through Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs); proposes repeal of separate billing requirements related to the collection of separate payments for the portion of QHP premiums attributable to coverage for certain abortion services; proposes to expand the annual open enrollment period and Navigator duties; proposes a new monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for advance payments of the premium tax credit (APTC) and whose household income does not exceed 150 percent of the federal poverty level (FPL); proposes to repeal the recent establishment of a Direct Enrollment option for Exchanges; and proposes to modify regulations and policies related to section 1332 waivers.

DATES:

To be assured consideration, comments must be received at one of the addresses provided below, by July 28, 2021.

ADDRESSES:

In commenting, please refer to file code CMS-9906-P.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

Electronically.

You may submit electronic comments on this regulation to

http://www.regulations.gov.

Follow the “Submit a comment” instructions.

By regular mail.

You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9906-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

By express or overnight mail.

You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9906-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

For information on viewing public comments, see the beginning of the

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

Alper Ozinal, (301) 492-4178, Adrianne Patterson, (410) 786-4178, Jacquelyn Rudich, (301) 492-5211, or Nora Simmons, (410) 786-1981, for general information.

Gian Johnson, (301) 492-4323, or Meredyth Woody, (301) 492-4404, for matters related to Navigator program standards.

Robert Yates, (301) 492-5151, for matters related to the Exchange Direct Enrollment option for Federally-facilitated Exchanges, State-based Exchanges on the Federal platform, and State Exchanges.

Carly Rhyne, (301) 492-4188, or Aziz Sandhu, (301) 492-4437, for matters related to open enrollment.

Carolyn Kraemer, (301) 492-4197, for matters related to special enrollment periods for Exchange enrollment under parts 147 and 155.

Nikolas Berkobien, (989) 395-1836, for matters related to standardized options.

Aaron Franz, (410) 786-8027, or Nora Simmons, (410) 786-1981, for matters related to user fees.

Rebecca Bucchieri, (301) 492-4341, for matters related to provision of essential health benefits and separate billing and segregation of funds for abortion services.

Erika Melman, (301) 492-4348, Deborah Hunter, (410) 786-0625, or Emily Martin, (301) 492-4400, for matters related to network adequacy.

Lina Rashid, (202) 260-6098, Michelle Koltov, (301) 492-4225, or Kimberly Koch, (202) 622-0854 for matters related to section 1332 waivers.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post comments received before the close of the comment period on the following website as soon as possible after they have been received:

http://www.regulations.gov.

Follow the search instructions on that website to view public comments. CMS will not post on

Regulations.gov

public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

Table of Contents

I. Executive Summary

II. Background

A. Legislative and Regulatory Overview

B. Stakeholder Consultation and Input

C. Structure of Proposed Rule

III. Provisions of the Updating Payment Parameters and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule

A. Part 147—Health Insurance Reform Requirements for the Group and Individual Health Insurance Markets

B. Part 155—Exchange Establishment Standards and Other Related Standards Under the Affordable Care Act

C. Part 156—Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges

IV. Provisions of the Proposed Rule for Section 1332 Waivers

A. 31 CFR Part 33 and 45 CFR Part 155—Section 1332 Waivers

V. Collection of Information Requirements

A. ICRs Regarding Navigator Program Standards (§ 155.210)

B. ICRs Regarding Segregation of Funds for Abortion Services (§ 156.280)

C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45 CFR Part 155)

D. Submission of PRA Related Comments

VI. Response to Comments

VII. Regulatory Impact Analysis

A. Statement of Need

B. Overall Impact

C. Impact Estimates of the Payment Notice Provisions and Accounting Table

D. Regulatory Alternatives Considered

E. Regulatory Flexibility Act

F. Unfunded Mandates

G. Federalism

H. Congressional Review Act

I. Executive Summary

American Health Benefit Exchanges, or “Exchanges,” are entities established under the Patient Protection and Affordable Care Act (ACA)

through

which qualified individuals and qualified employers can purchase comprehensive health insurance coverage through qualified health plans (QHPs). Many individuals who enroll in QHPs through individual market Exchanges are eligible to receive a premium tax credit (PTC) to reduce their costs for health insurance premiums and to receive reductions in required cost-sharing payments to reduce out-of-pocket expenses for health care services. This notice proposes rules and policies designed to promote greater access to comprehensive health insurance coverage through the Exchanges, consistent with applicable law and with the administration's policy priorities detailed in recent Presidential executive orders.

The Patient Protection and Affordable Care Act (Pub. L. 111-148) was enacted on March 23, 2010. The Healthcare and Education Reconciliation Act of 2010 (Pub. L. 111-152), which amended and revised several provisions of the Patient Protection

and Affordable Care Act, was enacted on March 30, 2010. In this proposed rule, we refer to the two statutes collectively as the “Affordable Care Act” or “ACA.”

On January 28, 2021, the President issued Executive Order 14009, “Executive Order on Strengthening Medicaid and the Affordable Care Act” (E.O. 14009), which stated the Administration's policy to protect and strengthen the ACA and to make high-quality health care accessible and affordable for every American.

This Executive Order instructed the Secretary of Health and Human Services (hereinafter referred to as “the Secretary”), along with the Secretaries of the Departments of Labor and the Treasury, to review all existing regulations, guidance documents, and other agency actions to determine whether they are consistent with the aforementioned policy, and to consider whether to suspend, revise, or rescind any agency actions that are inconsistent with it.

86 FR 7793 (Feb. 2, 2021).

On January 20, 2021, President Biden issued Executive Order 13985, “On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” (E.O. 13985),

directing that as a policy matter, the federal government should pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. E.O. 13985 also directs HHS to assess whether, and to what extent, its programs and policies perpetuate systemic barriers to opportunities and benefits for people of color and other underserved groups.

86 FR 7009 (Jan. 25, 2021).

Today, of the 30 million uninsured, half are people of color.

Of those that have insurance, there are frequently barriers to using insurance because of affordability concerns related to premiums, deductibles, copayments, and coinsurance, as well as challenges related to health literacy and the ability for the insured to find and access in-network providers. These barriers to using insurance are particularly problematic for those with chronic conditions and individuals with social risk factors (such as poverty, minority race and/or ethnicity, social isolation, and limited community resources),

which also includes members of underserved communities, people of color, and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. The COVID-19 public health emergency (PHE) has highlighted the negative effects of these circumstances as COVID-19 has unequally affected many racial and ethnic minority groups, putting them more at risk of getting sick and dying from COVID-19.

“Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, January-June 2020,” National Center for Health Statistics, February 2021, available at

https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202102-508.pdf.

See “Social Risk Factors and Medicare's Value-Based Purchasing Programs,” HHS Office of the Secretary of Planning and Evaluation, available at

https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs.

See Centers for Disease Control and Prevention, “Health Equity Considerations and Racial and Ethnic Minority Groups,” updated April 19, 2021, available at

https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#print.

As part of its review of regulations and policies under the Executive Orders described in the preceding paragraphs, HHS examined certain policies and requirements addressed in this proposed rule to analyze whether they are consistent with policy goals outlined in the Executive Orders, including whether they might create or perpetuate systemic barriers to obtaining health insurance coverage. The results of our examinations and analyses led to the policies and rules proposed in this rule.

In previous rulemakings, HHS established provisions and parameters to implement many ACA requirements and programs. In this proposed rule, we propose to amend and repeal some of these provisions and parameters, with a focus on making high-quality health care accessible and affordable for consumers. These proposed changes would provide consumers greater access to coverage through, for example, greater education and outreach, improve affordability for consumers, reduce administrative burden for issuers and consumers, and improve program integrity. As discussed more fully later in the preamble, each of these measures would strengthen the ACA or otherwise promote the policy goals outlined in the Executive Orders described above.

Although many of the policies proposed in this rule support the goals outlined in recent Executive Orders, as described later in the preamble discussions related to individual proposals, each of the proposals is supported by statutory authority independent of the Executive Orders.

We propose to amend § 147.104(b)(2) to specify that issuers are not required to provide a special enrollment period in the individual market with respect to coverage offered outside of an Exchange to qualifying individuals who would be eligible for the proposed special enrollment period triggering event at § 155.420(d)(16) described below.

We also propose to amend § 155.210(e)(9) to reinstitute previous requirements that Navigators in FFEs be required to provide consumers with information and assistance on certain post-enrollment topics, such as the Exchange eligibility appeals process, the Exchange-related components of the PTC reconciliation process, and the basic concepts and rights of health coverage and how to use it.

We also propose to remove § 155.221(j) and repeal the Exchange Direct Enrollment option which establishes a process for State Exchanges, State-based Exchanges on the Federal platform, and Federally-facilitated Exchanges to work directly with private sector entities (including QHP issuers, web-brokers, and agents and brokers) to operate enrollment websites through which consumers can apply for coverage, receive an eligibility determination from the Exchange, and purchase an individual market QHP offered through the Exchange with APTC and cost-sharing reductions (CSRs), if otherwise eligible.

For the 2022 coverage year and beyond, we propose to amend § 155.410(e) to lengthen the annual open enrollment period for coverage through all Exchanges to November 1 through January 15, as compared to the current annual open enrollment period of November 1 through December 15.

We propose to add a new paragraph at § 155.420(d)(16) to establish a monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for APTC, and whose household income does not exceed 150 percent of the FPL, in order to provide low-income individuals who generally will have access to a

premium-free silver plan with a 94 percent actuarial value (AV) with more opportunities to enroll in coverage. We also propose to clarify, for purposes of the special enrollment periods provided at § 155.420(d), that a qualified individual who meets the criteria at § 155.305(f), but who qualifies for a maximum APTC amount of zero dollars, is not considered APTC eligible. This approach would ensure that § 155.420 very clearly reflects appropriate special enrollment period eligibility for qualifying individuals who qualify for a maximum APTC amount of zero dollars and for those who become eligible for APTC amounts greater than zero.

In addition, to reflect updated analysis of enrollment and the cost of expanded services offered through the Federal platform, we propose to set the 2022 user fee rate at 2.75 percent of total monthly premiums charged by the issuer for each policy under plans offered through an FFE, and 2.25 percent of the total monthly premiums charged by the issuer for each policy under plans offered through an SBE-FP (rather than 2.25 and 1.75 percent of the total monthly premiums charged by the issuer for each policy under plans offered through an FFE or SBE-FP, respectively, as finalized in part 1 of the 2022 Payment Notice final rule). These proposed 2022 user fee rates are still less than the 2021 user fees currently being collected—3.0 and 2.5 percent of the total monthly premiums charged by the issuer for each policy under plans offered through an FFE or SBE-FP, respectively.

We also propose a technical amendment to requirements at § 156.115(a)(3) pertaining to the provision of the essential health benefits (EHB), to include a cross-reference to the Public Health Service (PHS) Act to make clear that health plans subject to EHB requirements must comply with all of the requirements under Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), including any amendments to MHPAEA.

We also propose to repeal the separate billing regulation at § 156.280(e)(2), which requires individual market QHP issuers that offer coverage of abortion services

for which federal funds are prohibited to separately bill for this portion of the policy holder's premium and to instruct the policy holder to pay for the separate bill in a separate transaction. Specifically, we are proposing to revert to and codify prior policy finalized in the 2016 Payment Notice

such that QHP issuers offering coverage of abortion services for which federal funds are prohibited again have flexibility in selecting a method to comply with the separate payment requirement in section 1303 of the ACA. Under this proposal, individual market QHP issuers covering abortion services for which federal funds are prohibited would still be expected to comply with all statutory requirements in section 1303 of the ACA and all applicable regulatory requirements codified at § 156.280.

These abortion services refer to abortion coverage that is subject to the Hyde Amendment's funding limitations which prohibit the use of federal funds for such coverage.

80 FR 10750.

This proposed rule also proposes modifications to the section 1332 Waivers for State Innovation (referred to throughout the preamble to this proposed rule as section 1332 waivers) implementing regulations, including changes to many of the policies and interpretations of the guardrails recently codified in regulation. As outlined in this proposed rule, the policies and interpretations proposed in this rule, if finalized, would supersede and rescind those outlined in the October 2018 “State Relief and Empowerment Waivers” guidance

(hereinafter referred to as the “2018 Guidance”) and repeal the previous codification of the interpretations of statutory guidelines in part 1 of the 2022 Payment Notice final rule. HHS and the Department of the Treasury (collectively, the Departments) also propose to modify regulations to set forth flexibilities in the public notice requirements and post award public participation requirements for section 1332 waivers under certain emergent situations. The Departments also propose in this rule processes and procedures for amendments and extensions for approved waiver plans.

83 FR 53575.

II. Background

A. Legislative and Regulatory Overview

Title I of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish various reforms to the group and individual health insurance markets.

These provisions of the PHS Act were later augmented by other laws, including the ACA. Subtitles A and C of title I of the ACA reorganized, amended, and added to the provisions of part A of title XXVII of the PHS Act relating to group health plans

and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans.

The term “group health plan” is used in title XXVII of the PHS Act and is distinct from the term “health plan” as used in other provisions of title I of ACA. The term “health plan” does not include self-insured group health plans.

Section 2702 of the PHS Act, as added by the ACA, establishes requirements for guaranteed availability of coverage in the group and individual markets.

Before enactment of the ACA, HIPAA amended the PHS Act (formerly section 2711) to generally require guaranteed availability of coverage for employers in the small group market.

Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to cover the EHB package described in section 1302(a) of the ACA, including coverage of the services described in section 1302(b) of the ACA, adherence to the cost-sharing limits described in section 1302(c) of the ACA, and meeting the actuarial value (AV) levels established in section 1302(d) of the ACA. Section 2707(a) of the PHS Act, which is effective for plan or policy years beginning on or after January 1, 2014, extends the requirement to cover the EHB package to non-grandfathered individual and small group health insurance coverage, irrespective of whether such coverage is offered through an Exchange. In addition, section 2707(b) of the PHS Act directs non-grandfathered group health plans to ensure that cost sharing under the plan does not exceed the limitations described in sections 1302(c)(1) of the ACA.

Section 1302 of the ACA provides for the establishment of an EHB package that includes coverage of EHBs (as defined by the Secretary), cost-sharing limits, and AV requirements. Section 1302(b) of the ACA directs that EHBs be equal in scope to the benefits provided under a typical employer plan, and that they cover at least the following 10 general categories: Ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

Section 1302(d) of the ACA describes the various levels of coverage based on their AV. Consistent with section 1302(d)(2)(A) of the ACA, AV is calculated based on the provision of EHB to a standard population. Section 1302(d)(3) of the ACA directs the Secretary to develop guidelines that allow for

de minimis

variation in AV calculations.

Section 1303 of the ACA, as implemented in 45 CFR 156.280, specifies standards for issuers of QHPs through the Exchanges that cover abortion services for which federal funding is prohibited. The statute and regulation establish that, unless otherwise prohibited by state law, a QHP issuer may elect to cover such 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 PTC or CSR funds are used to pay for abortion services for which public funding is prohibited.

As specified in section 1303(b)(2) of the ACA, 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 abortion services for which federal funds are prohibited collected through this payment into a separate allocation account used to pay for such abortion services.

Sections 1311(b) and 1321(b) of the ACA provide that each state has the opportunity to establish an individual market Exchange that facilitates the purchase of insurance coverage by qualified individuals through QHPs and meets other standards specified in the ACA. Section 1321(c)(1) of the ACA directs the Secretary to establish and operate such Exchange within states that do not elect to establish an Exchange or, as determined by the Secretary on or before January 1, 2013, will not have an Exchange operable by January 1, 2014.

Section 1311(c)(1) of the ACA provides the Secretary the authority to issue regulations to establish criteria for the certification of QHPs, including network adequacy standards at section 1311(c)(1)(B) of the ACA. Section 1311(d) of the ACA describes the minimum functions of an Exchange. Section 1311(e)(1) of the ACA grants the Exchange the authority to certify a health plan as a QHP if the health plan meets the Secretary's requirements for certification issued under section 1311(c)(1) of the ACA, and the Exchange determines that making the plan available through the Exchange is in the interests of qualified individuals and qualified employers in the state. Section 1311(c)(6) of the ACA establishes authority for the Secretary to require Exchanges to provide enrollment periods, including special enrollment periods, including the monthly enrollment period for Indians, as defined by section 4 of the Indian Healthcare Improvement Act, per section 1311(c)(6)(D) of the ACA.

The Indian Healthcare Improvement Act (IHCIA), the cornerstone legal authority for the provision of health care to American Indians and Alaska Natives, was made permanent when President Obama signed the bill on March 23, 2010, as part of the ACA.

Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange to establish a Navigator program under which it awards grants to entities to carry out certain Navigator duties.

Section 1312(c) of the ACA generally requires a health insurance issuer to consider all enrollees in all health plans (except grandfathered health plans) offered by such issuer to be members of a single risk pool for each of its individual and small group markets. States have the option to merge the individual and small group market risk pools under section 1312(c)(3) of the ACA.

Section 1312(e) of the ACA directs the Secretary to establish procedures under which a state may permit agents and brokers to enroll qualified individuals and qualified employers in QHPs through an Exchange and to assist individuals in applying for financial assistance for QHPs sold through an Exchange.

Sections 1313 and 1321 of the ACA provide the Secretary with the authority to oversee the financial integrity of State Exchanges, their compliance with HHS standards, and the efficient and non-discriminatory administration of State Exchange activities. Section 1321 of the ACA provides for state flexibility in the operation and enforcement of Exchanges and related requirements.

Section 1321(a)(1) of the ACA directs the Secretary to issue regulations that set standards for meeting the requirements of title I of the ACA for, among other things, the establishment and operation of Exchanges. When operating an FFE under section 1321(c)(1) of the ACA, HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of the ACA to collect and spend user fees. Office of Management and Budget (OMB) Circular A-25 establishes federal policy regarding user fees and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the general public.

Section 1321(d) of the ACA provides that nothing in title I of the ACA must be construed to preempt any state law that does not prevent the application of title I of the ACA. Section 1311(k) of the ACA specifies that Exchanges may not establish rules that conflict with or prevent the application of regulations issued by the Secretary.

Section 1332 of the ACA provides the Secretary of HHS and the Secretary of the Treasury (collectively, the Secretaries) with the discretion to approve a state's proposal to waive specific provisions of the ACA, provided the state's section 1332 waiver plan meets certain requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries to issue regulations regarding procedures for section 1332 waivers.

Section 1402 of the ACA provides for, among other things, reductions in cost sharing for EHB for qualified low- and moderate-income enrollees in silver level QHPs offered through the individual market Exchanges. This section also provides for reductions in cost sharing for American Indians enrolled in QHPs at any metal level.

Section 1411(c) of the ACA requires the Secretary to submit certain information provided by applicants under section 1411(b) of the ACA to other federal officials for verification, including income and family size information to the Secretary of the Treasury.

Section 1411(d) of the ACA provides that the Secretary must verify the accuracy of information provided by applicants under section 1411(b) of the ACA for which section 1411(c) of the ACA does not prescribe a specific verification procedure, in such manner as the Secretary determines appropriate.

Section 1411(f) of the ACA requires the Secretary, in consultation with the Secretary of the Treasury, the Secretary of Homeland Security, and the Commissioner of Social Security, to establish procedures for hearing and making decisions governing appeals of Exchange eligibility determinations.

Section 1411(f)(1)(B) of the ACA requires the Secretary to establish procedures to redetermine eligibility on a periodic basis, in appropriate circumstances, including eligibility to purchase a QHP through the Exchange and for APTC and CSRs.

Section 1411(g) of the ACA allows the use or disclosure 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.

Section 5000A of the Internal Revenue Code (“the Code”), as added by section 1501(b) of the ACA, requires individuals to have minimum essential coverage (MEC) for each month, qualify

for an exemption, or make an individual shared responsibility payment. Under the Tax Cuts and Jobs Act (Pub. L. 115-97, December 22, 2017) the individual shared responsibility payment has been reduced to $0, effective for months beginning after December 31, 2018. Notwithstanding that reduction, certain exemptions are still relevant to determine whether individuals age 30 and above qualify to enroll in catastrophic coverage under 45 CFR 155.305(h) or 156.155.

1. Program Integrity

In the June 19, 2013

Federal Register

(78 FR 37031), we published a proposed rule that proposed certain program integrity standards related to Exchanges and the premium stabilization programs (proposed Program Integrity Rule). The provisions of that proposed rule were finalized in two rules, the “first Program Integrity Rule” published in the August 30, 2013

Federal Register

(78 FR 54069) and the “second Program Integrity Rule” published in the October 30, 2013

Federal Register

(78 FR 65045). In the December 27, 2019

Federal Register

(84 FR 71674), we published a final rule that revised standards relating to oversight of Exchanges established by states and periodic data matching frequency. It also added new requirements for certain issuers related to the separate billing and collection of the separate payment for the premium portion attributable to coverage for certain abortion services. In the May 8, 2020

Federal Register

(85 FR 27550), we published the Medicare and Medicaid Programs, Basic Health Programs and Exchanges interim final rule with public comment (“May 2020 IFC”) and postponed the implementation deadline for those separate billing and collection requirements by 60 days.

2. Market Rules

An interim final rule relating to the HIPAA health insurance reforms was published in the April 8, 1997

Federal Register

(62 FR 16894). A proposed rule relating to ACA health insurance market reforms that became effective in 2014 was published in the November 26, 2012

Federal Register

(77 FR 70584). A final rule implementing those provisions was published in the February 27, 2013

Federal Register

(78 FR 13406) (2014 Market Rules).

A proposed rule relating to Exchanges and Insurance Market Standards for 2015 and beyond was published in the March 21, 2014

Federal Register

(79 FR 15808) (2015 Market Standards Proposed Rule). A final rule implementing the Exchange and Insurance Market Standards for 2015 and Beyond was published in the May 27, 2014

Federal Register

(79 FR 30240) (2015 Market Standards Rule). The 2018 Payment Notice final rule in the December 22, 2016

Federal Register

(81 FR 94058) provided additional guidance on guaranteed availability and guaranteed renewability. In the Market Stabilization final rule that was published in the April 18, 2017

Federal Register

(82 FR 18346), we released further guidance related to guaranteed availability. In the 2019 Payment Notice final rule in the April 17, 2018

Federal Register

(83 FR 17058), we clarified that certain exceptions to the special enrollment periods only apply with respect to coverage offered outside of the Exchange in the individual market.

In part 2 of the 2022 Payment Notice final rule in the May 5, 2021

Federal Register

(86 FR 24140), we made additional amendments to the guaranteed availability regulation regarding special enrollment periods and finalized new special enrollment periods related to untimely notice of triggering events, cessation of employer contributions or government subsidies to COBRA continuation coverage, and loss of APTC eligibility.

3. Exchanges

We published a request for comment relating to Exchanges in the August 3, 2010

Federal Register

(75 FR 45584). We issued initial guidance to states on Exchanges on November 18, 2010. In the July 15, 2011

Federal Register

(76 FR 41865), we published a proposed rule with proposals to implement components of the Exchanges, and a rule in the August 17, 2011

Federal Register

(76 FR 51201) regarding Exchange functions in the individual market and Small Business Health Options Program (SHOP), eligibility determinations, and Exchange standards for employers. A final rule implementing components of the Exchanges and setting forth standards for eligibility for Exchanges, including minimum network adequacy requirements, was published in the March 27, 2012

Federal Register

(77 FR 18309) (Exchange Establishment Rule).

In the 2014 Payment Notice and in the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule, published in the March 11, 2013

Federal Register

(78 FR 15541), we set forth standards related to Exchange user fees. We established an adjustment to the FFE user fee in the Coverage of Certain Preventive Services under the Affordable Care Act final rule, published in the July 2, 2013

Federal Register

(78 FR 39869) (Preventive Services Rule). In the 2016 Payment Notice in the February 27, 2015

Federal Register

(80 FR 10750), we finalized changes related to network adequacy and provider directories.

In the 2017 Payment Notice in the March 8, 2016

Federal Register

(81 FR 12204), we finalized six standardized plan options to simplify the plan selection process for consumers on the Exchanges. In the 2017 Payment Notice, we also finalized policies relating to network adequacy for QHPs on the FFEs. In the May 11, 2016

Federal Register

(81 FR 29146), we published an interim final rule with amendments to the parameters of certain special enrollment periods (2016 Interim Final Rule). We finalized these in the 2018 Payment Notice final rule, published in the December 22, 2016

Federal Register

(81 FR 94058). The 2018 Payment Notice also modified the standardized options finalized in the 2017 Payment Notice and included three new sets of standardized options. In the March 8, 2016

Federal Register

(81 FR 12203), the final 2017 Payment Notice codified State-based Exchanges on the Federal platform (SBE-FPs) along with relevant requirements.

In the April 18, 2017 Market Stabilization final rule

Federal Register

(82 FR 18346), we amended standards relating to special enrollment periods and QHP certification. In the 2019 Payment Notice final rule, published in the April 17, 2018

Federal Register

(83 FR 16930), we modified parameters around certain special enrollment periods and discontinued the designation of standardized options. In the April 25, 2019

Federal Register

(84 FR 17454), the final 2020 Payment Notice established a new special enrollment period. In the May 14, 2020

Federal Register

(85 FR 29204), the 2021 Payment Notice final rule made certain changes to plan category limitations and special enrollment period coverage effective date rules, allowed individuals provided a non-calendar year qualified small employer health reimbursement arrangement (QSEHRA) to qualify for an existing special enrollment period, and discussed plans for future rulemaking for employer-sponsored coverage verification and non-enforcement discretion for Exchanges that do not conduct random sampling until plan year 2021.

In part 1 of the 2022 Payment Notice final rule, published in the January 19, 2021

Federal Register

(85 FR 6138), we finalized a new Exchange Direct Enrollment (DE) option. In part 2 of the 2022 Payment Notice final rule in the May 5, 2021

Federal Register

(86 FR 24140) we finalized new special

enrollment periods related to untimely notice of triggering events, cessation of employer contributions or government subsidies to COBRA continuation coverage, loss of APTC eligibility, and clarified the regulation imposing network adequacy standards with regard to QHPs that do not use provider networks.

4. Essential Health Benefits

On December 16, 2011, HHS released a bulletin

that outlined an intended regulatory approach for defining EHB, including a benchmark-based framework. A proposed rule relating to EHBs was published in the November 26, 2012

Federal Register

(77 FR 70643). We established requirements relating to EHBs in the Standards Related to Essential Health Benefits, Actuarial Value, and Accreditation Final Rule, which was published in the February 25, 2013

Federal Register

(78 FR 12833) (EHB Rule). In the 2019 Payment Notice, published in the April 17, 2018

Federal Register

(83 FR 16930), we added § 156.111 to provide states with additional options from which to select an EHB-benchmark plan for plan years 2020 and beyond.

“Essential Health Benefits Bulletin,” December 16, 2011. Available at

https://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf.

5. Section 1332 Waivers

In the March 14, 2011

Federal Register

(76 FR 13553), the Departments published the “Application, Review, and Reporting Process for Waivers for State Innovation” proposed rule

to implement section 1332(a)(4)(B) of the ACA. In the February 27, 2012

Federal Register

(77 FR 11700), the Departments published the “Application, Review, and Reporting Process for Waivers for State Innovation” final rule

(hereinafter referred to as the “2012 Final Rule”). In the October 24, 2018

Federal Register

(83 FR 53575), the Departments issued the 2018 Guidance, which superseded the previous guidance

published in the December 16, 2015

Federal Register

(80 FR 78131) (hereinafter referred to as the “2015 Guidance”), and provided additional information about the requirements that states must meet for waiver proposals, the Secretaries' application review procedures, pass-through funding determinations, certain analytical requirements, and operational considerations. In the November 6, 2020

Federal Register

(85 FR 71142), the Departments issued an interim final rule

(hereinafter referred to as the “November 2020 IFC”), which revises regulations to set forth flexibilities in the public notice requirements and post award public participation requirements for waivers under section 1332 during the COVID-19 PHE. In the December 4, 2020

Federal Register

(85 FR 78572), the Departments 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

(hereinafter referred to as the “2022 Payment Notice proposed rule”) to codify certain policies and interpretations of the 2018 Guidance. In the January 19, 2021

Federal Register

(86 FR 6138), the Departments published the “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2022; Updates to State Innovation Waiver (Section 1332 Waiver) Implementing Regulations” final rule

(hereinafter referred to as the “part 1 of the 2022 Payment Notice final rule”) which codified many of the policies and interpretations outlined in the 2018 Guidance into section 1332 regulations.

https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf.

https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.

https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.

https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.

https://www.federalregister.gov/documents/2020/12/04/2020-26534/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022-and.

https://www.federalregister.gov/documents/2021/01/19/2021-01175/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022.

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, advocacy groups and the actuarial community to gather public input. We have solicited input from state representatives on numerous topics, particularly the direct enrollment option for FFEs, SBE-FPs and State Exchanges.

We consulted with stakeholders through monthly meetings with the National Association of Insurance Commissioners (NAIC), regular contact with states, and health insurance issuers, trade groups, consumer advocates, employers, and other interested parties. We considered all public input we received as we developed the policies in this proposed rule.

C. Structure of Proposed Rule

The regulations outlined in this proposed rule would be codified in 45 CFR parts 147, 155, and 156. In addition, the regulations outlined in this proposed rule governing waivers under section 1332 of the ACA at 45 CFR part 155 subpart N would also be codified in 31 CFR part 33.

The proposed changes to part 147 would specify that issuers are not required to provide a special enrollment period in the individual market with respect to coverage offered outside of an Exchange to consumers who would be eligible for the proposed special enrollment period at § 155.420(d)(16).

The proposed changes to part 155 would repeal the establishment of the Exchange DE option, which permitted State Exchanges, SBE-FPs, and FFEs 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. We propose extending FFE open enrollment to end on January 15 of the applicable year, rather than December 15 of the previous year beginning with the 2022 coverage year and beyond. We also propose to reinstitute previous requirements that Navigators in FFEs be required to provide consumers with information and assistance on certain post-enrollment topics, such as the Exchange eligibility appeals process, the Exchange-related components of the PTC reconciliation process, and the basic concepts and rights of health coverage and how to use it. We further propose to provide a monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for APTC, and whose household income does not exceed 150 percent of the FPL. Finally, we propose to clarify that, for purposes of the special enrollment periods provided at § 155.420(d), a qualified individual or enrollee who qualifies for APTC, or a dependent whose tax filer can qualify for APTC on their behalf, because they meet the criteria at § 155.305(f), but who qualifies for a maximum APTC amount of zero dollars, is not considered APTC eligible for purposes of these special enrollment periods.

The proposed changes to part 156 would update the user fee rates for the 2022 benefit year for all issuers participating on the Exchanges using the Federal platform. We also propose to

repeal the separate billing requirement, which requires individual market QHP issuers that offer coverage for abortion services for which federal funding is prohibited to separately bill policy holders for the portion of the premium attributable to coverage of such abortion services and instruct the policy holder to pay for this portion of their premium in a separate transaction. Finally, we propose to update a cross reference to mental health parity standards in the provision of EHB regulations.

The proposed changes in 31 CFR part 33 and 45 CFR part 155 related to section 1332 waivers would rescind the previous incorporation of certain policies and interpretations announced in the 2018 Guidance into regulation. The proposals related to section 1332 waivers include proposed processes and procedures for amendments and extensions for approved waiver plans. Additionally, the Departments propose to extend certain flexibilities in the public notice requirements and post award public participation requirements for section 1332 waivers during future emergent situations.

III. Provisions of the Updating Payment Parameters and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule

A. Part 147—Health Insurance Reform Requirements for the Group and Individual Health Insurance Markets

1. Guaranteed Availability of Coverage (§ 147.104)

a. Past-Due Premiums

On January 28, 2021, President Biden issued E.O. 14009, “Strengthening Medicaid and the Affordable Care Act,”

86 FR 7793 (February 2, 2021).

In the preamble to the Market Stabilization final rule,

we stated that, to the extent permitted by applicable state law, an issuer will not violate the guaranteed availability requirements in § 147.104 where the issuer attributes a premium payment made for new coverage to any past-due premiums owed for coverage from the same issuer or another issuer in the same controlled group within the prior 12-month period before effectuating enrollment in the new coverage. This policy addressed concerns regarding the potential for individuals to take unfair advantage of the guaranteed availability rules. For example, an individual could decline to make premium payments at the end of a benefit year, but still receive periods of unpaid coverage during a grace period before coverage is terminated. We were concerned that despite such failures to pay, such individuals would be able to immediately sign up for new coverage for the next benefit year during the individual market open enrollment period, without making restitution for the periods of unpaid coverage.

82 FR 18346, 18349 (April 18, 2017).

HHS currently is reviewing this policy to analyze whether it may present unnecessary barriers to accessing health coverage. In compliance with E.O. 14009, we intend to address this interpretation of guaranteed availability in the 2023 Payment Notice rulemaking.

b. Special Enrollment Periods (§ 147.104(b)(2))

As further discussed in the preamble section regarding the proposed monthly special enrollment period for APTC-eligible qualified individuals with an expected household income no greater than 150 percent of the FPL (§ 155.420(d)(16)), we propose to add a new paragraph at § 147.104(b)(2)(i)(G) to specify that issuers are not required to provide this special enrollment period in the individual market with respect to coverage offered outside of an Exchange. We propose to add this paragraph because eligibility for the special enrollment period is based on eligibility for APTC, as discussed in the § 155.420(d)(16) preamble section, and APTC cannot be applied to coverage offered outside of an Exchange. We request comment on this proposal.

B. Part 155—Exchange Establishment Standards and Other Related Standards Under the Affordable Care Act

1. Standardized Options (§ 155.20)

On March 4, 2021, the United States District Court for the District of Maryland decided

City of Columbus

Cochran,

No. 18-2364, 2021 WL 825973 (D. Md. Mar. 4, 2021). The court reviewed nine separate policies we had promulgated in the 2019 Payment Notice final rule. The court vacated four of these policies. One of the policies the court vacated was the 2019 Payment Notice's cessation of the practice of designating some plans in the FFEs as “standardized options.”

See 83 FR 16974-16975.

We intend to implement the court's decision as soon as possible, as explained in part 2 of the 2022 Payment Notice final rule.

We will not be able to fully implement those aspects of the court's decision regarding standardized options in time for issuers to design plans and for CMS to be prepared to certify such plans as QHPs for the 2022 plan year. With the rule removing standardized options vacated, we will also need to design and propose new standardized options that otherwise meet current market reform requirements and alter the Federal Exchange eligibility and enrollment platform system build (

HealthCare.gov

) to provide differential display of such plans. Web-brokers that are direct enrollment partners in FFE and SBE-FP states will also need time to adjust their respective systems to provide differential display of such plans on their non-Exchange websites.

We will need to design, propose, and finalize such plans in time for issuers to design their own standardized options in accord with HHS's parameters and to submit those plans for approval by applicable regulatory authorities and for certification as QHPs. This is not feasible for the upcoming QHP certification cycle for the 2022 plan year. The plan certification process for that year has already begun as of April 22, 2021. CMS' planning for the QHP certification cycle for the 2022 plan year has taken into account the existing policies that the court vacated, and it is too late now to revisit those factors if the process is to go forward in time for plans to be certified by open enrollment later this year.

See 86 FR 24140, 24264-24265.

See 45 CFR 155.220(c)(3)(i)(H).

Specifically, in the last iteration of standardized options we finalized in the 2018 Payment Notice, we created three sets of standardized options based on FFE and SBE-FP enrollment data and state cost-sharing laws. The basis on which we created these three sets of options as well as a number of other factors in the individual market (for example, states with FFEs or SBE-FPs transitioning to SBEs) have changed considerably since the last iteration of standardized options in 2018. Further, we do not have sufficient time to conduct a full analysis of the changes that have occurred in the last several years necessary to timely design and propose adequate standardized options suitable for the current environment. Additionally, in prior years, we

proposed and finalized standardized option plan designs prior to the start of the QHP certification cycle for the following plan year such that issuers had sufficient time to assess these standardized options and could thus determine if they wanted to offer them and take the steps necessary to do so. Issuers will not have a sufficient amount of time to meaningfully assess any standardized options we would propose and decide whether or not to offer them if such proposals were made effective before the 2023 plan year.

For these reasons, we intend to resume the designation of standardized options and propose specific plan designs in more complete detail in the 2023 Payment Notice. As such, we seek the views of stakeholders regarding issues related to the proposal of new standardized options, including specifically the views of states with FFEs or SBE-FPs regarding how unique state cost-sharing laws could affect standardized option plan designs to assist in our development of such proposals.

2. Navigator Program Standards (§ 155.210)

We propose to amend § 155.210(e)(9) to reinstitute the requirement that Navigators in the FFEs provide information and assistance with regard to certain post-enrollment topics.

Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange to establish a Navigator program under which it awards grants to entities to conduct public education activities to raise awareness of the availability of QHPs; distribute fair and impartial information concerning enrollment in QHPs, and the availability of PTCs and CSRs; facilitate enrollment in QHPs; provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman established under section 2793 of the PHS Act, or any other appropriate state agency or agencies for any enrollee with a grievance, complaint, or question regarding their health plan, coverage, or a determination under such plan or coverage; and provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange. The statute also requires the Secretary, in collaboration with states, to develop standards to ensure that information made available by Navigators is fair, accurate, and impartial. We have implemented the statutorily required Navigator duties through regulations at §§ 155.210 (for all Exchanges) and 155.215 (for Navigators in FFEs).

Further, section 1311(i)(4) of the ACA requires the Secretary to establish standards for Navigators to ensure that Navigators are qualified, and licensed, if appropriate, to engage in the Navigator activities described in the statute and to avoid conflicts of interest. This provision has been implemented at §§ 155.210(b) (generally for all Exchanges) and 155.215(b) (for Navigators in FFEs).

We have also established under § 155.205(d) and (e) that each Exchange must have a consumer assistance function, including the Navigator program, and must conduct outreach and education activities to educate consumers about the Exchange and insurance affordability programs to encourage participation.

We propose to amend § 155.210(e)(9) to reinstitute the requirement that Navigators in the FFEs provide information and assistance with regard to certain post-enrollment topics rather than merely being authorized to do so.

Following a reduction in overall funding available to the FFE Navigator program in 2020, we provided more flexibility to FFE Navigators by making the provision of certain types of assistance, including post-enrollment assistance, permissible, but not required, for FFE Navigators under Navigator grants awarded in 2019 or any later year.

On June 4, 2021, CMS issued the 2021 Navigator Notice of Funding Opportunity (NOFO), which will make $80 million in grant funding available to Navigators in states with an FFE for the 2022 plan year.

With funding for the FFE Navigator program increasing substantially for the 2022 plan year, we believe that there will be sufficient Navigator grant funding available to support the post-enrollment duties we propose to once again require of FFE Navigators. We also believe that this proposal aligns with E.O. 14009 on Strengthening Medicaid and the ACA because it will improve consumers' access to health coverage information, not only when selecting a plan, but also throughout the year as they use their coverage.

In addition, this proposal is designed to ensure that consumers would have access to skilled assistance beyond applying for and enrolling in health insurance coverage through the Exchange, including, for example, assistance with the process of filing Exchange eligibility appeals, understanding basic information about PTC reconciliation, and understanding basic concepts and rights related to health coverage and how to use it, such as locating providers and accessing care.

84 FR 17511-17514 (April 25, 2019). These post-enrollment topics included: Understanding the process of filing Exchange eligibility appeals; understanding and applying for exemptions from the individual shared responsibility payment that are granted through the Exchange; understanding the availability of exemptions from the requirement to maintain MEC and from the individual shared responsibility payment that are claimed through the tax filing process and how to claim them; the Exchange-related components of the premium tax credit reconciliation process; understanding basic concepts and rights related to health coverage and how to use it; and referrals to licensed tax advisers, tax preparers, or other resources for assistance with tax preparation and tax advice on certain Exchange-related topics.

https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0.

86 FR 7793 (Feb. 2, 2021).

Section 1311(i)(3)(D) of the ACA and 45 CFR 155.210(e)(4) already expressly require Navigators to provide post-enrollment assistance by referring consumers with complaints, questions, or grievances about their coverage to appropriate state agencies. This suggests that Congress anticipated that consumers would need assistance beyond the application and enrollment process, and that Navigators would maintain relationships with consumers and be a source of such post-enrollment assistance.

Consistent with the requirements under section 1311(i)(3)(B) and (C) of the ACA that Navigators distribute fair and impartial information concerning enrollment in QHPs and facilitate enrollment in QHPs, and pursuant to the Secretary's authority under section 1321(a)(1)(A) of the ACA, we propose to reinstitute as a requirement at § 155.210(e)(9)(i) that Navigators in the FFEs must help consumers with understanding the process of filing appeals of Exchange eligibility determinations. We are once again not proposing to establish a duty for Navigators to represent a consumer in an appeal, sign an appeal request, or file an appeal on the consumer's behalf. We believe that helping consumers understand Exchange appeal rights when they have received an adverse eligibility determination when applying for health insurance coverage, and assisting them with the process of completing and submitting appeal forms, would help to facilitate enrollment through the FFEs and would help consumers obtain fair and impartial information about enrollment through the FFEs. We would interpret this proposal to include helping consumers file appeals of eligibility determinations made by an Exchange related to enrollment in a QHP, special enrollment periods, and any insurance affordability program, including eligibility determinations for Exchange

financial assistance, Medicaid, the Children's Health Insurance Program (CHIP), and the Basic Health Program.

Currently, pursuant to § 155.210(e)(9)(ii), Navigators in the FFEs are permitted to provide information and assistance to consumers with regard to understanding and applying for exemptions from the individual shared responsibility payment that are granted through the Exchange, understanding the availability of exemptions from the requirement to maintain minimum essential coverage and from the individual shared responsibility payment that are claimed through the tax filing process and how to claim them, and understanding the availability of the Internal Revenue Service (IRS) resources on this topic. We propose to amend § 155.210(e)(9)(ii) slightly to reinstitute as a requirement that Navigators in the FFEs must help consumers understand and apply for exemptions from the requirement to maintain minimum essential coverage granted by the Exchange. Although consumers who do not maintain minimum essential coverage no longer need to receive an exemption from the individual shared responsibility payment to avoid having to make such a payment, Navigators can still assist consumers age 30 or above with filing an exemption to qualify to enroll in catastrophic coverage under § 155.305(h). We believe that this proposal is consistent with Navigators' duty under section 1311(i)(3)(B) and (C) of the ACA to distribute fair and impartial information concerning enrollment in QHPs, since impartial information concerning the availability of exemptions for consumers age 30 or above to enroll in catastrophic coverage would help consumers make informed decisions about whether or not to enroll in such coverage. This assistance with Exchange-granted exemptions from the requirement to maintain minimum essential coverage would include informing consumers about the availability of the exemption; helping consumers fill out and submit Exchange-granted exemption applications and obtain any necessary forms prior to or after applying for the exemption; explaining what the exemption certificate number is and how to use it; and helping consumers understand and use the Exchange tool to find catastrophic plans in their area.

In addition, we propose to reinstitute as a requirement at § 155.210(e)(9)(iii) that Navigators must help consumers with the Exchange-related components of the PTC reconciliation process and with understanding the availability of IRS resources on this process. This would include ensuring consumers have access to their Forms 1095-A and receive general, high-level information about the purpose of this form that is consistent with published IRS guidance on the topic. This proposal stems from the requirement under section 1311(i)(3)(B) of the ACA that Navigators distribute fair and impartial information concerning the availability of the PTC under section 36B of the Code.

Consumers who receive premium assistance through APTC may need help with a variety of issues related to the requirement to reconcile the APTC with the PTC allowed for the year of coverage. FFE Navigators would be required to help consumers obtain IRS Forms 1095-A and 8962, and the instructions for both, and to provide general information, consistent with applicable IRS guidance, about the significance of the forms. Navigators would also be required to help consumers understand (1) how to report errors on the Form 1095-A; (2) how to find silver plan premiums using the Exchange tool; and (3) the difference between APTC and PTC and the potential implications for enrollment and reenrollment of not filing a tax return and reconciling the APTC paid on consumers' behalf with their PTC for the year.

Navigators would still not be permitted to provide tax assistance or advice, or interpret tax rules and forms within their capacity as FFE Navigators. However, their expertise related to the consumer-facing aspects of the Exchange, including eligibility and enrollment rules and procedures, would uniquely qualify them to help consumers understand and obtain information from the Exchange that is necessary to understand the PTC reconciliation process. Because this proposal includes a proposed requirement that Navigators provide consumers with information and assistance understanding the availability of IRS resources, Navigators would be expected to familiarize themselves with the availability of materials on

irs.gov

, including the Form 8962 instructions, IRS Publication 974 Premium Tax Credit, and relevant FAQs, and to refer consumers with questions about tax law to those resources or to other resources, such as free tax return preparation assistance from the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs.

To help ensure consumers have seamless access to Exchange-related tax information beyond the basic information that Navigators can provide, we propose to reinstitute as a requirement at § 155.210(e)(9)(v) that FFE Navigators must refer consumers to licensed tax advisers, tax preparers, or other resources for assistance with tax preparation and tax advice related to consumer questions about the Exchange application and enrollment process, and PTC reconciliations.

We note that we are not proposing to reinstitute at § 155.210(e)(9)(v) the requirement that Navigators must provide referrals to licensed tax advisers, tax preparers, or other resources for assistance with tax preparation and tax advice related to consumer questions about exemptions from the requirement to maintain minimum essential coverage and from the individual shared responsibility payment in light of the fact that the individual shared responsibility payment was reduced to zero for months beginning after December 31, 2018 under the Tax Cuts and Jobs Act (Pub. L. 115-97, December 22, 2017).

We interpret the Navigator duties to facilitate enrollment in QHPs in section 1311(i)(3)(C) of the ACA, to distribute fair and impartial information concerning enrollment in QHPs under section 1311(i)(3)(B) of the ACA, and to conduct public education activities to raise awareness about the availability of QHPs in section 1311(i)(3)(A) of the ACA to include helping consumers understand the kinds of decisions they will need to make in selecting coverage, and how to use their coverage after they are enrolled. We have previously stated that one of the overall purposes of consumer assistance programs is to help consumers become fully informed and health literate.

See 79 FR 30276.

To improve consumers' health literacy related to coverage generally, and to ensure that individual consumers are able to use their coverage meaningfully, we propose to reinstitute at § 155.210(e)(9)(iv) the requirement that Navigators in the FFEs must help consumers understand basic concepts and rights related to health coverage and how to use it. We also propose to expand our interpretation of this requirement and the activities that fall within its scope. These activities could be supported through the use of existing resources such as the CMS “From Coverage to Care” initiative, which we encourage Navigators to review, and which are now available in multiple languages at

https://marketplace.cms.gov/c2c.

This proposal would improve consumers' access to health coverage information, not just when selecting a plan, but also when using their coverage.

We believe expanding our interpretation of the requirement that Navigators help consumers understand basic concepts and rights related to health coverage and how to use it and

the activities that fall within the scope of this requirement is vital to improving health equity and helping to address social determinants of health, particularly among underserved and vulnerable populations.

Navigators are already required under § 155.210(e)(8) to provide targeted assistance to underserved or vulnerable populations. Underserved and vulnerable populations often experience lower levels of health literacy, which can be a barrier to enrolling in and accessing care.

Social determinants of health can also create significant disparities in whether and how an individual is able to afford and access health coverage and health care services, including primary and preventive care. As trusted partners and members of local communities, Navigators are uniquely positioned to establish and build trust with individuals and families as they transition from enrolling in health coverage to using and maintaining their coverage throughout the year.

86 FR 7009 (Jan. 25, 2021).

Access to Health Services: Healthy People 2020. Office of Disease Prevention and Health Promotion, Department of Health & Human Services.

https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/access-to-health.

Additionally, Navigators in FFEs are already required under § 155.215(c)(1) to develop and maintain general knowledge about the racial, ethnic, and cultural groups in their service area, including each group's health literacy and other needs, and under § 155.215(c)(2) to collect and maintain updated information to help understand the composition of the communities in the service area. Because the health literacy needs of consumers will vary depending on their circumstances, we are not requiring Navigators to help consumers with specific health literacy topics. Instead, we propose to expand our interpretation of the Navigator duties proposed to be reinstituted as requirements at § 155.210(e)(9)(iv) to include, for example, helping consumers understand (1) key terms used in health coverage materials, such as “deductible” and “coinsurance,” and how they relate to the consumer's health plan; (2) the cost and care differences between a visit to the emergency department and a visit to a primary care provider under the coverage options available to the consumer; (3) how to evaluate their health care options and make cost-conscious decisions, including through the use of information required to be disclosed by their health plan as a result of the Transparency in Coverage Final Rules;

(4) how to identify in-network providers to make and prepare for an appointment with a provider—including utilizing tools and resources available through the No Surprises Act

to make informed decisions about their care; (5) how the consumer's coverage addresses steps that often are taken after an appointment with a provider, such as making a follow-up appointment and filling a prescription; and (6) the right to coverage of certain preventive health services without cost sharing under QHPs—including information and resources related to accessing viral testing and vaccination options supported by Exchange coverage. If this proposal is finalized, CMS intends to make training materials and other educational resources available to Navigators regarding the proposed expanded interpretation of this requirement.

85 FR 72158.

Title I of Division BB of the Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27, 2020).

FFE Navigators will continue to be permitted to perform the Navigator duties specified in § 155.210(e)(9) until this proposal, if finalized, becomes effective. If this proposal is finalized, FFE Navigators would be required to perform the Navigator duties specified in § 155.210(e)(9) beginning with Navigator grants awarded after the effective date of this rule, including non-competing continuation awards. For example, if this proposal is finalized prior to Navigator grant funding being awarded in fiscal year (FY) 2022, FY 2021 Navigator grantees will be required to perform these duties beginning with the Navigator grant funding awarded in FY 2022 for the second 12-month budget period of the 36-month period of performance. To the extent FFE Navigators awarded grant funding in FY 2021 are not already performing these duties under their year one project plans when this proposal, if finalized, becomes effective, they can revise their project plans to incorporate performance of the duties specified in § 155.210(e)(9) as part of their non-competing continuation application for their FY 2022 funding. If this proposal is finalized as proposed, we would codify in § 155.210(e)(9) the applicability date to make clear when the Navigator duties specified in § 155.210(e)(9) would once again be required.

We interpret the requirement to facilitate enrollment in a QHP under section 1311(i)(3)(C) of the ACA, and the requirement at § 155.210(e)(2) to provide information that assists consumers with submitting the eligibility application, to include assistance with updating an application for coverage through an Exchange, including reporting changes in circumstances and assisting with submitting information for eligibility redeterminations. Additionally, Navigators are already permitted, but not required, to help with a variety of other post-enrollment issues. For example, we interpret the requirements in § 155.210(e)(1) and (2) that Navigators conduct public education activities to raise awareness about the Exchange and provide fair and impartial information about the application and plan selection process to mean that Navigators may educate consumers about their rights with respect to coverage available through an Exchange, such as nondiscrimination protections, prohibitions on preexisting condition exclusions, and preventive services available without cost-sharing. We also interpret these requirements, together with the requirement in section 1311(i)(3)(B) of the ACA that Navigators distribute fair and impartial information concerning enrollment in QHPs, and the availability of Exchange financial assistance, to mean that Navigators may assist consumers with questions about paying premiums for coverage or insurance affordability programs enrolled in through an Exchange. Finally, we interpret the requirement in section 1311(i)(3)(D) of the ACA and § 155.210(e)(4) to provide referrals for certain post-enrollment issues to mean that Navigators may help consumers obtain assistance with coverage claims denials.

Certified application counselors (CACs) do not receive grants from the FFEs, and thus may have more limited resources than Navigators. As a result, while we are not proposing to require CACs to further expand their required duties, we encourage CACs to help with activities consistent with their existing regulatory duties and recognize that many of these CACs may already be participating in these post-enrollment activities.

We seek comment on all aspects of this proposal.

3. Exchange Direct Enrollment Option (§ 155.221(j))

In part 1 of the 2022 Payment Notice final rule, we codified § 155.221(j), which established a process for states to elect a new Exchange Direct Enrollment option (Exchange DE option). Under the Exchange DE option, State Exchanges, SBE-FPs, and FFE states may work directly with private sector entities (including QHP issuers, web-brokers,

and agents and brokers) to operate enrollment websites through which consumers can apply for coverage, receive an eligibility determination from the Exchange, and purchase an individual market QHP offered through the Exchange with APTC and CSRs, if otherwise eligible. Subject to meeting HHS approval requirements under § 155.221(j)(1) and (2), the Exchange DE option may be implemented in states with a State Exchange beginning in plan year 2022 and in SBE-FP or FFE states beginning in plan year 2023. We also finalized a 2023 user fee rate of 1.5 percent of the total monthly premiums charged by issuers for each policy in FFE and SBE-FP states that elect the Exchange DE option. Since the publication of part 1 of the 2022 Payment Notice final rule, there have been significant changes to policy and operational priorities resulting from recent shifting policy goals, as well as the enactment of new federal laws. Given these changes, as well as a general lack of interest expressed by states in the option, and potential for the Exchange DE option to be misaligned with administration priorities, we propose to remove § 155.221(j) and repeal the Exchange DE option.

On January 20, 2021, President Biden issued the Executive Order, “On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” (E.O. 13985),

directing that as a policy matter the federal government should pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality. On January 28, 2021, President Biden issued E.O. 14009.

Section 3 of E.O. 14009 directs HHS, and the heads of all other executive departments and agencies with authorities and responsibilities related to Medicaid and the ACA, to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions to determine whether they are inconsistent with policy priorities described in Section 1 of E.O. 14009, to include protecting and strengthening the ACA by assisting people who are potentially eligible for coverage, and eliminating unnecessary difficulties to obtaining health insurance. Specifically, this agency review must evaluate whether existing policies or regulations, “. . . undermine the Health Insurance Marketplace®

or the individual, small group, or large group markets for health insurance . . .” or “. . . present unnecessary barriers to individuals and families attempting to access Medicaid or ACA coverage . . .”

86 FR 7009 (Jan. 25, 2021).

86 FR 7793 (Feb. 2, 2021).

Health Insurance Marketplace® is a registered service mark of the U.S. Department of Health & Human Services.

86 FR 7793 (Feb. 2, 2021).

Section 2 of E.O. 14009 also requires that the Secretary of HHS consider whether to implement an Exchange special enrollment period for exceptional circumstances pursuant to § 155.420(d)(9) and other existing authorities, for uninsured and underinsured individuals to obtain coverage in light of the special circumstances caused by the COVID-19 pandemic. After E.O. 14009 was issued, HHS used its discretion to make such a special enrollment period available to uninsured and underinsured consumers through

HealthCare.gov

from February 15, 2021, through May 15, 2021. To support outreach, education and enrollment efforts for this special enrollment period, HHS has provided $2.3 million in additional funding to current Navigator grantees in the FFE.

https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period.

All State Exchanges followed suit and implemented corresponding special enrollment periods on similar timelines. HHS later made a decision to extend the ability of consumers to access the special enrollment period through

HealthCare.gov

through August 15, 2021, and many State Exchanges extended their special enrollment periods, as well. As of May 31, 2021, 1.2 million new consumers had selected plans through

HealthCare.gov

, which represents a substantial increase from previous years when special enrollment periods were available primarily for normal qualifying life events.

https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2.

In addition, Congress recently passed the ARP,

which was signed into law on March 11, 2021. The ARP establishes new ACA programs, including a new grant program for Exchange modernization, which appropriates $20,000,000 in federal funding, which is available until September 30, 2022, to State Exchanges to implement Exchange system, program, or technology updates to ensure compliance with applicable federal requirements. It also modifies eligibility criteria for existing ACA programs. For example, the provisions in the ARP include a temporary change (for taxable years 2021 and 2022) that allows consumers with household income above 400 percent of the FPL to be applicable taxpayers potentially eligible for PTC, an update to applicable percentage tables to increase the amount of PTC for qualified individuals in all income brackets, and a modification of eligibility for PTC for consumers receiving, or approved to receive, unemployment compensation in 2021. Beginning on April 1, HHS operationalized these new requirements through

HealthCare.gov

, and is providing technical assistance to State Exchanges that are operationalizing these requirements at the state level. Approximately 1.9 million consumers have returned to

HealthCare.gov

to reduce their monthly premiums after APTC by over 40 percent, from $100 to $57, on average, while for new consumers selecting plans during the special enrollment period, the average monthly premium after APTC fell by 25 percent.

Public Law 117-2.

https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-1.

There are also new obligations established via other health care-related legislation for which HHS is responsible to implement in coordination with states and other federal Departments. This includes the No Surprises Act,

which was enacted on December 27, 2020, and establishes an extensive array of federal and state requirements and programs to protect consumers against surprise medical bills.

Title I of Division BB of the Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27, 2020).

Given our obligation to review all existing policies and regulations in line with E.O. 14009, E.O. 13985, and recent actions by Congress, including the health care-related provisions of the ARP and other new federal legislation, for which HHS is now responsible or centrally involved in implementing, we have determined that all available resources should be directed to ensuring we are able to efficiently and effectively meet those obligations. Permitting the establishment of the Exchange DE option would detract from those efforts. Furthermore, meeting the new requirements of the health care provisions of the ARP would add complexity to Exchange operations that could reduce the prospects for successful implementation of the Exchange DE option, even if temporarily. For instance, states and DE entities would need to coordinate and implement new procedures to ensure that consumers receive eligibility

determinations and are enrolled in coverage in line with the modified PTC eligibility criteria under the ARP, and then, that this temporary modification no longer applies after taxable year 2022. As part of this process, HHS would need to ensure the adoption of appropriate procedures, proper approvals, and ongoing oversight. To foreclose the possibility that federal funding and resources will be diverted from efforts to provide direct benefits to consumers made available under recent legislation to optional programs, we are proposing to repeal the Exchange DE option. This will help ensure that available resources are allocated consistent with administration health care priorities and dedicated to implementation of newly-enacted federal laws that provide greater financial assistance and protections to consumers.

Repealing the Exchange DE option should generally have a minimal impact on states and other interested parties. States with State Exchanges already could engage with direct enrollment entities preceding the addition of § 155.221(j). In addition, the FFE has already implemented the direct enrollment program (including classic direct enrollment and enhanced direct enrollment), which provides broad availability of non-Exchange websites to assist consumers applying for, or enrolling in QHPs through an FFE or SBE-FP with APTC and CSRs, when otherwise eligible.

Additionally, nothing in the previous regulatory framework prohibited State Exchanges from engaging direct enrollment entities similar to the FFE in order to supplement Exchange operations in their states should they so choose. In fact, although we understand that several State Exchanges have engaged with direct enrollment entities to discuss possibilities for collaboration, State Exchanges and other stakeholders nearly universally cautioned against the Exchange DE option in public comments submitted in response to the proposal. In addition, to date, no state has expressed interest in implementing the Exchange DE option.

The FFE direct enrollment pathways are also available in SBE-FP states. See 45 CFR 155.220(l) and 155.221(i).

Finally, in reviewing § 155.221(j) in line with E.O. 13985 and E.O. 14009, and after further consideration of public comments received when the Exchange DE option was proposed, we have determined that the Exchange DE option is inconsistent with policies described in E.O. 13985 and sections 1 and 3 of E.O. 14009. Consistent with many public comments received when the Exchange DE option was proposed, we believe that shifting away from

HealthCare.gov

or State Exchange websites as the primary pathway to enroll in and receive information about coverage would harm consumers by unnecessarily fracturing enrollment processes among the Exchange and possibly multiple direct enrollment entities operating in a state. Such a shift would be particularly harmful now when over one million consumers have successfully navigated

HealthCare.gov

during the COVID special enrollment period to enroll in Exchange coverage. We also agree with many commenters who noted that a fractured process could foster consumer confusion about how to get covered and what coverage options are available, since consumers could be directed to direct enrollment entities that only offer assistance with a limited selection of products and some of those products may not provide, for example, MEC for consumers.

Many commenters raised concerns that this consumer confusion or limited product selection through direct enrollment entities could also potentially disrupt coordination of coverage with other insurance affordability programs, including Medicaid and CHIP, which is inconsistent with our “no wrong door” policy.

In addition, these consequences could act as an unnecessary barrier to consumers seeking Medicaid or ACA coverage rather than facilitating enrollment, and could have additional downstream impacts including an increased uninsured or underinsured population, or more consumers enrolled in less comprehensive coverage options. Commenters noted that these downstream impacts could lead to health inequities by disparately impacting certain vulnerable groups that tend to have a greater need for comprehensive coverage or rely more heavily on Medicaid and CHIP. These concerns and the accompanying risks to the health and well-being of vulnerable groups and consumers in general are heightened as the COVID-19 PHE continues.

Multiple commenters cited the following report as support for their comments related to DE entities offering limited plan selection and potential disruptions to coordination of coverage with other insurance affordability programs:

https://www.cbpp.org/research/health/direct-enrollment-in-marketplace-coverage-lacks-protections-for-consumers-exposes.

This policy is intended to ensure that consumers can complete a single eligibility application to receive determinations of eligibility across multiple health insurance affordability programs, including for QHPs, APTC, CSRs, as well as Medicaid and CHIP. See, for example, sections 1311(d)(4)(F) and 1413 of the ACA.

By finding the Exchange DE option inconsistent with recent Executive Orders, to ensure that resources are not diverted from fulfilling requirements under the new health care legislation and other initiatives like the COVID special enrollment period, and because no state has yet expressed interest in implementing the Exchange DE option, we propose to remove § 155.221(j) and repeal the Exchange DE option. As explained in the preamble section regarding user fee rates for the 2022 benefit year (§ 156.50), we also propose to repeal the accompanying user fee rate for FFE-DE and SBE-FP-DE states for 2023. We seek comment on this proposal.

4. Open Enrollment Period Extension (§ 155.410(e))

We propose to amend paragraph (e) of § 155.410, which provides the dates for the annual Exchange open enrollment period in which qualified individuals and enrollees may apply for or change coverage in a QHP. The Exchange open enrollment period is extended by cross-reference to non-grandfathered plans in the individual market, both inside and outside of an Exchange, under guaranteed availability regulations at § 147.104(b)(1)(ii). HHS is specifically proposing to alter the open enrollment period for the 2022 coverage year and beyond so that it begins on November 1 and runs through January 15 of the applicable benefit year.

In previous rulemaking, we established that the open enrollment period for benefit years beginning on or after January 1, 2018 would begin on November 1, 2021 and extend through December 15, 2021. In doing so, we indicated a preference for a shorter month-and-a-half open enrollment period, noting our belief that it provides sufficient time for consumers to enroll in or change QHPs and that an end date of December 15th carries the benefit of ensuring consumers receive a full year of coverage and simplifies operational processes for issuers and the Exchanges.

Accordingly, the annual open enrollment period dates have been set to November 1st through December 15

for the 2018, 2019, 2020, and 2021 plan years. We have observed several benefits using the present open enrollment period dates. Prior enrollment data suggests that the majority of new consumers to the Exchange select plans prior to December 15th so as to have coverage beginning January 1st. After 4 years, we believe

consumers have become accustomed to a December 15th end date for the annual open enrollment period. Consistency in open enrollment dates promotes consumer confidence, and a December end date generally aligns with the open enrollment dates for other health insurance programs such as Medicare and employer-based health plans.

See 82 FR 18346 at 18381.

We also observed that consumer casework volumes related to coverage start dates and inadvertent dual enrollment decreased in the years after the December 15th end date was adopted, suggesting that the consumer experience was improved by having a singular deadline of December 15th to enroll in coverage for the upcoming plan year. We note that an extension to January 15th may cause some previously observed consumer confusion to resurface surrounding the need to enroll by December 15th for a full year of coverage versus the final deadline of January 15th to enroll for a plan that would begin on February 1st. This confusion could cause some consumers to miss out on coverage for the month of January altogether. A January 15th end date may also require enrollment assisters allocate budget resources over a longer period of time.

However, after observing the effects of a month-and-a-half open enrollment period over these years, we have also observed negative impacts to consumers that may justify an extension of the open enrollment end date to January 15th. In particular, we have observed that consumers who receive financial assistance, who do not actively update their applications during the open enrollment period, and who are automatically re-enrolled into a plan are subject to unexpected plan cost increases if they live in areas where the second lowest-cost silver plan has dropped in price. These consumers will experience a reduction in their allocation of APTC based on the second lowest-cost silver plan price, but are often unaware of their increased plan liabilities until they receive a bill from the issuer in early January after the open enrollment period has concluded. Extending the open enrollment end date to January 15th would allow these consumers the opportunity to change plans after receiving updated plan cost information from their issuer and to select a new plan that is more affordable to them. We have also observed concerns from Navigators, CACs, and agents and brokers that the current open enrollment period does not leave enough time for them to fully assist all interested Exchange applicants with their plan choices. Extending the open enrollment end date to January 15th would allow more time for consumers to seek assistance from one of these entities. Together, the impacts of providing consumers with more time to react to updated plan cost information and more time to seek enrollment assistance may improve access to health coverage. The additional time for enrollment assistance provided by this proposal may be particularly beneficial to consumers in underserved communities who may face time or language barriers in accessing health coverage by extending the period in which these consumers can seek in-person assistance to enroll.

We seek comment on whether a January 15th end date would provide a balanced approach to providing consumers with additional time to make informed plan choices and increasing access to health coverage, while mitigating risks of adverse selection, consumer confusion, and issuer and Exchange operational burden. We invite comments from stakeholders that would experience specific benefits or adverse effects from a January 15th end date, and encourage comments on potential impacts to resources, consumer assistance budgets, overall enrollment numbers, premiums, and market stability. We seek comments on whether this extension would incentivize consumers who need coverage to begin on January 1st to still make a choice and enroll by December 15th, while also preserving sufficient time in the remainder of the plan year for issuers and Exchanges to perform other obligations such as QHP certification.

We further invite comments on alternative approaches to extending open enrollment to address coverage gaps or enrollment challenges facing consumers and stakeholders. We also invite comments to address whether HHS should explore the possibility of a new special enrollment period, such as for current enrollees who are automatically re-enrolled and experienced a significant cost increase, to address concerns for specific consumer challenges as an alternative to extending the annual open enrollment period. We are also considering whether approaches such as enhanced noticing or special, targeted outreach would address the needs of consumers who are automatically re-enrolled in areas where the second lowest-cost silver plan drops in value, thereby reducing APTC amounts. We seek comment on how we may improve communications and consumer engagement around potential cost changes for consumers who do not actively re-enroll in coverage. We are also considering if improved education and outreach during the coverage year to raise awareness of existing special enrollment period opportunities, such as those for loss of coverage or becoming newly eligible or ineligible for financial assistance, may serve consumers who do not enroll or change plans during open enrollment. We seek comment on whether adoption of these or other outreach approaches would be a viable alternate approach to finalizing our proposal to extend the open enrollment end date to January 15th.

We anticipate that if an open enrollment end date of January 15th were finalized, this change would apply to all Exchanges, including State Exchanges for the 2022 coverage year and beyond. We note that in preceding plan years, a majority of State Exchanges have used special enrollment period authority to offer additional enrollment time beyond the end date of December 15th in the Exchanges on the Federal platform. We invite additional comments on State Exchange flexibility, as well as operational challenges relating to State Exchange implementation of the proposed change for 2022 and beyond.

5. Monthly Special Enrollment Period for APTC-Eligible Qualified Individuals With a Household Income No Greater Than 150 Percent of the Federal Poverty Level (§ 155.420(d)(16))

In order to make affordable coverage available to more consumers, we propose to codify a monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for APTC, and whose household income is expected to be no greater than 150 percent of the FPL.

Section 9661 of the ARP amended section 36B(b)(3)(A) of the Code to decrease the applicable

percentages used to calculate the amount of household income a taxpayer is required to contribute to their second lowest cost silver plan for tax years 2021 and 2022.

The applicable percentages are used in combination with factors including annual household income and the cost of the benchmark plan to determine the PTC amount for which a taxpayer can qualify to help pay for a QHP on an Exchange for themselves and their dependents.

These decreased percentages generally result in increased PTC for PTC-eligible taxpayers. For those with household incomes no greater than 150 percent of the FPL, the new applicable percentage is zero. As a result of these changes, many low-income consumers whose QHP coverage can be fully paid for with APTC have one or more options to enroll in a silver-level plan without needing to pay a premium after the application of APTC. All of these consumers, if eligible to enroll through an Exchange and to receive APTC, will qualify for CSRs to enroll in a silver plan with an AV of 94 percent.

Generally, a qualifying individual is not eligible for a PTC if their income is below 100 percent of the FPL. However, there are a small number of consumers with a household income below 100 percent of the FPL who may qualify for APTC. Specifically, section 1401 of the ACA amended section 36B of the Code to provide that a taxpayer with a household income which is not greater than 100 percent of the FPL, and who is a lawfully present immigrant and ineligible for Medicaid due to their immigration status, may qualify for a PTC. Consumers for whom this is the case would be able to qualify for the proposed special enrollment period, as well. Additionally, we note that because individuals would qualify for this special enrollment period based on their household income level, household members who apply for coverage with financial assistance together generally will all qualify for the special enrollment period. However, it is also possible that one household member could trigger the special enrollment period based on a change in their eligibility for APTC—for example, a household member who loses access to an offer of coverage through an employer that is considered affordable based on 26 CFR 1.36B02(c)(3)(v).

Public Law 117-2.

See 26 CFR 1.36B-3(g) for more information on the applicable percentage and its relationship to the PTC.

See

§§ 155.305(g)(2) and 156.420(a).

We propose that this special enrollment period be available at the option of the Exchange, in order to allow State Exchanges to decide whether to implement it based on their specific market dynamics, needs, and priorities. Additionally, we propose that Exchanges on the Federal platform will implement this special enrollment period by providing qualified individuals who are eligible with a pathway to access it through the

HealthCare.gov

application. We propose that implementation in Exchanges on the Federal platform be consistent with current special enrollment period policy and operations, in particular such that there is no limitation on how often individuals who are eligible for this special enrollment period can obtain or utilize it.

Consistency in this area will mitigate consumer and other stakeholder confusion and simplify Exchange operations. To provide Exchanges with flexibility to prioritize ensuring that qualifying individuals are able to obtain coverage through this special enrollment period quickly following plan selection, or to implement this special enrollment period in keeping with their current operations, we propose to add a new paragraph at § 155.420(b)(2)(vii) to provide that the Exchange must ensure that coverage is effective in accordance with paragraph (b)(1) of this section or on the first day of the month following plan selection, at the option of the Exchange.

For example, those who qualify for the special enrollment period per § 155.420(d)(8) for qualifying individuals who gain or maintain status as an Indian, as defined by section 4 of the Indian Health Care Improvement Act, may change their plan selection multiple times each month, noting that only the last plan selection before the applicable cutoff date for coverage each month will take effect for the month in question.

We also propose to add a new paragraph at § 155.420(a)(4)(ii)(D) to provide that an Exchange must permit eligible enrollees and their dependents to change to a silver level plan, and to amend paragraph § 155.420(a)(4)(iii), which provides other plan category limitations for other special enrollment periods, to provide that these other plan category limitations do not apply to enrollees or dependents who qualify for the proposed special enrollment period.

While we expect that most consumers who qualify for this special enrollment period will select a silver level plan because based on their household income, they will be eligible to enroll in a silver level plan with an actuarial value of 94 percent, as further discussed below, we believe that ensuring that current Exchange enrollees do so through plan category limitations will help to mitigate adverse selection. Finally, we propose to add a new paragraph at § 147.104(b)(2)(i)(G) to specify that issuers are not required to provide this special enrollment period in the individual market with respect to coverage offered outside of an Exchange, because eligibility for the special enrollment period is based on eligibility for APTC, and APTC cannot be applied to coverage offered outside of an Exchange.

This provision would not prevent enrollees who qualify for the new special enrollment period from changing to a plan of any category through a special enrollment period that provides this flexibility, including the special enrollment periods at § 155.420(d)(4), (8), (9), (10), (12), and (14).

The APTC benefit changes under the ARP make affordable coverage available to more uninsured people. However, if past trends continue, we believe that some consumers who qualify for these benefits under the ARP may continue to forgo enrollment in premium-free coverage due to a lack of awareness of the opportunity to enroll or a misconception about what the coverage would cost. For example, a February 2021 HHS Assistant Secretary for Planning and Evaluation (ASPE) issue brief

indicates that, as of 2018, 20 percent of the uninsured had a household income no higher than $35,000, which, in 2018, was under 150 percent of the FPL for households with four or more members.

A recent analysis of American Community Survey (ACS) and U.S. Census data also indicates that families with low incomes are more likely to be uninsured, and that in 2019, more than 70 percent of uninsured adults said that they were uninsured because the cost of coverage was too high. It also noted that in 2019, almost 70 percent of uninsured, non-elderly adults had lacked coverage for more than a year, and that this group may be particularly difficult to reach with outreach and education efforts.

Trends in the U.S. Uninsured Population, 2010-2020. Office of the Assistant Secretary for Planning and Evaluation (ASPE), February 11, 2021:

https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.

2017 Federal Poverty Guidelines. ASPE:

https://aspe.hhs.gov/2017-poverty-guidelines.

We refer to 2017 FPL information to determine APTC eligibility for 2018 because, per 26 CFR 1.36B-1(h), the FPL for computing the PTC for a taxable year is the FPL in effect on the first day of the initial or annual open enrollment period preceding that taxable year. For example, ASPE released 2020 FPL information in January 2020, and so 2020 FPL information applies during the 2020 open enrollment period for 2021 coverage.

Key Facts about the Uninsured Population: Kaiser Family Foundation; Nov 06, 2020,

https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/. https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.

Therefore, while HHS will undertake extensive outreach and engagement efforts to promote enrollment during the open enrollment period for 2022 coverage and to help ensure consumer awareness of existing special enrollment periods for which they may qualify, given the established challenges with promoting awareness of access to coverage among low-income consumers, we believe additional enrollment opportunities for low-income consumers are appropriate and in the best interest of low-income consumers. The proposed monthly special enrollment period policy would align with E.O. 14009, which requires federal agencies to identify and appropriately address policies that create barriers to accessing ACA coverage, including access through mid-year enrollment.

In addition to providing certain low-income individuals with additional opportunities to newly enroll in free or low-cost coverage that is available to them, we believe this special enrollment period may help consumers who lose Medicaid coverage regain health care coverage. These consumers can already qualify for a special enrollment period due to their loss of Medicaid coverage, per § 155.420(d)(1). Additionally, Exchanges could provide consumers who do not learn of their opportunity to enroll in Exchange coverage until after their 60-day special enrollment period

has passed with additional time to enroll in health care coverage based on the regulation at § 155.420(c)(4) recently finalized in part 2 of the 2022 Payment Notice final rule to allow a qualified individual, enrollee, or dependent who did not receive timely notice of a triggering event and was otherwise reasonably unaware that a triggering event occurred to select a new plan within 60 days of the date that he or she knew, or reasonably should have known, of the occurrence of the triggering event.

However, whether consumers in these situations are able to benefit from this flexibility may vary, and may require Exchanges to assess eligibility on a case-by-case basis; it may also require consumers who generally have low household income and who therefore may face other barriers to accessing health care coverage, such as low health insurance literacy levels and lack of internet access, to be aware of the potential for an extended enrollment timeframe and to request it from their Exchange. Therefore, while this special enrollment period would not be limited to qualified individuals who have lost Medicaid coverage, we believe that providing access to a monthly enrollment opportunity could help some consumers who lose Medicaid coverage to regain health insurance coverage, especially those who do not initially realize that loss of Medicaid is a special enrollment period triggering event.

86 FR 24220.

Further, after the COVID-19 PHE comes to an end, we expect to see a higher than usual volume of low-income individuals transitioning from Medicaid coverage to the Exchange, for at least several months. This is because states will begin to catch up on a backlog of redeterminations and terminations for Medicaid beneficiaries with increased income following the end of the COVID-19 PHE, after having generally suspended Medicaid disenrollments since March 2020 to comply with the continuous enrollment provisions in section 6008(b)(3) of the Families First Coronavirus Response Act.

Individuals with household income below 150 percent of the FPL frequently experience income fluctuations that cause them to transition between Medicaid, CHIP, and Exchange coverage with financial assistance. Further, the consumer eligibility determination notices sent by state Medicaid and CHIP agencies can vary greatly as far as content, including clarity about the consumer's next steps to apply for other coverage, where and how to apply, and the timeframes for doing so. Consumers who become ineligible for Medicaid are at risk of being uninsured for a period of time and putting off accessing health care, which can lead to poorer health outcomes, if they are not ultimately able to successfully transition between coverage programs.

Public Law 116-127. These provisions enabled states to receive the temporary Federal Medical Assistance Percentage increase under that section.

For these consumers, 60 days may not be enough time to successfully transition to Exchange coverage, leading to long-term lack of coverage. We believe some of these consumers will benefit from additional time to enroll in Exchange coverage. In some cases, the loss of Medicaid or CHIP coverage comes at a time when consumers are least able to track down new health coverage, but are most in need of it. An example of this can be seen with consumers who lose pregnancy-related Medicaid or CHIP coverage after the postpartum period, posing a health coverage hurdle for new mothers at a time when access to health care is paramount, but their ability to find and enroll in new coverage is limited or impeded by their new childcare responsibilities.

Exchanges that elect to provide this proposed special enrollment period would have the option to require consumers to submit documentation to confirm their eligibility in accordance with their pre- or post-enrollment verification programs. CMS will determine eligibility for this special enrollment period in Exchanges on the Federal platform based on consumers' attested household income. Once an Exchange on the Federal platform grants this special enrollment period to a consumer based on their attested household income, the Exchange would then verify applicants' projected annual household income consistent with 45 CFR 155.320(c).

Specifically, CMS would continue to require consumers whose projected annual household income cannot be verified using a trusted electronic data source to submit documentation to confirm their annual income (currently approved under OMB control number 0938-1207/Expiration date February 29, 2024). However, we would not require submission of household income documentation prior to enrollment, and would not pend the enrollment as part of a pre-enrollment verification process, because we believe that the post-enrollment income verification process already in place is sufficient to ensure program integrity because consumers who do not verify their attested household income through the post-enrollment verification process will have their APTC adjusted accordingly.

Public Law 111-148.

Further, CMS' experience administering the verification processes for Exchanges on the Federal platform in accordance with § 155.320(c) shows that submitting documentation quickly to verify income can be especially onerous for those at the lowest income levels who may not have ready access to a computer or smartphone, the internet, a copier or scanner, or funds for postage. As noted above, consumers with household incomes less than 150 percent of the FPL are most likely to experience churn between our health care programs and would be disproportionately affected by the delayed access to coverage that will result while they complete the post-enrollment verification process. For this reason, we are of the view that requiring pre-enrollment verification would needlessly delay access to coverage for a significant portion of eligible consumers; and that it is reasonable and appropriate to allow applicants' enrollments to proceed subject to post-enrollment verification of their household income, if additional documentation is necessary due to inability to verify their household income using a trusted electronic data source.

In addition to outreach and education efforts, we believe that applying plan category limitations to this special enrollment period would help to mitigate adverse selection because it would limit the ability of enrollees to change to a higher metal level plan based on a new health care need and then change back to a silver plan once the health issue is resolved. However, enrollees may still choose to enroll in a silver level plan that is more expensive than their zero dollar option, and, with a monthly special enrollment period, could make this change during the plan year based on a difference in provider network or prescription drug formulary. We believe that enrollees who are interested in changing plans during the year will likely be deterred because such a change will generally mean they lose progress they have made toward meeting their deductible and other accumulators. We seek comment on this proposal and on whether, alternatively, plan category limitations should not be applied. For example, we seek comment on whether to instead exempt the proposed special enrollment period at § 155.420(d)(16) from plan category limitations in order to alleviate the implementation burden on Exchanges, or due to a lack of concern that eligible enrollees would use the proposed

special enrollment period to change to a plan category other than silver.

Additionally, we believe that that access to premium-free or very low-cost 94 percent AV coverage will help to mitigate risk of adverse selection, because qualifying individuals will not have an incentive to end coverage when health care services are no longer needed. However, we seek comment on the degree to which the risk of adverse selection increases due to the fact that not all qualifying individuals who have a household income no greater than 150 percent of the FPL will have access to a silver plan with a zero-dollar premium and therefore, due to their small premium for a silver plan, might be more inclined to enroll in coverage due to a health care need and end coverage once this need has been met.

We estimate that this adverse selection risk may result in issuers increasing premiums by approximately 0.5 to 2 percent, and a corresponding increase in APTC outlays and decrease in income tax revenues of approximately $250 million to $1 billion, when the enhanced APTC provisions of the ARP are in effect. We describe this impact in more detail and seek comment on it in the regulatory impact analysis (RIA) section later in this proposed rule. We also discuss some of the reasons adverse selection cannot be mitigated in the following paragraphs.

The adverse selection risk presented by the proposal stems, in part, from qualifying individuals who live in states where premiums for Exchange coverage cannot be fully paid for with APTC,

such that these individuals will not have access to a silver plan with a zero-dollar premium. Such individuals include residents of states that require all QHPs in the state to cover services that do not qualify as EHB, or that require coverage of certain abortion services for which federal funding is prohibited, and we estimate that ten states may fall into these categories. The portion of premium attributable to services ineligible for APTC is generally small, but increases with age and family size. Additionally, in a few locations, QHP issuers' plan designs are such that both the lowest-cost silver plan and the second lowest-cost silver plan

cover services that do not qualify as EHBs, which makes it impossible for most individuals, including those whose household income does not exceed 150 percent of the FPL, to access a silver plan with a zero dollar monthly premium.

See section 1303(b)(2)(A) of the ACA and section 36B(b)(3)(D) of the Code.

The second lowest-cost silver plan is the “benchmark plan” used to determine a household's APTC eligibility. See 26 CFR 1.36B-3(d)(1) and (f).

Other household-level variation in access to a silver plan with a zero-dollar premium includes households where some, but not all, applicants are APTC-eligible (for example, a household with one or more members with an offer of other MEC through a job), and households with applicants living in different locations, because Exchanges must determine APTC based on a benchmark plan specific to each location.

In this case, the applicable premium amount will be based on the subscriber's location, and so available APTC may not fully cover a silver plan premium for the policy. Finally, households that include one or more members who attest affirmatively to their smoking status also may not qualify for an APTC amount sufficient to pay the full premium of a silver plan, because consistent with 26 CFR 1.36B-3(e), APTC eligibility is not determined using a benchmark plan that rates for tobacco.

26 CFR 1.36B-3(f)(4).

As of May 2021, CMS data indicate that 1-8 percent of current enrollees, depending on the state, in Exchanges on the Federal platform are rated for tobacco use.

We seek comment from health insurance issuers and other stakeholders on our position that adverse selection related to this special enrollment period will be mitigated by the availability of free or very low-cost coverage with a 94 percent AV and the application of plan category limitations to this new special enrollment period, or whether the adverse selection risk created by this new special enrollment period cannot be sufficiently mitigated such that its creation may result in significant rate increases. We also solicit comment regarding whether health insurance issuers and other stakeholders have concerns that the policy could cause any adverse selection among higher income individuals with variable hours and income. We also seek comment on whether the requirement that Exchanges verify applicants' projected annual household income post-enrollment, consistent with 45 CFR 155.320(c), is sufficient, or if there are other measures we should put in place to further protect program integrity. We also solicit comment on estimated implementation burdens for Exchanges who elect to provide this additional enrollment opportunity, including whether implementation of this special enrollment period will be possible in time for consumers to benefit from it during the 2022 plan year. We request comment on whether issuers will have sufficient time to adjust rate filings to account for any increased risk and whether state regulators will have sufficient time to review those filings after a final rule is issued.

We further request comment on whether this proposed special enrollment period should be available indefinitely (as proposed), or whether it should be time-limited. For example, we seek comment on whether we should finalize the proposed special enrollment period to be available only for coverage during years when enhanced APTC benefits are also available, as provided by the section 9661 of the ARP or any subsequent statute. Finally, we request comment on strategies for providing outreach and education for consumers who may be eligible for this special enrollment period, in particular to help qualifying individuals understand and take advantage of the free or very low-cost coverage that is available to them. Within this group, we request comments on strategies for educating consumers who qualify to enroll in a 94 percent AV silver plan about the benefits of enrolling in such a plan even if they are required to pay a small premium, as opposed to electing a premium-free bronze plan with a lower AV.

6. Clarification of Special Enrollment Period for Enrollees Who Are Newly Eligible or Newly Ineligible for Advance Payments of the Premium Tax Credit (§ 155.420(f))

We are proposing new language to clarify that, for purposes of the special enrollment period rules at § 155.420(d), references to ineligibility for APTC refer to being ineligible for such payments or being technically eligible for such payments but qualifying for a maximum of zero dollars per month of such payments. That is, a qualified individual, enrollee, or his or her dependent who is technically eligible for APTC because they meet the criteria at § 155.305(f), but who qualifies for a maximum APTC amount of zero dollars, is also considered ineligible for APTC for purposes of these special enrollment periods, even if they experience a change in circumstance from an APTC ineligible status in accordance with § 155.305(f), such as having other MEC. Currently, the special enrollment periods to which this clarification is applicable are the triggering events at § 155.420(d)(6), but we propose that the clarification apply to all of § 155.420 to ensure consistency, for example, between special enrollment period triggering events at § 155.420(d) and related coverage effective date and

enrollment window rules at § 155.420(b) and (c), respectively.

We believe that the current special enrollment period rules that reference APTC eligibility at § 155.420(d)(6) could permit inconsistent interpretations of what it means to be newly eligible or ineligible for APTC. Exchange regulations at § 155.305(f)(1) define tax filers as APTC eligible if their expected household income for the benefit year for which coverage is requested is greater than or equal to 100 percent but not more than 400 percent of the FPL and they, or their expected tax dependents for the year, (1) meet the requirements for eligibility for enrollment in a QHP through the Exchange; and (2) are not eligible for MEC, with the exception of coverage in the individual market.

IRS rules at 26 CFR 1.36B-3 govern the APTC amount an individual may receive once they are found eligible for APTC under§ 155.420(d)(6). Pursuant to these IRS rules, an Exchange enrollee's monthly APTC amount is the excess of the adjusted monthly premium for the applicable benchmark plan

over 1/12 of the product of the taxpayer's household income and the applicable percentage for the taxable year. Under this formula, if the applicable percentage of 1/12 of a taxpayer's estimated annual household income is higher than the adjusted monthly premium of the relevant benchmark plan, a taxpayer will be eligible generally for APTC under § 155.305(f)(1), but will qualify for a maximum APTC amount of zero dollars under 26 CFR 1.36B-3. Currently, neither § 155.305(f)(1) or 26 CFR 1.36B-3 recognize or explain that an individual generally could be APTC eligible, but not qualify to receive any

amount

in APTC greater than zero. The current text of § 155.420 similarly does not address this issue such that there could exist some ambiguity about what it means to be APTC eligible or ineligible for purposes of the special enrollment periods under § 155.420.

Per IRS rules at 26 CFR 1.36B-3(f), the term “benchmark plan” is generally used to refer to the second lowest-cost silver plan, as described in section 1302(d)(1)(B) of the ACA (42 U.S.C. 18022(d)(1)(B)), offered to the taxpayer's coverage family through the Exchange for the rating area where the taxpayer resides.

We propose to add text to § 155.420 to clarify that an individual who qualifies for a maximum APTC amount of zero dollars is considered ineligible for APTC for purposes of the § 155.420's special enrollment periods. Specifically, any determination that an individual cannot receive an APTC amount greater than zero dollars is equivalent to being found APTC ineligible for purposes of special enrollment period eligibility under § 155.420(d). We believe this interpretation comports with the perspective of an applicant for Exchange coverage who will take their available financial assistance amount into account when selecting a QHP for the upcoming coverage year and who may wish to change their QHP partway through a coverage year because of a change in their financial assistance. Because we believe that the current regulation permits this interpretation, but could instead be interpreted to require strict adherence to the listed requirements for APTC eligibility at § 155.305(f) (which does not address situations where a consumer meets these requirements but qualifies for a zero dollar APTC amount), we are proposing regulation text to ensure consistent and correct interpretation of what it means to be determined ineligible for APTC. This reading of APTC ineligibility is also consistent with our discussion of the policy in previous rulemaking. For example, in the 2020 Payment Notice final rule,

we added a new paragraph at § 155.420(d)(6)(v) allowing Exchanges to provide a special enrollment period for qualified individuals who experience a decrease in household income and receive a new determination of eligibility for APTC by an Exchange, and who had MEC for one or more days during the 60 days preceding the financial change.

84 FR 17526.

We believe that this clarification should also apply to special enrollment periods provided in § 155.420(d)(6)(iii) through (v), which include special enrollment periods for individuals who become newly eligible for APTC. Section 155.420(d)(6)(iii) provides a special enrollment period for individuals who are enrolled in an employer-sponsored plan, and who are determined newly eligible for APTC, in part, because they are no longer eligible for qualifying coverage in an eligible-employer sponsored plan in accordance with 26 CFR 1.36B-2(c)(3) (for example, because their employer changed the coverage), and who are allowed to terminate their employer-sponsored coverage. We do not expect that this special enrollment period would be helpful to individuals who qualify for a maximum APTC amount of zero dollars because they would not receive assistance to help pay for monthly QHP premiums. Further, it likely would not benefit individuals currently enrolled in employer-sponsored coverage to change to a QHP without the benefit of an APTC dollar amount greater than zero, in part because changing plans in the middle of the plan year would cause their deductible and other accumulators to be reset. We seek comments on this proposal.

We believe that this clarification will be especially helpful in light of the removal of the upper APTC eligibility limit on household income at 400 percent of the FPL for taxable years 2021 and 2022 under the ARP.

This is because, with this change, any applicants with household incomes over 400 percent of the FPL may be eligible for APTC, more consumers likely will qualify for APTC technically, but for an APTC amount of zero dollars. This clarification ensures that special enrollment period regulations clearly reflect that enrollees for whom this is the case may qualify for a special enrollment period based on a decrease in their household income, or any other change that makes them newly eligible for an APTC amount of greater than zero dollars.

Public Law 117-2.

Additionally, this clarification is important because it helps ensure transparency in terms of why enrollees in certain situations that appear similar would not both qualify for one of the special enrollment periods at § 155.420(d)(6). For example, the new affordability provisions in the ARP allow for a situation where an enrollee with a household income above 400 percent of the FPL is newly determined to qualify for an APTC amount of zero dollars (as opposed to APTC-ineligible simply by virtue of exceeding the household income limit), while another enrollee with a household income above 400 percent of the FPL who is residing in a different service area is newly determined eligible for an APTC amount of more than zero dollars based on the cost of their benchmark plan.

Both enrollees have received new determinations of APTC eligibility based just being enrolled in Exchange coverage and not having another offer of MEC, but only the latter enrollee who is determined eligible for an APTC amount of greater than zero dollars is intended to be eligible for the special enrollment periods at § 155.420(d)(6). We believe the proposed new language provides needed clarity regarding the eligibility parameters of this special enrollment period to enrollees, particularly

enrollees with household incomes above 400 percent of the FPL.

In Exchanges on the Federal platform, where most ARP changes to APTC eligibility were implemented on April 1, 2021, enrollees in this situation could change their QHP coverage through the 2021 special enrollment period; however, this enrollment window was not available through all Exchanges.

Exchange regulations at § 155.420(d)(6) provide several special enrollment periods for enrollees and dependents based on a determination that they are newly eligible or newly ineligible for APTC. These special enrollment periods vary in terms of the details of their qualifying events, but all of them are dedicated to ensuring that current Exchange enrollees and other qualified individuals who become newly eligible or ineligible for APTC have an opportunity to re-assess previous decisions about their QHP enrollment, or their decision not to enroll in a QHP, based on gaining or losing eligibility for financial assistance available to them to help lower premiums. Ensuring that Exchanges consistently apply eligibility factors for these special enrollment periods is important under a variety of circumstances. For example, regulations at § 155.420(d)(6)(i) and (ii) provide current Exchange enrollees with an opportunity to change to a different QHP if they are determined newly eligible or newly ineligible for APTC for themselves or their dependents (or have a change in eligibility for CSRs), because such a change may impact the coverage they prefer or the type of coverage they can afford.

Section 155.420(d)(6)(iv) allows individuals to enroll in Exchange coverage if they either experience a change in household income or move to a different state, and as a result become newly eligible for APTC, after they were previously ineligible for APTC solely because of a household income below 100 percent of the FPL and, during the same timeframe, were ineligible for Medicaid because they lived in a non-Medicaid expansion state. Like the other qualifying events at § 155.420(d)(6), this special enrollment period benefits individuals because it allows them to take advantage of APTC for which they were previously ineligible, and we do not believe that it would benefit individuals who newly qualify for APTC but who are not entitled to an APTC amount greater than zero dollars. We also believe that, regarding the group of potentially eligible individuals, increases from a household income of less than 100 percent of the FPL to a household income high enough to qualify for an APTC amount of zero dollars are relatively uncommon.

Finally, § 155.420(d)(6)(v) provides a pathway for individuals who had MEC for at least one of the past 60 days to enroll in Exchange coverage if they experience a decrease in household income and the Exchange newly determines them eligible for APTC. This special enrollment period was established in the 2020 Payment Notice, specifically to permit individuals enrolled in coverage outside of the Exchange to enroll in Exchange coverage based on newly being able to access APTC.

Because this special enrollment period benefits qualified individuals by allowing them to obtain coverage that permits them to qualify for APTC, we do not believe that individuals who newly qualify for an APTC amount of zero dollars generally benefit from this special enrollment period, and they may even be harmed by changing plans mid-year because this would generally cause their deductible and other accumulators to be re-set.

84 FR 17526.

We seek comment on this proposal, including from State Exchanges, regarding whether this definition of APTC eligibility reflects their current implementation of the special enrollment period qualifying events per § 155.420(d)(6), and if not, whether there are policy concerns about this clarification, or the burden of making related changes to Exchange operations. We also seek comment on whether we should provide Exchanges with flexibility in terms of when they are required to ensure that their operations reflect this definition, and whether Exchanges should be permitted to adopt a more inclusive definition, for example, to consider an individual to be newly eligible or ineligible for APTC for purposes of the special enrollment periods at § 155.420(d)(6) based on a change from a zero-dollar maximum APTC amount to APTC ineligibility for another reason per regulations at § 155.305(f).

Additionally, we seek comment on whether the clarification that a qualified individual, enrollee, or his or her dependent is considered APTC ineligible if they meet the requirements at § 155.305(f), but qualify for a maximum APTC amount of zero dollars, should be applied as proposed to all of the special enrollment period qualifying events at § 155.420(d)(6), or whether it should be limited to only apply to some of them. For example, we seek comment on whether we should only apply this clarification to the special enrollment periods at § 155.420(d)(6)(i) and (ii) and (iv) and (v), to permit individuals whose employer-sponsored coverage is no longer considered affordable or no longer meets the minimum value standard to qualify for a special enrollment period to enroll in Exchange coverage through § 155.420(d)(6)(iii) regardless of whether they qualify for an APTC amount of greater than zero dollars.

C. Part 156—Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges

1. User Fee Rates for the 2022 Benefit Year (§ 156.50)

In the December 4, 2020

Federal Register,

we published the 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 part 1 of the 2022 Payment Notice 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 QHPs through the FFE at 2.25 percent of total monthly premiums, and the user fee rate for issuers offering QHPs through SBE-FPs at 1.75 percent of total monthly premiums.

On January 28, 2021, President Biden issued E.O. 14009, “Strengthening Medicaid and the Affordable Care Act,”

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 part 1 of the 2022 Payment Notice final rule 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.

86 FR 7793 (Feb. 2, 2021).

In compliance with E.O. 14009 and as a result of HHS's review of the proposed 2022 Payment Notice and part 1 of the 2022 Payment Notice final rule, we have reanalyzed the additional costs of expanded services, such as consumer outreach and education in the FFE and SBE-FPs, and Navigators in the FFE in 2022. As explained in part 2 of the 2022

Payment Notice final rule,

we indicated the intention to propose to increase the user fee rates for the 2022 benefit year in future rulemaking. Therefore, in this rule, HHS proposes new QHP issuer user fee 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. These proposed rates are based on internal projections of federal costs for providing special benefits to FFE and SBE-FP issuers during the 2022 benefit year, taking into account estimated changes in parameters, specifically the increased funding to the FFE Navigator program and consumer outreach and education. HHS is of the view that pursuit of this proposal is necessary for consistency 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. We believe that expanded outreach and education will lead to broader risk pools, lower premiums, fewer uninsured consumers, and expanded use of Exchange services.

86 FR 24140, 24288.

Section 1311(d)(5)(A) of the ACA permits an Exchange to charge assessments or user fees on participating health insurance issuers as a means of generating funding to support its operations. If a state does not elect to operate an Exchange or does not have an approved Exchange, section 1321(c)(1) of the ACA directs HHS to operate an Exchange within the state. Accordingly, in § 156.50(c), we specify that a participating issuer offering a plan through an FFE or SBE-FP must remit a user fee to HHS each month that is equal to the product of the annual user fee rate specified in the annual HHS notice of benefit and payment parameters for FFEs and SBE-FPs for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an FFE or SBE-FP. In addition, OMB Circular No. A-25 establishes federal policy regarding the assessment of user fee charges under other statutes, and applies to the extent permitted by law. Furthermore, OMB Circular No. A-25 specifically provides that a user fee charge will be assessed against each identifiable recipient of special benefits derived from federal activities beyond those received by the general public.

Activities performed by the federal government that do not provide issuers participating in an FFE with a special benefit, or that are performed by the federal government for all QHPs, including those offered through State Exchanges, are not covered by this user fee. As in benefit years 2014 through 2021, issuers seeking to participate in an FFE in the 2022 benefit year will receive two special benefits not available to the general public: (1) The certification of their plans as QHPs; and (2) the ability to sell health insurance coverage through an FFE to individuals determined eligible for enrollment in a QHP.

a. FFE User Fee Rate

For the 2022 benefit year, issuers participating in an FFE will receive the benefits of the following federal activities:

Under Consumer Information and Outreach:

• Provision of consumer assistance tools;

• Consumer outreach and education; and

• Management of a Navigator program.

Under Health Plan Bid Review, Management, and Oversight:

• Certification processes for QHPs (including ongoing compliance verification, recertification, and decertification); and

• Regulation of agents and brokers.

Under Eligibility and Enrollment:

• Eligibility determinations; and

• Enrollment processes.

Activities through which FFE issuers receive a special benefit also include use of the Health Insurance and Oversight System (HIOS), which is partially funded by FFE and SBE-FP user fees, and the Multidimensional Insurance Data Analytics System (MIDAS) platform, which is fully funded by FFE and SBE-FP user fees. In light of E.O. 14009,

published on January 28, 2021, the administration has a priority to increase accessibility and affordability of health care for every American. Consistent with increasing accessibility for every American an expanded budget for consumer support activities and Navigators was developed, and HHS conducted additional analytic review which revealed that the user fee rates established in part 1 of the 2022 Payment Notice final rule

need to be increased to sustain essential Exchange-related activities. Based on this new analysis of the increased contract costs and projected premiums and enrollment (including changes in FFE enrollment resulting from anticipated establishment of State Exchanges or SBE-FPs in certain states in which FFEs currently are operating) for the 2022 plan year, we are proposing to establish the FFE user fee for all participating FFE issuers at 2.75 percent of total monthly premiums.

86 FR 7793 (Feb. 2, 2021).

86 FR 6138 at 6152.

We seek comment on this proposed FFE user fee rate for 2022.

b. SBE-FP User Fee Rate

As previously discussed, OMB Circular No. A-25 establishes federal policy regarding user fees, and specifies that a user charge will be assessed against each identifiable recipient for special benefits derived from federal activities beyond those received by the general public.

SBE-FPs enter into a Federal platform agreement with HHS to leverage the systems established for the FFEs to perform certain Exchange functions, and to enhance efficiency and coordination between state and federal programs. Accordingly, in § 156.50(c)(2), we specify that an issuer offering a plan through an SBE-FP must remit a user fee to HHS, in the timeframe and manner established by HHS, equal to the product of the monthly user fee rate specified in the annual HHS notice of benefit and payment parameters for the applicable benefit year and the monthly premium charged by the issuer for each policy where enrollment is through an SBE-FP, unless the SBE-FP and HHS agree on an alternative mechanism to collect the funds from the SBE-FP or state.

The benefits provided to issuers in SBE-FPs by the federal government include use of the federal Exchange information technology and call center infrastructure used in connection with eligibility determinations for enrollment in QHPs and other applicable state health subsidy programs, as defined at section 1413(e) of the ACA, and QHP enrollment functions under § 155.400. The user fee rate for SBE-FPs is calculated based on the proportion of FFE costs that are associated with the FFE information technology infrastructure, the consumer call center infrastructure, and eligibility and enrollment services, and allocating a share of those costs to issuers in the relevant SBE-FPs, as issuers in SBE-FPs receive those special benefits and will be able to access the increased consumer support and education.

Similar to the FFE, activities through which SBE-FP issuers receive a special benefit also include use of HIOS, which is partially funded by FFE and SBE-FP user fees, and the MIDAS platform, which is fully funded by FFE and SBE-FP user fees. In light of E.O. 14009,

the

administration has a priority to increase accessibility and affordability of health care for every American. Consistent with increasing accessibility for every American an expanded budget for consumer support activities and Navigators was developed, and HHS conducted additional analytic review which revealed that the user fee rates established in part 1 of the 2022 Payment Notice final rule

need to be increased to sustain essential Exchange-related activities. Based on this new analysis of the increased contract costs and projected premiums and enrollment (including changes in FFE enrollment resulting from anticipated establishment of State Exchanges or SBE-FPs in certain states in which FFEs currently are operating) for the 2022 plan year, we are proposing to establish the SBE-FP user fee for all participating SBE-FP issuers at 2.25 percent of the monthly premium charged by the issuer for each policy under plans offered through an SBE-FP for benefit year 2022. We seek comment on the SBE-FP user fee rate for 2022.

86 FR 7793 (Feb. 2, 2021).

86 FR 6138 at 6152.

c. 2023 Exchange DE Option User Fee Rate

In the January 19, 2021

Federal Register

(86 FR 6138), we published part 1 of the 2022 Payment Notice final rule that codified § 155.221(j), which established a process for states to elect a new Exchange DE option. When finalizing this new Exchange option, we also finalized a 2023 user fee rate of 1.5 percent of the total monthly premiums charged by issuers for each policy in FFE and SBE-FP states that elect the Exchange DE option. As explained above, we propose to repeal the Exchange DE option, accordingly we also propose to repeal the user fee rate associated with § 155.221(j) for the FFE-DE and SBE-FP-DEs for 2023. We seek comment on this proposal.

2. Provision of EHB (§ 156.115)

We propose a technical amendment to § 156.115. Section 156.115(a)(3) provides that, to satisfy the requirement to provide EHB, a health plan must provide mental health and substance use disorder services, including behavioral health treatment services required under § 156.110(a)(5), in a manner that complies with the parity standards set forth in § 146.136, implementing the requirements under MHPAEA. Instead of referencing the regulation implementing MHPAEA, we propose to reference section 2726 of the PHS Act and its implementing regulations. We propose this change to make clear that health plans must comply with all the requirements under MHPAEA, including any amendments to MHPAEA, such as those made by the Consolidated Appropriations Act, 2021,

in order to satisfy the EHB requirements.

See section 203 of Title II of Division BB of the Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27, 2020).

3. Network Adequacy (§ 156.230)

As discussed in more detail in the preamble to § 155.20, on March 4, 2021, the United States District Court for the District of Maryland decided

City of Columbus

Cochran,

2021 WL 825973 (D. Md. Mar. 4, 2021). One of the policies the court vacated was the 2019 rule's elimination of the federal government's reviews of the network adequacy of QHPs offered through the FFE in certain circumstances by incorporating the results of the states' reviews.

This policy was first announced in the 2018 Letter to Issuers in the Federally-facilitated Marketplaces, December 16, 2016, available at

https://wayback.archive-it.org/2744/20200125161008/

https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf.