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

Federal RegisterSep 27, 2021

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DEPARTMENT OF THE TREASURY

31 CFR Part 33

RIN 1505-AC78

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 147, 155, and 156

[CMS-9906-F]

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

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This final rule sets forth revised 2022 user fee rates for issuers offering qualified health plans (QHPs) through federally-facilitated Exchanges and State-based Exchanges on the Federal platform; repeals separate billing requirements related to the collection of separate payments for the portion of QHP premiums attributable to coverage for certain abortion services; expands the annual open enrollment period and Navigator duties; implements 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, available during periods of time during which APTC benefits are available such that certain applicable taxpayers' applicable percentage is set at zero, such as during tax years 2021 and 2022 under the section 9661 of the American Rescue Plan Act of 2021; repeals the recent establishment of a Direct Enrollment option for Exchanges; and modifies regulations and policies related to section 1332 waivers.

DATES:

This final rule is effective on November 26, 2021.

FOR FURTHER INFORMATION CONTACT:

Adrianne Patterson, (410) 786-0686, 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 the annual open enrollment period.

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

Nikolas Berkobien, (301) 492-4400, for matters related to standardized options.

Aaron Franz, (410) 786-8027, 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:

Table of Contents

I. Executive Summary

II. Background

A. Legislative and Regulatory Overview

B. Stakeholder Consultation and Input

C. Structure of the Final Rule

III. Provisions of the Updating Payment Parameters and Improving Health Insurance Markets for 2022 and Beyond Final Rule and Responses to Public Comments

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 Final Rule for Section 1332 Waivers and Responses to Public Comments

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)

VI. 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 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 rule finalizes 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, HHS refers to the two statutes collectively as the “Affordable Care Act” or “ACA.”

On January 28, 2021, President Biden 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” or the “Secretary of HHS”), 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).

Those who have insurance frequently face barriers to using it 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. Today, of the 30 million uninsured, half are people of color.

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.

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.

“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 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, 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 analyzed whether certain policies and requirements addressed in this final rule 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 HHS's analyses led to the policies and rules finalized in this rule.

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

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

HHS amends § 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.

HHS also amends § 155.210(e)(9) to reinstitute previous requirements that Navigators in federally-facilitated Exchanges (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.

HHS also finalizes the removal of § 155.221(j) and repeal of the Exchange Direct Enrollment option which established a process for State Exchanges, State-based Exchanges on the Federal platform (SBE-FPs), and FFEs 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, HHS amends § 155.410(e) to lengthen the annual open enrollment period for coverage through all individual market Exchanges to November 1 through January 15, as compared to the current annual open enrollment period of November 1 through December 15, and HHS codifies flexibility for State Exchanges that operate their own eligibility and enrollment platform to set annual open enrollment period end dates no earlier than December 15.

HHS adds 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 Federal poverty line (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. This monthly special enrollment period will be available during periods of time when APTC benefits are available such that the applicable taxpayers' applicable percentage is set at zero, such as during tax years 2021 and 2022, as provided by section 9661 of the American Rescue Plan Act of 2021 (Pub. L. 117-2) (ARP). HHS also clarifies, 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 will ensure that § 155.420 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, HHS is finalizing 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 the HHS Notice of Benefit and Payment Parameters for 2022 (hereinafter referred to as “part 1 of the 2022 Payment Notice final rule”).

These finalized 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.

86 FR 6138.

HHS is also finalizing 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.

HHS is repealing 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, HHS will revert to, finalize, and codify the 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. As finalized, 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 (Feb. 27, 2015).

This rulemaking also finalizes modifications to the section 1332 Waivers for State Innovation (referred to throughout this rule as section 1332 waivers) implementing regulations, including changes to many of the policies and interpretations of the statutory guardrails recently codified in regulation. The policies and interpretations finalized in this rule 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 the statutory guardrails in part 1 of the 2022 Payment Notice final rule.

HHS and the Department of the Treasury (collectively, the Departments) are also finalizing flexibilities in the public notice requirements and post award public participation requirements for section 1332 waivers under certain future emergent situations. The Departments are also finalizing the processes and procedures for amendments and extensions for approved waiver plans.

83 FR 53575.

86 FR 6138.

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 the 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 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 AV 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 collected through this payment for abortion services for which Federal funds are prohibited 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 Health Care Improvement Act, per section 1311(c)(6)(D) 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 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), HHS 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), HHS 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), HHS 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. In light of court rulings in the ongoing litigation in Federal courts in Maryland, Washington, and California challenging the separate billing regulation,

the separate billing policy is not currently in effect.

Washington

Azar,

461 F. Supp. 3d 1016 (E.D. Wash. 2020);

Planned Parenthood of Maryland, Inc.

Azar

, No. CV CCB-20-00361 (D. Md. July 10, 2020);

California

U.S. Dep't of Health & Hum. Servs.,

473 F. Supp. 3d 992 (N.D. Cal. July 20, 2020).

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), HHS released further guidance related to guaranteed availability. In the 2019 Payment Notice final rule in the April 17, 2018

Federal Register

(83 FR 17058), HHS 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 the 2022 Payment Notice final rule in the May 5, 2021

Federal Register

(86 FR 24140) (hereinafter referred to as the “part 2 of the 2022 Payment Notice final rule”), HHS 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

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

Federal Register

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

Federal Register

(76 FR 41865), HHS 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), HHS set forth standards related to Exchange user fees. HHS 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), HHS finalized changes related to network adequacy and provider directories.

In the 2017 Payment Notice in the March 8, 2016

Federal Register

(81 FR 12203), HHS finalized six standardized plan options to simplify the plan selection process for consumers on the Exchanges and codified SBE-FPs along with relevant requirements, including the associated user fee. In the 2017 Payment Notice, HHS also finalized policies relating to network adequacy for QHPs on the FFEs. In the May 11, 2016

Federal Register

(81 FR 29146), HHS published an interim final rule with amendments to the parameters of certain special enrollment periods (2016 Interim Final Rule). HHS finalized these amendments 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 April 18, 2017 Market Stabilization final rule

Federal Register

(82 FR 18346), HHS 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), HHS 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 (ESC) verification and non-enforcement discretion for Exchanges that do not conduct random sampling to verify whether an employer offers ESC until plan year 2021.

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

Federal Register

(86 FR 6138), HHS 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) HHS 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). HHS 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), HHS 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 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-2015-12-16/pdf/2015-31563.pdf.

B. Stakeholder Consultation and Input

HHS consulted with stakeholders on policies related to the operation of Exchanges relevant to the policies in this final rule. HHS held a number of listening sessions with consumers, providers, employers, health plans, advocacy groups and the actuarial community to gather public input. HHS has solicited input from state representatives on numerous topics, particularly the direct enrollment option for FFEs, SBE-FPs and State Exchanges.

HHS 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. HHS considered all public input it received as HHS developed the policies in this rule.

C. Structure of Final Rule

The regulations outlined in this final rule were proposed in the “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” published in the July 1, 2021

Federal Register

(86 FR 35156 through 35216) and will be codified in 45 CFR parts 147, 155, and 156. In addition, the regulations outlined in this final rule governing waivers under section 1332 of the ACA at 45 CFR part 155 subpart N will also be codified in 31 CFR part 33.

The changes to part 147 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 special enrollment period at § 155.420(d)(16).

The changes to part 155 repeal the establishment of the Exchange DE option, which established a process for State Exchanges, SBE-FPs, and FFEs to elect to transition 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. HHS is finalizing an extension of the annual individual market open enrollment period to end on January 15 of the applicable year, rather than December 15 of the previous year beginning with the open enrollment period for the 2022 coverage year, and HHS is codifying flexibility for State Exchanges that operate their own eligibility and enrollment platform to set individual market annual open enrollment period end dates no earlier than December 15 and to adopt accelerated effective dates. HHS is also finalizing the reinstitution of previous requirements that Navigators in FFEs 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. HHS is further finalizing the provision of 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 for periods of time during which enhanced APTC benefits are also available, such that certain applicable taxpayers' applicable percentage is set at zero, as provided by the section 9661 of the ARP or any subsequent statute or rule. HHS is finalizing a clarification that, for purposes of the special enrollment periods provided at § 155.420(d), a qualified individual, enrollee, or his or her dependent who is eligible for APTC 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 changes to part 156 update the user fee rates for the 2022 benefit year for all issuers participating on the Exchanges using the Federal platform. HHS is also finalizing the repeal of the separate billing requirement, which required 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, HHS is finalizing an update to cross reference to mental health parity standards in the provision of EHB regulations.

The changes in 31 CFR part 33 and 45 CFR part 155 related to section 1332 waivers rescind the previous incorporation into regulation of certain policies and interpretations announced in the 2018 Guidance and are adopting new policies and interpretations for the statutory guardrails. The Departments are finalizing modifications to the section 1332 implementing regulations, and the proposals related to section 1332 waivers, which include adoption of processes and procedures for

amendments and extensions for approved waiver plans. Additionally, the Departments are finalizing the extension of 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 the Final Rule and Analysis and Responses to Public Comments

In the July 1, 2021

Federal Register

(86 FR 35156) HHS published the “Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond” proposed rule.

HHS received a total of 390 comments, including 168 comments that were substantially similar to one form letter. Comments were received from state entities, such as departments of insurance and State Exchanges, health insurance issuers, providers and provider groups, consumer groups, industry groups, national interest groups, and other stakeholders. The comments ranged from general support for the proposed rule, to specific support of or opposition to the proposed provisions, to specific questions regarding proposed changes. HHS also received a number of comments and suggestions that were outside the scope of the proposed rule. These out-of-scope comments are not addressed in this final rule.

86 FR 35156.

In this final rule, HHS provides a summary of proposed provisions, a summary of the public comments received that directly related to those proposals, its responses to these comments and a description of the provisions HHS is finalizing.

HHS first addresses comments regarding the publication of the proposed rule and the comment period.

Comment:

Some commenters were concerned about the length of the comment period, stating that a longer comment period is necessary to allow stakeholders to review the proposed rule and provide thoughtful comments. Some commenters expressed concern that HHS should not calculate the comment period from the posting of the public inspection version, and that HHS would not have time to adequately review and consider all the comments before issuing a final rule.

Response:

HHS disagrees that the comment period was not long enough to allow stakeholders to provide meaningful comments. HHS found commenters' submissions to be thoughtful and reflective of a detailed review and analysis of the proposed rule. HHS notes that in the interest of providing valuable information for issuers to set their rates for the 2022 plan year as soon as possible, HHS started the 30-day comment period with the posting of the rule for public inspection.

HHS further recognizes the importance of Federal agencies reviewing and considering all the relevant comments before issuing a final rule. The comment period for the proposed rule closed on July 28, 2021. HHS has had ample time to review and fully consider comments relevant to the rules and policies addressed in this final rule.

Comment:

HHS received several comments of general support for the rule and for the proposed provisions which expand access to affordable health coverage. Some commenters expressed support for EOs 13985 and 14009. Other commenters expressed concern regarding the timing of the rule and the repeal of policies finalized in part 1 of the 2022 Payment Notice final rule.

A few commenters stated that this rule is being published too late in the 2021 plan year for policy implementation and rate-setting for the 2022 plan year.

86 FR 24140.

Response:

HHS recognizes that this rulemaking has occurred later than usual in the plan year. However, HHS believes that the policies finalized in this rule align with the goals included in EOs 13985 and 14009.

See 86 FR 7009 (Jan. 25, 2021) and 86 FR 7793 (Feb. 2, 2021).

While several of the policies in this final rule do not directly impact rate-setting, this final rule is being released prior to the September 21, 2021 deadline for signing final QHP agreements to participate in FFEs and SBE-FPs during the 2022 plan year. The purpose of the policies in this final rule is to strengthen the health insurance markets comprising plans that are subject to the ACA market reforms, and HHS encourages issuers to continue their participation in the Exchanges for 2022. HHS also believes that there is sufficient time to implement the applicable policies in advance of the start of the 2022 plan year.

Comment:

One commenter requested that HHS assess and address systemic barriers to access for American Indian and Alaskan Native populations and establish guidance to address the social determinants of health that affect these communities and other communities of color.

Response:

While this comment is outside of the scope of this rule, HHS appreciates this feedback. HHS notes that it is actively seeking ways to engage with stakeholders in an effort to advance health equity and address the social determinants of health that disparately impact communities of color in line with E.O. 13985 as described previously.

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

1. Guaranteed Availability of Coverage (§ 147.104)

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

As further discussed in the preamble section regarding the 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)), HHS is finalizing the proposed special enrollment period with amendments, so that it is available only during periods of time during which APTC benefits are available such that the applicable taxpayers' applicable tax percentage is set at zero, such as during tax years 2021 and 2022, as provided by section 9661 of the ARP. HHS is otherwise finalizing this new special enrollment period as proposed, including adding 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. HHS proposed 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 that is not a QHP offered through an Exchange.

HHS requested comment on this proposal. HHS did not receive many comments on this aspect of the proposed special enrollment period. However, comments that HHS did receive supported the proposal to not require issuers to provide the proposed special enrollment period for consumers to enroll in coverage off-Exchange. HHS appreciates this support and is finalizing the proposed special enrollment period to specify that issuers are not required to provide it in the individual market with respect to coverage offered outside of an Exchange.

See

IRC 36B(b)(2)(A), (c)(2)(A)(i).

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 HHS had promulgated in the 2019 Payment Notice final rule. The court vacated four of these policies. One of the policies vacated was the 2019 Payment Notice's cessation of the practice of designating some plans in the FFEs as “standardized options.”

Additionally, in July 2021, President Biden's Executive Order 14036 on Promoting Competition in the American Economy directed HHS to standardize plan options in order to facilitate the plan selection process for consumers on the Exchanges.

See 83 FR 16974-16975.

See 86 FR 36987 (Jul. 9, 2021).

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

HHS 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, HHS will also need to design and propose new standardized options that otherwise meet current market reform requirements.

HHS 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's 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 in time for the annual open enrollment period 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 HHS finalized in the 2018 Payment Notice, HHS created three sets of standardized options based on FFE and SBE-FP enrollment data and state cost-sharing laws. The basis on which HHS 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 State Exchanges), have changed considerably since the last iteration of standardized options in 2018. Further, HHS does 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 standardized options suitable for the current environment. Additionally, in prior years, HHS 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 HHS would propose and decide whether or not to offer them if such proposals were made effective before the 2023 plan year.

For these reasons, HHS intends to resume the designation of standardized options and to propose specific plan designs in more complete detail in the 2023 Payment Notice. HHS sought the views of stakeholders regarding issues related to the proposal of new standardized options, including the views of states with FFEs or SBE-FPs regarding how unique state cost-sharing laws could affect standardized option plan designs.

The following is a summary of the comments received and HHS's responses related to standardized options.

Comment:

Some commenters recommended not requiring issuers to offer standardized options. Some commenters also recommended permitting issuers to voluntarily offer standardized options in states with State Exchanges, including SBE-FPs, even if issuers in the FFEs were required to offer them. Some commenters also noted opposition to limiting the number of non-standardized plans issuers could offer. Some commenters also recommended not preferentially or differentially displaying standardized options on

HealthCare.gov

These commenters explained that issuers are already required to cover the EHB at specified metal tiers of coverage, which provides consumers a sufficient degree of standardization. These commenters also explained that requiring issuers to offer standardized options could result in an influx of options that fail to provide additional value to consumers and make it more difficult to compare plan options. These commenters also explained that limiting the number of non-standardized plans issuers could offer would inhibit innovative plan designs that meet diverse coverage needs. These commenters also explained that the preferential or differential display of standardized options would appear to favor some plans over others, inadvertently steer consumers towards standardized plans, and discourage consumers from exploring all available options. These commenters recommended that CMS identify issuers with a disproportionately high volume of plan options in a given geographic region and work with these issuers to ensure there are actual meaningful differences among the plans.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

Some commenters recommended that CMS should employ a minimally disruptive approach in designing standardized options and not design plans to be radically different from those currently offered. These commenters explained that such plans would be more complicated for issuers to develop and could be challenging for consumers to interpret. These commenters recommended that CMS offer standardized options that are based on the most popular plans currently offered on the Exchanges, a similar approach to that taken in past iterations. Several of these commenters also recommended that CMS not be overly prescriptive in standardizing every aspect of cost sharing, but instead focus on setting annual deductible and out-of-pocket limits.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

Some commenters explained that plan standardization could stifle competition. These commenters explained that if cost sharing is standardized, the only difference between plans will be networks. These commenters also explained that if standardization strengthens the importance of networks while deemphasizing other aspects of coverage, issuers may not stay in markets where network costs exceed their competitors'. These commenters further explained that with every additional aspect of coverage that is standardized, issuers will have to consider their ability to compete as

potential areas to innovate and differentiate are limited.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

Commenters also expressed support for requiring issuers to offer standardized options, limiting the number of non-standardized plans that issuers could offer, and preferentially or differentially displaying standardized options.

Commenters explained the importance of simplifying the complex process of purchasing insurance and the important role that standardized options could play in that simplification. Commenters explained that there is significant variation in the cost sharing structures of non-standardized plans, much of which cannot be identified without a detailed analysis of benefit designs. Commenters explained that many individuals do not have the time, resources, or health literacy necessary for this level of analysis. Commenters explained that enrollees typically choose plans based on more readily available comparison points, like premiums, rather than factors that would be illuminated by a more detailed examination of plan designs, like expected out-of-pocket costs. Commenters explained that selecting a plan solely based on its premium without taking into consideration other attributes of its design, such as its cost sharing structure, deductible, or expected out-of-pocket costs, can result in unexpected costs and financial harm for consumers.

Commenters explained that barriers to conducting a detailed analysis of plan designs are particularly pronounced for those whose resources are already severely constrained, including those with limited English proficiency, those with inadequate internet access, and those with complex health needs. Commenters explained that facilitating consumer understanding and streamlining decision-making would benefit these populations as well as populations with disproportionately high rates of chronic diseases.

Commenters also explained that standardized plans could help individuals more easily identify plans that have potentially discriminatory benefit designs, such as plans that have coinsurance subject to the deductible as the cost sharing type for specialty tier prescription drugs. These commenters explained that discriminatory benefit designs target individuals with particular disabilities or health conditions by leaving them with substantial out-of-pocket costs. Commenters explained that conditions that are typically targeted, including HIV, diabetes, cancer, and mental health conditions, disproportionately affect individuals of color. Commenters explained that discriminatory benefit designs continue to violate the ACA's protections for people with preexisting conditions and its prohibition on discrimination based on race, sex, and disability.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

Commenters also recommended taking a more prescriptive approach beyond requiring issuers to offer standardized plans, limiting the number of non-standardized plans, and preferentially or differentially displaying standardized plans. These commenters recommended requiring issuers to offer standardized options exclusively, pointing to Covered California's approach, which has required issuers to offer standardized plans exclusively since 2014. These commenters explained that in Covered California's approach, to the extent issuers want to offer non-standardized products, they need to demonstrate that such designs are also patient-centered. These commenters explained that issuers in California have not seen the value in offering non-standardized options to date, suggesting that California's approach to standardized options has satisfied the needs of issuers and enrollees alike.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

Commenters also made recommendations regarding specific aspects of standardized plan designs. Some commenters expressed concern about the cost-sharing structure in the first set of standardized plans in the 2018 Payment Notice in particular, which had coinsurance subject to the deductible as the form of cost sharing for occupational, physical, and speech therapies. Many commenters also noted a strong preference for copayments over coinsurance as the form of cost sharing for as many benefit categories as possible. These commenters explained that consumers prefer copayments to coinsurance because copayments are more transparent and make it easier to predict out-of-pocket costs. Commenters also explained that in the context of prescription drugs, the use of coinsurance results in patients paying cost sharing amounts based on a medicine's list price, rather than a medicine's net price, which accounts for manufacturer discounts and rebates paid to pharmacy benefit managers (PBMs) and issuers. Some commenters recommended that standardized plans include a nominal cost-sharing cap in the form of copayments for all tiers of prescription drug coverage to limit the amount that consumers spend on prescriptions every month, as several states have already done.

Commenters also recommended having low deductibles, explaining that deductibles act as a barrier to access. One commenter pointed to Washington's standardized plans, which have a deductible that is on average $1,000 less than non-standard offerings and provide more pre-deductible services. Commenters also recommended exempting a range of benefits from the deductible, including primary care visits, specialist visits, outpatient visits, mental health services, habilitative and rehabilitative services, pediatric preventative services, preventative care, chronic condition management, and prescription drug coverage. One commenter explained that any standardized plan that is also a high deductible health plan (HDHP) should provide pre-deductible coverage for preventive care the Internal Revenue Service (IRS) has determined is permitted to be provided without a deductible pursuant to section 223(c)(2)(C) of the Code.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

Comment:

One commenter recommended delaying the implementation of standardized options requirements until plan year 2024 to allow issuers sufficient time to prepare for this change.

Response:

HHS will take these considerations into account when designing the standardized options that will be proposed in the 2023 Payment Notice.

2. Navigator Program Standards (§ 155.210)

HHS proposed 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. HHS has 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).

HHS has 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.

HHS proposed 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, HHS 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 August 27, 2021, HHS awarded $80 million in grant funding to 60 Navigator grantees in 30 states with an FFE for the 2022 plan year.

With this substantially increased funding for the FFE Navigator program for the 2022 plan year, HHS noted that HHS believes there will be sufficient Navigator grant funding available to support the post-enrollment duties HHS proposed to once again require of FFE Navigators. HHS also noted that HHS believes 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, the proposal was 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 PTC 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/biden-harris-administration-quadruples-number-health-care-navigators-ahead-healthcaregov-open.

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, HHS proposed 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. HHS noted that HHS was 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. HHS noted that HHS believes 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. HHS discussed that HHS would interpret the 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 Federal income tax filing process and how to claim them, and understanding the availability of the IRS resources on this topic. HHS proposed 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). HHS noted that HHS believes that the proposal was 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, HHS proposed 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. As explained in the proposed rule, 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. The proposal stemmed 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. As explained in the proposed rule, FFE Navigators would be required to help consumers obtain IRS Form 1095-A, Health Insurance Marketplace Statement, and Form 8962, Premium Tax Credit (PTC), and the instructions for Form 8962, and to provide general information, consistent with applicable IRS guidance, about the significance of the forms. HHS noted that, as proposed, 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.

HHS noted that, as proposed, 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 the proposal included a requirement that Navigators provide consumers with information and assistance understanding the availability of IRS resources, HHS noted that 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, HHS proposed 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.

HHS notes that HHS did not propose 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 MEC 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).

In the proposed rule, HHS discussed that it interprets 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. HHS has 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, HHS proposed 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. HHS also proposed to expand its interpretation of this requirement and the activities that fall within the requirement's scope. As explained in the proposed rule, these activities could be supported through the use of existing resources such as the CMS “From Coverage to Care” initiative, which HHS encourages Navigators to review, and which are now available in multiple languages.

HHS noted that, as proposed, the provision would improve consumers' access to health coverage information, not just when selecting a plan, but also when using their coverage.

See

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

HHS noted that HHS believes expanding its 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, HHS noted that 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, HHS noted that 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, HHS noted that HHS is not requiring Navigators to help consumers with specific health literacy topics. Instead, HHS proposed to expand its interpretation of the Navigator duties 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. HHS noted that, if this proposal were 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, Pub. L. 116-260 (Dec. 27, 2020).

HHS noted that, as proposed, FFE Navigators would continue to be permitted to perform the Navigator duties specified in § 155.210(e)(9) until this provision, if finalized, became effective. HHS explained that if the proposal was 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 the proposal was finalized prior to Navigator grant funding being awarded in fiscal year (FY) 2022, FY 2021 Navigator grantees would 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 the provision, if finalized, becomes effective, HHS noted that 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. HHS also noted that if the provision was finalized as proposed, HHS 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.

HHS discussed in the proposed rule that HHS interprets 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, HHS noted that Navigators are already permitted, but not required, to help with a variety of other post-enrollment issues. For example, HHS noted that HHS interpreted 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. HHS also noted that HHS interpreted 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, HHS noted that HHS interpreted 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 HHS did not propose to require CACs to further expand their required duties, HHS noted that HHS encouraged CACs to help with activities consistent with their existing regulatory duties and recognized that many of these CACs may already be participating in these post-enrollment activities.

The following is a summary of the comments received and HHS's responses related to Navigator program standards at § 155.210.

Comment:

The vast majority of comments HHS received in relation to this proposal expressed enthusiastic support. Many commenters stated that they believe it is important that high-quality consumer assistance to help people find, keep, and use health coverage be free and widely available. Several commenters emphasized that this was particularly important for individuals with limited English proficiency (LEP) or those who lack basic health insurance literacy to reduce health disparities in rural and underserved communities, including the Black, Indigenous, and other People of Color (BIPOC) community. Additionally, several commenters supported and noted the importance of increased funding for the Navigator program.

Response:

HHS appreciates the comments in support of this proposal and is finalizing the proposal 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 as proposed. HHS also appreciates commenters' support of increased

funding for the Navigator program, which has funded 60 Navigator grantees in 30 FFE states for plan year 2022.

Comment:

A few commenters said they believe the proposed Navigator duties duplicate services provided by issuers or agents and brokers. A few commenters suggested that Navigators be required to be licensed, carry errors and omissions insurance, and be under the oversight of state regulators.

Response:

HHS believes it is important for consumers to have access to a variety of assistance options. HHS especially believes it is important that consumers have access to Navigators who, unlike agents and brokers, are required under § 155.210(e)(2) to provide information and services in a fair, accurate, and impartial manner, and to abide by the conflict of interest provision at § 155.210(d)(4) prohibiting Navigators from receiving any consideration directly or indirectly from any health insurance issuer or issuer of stop loss insurance in connection with the enrollment of any individuals or employees in a QHP or a non-QHP. Although they are not required by CMS to carry errors and omissions insurance, Navigators are required to complete HHS-approved training, achieve a passing score on all approved certification examinations, and be certified or recertified on at least an annual basis before carrying out any consumer assistance functions under § 155.210. Additionally, Navigators in all states are required under § 155.210(c)(1)(iii) to meet any licensing, certification, or other standards prescribed by the state or Exchange, if applicable, so long as the standards do not prevent the application of the provisions of title I of the ACA.

Comment:

A few commenters expressed concern that CMS did not propose to restore the requirements to have at least two in-person Navigator organizations in each state and to ensure that at least one of those organizations was a community and consumer-focused nonprofit group.

Response:

HHS recognizes that trusted community non-profits and in-person presence are desirable qualities for Navigator organizations, and that these can be particularly valuable in serving vulnerable populations such as minorities, individuals with LEP, and individuals with disabilities. However, the existing Navigator grant process already gives considerable weight to the capacity of the Navigator organization to serve vulnerable populations, including those who may need communications assistance, lack broadband access, or have specialized needs. Therefore, HHS believes that reinstating these requirements would not be beneficial to Exchanges, as they currently have the flexibility to award funding to the number and type of entities that will be most effective for the specific Exchange, thus optimizing use of the funding amounts available to direct investments to effective and efficient Navigators, which may include selecting a single, high performing grantee in an Exchange.

Additionally, reinstating the requirement that one Navigator grantee in each Exchange must be a community and consumer-focused nonprofit group may unnecessarily limit an Exchange's ability to award grants to the strongest applicants, particularly in an Exchange that opts to have only one Navigator grantee, and where the strongest applicant is not a community and consumer-focused nonprofit group. Reinstating this requirement would effectively exclude any other type of statutorily eligible entities from becoming Navigators in an Exchange that opts to have only one Navigator grantee and would limit an Exchange's ability to target to the highest scoring and performing entities, regardless of organization type.

Comment:

A few commenters suggested HHS reinstate the requirement that Navigators receiving grants maintain a physical presence in the Exchange service area.

Response:

HHS agrees with commenters who emphasized the importance of providing more flexibility to each Exchange to structure its Navigator program to best serve the Exchange's service area. HHS believes that entities with a physical presence and strong relationships in their FFE service areas tend to deliver the most effective outreach and enrollment results. Navigator grant applicants that demonstrate the ability to maintain these relationships and establish new relationships through a physical presence in their proposed service area(s) may receive a higher score on their application than those who do not. The majority of HHS's 2021 Navigator grantees will be maintaining a physical presence in the state they are serving, and there will be at least one physically present Navigator organization in every FFE state. Additionally, nothing in this final rule prevents an Exchange from selecting grantees that are physically present and available to provide a spectrum of in-person, local outreach, education, and assistance, including directing these services towards vulnerable and underserved populations, if the Exchange elects to weight its selection process in that way and its selection process is consistent with section 1311(i)(2)(A) of the ACA and § 155.210(c)(1)(ii).

After consideration of the comments received, HHS is finalizing the proposals as proposed. FFE Navigators will continue to be permitted to perform the Navigator duties specified in § 155.210(e)(9) until Navigator grants are awarded in 2022. FFE Navigators will be required to perform the Navigator duties specified in § 155.210(e)(9) beginning with Navigator grants awarded in 2022, including non-competing continuation awards. Thus, prior to Navigator grant funding being awarded in 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.

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

In part 1 of the 2022 Payment Notice final rule, HHS 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 transition to private-sector enrollment pathways 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. These private-sector pathways could be offered in addition to or instead of a centralized eligibility and enrollment website operated by an Exchange. 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. HHS 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, 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, HHS proposed to remove § 155.221(j) and repeal the Exchange DE option.

On January 20, 2021, President Biden issued the 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 FFEs.

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 August 10, 2021, 2.5 million consumers have enrolled in coverage through

HealthCare.gov

and the State Exchanges, 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/press-releases/more-25-million-americans-gain-health-coverage-during-special-enrollment-period.

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. The approximately 2.5 million consumers that have enrolled in coverage through

HealthCare.gov

and the State Exchanges during the COVID-19 special enrollment period have reduced their monthly premiums by $40 per person per month due to the ARP's premium credits, with more than one-third of consumers finding coverage for $10 or less per month. In addition, out-of-pockets costs have fallen for new consumers that have enrolled since April, with the median plan deductible falling by nearly 90 percent from $450 to $50.

Public Law 117-2.

https://www.cms.gov/newsroom/press-releases/more-25-million-americans-gain-health-coverage-during-special-enrollment-period.

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 its 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, HHS determined that all available resources should be directed to ensuring HHS is 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 take steps and expend resources to end these new procedures since 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, HHS proposed to repeal the Exchange DE option. As explained in the proposed rule, this would 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.

HHS further explained that 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 DE entities preceding the addition of § 155.221(j). In addition, the FFEs have already implemented the DE program (including classic direct enrollment and enhanced direct enrollment, or EDE), 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, HHS noted that nothing in the previous regulatory framework prohibited State Exchanges from engaging DE entities similar to the FFEs in order to supplement Exchange operations in their states should they so choose. HHS also noted that although HHS understands that several State Exchanges have engaged with DE 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 initial proposal to establish the Exchange DE option. HHS further noted that, to date, no state had expressed interest in implementing the Exchange DE option.

The FFE DE 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, HHS explained in the proposed rule that HHS 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, HHS noted that HHS believed 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 DE entities operating in a state. HHS noted that such a shift would be particularly harmful now when over 2.5 million consumers have relied upon and successfully navigated

HealthCare.gov

and State Exchange websites during the COVID-19 special enrollment period to enroll in Exchange coverage. HHS also agreed 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 DE 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 DE entities could also potentially disrupt coordination of coverage with other insurance affordability programs, including Medicaid and CHIP, which is inconsistent with HHS's “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 in comprehensive coverage, and could have additional downstream impacts including an increased uninsured or underinsured population, or more consumers enrolling in less comprehensive coverage options. 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 underserved 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.

After 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-19 special enrollment period, and because no state had yet expressed interest in implementing the Exchange DE option, HHS proposed 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), HHS also proposed to repeal the accompanying user fee rate for FFE-DE and SBE-FP-DE states for 2023.

The following is a summary of the comments received and HHS's responses to the proposed repeal of the Exchange DE option (§ 155.221(j)).

Comment:

The overwhelming majority of commenters supported the proposal to repeal the Exchange DE option. These commenters both endorsed the rationale behind this proposal, and reiterated concerns about the potential negative ramifications of the Exchange DE option that were expressed in comments when the Exchange DE option was originally proposed in the 2022 Payment Notice. These include a lack of empirical research to quantify potential impacts or demonstrate the value that would be added by implementation of this option; the potential for consumer confusion due to fragmentation among multiple DE entities; the potential for DE entities with misaligned incentives to steer consumers toward less comprehensive coverage options or fail to inform consumers that they are eligible for Medicaid or CHIP; an increase in funding and resources that would be needed to provide effective oversight; and other downstream impacts, including the potential for an increase in uninsured and underinsured populations, particularly within the QHP, Medicaid, and CHIP populations.

Several commenters also raised health equity concerns, asserting that the Exchange DE option could have a disproportionate impact on certain underserved or historically-marginalized groups, and others that face barriers navigating the health care system to get coverage. Supporting commenters commented on behalf of those with pre-existing conditions, the LGBTQ+ population, women and children, those with substance use disorders, young adults, and others. One commenter noted that the Exchange DE option would disproportionately impact historically-marginalized populations by making Medicaid less accessible, asserting that DE entities do not necessarily provide Medicaid eligibility information to consumers. Another commenter noted that making Medicaid less accessible would be particularly harmful to women of color and those in the LGBTQ+ community who, due to discrimination and depressed wages, are disproportionately eligible for Medicaid and CHIP. Several commenters expressed concern that the Exchange DE option would disproportionately impact people with substance use disorders and mental health conditions given the increased prevalence of those conditions during the PHE. Commenters expressed concern that those with limited health literacy also could be particularly harmed by the Exchange DE option, citing consumers in underserved communities, young people, people who do not speak English as a first language, and others. These commenters

stated that such consumers are particularly susceptible to being harmed by insufficient information, coverage, and hidden costs. One commenter also noted that women generally have more health care needs and are more vulnerable to high health costs, which means enrolling in substandard coverage could result in care being delayed or denied, medical debt, and overall worse health outcomes. Commenters also noted that the potential increase in the number of consumers enrolled in substandard coverage as a result of the Exchange DE option would be particularly harmful for consumers with pre-existing conditions, since through such substandard coverage they could experience a denial of coverage due to their pre-existing conditions. Most of these commenters underscored that health equity concerns are heightened by the ongoing PHE.

Supporting commenters strongly encouraged the repeal to be finalized as proposed to remedy these concerns and protect consumers, particularly underserved and historically-marginalized consumers.

Response:

HHS appreciates the support of this proposal and generally agrees with commenters' concerns, particularly those regarding the potential negative impacts to underserved and historically-marginalized consumers during the PHE. The new enrollment and coverage opportunities available to consumers, including the special enrollment period to enroll in Exchange coverage through

HealthCare.gov

or their State Exchange website during the COVID-19 PHE, and the increased financial assistance under the ARP, have proven to be successful at increasing enrollment in comprehensive coverage options, such as ACA coverage offered through Exchanges.

HHS believes it is critical to build on this success by maximizing opportunities for consumers to get comprehensive ACA coverage through the Exchanges and to enroll in insurance affordability programs (for example, Medicaid and CHIP), when eligible. Moreover, HHS believes that this will best serve underserved and historically-marginalized groups, as well as support health equity. For example, as raised in comments that are summarized earlier in this preamble, consumers in these groups tend to have a greater need for more comprehensive coverage (for example, those with pre-existing conditions) or to require robust consumer support and ample opportunity to successfully navigate the health care system (for example, those with limited health literacy). HHS believes that focusing resources on the Exchanges and the new health care programs they are leading is the best approach to support these, and other consumer needs, for underserved and historically-marginalized groups, and for consumers in general.

https://www.cms.gov/newsroom/press-releases/more-25-million-americans-gain-health-coverage-during-special-enrollment-period.

HHS also notes that repealing the Exchange DE option will not foreclose states' option to leverage the existing FFE DE pathways,

nor the ability of State Exchanges to implement DE pathways similar to the FFEs, should they find that it is appropriate given their specific market dynamics, priorities, and needs. However, on balance, HHS believes there is much greater risk that the Exchange DE option could serve as a barrier to consumers getting comprehensive coverage rather than facilitate such enrollment. The repeal of the Exchange DE option also permits HHS to direct available resources to implementation of the new Federal requirements (for example, the No Surprises Act consumers protections and the ARP increased subsidies), rather than diverting resources to implement an optional program. Finally, as detailed earlier in this preamble, it aligns with the policy goals and directives in the recent Executive Orders to advance health equity for all, protect and strengthen the ACA, and eliminate unnecessary difficulties to obtaining health insurance. After consideration of comments, HHS is finalizing the repeal of the Exchange DE option and accompanying user fees, as proposed.

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

Comment:

Commenters requested clarification regarding the scope of the proposed repeal and whether HHS's intent is to eliminate the existing FFE DE pathways or just to eliminate the Exchange DE option.

Response:

HHS clarifies that the existing FFE DE pathways, including both classic DE and EDE, will not be impacted by the repeal of the Exchange DE option. Those pathways will continue to be available to consumers shopping for Exchange coverage in FFE and SBE-FP states. In addition, states with State Exchanges also still have the option to leverage DE should they choose to do so based on their specific market dynamics, priorities, and needs. The proposed repeal, which HHS is finalizing in this rule, is specific to removing the Exchange DE option codified at § 155.221(j) and the accompanying FFE-DE and SBE-FP-DE user fees. The other Federal requirements applicable to the FFE DE pathways, as outlined in §§ 155.220, 155.221, and 156.1230, remain intact.

Comment:

Several opposing commenters asserted it is premature to repeal the Exchange DE option on the grounds of lacking state interest, given the limited time since the proposal was finalized. They stated that reliance on this ground was questionable in light of the many other health care priorities that have occupied states such as implementing and operationalizing the health care provisions of recent legislation, including the ARP. Some opposing commenters recommended that the rollout of the Exchange DE option merely be delayed, rather than repealed, to give states additional time to explore its feasibility. Several commenters also expressed general support for the Exchange DE option, noting that it meets all applicable ACA statutory and regulatory requirements. One commenter suggested that the lowered user fee for the Exchange DE option for FFE and SBE-FP states could be attractive to states and weigh favorably in the balance for those states who may be interested in pursuing the Exchange DE option, if given more time to consider it. This commenter noted that another attractive feature to states is the potential cost savings on consumer support functions resulting from potentially having more enrollment channels available to consumers. Other commenters in opposition of the proposed repeal stated that there would be no cost to the Federal Government beyond oversight costs in states that elected to implement the Exchange DE option.

Response:

HHS acknowledges that the Exchange DE option was only recently finalized and it is plausible that but for competing health care priorities perhaps some states would express interest in the Exchange DE option. However, HHS clarifies that the lack of interest from states was just one factor that lead to the proposed repeal of the Exchange DE option. As detailed earlier in this preamble and in the proposed rule, HHS was also concerned that permitting the establishment of the Exchange DE option would detract from efforts to implement new Federal requirements, including consumer protections against surprise medical billing, for which HHS is now responsible and centrally involved in implementing. HHS was also concerned about the additional complexity to Exchange operations resulting from newly passed legislation that could impact the successful implementation of the Exchange DE

option, which could negatively impact consumers ability to enroll in comprehensive coverage. Finally, the proposal was made following HHS's evaluation of the Exchange DE option as directed by EOs 13985 and 14009, which determined the option was inconsistent with the policies outlined in those Executive Orders to advance health equity for all, protect and strengthen the ACA, and eliminate unnecessary difficulties to obtaining health insurance.

HHS appreciates that there are potentially attractive features of the Exchange DE option both for states and the Federal Government, particularly from a financial perspective. This was one of the considerations that led to the proposed establishment of the Exchange DE option. However, HHS does not believe that a reduced user fee or potential savings on consumer support costs outweighs the potential harm to consumers, or other considerations, outlined earlier in this preamble and in the proposed rule, that HHS considered as part of its recent evaluation of the Exchange DE option. Delaying the rollout of the Exchange DE option and giving states more time to evaluate its feasibility would not assuage the multitude of concerns expressed by the public or those outlined earlier in this preamble and in the proposed rule, including the need to focus health care resources on the emergent needs of struggling vulnerable and historically-marginalized consumers and the need to focus available Department resources on implementing new Federal requirements, including the new consumer protections against surprise medical billing. In part 1 of the 2022 Payment Notice final rule, HHS outlined many potential direct and indirect costs of startup, approval, and oversight.

HHS therefore disagrees that the Federal Government would incur only oversight costs in states that elect to implement the Exchange DE option.

See 86 FR 6169-6170.

Comment:

All opposing commenters argued that state flexibility, particularly the flexibility to tailor enrollment portals, should not be curtailed, especially during a PHE. Relatedly, these commenters asserted that consumers universally benefit from an increase in choice. One of these commenters stated that DE entities would serve to supplement and extend the reach of Exchanges rather than replacing them.

Response:

HHS agrees that proposals that encourage and promote state flexibility are important, as states are best suited to tailor programs to address local health care priorities and the needs of their residents. HHS also reiterates that the existing FFE DE pathways are not impacted by the repeal of the Exchange DE option. States using the

HealthCare.gov

platform and State Exchanges will still have the option to leverage DE as a supplement to the Exchange should they find that it would provide value for their consumers given their specific market dynamics, priorities, and needs. States that currently use

HealthCare.gov

also have flexibility to transition to a State Exchange model and adapt Exchange functions to their local markets and unique needs of their residents. HHS also believes that in this situation, on balance, the potential for expanded choice does not outweigh the potential consumer harms when there is a danger of fragmenting consumers' path to getting comprehensive coverage and directing consumers to less comprehensive coverage options that, in many cases, will not cover their health care costs. This places an outsized burden on consumers that, after further evaluation, HHS determined is unnecessary given their existing choice of multiple enrollment pathways offered by Exchanges, QHP issuers, web-brokers, agents and brokers, generally harmful for consumers, and unacceptable during a PHE.

HHS also highlights the recent enrollment increases driven by

HealthCare.gov

and State Exchange websites, which are outlined earlier in this preamble. In particular, HHS reiterates that as of August 10, 2021, approximately 2.5 million consumers have enrolled in coverage through

HealthCare.gov

and State Exchange websites during the COVID-19 special enrollment period, and have reduced their monthly premiums by $40 per person per month due to the ARP's premium credits, with more than one-third of consumers finding coverage for $10 or less per month.

In addition, out-of-pockets costs have fallen for new consumers that have enrolled since April, with the median plan deductible falling by nearly 90 percent from $450 to $50. This increased enrollment and cost savings to consumers, which has been driven by the current Exchange programs, further demonstrates their importance and effectiveness.

https://www.cms.gov/newsroom/press-releases/more-25-million-americans-gain-health-coverage-during-special-enrollment-period

Comment:

All opposing commenters asserted that DE entities and their platforms are better suited than Navigators and centralized, government-run Exchanges to innovate to meet consumer needs. Relatedly, they argue that the FFE DE pathways have in many ways surpassed the consumer support functionality of

HealthCare.gov

, and that this is largely driven by competition among DE entities to attract consumers. They also claim that the success of the FFE DE pathways is evidenced by the enrollment statistics from the successful plan year 2021 open enrollment period.

One commenter argued that EOs 13985 and 14009 would actually be better served by maintaining the Exchange DE option since it would provide more consumer-centric access to coverage, including for vulnerable populations.

Several commenters cited in particular that CMS data show that the FFE DE pathways more than doubled enrollments during the plan year 2021 open enrollment period, increasing from 521,000 to 1,130,000. They also noted that the FFE DE pathways have attracted a higher proportion of new consumers and increased the number of consumers who made active plan selections.

Response:

While HHS does not agree with many of these characterizations, HHS reiterates again that the FFE DE pathways will not be impacted by the repeal of § 155.221(j). Those pathways and their success may continue unimpeded since HHS is only repealing the Exchange DE option. DE may indeed be the right choice for some states and certain consumers, and HHS does not intend to diminish its success or inhibit innovation in this area. However, HHS maintains that the policy goals outlined in EOs 13985 and 14009 are best served by repealing the Exchange DE option. More specifically, the dangers that this optional program that would remove the centralized Exchange website could fragment consumers' path to getting comprehensive coverage, direct consumers to less comprehensive coverage options that, in many cases, will not cover their health care costs, and disproportionately impact certain underserved and historically marginalized groups are inconsistent with advancing health equity, protecting and strengthening the ACA, and eliminating unnecessary barriers to obtaining health insurance. These dangers are heightened during a PHE. HHS believes that access to comprehensive coverage options, including Exchange plans, and advancing health equity among consumers will be best served by enhancing access to coverage through proven enrollment channels like the Exchanges or the FFEs' DE pathways, and eliminating optional programs that have the potential to cause significant consumer confusion and harm at a time when consumer protection and enrollment in comprehensive coverage

is of paramount importance. Notwithstanding the claim that centralized, government-run Exchanges are not as well equipped to innovate to meet consumer needs as DE entities and platforms, HHS highlights that Exchanges do innovate, and are central participants in innovative programs. For instance, the State Exchanges and

HealthCare.gov

have administered innovative new health care programs in 2021 detailed previously

that have resulted in 2.5 million consumers successfully enrolling through the Exchanges with significant premium assistance. In addition, the FFEs have been central participants in innovating through the Federal DE pathways.

These pathways are designed to foster innovation of new consumer-based tools and functionality by approved DE partners.

HHS believes that these and other examples of Exchange innovation and collaboration with the private sector help dispel concerns about the ability of centralized, government-run Exchanges to meet consumer needs.

These include the efforts to administer the health care provisions of the ARP and the related COVID-19 special enrollment period.

One of the critical consumer-centric innovations of the Federal EDE pathway is to enable consumers to access eligibility and enrollment information directly through a DE entity's website by means of various application program interfaces rather than having to re-direct to

HealthCare.gov

For instance, DE entities may offer plan comparison tools with functionality targeted specifically to serve the needs of their consumer base.

Comment:

Opposing commenters argued that concerns about consumers being steered toward non-comprehensive coverage options like short-term limited duration insurance or association health plans are exaggerated since there are existing FFE DE requirements and limitations that would mitigate such concerns. They also highlighted that § 155.221(j) requires that a State Exchange electing to implement the Exchange DE option must have at least one DE entity that meets all requirements of the FFE DE program, including displaying all available QHPs. These commenters also suggested that concerns about potential disruptions to coordination of coverage with insurance affordability programs like Medicaid and CHIP are exaggerated because the DE entities participating in the FFE DE pathways use the same single, streamlined application and eligibility notices as

HealthCare.gov

to assist the Exchange with rendering an eligibility determination for all insurance affordability programs in compliance with the “no wrong door” policy.

Response:

HHS appreciates that there are Federal DE requirements and operational practices in place designed to protect consumers, including certain requirements to protect against steering QHP consumers to less comprehensive coverage options.

The Exchange DE option also included certain safeguards, including the requirement that at least one DE entity must meet all of the requirements to participate in the FFE DE program. However, HHS maintains that the previously identified dangers that this optional program could harm consumers by fragmenting the path to comprehensive coverage, directing consumers to less comprehensive coverage options, and disproportionately impacting certain underserved and historically marginalized groups are inconsistent with advancing health equity, protecting and strengthening the ACA, and eliminating unnecessary barriers to obtaining health insurance. These dangers are real,

they are heightened during a PHE, and after further evaluation, HHS determined they place an unnecessary and unacceptable outsized burden on consumers. HHS believes that access to comprehensive coverage options, including Exchange plans, and advancing health equity among consumers will be best served by enhancing access to coverage through proven enrollment channels, which includes maintaining a centralized Exchange website for consumers to apply for an enroll in QHPs and insurance affordability programs. The increased enrollment through Exchange websites during the COVID-19 special enrollment period underscores the importance of maintaining these known enrollment pathways for consumers. Finalizing the repeal of the Exchange DE option also ensures HHS can focus resources and efforts on implementing new Federal requirements, including consumer protections against surprise medical billing, for which HHS is now responsible and centrally involved in implementing, rather than on implementing and overseeing an optional program, which has the potential to cause significant confusion and harm at a time when consumer protection is paramount. Finally, HHS reiterates that the repeal of the Exchange DE option does not impact or change the other Federal requirements applicable to the FFE DE pathways, which will continue to be available in FFE and SBE-FP states. States with State Exchanges can also still leverage DE as a supplement to the Exchange website should they find it would provide value for their consumers given their specific market dynamics, priorities, and needs.

See, for example, 45 CFR 155.220(c)(3)(i)(A)—(L), 155.220(j), 155.221(b)(1)-(3) and 156.1230(a) and (b).

See,

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

After consideration of these comments, HHS is finalizing the repeal of the Exchange DE option and the FFE-DE and SBE-FP-DE user fees, as proposed.

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

HHS proposed to amend paragraph (e) of § 155.410, which provides the dates for the annual individual market Exchange open enrollment period in which qualified individuals and enrollees may apply for or change coverage in a QHP. The annual individual market 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 specifically proposed to alter the annual 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, HHS established that the annual open enrollment period for benefit years beginning on or after January 1, 2018 would begin on November 1 and extend through December 15. In doing so, HHS indicated a preference for a shorter 6-week annual open enrollment period, noting HHS's belief that it provides sufficient time for consumers to enroll in or change QHPs and that an end date of December 15 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 1 through December 15 for the 2018, 2019, 2020, and 2021 plan years. As discussed in the proposed rule, HHS has observed several benefits using the present annual open enrollment period dates. Prior enrollment data suggests that the majority of new consumers to the Exchange select plans prior to December 15 so as to have coverage beginning January 1.

See 82 FR 18346 at 18381.

HHS also observed that consumer casework volumes related to coverage start dates and inadvertent dual enrollment decreased in the years after the December 15 end date was adopted,

suggesting that the consumer experience was improved by having a singular deadline of December 15 to enroll in coverage for the upcoming plan year. HHS noted that an extension to January 15 may cause some previously observed consumer confusion to resurface surrounding the need to enroll by December 15 for a full year of coverage versus the final deadline of January 15 to enroll for a plan that would begin on February 1. This confusion could cause some consumers to miss out on coverage for the month of January altogether. A January 15 end date may also require enrollment assisters allocate budget resources over a longer period of time.

However, after observing the effects of a 6-week annual open enrollment period over these years, HHS has also observed negative impacts to consumers that may justify an extension of the annual open enrollment period end date to January 15. In particular, HHS has observed that consumers who receive financial assistance, who do not actively update their applications during the annual 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 annual open enrollment period has concluded. Extending the annual open enrollment period end date to January 15 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. HHS also noted in the proposed rule that HHS has also observed concerns from Navigators, CACs, and agents and brokers that the current annual open enrollment period does not leave enough time for them to fully assist all interested Exchange applicants with their plan choices. Extending the annual open enrollment period end date to January 15 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.

HHS sought comment on whether a January 15 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. HHS invited comments from stakeholders that would experience specific benefits or adverse effects from a January 15 end date, and encourage comments on potential impacts to resources, consumer assistance budgets, overall enrollment numbers, premiums, and market stability. HHS sought comment on whether this extension would incentivize consumers who need coverage to begin on January 1 to still make a choice and enroll by December 15, while also preserving sufficient time in the remainder of the plan year for issuers and Exchanges to perform other obligations such as QHP certification.

HHS further invited comments on alternative approaches to extending the annual open enrollment period to address coverage gaps or enrollment challenges facing consumers and stakeholders. HHS also invited 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. HHS also noted that HHS is 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. HHS sought comment on how HHS may improve communications and consumer engagement around potential cost changes for consumers who do not actively re-enroll in coverage. HHS also noted that HHS is 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 the annual open enrollment period. HHS sought comment on whether adoption of these or other outreach approaches would be a viable alternate approach to finalizing its proposal to extend the annual open enrollment period end date to January 15.

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

HHS is finalizing this policy for the FFEs and SBE-FPs, and HHS codifies flexibility for State Exchanges that operate their own eligibility and enrollment platform to set individual market annual open enrollment period end dates no earlier than December 15 and to offer accelerated effective date rules. HHS is clarifying that the annual open enrollment period end dates chosen by State Exchanges operating their own eligibility and enrollment platform will apply to all non-grandfathered plans in the individual market, both inside and outside of an Exchange, under guaranteed availability regulations at § 147.104(b)(1)(ii). The following is a summary of the comments received and HHS's responses to its proposals related to the annual open enrollment period extension (§ 155.410(e)).

Comment:

The majority of commenters supported HHS's proposal. Commenters agreed that lengthening the annual open enrollment period would provide valuable time to consumers to seek in-person assistance and make informed plan choices. Many commenters agreed that this time would be particularly helpful to those who are auto-reenrolled into coverage, but receive a lower subsidy than the prior year because the cost of their benchmark plan has dropped. Commenters also noted additional groups that would benefit from this extension: Consumers whose coverage is terminated towards the end of the calendar year and who do not become aware of its termination until after January 1, consumers whose Medicaid eligibility is ending as the result of the potential expiration of the continuous enrollment provisions in section 6008(b)(3) of the Families First

Coronavirus Response Act (Pub. L. 116-127), and consumers whose share of premiums may increase in plan year 2022 due to the expiration of extra subsidies provided for under the ARP. A January 15 end date would provide these consumers extra time and a streamlined process to understand their eligibility and plan cost changes and enroll in new coverage.

Several commenters highlighted the complex medical needs of consumers with chronic and serious medical conditions, noting that a longer annual open enrollment period would give these consumers more time to review and compare plan options, provider networks, and prescription drug offerings. Organizations and individuals providing application and enrollment assistance commented that there is often not enough time to provide individual or in-person help to all consumers who request it at the end of the current 6-week annual open enrollment period. Other commenters agreed with HHS's proposal that a longer annual open enrollment period would allow underserved populations more time to seek in person assistance and reduce barriers to enrollment, and that the proposal would allow agents and brokers, Navigators, and other consumer assisters more time to help and serve consumers shopping for plans. Finally, many commenters noted that the months of November and December are some of the busiest for consumers, and that holidays and end of the year activities cause significant time and financial constraints that are barriers to enrollment. Commenters argued that many consumers would benefit from additional time in January to complete plan shopping and enrollment activities.

Response:

HHS agrees with these comments and is finalizing the policy to extend the annual open enrollment period to January 15 of the applicable benefit year, as proposed, and HHS codifies flexibility for State Exchanges that operate their own eligibility and enrollment platform to set individual market annual open enrollment period end dates no earlier than December 15 and to use accelerated effective date rules.

Comment:

Many commenters noted that the majority of State Exchanges have already extended their annual open enrollment periods beyond the current December 15 deadline used by Exchanges on the Federal platform, and that State Exchanges have achieved enrollment gains in the month of January without introducing adverse selection into the market. Some State Exchange commenters noted that a longer annual open enrollment period allowed new consumers to enroll and resulted in a healthier risk pool mix. Another commenter noted that while most consumers continued to choose plans in December in order to have coverage effectuate January 1, the additional time in January offered flexibility for consumers who needed more time to weigh coverage options and enroll.

Many state commenters noted that State Exchanges that offered extended periods for the annual open enrollment period beyond the end date used by the Exchanges on the Federal platform in some cases offered more accelerated effective date rules during the annual open enrollment period such that plan selections made by the last day of the month are effective the first day of the following month. These commenters asked that this flexibility be maintained and that January 15 be the minimum end date for the annual open enrollment period in the State Exchanges. Other commenters noted that not all State Exchanges have chosen to extend their annual open enrollment periods into January and requested that State Exchanges maintain an ability to end the annual open enrollment period earlier than January 15. These commenters noted that State Exchanges may face operational burdens in adjusting their systems to accommodate the January 15 end date and that State Exchanges should maintain autonomy to set annual open enrollment period dates that best serve their populations.

Response:

HHS appreciates the comments highlighting evidence from State Exchange experiences with longer effective annual open enrollment periods, and are finalizing the policy to extend the annual open enrollment period to January 15. HHS agrees with commenters that State Exchanges are best suited to address the needs of their markets and are therefore codifying flexibilities for State Exchanges that operate their own eligibility and enrollment platform to set annual open enrollment period end dates no earlier than December 15. HHS also is codifying that these State Exchanges may extend their annual open enrollment periods beyond the end date of January 15 that will be used by the Exchanges on the Federal platform and may adopt more flexible accelerated effective date rules.

Comment:

Many commenters encouraged HHS to extend the annual open enrollment period even further, specifically to January 31. Commenters also asked that HHS use accelerated effective dates to make coverage available February 1 for plan selections received by January 31. Other commenters asked us to consider beginning the annual open enrollment period earlier in the year, for example on October 15, while still maintaining an end date of December 15 or December 31, as an alternative way to extend the total length of the annual open enrollment period. Still other commenters asked HHS to explore an October 15 start date in addition to the proposed extension, noting that the date would align with the beginning of Medicare's annual open enrollment period and that this alignment would facilitate additional consumer outreach and enrollments. Another commenter suggested providing an annual open enrollment period of January 1 through March 31 to avoid the holiday season and end of the calendar year altogether.

Response:

HHS recognizes that a January 31 end date would provide additional time for consumers to enroll, and that some State Exchanges have adopted this date. However, HHS believes the proposed date of January 15 sufficiently balances its priorities of allowing consumers additional time to enroll after the end of the calendar year, while still promoting full coverage year enrollment and minimizing administrative burdens on Exchanges and issuers associated with longer annual open enrollment periods. Given the high volume of transactions processed by the Federal platform, HHS's operational experience suggests that adopting accelerated effective dates for the annual open enrollment period could cause delays in enrollments and claims processing and would require further study. Accordingly, HHS is not considering requiring changes to effective date rules at this time, but as noted earlier, is codifying flexibility for State Exchanges operating their own eligibility and enrollment platforms to adopt accelerated effective dates.

While beginning the annual open enrollment period in October instead of November 1 would effectively lengthen the total annual open enrollment period timeframe, it would not address the needs of consumers who receive updated plan cost information or who experience program eligibility changes after January 1 and would also create administrative burdens on Exchanges and issuers to complete QHP plan certification and other pre-enrollment readiness activities. Similarly, HHS believes a change to begin the annual open enrollment period on January 1 and end in March would require a shift of the plan year calendar and create significant administrative burden on Exchanges, issuers, and state regulators, and HHS is not considering such a change at this time.

Comment:

Other commenters opposed the proposal to extend the annual open enrollment period to January 15. Commenters stated that this change would introduce adverse selection into the market, as more consumers would delay enrollment and may enroll in January only after needing care. Others noted that the change would increase administrative burdens and marketing and operational costs on issuers. Commenters noted that consumers have become accustomed to a 6-week annual open enrollment period and some commenters assisting consumers with enrollment activities noted that in their experience consumers did not need more time. Other commenters argued that the change would actually decrease total enrollment figures, as measured by total coverage months, as more consumers delay enrollment and neglect coverage for the month of January.

Response:

HHS acknowledges commenters' concerns regarding consumer confusion and coverage gaps, and recognizes that HHS will need to engage in consumer outreach activities to ensure consumers are aware of the new deadlines and the implications of signing up by December 15 for a January 1 effective date. However, HHS notes that the experience from State Exchanges operating their own eligibility and enrollment platforms suggests that extending the annual open enrollment period into January does result in increased consumer enrollments and does not introduce adverse selection into market. State Exchange commenters noted that the majority of consumers still enrolled in time to effectuate coverage for January 1, but that the Exchanges were able to achieve additional enrollments in January from consumers who simply missed the deadline or needed more time and help enrolling. The experience from these State Exchange commenters is also consistent with other comments received in support of this proposal which noted that underserved consumers, consumers with complex health needs, and consumers with unexpected plan cost or eligibility changes at the end of the year do not have enough time to shop and get in-person assistance under the current annual open enrollment period timeframe.

Comment:

HHS received comments in support of its suggestion to offer a special enrollment period for current enrollees who are automatically re-enrolled and experienced a significant cost increase as an alternative to extending the annual open enrollment period, and a request that HHS delay offering this special enrollment period until 2023. Other commenters opposed the idea of a targeted special enrollment period and noted that special enrollment periods create complexity and costs for issuers and are difficult and burdensome for consumers to navigate. Commenters stated that an extended annual open enrollment period offers a much more streamlined approach to achieving the policy goal of allowing consumers to change plans in response to updated cost information as compared to a special enrollment period. Commenters also supported HHS's suggestions to improve consumer outreach and education activities to address enrollment barriers, but did not agree this outreach is an adequate substitute for extending the annual open enrollment period.

Response:

While HHS is not aware of increased issuer costs or consumer burden in the State Exchanges that have used special enrollment periods to effectively lengthen the annual open enrollment period, HHS acknowledges that the targeted special enrollment period as discussed in this rule would be limited to certain consumers meeting specified criteria and, as such, could require additional administrative steps for issuers, consumers, and Exchanges. HHS agrees that an extended annual open enrollment period offers a more streamlined approach for consumers, and also serves the added benefit of allowing other consumers, such as those with complex health needs, those in underserved communities, and those who receive a lower subsidy than the prior year that they are not aware of until receiving their January bill more time to determine their best coverage option.

Comment:

Other commenters suggested HHS could do more to improve renewal notices to address the challenges faced by consumers who were automatically re-enrolled but then experienced a significant cost increase as an alternative to extending the annual open enrollment period. Commenters suggested HHS consider aligning operational timelines and allowing issuers to provide more timely and accurate premium tax credit and plan cost information to consumers. Commenters suggested HHS could improve its communications around the automatic re-enrollment process to better avoid consumers receiving surprising plan cost information after the benefit year has begun. Another commenter asked HHS to consider a policy for providing retroactive terminations to consumers who were automatically re-enrolled into coverage that they no longer want, and that such a policy could reduce spending on APTC paid for these months of inadvertent coverage.

Response:

HHS agrees that more improvements can be made in this area, and welcomes the suggestions by commenters to improve renewal notice processes to provide more accurate plan cost information to consumers earlier in the annual open enrollment period. However, after review of the range of public comments received, HHS does not believe improvements to the renewal noticing and automatic re-enrollment process alone is a sufficient alternative to providing additional enrollment time. HHS notes that current HHS policy does allow for consumers to request retroactive terminations under certain circumstance after their coverage has been automatically renewed, and that an extended annual open enrollment period deadline of January 15 will also allow consumers more time to become aware of their enrollment options after automatic reenrollment has occurred.

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

In order to make affordable coverage available to more consumers, HHS proposed 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.

As discussed in the proposed rule, HHS proposed making this special enrollment period available to individuals based on household income level because enhanced financial

assistance provided by the ARP for tax years 2021 and 2022 is such that many individuals with a household income no greater than 150 percent of the FPL have access to a silver plan with a zero dollar monthly premium after the application of APTC.

Specifically, 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, and 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 with a household income no greater than 150 percent of the FPL 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.

As noted in the proposed rule, a qualifying individual is generally not eligible for a PTC if their household income is below 100 percent of the FPL, but there are a small number of consumers with a household income below 100 percent of the FPL who may qualify for APTC. Specifically, section 36B(c)(1)(B) of the Code provides 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, HHS notes 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 1.36B-2(c)(3)(v).

86 FR 35169.

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).

HHS proposed 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, HHS proposed 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. HHS proposed 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 consume

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