2015 Form and Rate Filing Requirements for Health Plans ____________________________________________________

STATE OF MICHIGAN

DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES

BULLETIN 2014-06-INS

In the Matter of

2015 Form and Rate Filing Requirements for Health Plans

____________________________________________________/

Issued and entered

this 26th day of March 2014

by Annette E. Flood

Director

SECTION 1: CERTIFICATION AND RECERTIFICATION PROCESS AND STANDARDS

FOR QUALIFIED HEALTH PLANS (QHPs)

General Information and Timelines

The Department of Insurance and Financial Services (DIFS) will continue to perform

Plan Management functions for the 2015 plan year. Plan Management functions are

part of DIFS’ regulatory role for QHPs and plans offered on and off the Marketplace.

Issuers will work directly with DIFS to submit all QHP application data in accordance

with federal and state guidelines. The System for Electronic Rate and Form Filing

(SERFF) will be used by issuers to transmit information to DIFS, and DIFS will use

SERFF to transmit information to the Centers for Medicare & Medicaid Services

(CMS).

Many of the same guidelines apply to issuers filing plans offered off the Marketplace

and these items are referenced in this Bulletin. This bulletin addresses only those

areas where guidance has changed from 2014 or where additional clarification is

necessary. The omission of any particular federal or state requirement from this

bulletin should not be construed to mean that compliance with those requirements is

not necessary. For additional guidance, issuers are urged to refer to the CMS 2015

Letter to Issuers in the Federally-facilitated Marketplaces dated March 14, 2014 (CMS

2015 Letter to Issuers).

New Plans and Recertification of 2014 Plans

For the 2015 plan year, DIFS’ process for recertifying a QHP will largely mirror

the 2014 initial certification process. New plans and plans being recertified will

be required to submit much of the same information.

1

to the CMS 2015

Letter to Issuers in the Federally-facilitated Marketplaces dated March 14, 2014 (CMS

2015 Letter to Issuers).

New Plans and Recertification of 2014 Plans

For the 2015 plan year, DIFS’ process for recertifying a QHP will largely mirror

the 2014 initial certification process. New plans and plans being recertified will

be required to submit much of the same information.

1

2

Timeline for Issuers Filing Plans On the Marketplace and Issuers Filing Plans

Both On and Off the Marketplace

Issuers should be aware that offering any plan on the Marketplace subjects all

of that issuer’s plans (on and off the Marketplace) to the following set of

deadlines:

Activity

Dates

QHP

Application

Submission and

Review Process

Michigan Filing Deadline

06/09/2014

DIFS Transfers Plan Data to CMS

08/08/2014*

CMS Reviews Plan Data

08/11/2014

to

08/25/2014*

CMS Notifies DIFS of Necessary

Corrections to QHP Data

08/26/2014*

Final Deadline for Issuers to

Resubmit Data Into SERFF

09/04/2014*

DIFS Transfers Revisions to CMS

09/05/2014

to

09/10/2014*

CMS Completes Re-Review of Plan

Data and State Recommendations

09/22/2014*

Limited Window for Plan Correction

09/24/2014

to

10/06/2014*

QHP

Certification Notices and QHP

Agreement/Final Agreements Sent to Issuers,

10/14/2014

Certification

Agreements Signed, QHP Data

to

Finalized

11/03/2014*

Open Enrollment

11/15/2014

*All dates based on CMS functions are subject to

change

Timeline for Issuers Filing Plans Only Off the Marketplace

There is a special DIFS filing deadline for issuers operating solely off the

Marketplace. The deadline to submit forms, rates, and binder filings is

September 15, 2014 for plans beginning January 1, 2015.

2015 Filing Requirements: On and Off the Marketplace

See Exhibit 1.

ates based on CMS functions are subject to

change

Timeline for Issuers Filing Plans Only Off the Marketplace

There is a special DIFS filing deadline for issuers operating solely off the

Marketplace. The deadline to submit forms, rates, and binder filings is

September 15, 2014 for plans beginning January 1, 2015.

2015 Filing Requirements: On and Off the Marketplace

See Exhibit 1.

Michigan Forms Checklist (Revised for 2015)

The revised Michigan Forms Checklist must be completed and filed in SERFF

under the Supporting Documentation tab. The Forms Checklist must be filed in

both Excel and PDF format1, and must be filed with both the forms filing and the

binder. Please note that this requirement for PDF format is new this year.

Revisions to Previously-Approved QHPs: Red-Lined Versions

Issuers revising previously approved QHP forms must provide red-lined

versions. The red-lined and clean versions should both be filed under the

Forms Schedule tab of the SERFF rate and form filing under the same Item

Number.

Michigan Rates Checklist (Revised for 2015)

The revised Michigan Rates Checklist must be completed and filed in SERFF

under the Supporting Documentation tab. The Rates Checklist must be filed in

both Excel and PDF format, and must be filed with both the rates filing and the

binder filing. Please note that this requirement for PDF format is new this year.

SERFF Filings

Issuers should be aware that all filings submitted via SERFF (on- and off-

Marketplace) are considered to be public immediately upon being filed in

SERFF. This is a change from the transitional filing process that was

established for the 2014 coverage year only.

An issuer should submit the same Business Rules Template when filing both

individual and small group rate and form filings and associated binder filings.

All federal and Michigan-specific templates2 must be filed in Excel and PDF

formats. Please note that this requirement for PDF format is new this year

rom the transitional filing process that was

established for the 2014 coverage year only.

An issuer should submit the same Business Rules Template when filing both

individual and small group rate and form filings and associated binder filings.

All federal and Michigan-specific templates2 must be filed in Excel and PDF

formats. Please note that this requirement for PDF format is new this year.

(See instructions for converting an Excel document to PDF at footnote 1,

above.)

1 To convert an Excel document to a .pdf, select File and then Print. Under the print settings section, adjust the orientation

and scale until the contents are legible. If the Excel document has multiple worksheets, perform these adjustments for each

worksheet. When finished adjusting, select File, then Save As. Change the Save As type to PDF and select the Save button.

2 The required SERFF templates are: Administrative Data, Plan and Benefits, Prescription Drug, Network, Service Area,

Essential Community Providers, Rate Data, Rating Business Rules, and Unified Rate Review Templates.  In addition, DIFS

requires the Michigan Network Data Template.

3

Product Withdrawal and Uniform Modification

CMS has proposed standards regarding product modifications and what would

constitute uniform modifications and what, alternatively, constitutes the withdrawal of

the existing product and the creation of a new product. Any changes made pursuant

to federal or state law requirements—such as increases to annual limits on cost

sharing—would be considered a uniform modification rather than a product withdrawal

osed standards regarding product modifications and what would

constitute uniform modifications and what, alternatively, constitutes the withdrawal of

the existing product and the creation of a new product. Any changes made pursuant

to federal or state law requirements—such as increases to annual limits on cost

sharing—would be considered a uniform modification rather than a product withdrawal.

Modifications not required by law would be considered modifications of coverage if

they meet all of the following criteria:



The product is offered by the same issuer;



The product is the same product type (e.g., PPO or HMO);



The product covers the majority of the same counties in its service area;



The product has the same cost-sharing structure, except for variations in

cost-sharing related solely to the utilization or cost of medical care

necessary to maintain the same metal level of coverage; and



The product provides the same covered benefits, except for changes in

benefits not attributable to legal requirements that cumulatively affect the

rate for the product by no more than two percent.

DIFS will apply these standards to all plans submitted for the 2015 year, whether

offered on or off the Marketplace.

SECTION 2: CERTIFICATION STANDARDS

Licensure and Good Standing

DIFS will review the licensure status of all issuers filing plans on and/or off the

Marketplace.

Service Area

With regard to plans offered on the Marketplace (and if the same plan is also offered

off the Marketplace), CMS requires that any partial service areas (geographic areas

smaller than a county) offered on the Marketplace be established without regard to

racial, ethnic, language, or health status related factors. Issuers with partial service

areas must submit a partial service area justification in the supporting documentation

tab of the binder

if the same plan is also offered

off the Marketplace), CMS requires that any partial service areas (geographic areas

smaller than a county) offered on the Marketplace be established without regard to

racial, ethnic, language, or health status related factors. Issuers with partial service

areas must submit a partial service area justification in the supporting documentation

tab of the binder. Issuers should refer to the CMS Service Area Partial County

Justification Cover sheet located in the Supporting Documentation tab in SERFF for

instructions regarding acceptable reasons for partial service areas. Partial service

area requests will be reviewed on a case-by-case basis. Issuers of on-Marketplace

plans are urged to refer to the CMS 2015 Letter to Issuers dated March 14, 2014, for

additional guidance.

4

Network Adequacy

DIFS will collect network detail for all plans on the Michigan Network Data Template.

The Network Data Template is required for all networks, including dental-only

networks, and is available with accompanying instructions in SERFF and on the DIFS

website at: https://www.michigan.gov/difs/forms/insurance. The template has been

updated to allow issuers the expanded data capacity to include providers with multiple

sub-specialty health services. Narrowed and tiered networks will be reviewed using

the template.

All network reviews for plans offered on the Marketplace are subject to CMS oversight.

Issuers should review DIFS’ recently updated Michigan Network Adequacy Guidance

at the above link for more information.

Essential Community Providers

Issuers of on-Marketplace plans should refer to chapter 2, section 4, pp. 18-24, of

the CMS 2015 Letter to Issuers for current Essential Community Provider

requirements.

Patient Safety Standards

As outlined in Chapter 2, Section 6, pp

ight.

Issuers should review DIFS’ recently updated Michigan Network Adequacy Guidance

at the above link for more information.

Essential Community Providers

Issuers of on-Marketplace plans should refer to chapter 2, section 4, pp. 18-24, of

the CMS 2015 Letter to Issuers for current Essential Community Provider

requirements.

Patient Safety Standards

As outlined in Chapter 2, Section 6, pp. 26-27, of the CMS 2015 Letter to Issuers,

issuers contracting with hospitals with more than 50 beds must verify that the hospital

(as defined in section 1861(e) of the SSA) is Medicare-certified or has been issued a

Medicaid-only CMS Certification Number (CCN). To comply with this requirement,

issuers must include in their binder submission, within the Supporting Documentation

tab, an attestation that the issuer has collected and is maintaining the required

documentation from its network hospitals.

All group and individual plans offered on and off the Marketplace must comply with

federal and state law regarding guaranteed renewability, including all applicable

federal regulations and guidance and DIFS Bulletin 2011-17-INS.

In addition, CMS has recently determined that federal regulations governing

guaranteed availability supersede certain state law requirements. See 45 C.F.R. §

148.128; 45 C.F.R. § 147.104. As a result, issuers are no longer required to offer

conversion policies under MCL 500.3612.

5

SECTION 3: BENEFIT DESIGN (APPLICABLE TO ALL PLANS)

Guaranteed Renewability

and DIFS Bulletin 2011-17-INS.

In addition, CMS has recently determined that federal regulations governing

guaranteed availability supersede certain state law requirements. See 45 C.F.R. §

148.128; 45 C.F.R. § 147.104. As a result, issuers are no longer required to offer

conversion policies under MCL 500.3612.

5

SECTION 3: BENEFIT DESIGN (APPLICABLE TO ALL PLANS)

Guaranteed Renewability

Actuarial Value (AV) Requirements

All individual and small group plans offered on and off the Marketplace must be

assigned to one of the four “metal level” AV tiers or be classified as a catastrophic

plan. Determinations of AV must conform to 45 C.F.R. § 156.140.

Essential Health Benefits (EHB)

EHB Benchmark Plan

Michigan’s benchmark plan for 2015 is the same as it was for 2014. Issuers

should review the benchmark to ensure their on- and off-Marketplace plans

conform to it.

Mental Health Parity and Addition Equity Act (MHPAEA)

All group and individual plans must comply with the federal Mental Health Parity

and Addiction Equity Act and applicable regulations. In particular, issuers

should carefully review the final rule implementing the MHPAEA, issued on

November 13, 2013, and effective January 13, 2014. The final rule generally

applies to plan and policy years beginning on or after July 1, 2014. Issuers

should review the final rule to determine whether a particular plan is subject to

the MHPAEA and to determine whether a plan is in compliance with that statute

and regulations.

Actuarially Equivalent Substitutions of EHB

Actuarially equivalent substitutions of EHB are not permitted in Michigan.

SECTION 4: BENEFIT DESIGN (APPLICABLE TO ON-MARKETPLACE PLANS ONLY)

Accreditation

45 C.F.R. § 155.1045 establishes the timeline by which issuers offering plans on the

Marketplace must be accredited by NCQA, URAC, or AAAHC. An issuer’s

accreditation status will be available to consumers at the Marketplace website.

Required Cost-Sharing Variations for Individual Market Plans Only

45 C.F.R

n.

SECTION 4: BENEFIT DESIGN (APPLICABLE TO ON-MARKETPLACE PLANS ONLY)

Accreditation

45 C.F.R. § 155.1045 establishes the timeline by which issuers offering plans on the

Marketplace must be accredited by NCQA, URAC, or AAAHC. An issuer’s

accreditation status will be available to consumers at the Marketplace website.

Required Cost-Sharing Variations for Individual Market Plans Only

45 C.F.R. § 156.420 requires several cost-sharing plan variations for issuers offering

coverage in the individual market on the Marketplace. Issuers must submit for

approval the three plan variations for each silver plan offered, and the two zero- and

limited-cost sharing variations for each plan at any AV level.

6

SECTION 5: RATING REQUIREMENTS (APPLICABLE TO ALL PLANS)

Rating Factors

Rates may vary based only on the following factors:



whether the coverage or plan covers an individual or family;



rating area;



age (within a ratio of 3:1 for adults);



tobacco use (within a ratio of 1.5:1).

Additional Michigan Rating Factor Determinations

Michigan has made the following determinations related to the allowable rating factors,

applicable to all individual and small group plans:

Age Rating

Michigan plans must adhere to the 3:1 ratio and federal default age curve for

both individual and small group markets.

Tobacco Ratio

Issuers will not be required to use a tobacco ratio less than 1.5:1. Issuers will be

allowed to vary their tobacco ratio based on age, as long as the ratio does not

exceed 1.5:1 for any specific age.

Standard Family Tier

Michigan will not require the use of a standard family tier.

Per-Member Rating

Michigan requires per-member rating in the small group market. Issuers wishing

to offer small employers the option to be billed on a composite premium basis

must comply with the requirements set forth at 45 C.F.R. § 147.102(c)(3),

including the development of separate composite premiums for individuals age

21 and older and individuals under age 21

of a standard family tier.

Per-Member Rating

Michigan requires per-member rating in the small group market. Issuers wishing

to offer small employers the option to be billed on a composite premium basis

must comply with the requirements set forth at 45 C.F.R. § 147.102(c)(3),

including the development of separate composite premiums for individuals age

21 and older and individuals under age 21.

Geographic Rating

Michigan will maintain the 2014 geographic areas for use in both the individual

and small group market for the 2015 year. As allowed under 45 C.F.R. §

147.103, the number of geographic areas are equal to the number of

metropolitan service areas plus one, which equals 16 in Michigan. The 16

defined geographic areas, with each of the 83 counties in Michigan assigned to

7

one of 16 geographic areas and labeled A through P, can be found on the DIFS

website here.

General Requirements

Beginning with the 3rd quarter of 2014, DIFS will permit issuers in the small

group market to amend rates submitted in their annual rate filing for the 3rd and

4th quarters. The quarterly filing must include rates for the remainder of the

year and meet all the requirements of the DIFS Rates Checklist, including

submission of the following documents: the Part III Actuarial Memorandum,

Unified Rate Review Template, Rates Template, and Business Rules Template.

Deadlines

DIFS has previously advised that the deadline for 3rd quarter changes is May 2,

2014. DIFS is changing this deadline to April 15, 2014, because the Center for

Consumer Information and Insurance Oversight has indicated that it may

require 3rd quarter rates to be finalized in the SHOP by May 15, 2014. DIFS

will not accept filings that are effective only for the 4th quarter of 2014, due to

conflicts in timing between the annual filing and the 4th quarter filing.

SECTION 6: DEFINITION OF “SMALL GROUP”

The definition of “small group” or “small employer” varies according to whether plans

are being offered on or off the Marketplace

3rd quarter rates to be finalized in the SHOP by May 15, 2014. DIFS

will not accept filings that are effective only for the 4th quarter of 2014, due to

conflicts in timing between the annual filing and the 4th quarter filing.

SECTION 6: DEFINITION OF “SMALL GROUP”

The definition of “small group” or “small employer” varies according to whether plans

are being offered on or off the Marketplace. Starting in 2016, all states will be required

to adopt the same definition of small employer. CMS has said that it will address any

conflicts between state and federal law prior to the 2016 review period.

On the Marketplace

The number of employees for plans offered on the Marketplace should be

determined as set forth in § 4980H(c)(2) of the Internal Revenue Code, 26

U.S.C. § 4980H(c)(2). This method differs from Michigan state law, and uses a

full-time equivalent method for counting employees.

Off the Marketplace

Michigan law defines “small employer” as up to 50 employees. This definition,

which includes full-time employees working 30 or more hours per week, will be

8

Merging of Markets

Pursuant to 45 C.F.R. § 156.80, Michigan requires issuers to maintain separate risk

pools for the individual and small group small markets.

Small Group Quarterly Rate Changes for 2014

maintained through December 31, 2015, and applies to plans being offered off

the Marketplace only.

SECTION 7: WELLNESS PLANS

General Guidelines

Wellness plans, either participatory or health-contingent, may be offered with both

individual and small group plans. Any wellness plan must:



Meet the requirements of 45 C.F.R. 146 and 147;



Be a part of the policy (i.e., not offered separately); and



Be approved by DIFS.

Small Group Plans Rated for Tobacco Use

Issuers must include a health-contingent wellness plan in the small group market if

they are rating for tobacco use. The plan must provide for a reduction or elimination of

the tobacco rating if the insured participates in a tobacco cessation program

R. 146 and 147;



Be a part of the policy (i.e., not offered separately); and



Be approved by DIFS.

Small Group Plans Rated for Tobacco Use

Issuers must include a health-contingent wellness plan in the small group market if

they are rating for tobacco use. The plan must provide for a reduction or elimination of

the tobacco rating if the insured participates in a tobacco cessation program. The plan

must also meet the requirements stated above. The plan materials must describe the

conditions and benefits of the wellness plan; simply stating that a wellness plan is

offered is not sufficient.

Any questions regarding this bulletin should be directed to:

Department of Insurance and Financial Services

Office of Insurance Rates and Forms

611 West Ottawa Street

P.O. Box 30220

Lansing, Michigan 48909-7720

Toll Free: (877) 999-6442

_________________________________________

Annette E. Flood

Director

9

2015 Filing Requirements On and Off the Marketplace

Page 1 of 2

3/21/2014

Exhibit 1

Requires submission via SERFF

Requires submission via HIOS

Template Name

Must be

filed with:

Health Plans

Stand-Alone Dental Health Plans

Required for On-

Marketplace & On/Off-

Marketplace

Required for Off-

Marketplace (Issuer has NO

On-Marketplace plans)

Required for On-

Marketplace & On/Off-

Marketplace

Required for On-

Marketplace &

On/Off- Marketplace

Required for Off-

Marketplace (Issuer has NO

On-Marketplace plans)

Federal

Requirement

Administrative

Yes

Yes

Yes

Binder only

Essential

Binder only

Community

Yes

No

Yes

Providers

Actuarial Value

Binder only

Calculator

Yes

Yes

No

Plan/Benefit

Yes

Yes

Yes

Binder only

Plan/Benefit Add-in

Yes

Yes

Yes

Binder only

Service Area

Yes

Yes

Yes

Binder only

Network

Yes

Yes

Yes

Binder only

Prescription Drug

Yes

Yes

No

Binder only

Rate Data

Rate Filing

Yes

Yes

Yes

& Binder

Business Rules- 1

Rate

ders

Actuarial Value

Binder only

Calculator

Yes

Yes

No

Plan/Benefit

Yes

Yes

Yes

Binder only

Plan/Benefit Add-in

Yes

Yes

Yes

Binder only

Service Area

Yes

Yes

Yes

Binder only

Network

Yes

Yes

Yes

Binder only

Prescription Drug

Yes

Yes

No

Binder only

Rate Data

Rate Filing

Yes

Yes

Yes

& Binder

Business Rules- 1

Rate Filing

per Issuer. Include

Yes

Yes

Yes

& Binder

both Ind. & Sm. Grp.

Accreditation

Yes

No

No

Binder only

Unified Rate

Yes if any product includes Rate Filing

Review

Yes

Yes

No

Yes

a rate increase.

& Binder

Part II Consumer

Yes, for each product

Yes, for each product with

Yes, for each

Yes, for each product with

Rate Filing

Justification

with >10% increase.

>10% increase.

No

product with >10%

>10% increase.

& Binder

Narrative

increase.

Part III: Actuarial

Yes, if any product

Rate Filing

Memorandum

Yes

Yes

No

Yes

includes a rate increase.

& Binder

2015 Filing Requirements On and Off the Marketplace

Page 2 of 2

3/21/2014

Exhibit 1

Requires submission via SERFF

Requires submission via HIOS

Template

Name

Major Medical

Stand-Alone Dental Major Medical

Must be

filed with:

On- Marketplace

On/Off-

&

Off-

NO

Marketplace (Issuer has

On-Marketplace plans)

On- Marketplace &

On/Off- Marketplace

On- Marketplace

On/Off-

&

Off- Marketplace (Issuer

has NO On-Marketplace

Marketplace

Marketplace

plans)

Michigan

Requirement

MI Network Data

Yes

Yes

Yes

Binder only

MI Forms Checklist

Form Filing

Revised for 2015

Yes

Yes

Yes

& Binder

MI Rates Checklist

Rate Filing

Revised for 2015

Yes

Yes

Yes

& Binder

Deadline for

Filing-All required

June 9, 2014

September 15, 2014

Templates must be

June 9, 2014

September 15, 2014

June 9, 2014

completed before

filing

MI Network Data

Yes

Yes

Yes

Binder only

MI Forms Checklist

Form Filing

Revised for 2015

Yes

Yes

Yes

& Binder

MI Rates Checklist

Rate Filing

Revised for 2015

Yes

Yes

Yes

& Binder

Deadline for

Filing-All required

June 9, 2014

September 15, 2014

Templates must be

June 9, 2014

September 15, 2014

June 9, 2014

completed before

filing.

NOTE:

If DIFS requires a revision to any Template, the revised Template must be submitted in all

filings where it was originally required. For example; a revision to the Unified Rate Review

must be submitted in both the Binder and the Rate Filing, while a revision to the Actuarial

Value Calculator need only be submitted in the Binder.