Section 2001.12 Cost-Sharing

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE

PART 2001 CONSTRUCTION AND FILING OF ACCIDENT AND HEALTH INSURANCE POLICY FORMS

SECTION 2001.12 COST-SHARING

Section 2001.12  Cost-Sharing

a)         Cost-Sharing Under Group Health Plans

A group health

plan shall ensure that any annual cost-sharing imposed under the plan does not

exceed the limitations provided for under subsections (a)(1) and (2). (See 42 USC

300gg-6(b).)

Requirements relating to cost-sharing are:

1)

Annual Limitation on Cost-Sharing

A)

2014

The cost-sharing

incurred under a health plan with respect to self-only coverage or coverage

other than self-only coverage for a plan year beginning in 2014 shall not

exceed the dollar amounts in effect under

26 USC 223(c)(2)(A)(ii)

for self-only and family coverage, respectively, for taxable years

beginning in 2014.

B)

2015 and Later

In the case of any

plan year beginning in a calendar year after 2014, the limitation under this subsection

(a)(1)(B) shall:

i)

in the case of self-only coverage, be equal to the dollar

amount under subsection (a)(1)(A) for self-only coverage for plan years

beginning in 2014, increased by an amount equal to the product of that amount

and the premium adjustment percentage under subsection (a)(4) for the calendar

year; and

ii)         in

the case of other coverage, twice the amount in effect under subsection (a)(1)(B)(i).

C)        If

the amount of any increase under subsection (a)(1)(B)(i) is not a multiple of

$50, such increase shall be rounded to the next lowest multiple of $50.

2)

Annual Limitation on Deductibles for Employer-Sponsored Plans

A)

In General

i)          In

the case of a health plan offered in the small group market, the deductible

under the plan shall not exceed $2,000 in the case of a plan covering a single

individual and $4,000 in the case of any other plan

i) is not a multiple of

$50, such increase shall be rounded to the next lowest multiple of $50.

2)

Annual Limitation on Deductibles for Employer-Sponsored Plans

A)

In General

i)          In

the case of a health plan offered in the small group market, the deductible

under the plan shall not exceed $2,000 in the case of a plan covering a single

individual and $4,000 in the case of any other plan.

ii)         The

amounts under subsection (a)(3)(A)(i) may be increased by the maximum amount of

reimbursement that is reasonably available to a participant under a flexible

spending arrangement described in

26 USC 106(c)(2)

(determined without regard to any salary reduction arrangement).

B)

Indexing of Limits

In the case of any

plan year beginning in a calendar year after 2014:

i)

the dollar amount under subsection (a)(1)(A)(i) shall be

increased by an amount equal to the product of that amount and the premium

adjustment percentage under subsection (a)(4) for the calendar year; and if the

amount of any increase under subsection (a)(2)(B)(i) is not a multiple of $50,

such increase shall be rounded to the next lowest multiple of $50.

ii)

the dollar amount under subsection (a)(1)(A)(ii) shall be

increased to an amount equal to twice the amount in effect under subsection

(a)(1)(A)(i) for plan years beginning in the calendar year, determined after

application of subsection (a)(2)(B)(i).

C)

Actuarial Value

The limitation under

this subsection (a) shall be applied in such a manner so as to not affect the

actuarial value of any health plan, including a plan in the bronze level.

D)

Coordination with Preventive Limits

Nothing in this subsection

ect under subsection

(a)(1)(A)(i) for plan years beginning in the calendar year, determined after

application of subsection (a)(2)(B)(i).

C)

Actuarial Value

The limitation under

this subsection (a) shall be applied in such a manner so as to not affect the

actuarial value of any health plan, including a plan in the bronze level.

D)

Coordination with Preventive Limits

Nothing in this subsection

(a) shall be construed to allow a plan to have a deductible under the plan

apply to benefits described in section 2713 of the federal Public Health

Service Act (45 CFR 130).

3)

Cost-Sharing

A)

In general, the term "cost-sharing" in this Section

includes:

i)

deductibles, coinsurance, copayments or similar charges; and

ii)

any other expenditure required of an insured individual that is

a qualified medical expense (within the meaning of

26 USC 223(d)(2))

with respect to EHB covered under the plan.

B)

Exceptions

The term "cost-sharing"

in this Section does not include premiums, balance billing amounts for

non-network providers, or spending for non-covered services.

4)

Premium Adjustment Percentage

For purposes of subsections

(a)(1)(B)(i) and (a)(2)(B)(i), the premium adjustment percentage for any

calendar year is the percentage (if any) by which the average per capita

premium for health insurance coverage in the United States for the preceding

calendar year (as estimated by the Secretary no later than October 1 of such

preceding calendar year) exceeds such average per capita premium for 2013 (as

determined by the Secretary). (See 42 USC 18022(c).)

b)

Levels of Coverage

The

levels of coverage described in this subsection (b) are as follows:

1)

Bronze Level

A plan in the bronze

level shall provide a level of coverage that is designed to provide benefits

that are actuarially equivalent to 60 percent of the full actuarial value of

the benefits provided under the plan

premium for 2013 (as

determined by the Secretary). (See 42 USC 18022(c).)

b)

Levels of Coverage

The

levels of coverage described in this subsection (b) are as follows:

1)

Bronze Level

A plan in the bronze

level shall provide a level of coverage that is designed to provide benefits

that are actuarially equivalent to 60 percent of the full actuarial value of

the benefits provided under the plan.

2)

Silver Level

A plan in the silver

level shall provide a level of coverage that is designed to provide benefits

that are actuarially equivalent to 70 percent of the full actuarial value of

the benefits provided under the plan.

3)

Gold Level

A plan in the gold

level shall provide a level of coverage that is designed to provide benefits

that are actuarially equivalent to 80 percent of the full actuarial value of

the benefits provided under the plan.

4)

Platinum Level

A plan in the

platinum level shall provide a level of coverage that is designed to provide

benefits that are actuarially equivalent to 90 percent of the full actuarial

value of the benefits provided under the plan. (See 42 USC 18022(d).)

c)

Actuarial Value (

AV) Calculation for Determining Level

of Coverage

1)         Calculation

of AV

Subject to subsection (c)(2), to

calculate the AV of a health plan, the issuer must use the AV Calculator

developed and made available by HHS.

2)         Exception

to the Use of the AV Calculator

If a health plan's design is not

compatible with the AV Calculator, the issuer must meet the following:

A)        Submit

the actuarial certification from an actuary, who is a member of the American

Academy of Actuaries, on the chosen methodology identified in subsection (c)(2)(B)

or (C)

he AV Calculator

developed and made available by HHS.

2)         Exception

to the Use of the AV Calculator

If a health plan's design is not

compatible with the AV Calculator, the issuer must meet the following:

A)        Submit

the actuarial certification from an actuary, who is a member of the American

Academy of Actuaries, on the chosen methodology identified in subsection (c)(2)(B)

or (C).

B)        Calculate

the plan's AV by:

i)          Estimating

a fit of its plan design into the parameters of the AV Calculator; and

ii)         Having

an actuary, who is a member of the American Academy of Actuaries, certify that

the plan design was fit appropriately in accordance with generally accepted

actuarial principles and methodologies.

C)        Use

the AV Calculator to determine the AV for the plan provisions that fit within

the calculator parameters and have an actuary, who is a member of the American

Academy of Actuaries, calculate and certify, in accordance with generally

accepted actuarial principles and methodologies, appropriate adjustments to the

AV identified by the calculator, for plan design features that deviate

substantially from the parameters of the AV Calculator.

D)        The

calculation methods described in subsections (c)(2)(B) and (C) may include only

in-network cost-sharing, including multi-tier networks.

3)         Employer

Contributions to Health Savings Accounts and Amounts Made Available Under Certain

Health Reimbursement Arrangements

For plans other than those in the

individual market that at the time of purchase are offered in conjunction with

a Health Savings Account (HSA) or with integrated Health Reimbursement Accounts

(HRAs) that may be used only for cost-sharing, annual employer contributions to

HSAs and amounts newly made available under such HRAs for the current year are:

A)        Counted

towards the total anticipated medical spending of the standard population that

is paid by the health plan; and

B)        Adjusted

to reflect the expected spending for he

r with integrated Health Reimbursement Accounts

(HRAs) that may be used only for cost-sharing, annual employer contributions to

HSAs and amounts newly made available under such HRAs for the current year are:

A)        Counted

towards the total anticipated medical spending of the standard population that

is paid by the health plan; and

B)        Adjusted

to reflect the expected spending for health care costs in a benefit year so

that:

i)          Any

current year HSA contributions are accounted for; and

ii)         The

amounts newly made available under such integrated HRAs for the current year

are accounted for.

4)         Use

of State-Specific Standard Population for the Calculation of AV

Beginning in 2015, if submitted by

the State and approved by HHS, a State-specific data set will be used as the

standard population to calculate AV in accordance with subsection (c)(1). The

data set may be approved by HHS if it is submitted in accordance with subsection

(c)(5) and:

A)        Supports

the calculation of AVs for the full range of health plans available in the

market;

B)        Is

derived from a non-elderly population and estimates those likely to be covered

by private health plans on or after January 1, 2014;

C)        Is

large enough that:

i)          The

demographic and spending patterns are stable over time; and

ii)         It includes

a substantial majority of the State's insured population, subject to the

requirement in subsection (c)(4)(B);

D)        Is a

statistically reliable and stable basis for area-specific calculations; and

E)        Contains

claims data on health care services typically offered in the then-current

market

The

demographic and spending patterns are stable over time; and

ii)         It includes

a substantial majority of the State's insured population, subject to the

requirement in subsection (c)(4)(B);

D)        Is a

statistically reliable and stable basis for area-specific calculations; and

E)        Contains

claims data on health care services typically offered in the then-current

market.

5)         Submission

of State-Specific Data

AV will be calculated using the

default standard population described in subsection (c)(6), unless a data set

in a format specified by HHS that can support the use of the AV Calculator as

described in subsection (c)(1) is submitted by a State and approved by HHS

consistent with subsection (c)(4) by a date specified by HHS.

6)         Default

Standard Population

The default standard population

for AV calculation will be developed and summary statistics, such as in

continuance tables, will be provided by HHS in a format that supports the

calculation of AV as described in subsection (c)(1). (See 45 CFR 156.135.)

d)

Actuarial

Value

L

evels of Coverage

1)         General

Requirement for Levels of Coverage

AV, calculated as described in

subsection (c), and within a de minimis variation as defined in subsection

(d)(3), determines whether a health plan offers a bronze, silver, gold or

platinum level of coverage.

2)         The

levels of coverage are:

A)        A

bronze health plan is a health plan that has an AV of 60 percent.

B)        A

silver health plan is a health plan that has an AV of 70 percent.

C)        A gold

health plan is a health plan that has an AV of 80 percent.

D)        A

platinum health plan is a health plan that has as an AV of 90 percent.

3)         De Minimis

Variation

The allowable variation in the AV

of a health plan that does not result in a material difference in the true

dollar value of the health plan is ±2 percentage points

alth plan that has an AV of 70 percent.

C)        A gold

health plan is a health plan that has an AV of 80 percent.

D)        A

platinum health plan is a health plan that has as an AV of 90 percent.

3)         De Minimis

Variation

The allowable variation in the AV

of a health plan that does not result in a material difference in the true

dollar value of the health plan is ±2 percentage points. (See 45 CFR 146.140.)

e)         Determination of Minimum

Value

1)         Acceptable

Methods for Determining Minimum Value

An employer-sponsored plan

provides minimum value (MV) if the percentage of the total allowed costs of

benefits provided under the plan is no less than 60 percent. An employer-sponsored

plan may use one of the following methods to determine whether the percentage

of the total allowed costs of benefits provided under the plan is not less than

60 percent:

A)        The MV

Calculator to be made available by HHS and the Internal Revenue Service. The

result derived from the calculator may be modified under subsection (e)(2).

B)        Any

safe harbor established by HHS and the Internal Revenue Service.

C)        If the

plan is a group health plan, it may seek certification by an actuary to determine

MV if the plan contains non-standard features that are not suitable for either

of the methods described in subsections (e)(1)(A) or (B). The determination of

MV must be made by a member of the American Academy of Actuaries, based on an

analysis performed in accordance with generally accepted actuarial principles

and methodologies.

D)        If the

plan is in the small group market that meets any of the levels of coverage, as

described in subsection (d), it satisfies MV

of the methods described in subsections (e)(1)(A) or (B). The determination of

MV must be made by a member of the American Academy of Actuaries, based on an

analysis performed in accordance with generally accepted actuarial principles

and methodologies.

D)        If the

plan is in the small group market that meets any of the levels of coverage, as

described in subsection (d), it satisfies MV.

2)         Benefits

that May Be Counted Towards the Determination of MV

A)        In the

event that a group health plan uses the MV Calculator and offers an EHB outside

of the parameters of the MV Calculator, the plan may seek an actuary, who is a

member of the American Academy of Actuaries, to determine the value of that

benefit and adjust the result derived from the MV Calculator to reflect that

value.

B)        For

the purposes of applying the options described in subsection (e)(1) in

determining MV, a group health plan will be permitted to take into account all

benefits provided by the plan that are included in any one of the EHB benchmarks.

3)         Standard

Population

The standard population for MV

determinations described in subsection (e)(1) is the standard population

developed by HHS for such use and described through summary statistics issued

by HHS. The standard population for MV must reflect the population covered by

self-insured group health plans.

4)         Employer

Contributions to Health Savings Accounts and Amounts Made Available Under Certain

Health Reimbursement Arrangements

For employer-sponsored

self-insured group health plans and insured group health plans that at the time

of purchase are offered in conjunction with an HSA or with integrated HRAs that

may be used only for cost-sharing, annual employer contributions to HSAs and

amounts newly made available under such HRAs for the current year are:

A)        Counted

towards the total anticipated medical spending of the standard population that

is paid by the health plan; and

B)        Adjusted

to reflect the expected spendi

are offered in conjunction with an HSA or with integrated HRAs that

may be used only for cost-sharing, annual employer contributions to HSAs and

amounts newly made available under such HRAs for the current year are:

A)        Counted

towards the total anticipated medical spending of the standard population that

is paid by the health plan; and

B)        Adjusted

to reflect the expected spending for health care costs in a benefit year so

that:

i)          Any

current year HSA contributions are accounted for; and

ii)         The

amounts newly made available under such integrated HRAs for the current year

are accounted for. (45 CFR 156.145)

f)

Application

In determining

t

he percentage of the total allowed costs of benefits provided under a

group health plan or health insurance coverage that are provided by such plan

or coverage, this Section shall apply.  (See 42 USC 18022(d)(2)(C).)

g)

Allowable Variance

There may be a de

minimis variation in the actuarial valuations used in determining the level of

coverage of a plan to account for differences in actuarial estimates.  (See 42

USC 18022(d)(3).)

h)

Plan Reference

In this Section, any

reference to a bronze, silver, gold or platinum plan shall be treated as a

reference to a qualified health plan providing a bronze, silver, gold or

platinum level of coverage, as the case may be.  (See 42 USC 18022(d)(4).)

i)

Catastrophic Plan

1)

In General

A health plan not

providing a bronze, silver, gold or platinum level of coverage shall be treated

as meeting the requirements of subsection (b) with respect to any plan year if:

A)

the only individuals who are eligible to enroll in the plan are

individuals described in subsection (c)(2); and

B)

the plan provides:

i)

except as provided in subsection (c)(1)(B)(ii), the essential

health benefits determined under Section 2001.11(c), except that the plan

provides no benefits for any plan year until the individual has incurred

cost-sharing expenses in an amount equal to the annual limitation in effect

under subsect

enroll in the plan are

individuals described in subsection (c)(2); and

B)

the plan provides:

i)

except as provided in subsection (c)(1)(B)(ii), the essential

health benefits determined under Section 2001.11(c), except that the plan

provides no benefits for any plan year until the individual has incurred

cost-sharing expenses in an amount equal to the annual limitation in effect

under subsection (a)(1) for the plan year (except as provided for in PHS Act section

2713

); and

ii)

coverage for at least three primary care visits.

2)         Individuals

Eligible for Enrollment

An individual is

described in this subsection (i)(2) for any plan year if the individual:

A)

has not attained the age of 30 before the beginning of the plan

year; or

B)

has a certification in effect for any

plan year under this Part that the individual is exempt from the requirement

under 26 USC

5000A

by reason of:

i)

26 USC

5000A

(e)(1) (relating to individuals without affordable coverage); or

ii)

26 USC

5000A

(e)(5) (relating to individuals with hardships).

3)

Restriction to Individual Market

If a health

insurance issuer offers a health plan described in this subsection (i), the

issuer may only offer the plan in the individual market.  (See 42 USC 18022(e).)

j)

Child-Only Plans

If a qualified

health plan is offered through the Health Benefits Exchange in any level of

coverage specified under subsection (c), the issuer shall also offer that plan

through the Health Benefits Exchange in that level as a plan in which the only

enrollees are individuals who, as of the beginning of a plan year, have not

attained the age of 21, and such plan shall be treated as a qualified health

plan.  (See 42 USC 18022(f).)

k)         Payments

to Federally Qualified Health Centers

If any item or

service covered by a qualified health plan is provided by a Federally Qualified

Health Center (as defined in 42 USC

1396d

n which the only

enrollees are individuals who, as of the beginning of a plan year, have not

attained the age of 21, and such plan shall be treated as a qualified health

plan.  (See 42 USC 18022(f).)

k)         Payments

to Federally Qualified Health Centers

If any item or

service covered by a qualified health plan is provided by a Federally Qualified

Health Center (as defined in 42 USC

1396d

(l)(2)(B)) to an enrollee of the plan, the

offeror of the plan shall pay to the center for the item or service an amount

that is not less than the amount of payment that would have been paid to the

center under 42 USC

1396a

(bb)

) for such item or service. (See

42 USC 18022(g).)

l)          Mutually Agreed Payment

Rates

Nothing in subsection (k) precludes

a Qualified Health Plan issuer and a Federally Qualified Health Center from

mutually agreeing upon payment rates other than those that would have been paid

to the center under 42 USC 1396a(bb), as long as the mutually agreed upon rates

are at least equal to the generally applicable payment rates of the issuer

indicated in 45 CFR 156.235(d).

(See 45 CFR 156.235(e).)