Washington D.C. — The Centers for Medicare & Medicaid Services (CMS) has issued a significant final rule addressing standards under the Patient Protection and Affordable Care Act (ACA) and focusing specifically on Marketplace Integrity and Affordability. The comprehensive regulation aims to enhance market stability, protect consumers, and reduce improper enrollment practices that have previously impacted federal taxpayers.
The rule introduces a series of revisions impacting various facets of the health insurance marketplaces established under the ACA. These range from consumer eligibility criteria and enrollment processes to standards for participating plans and the conduct of agents and brokers. The changes are designed to solidify the functioning of the marketplaces while also taking steps to improve their financial integrity.
Key Changes to Eligibility and Enrollment
Among the notable revisions is the clarification of standards related to the denial of coverage for failure to pay past-due premiums. This measure provides insurers with clearer guidelines on handling situations where individuals fall behind on payments, a critical aspect for maintaining the financial health of the marketplace.
A particularly significant policy change is the exclusion of Deferred Action for Childhood Arrivals (DACA) recipients from the definition of “lawfully present” for the purpose of eligibility to enroll in coverage through the Health Insurance Marketplace and receive subsidies. This revision alters eligibility pathways for this specific population under the ACA.
The rule also revises the Exchange automatic reenrollment hierarchy. This hierarchy dictates how individuals are automatically enrolled into a health plan if they do not actively choose one during the annual open enrollment period, aiming to streamline the process while potentially guiding consumers towards suitable coverage options. Standards for the annual open enrollment period itself, as well as for special enrollment periods that allow individuals to sign up for coverage outside the regular window due to qualifying life events, have also been refined to ensure clarity and consistency.
Strengthening Financial Integrity and Verification
A major focus of the final rule is on tightening financial controls and eligibility verification processes. New standards are established regarding failure to file and reconcile premium tax credits. Previously, individuals receiving advance payments of the premium tax credit (APTC) were required to file federal income tax returns and reconcile the APTC received against the final amount they were eligible for. The rule reinforces requirements around this process.
Relatedly, the rule revises procedures for income eligibility verifications for both premium tax credits and cost-sharing reductions. These subsidies are crucial for making coverage affordable for millions of Americans, and accurate verification is essential to prevent improper payments. Standards for annual eligibility redeterminations, the process by which marketplaces reassess an individual’s eligibility for coverage and subsidies each year, are also updated.
CMS noted that temporary actions included in the rule are intended to reduce improper enrollments. The agency highlighted that limits on repayment of advance payments of the premium tax credit (APTC) and the expiring expanded subsidy regime have previously cost Federal taxpayers billions of dollars. By refining verification and reconciliation processes, the rule seeks to mitigate such costs going forward.
Plan Standards and Market Conduct
Beyond eligibility and finances, the rule addresses standards for health plans and marketplace participants. It revises the de minimis thresholds for actuarial value for plans subject to essential health benefits (EHB) requirements. Actuarial value represents the average percentage of healthcare costs that a health plan is expected to cover. Adjusting these thresholds can impact the generosity and design of plans offered in the marketplace.
Standards for income-based cost-sharing reduction plan variations are also included. Cost-sharing reductions lower out-of-pocket costs like deductibles, copayments, and coinsurance for eligible individuals based on their income. The rule provides updated guidance on how these plan variations must be structured and offered.
Furthermore, the regulation establishes evidentiary standards for assessing noncompliance by agents, brokers, or web-brokers who assist consumers with marketplace enrollment. This aims to ensure that individuals receive accurate information and support during the enrollment process and holds intermediaries accountable for adhering to marketplace rules.
Overall, the final rule enacts permanent reforms aimed at bolstering market stability and affordability within the ACA marketplaces, alongside temporary measures designed to enhance integrity and fiscal responsibility by reducing improper enrollments and the associated costs to Federal taxpayers.
