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Small Business Employee Benefits and HR Blog

Final Rule Released on Health Insurance Exchanges

May 19, 2014
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On May 16, 2014, the Department of Health and Human Services (HHS) released the final rule on the Health Insurance Exchanges ("Marketplaces"). The rule finalizes policies regarding consumer notices, the Small Business Health Options Program (SHOP), standards for Navigators and other consumer assisters, policies regarding the premium stabilization programs, and more.US-DeptOfHHS

Final Rule on Health Insurance Exchanges - Key Highlights

Below are the key highlights from the lengthy, 400-page final rule:

  • Standardized Notices:  The final rule requires issuers to use standardized notices when renewing coverage or discontinuing products. These notices are intended to help consumers understand the changes and choices in the individual and small group market. 

  • Navigator Guidelines: The final rule reduces states' ability to regulate navigators. According to the guidelines, CMS will pre-empt entire state laws, or parts of them, if they "prevent the application of the provisions of Title I of the" ACA. CMS specified that it would not pre-empt state laws that do not prohibit navigators from completing their federal duties, such as measures that require navigators to register, pass background checks or complete state training. However, CMS will pre-empt laws that require navigators to refer consumers to insurance brokers or agents for help with choosing an Exchange plan.

  • Premium Stabilization Programs: The final rule confirms the parameters for the 2015 premium stabilization programs including the temporary reinsurance program, the temporary risk-corridor program, and the permanent risk-adjustment program. CMS intends to increase the ceiling on administrative costs and the profit margin floor each by 2 percentage points in 2015, thereby increasing potential risk corridor payments. And, CMS indicated it intends to lower the threshold for reinsurance payments in 2015 to the 2014 threshold level of $45,000.

  • Essential health benefits prescription drug coverage. The final rule adds a requirement that a plan's procedures must include an expedited (no more than 24 hours) coverage determination process for exigent circumstances and requires the plan to cover the drug for the duration of the exigency.

  • Employee Choice in the Small Business Health Options Program (SHOP) Exchange. The final rule provides more flexibility to state departments of insurance in recommending a one-year delay of employee choice for the federally facilitated SHOPs in 2015, to 2016. 

  • Fixed-Dollar Indemnity Policies: The final rule addresses "mini-med" policies, where coverage is often a fixed-dollar reimbursement amount for specific covered services. The final rule allows indemnity coverage to be sold, but only if certain requirements are observed. Specifically, the benefits may generally only be provided to individuals who otherwise have minimum essential coverage as a supplement, not a substitute, for major medical coverage.

  • Quality Standards:  The final rule adds to the existing Qualified Health Plan (QHP) certification requirements related to quality standards. The Exchanges must display the HHS-calculated quality ratings and enrollee satisfaction survey results in a clear and standardized manner starting in 2016. HHS will specify the form, manner, reporting level, and timeline in future technical guidance. 

The final rule can be found at the Federal Register (click here).

CMS's overview of the final rule can be found here.

We'll continue to write about the impact of the final rule on the Health Insurance Exchanges.

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