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On January 14th, CMS issued the first final rule confirming several provisions for the annual Notice of Benefit & Payment Parameters for 2022. This response addresses several pain-points the public had after reviewing the proposed 2022 payment notice once it became available in November 2020. 

The rule was finalized with the intent to lower consumer costs, empower states to develop their own plans, accelerate innovation, and clarify program requirements.  

“The actions we’re taking today ensure these improvements can continue tomorrow because we must never be satisfied when too many Americans still cannot afford coverage in the individual market” CMS Administrator, Sema Verma, stated. 

Key takeaways of the first final rule include: 

  • Efforts to reduce premiums by lowering user fee rates  
  • Enhancing Consumer Experience through Exchange Direct Enrollment  
  • Reducing administrative burdens for states  
  • Giving clarity on building plans that do not have a traditional provider network 

Expect changes to regulations to take effect on March 15, 2021 and continue throughout the 2022 coverage year. Keep reading for more detailed breakdown of specific changes. 

Reducing Premiums Through Lower User Fee Rates  

Starting in the 2022 benefit year, the user fee for insurers offering plan through a Federally-facilitated Exchange (FFE) will decrease to 2.25 % of total monthly premiums, and issuers offering plans through State-based Exchanges on the Federal Platform (SBE-FP) will see a user fee rate of 1.75 %. This 0.75-point decrease from the 2021 benefit year reflects CMS’s past cost-saving initiatives and their desire to create a chain-reaction that will lead to lower premiums.  

Enhancing Consumer Experience Through the Exchange Direct Enrollment Option 

Under the new “Exchange Direct Enrollment option,” approved private sectors and Direct Enrollment entities (such as web brokers) will serve as a user-friendly way for consumers to compare and enroll in qualified health plans. 

Instead of a single exchange enrollment website, approved direct enrollment entities can run private-sector websites that can also enroll individuals into a QHP and give a determination of eligibility for coverage, advance premium tax credit (APTC) and cost-sharing reductions (CSRs). The Exchange will still be responsible for all back-end eligibility and enrollment functionality used by entities. 

Increasing Transparency Regarding State Waivers  

In efforts to reduce administrative burden and promote State development of unique local health care programs, the final rule codifies regulatory text guidance first seen in the 2018 “State Relief and Empowerment Waivers.” Now implemented through section 1332 waivers, states will have greater clarity regarding how the government will evaluate, monitor, and approved proposals regarding creating State tailored health programs in accordance to section 1332’s statuary guidelines.  

CMS projects that increased transparency regarding this process will lead to an increase in the number of state proposals received due to improved risk mitigations. States should feel more comfortable spending resources to submit proposals if they receive clear guidance on what qualifies or what would be considered an incomplete wavier application. 

Providing clarity on building plans that do not have a traditional provider network 

Health and Human Services (HHS) provides clarity to the issue surrounding QHP regulatory requirements. Approved QHPs, that do not vary benefits based on “in-network” or “out-of-network” care, do not need to conform to network adequacy standards. This clarification provides added support to an already industry accepted exclusion for plans that do not alter benefits based on network status. 

Additional changes will be addressed in a second final rule to be published at a later date. 

Check out the entire press release from CMS here, and stay tuned for additional commentary from our team on how the final rule affects the future of health insurance.