When the U.S. Department of Health and Human Services (HHS) released the 2022 Notice of Benefit & Payment Parameters (NBPP) earlier this year, everyone expected to see some changes. The annual rule responsible for governing the core provisions of the Affordable Care Act (ACA) did, in fact, see a few much-needed enhancements. In addition to operational shifts regarding the marketplaces, insurance provider standards, and timelines, states and state-based marketplaces (SBMs) also saw direct changes. Today, we’ll review Part II of the NBPP and highlight just what affordability and direct enrollment effects states and SBMs can expect.
What the NBPP Part II Finalizes
The key entities affected by the finalization of Part II of the NBPP include web brokers states, SBMs, and issuers. One objective outlined in the NBPP Part II is to impact health equity measures and lower the maximum amounts consumers pay out of pocket. There is also a focus on the consumer engagement experience.
Affordability and the Lowering of Out-of-Pocket Costs
When consumers can find more affordable advantages of shopping via the SBMs, states can expect to see an influx of participation in those plans. And the NBPP Part II offered improvements lowering those consumer-based out-of-pocket maximum amounts by $400. When the Trump Administration’s 2020 NBPP changed the method of calculation for authorizing subsidies, the industry feedback indicated there were new affordability concerns. Many were concerned that this new way of determining income percentages increased the premium contribution percentages and the maximum out-of-pocket thresholds. The Biden Administration responded, shifting back to the old way of calculating, and the recently passed American Rescue Plan applied those reduced caps through this year and next year’s caps.
However, in this new NBPP Part II, the final rule takes affordability efforts one step further. The maximum annual limitation for 2022 cost-sharing is now $8,700 for individual coverage and $17,400 for family coverage. This is $400 less than the Trump Administration proposed. And to make sure that SBMs and insurance providers have the information they need to make any necessary changes, HHS also announced they will publish the required contribution changes, maximum caps for out-of-pocket expenses, and premium adjustment percentages beginning January of next year. These parameters will come via sub-regulatory guidance and not the traditional rulemaking.
State Exchange Direct Enrollment Provisions
HHS also finalized the proposal that extends a new Exchange Direct Enrollment option (DE provision.) Under this new allowance, state exchanges can facilitate enrollments through private-sector, direct enrollment entities, including health insurance providers and web brokers. States can oversee those direct enrollment efforts, including management of eligibility, application of advanced premium tax credits, and cost-sharing reductions. The Exchange will be responsible for building and maintaining the systems themselves, according to regulatory requirements. Healthcare.gov will still offer the information consumers need. According to CMS, SBEs can opt in come the first part of the 2022 plan year, while FFEs and SBE-FPs can elect to participate beginning 2023. CMS also points out that additional parameter changes may expand, including the addition of consumer experience details and future rulemaking, in the months to come.
A Focus on the Consumer Engagement Experience
The NBPP Part II also suggests the administration is moving forward with enhancements designed to improve the consumer-level experience. For example, there is an expansion to cover more people with Special Enrollment Periods (SEPs), including those who may already have COBRA coverage. Making the health insurance shopping and enrollment engagement even more accessible, HHS also outlined flexibilities for enrollees to switch plans to other metal tier levels, should they lose out on qualifying for a premium tax credit. SBMs will need to make accommodations for these rules by January 1, 2024.
State Health & Value Strategies highlights a few other state-level effects of the NBPP Part II. The latest rule also allows individuals to qualify for an SEP based on qualifying event timelines. Should someone experience a triggering event and not receive timely notice, that individual will be eligible for a SEP, providing 60 days to make new health insurance enrollment decisions. Those affected by the inadequate notice will have the ability to select the earliest effective date based on proper notice timelines, as well.
State-Level Flexibility and Other Consumer Benefits
To help promote better transparency and stability within the exchanges, a few other changes are in place. And there are some flexibility options available to states and SBMs, as well. For example, SBMs traditionally performed and submitted findings from enrollment audits to identify any individuals improperly receiving premium tax credits. Under the new rule, HHS will not be enforcing any penalties for SBMs not performing those random audits. Also, states are no longer required to conduct eligibility verification investigations. HHS noted the increased administrative burdens on consumers and SBMs alike in loosening the reins on these previously enacted requirements.
States and SBMs will have more flexibility when it comes to updates and mandated reporting. HHS announced in the final rule that it would use “enforcement discretion” and not penalize state entities that don’t submit the annual reporting. HHS will resume enforcing these yearly report requirements in 2022.
For states and SBMs, the next few years could see additional enhancements that allow for even more flexibility.
Meet the Author
Josh Schultz is a Senior Policy Analyst at Softheon, where he advises the company on health policy issues affecting businesses and government health agencies. Prior to Softheon, Josh worked for a non-profit agency assisting Medicare beneficiaries, a technology company, and consulting firms.