Impact of the Proposed Notice of Benefit and Payment Parameters on Exchanges, Health Plans, and Web Brokers

On December 28, 2021, the Centers for Medicare and Medicaid Services (CMS) issued its annual proposed Notice of Benefit and Payment Parameters (NBPP). This important set of proposals will impact health plans, web brokers, the Federally Facilitated Marketplace (FFM), State-based Marketplaces using the Federal Platform (SBM-FP), and State-based Marketplaces (SBMs). Comments on the regulation were due on January 27, 2022.

The potential impacts of the NBPP differ in each state due because the type of marketplace varies in each state. Provisions outlined in the NBPP provide insight into the future direction of HealthCare.gov and SBMs. CMS is proposing to increase control over some operations and processes for FFM and SBM-FP states while relaxing some regulations for SBMs.

Proposed Changes to HealthCare.gov

Promoting Smart Consumer Choices Through Standard Plan Offerings

CMS aims to simplify health insurance offerings by proposing a requirement for carriers in FFM and SBM-FP states to offer standardized plans. First promoted by the Obama Administration, standard plan offerings would require carriers to provide the following:

Standard plans intend to address the oversaturation of plan choices in the ACA marketplaces.  CMS believes that the large number of plan options limits the ability of consumers to effectively choose coverage options as shoppers have little hope of fully comprehending all their options. In today’s market, even small, regional carriers will offer an extraordinary number of plans, which can be make choosing among those options difficult.  

Carriers would have to offer standard plans for every product network type, at every metal level, in every service area a carrier offers plans. Standard plans would be accessible to enrollees through HealthCare.gov.

CMS also sought feedback on whether there should also be a limit on the number of non-standardized plans available through the FFM (including in SBM-FP states) beginning with the 2024 plan year.

Improving Enrollment Rates with Reduced SEP Eligibility Verification Requirements

Currently, consumers in FFM and SBM-FP states seeking to enroll in coverage outside of open enrollment must submit documentation proving they qualify for a Special Enrollment Period (SEP) In an attempt to reduce uninsured rates and promote coverage among disadvantaged populations, CMS proposed to eliminate most situations where consumers need to submit proof they qualify for an SEP. Under the regulation, only consumers who have lost minimum essential coverage would have to submit that type of documentation.

The proposal would also give SBMs greater flexibility over when and how to conduct SEP eligibility verifications. Under the proposal, states would be allowed to provide broad exemptions to consumers from their SEP verification processes based on special circumstances, such as public health emergencies.

Extending State Flexibility in Marketplace Verifications

Currently, SBMs must have comprehensive programs in place to verify an individual’s access to employer-sponsored insurance (ESI). CMS proposes to give SBMs more flexibility in verifying whether an individual has access to ESI. States will be permitted to design their ESI verification process based on the likelihood that an enrollee would improperly receive marketplace subsidies.

Requesting Feedback on an Active Purchaser Model

CMS seeks feedback on whether the FFM should become an active purchaser of health plans. Becoming an active purchaser would mean the FFM could negotiate contracts with insurers, limit the number of participating insurers, require only standardized plans, and exclude lower-value plans from being sold. Several SBMs, such as Covered California and the Massachusetts Health Connector, have already taken this approach in their marketplaces.

The Massachusetts Health Connector determines which plans can be sold and dictates the benefit designs offered. Based on its adoption of this active purchaser model and other factors, Massachusetts had the lowest average premiums in the U.S. in 2017 and 2018.

Extending Current User Fees

Carriers in FFM and SBM-FP states pay a user fee to CMS for the use of HealthCare.gov. CMS proposes to maintain the current user fees at 2.75% for FFM states and 2.25% for SBM-FP states. Reductions of user fees have been a trans-presidential concern with a NBPP issued by the Trump Administration reducing FFM user fees from 3% to 2.5%; however, the Biden Administration’s investments in call centers, an expanded navigator program, and marketing efforts resulted a higher 2.75% FFM user fee than originally expected (and a 2.25% user fee for SBM-FP states).   

Proposed Changes for Health Plans

Reinstating Health Plan Network Adequacy Reviews for the FFM

The Biden Administration proposes to reinstate CMS-run health plan network adequacy reviews – a policy last active during the Obama Administration. Under this proposal, CMS would require carriers offering plans on the FFM to meet quantifiable standards for network access. Health plans would be required to meet new standards including maximum appointment wait times and travel distances to providers.

Further, CMS proposes requiring plans to undergo a prospective network adequacy review before being marketed or sold in FFM and SBM-FP states. Reducing and setting requirements on plans sold on the marketplace would prevent health plans from submitting an overabundance of plan offerings that offer little variation.

Enforcing Network Adequacy Standards for SBMs

Currently, SBMs conduct their own network adequacy reviews. CMS expressed a need for greater alignment of network adequacy reviews across FFM and SBM states. Potentially mandating network adequacy standards in SBMs grants CMS greater oversight to facilitate changes that would be consistent across the FFM, SBM-FP states, and SBMs.

Improving the Annual Health Plan Renewals Processes

Currently, FFM enrollees are re-enrolled into the same plan from one year to the next. However, plans and premium subsidy amounts change each year, making a plan that was a good choice one year a bad choice the next. CMS proposes changing the approach to eligibility redeterminations by incorporate out-of-pocket costs, premiums, and plan generosity into the automatic reenrollment hierarchy. Considering member behavior and plan details allows the automated reenrollment processes make more informed decisions and possibly increase member retention.

Updating Cost-Sharing Limits

The ACA sets a maximum limit on cost sharing for all health insurance policies applicable nationwide in both FFM and SBM states. In 2022, the annual limit on cost-sharing is $8,700 for self-only coverage and $18,200 for other than self-only coverage. CMS would update these amounts to $9,100 for self-only coverage and $18,200 for other than self-only coverage in 2023. (CMS is making these updates through a separate guidance document issued around the same time as the NBPP.)

Revising Policies on Guaranteed Availability of Coverage

Under rules issued during the Trump Administration, carriers can decline to effectuate coverage for consumers who have past-due premiums from a previous enrollment. Under the proposed rule, insurers would no longer be able to deny coverage to applicants with outstanding debt from previous coverage. This policy would apply nationwide – in both FFM and SBM states.

Reinstating coverage to those with past-due premium payments may present new administrative complexities for health plans. Tracking and targeting members with an outstanding balance in efforts to retain the member requires automated communication informed by member behavior.

Proposed Changes for Web Brokers

Introducing Display Requirements for Web Brokers

CMS proposes to bar web-brokers from using advertisements or other preferential displays for QHPs based on the compensation they would receive. Web brokers would be required to display the same QHP comparative information as HealthCare.gov including:

CMS aims to clarify that web-brokers are prohibited from favoring certain plans due to payment from carriers. In this same spirit, the rule proposes requiring web brokers to display an informed rationale for all their plan recommendations. Additionally, brokers would need to provide a rational and methodology for selecting plan displays on their website.

Enacting Broker Enrollment Rules

CMS has become concerned that certain agents, brokers, and web-brokers were completing the marketplace application process without a consumer’s consent or knowledge.

When this occurred, brokers would submit income information that resulted in a $0 monthly premium. Brokers would receive commissions from carriers, and consumers might not discover they’d been erroneously enrolled in a plan until tax time – when they suddenly owed money to the IRS.

To prevent this from happening, CMS proposed several restrictions to ensure that the email address, telephone number, mailing address, and income information entered on applications submitted by agents, brokers, or web-brokers are valid.

These restrictions only apply to FFM agents, brokers, and web-brokers, but this problem has occurred in SBM states as well. Because of this, CMS recommends that SBMs also take action to address fraudulent marketplace submissions.

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