On April 30, 2021, the Biden administration released the final rule HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards. This is the second final rule released that includes policies for the health insurance exchanges in 2022. The first rule was released in the final days of the Trump administration but did not address all of the policies in the initial proposed rule.

This second final rulemaking addresses a number of policies, including the following:

• Lower maximum cost sharing limitations;
• Additional flexibilities in certain special enrollment periods;
• Updates to risk adjustment policies;
• Reporting requirements for pharmacy benefit managers (PBMs); and
• Webpage display requirements for direct enrollment entities.

Finalized policies will generally impact qualified health plans (QHPs) offered on the exchanges in plan year 2022.

HHS Plans to Revisit Exchange Policies Adopted in Final Days of Trump Administration

In this final rule, the Department of Health and Human Services (HHS) says the agency intends to issue additional rulemaking in the spring to address certain policies that were finalized by the Trump administration in the first 2022 Notice of Benefit and Payment Parameters (NBPP) final rule. This subsequent rulemaking will address the following:

• New proposed qualified health plan (QHP) user fees for 2022;
• Exchange Direct Enrollment (DE) options for states; and
• Changes to regulations to section 1332 state innovation waivers.

Lower Cost Sharing Limitations Finalized

In this second rulemaking, HHS finalizes a maximum annual limitation on cost sharing of $8,700  for self-only coverage and $17,400  for non-self-only coverage. These finalized maximum annual limitations are lower than what was initially proposed. Certain beneficiaries also see a reduction in this maximum depending on income level.

For future benefit years, HHS will publish certain benefit parameters in guidance released in the January of the benefit year prior to that applicable year. For example, this means these parameters would be published in January 2022 for the 2023 benefit year. This includes premium adjustment percentage, maximum annual limitation on cost sharing, reduced maximum annual limiting on cost sharing, and required contribution percentage.

HHS Adds Additional Flexibility for Certain Special Enrollment Periods

This rule adopts an additional flexibility related to special enrollment periods (SEPs) by allowing Exchange enrollees to change to a lower metal level qualified health plan (QHP) if they qualify for a SEP based on a loss of APTC eligibility. Exchanges must implement this by January 1, 2024. In addition, a qualified enrollee who did not receive timely notice of a triggering event and was unaware of such an event will be allowed to select a plan within 60 days of the date the enrollee knew or reasonably should have known of the triggering event.

HHS also clarifies that an SEP is available when employer contributions or government subsidies for COBRA continuation coverage cease.

HHS did not finalize a proposal to require all exchanges to verify special enrollment periods for at least 75% of new enrollments in response to comments saying this would impose additional administrative burden on consumers and states in additional to a financial burden for states.

PBMs will Now Report Certain Data if Contracting with QHP Plan Sponsors

Statue requires QHP issuers to report certain prescription drug information to HHS. The agency is now expanding this to include pharmacy benefit managers (PBMs) that contract with a plan sponsor that offers at least one QHP. If a QHP does not contract with a PBM, the QHP will still have to report this information to HHS. This information includes percentage of prescriptions provided in retail and mail order pharmacies; the generic dispensing rate; the aggregate amount and type of rebates, discounts, or price concessions; and the aggregate amount of the different between what the plan pays the PBM and the amount paid to the pharmacy.

HHS Adopts Variety of Risk-Adjustment Policies

HHS is recalibrating the risk adjustment models to be consistent with what was used in 2020, transitioning away from the use of MarketScan® data. HHS will also use the same data years of EDGE data for 2022 model recalibration that was used for 2021 (2016, 2017, and 2018 data), which are the 3 most recent consecutive years of enrollee-level data. HHS does note that the agency will no longer republish the risk adjustment methodology in the annual NBPP unless the agency is proposing changes.

HHS operates risk adjustment programs for state exchanges and utilizes data validation to ensure program integrity. In this final rule, HHS revises the schedule for collection risk adjustment data validation (HHS-RADV) charges and disbursement of payments so that these will occur in the same calendar year that HHS-RADV results are released. The risk adjustment user fee for the 2022 benefit year is $0.25 PMPM.

HHS is not finalizing multiple proposed updates to risk adjustment models, including changes to the specifications of both the adult and child models, updates to enrollment duration factors in the adult models, and removal of the current severity illness indicators. However, the agency will continue to use a price adjustment for hepatitis C drugs that has been in use since the 2020 plan year.

In this rule, HHS announces it is approving a request from Alabama to reduce risk adjustment transfers by 50 percent for the 2022 benefit year for the individual and small group markets. HHS intends to include any subsequent state requests in the annual NBPP rulemaking.

Direct Enrollment Entities Must Advertise Product Offerings on Separate Webpages to Promote Consumer Clarity

Direct enrollment (DE) entities that display and market qualified health plans (QHPs) through the exchange, individual coverage offered outside the Exchanges, and all other products will be required to do so on at least three separate website pages. HHS intends to monitor implementation of this to determine if further clarification or requirements are needed to protect consumers. Conversely, HHS decided not to finalize an exception to display requirements of QHP comparative information on web broker non-exchange websites. The agency agreed with commenters that displaying more comparative information is beneficial for consumers comparing QHP options.

Plans are required to report prescription drug rebates and other price concessions for MLR purposes. Stakeholders had requested that HHS align the definition of these rebates and price concessions with what is statutorily required to be reported by QHPs. In this rule, CMS aligns those definitions and clarifies that the definition excludes bona fide service fees as well as any remuneration, coupons, or price concessions for which the full value is passed on to the plan enrollee. This begins with 2022 MLR reporting, which means reports filed in 2023.

Enrollee Experience Survey Data to Be Released Publicly

This rule finalizes a proposal to post an annual public use file (PUF) containing QHP enrollee experience survey information. This policy is in line with agency-wide effort to promote transparency.