This afternoon, the Department of Health and Human Services released the requirements for qualified health plans (QHPs) offered through the Affordable Care Act’s (ACA’s) Exchanges. Generally, the requirements will apply to plan year 2019; exceptions are noted below.  The rule includes many proposals aimed to reduce burdens on states and grant health plan issuers more flexibility in designing plan offerings.

Overall, the rule will expand the role that states will play in the administration of ACA, particularly those states that have declined to establish their own exchanges. Under the Obama Administration, states that failed to establish their own exchanges abdicated a lot of administrative responsibility back to the federal government. The Trump Administration looks to expand the authority of those states, which may incentivize the states that have the capacity and expertise to perform some of those functions themselves.

The rule will apply to plans offered during the 2019 calendar year. Open enrollment will take place in late 2018.

States Will Have More Flexibility in Selection of EHB-Benchmark Plan, Network Adequacy

• Beginning with plan year 2020, states will have more flexibility in how they choose the essential health benefits (EHB)-benchmark plan with multiple options.
• States will be allowed to select an EHB-benchmark plan that was used by another state in 2017, replace an EHB category or categories with the same categories of benefits from another state’s 2017 EHB-benchmark plan, or select the benefits for their EHB-benchmark plan provided that the plan does not exceed the generosity of the most generous among comparison plans.
• States will be able to change their EHB-benchmark plans annually or maintain the current plan without action.
• The ACA ties a benchmark plan to a “typical employer plan” and HHS is finalizing defining two sets of typical employer plans from which a state can choose.
• Additional flexibility will be given the states in implementing network adequacy and essential community provider standards in states with exchanges operating on federal platforms (SBE-FPs).

Tax Credits and Special Enrollment Periods Set to Tighten, Hardship Exemptions Broaden

• Next year, Exchanges will be required to implement more strict checks that verify an applicant’s income in order to determine whether the applicant qualified for premium tax credit assistance.
• Exchanges will also be allowed to discontinue premium tax credits for enrollees that fail to file taxes and reconcile past tax credits without first notifying the individual.
• Enrollment options for all dependent newly enrolling in Exchanges via a special enrollment period (SEP) and will be added to a plan with a current enrollee (e.g. current Exchange enrollee marries, or has a child). Pregnant women receiving health care services through the Children’s Health Insurance Program (CHIP) will qualify for a loss of coverage SEP upon losing access to CHIP coverage.
• Hardship exemptions for individuals in counties with no or only one issuer will not qualify for a hardship exemption from the penalty for not maintaining coverage. In 2018, approximately 26% of enrollees had access to only one insurer, including all counties in the following states: Alaska, Arizona, Iowa, Kentucky, Mississippi, Nebraska, Oklahoma, South Carolina, and Wyoming.

Dental Plans No Longer Required to Meet Actuarial Value Requirements

• In 2019, stand-alone dental plans (SADPs) offered through the Exchange will no longer have to meet the actuarial equivalent (AV) requirements for pediatric dental essential health benefits (EHBs). Previously, SADPs had to cover pediatric dental EHBs at either a low (70%) or high (85%) AV.
• CMS anticipates that this change will enable plans to offer more flexible design options. SADPs maintain that it is difficult to meet the low AV requirement and offer preventative care without cost-sharing.
• In response to concerns that this would allow SADPs to offer plans with low AV, CMS noted that pediatric dental EHBs and cost sharing limits are still in effect.
• SADPs will still need to have the plan certified by a member of the American Academy of Actuaries, but they will no longer be required to have the plan’s level of coverage certified. Guaranteed renewability requirements do not apply to SADPs because they are considered excepted health benefit plans.

Plans Will be Required to Accept Premium Payments from Qualified Employers or Enrollees

• SHOPs must allow employers and enrollees to register in coverage through the plan itself, or a SHOP-registered agent or broker. This change was made to reduce administrative burdens on SHOPs. Plans will be required to accept enrollments from groups and maintain processes sufficient to identify whether a group market enrollment is an enrollment through the SHOP and maintain records of SHOP enrollment for a period of 10 years.
• SHOPs will be able to establish enrollment periods and processes outside of those that apply to the individual Exchanges, as along as the same enrollment periods and processes apply to all qualified employers and group members.
• These changes apply to SHOP plan years that begin on or after January 1, 2018.

Like Medicare, Meaningful Difference Requirements for QHPs Eliminated

• Requirements that the same plan offer plan options that are “meaningfully different” from one another will be eliminated in 2019.
• This mirrors a similar provision in the 2019 Medicare Advantage and Part D Call Letter, which eliminated similar requirements under those benefits.

Student Health Insurance No Longer Subject to Rate Review

• Health plans offered to students will no longer require Federal rate review.
• Additionally, the default threshold for review of reasonableness will be raised from 10% to 15%.