On January 14, 2013, CMS issued proposed regulations(474 pages), a press release and Fact Sheet on Eligibility and Enrollment Provisions in Health Insurance Exchanges. While much of the guidance details eligibility provisions for individuals and for the Exchanges themselves (such as Eligibility Notices, Fair Hearing and Appeals Processes for Eligibility Appeals), part of the proposed regulations also include provisions on Verification of Employer-sponsored Coverage. This is important for employers who sponsor group health plans because individuals who are enrolled in employer-sponsored coverage or eligible for employer-sponsored coverage that meets affordability and minimum value standards are ineligible to receive advance payments of the premium tax credit or cost-sharing reductions through the Exchange. Potential penalties apply if full-time employees do receive these subsidies and were not offered employer coverage that meets affordability and minimum value standards. The proposed rule includes details on the procedures for the Exchange to verify access to employer-sponsored coverage. It also proposes that an Exchange may opt to fulfill the employer-sponsored coverage verification process by relying on HHS.
Leavitt will provide additional information after we have had a chance to read these voluminous regulations.
Summary of Provisions Affecting Employers
The Preamble to the Proposed Regulations provides:
Beginning in 2014, individuals and small businesses will be able to purchase private health insurance through competitive marketplaces called Affordable Insurance Exchanges, or “Exchanges.” This proposed rule would:
- Set forth standards for adjudicating appeals of individual eligibility determinations and exemptions from the individual responsibility requirements, as well as determinations of employer-sponsored coverage, and determinations of SHOP employer and employee eligibility for purposes of implementing section 1411(f) of the Affordable Care Act,
- Set forth standards for adjudicating appeals of employer and employee eligibility to participate in the SHOP,
- Outline criteria related to the verification of enrollment in and eligibility for minimum essential coverage through an eligible employer-sponsored plan, and
- Further specify or amend standards related to other eligibility and enrollment provisions.
The intent of this rule is to afford states substantial discretion in the design and operation of an Exchange, with greater standardization provided where directed by the statute or where there are compelling practical, efficiency or consumer protection reasons.
Summary of Provisions Affecting Individuals and Exchanges
The CMS Press Release provides:
Today’s proposed rule includes information on how consumers will receive coordinated communications on eligibility determinations and can appeal eligibility determinations. It gives states flexibility in designing benefits and determining cost sharing in the Medicaid program. The proposed rule also provides flexibility to state-based Exchanges by allowing them to choose to rely on HHS for verifying whether an individual has employer-sponsored coverage and conducting some types of appeals.