The HHS 2015 Notice of Benefit and Payment Parameters Final Rule (issued March 6, 2014) included numerous and varied provisions of interest, not only regarding the payment parameters of the premium stabilization “3 R’s” (risk adjustment, reinsurance, and risk corridor), but also regarding: cost-sharing limits (for stand-alone dental as well as medical plans), changes to the 2015 annual open enrollment period dates, the 2015 actuarial value (AV) calculator, patient safety, the Small Business Health Options Program (SHOP), and several others.
Most provisions remain unchanged from the Proposed Rule (issued November 24, 2013), but the Final Rule does extend the Exchange open enrollment period by one month.
HHS also published a Fact Sheet that summarizes the Final Rule.
Transitional Reinsurance Fee Assessments
The final rule confirms that the 2015 reinsurance fee will be reduced to $44 per enrollee. (Enrollee includes both employees and dependents.) The fee for 2014 is $63 per enrollee.
The transitional reinsurance fee will be assessed on insured and self-funded group health plans in 2014-2016. It is intended to collect $25 billion in fees over those three years, which will be paid to partially reimburse insurers in the individual exchanges who cover high claims individuals. The final rule confirms the following changes regarding the reinsurance fee:
- The 2014 assessment will be due in two installments: $52.50 per enrollee (the reinsurance contribution) will be due in January 2015, and the remaining $10.50 (the Treasury contribution) will be due in December 2015.
- Self-insured plans that self-administer claims (do not hire a third-party administrator) will be exempt from the reinsurance fee in 2015 and 2016. These types of plans usually are multi-employer union plans.
2015 Limits on Cost Sharing
The ACA limits the maximum amount most non-grandfathered plans can require participants to pay—both for deductibles and for the overall out-of-pocket cost-sharing—and provides that these limits will be adjusted annually based on the percentage increase in the average per capita health insurance premiums (based on data the government publishes annually). The final rule provides for a 4.21% increase for 2015, which will:
- increase the individual deductible from $2,000 to $2,050, and the family deductible from $4,000 to $4,100
- increase the individual out-of-pocket maximum from $6,350 to $6,600, and the family out-of-pocket maximum from $12,700 to $13,200
Although these amounts are higher than the 2014 amounts, they are slightly lower than the proposed 2015 cost-sharing limits that were in the November 2013 proposed rule. Also note that the out-of-pocket maximums generally only apply to in-network costs; however, if no in-network provider is available in a particular specialty, then the participant’s out-of-network costs will also count toward the out-of-pocket maximum.
Annual Limit on Cost Sharing for Stand-Alone Dental Plans
The national out-of-pocket maximum on stand-alone dental plans will be $350 for one covered child and $700 for two or more children.
2015 Federal Marketplace User Fee
Insurers that offer plans in the federal Marketplace must pay a user fee. In 2015 this fee will be 3.5% of premiums, the same as in 2014.
2015 Actuarial Value Calculator
The final rule also updates the AV Calculator for 2015. The Calculator and Methodology can be accessed at the Center for Consumer Information and Insurance Oversight (CCIIO) website. http://www.cms.gov/cciio/resources/regulations-and-guidance/index.html
2015 Open Enrollment Period
The open enrollment period to purchase coverage in the federal Exchange for 2015 will begin on November 15, 2014 and extend through February 15, 2015.
Originally, the 2015 open enrollment period would have been October 1 – December 31, 2014. The proposed rule in November 2013 would have changed it to November 15, 2014 – January 15, 2015. The final rule extends it by one month.
Additional Time for States to Get Approval for State-Based Marketplace
States that have not implemented a state-based marketplace (SBM) but want to do so must submit an Exchange Blueprint. The date by which states were required to receive approvals or conditional approvals was January 1, for implementation by the following January 1. That deadline will be moved forward to June 15, for implementation by the following January 1. Obviously, the federal government wants to make it easier for states to implement state-based marketplaces.
Changes to the 2014 Premium Stabilization Parameters
Under the 2014 payment parameters, transitional reinsurance funds will be allocated to insurers under the following criteria: once an insurer has paid $60,000 in claims for an individual (the individual attachment point), the insurer will be reimbursed for 80% of that individual’s claims above $60,000, to a cap of $250,000 for that policy year. The 2015 final rule makes the following changes:
- The reinsurance attachment point in 2014 will be decreased from $60,000 to $45,000.
- For 2015, the attachment point will be $70,000 (rather than $60,000), and the insurer will be reimbursed for 50% (rather than 80%) of that individual’s claims above $70,000, to a cap of $250,000 for that policy year.
HHS wants to ensure that all reinsurance fees collected in a particular year are spent for claims in that same year. For 2014 and 2015, if reinsurance fees collected for a benefit year exceed the requests for reinsurance payments, HHS will increase the coinsurance rate up to 100% on its payments before rolling over any excess funds to the next year.
The reason HHS made the above changes to the 2014 premium stabilization parameters is because HHS recognizes that the 2014 risk pool will likely be smaller and will include more high-claims individuals than initially projected. This is expected because of the federal exchange website problems, and the belief that lower-claims individuals will continue in their non-ACA compliant plans for another three years as a result of the President’s transitional relief that allows insurers to continue offering non-ACA-compliant policies in 2014-2017 (policies beginning by October 1, 2016) subject to approval by state regulators.
The final Rule also addresses several changes to the Small Business Health Options Program (SHOP), the actuarial value (AV) calculator, and patient safety standards.