On January 31, 2020, the Centers for Medicare and Medicaid Services (CMS) released the proposed Notice of Benefit and Payment Parameters (NBPP) and the draft Letter to Issuers in the Federally-facilitated Exchanges (hereafter “the Letter”)[1] as well as accompanying guidance and timelines.[2] CMS is accepting comments on these items through 5pm on March 2, 2020.
To assist states in considering whether to submit comments, we compiled the major changes proposed in the 2021 annual Qualified Health Plans (QHP) guidance into a fact sheet. Click here to view the fact sheet.
Below, we provide additional background information on topics we believe may warrant comment to CMS by states and stakeholders, as well as on the annual payment parameters and QHP certification timeline.
Essential Health Benefit Defrayal Policy
One of the big changes proposed in the NBPP relates to the cost defrayal requirements relative to the adoption of new state-mandated benefits, as well as ongoing tracking and monitoring of state mandates that may exceed the Essential Health Benefits (EHBs). In previous years’ guidance, CMS outlined the flexibility relative to cost defrayal, but in October 2018 CMS issued further guidance on the topic, including an FAQ.
Being able to supplement or change the benchmark is not new flexibility, as states have been able to mandate additional benefits under the ACA that exceeded the ten EHBs. However, states must defray the cost of covering non-EHB benefits by either making payments to QHP enrollees or the applicable insurance carrier. The proposed 2021 guidance restates that the entity responsible for identifying new state mandates is the state and, more specifically, the entity responsible for certification, but CMS is seeking comment on who should be responsible for identifying the benefits that require defrayal.
States may be particularly interested in submitting comments regarding the important question of EHB-defining authority, particularly in light of the NBPP’s proposed reporting requirements (outlined in the PCG fact sheet). As set forth in the proposal, CMS will review and define EHBs on behalf of states that do not submit reports—a binding determination that would become part of the state’s EHB for the next year.
Auto Re-Enrollment
The passage of last December’s budget bill led most to believe that auto re-enrollment would not be addressed in this year’s NBPP. However, while maintaining the process as required, CMS is proposing changes targeted at those who would be auto re-enrolled with no premiums due to Advance Premium Tax Credits (APTCs). As detailed in PCG’s fact sheet, CMS is proposing to either reduce or eliminate APTCs that would otherwise fully cover the enrollee’s premium unless that individual actively re-enrolls and applies for financial assistance. Many states and health policy experts have raised concerns about this provision’s potential to create a new kind of surprise bill—especially for individuals who are accustomed to auto re-enrollment.
Payment Parameters
Below, Health Policy News has summarized the NBPP’s annual Exchange / QHP payment parameters for the coming year.
User Fees
CMS has proposed maintaining the Federal Exchange user fees at current rates:
- 3 percent of monthly premiums for Federally-facilitated Exchanges.
- 5 percent of monthly premiums for State-based Exchanges on the federal platform.
CMS noted in the preamble, however, that it is considering reducing the user fees for 2021 and invited comments on doing so. CMS is also seeking information on “trends in usage of Federal platform functions and services, potential efficiencies in Federal platform operations, and premiums and enrollment projections,” which it notes may impact the final user fee rates.
Maximum Out-of-Pocket and Cost-Sharing Reduction (CSR) Plan Variations
As required under the ACA, CMS has proposed increases to the annual limit on cost-sharing for QHPs, including for CSR plan variations, based on the proposed 2021 premium adjustment percentage.
Draft Timeline for QHP Certification
CMS also released the key dates for QHP certification, which closely mirror past years’ dates. Although this topic does not necessarily warrant comment to CMS, Health Policy News created a visual of the timeline (below) for use by key state staff in moving though the annual QHP certification process and setting internal form and rate review deadlines.
In addition to this timeline, more information on the QHP certification process—including the proposed rate review dates and AV calculator/methodology for 2021—can be found in CMS’s previously released guidance related to rate review from December 20, 2019.[3]
HPN will continue to monitor this guidance and update readers on changes once finalized by CMS. If states have any questions on proposed policy changes or would like assistance in drafting comments to CMS, please contact us at healthpolicynews@pcgus.com.
Footnotes
[1] CMS updated the Letter on 2/14/20 to fix technical issues (including user fee amount correction and public comment deadline). Find the reissued guidance here.
[2] Links to guidance released by CMS on January 31st:
- 2021 Proposed Notice of Benefit and Payment Parameters
- Fact Sheet on NBPP
- 2021 Letter to Issuers in the FFM
- Proposed Key Dates for 2021
[3] Links to 2021 Rate Guidance:
