The Department of Health and Human Services Finalizes Third Exchange Rule for 2022

The Department of Health and Human Services (HHS) finalized the third part of the Notice of Benefit and Payment Parameters for 2022 (NBPP) this month. As the Summer Edition of Health Policy News highlighted, this this rule was expected and previewed in Part 2 of the final Notice of Benefit and Payment Parameter for 2022 and was the Biden Administration’s first independent Exchange rule. The  rulemaking addresses guidance that was previously finalized by the Trump administration, and represents a reset similar to what we saw when President Trump issued the Market Stabilization Rule after entering office.

The rule was proposed in July just following the Supreme Court decision in California v. Texas upholding the Affordable Care Act. After reviewing nearly 400 comments, HHS finalized the rule on September 17, 2021.

Below are updates on the major policy changes finalized in the rule.

Exchange User Fees

The rule finalizes the increase in the 2022 Exchange User Fees to:

  • 2.75 percent for Federally-facilitated Exchanges (FFEs) – increased from 2.25 percent
  • 2.25 percent for State-based Exchanges-Federal Platform (SBE-FPs) – increased from 1.75 percent

These amounts remain lower than the current user fees of 3 percent for FFEs and 2.5 percent for SBE-FPs. The increased fees will be used to fund enhanced outreach and enrollment and the Navigator program.

Open Enrollment Period

The rule extends the Marketplace Open Enrollment Period (OEP) starting in 2022. The OEP will again extend from November 1st through January 15th.

Direct Enrollment

The rule finalizes the proposal to repeal the Exchange Direct Enrollment option enacted via Part 1 of the NBPP. This option was slated to become available for states with State-based exchanges (SBEs) beginning in the 2022 plan year, and to FFE and SBE-FP states beginning in the 2023 plan year. States will no longer have the option to facilitate enrollment solely through a private direct enrollment entity in place of a centralized Exchange platform. No state had yet began pursuing the option. Direct enrollment as one enrollment pathway to enroll in a centralized Exchange remains an option.

Section 1332 Waiver Requirements

HHS and the Department of Treasury finalized their joint proposal to remove the enhanced flexibility relative to Section 1332 Waiver guardrails[1] enacted via Part 1 of the NBPP. The rule enacts standards similar to those put into place in 2015 and overturned via guidance in 2018.

The Departments also establish a process for waiver extensions and amendments via the rule, both of which will require a letter of intent describing proposed changes and implementation plans. Waiver extensions must be submitted at least one year prior to the waiver’s end date, and waiver amendments must be submitted at least 9 to 15 months prior to the proposed implementation date. Within 30 days of the submission, the Departments will respond to confirm that the change qualifies and identify the information that must be submitted based on the state-specific needs and requests. These requests will be subject to state and federal public comment requirements.

The rule also permanently adopts and extends flexibility related to public notice requirements in all emergency situations.

Finally, in the preamble, the Departments note that they reserve the right to further evaluate approved waivers and suspend or terminate any that they find materially fail to comply with the terms and conditions of the waiver or the guardrails, laws, and regulations.

Additional Changes

Other changes finalized in the rule include:

  • Clarifying that all health plans must comply with mental health parity and that, to comply with Essential Health Benefit requirements, plans must provide mental health and substance use disorder coverage.
    • Providing Exchanges the option of a new monthly special enrollment period (SEP) for individuals who are eligible for Advance Premium Tax Credits (APTCs) and whose incomes are projected to be no more than 150 percent of the Federal Poverty Level. Under the final rule, this SEP will only be available for enrollment through Exchanges and will only be in effect when the required personal contribution to premiums for this population is 0 percent, such as in 2021 and 2022 under the American Rescue Plan. Additionally, the circumstances under which current enrollees who qualify for the SEP can newly add dependents to their coverage is limited. The rule also clarified that the existing SEP for those who become newly eligible or ineligible for APTCs does not apply to those with a maximum APTC amount of $0. In the preamble to the rule, HHS also noted that it may provide a SEP to ensure that those losing Medicaid eligibility at the end of the COVID-19 public health emergency can enroll in Exchange coverage.
    • Reinstating requirements that FFE Navigators provide consumers with post-enrollment information and assistance, including that related to eligibility appeals, premium-tax credit reconciliation, and health care coverage concepts and rights. This requirement will go into effect for the next round of Navigator grants, and training materials will be made available.
    • Eliminating the requirement that separate bills and payments be sent for the portion of insurance premiums attributable to coverage for abortion services. Carriers may still choose to send two bills, as long as they do so in a manner than minimizes consumer confusion and promotes continuity of coverage.

As we noted in our coverage of the proposed rule, HHS is still expected to make a few additional changes to reverse actions by the last administration, though – for timing reasons – it was unable to do so in this round of rule-making. Specifically:

  • HHS reiterated its intent to take action required by the ruling in City of Columbus v. Cochran to reinstate standardized plans and propose plan designs in the 2023 NBPP.
  • Likewise, HHS confirmed that it will make the required changes to Federal network adequacy reviews via the 2023 NBPP.
  • HHS also noted to that it will review the current policy for applying premium payments when past due amounts have not yet been paid in the NBPP for 2023.


[1] The Section 1332 Waiver guardrails are as follows: 1. The proposal will provide coverage that is at least as comprehensive as without the waiver; 2. The proposal will provide coverage and cost-sharing protections that are at least as affordable as without the waiver; 3. the proposal will provide coverage to at least a comparable number of the state’s residents as without the waiver; and 4. the proposal will not increase the federal deficit.

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