For some time insurers have been complaining that consumers have been abusing special enrollment periods (SEPs) to sit out open enrollment opportunities while healthy and then enroll in coverage through SEPs once they need health care. Consumer Oriented and Operated (CO-OP) plans have complained that excessively rigid regulatory requirements have impeded their operations.
On May 6, the Centers for Medicare and Medicaid Services took action by adopting an interim final rule that amends both current SEP requirements and regulations governing CO-OP board and marketing requirements (fact sheet) CMS also released consumer and insurer fact sheets describing the six SEPs that are currently available for consumers to enroll in health plans outside of the annual open enrollment periods (the insurer fact sheet is at the CMS REGTAP.info website).
The Permanent Move SEP
The biggest change in the SEPs affects the permanent move SEP. Under current rules, if a consumer or his or her dependent gains access to new qualified health plans (QHPs) because of a permanent move, the consumer has up to sixty days to enroll in a new QHP. This has been true whether or not the consumer was previously enrolled in marketplace coverage. Insurers have objected that this SEP has given consumers who failed to enroll in coverage during open enrollment and then find that they are in need of medical care the opportunity to establish eligibility for coverage simply by moving to a new address (or claiming to have done so).
Under the amended SEP, most individuals who move will (as of July 11, 2016) be eligible for an SEP only if they have been enrolled in coverage for at least one day during the previous sixty days. In other words, consumers who have already enrolled in coverage and then move may enroll in marketplace plans covering their new homes, but consumers who were not enrolled before the move will have to wait until the next open enrollment period.
There are important exceptions to this changed rule, recognizing that some consumers who move would not previously have had an opportunity to enroll in coverage. First, individuals who move to the United States from outside the U.S. or from a United States territory will still have be able to enroll through an SEP. Second, individuals who gain access to coverage because they are released from incarceration will be granted an SEP; but not because they have moved, but rather because they were not eligible for marketplace coverage while they were incarcerated. Finally, individuals who lived in a state that did not expand Medicaid and were ineligible for marketplace coverage because their income was below 100 percent of poverty, but who become eligible for marketplace coverage when they move to another state (presumably because of increased income), are also eligible for an SEP.
Advance Availability Of SEPs
The interim final rule removes a requirement imposed by the 2016 Benefit and Payment Parameters rule that mandated that marketplaces be ready by January 1, 2017 to provide 60 days' advance availability of an SEP for individuals who experience a permanent move, or who lose a dependent or are no longer considered a dependent because of divorce, legal separation, or death. The timing of Implementation of advance availability will now be at the option of the marketplaces. Presumably the federally facilitated marketplace will delay implementation of advance availability, although this is not explicitly stated.
The SEP Landscape
The SEP rule as amended provides for six SEPs, which are listed in the issuer and consumer fact sheets. These SEPS are for:
- Loss of other qualified coverage, such as Medicare, Medicaid, or employer coverage;
- Changes in household circumstances, such as through marriage, birth, adoption, divorce, or a death in the family;
- Permanent moves as defined in the interim final rule;
- Changes in eligibility for financial help, for example when an individual gains lawful alien, citizenship, or recognized Indian status, or experiences an increase of income to above 100 percent of the federal poverty level in a state where the individual was not eligible for Medicaid previously because the state had not expanded Medicaid eligibility;
- Certain types of errors made by marketplaces or plans; and
- Other specific situations, as defined by guidance, such as where an individual is a victim of spousal abandonment or domestic abuse apply for separate coverage.
The guidance describes these SEPS as “defined and limited,” but some of the SEPs are still quite open-ended, and the interim final rule does not further limit any SEPs other than the permanent move SEP. The SEPs as modified by the interim final rule apply for all non-grandfathered individual coverage as well as SHOP coverage.
The interim final rule also does not address what has until now been the key insurer SEP demand, that SEP eligibility be established by documentary evidence before consumers are enrolled in coverage through SEPs. But CMS may not yet be done with tightening up on access to SEPs; further action is likely. It will be unfortunate if the steps that CMS is taking only discourage SEP enrollment that insurers regard as inappropriate, rather than encouraging more consumers to enroll appropriately through SEPs. Expanding SEP enrollment to cover more healthy consumers could in fact do much to improve the risk pool, the ultimate goal of insurers.
Loosening Restrictions On CO-Op Board Membership
The interim final rule also amends a number of regulations affecting the CO-Ops. Under current rules, a majority of officers of a CO-OP must be CO-OP members. Government employees and employees of insurers that existed before the ACA have been ineligible to serve as board members. Under the amended rule, only high level government or insurer employees will be ineligible for board membership (although government employees will not be able to be board members of a CO-OP that serves their jurisdiction).
Moreover, the board member eligibility bar will apply only to employees of pre-existing insurers that operated in the individual or small group market. The requirement that board members with specialized expertise, experience, or affiliation not constitute a majority of a board is also removed.
Under the interim final rule, a majority of a CO-OP's board will still have to be elected by a majority of its members, but a majority of board members will not actually have to be CO-OP members. Entities offering loans, investments, or services may now be represented on CO-OP boards.
CO-OP Plan Offerings And Wind-Downs
The interim final rule also modifies the requirement that at least two thirds of the plans issued by a CO-OP must be QHPs in the individual or small group market. The difficulty of achieving predictable compliance with the two-thirds rule has discouraged CO-OPs from diversifying their product lines by offering Medicare, Medicaid, or supplemental dental or vision coverage. The rule clarifies that if a CO-OP temporarily fails to meet the standard in a given year, HHS will not necessarily enforce its right to require early loan repayment as long as the CO-OP offers silver and gold plans, has a specific plan and timetable to return to compliance with the two-thirds requirement, and acts with diligence and good faith to return to compliance with the two-thirds standard for future years.
Additionally, the interim final rule addresses the application of the prohibition against a CO-OP converting or selling to a for-profit or non-consumer operated entity to the situation where CO-OP policies are sold or converted to a non-CO-OP insurer in connection with the wind-down of an insolvent CO-OP. Under the loan-agreement between CO-OPs and CMS, CMS can accelerate loan repayment or terminate its loan agreement if the prohibition is violated. HHS recognizes that in appropriate circumstances, it may allow an insolvent CO-OP to enter into an arrangement to sell or convert policies to preserve coverage for its enrollees.
The preface lists the outstanding loan amounts for each of the eleven remaining CO-OPs, totaling $1.2 billion. The CO-OP provisions of the interim final rule are effective as of May 11, 2016.
A CMS Openness To State Discretion On Risk Adjustment?
Finally, the preface to the interim final rule notes enigmatically that the risk adjustment program has caused problems for some new, small, or rapidly growing insurers. It recognizes that states are the primary regulators of insurance markets, and encourages states “to examine whether any local approaches, under State legal authority, are warranted to help ease this transition to new health insurance markets.” A National Association of Insurance Commissioners working group is reviewing what authority states may have to reallocate risk adjustment payments and contributions, and whether such authority should be exercised. This is the first sign I have seen that HHS might be sympathetic to a state's exercise of such discretion.
No comments:
Post a Comment