On July 1, 2014, CMS released a proposed regulation on how the exchange will determine eligibility to enroll in qualified health plans (QHPs) and receive premium tax credits and cost-sharing reductions for that coverage. The proposed regulation also addresses the re‑enrollment process for individual and small group exchange plans for 2015. Under the proposed regulation, many who have already enrolled in exchange coverage in the individual market, even subsidized coverage, will not have to fill out a new application or go back through healthcare.gov in 2015.
Redeterminations for Subsidies
The regulation provides three options for redeterminations of eligibility for the premium tax credits or cost-sharing subsidies. Exchanges can choose one of the three sets of procedures for making annual eligibility redeterminations:
- Existing procedures set forth in July 2013 final regulations with minor amendments.
- Alternative procedures specified by HHS for each plan year.
- Subject to HHS approval, exchange‑specific alternative procedures requested by the exchange that meet certain standards. The preamble notes that if the proposed regulation is finalized, the federally facilitated exchange will use the HHS alternative procedures for 2015.
Alternative Procedures for 2015
Contemporaneously with the proposed regulation, HHS released a separate memorandum specifying what its alternative procedures would be for 2015 if the proposed regulation is finalized. Under these alternative procedures, exchanges would request updated tax data only from the IRS and only for individuals currently receiving affordability assistance. These individuals will receive a standard notice describing the annual redetermination and renewal process, the requirements and process for reporting changes affecting eligibility for affordability assistance, and the eligibility determination for 2015. Additional notices would be required for individuals with income levels near or above the eligibility threshold for affordability assistance. Some consumers may have to go back into the exchange and renew their coverage if, for example, their income changed, they experienced a qualifying event or they want to switch their health insurance plan.
Enrollment Process for 2015
Under the proposed regulation, insurance carriers will issue notices to consumers informing them that unless the consumer instructs otherwise, they will be re-enrolled in the same plan and receive the same subsidy, unless their income has changed in 2015. In the event that a consumer is enrolled in a plan that will no longer be offered on the exchange in 2015 and the consumer does not proactively select a new insurance plan, that consumer will be automatically enrolled in a different plan of the same carrier and metal level. If the carrier does not offer a different plan of the metal level the consumer was previously enrolled in, the consumer will be enrolled in a plan one metal level higher or one metal level lower than the plan in which they were previously enrolled. If none of the above options are available, the consumer will be enrolled in “any other plan offered under the product in which the enrollee’s current QHP is offered in which the enrollee is eligible to enroll.” Further, if a consumer’s cancelled plan is not available on the exchange the next year and the above scenarios are not possible, the carrier may re-enroll the consumer in a different product offered by the same carrier if permitted by state law. In this case, if the consumer is enrolled in an off-exchange plan, any potential subsidies would no longer be available.
Separately, HHS issued draft standard notices for insurers to use when discontinuing or renewing a product in the small group or individual markets. In addition to content required by the eligibility redetermination regulation described above, the renewal and discontinuation notices include insurer contact information and information about other health coverage options. Renewal notices also address premiums, premium tax credits and plan changes. Insurers will provide notices for the small group market to the employer sponsoring the plan. An accompanying memorandum explains that HHS is accepting comments before finalizing the notices, but the draft notices may be used at least through Sept. 30, 2015.
There is a 30-day comment window on this regulation with comments due by July 28, 2014.
Guidance Memorandum for 2015
Instructions for Draft Notices