On Nov. 21, 2014, CMS issued proposed regulations related to benefit and payment parameters for the 2016 benefit year. The regulations address several topics, outlined below.
Transitional Reinsurance Contributions. The proposed contribution amount for 2016 is $27 per covered life. This is a decrease from the 2015 contribution amount of $44. The contribution is currently not payable on fully insured expatriate plans. The proposed regulations would also exempt self-insured expatriate plans in 2016.
Marketplace Open Enrollment. The open enrollment period for the individual marketplace would be from Oct. 1, 2015 through Dec. 15, 2015 with a coverage effective date of Jan. 1, 2016.
Special Enrollment Periods (SEP). An individual who is eligible for a non-calendar year employer sponsored plan would experience a SEP at the end of the plan year, permitting the individual to enroll in the marketplace outside of open enrollment. The regulations also propose a SEP for an individual who is making less than 100 percent of the federal poverty level (FPL) and resides in a state that has not expanded Medicaid. The SEP would apply if the individual has a subsequent change in household income to between 100 and 400 percent of FPL, resulting in premium tax credit eligibility.
Individual Mandate Exemptions. An individual who is required to pay more than 8.1 percent of household income for minimum essential coverage would be exempt from the individual mandate. This is an increase from the current 8.0 percent.
SHOP. SHOPS would be permitted to assist employers with COBRA premium processing. The SHOP would, at the employer’s request, collect COBRA premium payments directly from participants and forward the payments to the insurer. The employer would still be responsible for all other COBRA administrative functions including notice requirements.
Out-of-pocket (OOP) maximum. For 2016, the proposed OOP maximum is $6,850 for self-only coverage and $13,700 for family coverage. This is an increase from the 2015 OOP maximums of $6,600 for self-only and $13,200 for family.
Pediatric services. Pediatric dental and vision services, which are essential health benefits (EHB), would be offered to children through the end of the calendar year in which they turn 19 years of age. This is a change from the current requirement to provide coverage until age 19.
Habilitative services. The proposed regulations define habilitative services, which is a category of EHB, as services and devices provided for an individual to attain, maintain or prevent deterioration of a skill or function never learned or acquired due to a disabling condition. This is different from rehabilitative services which are provided to an individual who had acquired such skills but lost them or became impaired because of illness, injury or a disabling condition. An example of an habilitative service is therapy for a child who is not walking or talking at the expected age.
Prescription drugs. Plans required to provide coverage for EHB could not limit prescription drug coverage to mail-order delivery. There would be an exception for certain drugs that have limited access and are not generally available through retail pharmacies. The plan would be permitted to charge different cost-sharing amounts for pharmacy versus mail-order delivery. Also, plans would be required to publish a complete list of all covered drugs on its formulary drug list including any tiering structure.
Discrimination in EHB. The regulations identify several practices which the agency would generally consider to be discriminatory and in violation of the EHB regulations. Examples include placing all drugs for a specific condition on a high-cost sharing tier and limiting coverage for hearing aids to participants who are 6 years of age or younger.
Minimum Value. The regulations propose rules in line with IRS Notice 2014-69, which state a group health plan would not be considered to provide minimum value unless the plan includes coverage for inpatient hospitalization and physician services. The notice provided an exception for employers who entered into a binding written commitment or began enrolling employees prior to Nov. 4, 2014 and the plan year begins by Mar. 1, 2015. The proposed regulations clarify that a binding written commitment exists when an employer is contractually required to pay for an arrangement, and a plan begins enrolling employees when it begins accepting employee elections to participate in the plan.
MLR. Currently, a group health plan that is subject to ERISA and receives a MLR rebate (which represents plan assets) must use the rebate within three months or place the rebate amount in trust. Non-federal government plans and church plans are not subject to ERISA and do not have a similar timeframe imposed to use the rebate. The regulations propose that employer plan sponsors not subject to ERISA must use the rebate within three months. They could use the rebate to reduce the employees’ portion of premium for the subsequent policy year (including spreading the reduction over all 12 months of the policy year), but the policy year must begin within three months of receiving the rebate. Otherwise the employer must distribute the rebate in the form of a cash refund or apply a mid-year premium credit to the employees.
CMS is accepting comments on the proposed regulations through Dec. 26, 2014.
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