Final 2019 Notice of Benefit and Payment Parameters Released
April 2018 ~
CMS and the Department of Health and Human Services (HHS), on April 9, issued the Notice of Benefits and Payment Parameters (NBPP) final rule for plan year 2019, updating policies and standards applying to qualified health plans (QHPs) offered on Affordable Care Act (ACA) Exchanges.
Major provisions within the Notice of Benefit and Payment Final Rule include:
Essential Health Benefits (EHBs)
- The ACA mandates that non-grandfathered individual and small group market plans, including exchange plans, must cover 10 categories of EHBs. Under the 2019 Payment Notice Final Rule, states will be provided with increased flexibility to define the items and services that constitute each of these categories of EHBs.
- Beginning with plan year 2020, CMS will allow states on an annual basis to pick from three options when setting their EHB-benchmark plans:
- choose one of the 50 benchmark plans that states used in plan year 2017;
- replace one or more of the 10 statutorily required EHB categories of items and services under the state’s benchmark plan used in plan year 2017 with the same category or categories of items and services from another state’s benchmark plan used in plan year 2017; or
- select an entirely new set of benefits as the state’s benchmark plan.
- These options are subject to two scope-of-benefit requirements.
- First, a state’s benchmark plan must provide benefits that are at least equal to the scope of benefits provided under a typical employer plan. A typical employer plan is defined as one of the state’s 10 benchmark plan options in plan year 2017 or one of the state’s five largest group health insurance products by enrollment in plan year 2017, assuming such products meet certain additional conditions.
- Second, a state’s benchmark plan must not be more generous than the most generous comparison plan, which is defined to include the state’s benchmark plan in plan year 2017 and the state’s three largest small group health plans by enrollment in plan year 2017.
Individual Mandate Hardship Exemptions
- For plan year 2018, affordable coverage, which is used to determine whether an individual is eligible for a hardship exemption, will be based on the individual’s projected income using the lowest-cost metal level plan offered through an exchange when there is no bronze level plan available in the individual’s service area.
- In conjunction with the 2019 Payment Notice, CMS released guidance expanding eligibility for the shared responsibility payment hardship exemption to individuals living in counties with no issuers or only one issuer, counties where all plans include abortion as a benefit contrary to one’s belief, or because of the need for specialty care.
Standardized Plan Options
- CMS will eliminate the meaningful difference standard, which required QHPs to be meaningfully different from other QHPs offered by the same issuer within a service area and metal level tier. CMS is also eliminating standardized plan options for plan year 2019, including by not specifying standardized options on HealthCare.gov, the federal exchange web portal.
Medical Loss Ratio (MLR)
- CMS will be given the authority to allow a state to lower its individual market MLR if the state shows that a lower MLR would help stabilize its individual market.
- CMS will continue to defer to state review of network adequacy when a state has the authority and means to enforce standards that are at least equal to the federal “reasonable access standard.”
- For states that do not have such authority and means, CMS will rely on an issuer’s accreditation or the submission of an access plan as part of the issuer’s QHP application.
Special Enrollment Periods (SEPs)
- Three changes will be made to SEPs by:
- (1) aligning enrollment options for dependents who are newly enrolling in coverage through an SEP and who are added to an application with current enrollees;
- (2) making women who lose access to pregnancy-related Children’s Health Insurance Program coverage eligible for a 60-day SEP; and
- (3) clarifying that the prior coverage requirement for SEP eligibility does not apply if an individual is moving from a bare county.
- CMS will impose an increased exchange subsidy verification requirement for individuals with data matching issues who attest to income over 100 percent of the federal poverty level.
Risk Adjustment Program
- Modifies the risk adjustment methodology to improve the accuracy of enrollee risk assessment and permits states to request a reduction in risk adjustment transfers to reflect unique state-specific features.
- Beginning in plan year 2020, in states where the federal government operates the risk adjustment program, CMS will allow state regulators to request a percentage adjustment of up to 50% in the individual, small group, or merged market if the state regulator can demonstrate that state-specific factors warrant such an adjustment.
- CMS, in partnership with states, reviews any proposed rate premium increases above a threshold to ensure the increases are not “unreasonable.” The 2019 Payment Notice includes a change to the rate review default threshold from premium increases of 10% to increases of 15% in states where the federal government reviews rates.
Small Business Health Options Program (SHOP) Exchanges
- CMS will no longer require SHOPs to provide employee eligibility, premium aggregation, or online enrollment functionality. Note: this change in policy is codified in the 2019 Payment Notice, but the change was implemented (by CMS) in plan year 2018.
The agencies also issued the final 2019 Letter to Issuers in the Federally-facilitated Exchanges, providing technical guidance to insurers, new guidance on hardship exemptions, and a bulletin regarding transitional health plans.
These regulations will become effective on June 18, 2018. For full details, see the Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2019 Final Rule here, and for more information refer to the CMS Fact Sheet.