Under the Affordable Care Act (ACA), individuals and small businesses will be able to purchase private health insurance through state-based competitive marketplaces, known as Affordable Health Insurance Exchanges (Exchanges). The Exchanges are expected to become operational in 2014, with enrollment beginning Oct. 1, 2013.
On Aug. 30, 2013, the Department of Health and Human Services (HHS) published a final rule on the Exchanges. The final rule takes effect on Sept. 30, 2013.
This rule, which generally finalizes provisions in proposed rules without significant changes, outlines Exchange standards with respect to eligibility appeals, privacy and security, agents and brokers, issuer direct enrollment and the handling of consumer cases. It also sets forth standards with respect to a state’s operation of the Exchange and Small Business Health Options Program (SHOP).
Overview of the Final Rule
This rule finalizes certain provisions in an HHS proposed rule addressing issues that are necessary to prepare the Exchanges for open enrollment on Oct. 1. The rule also finalizes eligibility and SHOP appeals provisions from a separate HHS proposed rule.
A part of the final rule focuses on program integrity regarding issuers offering coverage in the Federally-facilitated Exchanges (FFEs). This rule also finalizes standards for issuer handling of consumer complaints in the Exchange, as well as other provisions related to Exchange operation and state flexibility.
Several of the program integrity provisions of the proposed rule are omitted from the final rule. HHS intends to release these in a subsequent final rule.
Oversight of QHP Issuers in FFEs
The final rule provides for standards that would establish oversight of health insurance issuers in FFEs. The rule also provides transition relief for 2014, where QHP issuers will not be subject to civil penalties or decertification if they attempt in good faith to comply with Exchange standards. HHS plans to consider extending this transition relief through 2015.
Oversight and Monitoring of Privacy and Security Requirements
The rule provides that HHS will oversee and monitor all the FFE and non-Exchange entities operating in the FFEs for compliance with the privacy and security standards established and implemented by the FFE. Additionally, HHS will monitor each state-based Exchange for compliance with the privacy and security standards established and implemented by the state Exchange. State Exchanges must also oversee and monitor non-Exchange entities operating in the Exchange.
Consumer Protections for Payment and Application Assistance
The final rule requires QHP issuers to accept a variety of payment methods, including checks, cashier’s checks, money orders, electronic fund transfers and prepaid debit cards. Issuers must equally present those methods together as options for consumers to select so they may utilize their preferred payment method.
The rule also clarifies and provides additional standards for agent and broker participation in FFEs and state partnership Exchanges when assisting consumers and small businesses, while preserving states’ traditional role in overseeing and regulating agents and brokers.
Individual Eligibility Appeals
The final rule provides standards for the eligibility appeals process, including:
- Coordination between agencies and appeals entities;
- Standards for appeal notices and requests, pended benefits, informal resolution, hearings and appeal decisions; and
- The appellant’s due process and procedural rights.
The final rule sets forth a federal appeals process for the individual market Exchanges. Appellants will first undergo a preliminary case review, known as “informal resolution.” If the appellant is satisfied with the outcome of the informal resolution, it will be the final decision in the matter. However, the appellant retains the right to a hearing if he or she is dissatisfied with the outcome of informal resolution.
In addition, under the final rule, state Exchanges have the flexibility to implement their own appeals process, as long as it meets certain requirements. However, state Exchange appellants in the individual market retain the right to escalate their appeal to the federal appeal process if they are dissatisfied with the state appeals decision. Like the federal appeals process, state-based appeals processes may also include an informal resolution process.
Employer Appeals in the Individual Market
The ACA requires a separate appeals process to be established for employers that wish to contest an Exchange determination that the employer does not provide minimum essential coverage (MEC) that meets both minimum value and affordability standards.
Under the final rule, state Exchanges will have the flexibility to establish a state-based appeals process for employer appeals. HHS will provide this process if the state does not opt to do so or does not operate a state Exchange.
SHOP Eligibility Appeals
Under the final rule, employer and employee applicants to the SHOP may appeal denials of eligibility to purchase coverage through the SHOP. The final rule provides standards for this appeals process.
The final rule also specifies that any state that operates a SHOP will also operate the SHOP appeals process. HHS will provide the appeals process for states that do not operate a SHOP.
Flexibility for States
The final rule allows a state to operate a state-based SHOP while HHS operates an individual market FFE in that state. States that can provide reasonable assurances through the Exchange Blueprint submission or amendment process that they will be able to establish and operate a SHOP can do so in 2014.
Source: Dept. of Health and Human Services