Employers that purchase small group coverage that is federally regulated under the Affordable Care Act will have additional assurances that their plan members will not be balance billed in certain situations, under proposed rules issued in pre-publication form on Nov. 22. The rule also plans for the adoption of network adequacy provisions to compensate for narrower networks that are proliferating to control cost growth some observers say is being exacerbated by the health care reform law.
The Benefit and Payment Parameters for 2017 (proposed rule), also hikes the out-of-pocket limits that employers can allow employees to be charged on an annual basis. Comments are being accepted until Dec. 21, 2015. Here is a fact sheet on the proposal, from the Centers for Medicare and Medicaid Services.
Protection from Balance-billing of Patients
CMS is seeking comment on a requirement that coverage sold on federal exchanges protects patients from unexpected charges from out-of-network providers by allowing charges by such providers to count toward their annual out-of-pocket maximum, if two conditions are met: (1) the service was performed at an in-network facility; and (2) the patient was not forewarned that an out-of-network provider would be giving them services.
Example: If a patient who had surgery at an in-network facility finds out later that their anesthesiologist was not part of the health plan’s network, cost-sharing charges for that anesthesiologist’s services would count toward the out-of-pocket maximum, protecting the patient against additional financial liability.
In order to meet the safe harbor, the insurer would have to notify the enrollee within 10 days of the service that an out-of-network provider might be involved. Presently, out-of-network charges are not counted toward the out-of-pocket maximum, even if the patient is not forewarned. See related article.
Other Network Adequacy Provisions
Under the proposal, states would select a network adequacy standard for exchange plans sold in the state. The U.S. Department of Health and Human Services would reserve the right to veto state adequacy standards that are too low. The goal is to protect consumers from surprise billing.
The network adequacy rules reflect policies embodied in the National Association of Insurance Commissioners’ model act on network sufficiency.
The agency seeks comment on whether it should issue grades denoting network strength, which it said might support informed consumer decision-making.
CMS proposes to require insurers to provide written notice about discontinuation of a provider 30 days before it is effectuated; or as soon as possible after it learns about the change. Also, if a provider is terminated without cause, the rule would require insurers to allow an affected enrollee to continue treatment until the treatment is complete, at in-network cost (but only if the enrollee is in active treatment), up to 90 days.
Out-of-pocket Limits May Rise
The reform law allows plans and insurers to increase the amount of annual out-of-pocket expenses employees can be required to pay. The health care reform out-of-pocket limits for 2015 are $6,600 for individuals and $13,200 for families. And for 2016, they are $6,850 single/$13,700 family. The 2017 maximum annual limitation on cost sharing would be $7,150 for individual coverage and $14,300 for family coverage. The dollar limits for calendar year 2014 were $6,350 for self-only coverage and $12,700 for family coverage. Note: “Out-of-pocket costs” include deductibles, coinsurance, copays and other expenditures required under a plan.
Premium Adjustment Percentage
This change stems from an agency proposal in the rule that the premium adjustment percentage — which mandates that small group and individual policies sold on exchanges should not increase by more than a certain percentage as determined by market data — will be 13.2 percent between 2014 and 2017.
Stand-alone Dental Plans
The proposed rules also adjusts standards for stand-alone dental plans related to annual limitations on cost sharing. The cost-sharing limit for covering one child is currently $350, and it is $700 for two or more children. For plan years starting Jan. 1, 2017. The rule proposes adjusting that amount for dental price inflation, using U.S. Department of Labor data. The proposed rule does not include a rate for 2017.
Open Enrollment
The rule would set the open enrollment period to purchase 2017 exchange coverage from Nov. 1, 2016 to Jan. 31, 2017.
Proposed Standard Options
The proposal includes six new standard plan options —a bronze, a gold, a four silver plans (with 73 percent, 80-percent, 87-percent and 94-percent actuarial values) — to make choosing a plan easier for individuals buying coverage on an exchange. According to the Health Affairs blog, the plans would have:
- standard deductibles (ranging from $6,650 for the bronze plan to $3,500 for the standard silver to $250 for the 94 percent silver cost-sharing variation),
- four-tier drug formularies,
- only one in-network provider tier,
- deductible-free services (for the silver level plan including urgent care, primary care visits, specialist visits, generic drugs, and some preferred brand drugs),
- and a preference for copayments over coinsurance.
Insurers would could offer non-standardized plans if they meet ACA standards, but standardized plans would be displayed in a manner that would make them easy for consumers to find.
Reinsurance Attachment Points for Insurers
Fees to stabilize premiums in the individual and small group markets will not be assessed against health insurers and self-insured plans in 2017. The transitional reinsurance fund charged $63 per year per participant in 2014; it dropped to $44 per enrollee for 2015; and it became $27 in 2016. Insurers drew from and paid into the reinsurance fund, and here is data issued Nov. 19 on those money flows. For more information on health reform’s fees on self-funded plans, see Section 795 of The New Health Care Reform Law: What Employers Need to Know.
If any reinsurance money is left after the 2016 benefit year, the agencies would lower the 2016 attachment point of $90,000 to exhaust the fund for the 2016 benefit year.
More SHOP Choices
Starting for 2017 plan years, employers buying small-group coverage on (federally facilitated) Small Business Health Options exchanges could avail themselves of a new “vertical choice” option, whereby they could offer all plans across all actuarial value levels from one insurer. The agency says this would benefit insurers by allowing them to enroll more members and fill risk pools, minimizing the risk of adverse selection.
The agency also is considering letting employers select an actuarial value level of coverage; employees could choose from plans available at that level and the level above it. Currently, employers can offer their employees a single SHOP coverage option or a choice of plans within a single metal tier, from different insurance companies.
Exchange Re-enrollment
CMS proposes that auto re-enrollees who were in a silver plan that was no longer available would be auto re-enrolled in the most similar silver plan product offered by the same insurer, rather than in a different metal level in the same product. One benefit of that would be to keep the employee on the same status for federal subsidy eligibility. This would apply both to SHOP and regular exchange coverage.
Drug Benefit Appeals
The rule proposes an expedited review process when a physician needs to prescribe medications that are not covered by an exchange plan. CMS wants comments about whether to extend state laws allowing appeals for non-formulary drugs, including expedited time periods, to the exchanges.
Monitoring Insurer Rate Increases
The rule proposes disclosing to the public all rate increases on the CMS website, including increases of less than 10 percent. Under the ACA, health insurers must justify rate increases; state or federal regulators will review rate increases to ensure that they are “reasonable;” and insurers must send subscribers an explanation of why such rate increases happened.
Health insurers may not raise rates by 10 percent or more without first explaining its reasons to a state or federal “rate review program.” States will set up “rate review programs” to monitor unreasonable health insurance rate increases. Rate hikes are unreasonable if, for example:
- they are based on faulty assumptions or unsubstantiated trends; or
- they charge different prices to people who pose similar risks to the insurer.