PPACA; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Final Rule, 45 CFR Parts 147, 150, 153, 155, 156, 158, and 184, 86 Fed. Reg. 24140 (May 5, 2021); Notice of Benefit and Payment Parameters for 2022 Final Rule Part Two Fact Sheet
HHS has released a second set of regulations with 2022 benefit and payment parameters and insurance market and Exchange-related final rules. An earlier set of regulations finalized rules with Exchange requirements for direct enrollments, network adequacy, and state innovation waivers, as well as Exchange standards for individual coverage HRAs (ICHRAs) and qualified small employer HRAs (QSEHRAs) (see our Checkpoint article). And HHS anticipates additional rulemaking for the 2022 payment notice later this year. Several provisions in this second set of regulations are of interest to employers and their advisors. Here are highlights:
Annual Cost-Sharing Limits. The maximum annual limit on cost-sharing for 2022 will increase to $8,700 for self-only coverage and $17,400 for other than self-only coverage. Note that this is $400 less than the proposed limits of $9,100 for self-only coverage and $18,200 for other than self-only coverage (see our Checkpoint article). (The 2021 limits are $8,550 and $17,100 (see our Checkpoint article).) [EBIA Comment: The final limits reflect a changed methodology for 2022 that returns to measures used from 2015 to 2019 to calculate changes in the cost of coverage. This change will also impact indexing of employer shared responsibility penalties and affordability of employer-sponsored coverage (see our Checkpoint article).]
COBRA and Exchange Special Enrollment. The regulations finalize a variety of rules for special enrollment periods, including some that impact COBRA coverage. The regulations codify HHS policy recognizing the complete cessation of employer COBRA contributions or government subsidies (such as the ARPA COBRA premium subsidies (see our Checkpoint article)) as triggering a special enrollment period for individual market coverage both on or off an Exchange. Affected individuals who voluntarily end COBRA continuation coverage or have such coverage terminated have 60 days before or after the last day of subsidized coverage to enroll.
MLR Reporting and Rebates. Following previous regulations impacting how drug manufacturer coupons accrue toward the annual limits on cost-sharing and are counted for purposes of medical loss ratio (MLR) calculations (see our Checkpoint article), these regulations define the prescription drug rebates and other price concessions (including discounts, coupons, and reduced-price services) that insurers must deduct from incurred claims for MLR reporting and rebate calculation purposes, beginning with the 2022 MLR reporting year (MLR reports filed in 2023). In addition, HHS expands a temporary COVID-19-related policy that allowed insurers to prepay estimated MLR rebates as premium credits for the 2019 reporting year (MLR reports filed in 2020) (see our Checkpoint article). Beginning with the 2020 MLR reporting year (MLR reports filed in 2021), HHS will permit insurers to prepay estimated MLR rebates at any time during the year, regardless of the form in which they are paid (so long as they do so in a nondiscriminatory manner). The regulations also clarify the MLR reporting and rebate requirements for insurers offering temporary premium credits during a public health emergency, beginning with the 2021 MLR reporting year (MLR reports filed in 2022).
EBIA Comment: As expected, these final regulations contain numerous changes from the proposed version issued by the previous administration (see our Checkpoint article). Although the regulations are largely aimed at insurers and Exchange regulators, employers and their health plan advisors will want to review them for indirect impacts on their health plans. For more information, see EBIA’s Health Care Reform manual at Sections IX.B (“Cost-Sharing Limits”), XIV.G (“Medical Loss Ratio (MLR) Requirements”), and XXI.A.3 (“Annual and Special Enrollment Periods Required for Exchanges”). See also EBIA’s COBRA manual at Section XXVI.N (“Health Insurance Exchanges”).
Contributing Editors: EBIA Staff.