Proposed Rule: PPACA, HHS Notice of Benefit and Payment Parameters for 2024, 45 CFR Parts 153, 155 and 156, 87 Fed. Reg. 78206 (Dec. 21, 2022); Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2024 Benefit Year (Dec. 12, 2022); Fact Sheet: HHS Notice of Benefit and Payment Parameters for 2024 Proposed Rule
HHS has issued a memo announcing the maximum annual limitations on cost-sharing for the 2024 benefit year for non-grandfathered group health plans under the Affordable Care Act (ACA), along with proposed regulations containing a variety of payment parameters and insurance market and Exchange-related proposals. Here are highlights:
2024 Annual Cost-Sharing Limits. Consistent with policy finalized in the 2022 benefit and payment notice (see our Checkpoint article), HHS has announced that the maximum annual limit on cost-sharing for 2024 is to increase to $9,450 for self-only coverage and $18,900 for other than self-only coverage (the 2023 limits are $9,100 and $18,200). In general, cost-sharing includes deductibles, coinsurance, copayments, and any other required expenditure that is a qualified medical expense with respect to essential health benefits covered under the plan.
Mid-Year Terminations of Exchange Coverage for Dependent Children. Based on the ACA requirement that group health plans and insurers that offer coverage to dependent children allow the children to stay on their parents’ plan until age 26, federally facilitated Exchanges have required insurers to maintain coverage of dependent children until the end of the plan year in which they turn 26. Codifying this requirement for federally facilitated Exchanges, the proposed regulations would prohibit mid-year terminations of dependent children who reach the maximum age limit under the ACA or state law (unless termination is otherwise permitted). HHS notes that because Exchange eligibility determinations are made for the entire plan year, Exchanges generally pay the insurer the advance premium tax credit, including the portion attributable to a dependent child, through the end of the plan year in which the dependent child turns 26 (or reaches the maximum age required under state law). The requirement would be optional for state-based Exchanges.
Exchange Enrollment Periods. HHS proposes that, beginning January 1, 2024, Exchanges would have the option to implement a new special rule for individuals losing Medicaid or Children’s Health Insurance Program (CHIP) coverage that is also considered minimum essential coverage. The proposal would give individuals 60 days before, or 90 days after, a loss of Medicaid or CHIP coverage to select an Exchange plan. Another proposal would revise existing coverage effective date requirements so that Exchanges could offer earlier start dates for certain individuals attesting to a future loss of minimum essential coverage.
EBIA Comment: As usual, the proposed regulations address a wide range of Exchange and insurance market rules of interest to insurers and Exchanges (e.g., proposals for revised rules on network adequacy and Exchange eligibility redeterminations, and new requirements related to agents and brokers) that employers and their health plan advisors will want to review for indirect impacts on their health plans. In the past, HHS announced the annual limitation on cost-sharing in the notice of benefit and payment parameters for a given benefit year. However, in the notice of benefit and payment parameters for 2022, HHS amended its regulations to provide that, starting with the 2023 benefit year, the maximum annual limitation on cost-sharing (and certain other limits) will be published in guidance by January of the benefit year prior to the applicable benefit year, rather than in the annual notice of benefit and payment parameters, so long as no changes to the methodologies to calculate these amounts are proposed. For the 2024 benefit year, HHS is not proposing changes to the methodology to calculate the premium adjustment percentage or related parameters, and thus HHS has separately issued the 2024 limits rather than proposing them in regulations. For more information, see EBIA’s Health Care Reform manual at Sections IX.B (“Cost-Sharing Limits”), XI.B (“Requirement to Extend Coverage to Children Under Age 26”), and XXI.A.3 (“Annual and Special Enrollment Periods Required for Exchanges”). See also EBIA’s Self-Insured Health Plans manual at Section XV.D (“Designing Cost-Sharing Features”).
Contributing Editors: EBIA Staff.