PPACA; HHS Notice of Benefit and Payment Parameters for 2020, Proposed Rule, 45 CFR Parts 146, 147, 148, 153, 155, and 156, 84 Fed. Reg. 227 (Jan. 24, 2019); Proposed HHS Notice of Benefit and Payment Parameters for 2020 Fact Sheet
HHS has released proposed regulations (scheduled for publication in the Federal Register on January 24) with the benefit and payment parameters for 2020 and a few other insurance market and Exchange-related proposed rules. The collection of proposed rules is largely aimed at insurers and state regulators, but some provisions may be of interest to employers and their advisors. Here are highlights:
Annual Cost-Sharing Limits Increased. HHS has proposed to increase the maximum annual limitation on cost-sharing for 2020 to $8,200 for self-only coverage and $16,400 for other than self-only coverage (compared to $7,900 and $15,800 for 2019). The proposal reflects a changed methodology—considering premium increases in the individual insurance market and employer-sponsored insurance—that would also impact indexing of employer shared responsibility penalties and affordability of employer-sponsored coverage.
Generic Drugs. The proposal would create an exception to the prohibition on midyear coverage modifications by permitting insurers to adopt specified midyear prescription-drug formulary changes when generic equivalents to brand-name drugs become available. In certain circumstances, the brand-name drug would not be considered an essential health benefit—allowing insurers to exclude a portion of the brand-name drug’s cost from the annual cost-sharing limit and to impose lifetime or annual dollar limits on some brand-name drug coverage.
SHOP Functionality Decreased. After a roll back of the federally facilitated Small Business Health Options Program (FF-SHOP) for 2019, employers purchase and enroll their employees in FF-SHOP coverage through insurers or registered agents and brokers rather than through an online FF-SHOP platform (see our Checkpoint article). HHS retained call centers to answer SHOP-related questions for 2019, but now proposes to scale them back since call center volume has been extremely low.
Exchange Enrollment Enhanced. HHS continues to focus on enhancing direct enrollment, which allows individuals to enroll in Exchange coverage through the website of an insurer or web broker (direct enrollment entity) rather than Healthcare.gov. Initially implemented for Exchanges in 2019, significant changes are now proposed to streamline and consolidate the requirements applicable to insurers and web brokers.
Comments on Silver Loading Requested. The preamble discusses the administration’s support for legislation that would appropriate funds for cost-sharing reduction payments and, thereby, end “silver loading.” (Silver loading is a state practice that allows insurers to increase premiums on silver-level Exchange plans to compensate for the lack of federal reimbursement of cost-sharing reductions. Higher premium tax credits may insulate lower-income consumers in silver-level plans from the increased premiums.) The preamble requests comments on how HHS (in the absence of Congressional action) could address its concerns about silver loading in future rulemaking (see our Checkpoint article).
EBIA Comment: These regulations address a broad range of Exchange and insurance market rules but notably do not cover as much ground as those for prior years. Nonetheless, insurers and advisors will be eager to review the proposals, which have been released later than usual. For more information, see EBIA’s Health Care Reform manual at Sections IX (“Lifetime, Annual, and Cost-Sharing Limits”), XXI.A (“Establishment of Exchanges”), XXI.B (“Individuals and Employers Eligible for the Exchange”), and XXI.D (“Small Business Health Options Program (SHOP)”). See also EBIA’s Consumer-Driven Health Care manual at Section X.I (“Effects of Health Care Reform on HDHP Design”).
Contributing Editors: EBIA Staff.