PPACA; HHS Notice of Benefit and Payment Parameters for 2020, Final Rule, 45 CFR Parts 146, 147, 148, 153, 155, and 156, 84 Fed. Reg. 17454 (Apr. 25, 2019); HHS Notice of Benefit and Payment Parameters for 2020, Fact Sheet
HHS has released final regulations with the benefit and payment parameters for plan years beginning on or after January 1, 2020, along with a few other insurance market and Exchange-related final regulations. Although largely aimed at insurers and state regulators, the regulations include provisions of interest to employers and their advisors. Here are highlights:
Annual Cost-Sharing Limits. HHS has increased the maximum annual limitation on cost-sharing for 2020 to $8,150 for self-only coverage and $16,300 for other than self-only coverage (up from $7,900 and $15,800 for 2019). [EBIA Comment: HHS finalized a proposed change to the way it calculates this adjustment that takes into account increases in individual health insurance premiums, acknowledging that the change will result in higher cost-sharing limits. The final limits for 2020 are less than the proposed limits (see our Checkpoint article) because data inputs used in the formula were updated after publication of the proposed regulations. This formula also affects adjustments to employer shared responsibility penalties under Code § 4980H.]
Generic Drugs. Health plans are not required to count drug manufacturer coupons toward the annual limit on cost-sharing when a medically appropriate generic equivalent is available. However, HHS declined to finalize a proposal that would have allowed plans that cover both a brand-name prescription drug and its generic equivalent to consider the brand-name drug to not be an essential health benefit. Also not finalized was a proposal to create an exception to the prohibition on midyear coverage modifications that would have allowed midyear prescription-drug formulary changes. [EBIA Comment: The provision on coupons is intended to discourage providers and patients from choosing expensive brand-name drugs when a less expensive and equally effective alternative is available.]
Exchange and SHOP Enrollment. The final regulations continue HHS’s efforts to revise the federal Exchange enrollment process. For 2020, the changes are primarily focused on streamlining and consolidating the rules for enhanced direct enrollment in Exchange coverage through the websites of insurers and web brokers. The regulations also explain that employers already purchase and enroll their employees in federal SHOP Exchange coverage through insurers, agents, and brokers rather than using an online federal SHOP platform; therefore, HHS has finalized its proposal to continue only a toll-free hotline with pre-recorded information for the federal SHOP for 2020, rather than a full call center.
Silver Loading. The preamble summarizes the comments that were received on ways for HHS to address “silver loading” in the absence of Congressional action appropriating funds to pay insurers for cost-sharing reductions. (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.) Because HHS had not proposed any changes to silver loading, the final rules provide that HHS will not add any restrictions on silver loading at this time but will take the comments into consideration in future policymaking.
EBIA Comment: These regulations cover less ground than those for prior years, but insurers and advisors must nonetheless become familiar with the changes, which have been released later than usual. Proposed changes that were not adopted (e.g., those involving generic drugs) may reappear in future rulemaking after HHS considers the comments it received. 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.