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Benefits

Proposed 2022 Benefit and Payment Parameters Include Increased Cost-Sharing Limits, New Rules for COBRA-Related Exchange Special Enrollments and MLR Rebates

PPACA; HHS Notice of Benefit and Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; Updates To State Innovation Waiver (Section 1332 Waiver) Implementing Regulations; Proposed Rule, 45 CFR Parts 147, 150, 153, 155, 156, 158, and 184, 85 Fed. Reg. 78572 (Dec. 4, 2020); Notice of Benefit and Payment Parameters for 2022 Proposed Rule Fact Sheet

Proposed Rule

Fact Sheet

HHS has released proposed regulations with the 2022 benefit and payment parameters and insurance market and Exchange-related proposed rules. Although largely aimed at insurers and Exchange regulators, some provisions may be of interest to employers and their advisors. Here are highlights:

  • Annual Cost-Sharing Limits. The maximum annual limit on cost-sharing for 2022 is proposed to increase to $9,100 for self-only coverage and $18,200 for other than self-only coverage (the 2021 limits are $8,550 and $17,100).
  • COBRA and Exchange Special Enrollment. Under the proposal, complete cessation of employer contributions toward the cost of COBRA coverage would trigger a special enrollment period for Exchange coverage. HHS requests comments on whether the proposal should also apply if an employer reduces but does not terminate a COBRA subsidy. [EBIA Comment: Under HHS’s original interpretation of the Exchange special enrollment rules, loss of an employer’s COBRA subsidy did not trigger a special enrollment period. However, the federal Exchange later began allowing a special enrollment period under these circumstances without amending the applicable regulations. The preamble notes that this change would make this policy explicit for Exchanges using the federal platform and would apply the policy to individual market policies sold off-Exchange and through state-based Exchanges.]
  • MLR Reporting and Rebates. The proposals address a variety of issues for medical loss ratio (MLR) reporting and rebates:

    • Prescription Drug Concessions. HHS has proposed defining 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). [EBIA Comment: These definitions would fill a gap in the recently amended MLR rules, which require insurers to deduct these items from incurred claims when they are received and retained by the insurer or a pharmacy benefit manager (PBM) or other entity providing PBM services to the insurer (see our Checkpoint article).]
    • Rebate Prepayment. Expanding a temporary policy announced in June 2020 (see our Checkpoint article), HHS proposes to allow insurers to provide MLR rebates as premium credits before the date that the regulations currently permit, beginning with the 2020 MLR reporting year (MLR reports filed in 2021). The proposal would 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: The temporary prepayment policy was limited to insurers that prepaid their estimated 2019 MLR rebate as a premium credit, since existing rules already permit lump-sum prepayments, so long as the full rebate amount is paid by a stated deadline. The proposal would allow insurers to prepay estimated rebates for any MLR reporting year— regardless of the payment form—in a nondiscriminatory manner to all eligible enrollees in a particular state. And if the prepayment represents at least 95% of the total MLR rebate owed for the reporting year, payment of the remainder could be deferred until the following reporting year.]

EBIA Comment: These proposed regulations address a wide range of Exchange and insurance market rules of interest to insurers and Exchanges, including proposals for PBM transparency and extension of the nonenforcement policy for Exchanges that do not obtain sufficient data to verify whether an applicant has an offer of affordable coverage that meets minimum value standards through an employer. Nevertheless, 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”) and EBIA’s Consumer-Driven Health Care manual at Sections X.K (“Effects of Health Care Reform on HDHP Design”).

Contributing Editors: EBIA Staff.

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