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The Department of Health and Human Services recently issued its proposed rule on 2021 benefit and payment parameters under the Affordable Care Act. The proposal makes primarily technical changes to the framework outlined in previous rules.

While the proposed rule does not directly address many of The Council’s core interests related to the ACA, it does touch some of the more tangential topics and policy issues that we have been following, including efforts around reigning in costly state benchmark plans:

  • In response to concerns that states are not complying with the federal requirement that they defray the cost of state-required benefits offered in addition to essential health benefits (“EHB”), require states to submit annual reports to CMS identifying (1) the benefits mandated by state law that are not in addition to EHB (i.e., do not require defrayal), and (2) those that exceed EHB (i.e., do require defrayal);
  • Set submission deadlines for states seeking to implement changes to their EHB benchmark plans or select a new benchmark plan; and
  • Clarify that states—in opting to select an updated EHB-benchmark plan—may not exceed the generosity of the most generous among the set of comparison plans even by a de minimis amount.

Additionally, the proposed rule would:

  • Amend a provision finalized in the 2020 benefit and payment parameters rule and address an issue raised by an August 2019 policy to provide that insurers are permitted—but not required—to count coupons and other forms of direct support offered by drug manufacturers towards a consumer’s maximum out-of-pocket limit, regardless of whether the coupon is for a brand-name or generic drug;
  • Implement a series of changes to the medical loss ratio (“MLR”) standards (e.g., clarify insurer reporting requirements for expenses spent on functions outsourced to/services provided by third-party entities, require insurers to deduct prescription drug rebates and other drug-related price concessions—whether received by the insurer directly or by a pharmacy benefit manager or similar entity—from incurred claims, and permit insurers in the individual market to include the cost of certain wellness incentives as a quality improvement activity in their MLR calculation); and
  • Establish notice requirements for excepted benefit health reimbursement arrangements offered by non-federal governmental plan sponsors.

The proposed rule includes other ACA- and exchange-related topics, which may be of more general interest to Council members, including:

  • Modifying the automatic reenrollment process for individuals who qualify for $0 premium plans as a result of advanced premium tax credits (“APTC”) by requiring automatic re-enrollment without accounting for the APTC (i.e., enrolling consumers at the full premium amount even if they are eligible for APTC/a $0 premium plan);
  • Deleting the regulations associated with the Early Retiree Reinsurance Program;
  • Recalibrating the risk adjustment models for the 2021 plan year; and
  • Revising the premium adjust percentage to 1.35%, adjusting the maximum out-of-pocket limit on cost sharing for self-only coverage to $8,550 (and $17,100 for other than self-only coverage), and setting the required contribution percentage at 8.27% for the 2021 plan year.

The proposed rule can be found here.