HHS Proposed Rule Would Have Certain Small Group Plans Report Benefit Information

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By Sara Hansard  

The three largest small group health insurance plans in each state would have to report benefit information to the Department of Health and Human Services under a proposed rule released June 1 by HHS.

The proposed rule is intended “to collect sufficient information on potential benchmark plans' benefits to enable plans seeking to offer coverage in the individual or small group markets in 2014 to know what benefits will be included in the [essential health benefits] benchmark,” HHS said.

The information would be used by HHS, states, exchanges, and issuers to define, evaluate, and provide EHBs, HHS said. HHS also asked for comment on whether plans that are closed to new business or health plans sold through associations should be included as options in selecting the largest three small group products that would have to report on their benefits.

In addition, HHS proposed the first phase of a two-phased approach for recognizing accrediting entities to implement standards for “qualified health plans” (QHPs) that will be sold in health insurance exchanges beginning in 2014. The proposed rule was published in the June 5 Federal Register, with public comments due 30 days after publication (77 Fed. Reg. 33,133).

HHS said that the 38-page proposed rule is “not considered a major rule” and does not meet the $100 million a year cost threshold that would require it to conduct a regulatory impact analysis.

Under the Patient Protection and Affordable Care Act, beginning in 2014 all “nongrandfathered” health plans in the individual and small group markets--those that took effect after PPACA was enacted on March 23, 2010--must cover “essential health benefits” that HHS will define. The coverage requirement also applies to Medicaid benchmark and benchmark-equivalent plans, and to Basic Health Program plans that states can elect to create for residents with incomes between 133 percent and 200 percent of the federal poverty level.

In December 2011 HHS released a guidance bulletin outlining its intended approach for defining EHBs that would allow each state to choose from among four types of benchmark plans for 2014 and 2015 (see previous article). States could choose from the largest three small group plans in their state, the largest three state employee health plans, the largest commercial non-Medicaid health maintenance organization in the state, or any of the largest three Federal Employees Health Benefits Program plans to define EHBs for their state.

Small Group Plans Defaults for EHBs.

If a state does not designate a benchmark plans for EHBs, HHS said in the bulletin that it intends to propose in a future rulemaking that the default plan would be the largest small group plan in each state, based on enrollment, for plan years 2014 and 2015.

In January, the Center for Consumer Information and Insurance Oversight published a list of all health plans that would qualify as benchmarks for the EHBs (see previous article).

“We intend to propose these options in comprehensive rulemaking on [EHBs] in the future,” HHS said in the proposed rule. HHS said it received about 11,000 comments on the guidance bulletin, and many commenters urged HHS to publish the benefit designs of the selected benchmark plans “as soon as possible.” Insurance issuers emphasized that “timely access to the benefits included in the benchmark is necessary to design health plans,” the agency said.

Health Plan QHP Accreditation Required.

PPACA also requires that health plans must be accredited and certified as QHPs to be sold in the online exchange markets that will be in operation in all states beginning in 2014. The QHPs must cover EHBs.

In March HHS issued a final rule implementing the health exchanges that specified that QHP issuers must be accredited by an entity recognized by HHS (see previous article).

In the first phase of the accrediting process proposed by HHS, the National Committee for Quality Assurance and URAC, formerly known as the Utilization Review Accreditation Commission, would accredit QHPs on an interim basis. HHS said it conducted a review and found that “substantially all issuers that have health plan accreditation” are accredited by those two organizations.

Recognizing the two accrediting groups on an interim basis is necessary to meet the timeline for exchange QHP certifications that must begin in early 2013, HHS said.

HHS proposed that accrediting entities provide separate determinations for each product offered by a QHP issuer in each exchange, such as exchange health maintenance organizations, exchange point-of-service plans, and exchange preferred provider organizations.

In the second phase, a “criteria-based review process” would be adopted through future rulemaking, HHS said. The future rule will include application procedures, standards for recognition, a criteria-based review of applications, public participation, and public notice of the recognition, HHS said in the proposed rule.

By Sara Hansard  

A prepublication copy of the proposed rule (CMS-9965-P) on data collection to support essential health benefit standards and recognition of entities to accredit qualified health plans is at http://op.bna.com/hl.nsf/r?Open=shad-8uummc.