DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 155 and 156 [CMS-9941-P]
RIN 0938-AS32 Patient Protection and Affordable Care Act; Annual Eligibility Redeterminations for Exchange Participation and Insurance Affo rdability Programs; Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
SUMMARY: This proposed rule would specify a dditional options for annual eligibility redeterminations and renewal and re-enrollment notice requirements for qu alified health plans offered through the Exchange, beginning with annual redeterminations for coverage for plan year 2015. In particular, this proposed rule would provide additional flexibility for Marketplaces, including the ability for Marketplaces to propose unique approaches that meet the specific needs of their State, while streamlin ing the consumer experience.
DATES : To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on July 28, 2014.
ADDRESSES: In commenting, please refer to file code CMS-9941-P. Because of staff and resource limitations, we ca nnot accept comments by facsimile (FAX) transmission. You may submit comments in one of four ways (please choose only one of the ways listed): 1. Electronically. You may submit elec tronic comments on this regulation to http://www.regulations.gov . Follow the "Submit a comment" instructions.CMS-9941-P 2

2. By regular mail. You may mail writte n comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9941-P, P.O. Box 8010, Baltimore, MD 21244-8010. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-9941-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. By hand or courier. Altern atively, you may deliver (by ha nd or courier) your written comments ONLY to the following addresses prio r to the close of the comment period: a. For delivery in Washington, DC-- Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building,CMS-9941-P 3

200 Independence Avenue, S.W., Washington, DC 20201 (Because access to the interior of the Hube rt H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots loca ted in the main lobby of the building. A stampin clock is available for persons wishing to reta in a proof of filing by st amping in and retaining an extra copy of the comments being filed.) b. For delivery in Baltimore, MD-- Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members. Comments erroneously mailed to the addres ses indicated as appr opriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public co mments, see the beginning of the "SUPPLEMENTARY INFORMATION" section.
FOR FURTHER INFORMATION CONTACT: Benjamin Walker, (301) 492-4430.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public , including any persona lly identifiable orCMS-9941-P 4

confidential business information that is included in a comment. We post all comments received before the close of the comment period on the fo llowing Web site as soon as possible after they have been received: http://www. regulations.gov. Follow the search instructions on that Web site to view public comments. Comments received timely will also be av ailable for public inspection as they are received, generally beginning approximately 3 w eeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.
Electronic Access This Federal Register document is also available from the Federal Register online database through Federal Digital System (FDsys) , a service of the U.S. Government Printing Office. This database can be accessed vi a the internet at http://www.gpo.gov/fdsys

. Table of Contents I. Background A. Legislative Overview B. Stakeholder Consultation and Input C. Structure of the Proposed Rule II. Provisions of the Proposed Rule A. Part 155 – Exchange Establishment Sta ndards and Other Related Standards Under the Affordable Care Act; Subpart D – Exchange F unctions in the Individual Market: Eligibility Determinations for Exchange Participa tion and Insurance Affordability ProgramsCMS-9941-P 5

B. Part 156 – Health Insurance Issuer Standa rds Under the Affordable Care Act, Including Standards Related to Exchanges; Subpart M—Qu alified Health Plan Issuer Responsibilities III. Response to Comments IV. Collection of Information Requirements V. Regulatory Impact Statement I. Background A. Legislative Overview The Patient Protection and Affordable Ca re Act (Pub. L. 111–148) was enacted on March 23, 2010. The Health Care and Education Rec onciliation Act of 2010 (Pub. L. 111–152), which amended and revised several provi sions of the Patient Protection and Affordable Care Act, was enacted on March 30, 2010. In this proposed rule, we refer to the two statutes collectively as the “Affordable Care Act.” Subtitles A and C of T itle I of the Affordable Care Act reorganized, amended, and added to the provisions of part A of Title XXVII of the Public Health Service Act (PHS Act) relating to group health plans and hea lth insurance issuers in the group and individual markets. Starting on October 1, 2013 for coverage st arting as soon as January 1, 2014, qualified individuals and qualified employers have been able to purchase qualified health plans (QHPs) – private health insurance that has been certi fied as meeting certain standards – through competitive marketplaces called Exchanges or H ealth Insurance Marketplaces. The word “Exchanges” refers to both State Exchanges, al so called State-based Ex changes, and Federallyfacilitated Exchanges (FFEs). In this proposed rule, we use the terms “State Exchange” or “FFE” when we are referring to a particular type of Exchange. When we refer to “FFEs,” we are also referring to State Partnership Ex changes, which are a form of FFE.CMS-9941-P 6

Section 1411(f)(1)(B) of the Affordable Care Act directs the Secretary of Health and Human Services (the Secretary) to establish procedures to redetermine the eligibility of individuals on a periodic basis in appropriate circumstances. Sec tion 1321(a) of the Affordable Care Act provides authority for the Secretary to establish standards and re gulations to implement the statutory requirements relate d to Exchanges, QHPs and other components of title I of the Affordable Care Act. Under section 2703 of the PH S Act, as added by the Affordable Care Act, health insurance issuers in the group and individual markets must guarantee the renewability of coverage unless an exception applies. B. Stakeholder Consultation and Input HHS has consulted with stakeholders on a num ber of polices relate d to the operation of Exchanges, including eligibility redeterminati on. HHS has held a number of listening sessions with consumers, providers, employers, health plan s, and State representatives to gather public input. HHS consulted with stakeholders through regular meetings with the National Association of Insurance Commissioners (NAI C), regular contact with States through the Exchange grant process, and meetings with tribal leaders and representatives, health insurance issuers, trade groups, consumer advocates, employers, and other inte rested parties. We considered all of the public input as we developed the pol icies in this proposed rule. C. Structure of the Proposed Rule The regulations outlined in this proposed ru le would be codified in 45 CFR parts 155 and 156. Part 155 specifies standards relative to the establishment, operation, and minimum functionality of Exchanges, including annual e ligibility redeterminations. Part 156 specifies standards for health insurance issuers with respect to participation in an Exchange. II. Provisions of the Proposed RegulationsCMS-9941-P 7

A. Part 155 – Exchange Establishment Sta ndards and Other Related Standards Under the Affordable Care Act; Subpart D – Exchange F unctions in the Individual Market: Eligibility Determinations for Exchange Participa tion and Insurance Affordability Programs Section 1411(f)(1)(B) of the Affordable Care Act directs the Secretary to establish procedures to redetermine the eligibility of individuals on a periodic basis in appropriate circumstances. Section 1321(a) of the Affordable Care Act provides aut hority for the Secretary to establish standards and regulations to im plement the statutory re quirements related to Exchanges, QHPs and other components of title I of the Affordable Care Act. On March 27, 2012, we published a final rule en titled Patient Protec tion and Affordable Care Act; Establishment of Exchanges and Qua lified Health Plans; Exchange Standards for Employers (77 FR 18310). The final rule added 45 CFR 155.335, which, together with the provisions in 45 CFR 155.330 on eligibility redete rminations during a benefit year, implements section 1411(f)(1)(B) of the Affordable Care Act. On July 15, 2013, we amended §155.335 in a final rule entitled Medicaid and Children’s He alth Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibil ity Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment (78 FR 42160, 42319). Under the process currently defined in §155.335, the Exchange will provide a notice to all individuals who have been de termined eligible fo r enrollment in a QHP through the Exchange (qualified individuals) in adva nce of the annual open enrollment period, consistent with §155.335(c). For 2015, current regulati ons in §155.335(d)(1) specify that this notice and the annual open enrollment period notice descri bed in §155.410(d) be provided as a single, coordinated notice. For an indi vidual who requested an eligibili ty determination for insurance affordability programs and who authorized the Exch ange to obtain the most recent tax returnCMS-9941-P 8

information available from the Secretary of the Treasury for the purposes of annual redetermination, this notice will include a proj ected eligibility determination for insurance affordability programs for the following year that is computed based on the updated income and family size information, all other eligibility info rmation currently on file with the Exchange, and plan premiums for the following year. Specifica lly, if advance payments of the premium tax credit (APTC) are being paid on such an enroll ee’s behalf and the ta x filer authorized the Exchange to obtain updated tax data for the pur poses of annual redetermination, the Exchange will recalculate advance payments of the premiu m tax credit and cost-sharing reductions (CSR) for the upcoming year in accordance with updated income and family size information and premium data for the applicable benchmark pla n, as defined in 26 CFR 1.36B-3(f), calculated using premiums for the upcoming year. Consis tent with §155.335(e), the Exchange will require qualified individuals to report chan ges. The process currently esta blished in regula tion allows an individual who is enrolled in a QHP through the Exchange and whose QHP remains available to renew coverage for the following year without reappl ying or having to take ot her actions. This is a key element of the redetermination process, si nce it enables a streamlined renewal process for enrollees and also reduces administrative co sts for States and the Federal government. Based on the authority in sect ions 1411(f)(1)(B) and 1321(a) of the Affordable Care Act, we propose to modify §155.335(a) to allow for an Exchange to choose one of three methods for conducting annual redeterminations. To accomm odate proposed new paragraph (a)(2), we propose to renumber existing paragraph (a) as pa ragraph (a)(1). Then, in proposed paragraph (a)(2), we propose that the Excha nge must conduct annual redetermin ations using one of the sets of procedures described in proposed paragraphs (a)(2)(i), (a)(2)(ii) , or (a)(2)(iii). First, in proposed paragraph (a)(2)(i), we propose that th e Exchange may utilize the existing proceduresCMS-9941-P 9

described in §155.335(b) through (m). Second, in paragraph (a)(2)(ii), we propose that the Exchange may utilize alternative procedures spec ified by the Secretary for the applicable plan year. We note that, contemporaneously with this proposed rule, the Secretary is providing guidance describing alternative procedures that would be av ailable to Exchanges under paragraph (a)(2)(ii) for annual redeterminations fo r coverage for plan year 2015 if this proposal is finalized. We are providing this guidance at the same time as this proposed rule given the limited amount of time available for Exchanges a nd issuers to develop and test the systems and processes that will be needed to implement the annual redetermination process. If this proposal is finalized, Federally-facilitate d Exchanges will adopt the altern ative procedures specified in this guidance for plan year 2015. Also, if this proposal is finalized, we expect that updated guidance under paragraph (a)(2)(ii ) may be provided on an annua l basis. Third, in proposed paragraph (a)(2)(iii), we propose that the Exchan ge may utilize alternative procedures approved by the Secretary based on a showing by the Exch ange that the alternative procedures would facilitate continued enrollment in coverage for which the enrollee remains eligible, provide clear information about the process to the qualified in dividual or enrollee (inc luding any action by the qualified individual or enrollee necessary to obtain the most accurate redetermination of eligibility), and provide adequa te program integrity protecti ons. We note that paragraph (a)(2)(iii) is designed to enable Exchanges to propose annual re determination procedures that would deliver on the key goals of the annual redetermination pro cess, including those specified in this paragraph. We solicit comment regardi ng standards for approving alternative procedures, and on other elements of the annual redeterminat ion process, as well as how it affects renewal for individuals who are enrolled in a QHP th rough the Exchange. We also note that special procedures may be needed for an Exchange that is transitioning the eligibility and enrollmentCMS-9941-P 10

functions from Federal to State operation, or vice versa. We will work closely with affected States to facilitate these transitions. In addition to the proposal to allow Exch anges to choose one of three options for performing annual redeterminations, we propose to make three amendments to the detailed procedures described in §155.335 and one corresponding amendment to §155.330, which governs eligibility redetermination during a bene fit year. First, in §155.33 5(e), we propose to revise the language regarding change reporting to generally align with the standards in §155.330(b), so that §155.335(e) would specify that, except as speci fied in proposed paragraph (e), the Exchange must require a qualified individual to report any change with respect to the eligibility standards specified in §155.305 within 30 days of any such change. Under proposed paragraph (e)(1), the Exchange would not be permitted to require a qualified individual who did not request an eligibility determination for insu rance affordability prog rams to report changes that affect eligibility for insurance afford ability programs. Unlike §155.330, we do not propose to allow the Exchange to establish a reasonable threshold for changes in income, such that a qualified individual who experiences a change in income that is below the threshold would not be required to report such change, since we be lieve that reporting of all income changes is important at the time of annual redetermination. With this exception, th e proposed standards are identical to those currently established in 45 CFR §155.330(b). We propose these changes to paragraph (e) because the existing text refers to reporting changes with respect to the information included in the annual redetermina tion notice, which is not required to include a summary of the qualified individual’s application information on file, although an Exchange may opt to include this information. These proposed changes woul d align reporting requirements with the noticeCMS-9941-P 11

and ensure that Exchanges require relevant ch anges to be reported in a timely manner, consistently throughout the year. Second, in proposed §155.335(e)(2), we propose to amend the existing provision which specifies that the Exchange must allow a qualified i ndividual, or an applicati on filer, on behalf of the qualified individual, to re port changes via the channels av ailable for submission of an application, as described in §155.405(c)(2). We pr opose that this requirement would continue to apply, except that the Exchange would no longer be required to a llow a qualified individual, or an application filer, on behalf of the qualified individua l, to report changes via mail. We also propose the same change to §155.330(b)(4), which addresses the reporting of changes in the context of eligibility redetermination during a benefit year. Accepting changes via mail would frequently require follow-up tele phone contact with individuals attempting to report changes in order to obtain answers to questions that may be triggered by the reported changes. We propose this because of the dynamic nature of the elig ibility process, under which, for example, the Exchange should only ask questions about an in dividual’s access to qualifying coverage in an eligible employer-sponsored plan for an individu al who has a level of income for his or her family size that would qualify him or her for advance payments of the premium tax credit or cost-sharing reductions, if he or she is otherw ise eligible. With a pa per process, under this example, it frequently would not be possible to know in advance whether information about an individual’s access to qualifying coverage in an eligible employer-sponsored plan would need to be collected based on a reported ch ange in income or family size. Since change reporting via mail would frequently trigger subsequent telepho ne contact, we belie ve it would promote administrative efficiency to eliminate the requi rement to accept change reporting via mail while encouraging use of the telephone option, during wh ich a call center repres entative can use theCMS-9941-P 12

dynamic application to ask the qualified individu al any follow-up questions that may arise from the change report. We note that our proposed polic y would continue to requi re that an Exchange must permit change reporting on line, via telephone, and in pe rson with the assistance of Navigators, certified application counselors, and ot her in-person assistance personnel, and that an Exchange could choose to permit change reporting via mail. If this proposal is finalized, we anticipate that the Federally-faci litated Exchange would not accep t changes reported via mail for the foreseeable future. We also note that this rule does not propose to modify 42 CFR 435.916(a)(3)(B) or (c), which specify that a Me dicaid agency must allow an individual to respond to an annual redetermination or report changes via mail. Third, we propose to modify the standards for re -enrollment in coverage in paragraph (j). First, in paragraph (j)(1), we pr opose that if an enrollee remains e ligible for enrollment in a QHP through the Exchange upon annual redeterminat ion, and the product under which the QHP in which he or she was enrolled remains availa ble for renewal, consistent with 45 CFR 147.106, such enrollee will have his or her enrollment in a QHP under the product renewed unless he or she terminates coverage, including terminati on of coverage in conn ection with voluntarily selecting a different QHP, in accordance with §1 55.430. In this situation, we propose that the QHP in which the enrollee will be renewed will be selected according to the following order of priority: first, in the same plan as the enro llee’s current QHP, unless the current QHP is not available; second, if the enrollee’s current QHP is not available, the enro llee’s coverage will be renewed in a plan at the same metal level as the enrollee’s current QHP; third, if the enrollee’s current QHP is not available and the enrollee’s product no longer include s a plan at the same metal level as the enrollee’s current QHP, the enro llee’s coverage will be re newed in a plan that is one metal level higher or lower than the enro llee’s current QHP; and fourth, if the enrollee’sCMS-9941-P 13

current QHP is not available and the enrollee’s pr oduct no longer includes a plan that is at the same metal level as, or one metal level higher or lower than the enrollee’s current QHP, the enrollee’s coverage will be renewed in any ot her plan offered under the product in which the enrollee’s current QHP is offered in whic h the enrollee is eligible to enroll. In paragraph (j)(2), we propose standards to ad dress re-enrollment in situations in which the product under which an enrollee’s QHP is offe red is not available through the Exchange for renewal, consistent with 45 CFR 147.106. In this situation, the QHP issuer may still re-enroll the enrollee in a different product offered by the same QHP issuer, to the extent permitted by applicable State law, unless the enrollee terminates coverage. To the extent that an issuer is reenrolling such an enrollee, we propose that the plan in which the enrollee will be renewed will be selected according to the following order of priority : first, in a plan through the Exchange at the same metal level as the enrollee’s current QHP in the product offered by the issuer that is the most similar to the enrollee’s current product; se cond, if the issuer does not offer another plan through the Exchange at the same metal level as the enrollee’s current QHP, the enrollee will be re-enrolled in a plan through the Exchange that is one metal level high er or lower than the enrollee’s current QHP in the product offered by th e issuer through the Exchange that is the most similar to the enrollee’s current product; third, if the issuer does not offer another plan through the Exchange at the same metal level as, or one metal level higher or lower than the enrollee’s current QHP, the enrollee will be re-enrolled in any other plan offered through the Exchange by the QHP issuer in which the enrollee is eligible to enroll; and fourth, if the issuer does not offer any plan through the Exchange in which the enrollee is eligible to enroll, the enrollee may be reenrolled in a plan offered outside the Exchange by the QHP issuer under the product that is the most similar to the enrollee’s curre nt product, in which the enrollee is eligible to enroll. We noteCMS-9941-P 14

that the Exchange would not send an enrollme nt transaction for an enrollment outside the Exchange, and that premium tax credits and co st-sharing reductions are not available for enrollment that is not through the Exchange. The proposed changes to this provision in clude minor changes to improve clarity, amendments to reflect that renewal of coverage in a QHP through the Exchange intersects with §147.106, which provides market-wide standards for guaranteed renewability of coverage offered both through and outside th e Exchange, and a specific order of priority to ensure that renewal of and re-enrollment in coverage in a plan through the Exchange occurs through the Exchange, and is in products that are as similar to the enrollee’ s existing product as possible, in order to minimize disruption, enable consumers to continue with advance payments of the premium tax credit and cost-sha ring reductions (which are only available for enrollment through the Exchange) and limit consumer confusion. Furthe r, the current text of paragraph (j), if read separately from §147.106, could give the incorrect impression that a QHP enrollee would have his or her coverage in a QHP renewed even if the product unde r which the QHP was offered was no longer available for renewal, consistent with §147.106. Accordingly, the proposed language is designed to clarify the depe ndency of renewal of coverage in a QHP through the Exchange on the continuing availability of the product under which the QHP is offered in accordance with market-wide standards. We solicit comments on these proposed standards and on the proposed order in which plans would be selected for re newal of and re-enrollment in coverage. In particular, we solicit comment regarding whether paragraphs (j)(1)(iii) an d (j)(2)(ii) should only prioritize a plan with a lower metal level, and wh ether in general, priority should be placed on plans that have a premium that is closest to the plan in which an enrollee is currently enrolled.CMS-9941-P 15

B. Part 156 – Health Insurance Issuer Standard s Under the Affordable Care Act, Including Standards Related to Exchanges; Subpart M – Qualified Health Plan Issuer Responsibilities In 45 CFR §147.106(f)(1) of the final rule enti tled, “Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond,” published on May 27, 2014 (79 FR 30240) (Market Standards Rule), we specified that health insurance issuers of non-grandfathered plans in the individual market will provide written notice of renewals before the first day of the next annual open enrollment period in a form and ma nner specified by the Secretary. Under 45 CFR 147.106(c)(1), health insu rance issuers of non-grandfathered plans in the individual market also will provide written notices of product discontinuances. We propose adding to subpart M a new §156.1255, which would require a health insurance issuer in the individua l market that is renewing an en rollment group’s coverage in a qualified health plan offered thr ough the Exchange (including a re newal with modifications), or that is discontinuing a produc t that includes plans offered through the Exchange and automatically enrolling an enrollee in a QHP und er a different product offered by the same QHP issuer through the Exchange, to include certain information in the renewal or discontinuation notices, as applicable. We propose that the a dditional information include the following: (1) premium and premium tax credit information suffi cient to notify the en rollment group of its expected monthly premium payment under the renewed coverage, in a form and manner specified by the Exchange, provided that if the Exchange does not provide this information to enrollees and does not require issu ers to provide this information to enrollees, consistent with this section, such information must be provide d in a form and manner specified by HHS; (2) an explanation of the requirement to report change s to the Exchange, the timeframe and channels through which changes can be reported, and the imp lications of not reporting changes; (3) for anCMS-9941-P 16

enrollment group that includes an enrollee on wh ose behalf advance payments of the premium tax credit are being provided, a de scription of the reconciliation process for advance payments of the premium tax credit; and (4) for an enrollment group that includes an enrollee whose coverage includes cost-sharing reductions, if the enrollment group’s covera ge is being renewed in a QHP at a different (non-silver) metal level, an e xplanation that, unless the enrollment group changes its enrollment to select a new silver-level pla n, cost-sharing reductions w ill not be provided for the upcoming year. In accordance with §147.106(f )(1), renewal notices would need to be provided no later than the first day of the open enrollment period for the upcoming plan year. An issuer also may provide this notice along w ith the applicable summary of benefits and coverage notice that is provi ded at renewal in accordan ce with 45 CFR 147.200. We seek comment on this proposal. Contemporaneously with the issuance of this proposed rule, we are specifying the form and manner of the notices describe d in 45 CFR 146.152, 147.106, and 148.122 by providing standard notices for issuers to use when discontinuing or renewing coverage. These notices take into account the feedback we received on the dr aft notices issued contemporaneously with the proposed Market Standards Rule. 1 We believe that adding th e information that would be specified pursuant to §156.1255 to the renewa l notices required under §147.106 would best assure that qualified individuals receive, in a single notice, the relevant information that they need to make informed decisions about whether to keep their current plan or examine other QHP options. Further, this approach potentially would reduce burden on health insurance issuers. As noted above, the Market Standards Rule requires that notices be provided in a form and manner

1 CMS Insurance Standards Bulletin, Draft Notices When Discontinuing or Renewing a Product in the Group or Individual Market (March 14, 2014), http://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/draft-discontinuance-renewal-notices-03-14-14.pdf

.CMS-9941-P 17

specified by the Secretary. The guidance accomp anying the standard notices that we are releasing for public comment contemporaneously with this proposed rule specifies that the form and manner may consist of standard notices developed by States that are enforcing the requirements of the Affordable Ca re Act, provided the State-deve loped notices are at least as protective as the standa rd Federal notices. We recognize that the current notice requirements do not cove r every situation in which an issuer may non-renew or discontinue coverage , consistent with the guaranteed renewability statute and regulations. For ex ample, an issuer whose product no longer covers the service area of enrollees may non-renew those enrollees’ covera ge under that product. But, as long as the issuer’s product continues to cove r a majority of the same service area, the service area reduction would not trigger a product discontinuation and corresponding notice to affected enrollees under the current regulations. We also propose establishing a notice re quirement that would apply to all plans subject to the guaranteed renewabili ty requirements that non-renew coverage based on continued coverage not being ava ilable in the enrollee’s service ar ea as a result of changes that do not result in product discontinuances. These no tices would be provided in a form and manner specified by HHS. We solicit comments on this proposal, including the ap propriate timeframe for providing the notice. III. Response to CommentsCMS-9941-P 18

Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the "DATES" section of this preamble, and, when we proceed with a subse quent document, we will respond to the comments in the preamble to that document. IV. Collection of Information Requirements Emergency Clearance: Public Information Collec tion Requirements Submitt ed to the Office of Management and Budget (OMB) In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services, is publishing a summary of this proposed informa tion collection for public comment. Interested persons are invited to send comments regarding this collection’s proposed burden estimates or any other aspect of this collec tion of information, including any of the following subjects: (1) The necessity and utility of the proposed inform ation collection for the proper performance of the agency's functions; (2) the a ccuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the inform ation to be collected; and (4) the use of automated collection techniques or other forms of information t echnology to minimize the information collection burden. In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we have also submitted to the Office of Manageme nt and Budget (OMB) the proposed information collection for their emergency review. While th e collection is necessary to ensure compliance with an initiative of the Ad ministration, we are requesting emergency review under 5 CFR 1320(a)(2)(i) because public harm is reasonabl y likely to result if the regular clearanceCMS-9941-P 19

procedures are followed. The approval of this data collection process is es sential to ensuring that renewal notices associated with the 2015 plan year are provided to consumers in a timely manner prior to the 2015 open enrollment period. Consumer s will need the information in these notices in order to make decisions regarding their coverage for the 2015 plan year. ICRs Regarding Renewal and Re-enr ollment Notice Requirements (§156.1255) Proposed §156.1255 would require that a health insurance issuer in the individual market that is renewing an enrollment group’s coverage in a qualified health plan offered through the Exchange (including a renewal w ith modifications), or that is discontinuing a product offered through the Exchange and automati cally enrolling an enrollee in a QHP under a different product offered by the same QHP issuer through the Excha nge include certain info rmation in the written notice specified in §147.106( c)(1) or (f)(1). Since there are existing requirements for i ssuers to send renewal and discontinuance notices, we only estimate the burden for QHP issuers to revise current notices to comply with the proposed provisions of this proposed rule. We estimate that there are 575 QHP issuers and assume that they would all revise their existing notices to comply with the requirements in this proposed rule. For renewal notices, we estimate that, for each issuer, it would require three hours of clerical labor (at a cost of $33.67 per hour) to prepare the notice and one hour for a senior manager (at a cost of $75.34 per hou r) to review it. We also estimate that it would take a computer programmer 20 hours (at a cost of $52.53 per hour) to write and test a program to automate the notices. The total burden for each issuer to prepare the notice would be 24 hours with an equivalent cost of approximately $1,277. For all 575 QHP issuer s, the total burden would be 13,800 hours with an equivalent cost of approximately $705,479.CMS-9941-P 20

For re-enrollment (or discontinuance) notices, wh ich could also be used in cases of other terminations or non-renewals, we estimate that, for each issuer, it woul d require three hours of clerical labor (at a cost of $33.67 per hour) to prepare the notice and one hour for a senior manager (at a cost of $75.34 per hour) to review the notice. We also estimate that it would take a computer programmer 9 hours (at a cost of $52.53 per hour) to write and test a program to automate the notices. The total annual burden fo r each issuer to prepar e the notice would be 13 hours with an equivalent cost of approximately $649. For all 575 QHP issuers, the total annual burden would be 7,475 hours with an equi valent cost of approximately $373,237. States that are enforcing the Affordable Care Act may develop their own standard notices. However, we anticipate that fewer than 10 States would opt for this alternative. Under 5 CFR 1320.3(c)(4), this requirement is not subject to the PRA as it would affect fewer than 10 entities in a 12-month period. We are requesting emergency OMB review with a 180-day approval period. Written comments and recommendations for this emergenc y request only will be considered from the public if received by the date and address noted below. The proposed information collection requireme nt at §156.1255 is but one component of a broader information collection request. We are also soliciting comments for the aforementioned information collection request in a notice published elsewhere in this issue of the Federal Register . The notice provides the public with 30 da ys to submit comments. Copies of the supporting statement for this information collect ion request and any related forms can be found

at: http://www.cms.hhs.gov/PaperworkReductionActof1995 or can be obtained by e-mailing your request, including your address, phone number, OMB number, and CMS documentCMS-9941-P 21

identifier, to: Paperwork@cms.hhs.gov , or by calling the Reports Clearance Office at: 410-786-
1326. When commenting on this proposed informa tion collection, please reference the CMS document identifier and the OMB control number. To be assured consideration, comments and recommendations must be received in one of the following ways by July 28, 2014: 1. Electronically. You may submit your comments electronically to http://www.regulations.gov. Follow the instructi ons for "Comment or Submission" or "More Search Options" to find the information collection document(s) accepting comments. 2. By regular mail. You may mail writt en comments to the following address: CMS, Office of Strategic Oper ations and Regulatory Affairs Division of Regula tions Development Attention: Document Identifier (CMS-10527)
Room C4-26-05 7500 Security Boulevard Baltimore, Maryland 21244-1850. and, OMB Office of Informati on and Regulatory Affairs Attention: CMS Desk Officer New Executive Office Building, Room 10235 Washington, D.C. 20503 Fax Number: 202-395-6974 V. Regulatory Impact StatementCMS-9941-P 22

A. Summary We are publishing this proposed rule to im plement the protections intended by the Congress in the most economically efficient manner possible. We have examined the effects of this rule as required by Executive Order 13563 (76 FR 3821, January 21, 2011), Executive Order 12866 (58 FR 51735, September 1993, Regulatory Pl anning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, P ub. L. 96-354), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C. 804(2)). B. Executive Orders 12866 and 13563 Executive Order 12866 (58 FR 51735) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and e quity). Executive Order 13563 (76 FR 3821, January 21, 2011) is supplemental to and reaffirms the prin ciples, structures, and definitions governing regulatory review as estab lished in Executive Order 12866. Section 3(f) of Executive Order 12866 define s a “significant regulatory action” as an action that is likely to result in a proposed rule -- (1) having an annual effect on the economy of $100 million or more in any one year, or adversel y and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also refe rred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetar y impacts of entitlement grants, user fees, or loan programs or the rights and obligations of re cipients thereof; or (4 ) raising novel legal orCMS-9941-P 23

policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. A regulatory impact analysis (RIA) must be prepared for rules with economically significant effects (for example, $100 million or more in any 1 year), and a “significant” regulatory action is subject to revi ew by the OMB. We have concl uded that this proposed rule is not likely to have economic impacts of $100 million or more in any one year, and therefore does not meet the definition of “economically significa nt rule” under Executive Order 12866. 1. Need for Regulatory Action This proposed rule specifies a dditional options for annual elig ibility redeterminations and renewal and re-enrollment notice requirements for QHPs in the Exchange beginning with annual redeterminations for coverage for plan year 2015. 2. Summary of Impacts It is expected that Exchanges will adopt an alternative method for annual eligibility redeterminations only if the related costs are no more than those associated with the process currently defined in §155.335. Therefore, we do not expect that there would be additional costs related to these provisions. QHP issuers would incur costs to prepare and send renewal notices to comply with the proposed provisions, as detailed in section IV. States that choos e to develop their own renewal notices would incur costs to do so. Providing consumers with information such as benefit changes and premium amounts will enable them to make decisions regarding their coverage for the next plan year. C. Regulatory Flexibility ActCMS-9941-P 24

The Regulatory Flexibility Act (RFA) requires agencies that issue a regulation to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. The RFA generally defines a "small entity" as: (1) a proprietary firm meeting the size standards of the Small Bu siness Administration (SBA); (2) a nonprofit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000 (States and individuals are not included in th e definition of "small entity"). HHS uses as its measure of signifi cant economic impact on a substantial number of small entities a change in revenues of more than 3 to 5 percent. We do not believe that this threshold will be reached by the provisions of this proposed rule. D. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Re form Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits be fore issuing any rule that includes a federal mandate that could result in expenditure in any on e year by State, local or tribal governments, in the aggregate, or by the private sector, of $100 million in 1995 dollars , updated annually for inflation. In 2014, that threshold level is approximately $141 million. UMRA does not address the tota l cost of a rule. Rather, it focuses on certain categories of cost, mainly those “Federal mandate” costs resulting from: (1) Imposing enforceable duties on State, local, or tribal governme nts, or on the private sector; or (2) increasing th e stringency of conditions in, or decreasing the funding of, State, local, or tribal governments under entitlement
programs. This proposed rule would allow States to choose one of three methods for conducting annual redeterminations. We assume that States would choose an alternat ive method only if it is less costly than the current me thod. It would also require QHP issuers to include specificCMS-9941-P 25

information in renewal and re-enrollment notices sent to enrollees and issuers would incur costs to comply with this requirement. States that choose to develop their own notices would incur costs to do so. Consistent with policy embodied in UMRA, this proposed rule has been designed to be the least burdensome alternative for State, local and tribal govern ments, and the private sector while achieving the objectives of the Affordable Care Act.

E. Federalism Executive Order 13132 establishes certain requirem ents that an agency must meet when it promulgates a rule that imposes substantial direct requirement costs on State and local governments, preempts State law, or othe rwise has Federalism implications. States are the primary regulators of health insurance coverage, and State laws will continue to apply to health insu rance coverage and the business of insurance. However, if any State law or requirement prevents the application of a Federal standa rd, then that particular State law or requirement would be preempted. State requirements that are more stringent than the Federal requirements would not be preempted by this proposed rule. Accordingly, States have significant latitude to impose requi rements with respect to health insurance coverage that are more restrictive than the Federal law. F. Congressional Review Act This proposed rule is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can take effect, the federal agency promulgating the rule shall submit to each House of the Congress and to th e Comptroller General a report containing a copy of the ruleCMS-9941-P 26

along with other specified information, and has been transmitted to Congress and the Comptroller General for review.

List of Subjects
45 CFR Part 155 Administrative practice and pr ocedure, Health care access, Health insurance, Reporting and recordkeeping requirements, State and local governments, Cost-sharing reductions, Advance payments of premium tax credit, Administrati on and calculation of advance payments of the premium tax credit
45 CFR Part 156 Administrative practice and pr ocedure, Health care, Health insurance, Reporting and recordkeeping requirements For the reasons set forth in the preamble, th e Department of Health and Human Services proposes to amend 45 CFR parts 155 and 156 as set forth below:CMS-9941-P 27

PART 155 – EXCHANGE ESTABLISHMEN T STANDARDS AND OTHER RELATED
STANDARDS UNDER THE AFFORDABLE CARE ACT 1. The authority citation for part 155 continues to read as follows: Authority: Title I of the Affordable Care Act, sections 1301, 1302, 1303, 1304, 1311, 1312, 1313, 1321, 1322, 1331, 1332, 1334, 1402, 1411, 1412, 1413, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 18051, 18054, 18071, and 18081- 18083). 2. Amend §155.330 to revise paragraph (b)(4) as follows: §155.330 Eligibility redeterminati on during a benefit year. * * * * * (b) * * * (4) The Exchange must allow an enrollee, or an application filer on be half of the enrollee, to report changes via the channels available for the submission of an application, as described in §155.405(c)(2), except that the Exchange is permitted but not required to allow an enrollee, or an application filer, on behalf of the en rollee, to report changes via mail.
* * * * * 3. Amend §155.335 to revise paragraphs (a), (e), and (j) as follows: §155.335 Annual eligibility redetermination. (a) General requirement. (1) Except as specified in paragraphs (l) and (m) of this section, the Exchange must redetermine the eligibility of a qualified individual on an annual basis. (2) The Exchange must conduct annual rede terminations required under paragraph (a)(1) of this section using one of the following: (i) The procedures described in paragr aphs (b) through (m) of this section;CMS-9941-P 28

(ii) Alternative procedures specified by the Secretary for the applicable plan year; or (iii) Alternative procedures approved by the Secretary based on a showing by the Exchange that the alternative procedures would facilitate continued enro llment in coverage for which the enrollee remains eligib le, provide clear information a bout the process to the qualified individual or enrollee (incl uding regarding any action by the qualified individual or enrollee necessary to obtain the most accu rate redetermination of eligib ility), and provide adequate program integrity protections.
* * * * * (e) Changes reported by qualified individuals

. Except as specified in paragraph (e)(1) of this section, the Exchange must require a qualified indi vidual to report any change with respect to the eligibility standards specified in §155.305 within 30 days of such change. (1) The Exchange must not require a qua lified individual who did not request an eligibility determination for insurance affordab ility programs to report changes that affect eligibility for insurance affordability programs. (2) The Exchange must allow a qualified indivi dual, or an applicati on filer, on behalf of the qualified individual, to repor t changes via the channels ava ilable for the submission of an application, as described in §155.405(c)(2), exce pt that the Exchange is permitted but not required to allow a qualified individual, or an application filer, on behalf of the qualified individual, to report changes via mail.
* * * * * (j) Re-enrollment

. If an enrollee remains eligible for enrollment in a QHP through the Exchange upon annual redetermination—CMS-9941-P 29

(1) And the product under which the QHP in which he or she is enrolled remains available through the Exchange for renewal, co nsistent with §147.106 of this subchapter, such enrollee will have his or her enrollment thr ough the Exchange in a QHP under that product renewed, unless he or she terminates coverage, including termination of coverage in connection with voluntarily selecting a different QHP , in accordance with §155.430. The Exchange will ensure that re-enrollment in c overage under this paragraph (j)(1) occurs under the same product in which the enrollee was enrolled, as follows: (i) The enrollee’s coverage will be renewed in the same plan as the enrollee’s current QHP, unless the current QHP is not available. (ii) If the enrollee’s current QHP is not avai lable, the enrollee’s coverage will be renewed in a plan at the same metal leve l as the enrollee’s current QHP; (iii) If the enrollee’ s current QHP is not available a nd the enrollee’s product no longer includes a plan at the same metal level as the enrollee’s current QHP, th e enrollee’s coverage will be renewed in a plan that is one metal leve l higher or lower than the enrollee’s current QHP;

or (iv) If the enrollee’ s current QHP is not available a nd the enrollee’s product no longer includes a plan that is at the same metal level as, or one metal level higher or lower than the enrollee’s current QHP, the enrollee’s coverage w ill be renewed in any other plan offered under the product in which the enrollee’s current QHP is offered in which the enro llee is eligible to enroll. (2) And the product under which the QHP in whic h he or she is enro lled is not available through the Exchange for renewal, consistent with §147.106 of this subchapter, such enrollee may be enrolled in a plan under a different product offered by the same QHP issuer, to the extentCMS-9941-P 30

permitted by applicable State law, unless he or she terminates coverage, including termination of coverage in connection with voluntarily sele cting a different QHP, in accordance with §155.430. The Exchange will ensure that re-enrollment in coverage under this paragraph (j)(2) occurs as follows: (i) The enrollee will be re-enrolled in a pl an through the Exchange at the same metal level as the enrollee’s current QHP in the product o ffered by the issuer that is the most similar to the enrollee’s current product; (ii) If the issuer does not offer another plan through the Exchange at the same metal level as the enrollee’s current QHP, th e enrollee will be re-enrolled in a plan through the Exchange that is one metal level higher or lower than th e enrollee’s current QHP in the product offered by the issuer through the Exchange that is the most similar to the enroll ee’s current product; (iii) If the issuer does not offer another plan through the Exchange at the same metal level as, or one metal level higher or lower than th e enrollee’s current QHP, the enrollee will be reenrolled in any other plan offered through the Ex change by the QHP issuer in which the enrollee is eligible to enroll. (iv) If the issuer does not offer any plan through the Exchange in which the enrollee is eligible to enroll, the enrollee will be re-enrol led in a plan offered outside the Exchange by the QHP issuer under the product that is the most sim ilar to the enrollee’s current product, in which the enrollee is eligible to enroll.
* * * * *
PART 156—HEALTH INSURANCE IS SUER STANDARD S UNDER THE AFFORDABLE CARE ACT, INCLUDING ST ANDARDS RELATED TO EXCHANGES 4. The authority citation for part 156 continues to read as follows:CMS-9941-P 31

Authority : Title I of the Affordable Ca re Act, sections 1301–1304, 1311–1313, 1321- 1322, 1324, 1334, 1342–1343, 1401–1402, Pub. L. 111-148, 124 Stat. 119 (42 U.S.C. 18021- 18024, 18031-18032, 18041-18042, 18044, 18054, 18061, 18063, 18071, 18082, 26 U.S.C. 36B, and 31 U.S.C. 9701). 5. Add §156.1255 to read as follows: §156.1255 Renewal and re-enrollment notices. A health insurance issuer that is rene wing an enrollment group’s coverage in an individual market QHP offered through the Exch ange (including a renewal with modifications) in accordance with §147.106 of this subchapter , or that is discontinuing a product offered through the Exchange and automati cally enrolling an enrollee in a QHP under a different product offered by the same QHP issuer through the Exchange in accordance with §155.335 of this subchapter, must include the following informa tion in the applicable notice described in §147.106(c)(1) or (f)(1) of this subchapter: (a) Premium and premium tax credit information sufficient to notify the enrollment group of its expected monthly premium payment under the renewed coverage, in a form and manner specified by the Exchange, provided that if the Exchange does not provide this information to enrollees and does not require issu ers to provide this information to enrollees, consistent with this section, such information must be pr ovided in a form and manner specified by HHS; (b) An explanation of the requirement to repor t changes to the Exchange, as specified in §155.335(e) of this subchapter, the timeframe and channels through which changes can be reported, and the implications of not reporting changes; (c) For an enrollment group that includes an enrollee on whose behalf advance payments of the premium tax credit are being provided, an explanation of the r econciliation process forCMS-9941-P 32

advance payments of the premium tax credit established in accordan ce with 26 CFR 1.36B-4; and (d) For an enrollment group that includes an en rollee with cost-shari ng reductions, but for whom no QHP under the product remains available for renewal at the silver level, an explanation that unless the enrollment gr oup selects a silver-level QHP through the Exchange, no costsharing reductions will be provided.CMS-9941-P

Dated: June 19, 2014

___________________________________ Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services.

Approved: __June 24, 2014___

___________________________________ Sylvia M. Burwell, Secretary.

BILLING CODE 4120-01-P

[FR Doc. 2014-15362 Filed 06/26/2014 at 4:15 pm; Publication Date: 07/01/2014]