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 Affordability 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 additional options for annual eligibility 

redeterminations and renewal and re-enrollment notice requirements for qualified 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 streamlining 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 cannot 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 electronic 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 written 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. Alternatively, you may deliver (by hand or courier) your written 

comments ONLY to the following addresses prior 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 Hubert 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 located in the main lobby of the building. A stampin clock is available for persons wishing to retain a proof of filing by stamping 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 addresses indicated as appropriate for hand or 

courier delivery may be delayed and received after the comment period. 

For information on viewing public comments, 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 personally identifiable or 
CMS-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 following 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 available for public inspection as they are 

received, generally beginning approximately 3 weeks 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 via 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 Standards and Other Related Standards Under the 

Affordable Care Act; Subpart D – Exchange Functions in the Individual Market: Eligibility 

Determinations for Exchange Participation and Insurance Affordability Programs 
CMS-9941-P 5 

B. Part 156 – Health Insurance Issuer Standards Under the Affordable Care Act, Including 

Standards Related to Exchanges; Subpart M—Qualified 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 Care Act (Pub. L. 111–148) was enacted on March 

23, 2010. The Health Care and Education Reconciliation Act of 2010 (Pub. L. 111–152), which 

amended and revised several provisions 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 Title 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 health insurance issuers in the group and individual 

markets. 

Starting on October 1, 2013 for coverage starting 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 certified as meeting certain standards – through 

competitive marketplaces called Exchanges or Health Insurance Marketplaces. The word 

“Exchanges” refers to both State Exchanges, also called State-based Exchanges, 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 Exchanges, which are a form of FFE. 
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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. Section 1321(a) of the Affordable 

Care Act provides authority for the Secretary to establish standards and regulations to implement 

the statutory requirements related to Exchanges, QHPs and other components of title I of the 

Affordable Care Act. Under section 2703 of the PHS 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 number of polices related to the operation of 

Exchanges, including eligibility redetermination. HHS has held a number of listening sessions 

with consumers, providers, employers, health plans, and State representatives to gather public 

input. HHS consulted with stakeholders through regular meetings with the National Association 

of Insurance Commissioners (NAIC), 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 interested parties. We considered all of the 

public input as we developed the policies in this proposed rule. 

C. Structure of the Proposed Rule 

 The regulations outlined in this proposed rule 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 eligibility redeterminations. Part 156 specifies 

standards for health insurance issuers with respect to participation in an Exchange. 

II. Provisions of the Proposed Regulations 
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A. Part 155 – Exchange Establishment Standards and Other Related Standards Under the 

Affordable Care Act; Subpart D – Exchange Functions in the Individual Market: Eligibility 

Determinations for Exchange Participation 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 authority for the Secretary 

to establish standards and regulations to implement the statutory requirements related to 

Exchanges, QHPs and other components of title I of the Affordable Care Act. 

On March 27, 2012, we published a final rule entitled Patient Protection and Affordable 

Care Act; Establishment of Exchanges and Qualified 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 redeterminations 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 Health Insurance Programs: Essential Health 

Benefits in Alternative Benefit Plans, Eligibility 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 determined eligible for enrollment in a QHP through the Exchange 

(qualified individuals) in advance of the annual open enrollment period, consistent with 

§155.335(c). For 2015, current regulations in §155.335(d)(1) specify that this notice and the 

annual open enrollment period notice described in §155.410(d) be provided as a single, 

coordinated notice. For an individual who requested an eligibility determination for insurance 

affordability programs and who authorized the Exchange to obtain the most recent tax return 
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information available from the Secretary of the Treasury for the purposes of annual 

redetermination, this notice will include a projected 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 information currently on file with the Exchange, and 

plan premiums for the following year. Specifically, if advance payments of the premium tax 

credit (APTC) are being paid on such an enrollee’s behalf and the tax filer authorized the 

Exchange to obtain updated tax data for the purposes of annual redetermination, the Exchange 

will recalculate advance payments of the premium 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 plan, as defined in 26 CFR 1.36B-3(f), calculated 

using premiums for the upcoming year. Consistent with §155.335(e), the Exchange will require 

qualified individuals to report changes. The process currently established in regulation 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 reapplying or having to take other actions. This is 

a key element of the redetermination process, since it enables a streamlined renewal process for 

enrollees and also reduces administrative costs for States and the Federal government. 

Based on the authority in sections 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 accommodate proposed new paragraph (a)(2), we 

propose to renumber existing paragraph (a) as paragraph (a)(1). Then, in proposed paragraph 

(a)(2), we propose that the Exchange must conduct annual redeterminations 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 the Exchange may utilize the existing procedures 
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described in §155.335(b) through (m). Second, in paragraph (a)(2)(ii), we propose that the 

Exchange may utilize alternative procedures specified 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 available to Exchanges under 

paragraph (a)(2)(ii) for annual redeterminations for 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 and 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-facilitated Exchanges will adopt the alternative 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 annual basis. Third, in proposed 

paragraph (a)(2)(iii), we propose that the Exchange may utilize alternative procedures approved 

by the Secretary based on a showing by the Exchange 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 individual or enrollee (including any action by the 

qualified individual or enrollee necessary to obtain the most accurate redetermination of 

eligibility), and provide adequate program integrity protections. We note that paragraph 

(a)(2)(iii) is designed to enable Exchanges to propose annual redetermination procedures that 

would deliver on the key goals of the annual redetermination process, including those specified 

in this paragraph. We solicit comment regarding standards for approving alternative procedures, 

and on other elements of the annual redetermination process, as well as how it affects renewal 

for individuals who are enrolled in a QHP through the Exchange. We also note that special 

procedures may be needed for an Exchange that is transitioning the eligibility and enrollment 
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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 Exchanges 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 benefit year. First, in §155.335(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 specified 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 insurance affordability programs to report changes 

that affect eligibility for insurance affordability 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 believe that reporting of all income changes is 

important at the time of annual redetermination. With this exception, the 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 redetermination 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 would align reporting requirements with the notice 
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and ensure that Exchanges require relevant changes 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 individual, or an application filer, on behalf of 

the qualified individual, to report changes via the channels available for submission of an 

application, as described in §155.405(c)(2). We propose that this requirement would continue to 

apply, except that the Exchange would no longer be required to allow a qualified individual, or 

an application filer, on behalf of the qualified individual, 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 telephone 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 eligibility process, under which, for example, the 

Exchange should only ask questions about an individual’s access to qualifying coverage in an 

eligible employer-sponsored plan for an individual 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 otherwise eligible. With a paper 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 change in income or family size. Since change reporting via 

mail would frequently trigger subsequent telephone contact, we believe it would promote 

administrative efficiency to eliminate the requirement to accept change reporting via mail while 

encouraging use of the telephone option, during which a call center representative can use the 
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dynamic application to ask the qualified individual any follow-up questions that may arise from 

the change report. We note that our proposed policy would continue to require that an Exchange 

must permit change reporting online, via telephone, and in person with the assistance of 

Navigators, certified application counselors, and other 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-facilitated Exchange would not accept 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 Medicaid 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 propose that if an enrollee remains eligible for enrollment in a QHP 

through the Exchange upon annual redetermination, and the product under which the QHP in 

which he or she was enrolled remains available 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 termination of coverage in connection with voluntarily 

selecting a different QHP, in accordance with §155.430. 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 enrollee’s current QHP, unless the current QHP is not 

available; second, if the enrollee’s current QHP is not available, the enrollee’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 includes a plan at the same 

metal level as the enrollee’s current QHP, the enrollee’s coverage will be renewed in a plan that 

is one metal level higher or lower than the enrollee’s current QHP; and fourth, if the enrollee’s 
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current QHP is not available and 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 will be renewed in any other plan offered under the product in which the 

enrollee’s current QHP is offered in which the enrollee is eligible to enroll. 

In paragraph (j)(2), we propose standards to address re-enrollment in situations in which 

the product under which an enrollee’s QHP is offered 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; second, 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 higher or lower than the 

enrollee’s current QHP in the product offered by the 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 current product, in which the enrollee is eligible to enroll. We note 
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that the Exchange would not send an enrollment transaction for an enrollment outside the 

Exchange, and that premium tax credits and cost-sharing reductions are not available for 

enrollment that is not through the Exchange. 

The proposed changes to this provision include 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 the 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-sharing reductions (which are only available for enrollment through 

the Exchange) and limit consumer confusion. Further, 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 under which the QHP was offered was 

no longer available for renewal, consistent with §147.106. Accordingly, the proposed language 

is designed to clarify the dependency 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 renewal of and re-enrollment in coverage. In 

particular, we solicit comment regarding whether paragraphs (j)(1)(iii) and (j)(2)(ii) should only 

prioritize a plan with a lower metal level, and whether 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.
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B. Part 156 – Health Insurance Issuer Standards 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 entitled, “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 manner specified by the 

Secretary. Under 45 CFR 147.106(c)(1), health insurance 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 individual market that is renewing an enrollment group’s coverage in a 

qualified health plan offered through the Exchange (including a renewal with modifications), or 

that is discontinuing a product that includes plans offered through the Exchange and 

automatically enrolling an enrollee in a QHP under 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 additional information include the following: (1) 

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 issuers to provide this information to enrollees, consistent with 

this section, such information must be provided in a form and manner specified by HHS; (2) an 

explanation of the requirement to report changes to the Exchange, the timeframe and channels 

through which changes can be reported, and the implications of not reporting changes; (3) for an 
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enrollment group that includes an enrollee on whose behalf advance payments of the premium 

tax credit are being provided, a description 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 coverage is being renewed in a QHP 

at a different (non-silver) metal level, an explanation that, unless the enrollment group changes 

its enrollment to select a new silver-level plan, cost-sharing reductions will 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 with the applicable summary of benefits and 

coverage notice that is provided at renewal in accordance 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 described 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 draft notices issued contemporaneously with the 

proposed Market Standards Rule.1 We believe that adding the information that would be 

specified pursuant to §156.1255 to the renewal 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 accompanying 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 Care Act, provided the State-developed notices are at least as 

protective as the standard Federal notices. 

We recognize that the current notice requirements do not cover every situation in which 

an issuer may non-renew or discontinue coverage, consistent with the guaranteed renewability 

statute and regulations. For example, an issuer whose product no longer covers the service area 

of enrollees may non-renew those enrollees’ coverage under that product. But, as long as the 

issuer’s product continues to cover 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 requirement that would apply to 

all plans subject to the guaranteed renewability requirements that non-renew coverage based on 

continued coverage not being available in the enrollee’s service area as a result of changes that 

do not result in product discontinuances. These notices would be provided in a form and manner 

specified by HHS. We solicit comments on this proposal, including the appropriate timeframe 

for providing the notice. 

III. Response to Comments 
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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 subsequent document, we will respond to the comments 

in the preamble to that document.

IV. Collection of Information Requirements

Emergency Clearance: Public Information Collection Requirements Submitted 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 information collection for public comment. Interested 

persons are invited to send comments regarding this collection’s proposed burden estimates or 

any other aspect of this collection of information, including any of the following subjects: (1) 

The necessity and utility of the proposed information collection for the proper performance of 

the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, 

utility, and clarity of the information to be collected; and (4) the use of automated collection 

techniques or other forms of information technology 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 Management and Budget (OMB) the proposed information 

collection for their emergency review. While the collection is necessary to ensure compliance 

with an initiative of the Administration, we are requesting emergency review under 5 CFR 

1320(a)(2)(i) because public harm is reasonably likely to result if the regular clearance 
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procedures are followed. The approval of this data collection process is essential 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. Consumers 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-enrollment 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 with modifications), or that is discontinuing a product offered 

through the Exchange and automatically enrolling an enrollee in a QHP under a different product 

offered by the same QHP issuer through the Exchange include certain information in the written 

notice specified in §147.106(c)(1) or (f)(1). 

Since there are existing requirements for issuers 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 hour) 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 issuers, 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, which could also be used in cases of other 

terminations or non-renewals, 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 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 for each issuer to prepare 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 equivalent 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 emergency request only will be considered from the 

public if received by the date and address noted below. 

The proposed information collection requirement 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 days to submit comments. Copies of the 

supporting statement for this information collection 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 document 
CMS-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 information 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 instructions for "Comment or Submission" or "More 

Search Options" to find the information collection document(s) accepting comments. 

2. By regular mail. You may mail written comments to the following address: 

CMS, Office of Strategic Operations and Regulatory Affairs 

Division of Regulations Development 

Attention: Document Identifier (CMS-10527) 

Room C4-26-05 

7500 Security Boulevard 

Baltimore, Maryland 21244-1850. 

and, 

OMB Office of Information 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 Statement 
CMS-9941-P 22 

A. Summary 

We are publishing this proposed rule to implement 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 Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 1980, Pub. 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 equity). Executive Order 13563 (76 FR 3821, January 

21, 2011) is supplemental to and reaffirms the principles, structures, and definitions governing 

regulatory review as established in Executive Order 12866. 

Section 3(f) of Executive Order 12866 defines 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 adversely 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 referred 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 budgetary impacts of entitlement grants, user fees, or 

loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or 
CMS-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 review by the OMB. We have concluded 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 significant rule” under Executive Order 12866. 

1. Need for Regulatory Action 

This proposed rule specifies additional options for annual eligibility 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 choose 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 Act 
CMS-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 Business 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 the definition of "small 

entity"). HHS uses as its measure of significant 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 Reform Act of 1995 (UMRA) requires that 

agencies assess anticipated costs and benefits before issuing any rule that includes a federal 

mandate that could result in expenditure in any one 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 total 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 governments, or on the private sector; or (2) increasing the 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 alternative method only if it is 

less costly than the current method. It would also require QHP issuers to include specific 
CMS-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 governments, and the private 

sector while achieving the objectives of the Affordable Care Act. 

E. Federalism 

Executive Order 13132 establishes certain requirements 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 otherwise has Federalism implications. 

States are the primary regulators of health insurance coverage, and State laws will 

continue to apply to health insurance coverage and the business of insurance. However, if any 

State law or requirement prevents the application of a Federal standard, 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 requirements 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 the Comptroller General a report containing a copy of the rule 
CMS-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 procedure, Health care access, Health insurance, Reporting 

and recordkeeping requirements, State and local governments, Cost-sharing reductions, Advance 

payments of premium tax credit, Administration and calculation of advance payments of the 

premium tax credit 

45 CFR Part 156 

Administrative practice and procedure, Health care, Health insurance, Reporting and 

recordkeeping requirements 

For the reasons set forth in the preamble, the 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 ESTABLISHMENT 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 redetermination during a benefit year.

 * * * * * 

 (b) * * * 

 (4) The Exchange must allow an enrollee, or an application filer on behalf 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 enrollee, 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 redeterminations required under paragraph (a)(1) 

of this section using one of the following: 

 (i) The procedures described in paragraphs (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 enrollment in coverage for 

which the enrollee remains eligible, provide clear information about the process to the qualified 

individual or enrollee (including regarding any action by the qualified individual or enrollee 

necessary to obtain the most accurate redetermination of eligibility), 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 individual 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 qualified individual who did not request an 

eligibility determination for insurance affordability programs to report changes that affect 

eligibility for insurance affordability programs. 

(2) The Exchange must allow a qualified individual, or an application filer, on behalf of 

the qualified individual, 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 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, consistent with §147.106 of this subchapter, such 

enrollee will have his or her enrollment through 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 coverage 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 available, the enrollee’s coverage will be renewed 

in a plan at the same metal level as the enrollee’s current QHP; 

(iii) If the enrollee’s current QHP is not available and the enrollee’s product no longer 

includes a plan at the same metal level as the enrollee’s current QHP, the enrollee’s coverage 

will be renewed in a plan that is one metal level higher or lower than the enrollee’s current QHP; 

or 

(iv) If the enrollee’s current QHP is not available and 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 will be renewed in any other plan offered under 

the product in which the enrollee’s current QHP is offered in which the enrollee is eligible to 

enroll. 

(2) And the product under which the QHP in which he or she is enrolled 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 extent 
CMS-9941-P 30 

permitted by applicable State law, 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 coverage under this paragraph (j)(2) occurs as 

follows: 

 (i) The enrollee will be re-enrolled 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; 

 (ii) 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 higher or lower than the enrollee’s current QHP in the product offered by 

the issuer through the Exchange that is the most similar to the enrollee’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 the enrollee’s current QHP, the enrollee will be reenrolled in any other plan offered through the Exchange 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-enrolled in a plan offered outside the Exchange by the 

QHP issuer under the product that is the most similar to the enrollee’s current product, in which 

the enrollee is eligible to enroll. 

* * * * * 

PART 156—HEALTH INSURANCE ISSUER STANDARDS UNDER THE 

AFFORDABLE CARE ACT, INCLUDING STANDARDS 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 Care 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 renewing an enrollment group’s coverage in an 

individual market QHP offered through the Exchange (including a renewal with modifications) 

in accordance with §147.106 of this subchapter, or that is discontinuing a product offered 

through the Exchange and automatically 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 information 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 issuers to provide this information to enrollees, consistent with 

this section, such information must be provided in a form and manner specified by HHS; 

(b) An explanation of the requirement to report 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 reconciliation process for 
CMS-9941-P 32 

advance payments of the premium tax credit established in accordance with 26 CFR 1.36B-4; 

and 

(d) For an enrollment group that includes an enrollee with cost-sharing reductions, but for 

whom no QHP under the product remains available for renewal at the silver level, an explanation 

that unless the enrollment group 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]