Vol. 78 Friday, 

No. 169 August 30, 2013 

Part VI 

Department of Health and Human Services 

45 CFR Parts 147, 153, 155, et al. 

Patient Protection and Affordable Care Act; Program Integrity: Exchange, 

SHOP, and Eligibility Appeals; Final Rule 


tkelley on DSK3SPTVN1PROD with RULES3
54070 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

1Patient Protection and Affordable Care Act; 

Establishment of Exchanges and Qualified Health 

Plans; Exchange Standards for Employers, 77 FR 

18310 (March 27, 2012). 

2Patient Protection and Affordable Care Act; 

Standards Related to Reinsurance, Risk Corridors 

and Risk Adjustment, 77 FR 17220 (March 23, 

2012). 

3Patient Protection and Affordable Care Act; HHS 

Notice of Benefit and Payment Parameters for 2014 

and Amendments to the HHS Notice of Benefit and 

Payment Parameters for 2014, 78 FR 15410 and 

15541 (Mar. 11, 2013). 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 147, 153, 155, and 156 

[CMS–9957–F] 

RIN 0938–AR82 

Patient Protection and Affordable Care 

Act; Program Integrity: Exchange, 

SHOP, and Eligibility Appeals 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule implements 

provisions of the Patient Protection and 

Affordable Care Act and the Health Care 

and Education Reconciliation Act of 

2010 (collectively referred to as the 

Affordable Care Act). Specifically, this 

final rule outlines Exchange standards 

with respect to eligibility appeals, 

agents and brokers, privacy and 

security, issuer direct enrollment, and 

the handling of consumer cases. It also 

sets forth standards with respect to a 

State’s operation of the Exchange and 

Small Business Health Options Program 

(SHOP). It generally is finalizing 

previously proposed policies without 

change. 

DATES: These regulations are effective 

on September 30, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Leigha Basini at (301) 492–4380, or 

Noah Isserman at (301) 492–4401 for 

general information and matters relating 

to parts 155 and 156. 

Seth Schneer at (301) 492–4405 for 

matters relating to the SHOP. 

Jacob Ackerman at (301) 492–4179 for 

matters relating to part 147. 

Jaya Ghildiyal at (301) 492–5149 for 

matters relating to part 153. 

Christine Hammer at (301) 492–4431 

for matters relating to part 155 subpart 

F. 

Paul Tibbits at (301) 492–4229 for 

matters relating to part 156, subpart K. 

SUPPLEMENTARY INFORMATION: 

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. 

Acronyms and Short Forms 

Because of the many organizations 

and terms to which we refer by acronym 

in this proposed rule, we are listing 

these acronyms and their corresponding 

terms in alphabetical order below: 

Affordable Care Act The Affordable Care 

Act (which is the collective term for the 

Patient Protection and Affordable Care Act 

(Pub. L. 111–148) and the Health Care and 

Education Reconciliation Act of 2010 (Pub. 

L. 111–152)) 

AV Actuarial Value 

CFR Code of Federal Regulations 

CHIP Children’s Health Insurance Program 

CMP Civil Money Penalty 

CMS Centers for Medicare & Medicaid 

Services 

DOI State Department of Insurance 

DOL U.S. Department of Labor 

EFT Electronic Funds Transfer 

EHB Essential Health Benefits 

FEHB Federal Employees Health Benefits 

FFE Federally-facilitated Exchange 

FFE API Federally-facilitated Exchange 

Application Programming Interface 

FF–SHOP Federally-Facilitated Small 

Business Health Options Program 

GAO United States Government 

Accountability Office 

GLBA Gramm Leach Bliley Act 

HHS U.S. Department of Health and Human 

Services 

HIPAA Health Insurance Portability and 

Accountability Act of 1996 (Pub. L. 104– 

191, as amended) and its implementing 

regulations 

IRS Internal Revenue Service 

LEP Limited English Proficiency 

MAGI Modified Adjusted Gross Income 

MLR Medical Loss Ratio 

NAIC National Association of Insurance 

Commissioners 

NPRM Notice of Proposed Rulemaking 

OMB Office of Management and Budget 

PCIP Pre-existing Condition Insurance Plan 

PHI Protected Health Information 

PHS Act Public Health Service Act 

PII Personally Identifiable Information 

PRA Paperwork Reduction Act 

QHP Qualified Health Plan 

SHOP Small Business Health Options 

Program 

The Code Internal Revenue Code of 1986 

TIN Taxpayer Identification Number 

Executive Summary 

Starting on January 1, 2014, qualified 

individuals and qualified employees 

will be able to be covered by private 

health insurance coverage through 

competitive marketplaces called 

Affordable Insurance Exchanges, or 

‘‘Exchanges’’ (also called Health 

Insurance Marketplaces). This rule sets 

forth standards for eligibility appeals, 

verification of eligibility for minimum 

essential coverage, and treatment of 

incomplete applications. It also 

establishes additional consumer 

protections regarding privacy and 

security; clarifies the role of agents, 

brokers, and issuer application assisters 

in assisting consumers with obtaining 

Exchange coverage; provides for the 

handling consumer cases; and 

establishes non-discrimination 

standards for methods of premium 

payment. Finally, it sets forth provisions 

regarding a State’s operation of the 

SHOP. 

Although many of the provisions in 

this rule will become effective by 

October 1, 2013, we do not believe that 

affected parties will have difficulty 

complying with the provisions by their 

effective dates, because the standards 

are based on existing standards 

currently in effect in the private health 

insurance market, were previously 

addressed in the Exchange Blueprint 

process, discussed in agency-issued subregulatory guidance, or discussed in the 

preambles to the Exchange 

Establishment Rule,1 Premium 

Stabilization Rule,2 or the HHS Notice 

of Benefit and Payment Parameters for 

2014.3 In addition to comments on the 

substance of the provisions we are now 

finalizing, we sought input on ways to 

implement the proposed policies to 

minimize burden. 

Table of Contents 

I. Background 

A. Legislative Overview 

B. Stakeholder Consultation and Input 

II. Provisions of the Proposed Regulations 

and Analysis of and Responses to Public 

Comments 

A. Part 147—Health Insurance Reform 

Requirements for the Group and 

Individual Health Insurance Markets 

1. Fair Health Insurance Premiums 

B. Part 153—Standards Related to 

Reinsurance, Risk Corridors, and Risk 

Adjustment Under the Affordable Care 

Act 

1. Subpart F— Health Insurance Issuer 

Standards Related to the Risk Corridors 

Program 

C. Part 155—Exchange Establishment 

Standards and Other Related Standards 

Under the Affordable Care Act 

1. Subpart A—General Provisions 

2. Subpart B—General Standards Related to 

the Establishment of an Exchange 

3. Subpart C—General Functions of an 

Exchange 

4. Subpart D—Exchange Functions in the 

Individual Market: Eligibility 

Determinations for Exchange 

Participation and Insurance Affordability 

Programs 

5. Subpart E—Exchange Functions in the 

Individual Market: Enrollment in 

Qualified Health Plans 

6. Subpart F—Appeals of Eligibility 

Determinations for Exchange 

Participation and Insurance Affordability 

Programs 


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Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54071 

4Section 1321(c) of the Affordable Care Act 

erroneously cites to section 2736(b) of the PHS Act 

instead of 2723(b) of the PHS Act. This was clearly 

a typographical error, and we have interpreted 

section 1321(c) of the Affordable Care Act to 

incorporate section 2723(b) of the PHS Act. 

7. Subpart H—Exchange Functions: Small 

Business Health Options Program 

(SHOP) 

D. Part 156—Health Insurance Issuer 

Standards Under the Affordable Care 

Act, Including Standards Related to 

Exchanges 

1. Subpart A—General Provisions 

2. Subpart C—Qualified Health Plan 

Minimum Certification Standards 

3. Subpart D—Federally-facilitated 

Exchange Qualified Health Plan Issuer 

Standards 

4. Subpart I—Enforcement Remedies in 

Federally-facilitated Exchanges 

5. Subpart K—Cases Forwarded to 

Qualified Health Plans and Qualified 

Health Plan Issuers in Federallyfacilitated Exchanges by HHS 

6. Subpart M—Qualified Health Plan Issuer 

Responsibilities 

III. Collection of Information Requirements 

IV. Regulatory Impact Analysis 

V. Regulations text 

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 final 

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 Title XXVII of the Public Health 

Service Act (PHS Act) relating to health 

insurance issuers in the group and 

individual markets and to group health 

plans that are non-Federal governmental 

plans. As relevant here, section 2701 of 

the PHS Act (fair health insurance 

premiums) provides that the premium 

rate charged by a health insurance 

issuer for non-grandfathered health 

insurance coverage in the individual or 

small group market may vary with 

respect to a particular plan or coverage 

only based on family size, rating area, 

age (within a ratio of 3:1 for adults), and 

tobacco use (within a ratio of 1.5:1). 

Starting on October 1, 2013 for 

coverage starting as soon as January 1, 

2014, qualified individuals and 

qualified employers will be able to 

enroll in 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 

Departments of Health and Human 

Services, Labor, and the Treasury have 

been working in close coordination to 

release guidance related to QHPs and 

Exchanges in several phases. The word 

‘‘Exchanges’’ refers to both State 

Exchanges, also called State-based 

Exchanges, and Federally-facilitated 

Exchanges (FFEs). In this final 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. 

In the proposed rule, we encouraged 

State flexibility. Sections 1311(b) and 

1321(b) of the Affordable Care Act 

provide that each State has the 

opportunity to establish an Exchange. 

Section 1311(b)(1) gives each State the 

opportunity to establish an Exchange 

that both facilitates the purchase of 

QHPs and provides for the 

establishment of a Small Business 

Health Options Program (SHOP) that 

will help qualified employers enroll 

their qualified employees in QHPs. 

Section 1311(b)(2) contemplates the 

separate operation of the individual 

market Exchange and the SHOP under 

different governance and administrative 

structures, permitting the individual 

market Exchange and SHOP to be 

merged if States have adequate 

resources to assist both populations 

(individual and small employers). 

Section 1321(a) of the Affordable Care 

Act provides general authority for the 

Secretary of Health and Human Services 

(referred to throughout this rule as 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. 

Section 1321(c)(1) requires the 

Secretary to establish and operate an 

FFE within States that either: do not 

elect to establish an Exchange or, as 

determined by the Secretary, will not 

have any required Exchange operational 

by January 1, 2014. 

Section 1321(c)(2) of the Affordable 

Care Act authorizes the Secretary to 

enforce the Exchange standards using 

civil money penalties (CMPs) on the 

same basis as detailed in section 2723(b) 

of the PHS Act.4 Section 2723(b) of the 

PHS Act authorizes the Secretary to 

impose CMPs as a means of enforcing 

the individual and group market 

reforms contained in Title XXVII, Part A 

of the PHS Act when a State fails to 

substantially enforce these provisions, 

as determined by the Secretary. 

Section 1311(d)(4)(A) of the 

Affordable Care Act directs that each 

Exchange must implement procedures 

for the certification, recertification, and 

decertification of health plans as QHPs, 

consistent with guidelines developed by 

the Secretary. 

Section 1312(c) of the Affordable Care 

Act directs a health insurance issuer to 

consider all enrollees in all health plans 

(other than grandfathered health plans) 

offered by such issuer to be members of 

a single risk pool for each of its 

individual and small group markets. 

Section 1312(c) of the Affordable Care 

Act also gives States the option to merge 

the individual and small group markets 

within the State into a single risk pool. 

Section 1312(e) of the Affordable Care 

Act directs the Secretary to establish 

procedures under which a State may 

permit agents and brokers to enroll 

qualified individuals and qualified 

employers in QHPs through an 

Exchange, and to assist individuals in 

applying for advance payments of the 

premium tax credit and cost-sharing 

reductions. 

Section 1313 of the Affordable Care 

Act, combined with section 1321 of the 

Affordable Care Act, provides the 

Secretary with the authority to oversee 

the financial integrity, compliance with 

HHS standards, and efficient and nondiscriminatory administration of State 

Exchange activities. Section 

1313(a)(6)(A) of the Affordable Care Act 

specifies that payments made by, 

through, or in connection with an 

Exchange are subject to the False Claims 

Act (31 U.S.C. 3729, et seq.) if those 

payments include any Federal funds. 

Under section 1411 of the Affordable 

Care Act, the Secretary is directed to 

establish a program for determining 

whether an individual meets the 

eligibility standards for Exchange 

participation, advance payments of the 

premium tax credit, cost-sharing 

reductions, and exemptions from the 

shared responsibility payment under 

section 5000A of the Code. 

Section 1411(g) of the Affordable Care 

Act specifies that information provided 

by an applicant or received from a 

Federal agency may be used only for the 

purpose of, and to the extent necessary 

in, ensuring the efficient operation of 

the Exchange, including for the purpose 

of verifying the eligibility of an 

individual to enroll through an 

Exchange, to claim a premium tax credit 

or cost-sharing reduction, or for 

verifying the amount of the tax credit or 

reduction. 

Section 1411(h) of the Affordable Care 

Act sets forth civil penalties that any 

person may be subject to if he or she 

fails to provide correct information or 


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54072 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

5Questions and Answers Related to Health 

Insurance Market Reforms (April 26, 2013). 

Available at: http://www.cms.gov/CCIIO/Resources/ 

Fact-Sheets-and-FAQs/qa_hmr.html. 

knowingly and willfully provides false 

or fraudulent information under section 

1411(b), or improperly uses or discloses 

information provided by an applicant or 

another Federal agency under section 

1411(b), (c), (d), or (e). 

Sections 1412 and 1413 of the 

Affordable Care Act and section 1943 of 

the Social Security Act (the Act), as 

added by section 2201 of the Affordable 

Care Act, contain additional provisions 

regarding eligibility for advance 

payments of the premium tax credit and 

cost-sharing reductions, as well as 

provisions regarding simplification and 

coordination of eligibility 

determinations and enrollment with 

other health programs. 

Unless otherwise specified, the 

provisions in this final rule related to 

the establishment of minimum 

functions of an Exchange are based on 

the general authority of Secretary under 

section 1321(a)(1) of the Affordable Care 

Act. 

B. Stakeholder Consultation and Input 

HHS has consulted with stakeholders 

on a number of polices related to the 

operation of Exchanges, including the 

SHOP, and premium stabilization 

programs. 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 

establishment grant process and the 

Exchange Blueprint approval 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 the proposed rule and this 

final rule. 

II. Provisions of the Proposed 

Regulations and Analysis of and 

Responses to Public Comments 

A proposed rule, titled ‘‘Patient 

Protection and Affordable Care Act; 

Program Integrity: Exchange, SHOP, 

Premium Stabilization Programs, and 

Market Standards’’ (78 FR 37032), was 

published in the Federal Register on 

June 19, 2013 with a comment period 

ending on July 19, 2013. In total, we 

received 99 public comments on the 

proposed rule from various 

stakeholders, including States, health 

insurance issuers, consumer groups, 

agents and brokers, provider groups, 

Members of Congress, Tribal 

organizations, and other stakeholders. 

Of the comments received, about 22 

were substantially identical submissions 

related to non-discrimination standards, 

Web-brokers, incomplete applications, 

and payment method nondiscrimination standards for the 

unbanked. We received a few comments 

that were outside the scope of the 

proposed rule. In this final rule, we 

provide a summary of each proposed 

provision, a summary of the public 

comments received and our responses to 

them, and the policies we are finalizing. 

We are not finalizing all the provisions 

from this proposed rule. This final rule 

includes those provisions that need to 

be effective for the beginning of open 

enrollment on October 1, 2013. We will 

finalize the other provisions at a later 

date. 

Another proposed rule, entitled 

‘‘Essential Health Benefits in Alternative 

Benefit Plans, Eligibility Notices, Fair 

Hearing, and Appeal Processes for 

Medicaid and Exchange Eligibility 

Appeals and Other Provisions Related to 

Eligibility and Enrollment for 

Exchanges, Medicaid and CHIP, and 

Medicaid Premiums and Cost Sharing’’ 

(78 FR 4594), was published in the 

Federal Register on January 22, 2013 

with a comment period ending on 

February 13, 2013. We received a total 

of 741 comments from various 

stakeholders including individuals, 

State Medicaid agencies, advocacy 

groups, and Tribal organizations. In this 

final rule, we are only addressing from 

that proposed rule the provisions 

related to appeals in Part 155 Subpart F 

and § 155.740. Other provisions from 

the January 22, 2013 proposed rule were 

finalized in a final rule, titled ‘‘CMS– 

2234–F: 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) published in 

the Federal Register on July 15, 2013. 

A. Part 147—Health Insurance Reform 

Requirements for the Group and 

Individual Health Insurance Markets 

1. Fair Health Insurance Premiums 

(§ 147.102) 

We proposed two clarifications in 

§ 147.102, which implements section 

2701 of PHS Act regarding fair health 

insurance premiums. In paragraph (a), 

we proposed to add a reference to the 

single risk pool standard codified in 

§ 156.80 to clarify the connection 

between section 1312(c) of the 

Affordable Care Act and section 2701 of 

the PHS Act with respect to the 

development of rates and premiums for 

health insurance coverage in the 

individual and small group markets. 

In paragraph (a)(1)(ii), we proposed to 

clarify that for rating purposes under 

section 2701 of the PHS Act, the 

geographic rating area is determined in 

the small group market using the 

principal business address of the group 

policyholder, and in the individual 

market using the address of the primary 

policyholder, regardless of the location 

of other individuals covered under the 

plan or coverage. These proposed 

standards would apply both inside and 

outside of the Exchanges and are 

consistent with previously released 

guidance describing our intended 

approach.5 We solicited comments on 

this proposal. 

Comment: While some commenters 

supported our proposal that issuers in 

the small group market apply rates 

based on the employer’s principal 

business address, other commenters 

noted that issuers in some States have 

already developed administrative 

systems and rates for 2014 based on 

guidance from State regulators to use 

each employee’s place of residence. 

These commenters requested that States 

have flexibility to use either employer 

or employee address when rating for 

geography. 

Response: We believe it is important 

that all issuers offering coverage within 

a State, both through the Exchanges and 

outside of the Exchanges, use a 

consistent geographic rating 

methodology to promote the accuracy of 

the risk adjustment program established 

under section 1343 of the Affordable 

Care Act. Further, we believe that rating 

based on the employer’s principal 

business address is consistent with 

current prevailing industry practice and 

will simplify administration of the 

geographic rating factor. We recognize, 

however, that issuers in some cases may 

have relied in good faith on guidance or 

instructions from States to rate based on 

employee address for 2014. Thus, while 

we are finalizing our proposed policy 

that geographic rating be based on the 

employer’s principal business address 

generally for plan years beginning on or 

after January 1, 2014, we are also 

providing in this final rule that where 

issuers can demonstrate that they have 

relied in good faith on different 

guidance from a State insurance 

regulator prior to the issuance of this 

final rule, the amendments to 

§ 147.102(a)(1)(ii) will not apply until 

the first plan year beginning on or after 


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Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54073 

January 1, 2015 with respect to coverage 

in the small group market. We believe 

this approach promotes consistency in 

rating, while affording issuers in certain 

circumstances a reasonable period of 

time to transition to the geographic 

rating methodology in this final rule. 

We note that this flexibility will not 

apply to plans offered through the 

Federally-facilitated Small Business 

Health Options Program (FF–SHOP), 

which will apply rates based on the 

employer’s principal business 

addressing beginning in 2014. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 147.102 of the proposed 

rule with the addition of a transition 

period for issuers in certain 

circumstances. 

B. Part 153—Standards Related to 

Reinsurance, Risk Corridors, and Risk 

Adjustment Under the Affordable Care 

Act 

1. Subpart F—Health Insurance Issuer 

Standards Related to the Risk Corridors 

Program 

a. Definitions (§ 153.500) 

In the proposed rule, we sought 

comment on our proposed amendment 

to § 155.20 that for a plan offered 

outside the Exchange to be considered 

the same plan as one that is certified as 

a QHP and offered through the 

Exchange, the benefits package, 

provider network, service areas, and 

cost-sharing structure of the two 

offerings would have to be identical. As 

discussed below in Part C(1)(a) of this 

final rule, we are finalizing this policy 

as proposed. In the proposed rule, we 

also proposed that this standard be used 

to determine which off-Exchange plans 

would be subject to the risk corridors 

program. As discussed below in Part 

C(1)(a) of this final rule, many 

commenters suggested that, in addition 

to the plans described in our proposal, 

plans that differ from a QHP offered 

through the Exchange only as a result of 

Federal or State requirements or 

prohibitions on the coverage of benefits 

that apply differently to plans 

depending on whether they are offered 

through or outside an Exchange, should 

be afforded the protection of risk 

corridors. 

For example, several commenters 

suggested that a plan offered outside the 

Exchange that differs from a QHP 

offered through an Exchange solely 

based on inclusion of the required 

pediatric dental EHB should be 

included in the risk corridors program. 

Because health insurance issuers may 

sell a QHP without the pediatric dental 

EHB through an Exchange if a standalone dental plan that covers the 

pediatric dental EHB is offered on that 

Exchange, commenters argued that 

plans that differ solely due to coverage 

of the pediatric dental EHB differ only 

because of a Federal requirement, and 

that this requirement should not prevent 

the plans from receiving risk corridors 

protections when offered outside the 

Exchange. Another commenter 

suggested that the network requirements 

for multi-state plan (MSP) issuers set by 

the Office of Personnel Management 

(OPM) could conflict with comparable 

State requirements, similarly potentially 

disqualifying plans offered outside the 

Exchanges that are comparable to MSP 

options from participating in the risk 

corridors program. 

We agree with these commenters that 

the risk corridors program should also 

cover plans offered outside the 

Exchanges that differ from a QHP only 

as a result of Federal or State 

requirements or prohibitions on the 

coverage of benefits that apply 

differently to plans depending on 

whether they are offered through or 

outside the Exchange; therefore, we are 

not finalizing this risk corridors policy 

as proposed. Rather, we are reiterating 

our policy, previously finalized in the 

preamble to the Premium Stabilization 

Rule (77 FR 17237), where we stated 

that health plans that are substantially 

the same as a QHP will be subject to the 

risk corridors program and signaled an 

intent to clarify this standard in future 

rulemaking. Here, we clarify that a plan 

offered by an issuer outside the 

Exchange that differs from a QHP 

offered by the issuer through the 

Exchange only as a result of Federal or 

State requirements or prohibitions on 

the coverage of benefits that apply 

differently to plans depending on 

whether they are offered through or 

outside the Exchange, is ‘‘substantially 

the same’’ as the QHP and will, 

therefore, participate in the risk 

corridors program. To effectuate this 

change, we are amending the definition 

of ‘‘qualified health plan’’ at § 153.20 

and moving it to § 153.500 to apply 

solely for purposes of the risk corridors 

program. Here, we are also clarifying 

that, when reading the regulations at 45 

CFR part 153, subpart F regarding risk 

corridors, any reference to a ‘‘qualified 

health plan’’ or ‘‘QHP’’ includes plans 

that are the ‘‘same’’ as a QHP, as 

specified below in Part C(1)(a) of this 

rule, and plans that are ‘‘substantially 

the same’’ as a QHP, as specified above. 

We note that changes in service area, 

and changes in benefits, cost-sharing 

structure, premium, or provider network 

that are not tied directly and exclusively 

to the Federal or State requirements or 

prohibitions on the coverage of benefits 

that apply differentially to a plan 

depending on whether it is offered 

through the Exchange, disqualify the 

plan offered outside the Exchange from 

participation in the risk corridors 

program. Additionally, we recognize 

that OPM may issue additional 

standards for MSP issuers in the future 

(for example, standards related to 

provider networks) that could create 

situations analogous to the ones we 

discuss above. We will consider 

whether a plan that differs from a QHP 

(as defined at § 155.20) based on these 

standards would be considered to be 

‘‘substantially the same’’ as a QHP for 

purposes of participating in the risk 

corridors program, and may address this 

topic in future rulemaking. 

We intend to issue guidance on the 

operational aspects of this standard, 

including how HHS and issuers will 

identify plan submissions (including 

those submitted for the 2014 benefit 

year) that are ‘‘substantially the same’’ 

as a QHP offered through an Exchange 

for the purposes of determining whether 

the plan will participate in the risk 

corridors program. We note that this 

amendment is limited to the risk 

corridors program, and does not expand 

the definition of a QHP for other 

purposes, including for purposes of 

parts 155 and 156. 

Summary of Regulatory Changes 

We are adding a definition of 

‘‘qualified health plan’’ at § 153.500 to 

specify which plans will be subject to 

the risk corridors program. We are 

deleting the definition of ‘‘qualified 

health plan’’ at § 153.20. 

C. Part 155—Exchange Establishment 

Standards and Other Related Standards 

Under the Affordable Care Act 

1. Subpart A—General Provisions 

a. Definitions (§ 155.20) 

We proposed to amend 45 CFR 155.20 

to reflect new flexibility permitting a 

State to elect to establish and operate 

just a SHOP, and not both a SHOP and 

an individual market Exchange, by 

modifying the definition of ‘‘Exchange.’’ 

Exchange 

We proposed to amend the term 

‘‘Exchange’’ to mean a governmental 

agency or non-profit entity that meets 

the applicable standards of Part 155 and 

makes QHPs available to qualified 

individuals and/or qualified employers. 

Unless otherwise identified, under the 

proposed definition this term would 

include an Exchange serving the 


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54074 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

individual market for qualified 

individuals and a SHOP serving the 

small group market for qualified 

employers, regardless of whether the 

Exchange is established and operated by 

a State (including a regional Exchange 

or subsidiary Exchange) or by HHS. 

Although we received no direct 

comment on this proposed change, we 

received several general comments to 

the proposed amendments to § 155.100 

in support of permitting a State to elect 

to establish just a SHOP while HHS 

operates the individual market 

Exchange. These comments are 

addressed in conjunction with the 

comments to §§ 155.100. 

Issuer Application Assister 

We proposed to define a new term, 

‘‘issuer customer service representative’’ 

to mean an employee, contractor, or 

agent of a QHP issuer that provides 

assistance to applicants and enrollees, 

but is not licensed as an agent, broker, 

or producer under State law. However, 

for the same reasons specified in the 

preamble to § 155.415 below, we will 

use the term ‘‘issuer application 

assisters’’ in place of ‘‘issuer customer 

service representatives’’ to more clearly 

articulate the role of such individuals. 

Moreover, as also specified in the 

preamble to § 155.415 below, we are 

finalizing a modified definition in this 

section to reflect in more detail the role 

of issuer application assisters as defined 

in § 155.415. 

Qualified Health Plan 

In the proposed rule, we proposed to 

specify that, for a plan offered outside 

an Exchange to be considered the same 

plan as one that is certified as a QHP 

and offered through the Exchange, the 

benefits package, provider network, 

service areas, and cost-sharing structure 

of the two offerings would have to be 

identical. We noted that nothing in that 

proposal would relieve an issuer of a 

plan that has been certified as a QHP by 

an Exchange from the requirement to 

charge the same premium for the QHP 

sold to consumers outside of an 

Exchange pursuant to sections 

1301(a)(C)(iii) of the Affordable Care Act 

and 45 CFR 156.255(b) and 45 CFR 

147.104. We also proposed to clarify 

that a plan sold to consumers outside of 

an Exchange would only be subject to 

the risk corridors program if it is the 

same plan as a QHP actually offered by 

that issuer on the Exchange. We 

requested comment on all aspects of this 

approach. 

In this final rule, we are finalizing the 

proposed policy regarding when a plan 

is the same plan as a QHP for purposes 

of the same premium requirement. 

However, as discussed above in Part 

B(1)(a) of this final rule, in response to 

many of the comments we received on 

this policy with regard to the risk 

corridors program, we are not finalizing 

our proposed policy that would have 

required a plan sold to consumers 

outside of an Exchange to be the same 

plan as a QHP offered through an 

Exchange for purposes of participating 

in the risk corridors program. We 

further discuss this policy with respect 

to the risk corridors program above in 

Part B(1)(a) of this final rule. 

Comment: A number of commenters 

stated that requiring a plan offered 

outside of an Exchange to be identical 

to a QHP offered through an Exchange 

with respect to the characteristics 

described above in order to be 

considered the same plan was too 

restrictive. As discussed above in Part 

B(1)(a) of this final rule, commenters 

were particularly concerned about the 

effect of such a standard on plans that 

differ from Exchange QHPs solely as a 

result of Federal and State requirements 

or prohibitions on the coverage of 

benefits that apply differently to plans 

depending on whether they are offered 

through or outside the Exchange. 

Response: Although we understand 

the commenters’ concern that Federal or 

State requirements or prohibitions on 

the coverage of benefits that apply 

differently to plans depending on 

whether they are offered through or 

outside the Exchange could deprive 

plans offered outside the Exchange of 

the protections of risk corridors, we do 

not believe that this policy concern 

should result in our considering plans 

that are ‘‘substantially the same’’ as a 

QHP to be the ‘‘same plan’’ as the QHP. 

In the Premium Stabilization rule (77 

FR 17220), we stated that a plan offered 

outside of an Exchange that is 

‘‘substantially the same’’ as a QHP 

would qualify for the risk corridors 

program, and stated that we might 

clarify that standard in future guidance. 

In response to comment, in Part B(1)(a) 

of this final rule we are clarifying which 

plans are ‘‘substantially the same’’ as a 

QHP, and will therefore be subject to the 

risk corridors program. 

We believe that, for plans that are 

substantially the same as a QHP, any 

variations in benefits and cost-sharing 

structure that are directly tied to Federal 

or State requirements or prohibitions on 

the coverage of benefits that apply 

differently to plans depending on 

whether they are offered through or 

outside the Exchange could affect QHP 

premium rating. Therefore, we are 

clarifying that a plan offered by a QHP 

issuer outside an Exchange would be 

the same as a QHP offered by that same 

QHP issuer through the Exchange, only 

if they are identical with respect to 

benefits, provider network, service area, 

and cost-sharing structure, and that, in 

contrast to our statement in the 

Exchange Establishment rule, only plans 

that are the same as a QHP offered 

through an Exchange must have the 

same premium as the QHP offered 

through the Exchange, pursuant to 45 

CFR 156.255(b). We also note that this 

definition of what constitutes the same 

QHP defines identical plan offerings 

based only on the criteria set forth 

above. Accordingly, plan offerings that 

differ only in other respects (for 

example, plans’ appeals processes or 

plan name) would not be considered 

different plans for purposes of the 

requirement that the same premiums be 

charged both through and outside the 

Exchange. 

Comment: A few commenters 

expressed concern that issuers would 

have already submitted their QHPs to 

Exchanges for approval for 2014 without 

the benefit of knowing how to align 

plans offered outside the Exchanges 

with QHPs offered through the 

Exchanges. They asserted that issuers 

were relying on a ‘‘substantially the 

same’’ standard when they filed their 

rates and designed their plan offerings 

for the 2014 benefit year, and that 

implementation of the proposed 

definition in the 2014 benefit year could 

have a destabilizing effect on the 

market. Although some commenters 

recommended that HHS adopt a 

‘‘substantially the same’’ standard for 

QHPs offered outside the Exchanges for 

the duration of the temporary risk 

corridors program, others believed that 

a one-year transition period would 

provide issuers sufficient time to 

develop 2015 benefit year offerings that 

would be eligible for risk corridors. 

Most commenters did not attempt to 

clarify how they would decide which 

plans were ‘‘substantially the same’’ as 

a QHP; however, one commenter 

suggested that any plan offered outside 

the Exchange that could qualify as a 

QHP be considered ‘‘substantially the 

same’’ as a QHP. 

Response: In Part B(1)(a) of this final 

rule, we are revising the risk corridors 

regulations at Part 153 to set forth 

standards for plans offered outside of an 

Exchange that are ‘‘substantially the 

same’’ as a QHP and that will be subject 

to the risk corridors program. We 

believe that the regulation text we 

codify in this rule reflects the standard 

set forth in the Premium Stabilization 

Rule, provides flexibility for plans that 

were relying on an undefined 

‘‘substantially the same’’ standard prior 

to the 2014 rate filing deadline, and also 


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helps to ensure the integrity of the risk 

corridors program so that it is clear, 

prior to the end of 2014 when data for 

the risk corridors calculation become 

available, which off-Exchange plans are 

subject to risk corridors, and which offExchange plans are not. We note that we 

intend to issue guidance on the 

operational aspects of this standard, 

including how HHS and issuers will 

identify plans submissions (including 

those submitted for the 2014 benefit 

year) that are ‘‘substantially the same’’ 

as a QHP offered through an Exchange 

for the purposes of determining whether 

the plan will participate in the risk 

corridors program. 

Comment: In the proposed rule, we 

indicated our intention to clarify that, in 

order to be the same plan as a QHP, the 

off-Exchange plan must be offered by 

the same issuer that offers a QHP inside 

of an Exchange. Two commenters stated 

that requiring plans offered through the 

Exchange and plans offered outside of 

the Exchange to be offered by the same 

issuer could present significant 

operational challenges for issuers that 

organize their corporate structures so 

that Exchange offerings are provided by 

one entity and offerings outside of an 

Exchange are provided by another. One 

of the commenters was also concerned 

that the requirement could restrict the 

range of products that would be 

available outside of an Exchange, and 

recommended that we revise our 

proposed policy to clarify that an offExchange QHP would be subject to the 

risk corridors program if it met the 

criteria in our proposed policy and was 

offered on an Exchange by the same 

‘‘issuer group,’’ as defined at 45 CFR 

156.20, instead of the same issuer. 

Response: While we recognize that 

the structure of some organizations may 

result in Exchange offerings and 

offerings outside of an Exchange that are 

offered by different issuers within the 

same issuer group, we believe that 

expanding this definition beyond the 

issuer level is inconsistent with how 

pricing is developed pursuant to the 

single risk pool provision at 45 CFR 

156.80, which applies at the issuer level 

to all non-grandfathered plans in the 

individual and small group markets 

within a State. Expanding the risk 

corridors program to plans that are the 

same or substantially the same as QHPs 

offered outside the Exchange by a 

different issuer within an issuer group 

could result in a risk corridors 

calculation that must take into account 

total claims costs and total premiums 

for the entire risk pool for all the 

relevant issuers in the issuer group. We 

believe the risk corridors program 

properly considers claims and 

premiums only for the risk pool 

applicable to the single issuer. 

Comment: One commenter supported 

our proposal requiring a plan offered 

outside of an Exchange to have an 

identical provider network and service 

area as a QHP offered through an 

Exchange in order to be the same plan 

as the QHP offered through the 

Exchange. Another commenter opposed 

these requirements, arguing that the 

proposed standard should only include 

EHB, actuarial value (AV), and costsharing structure. The commenter 

believed that requiring identical 

networks and service areas was too 

restrictive because it would not allow 

for differences in network and service 

areas that result from licensure 

restrictions. 

Response: As stated above, a plan is 

the same as a QHP only if it is identical 

with respect to benefits, provider 

network, service area, and cost-sharing 

structure to a QHP offered by the same 

issuer through the Exchange. We believe 

that certification of a plan’s service area 

is an integral part of the QHP 

certification process, and so believe it is 

integral to what it means to be the same 

QHP. We also believe it important that 

Exchange enrollees enjoy access to the 

same service areas (and networks) as 

enrollees in the same plans when 

offered outside the Exchanges. 

Summary of Regulatory Changes 

We are finalizing the definition of 

‘‘Exchange’’ as it was proposed. We are 

not codifying changes to the definition 

of ‘‘qualified health plan’’ in this 

section. For purposes of clarity, in 

finalizing this policy, we will use the 

term ‘‘issuer application assisters’’ in 

place of ‘‘issuer customer service 

representatives’’ to more clearly 

articulate the role of such individuals 

and we are finalizing a modified 

definition of ‘‘issuer application 

assisters’’ to reflect in more detail the 

role of issuer application assisters as 

defined in § 155.415. 

2. Subpart B—General Standards 

Related to the Establishment of an 

Exchange 

a. Establishment of a State Exchange, 

Approval of a State Exchange, 

(§§ 155.100, 155.105, and 155.140) 

Consistent with our proposed 

amendment to the definition of 

‘‘Exchange’’ in § 155.20, we proposed to 

amend § 155.100 to permit a State to 

establish and operate only a State-based 

SHOP while the individual market 

Exchange is established and operated as 

an FFE. We proposed that pursuant to 

the proposed amendment, States would 

not be permitted to establish and 

operate only the individual market 

Exchange. 

We proposed in § 155.100(a)(3) that a 

State that has timely applied for 

certification of an Exchange for 2014, 

and that has received conditional 

approval for its application, would be 

able to modify its Exchange Blueprint 

pursuant to 45 CFR 155.105(e) to 

exclude the operation of the individual 

market Exchange functions for 2014. We 

explained in the preamble to the 

proposed rule that such States have 

been preparing to establish and operate 

both the individual market and SHOP 

Exchanges for 2014, and would be in a 

position to establish and operate just the 

SHOP in 2014. We sought comment on 

this approach. 

We proposed to amend § 155.105 so 

that the Exchange approval criteria set 

forth therein would be consistent with 

the Exchange operational models 

proposed in §§ 155.20, 155.100, and 

155.200, and to permit HHS to operate 

only a FFE that will make QHPs 

available to qualified individuals when 

a State has elected to operate only an 

Exchange providing for the 

establishment of a SHOP pursuant to 

proposed § 155.100(a)(2). 

We also proposed an amendment to 

§ 155.105(f) to clarify that the regulatory 

provisions that will apply in an FFE 

include the nondiscrimination 

requirements of § 155.120(c). Section 

155.120(c), as written, applies to all 

Exchanges, and its previous omission 

from the list of provisions referenced in 

§ 155.105(f) was inadvertent. 

We also proposed to amend § 155.140 

to clarify how a subsidiary or regional 

Exchange may operate in light of the 

proposed amendments to permit a State 

to establish and operate an Exchange 

only providing for the establishment of 

a SHOP. 

Comment: We received several 

general comments in support of 

permitting a State to elect to establish 

and operate only a SHOP. Some 

commenters supported the additional 

flexibility provided for States to 

establish and operate only a SHOP in 

2014 and recommended expanding the 

provision further to allow other States, 

such as States that timely submitted a 

complete Blueprint, to establish and 

operate only a SHOP in 2014. One 

commenter supported allowing any 

State that believes it would be ready to 

establish and operate only a SHOP to do 

so in 2014. Other commenters opposed 

allowing a State to establish and operate 

only a SHOP, noting potential adverse 

consequences to consumers due to a 

loss of efficiencies and coordination by 

having different entities administering 


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the individual market Exchange and the 

SHOP. One commenter supported the 

proposed policy of not allowing a State 

to establish and run only an individual 

market Exchange and the while the 

SHOP is established and operated as an 

FF–SHOP. This commenter noted that 

in this scenario, there would be less 

leverage for attracting issuer 

participation in the SHOP and the 

SHOP would suffer diminished 

operational efficiencies if it is not 

accompanying an individual market 

Exchange. 

Response: We agree with the 

commenters who suggested that we 

should extend the opportunity to 

establish and operate only a SHOP in 

2014 to more than just those States that 

have a conditionally approved Exchange 

Blueprint in place for 2014. As we 

explained in the preamble to the 

proposed rule, our intent in limiting the 

option in 2014 was to make sure that 

only those States that would be in a 

position to establish and operate just the 

SHOP in 2014 do so. We are convinced 

by the commenters who suggested that 

these States might include more than 

just those States with a conditionally 

approved Exchange Blueprint. 

Accordingly, we have modified the 

proposed language to extend the option 

of establishing and operating only a 

SHOP Exchange for 2014 to any State 

that provides reasonable assurances, 

through the Exchange Blueprint 

submission and/or amendment process, 

to CMS that it will be in a position to 

establish and operate just a SHOP in 

2014. 

Comment: A number of commenters 

expressed support for our clarification 

in § 155.105(f) that the regulatory 

provisions that apply in FFEs include 

the nondiscrimination requirements of 

§ 155.120(c). Commenters recommended 

including in § 155.105(f) a reference to 

section 1557 of the Affordable Care Act, 

and one commenter asked CMS to 

identify prohibited practices under 

section 1557 of the Affordable Care Act. 

Commenters also requested further 

clarification on the application of these 

antidiscrimination protections to 

consumer assistance entities receiving 

funds associated with implementation 

and operation of the Federallyfacilitated Exchanges. 

Response: We are finalizing this 

clarification as proposed. We note that 

§ 155.120(c)(1) already specifies that the 

State and the Exchange, which would 

include FFEs and State Partnership 

Exchanges through this amendment to 

155.105(f), must comply with applicable 

nondiscrimination statutes. Section 

1557 of the Affordable Care Act applies 

to all Exchanges as entities created 

under Title I of the Affordable Care Act. 

Therefore, we do not think it is 

necessary to refer to any specific 

nondiscrimination statutes in this 

regulation text. Further clarification of 

prohibited practices under section 1557 

of the Affordable Care Act is beyond the 

scope of this rulemaking. For a more 

detailed discussion of the application of 

§ 155.120(c) to Exchange consumer 

assistance entities, please see the recent 

final rule, Patient Protection and 

Affordable Care Act; Exchange 

Functions: Standards for Navigators and 

Non-Navigator Assistance Personnel; 

Consumer Assistance Tools and 

Programs of an Exchange and Certified 

Application Counselors, 78 FR 42824, 

42829–42830, 42844 (July 17, 2013). 

Comment: One commenter sought 

clarification in proposed § 155.140 on 

the provision relating to the geographic 

area covered by subsidiary SHOPs in a 

State operating only a SHOP. The 

commenter wanted to ensure that if a 

State establishes subsidiary SHOPs that 

it must provide access to a SHOP in all 

geographic areas of the State. 

Response: We clarify here that the 

proposed provision on subsidiary 

SHOPs in a State operating only a SHOP 

requires the combined geographic area 

of all subsidiary SHOPs established by 

the State to encompass all geographic 

areas of the State. In such 

circumstances, HHS would establish an 

individual market Exchange that covers 

all geographic areas of the State. Thus, 

the combined geographic areas of any 

subsidiary SHOPs would also be 

required to encompass all geographic 

areas of the State. 

Summary of Regulatory Changes 

We are finalizing these provisions as 

follows. We are finalizing 

§ 155.100(a)(3) at 155.100(b) and 

redesignating § 155.100(b) as 

§ 155.100(c) to ensure parallel structure 

in the regulatory text. We are modifying 

§ 155.100(b) to expand the opportunity 

to operate only a SHOP in 2014 to States 

that provide reasonable assurances, 

through the Exchange Blueprint 

submission and/or amendment process, 

to CMS that they are prepared to 

establish and operate only a SHOP in 

2014. We are also modifying 

§ 155.105(b)(1) and (f) to include crossreferences to the Exchange minimum 

functions concerning eligibility appeals 

and exemptions from the shared 

responsibility payment that are being 

finalized at the time of this rule. 

3. Subpart C—General Functions of the 

Exchange 

a. Functions of an Exchange (§ 155.200) 

Consistent with the amendments 

described above to §§ 155.20, 155.100, 

155.105, and 155.140, which permit a 

State to operate only an Exchange 

providing for the establishment of a 

SHOP, we proposed amending § 155.200 

so that a State operating an Exchange 

which provides only for the 

establishment and operation of a SHOP 

need perform only the minimum 

functions described in subpart H and all 

applicable provisions of other subparts 

referenced therein. Under such 

circumstances, the Exchange operated 

by HHS need not perform the minimum 

functions related to the establishment of 

a SHOP. 

Although we received no direct 

comment on this proposal, we received 

several general comments and 

comments to § 155.100 in support of 

permitting a State to elect to establish 

just a SHOP. 

Summary of Regulatory Changes 

We are finalizing the provision, with 

a modification to include crossreferences to the Exchange minimum 

functions concerning eligibility appeals 

and exemptions from the shared 

responsibility payment that are being 

finalized at the time of this rule. 

b. Ability of States To Permit Agents 

and Brokers To Assist Qualified 

Individuals, Qualified Employers, or 

Qualified Employees Enrolling in QHPs 

(§ 155.220) 

We proposed amending 

§ 155.220(c)(3)(i), which currently 

requires that a Web-broker meet all 

standards for disclosure and display of 

QHP information contained in 

§ 155.205(b)(1) and § 155.205(c). We 

sought comment on whether we should 

instead remove § 155.220(c)(3)(ii). 

We proposed adding a new paragraph 

(c)(3)(vii) that would require a 

disclaimer be used by Web-brokers on 

their Web sites. 

We proposed to add a new 

§ 155.220(c)(4) that would require any 

Web-broker who makes an Internet Web 

site available to other agents and brokers 

to enroll consumers in QHPs through 

the FFE to require as a condition of 

agreement or contract that the agent or 

broker accessing and using the Internet 

Web site complies with § 155.220(c) and 

(d). We also proposed that a Web-broker 

that makes an Internet Web site 

available for this purpose would be 

required to provide to HHS a list of 

agents and brokers who are under such 

arrangements, and that the Web-broker 


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be required to ensure that the agent or 

broker accessing or using the Internet 

Web site would be required to comply 

with the policies that the Web-broker 

would be required to develop under 

proposed § 155.220(d)(4). 

We further proposed adding a new 

§ 155.220(d)(4) requiring agents and 

brokers assisting or enrolling consumers 

in the individual market of an FFE to 

establish policies and procedures 

implementing the privacy and security 

standards pursuant to § 155.220(d)(3). 

We proposed such standards to include 

training employees, representatives, 

contractors, and agents with regard to 

those policies and procedures on a 

periodic basis, and to ensure such 

individuals comply with those policies 

and procedures. We sought comment on 

the appropriate frequency of retraining 

requirements. 

We also proposed adding a new 

§ 155.220(f), which would require 

agents and brokers who wish to 

terminate their agreement with an FFE 

to send to HHS a 30-day advance 

written notice of the intent to terminate, 

and invited comment on whether we 

should additionally require agents and 

brokers to also directly notify their 

clients of the termination. 

We proposed adding a new 

§ 155.220(g), which would set forth 

standards under which HHS may 

terminate an agent’s or broker’s 

agreement with an FFE for cause. In 

§ 155.220(g)(1), we proposed that HHS 

may pursue termination with notice of 

an agent’s or broker’s agreement with an 

FFE executed pursuant to § 155.220(d) 

if, in HHS’s determination, a specific 

finding of noncompliance or pattern of 

noncompliance is sufficiently severe. In 

§ 155.220(g)(2), we set forth the 

violations that could lead to a 

termination for cause. We explained 

that we were also considering 

implementing informal procedures to 

resolve certain compliance issues that 

would take place prior to HHS’s 

termination of an agent’s or broker’s 

agreement for cause. Notwithstanding 

the fact that we were also contemplating 

an informal resolution procedure, we 

also proposed that upon identification 

of a sufficiently severe violation, HHS 

would formally notify the agent or 

broker of the specific finding of 

noncompliance or pattern of 

noncompliance, as proposed in 

§ 155.220(g)(3). The agent or broker 

would then have a period of 30 days 

from the date of the notice to correct the 

noncompliance to HHS’s satisfaction, 

through good faith efforts. If after 30 

days, the noncompliance is not 

appropriately addressed, we proposed 

HHS may terminate the agreement for 

cause. 

We proposed adding a new 

§ 155.220(h) to provide an agent or 

broker whose agreement with the FFE 

was terminated for cause with a process 

to request reconsideration of the 

termination. We proposed that the agent 

or broker must submit a request for 

reconsideration to the HHS 

reconsideration entity within 30 

calendar days of the date of the written 

notice from HHS, after which the HHS 

reconsideration entity would provide 

the agent or broker with a written notice 

of a final reconsideration decision 

within 30 calendar days of the date the 

request was received. 

Comment: Many commenters offered 

feedback on the proposed amendment to 

§ 155.220(c)(3)(i). Some commenters 

expressed support for the amendment 

while several other commenters 

opposed any changes to the requirement 

for Web-brokers to display QHP 

information. In expressing their 

opposition to the amendment of 

§ 155.220(c)(3)(i), some commenters 

offered recommendations in the event 

we finalized the amendment. Some 

commenters suggested that a Webbroker prominently display a 

standardized disclaimer provided by 

HHS if the Web-broker is not able to 

display the required QHP information 

for a given plan, and that the Webbroker provide a Web link to the 

Exchange Web site. 

Response: We did not accept the 

comments which suggested that we not 

finalize the proposed amendment to 

§ 155.220(c)(3)(i) because there may be 

circumstances beyond the control of 

Web-brokers that will preclude them 

from displaying all of the information 

required under § 155.205. For instance, 

Web-brokers currently obtain plan data 

directly from issuers, and generally only 

obtain data from issuers if they have 

contractual arrangements and/or 

appointments to sell the issuer’s plans. 

Thus Web-brokers may be restricted 

from displaying all plan data, including 

premium and rate information, if they 

do not have agreements or appointments 

with some issuers. Similarly, the 

Exchange may be precluded by trade 

secret and confidentiality 

considerations from providing all Webbrokers with certain data elements 

necessary to meet the § 155.205(b)(1) 

standards. As a result, we continue to 

believe that the amendment to 

§ 155.220(c)(3)(i) is necessary. In such 

circumstances, it is important that Webbrokers ensure applicants are aware that 

not all QHP information may be 

available on their Web sites by 

displaying required disclaimers under 

§ 155.220(c)(3)(i) and (vii). 

Comment: The proposed amendment 

to § 155.220(c)(3)(i) also added to the 

standards for Web-brokers’ Web sites by 

requiring a link to the Exchange Web 

site. In addition, proposed 

§ 155.220(c)(3)(vii) required a disclaimer 

that included acknowledgement that the 

Web-broker’s Web site might not display 

all QHP data available on the Exchange 

Web site. A number of commenters 

proposed combining these two 

concepts, recommending that HHS 

provide a standardized disclaimer and a 

link to the Exchange Web site to the 

extent that not all QHP information 

required under § 155.205(b)(1) is 

displayed on a Web-broker’s Web site. 

Conversely, other commenters suggested 

that this disclaimer should be separate 

from the disclaimer proposed in 

§ 155.220(c)(3)(vii) informing the 

consumer that the Web-broker’s Web 

site is not the Exchange Web site. 

Commenters suggested that a 

standardized disclaimer would provide 

a uniform and consistent way to notify 

the consumer regarding how to obtain 

the available QHP information in the 

event that such information is not 

available on the Web-broker’s Web site. 

Response: We found these comments 

regarding the need for a standardized 

disclaimer and Web-link to be 

persuasive so applicants are aware of 

the incompleteness of the information 

available on these Web sites. As a result, 

we have modified the amendment to 

§ 155.220(c)(3)(i) by requiring Webbrokers to prominently display a 

standardized disclaimer and to provide 

a Web link to the Exchange Web site. 

We will make available a HHS-approved 

standardized disclaimer that Webbrokers can use to meet this 

requirement, stating that information 

required under § 155.205(b)(1) for the 

QHP is available on the Exchange Web 

site. 

We considered, but did not accept, 

other recommendations provided by 

commenters if the amendment were to 

be retained, including consideration of 

an inline frame or ‘‘I-frame’’ approach to 

presenting QHP information, requiring 

that Web-brokers refer consumers to 

Navigators and certified application 

counselors if unable to display all QHP 

information, and to have HHS release all 

plan information for a particular QHP to 

Web-brokers if the issuer of the QHP 

requests that HHS do so. We recognize 

that each of these suggestions may help 

provide additional information to 

consumers about their QHP options, but 

may be difficult to implement prior to 

the start of open enrollment. 


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6Role of Agents, Brokers, and Web-brokers in 

Health Insurance Marketplaces (May 1, 2013), 

available at: http://www.cms.gov/CCIIO/Resources/ 

Regulations-and-Guidance/Downloads/agentbroker-5-1-2013.pdf. 

Comment: Many commenters offered 

recommendations about whether to 

remove § 155.220(c)(3)(ii), which 

requires Web-brokers to provide 

consumers with the ability to view all 

QHPs offered through the Exchange, as 

an alternative to amending 

§ 155.220(c)(3)(i). Several commenters 

expressed support for retaining 

§ 155.220(c)(3)(ii) as a key consumer 

protection, while other commenters 

recommended removing the 

requirement in lieu of amending 

§ 155.220(c)(3)(i). 

Response: We agree with commenters 

that the requirement for Web-brokers to 

provide consumers with the ability to 

view all QHPs offered through the 

Exchange is an important consumer 

protection, even if the Web-broker is not 

able to display all plan details for each 

QHP. We are retaining § 155.220(c)(3)(ii) 

without modification. 

Comment: A number of commenters 

expressed support for proposed 

§ 155.220(c)(3)(vii) so consumers would 

be informed that the Web-broker’s Web 

site is not the Exchange Web site, and 

that the Web-broker has agreed to 

comply with applicable regulations as a 

condition of their agreements with HHS. 

Some commenters recommended that 

HHS provide a standardized disclaimer 

that could be used by all Web-brokers to 

meet this requirement, to ensure 

uniform and consistent communication 

to consumers across all Web-broker Web 

sites. Commenters recommended 

specific elements that should be 

included in the disclaimer. Other 

commenters suggested that Web-brokers 

be required to display the disclaimer in 

specific locations or on every page of 

the Web-broker’s Web site. One 

commenter recommended that the 

disclaimer not reference the Webbroker’s agreement with HHS, but rather 

the standards to which the Web-broker 

must comply. To provide for greater 

consumer protection, several 

commenters also suggested that HHS 

standardize the notification by 

providing a standardized disclaimer, 

which would provide for uniform and 

consistent communication to consumers 

across all Web-broker Web sites. 

Response: The proposed 

§ 155.220(c)(3)(vii) added to the 

standards for Web-broker’s Web sites in 

FFEs by requiring prominent display of 

language notifying consumers that the 

agent’s or broker’s Web site is not the 

FFE Web site, that the agent or broker’s 

Web site might not display all QHP data 

available on the FFE Web site, that the 

agent or broker has entered into an 

agreement with HHS pursuant to 

paragraph (d) of this section, and that 

the agent or broker agrees to conform to 

the standards specified in paragraphs (c) 

and (d) of this section. While the 

proposed § 155.220(c)(3)(vii) specified 

the elements to be included in the 

notification, it would have permitted 

Web-brokers to independently develop 

their own notifications. 

To provide for greater consumer 

protection, we agree with commenters 

that a standardized disclaimer should be 

used for the FFEs, and we have 

modified the final § 155.220(c)(3)(vii) to 

require Web-brokers to use a 

standardized disclaimer provided by 

HHS, which would distinguish the Webbroker’s Web site from the FFE Web site. 

The standardized disclaimer would 

include the following notifications: (1) 

That the Web-broker’s Internet Web site 

is not an FFE Web site, (2) that the Webbroker’s Web site may not contain all 

QHP data available on the FFE Web site, 

(3) that the Web-broker is required to 

conform to the standards specified in 

paragraphs (c) and (d) of § 155.220, and 

(4) the Web-broker is subject to privacy 

and security standards established by 

HHS pursuant to § 155.260. 

We also recognize that commenters 

provided other suggestions for topics to 

include in the disclaimer, including 

information about whether the Webbroker’s Web site contains all 

information for QHPs in a given State, 

or information about how consumers 

can contact HHS if the Web-broker does 

not comply with the requirements for 

display of QHPs. Although we are not 

adopting these suggestions at this time, 

HHS may adjust the disclaimer in the 

future to meet the needs of the FFE and 

its consumers. 

We believe that requiring the 

disclaimer to be posted on every Web 

page of a Web-broker’s Web site may be 

repetitive and burdensome. However, 

we agree that the disclaimer should be 

prominently displayed, and that display 

on more than a single Web page may be 

warranted so that the consumer may be 

fully informed. We plan to address how 

the disclaimer should be displayed in 

future guidance. 

Comment: Several commenters 

recommended that we clarify the 

process that Web-brokers must follow 

when a consumer (or a member of that 

consumer’s family) using a Web-broker’s 

Web site is determined or assessed to be 

eligible for Medicaid or CHIP. 

Response: As indicated in CMS’s 

guidance titled ‘‘Role of Agents, 

Brokers, and Web-brokers in Health 

Insurance Marketplaces,’’ 6 we expect 

agents and brokers, including Webbrokers, to work with all consumers, 

including individuals who are 

ultimately determined to be eligible for 

Medicaid or CHIP. In such cases, we 

expect that agents, brokers and Webbrokers will refer the individual to the 

appropriate State agency for enrollment 

in health coverage. 

Comment: Some commenters 

recommended that we apply 

§ 155.220(c)(3)(vii) to State Exchanges. 

Other commenters requested that we 

clarify that State Exchanges are not 

required to contract with Web-brokers, 

and that they may set more stringent 

standards than the FFE. 

Response: While we did not accept 

the comment to apply 

§ 155.220(c)(3)(vii) to State Exchanges, 

we note that State Exchanges have 

discretion to apply a similar or more 

stringent requirements. 

Comment: We received substantial 

feedback on proposed § 155.220(c)(4). 

Many commenters expressed support 

for allowing arrangements under which 

agents and brokers would be able to 

enroll qualified individuals in an FFE 

through a Web-broker’s Internet Web 

site, even if the agent or broker were not 

an employee or subcontractor of the 

Web-broker. Such commenters noted 

that requiring independent agents and 

brokers to subcontract with Web-brokers 

is not standard in the industry. Some 

commenters recommended that we 

clarify the types of arrangements that 

would be permitted between Webbrokers and other agents and brokers. 

Other commenters recommended 

prohibiting agents and brokers from 

accessing Web-brokers’ Web sites 

altogether, unless they were an 

employee or subcontractor of the Webbroker. Such commenters believed that 

such arrangements bring additional 

complexity, noting that Web-brokers’ 

Web sites may not display all required 

QHP information, and were concerned 

that these agents and brokers might not 

be subject to the same level of oversight 

as other agents and brokers in the FFE, 

since they are not party to HHS’ 

agreement with the Web-broker. 

Some commenters responded to our 

concerns regarding oversight of other 

agents and brokers that access the Webbroker’s Web sites, objecting to the 

provision requiring Web-brokers to 

ensure that agents and brokers accessing 

their Web sites comply with 

§ 155.220(c) and (d). These commenters 

noted that it could result in a Webbroker and all agents and brokers 

accessing its Web site to have their 

connection to the Federally-facilitated 

Exchange terminated based upon 

violations by a single agent or broker. 


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Other commenters provided specific 

recommendations for Web-broker 

requirements if agents and brokers are 

permitted to use Web-brokers’ Web sites 

to enroll consumers in QHPs through 

the Exchange, including ensuring agents 

and brokers provide unique identifiers 

such as FFE User ID numbers or 

National Producer Numbers (NPNs), and 

other documentation to the Web-broker 

proving they are trained and registered 

to sell products on the Exchange, and 

have entered into agreements with CMS 

to abide by the terms of § 155.220. 

Commenters stated there should be a 

way for CMS to identify and notify Webbrokers providing access to other agents 

and brokers, if the other agent or broker 

commits a material breach of their 

agreements with HHS, so that the Webbroker may limit the agent’s or broker’s 

access as needed. 

Response: While we recognize that 

agents and brokers may be able to reach 

and enroll significant number of 

consumers through Web-broker’s Web 

sites, we are also concerned about 

ensuring that such agents and brokers 

comply with the standards in 

§ 155.220(c) and (d). We note that agents 

or brokers who carry out the functions 

authorized under § 155.220(a)(2) and (3) 

are required to comply with the 

standards in § 155.220(c) and (d), 

regardless of whether they use a Webbroker’s Web site, and that they 

ultimately remain responsible for their 

own compliance. Many agents and 

brokers currently use Web sites and 

other systems technology provided by 

Web-brokers to help significant numbers 

of consumers compare and purchase 

individual market coverage across 

multiple issuers. If Web-brokers are able 

to provide a way for other agents and 

brokers to leverage their Web sites and 

connection to HHS when the Exchanges 

begin operating, these agents and 

brokers would be able to reach 

additional individuals currently without 

coverage. As a result, we did not accept 

comments that agents and brokers be 

prohibited from entering into 

arrangements that would enable them to 

use a Web-broker’s Web site to assist a 

consumer in enrolling in a QHP through 

the Exchange. While we recognize that 

some Web-brokers might be willing to 

be responsible for overseeing the actions 

of other agents and brokers who access 

their Web sites, we also did not want to 

limit the permissible arrangements to 

those in which the agent and broker can 

only use the Web-broker’s Web site as 

a subcontractor so as to maximize 

opportunity for agent and broker 

participation. 

We also recognize the concerns of 

Web-brokers that they, along with other 

agents and brokers who access their 

Web sites, might be held accountable for 

the non-compliance of a single agent or 

broker. However, we also want to ensure 

that HHS can take action against the 

single non-compliant agent or broker if 

necessary, and that the Web-broker and 

HHS can terminate that agent’s or 

broker’s ability to transact eligibility and 

enrollment information through the 

Web-broker’s Web site. We also want to 

ensure that HHS has a way to contain 

privacy and security incidents and 

breaches, should they be caused by 

agents and brokers accessing the Webbrokers’ Web sites. As a result, we have 

modified the proposed § 155.220(c)(4) 

so that the Web-broker is no longer the 

entity that must ensure that agents and 

brokers accessing its Web site comply 

with the standards in § 155.220(c) and 

(d). We accept commenters’ 

recommendations that the Web-broker 

must verify that any other agent or 

broker accessing its Web site is licensed 

by the applicable State(s), has 

completed training, has signed all 

required agreements with the FFE, and 

is registered with the FFE pursuant to 

§ 155.220(d). The Web-broker must 

cooperate with HHS in taking 

compliance actions against a noncompliant agent or broker, including 

facilitating a shut-down of any 

connection to HHS systems while 

privacy and security incidents and 

breaches are investigated, ensuring 

compliance with applicable standards 

by all agents and brokers accessing its 

Web site, and performing necessary 

actions to assist HHS with overseeing 

the actions of agents and brokers using 

its Web site. In response to the 

comments, we believe that requiring the 

Web-broker to display its name and 

identifier on the Web site when it is 

made available to another agent or 

broker, will increase transparency 

regarding the relationships between the 

other agents and brokers and the Webbroker, and facilitate CMS and/or State 

enforcement actions against an agent or 

broker accessing its Web site, in the 

event of a breach or violation. 

In response to all of these comments, 

we are modifying the final 

§ 155.220(c)(4) to clarify the 

requirements that apply to a Web-broker 

that permits other agents or brokers to 

access its Web site pursuant to a 

contractual arrangement. In response to 

comments recommending clarification 

of the types of permissible arrangements 

between Web-brokers and other agents 

and brokers under this provision, we 

clarify that the provision applies to 

contractual or other arrangements in 

which an agent or broker accesses the 

Web-broker’s Web site to enroll 

consumers through the FFE. We have 

also added language to the final rule 

clarifying that in such arrangements, the 

agent or broker is the agent of record on 

the enrollment. As finalized, 

§ 155.220(c)(4) would allow HHS to 

identify Web-broker’s Web sites and 

take appropriate action if the agent or 

broker who uses the Web-broker’s Web 

site violates the terms of the agent’s or 

broker’s agreement with HHS. Section 

155.220(c)(4)(i) applies the following 

requirements on Web-brokers that allow 

other agents and brokers to access their 

Web sites: (1) The Web-broker must 

provide the FFE with a list of agents or 

brokers who enter into such an 

arrangement if requested by HHS; (2) 

the Web-broker must verify that the 

agent or broker using the Web site is 

licensed in the FFE’s State, has 

completed training and registration, and 

has signed all applicable agreements 

with the Federally-facilitated Exchange; 

(3) the Web-broker must ensure that its 

name and any identifier required by 

HHS, such as the Web-broker’s National 

Producer Number (NPN), appears on the 

Internet Web site and written materials 

containing QHP information that can be 

printed from the Web site, even if the 

agent or broker that is accessing the 

Internet Web site is able to customize 

the appearance of the Web site; (4) 

terminate the other agent or broker’s 

access to its Web site if HHS determines 

that the agent or broker is in violation 

of the provisions of § 155.220 and any 

required agreement between HHS and 

the agent or broker is terminated; and 

(5) report to HHS and applicable State 

Department of Insurance any potential 

material breach of the standards in 

§ 155.220(c) and (d) by the agent or 

broker accessing the Internet Web site, 

should the Web-broker become aware of 

any such potential breach. 

This approach would ensure that 

agents and brokers that access Webbroker’s Web sites must meet the same 

registration and training requirements 

and be subject to the same oversight 

requirements as other agents and 

brokers in the FFE. This approach 

would also ensure that agents and 

brokers whose agreements with HHS are 

terminated are no longer able to access 

HHS systems through a Web-broker’s 

connection. In addition, this 

requirement would also help provide 

transparency and traceability back to the 

Web-broker making the Web site 

available, if HHS or a State department 

of insurance needed to take action with 

respect to an agent or broker using a 

Web-broker’s Web site. 

Section 155.220(c)(4)(ii) clarifies that 

HHS retains the right to temporarily 


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suspend the Web-broker’s connection to 

HHS’ systems in the event of a privacy 

and security incident or breach 

involving a Web-broker that makes its 

Web site available to third party agents 

and brokers under previously described 

arrangements. In the case of an incident 

or breach, HHS must follow its incident 

response plan to address privacy and 

security incidents and breaches. In 

adhering to its incident response plan, 

HHS may need to temporarily suspend 

a Web-broker’s connection to HHS’ 

systems to contain further damage from 

the incident or breach if the incident or 

breach is related to the Web-broker and 

its connection to HHS’ systems. The 

temporary suspension would provide 

HHS with the ability to conduct an 

investigation and work with the Webbroker to remedy the breach or incident. 

Comment: Several commenters 

recommended that Web-brokers not be 

permitted to use data collected for 

Exchange enrollment purposes for any 

other purpose. 

Response: Data collected for Exchange 

application purposes may be used only 

in accordance with section 1411(g) of 

the Affordable Care Act. Consistent with 

section 1411(g), in the agreements that 

HHS will enter into with Web-brokers, 

HHS will permit Web-brokers to use 

personally identifiable information (PII) 

collected through the Exchange 

application and enrollment process only 

for certain functions related to the 

efficient operation of the Exchange, 

such as assisting with applications for 

QHP eligibility, supporting QHP 

selection and enrollment by assisting 

with plan selection and plan 

comparisons, and assisting with 

applications for the receipt of APTCs or 

CSRs, and selecting an APTC amount. 

Comment: Several commenters 

expressed support for proposed 

§ 155.220(d)(4), which proposed 

requiring agents and brokers 

participating in the FFE individual 

market to implement policies to train 

their workforce in privacy and security 

standards pursuant to § 155.220(d)(3). 

Some commenters further 

recommended that such training occur 

on an annual basis, at a minimum. One 

commenter also recommended that HHS 

clarify that agents and brokers could 

only use PII accessed from individuals 

during the QHP eligibility and 

enrollment process for FFE-related 

functions that agent or broker is 

authorized to carry out under the terms 

of its agreement with HHS, and several 

others stressed that agents and brokers 

should be required to destroy any PII 

obtained during the eligibility and 

enrollment process after the termination 

of an agent or broker’s relationship with 

an FFE. 

Response: We believe it is critical to 

ensure that agents and brokers 

implement appropriate safeguards and 

procedures, including privacy and 

security training to protect the PII of 

individuals whom they assist with 

applications for Exchange coverage, 

advance payments of the premium tax 

credit, and cost sharing reductions, and 

with QHP enrollment through the FFE. 

We note that § 155.260(b) requires nonExchange entities, including agents and 

brokers, to abide by the privacy and 

security policies adopted by the FFE as 

a condition of contract or agreement 

with the FFE. Because obligations 

regarding compliance with privacy and 

security standards will be imposed on 

agents and brokers through agreements 

executed pursuant to § 155.260(b), we 

are not finalizing § 155.220(d)(4), or 

additional privacy and security 

requirements for agents and brokers in 

this rule. Instead we clarify here that in 

the FFEs, agents and brokers will agree 

to comply with the Exchange’s privacy 

and security standards as required by 

§ 155.220(d)(3) through separate 

agreements that the FFE will execute 

with agents and brokers under 

§ 155.260. Such agreements will specify 

the authorized functions for which 

agents and brokers may use PII, and will 

set forth the agent’s or broker’s duties to 

protect and maintain the privacy and 

security of PII for such functions, 

including developing privacy and 

security training programs for members 

of their workforces who access PII while 

carrying out such authorized functions. 

The agreements will also prohibit agents 

and brokers from using PII accessed 

through the Exchange application and 

enrollment process for any purpose 

other than the specific functions 

authorized by the agreements. 

HHS seeks to minimize burdensome 

duplication of existing laws and any 

Exchange-specific requirements and 

standards for protecting PII pursuant to 

section 1411(g) and § 155.260. We 

recognize that agents and brokers are 

also required to adhere to other Federal 

laws safeguarding certain kinds of 

information, such as HIPAA and the 

Gramm-Leach-Bliley Act (GLBA), in 

addition to any applicable State laws, 

and may leverage existing compliance 

infrastructures as appropriate to 

implement Exchange privacy and 

security requirements to protect PII. 

Comment: We received broad support 

from commenters for proposed 

§ 155.220(f), which provided for a 30- 

day advance written notice of 

termination from agents and brokers to 

HHS. A few commenters stressed it 

would be appropriate for all agents or 

brokers that receive a 30-day advanced 

notice of termination to be immediately 

suspended from assisting individuals to 

enroll in a QHP offered through the FFE 

and/or the ability to securely exchange 

information with HHS, at least 

temporarily. In response to our request 

for comments, commenters expressed 

support for a requirement that agents 

and brokers notify clients of such 

termination. Commenters recommended 

that agents and brokers should continue 

to assist existing clients with 

completion of QHP applications and/or 

enrollment until the agent’s or broker’s 

intended date of termination, and to 

inform clients that additional assistance 

is available through the FFE. 

Response: We agree with commenters’ 

recommendations to also require agents 

and brokers to notify consumers if the 

agent or broker plans to terminate its 

agreement with an FFE under 

§ 155.220(f). Further, we agree that 

agents and brokers should continue 

assisting consumers throughout the pretermination period, and should inform 

consumers that they can continue to 

obtain additional assistance through an 

FFE. We have modified the final rule to 

include provisions reflecting these 

comments. 

Comment: Several commenters 

supported proposed § 155.220(g) and 

suggested that we specify that HHS may 

terminate an agent’s or broker’s 

agreement for violations of specific State 

laws, including patterns of steering or 

unfair and deceptive trade practices. 

Other commenters that expressed 

support for § 155.260(g) also 

recommended HHS immediately 

suspend an agent’s or broker’s 

agreement, if findings of noncompliance 

were sufficiently egregious, until the 

cure period is completed to HHS’ 

satisfaction. 

Response: We will look to State 

authorities to enforce their own State 

laws regulating agents and brokers. In 

response to the comments regarding 

immediate and temporary suspensions 

or terminations from the FFE, we 

believe the implementation of an 

informal resolution procedure prior to 

terminating an agent’s or broker’s 

agreement that was discussed in the 

preamble and contemplated under the 

cure period in § 155.220(g), addresses 

the range of potential responses and 

recognizes that nothing would preclude 

HHS from retaining the right to bypass 

these informal procedures. We also note 

that HHS retains the ability to terminate 

an agent’s or broker’s relationship with 

an FFE for cause, including based on 

termination of the separate agreement 

executed pursuant to § 155.260(b). 


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7The Accredited Standards Committee is 

chartered by the American National Standards 

Institute. See, http://www.x12.org/. 

Comment: Several commenters also 

recommended HHS should be required 

to inform State departments of 

insurance (DOIs) of any administrative 

or disciplinary actions taken against 

licensed agents and brokers for 

violations of FFE rules under § 155.220. 

One commenter also suggested HHS 

should not take any action based on an 

FFE violation until the State takes 

action. 

Response: As we emphasized in the 

preamble to the proposed rule, we 

expect that States will continue to 

oversee and regulate agents and brokers 

within their States, both inside and 

outside of the Exchange. This applies 

whether the Exchange is an FFE, 

including a State Partnership Exchange, 

or a State Exchange. To avoid 

duplication of oversight activities 

related to agents and brokers enrolling 

or assisting consumers through an FFE, 

HHS will focus its oversight activities 

primarily on ensuring that agents and 

brokers in an FFE meet the standards 

outlined in § 155.220, including the 

requirements set forth in the agreements 

entered into under § 155.260(b). Thus, 

we intend to defer to States in all areas 

where the State DOIs are the primary 

regulators of agent and broker conduct, 

which will entail open communication 

and collaboration with State DOIs. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.220(c)(3) of the 

proposed rule as follows: in paragraph 

(c)(3)(i), we amend the provision to 

require the prominent display of a 

standardized disclaimer provided by 

HHS stating that QHP information 

required under § 155.205(b)(1) is 

available on the Exchange Web site and 

providing Web link to the Exchange 

Web site, for use when not all QHP 

information required under 

§ 155.205(b)(1) is displayed on the Webbroker’s Web site. In paragraph 

(c)(3)(vii), we modify the provision to 

require the display of a standardized 

disclaimer provided by HHS, and 

provision of a Web link to the Exchange 

Web site. In paragraph (c)(4), we clarify 

that the provisions in this paragraph are 

applicable to a Web-broker when it 

permits other agents and brokers to use 

its Internet Web site to enroll 

individuals in an FFE through a contract 

or other arrangement, and the agent or 

broker accessing the Web site pursuant 

to the arrangement is listed as the agent 

of record on the enrollment. We also 

require that such a Web-broker must: (1) 

Provide HHS a listing of agents and 

brokers entering into such arrangements 

if requested by HHS; (2) ensure that the 

agent or broker is licensed in the State 

in which the consumer is selecting the 

QHP; (3) verify that the agent or broker 

has completed training, registration and 

has signed all required agreements with 

the FFE; (4) ensure that its name and 

any identifier required by HHS 

prominently appears on the Internet 

Web site and on written materials 

containing QHP information that can be 

printed from the Web site, (5) terminate 

the agent’s or broker’s access to its Web 

site if HHS determines that the agent or 

broker is in violation of the provisions 

of this section and/or HHS terminates 

any required agreement with the agent 

or broker, and (6) report to HHS and the 

applicable State DOI any potential 

material breach of the standards in 

§ 155.220(c) and (d), or the agreement 

entered into pursuant to § 155.260(b), by 

the agent or broker accessing the 

Internet Web site. Furthermore, 

paragraph (c)(4)(ii) also permits HHS to 

temporarily suspend the Web-broker’s 

ability to transact information with HHS 

in the event of a severe privacy and 

security incident or breach, for the 

period in which HHS conducts an 

investigation and the incident or breach 

is remedied. 

Additionally, we are not finalizing 

§ 155.220(d)(4) and are amending 

§ 155.220(f) to require agents and 

brokers to also notify consumers that 

they plan to terminate their agreement 

with an FFE. We revised § 155.220(f) 

and (g) to refer to the agreements that 

the FFE will enter into with agents and 

brokers pursuant to 155.260(b), and are 

making a technical correction to correct 

a typographical error in § 155.220(h)(3). 

c. Electronic Information Exchange With 

Covered Entities (§ 155.270) 

Section 155.270 of 45 CFR directs 

Exchanges that perform electronic 

transactions with a HIPAA-covered 

entity to use standards, implementation 

specifications, operating rules, and code 

sets adopted by the Secretary in 45 CFR 

parts 160 and 162. When 45 CFR 

155.270 was finalized in its current 

form, HHS believed that the HIPAA 

standard transactions, adopted pursuant 

to 45 CFR Parts 160 and 162, were the 

most appropriate standards for 

transmitting information electronically 

between Exchanges and issuers. Since 

then, the Accredited Standards 

Committee X12,7 which governs the 

electronic transactions addressed in 45 

CFR 160 and 162, has determined that 

the currently approved transaction used 

to communicate payment-related 

information, the HIPAA ASC X12 

005010X218, will not provide the 

program-level payment information 

necessary for the risk adjustment, 

reinsurance, and risk corridors 

programs, and therefore does not meet 

the business requirements of the 

Affordable Care Act programs. As a 

result, HHS has worked with the 

Accredited Standards Committee X12 to 

develop and finalize the ASC X12 

005010X306, referred to as the ‘‘HIX 

820.’’ The HIX 820 meets the same 

HIPAA technical requirements as the 

currently approved ASC X12 

005010X218, but it is a new 

implementation of the transaction, so it 

has not yet been adopted by the 

Secretary pursuant to 45 CFR parts 160 

and 162. We believe that the HIX 820 is 

another appropriate method for 

transmitting payment-related 

information between the Exchange and 

a covered entity. We note that the HIX 

820 is the only method that provides the 

program-level payment information 

necessary for the risk adjustment, 

reinsurance, and risk corridors 

programs. HHS intends to use the HIX 

820 for those reasons. To provide for 

flexibility should similar situations arise 

in the future, we proposed to amend 

§ 155.270 to specify that to the extent 

that an Exchange performs electronic 

transactions with a HIPAA-covered 

entity, an Exchange must use standards, 

implementation specifications, 

operating rules, and code sets that are 

adopted by the Secretary pursuant to 45 

CFR parts 160 and 162 or that are 

otherwise approved by HHS. We further 

proposed to approve the HIX 820 

transaction for transmitting paymentrelated information between the 

Exchange and a HIPAA-covered entity. 

We note that the choice of transaction 

protocol does not implicate privacy or 

security concerns. 

After considering the comments 

below, we are finalizing the amendment 

to this provision as proposed. We are 

also finalizing in the preamble approval 

of the HIX 820 transaction, and we are 

identifying the NACHA CCD with 

Addenda Record (CCD+) as the HIPAA 

standard for healthcare electronic funds 

transfer when a HIX 820 transaction is 

transmitted between an Exchange and a 

covered entity. 

Comment: One commenter asked HHS 

to require all Exchanges to use the HIX 

820 transaction as a condition of 

participation with the Federal data 

services hub because a uniform standard 

would streamline data processes for 

multi-State issuers. 

Response: HHS will not require 

Exchanges to use the HIX 820 

transaction. Many State Exchanges are 

deploying systems using the currently 


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54082 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

approved HIPAA ASC X12 005010X218 

standard, and we do not wish to require 

States to rework existing 

implementations. 

Comment: Several commenters asked 

that HHS commit to working through 

existing standards organizations and 

attempt to leverage existing standards, 

or those derived from existing 

standards, for approving electronic 

transactions. Those commenters asked 

HHS to engage the affected stakeholders 

or trading partners in a formalized 

advisory process to develop an 

appropriate proprietary transaction 

standard with the goal of minimizing 

trading partner system disruptions or 

burdens. 

Response: In the future, we anticipate 

consulting with stakeholders and 

standards bodies prior to approving a 

new electronic transaction, as we did 

with the HIX 820 and as we do now 

with the NACHA CDD with Addenda 

Record (CCD+). 

Comment: One commenter requested 

that Exchanges that have adopted their 

own transaction standards be permitted 

to use those standards given the limited 

time period to implement Federal 

standards. 

Response: In adopting the HIX 820, 

we are providing Exchanges with the 

flexibility to use a transaction format 

developed with the Affordable Care Act 

provisions in mind. However, in the 

interests of standardization, we are not 

permitting States additional flexibility, 

in order to simplify issuers’ 

implementation. 

Comment: One commenter 

recommended that the Secretary clarify 

in the final rule that the healthcare EFT 

standard under HIPAA should be used 

as the electronic funds transfer when an 

HIX 820 transaction is transmitted 

between an Exchange and a HIPAAcovered entity. One commenter 

recommended that the Secretary 

‘‘otherwise approve’’ the use of the 

Corporate Trade Exchange (CTX) 

Automated Clearing House (ACH) 

standard as an alternative healthcare 

electronic funds transfer standard for 

use when an Exchange and a covered 

entity need to transmit a HIX 820. 

Response: We are clarifying that the 

NACHA CCD with Addenda Record 

(CCD+) is the healthcare electronic 

funds transfer standard when a HIX 820 

transaction is transmitted between an 

Exchange and a covered entity. We are 

not approving use of the CTX ACH 

standard because the CCD+ is the 

healthcare electronic funds transfer 

standard adopted pursuant to 45 CFR 

162.1602 (77 FR 1556) for the period on 

and after January 1, 2014. 

Summary of Regulatory Changes 

At 45 CFR 155.270, we are finalizing 

this provision related to the use of 

standards and protocols for electronic 

transactions as proposed. 

d. Oversight and Monitoring of Privacy 

and Security Requirements (§ 155.280) 

In § 155.280, consistent with section 

1411(g) and (h) of the Affordable Care 

Act, we proposed that HHS will monitor 

any individual or entity who would be 

subject to the privacy and security 

requirements as established and 

implemented by an Exchange under 

§ 155.260. We proposed in § 155.280(a) 

that HHS will oversee and monitor the 

FFEs and non-Exchange entities 

associated with FFEs for compliance 

with the privacy and security standards 

established and implemented by the 

FFEs pursuant to § 155.260 for 

compliance with those standards. We 

proposed that HHS will monitor State 

Exchanges for compliance with the 

privacy and security standards 

established and implemented by the 

State Exchanges pursuant to § 155.260. 

In addition, we proposed that State 

Exchanges will oversee and monitor 

non-Exchange entities associated with 

the State Exchange for compliance with 

the standards implemented by the State 

Exchange pursuant to § 155.260. 

In § 155.280(b), we proposed the 

oversight activities that HHS may 

conduct in order to ensure adherence to 

the privacy and security requirements in 

§ 155.260. These may include, but are 

not limited to, audits, investigations, 

inspections and any reasonable 

activities necessary for appropriate 

oversight of compliance with the 

Exchange privacy and security 

standards as permitted under sections 

1313(a)(2) and (a)(3) of the Affordable 

Care Act. 

In § 155.280(c)(1)(i) and (ii), we 

proposed definitions for the terms 

‘‘incident’’ and ‘‘breach’’ as they apply 

to the privacy and security of PII in the 

Exchanges. In § 155.280(c)(2) we 

proposed that in the event of an 

incident or breach, the entity where the 

incident or breach occurs would be 

responsible for reporting and managing 

it according to the entity’s documented 

incident handling or breach notification 

procedures. 

In § 155.280(c)(3), we proposed that 

FFEs, non-Exchange entities associated 

with FFEs, and State Exchanges must 

report all privacy and security incidents 

and breaches to HHS within one hour of 

discovering the incident or breach. We 

also proposed that a non-Exchange 

entity associated with a State Exchange 

must report all privacy and security 

incidents and breaches to the State 

Exchange with which they are 

associated. 

Comment: We received comments 

expressing concern about the 

requirements of § 155.280 that would 

apply to entities that are already 

required to be HIPAA-compliant. 

Commenters noted that there are 

existing State-based insurance 

regulations as well as existing Federal 

laws that apply to the various types of 

the non-Exchange entities that will be 

associated with FFEs. These 

commenters were concerned that HHS 

was proposing to implement an 

additional regulatory regime with 

largely the same goals as HIPAA and 

other laws and regulations, which 

would be overly burdensome. 

Commenters suggested relying on 

compliance with existing HIPAA 

regulations and standards, or 

accountability under State-based 

insurance regulation, to provide 

adequate oversight and monitoring to 

ensure compliance. 

Response: Section 155.260 was 

implemented to create a uniform set of 

privacy and security principles that 

would apply to Exchanges and nonExchange entities. Section 155.280 

permits Exchanges to conduct oversight 

to ensure compliance with the standards 

established pursuant to § 155.260. We 

believe that a single comprehensive 

framework is needed for oversight and 

monitoring of all Exchanges and nonExchange entities for compliance with 

the standards established pursuant to 

§ 155.260. Section 155.280 is necessary 

because not all entities that are subject 

to § 155.260 and § 155.280 are currently 

covered under another single set of 

oversight regulations, such as HIPAA or 

State insurance regulations. 

HIPAA does not provide 

comprehensive safeguards because the 

privacy, security, and breach 

notification rules issued under HIPAA 

will not apply to all actors who are 

subject to §§ 155.260 and 155.280, or to 

all information that will be protected 

under those provisions. HIPAA 

requirements apply only to covered 

entities (defined under HIPAA as 

certain health care providers, health 

plans, health care clearinghouses, 45 

CFR 160.103) and their business 

associates (defined under HIPAA 

generally as a person or entity who 

performs functions or activities on 

behalf of, or certain services for, a 

covered entity that involve the use or 

disclosure of protected health 

information (45 CFR 160.103). The 

HIPAA Omnibus Final Rule (78 FR 

5566, January 25, 2013) added to the 

definition of ‘‘business associate’’, a 


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subcontractor that creates, receives, 

maintains or transmits protected health 

information on behalf of a business 

associate). 

Similarly, State insurance regulations 

will not provide comprehensive 

safeguards because they do not apply to 

all entities subject to §§ 155.260 and 

155.280. State insurance regulations 

will vary from State to State and will 

often apply to agents, brokers, QHP 

issuers, and issuers of health plans. 

We recognize that Exchanges and 

non-Exchange entities may be subject to 

other regulations and oversight 

frameworks that are similar to the 

framework outlined in §§ 155.260 and 

155.280. However, we believe that 

§§ 155.260 and 155.280 are necessary to 

safeguard the information that section 

155.260 was implemented to protect. 

We intend to implement § 155.280 

without significantly increasing the 

burden on already regulated entities. 

Comment: Several commenters 

requested clarification on the definition 

of ‘‘non-Exchange entities.’’ One 

commenter was concerned that the 

definition for a non-Exchange entity was 

too broad. Another commenter 

requested that since QHP issuers are 

HIPAA covered entities and comply 

with HIPAA standards, they should not 

be included in the definition of nonExchange entities under § 155.260(b). 

Response: We intend to further clarify 

the scope of applicability of § 155.260(b) 

in future rulemaking. 

Comment: Commenters raised points 

regarding the definitions for incident 

and breach established within proposed 

§§ 155.280(c)(1)(i) and 155.280(c)(1)(ii). 

The majority of comments noted that 

these definitions were different from 

what has been established for HIPAA, 

and raised concerns that this difference 

created the potential for conflicting 

standards. Additionally, there were 

comments regarding the breadth of the 

definitions and the types of events that 

would fall under each of the definitions, 

which generated a concern about 

administrative burden. 

Response: The definitions for incident 

and breach that we proposed to codify 

in this regulation have been included in 

the computer matching, information 

exchange and other data sharing 

agreements, as authorized under 

sections 1413(c) and 1413(d) of the 

Affordable Care Act. CMS has executed 

these agreements with other Federal 

agencies (Internal Revenue Service, 

Social Security Administration, 

Department of Homeland Security, 

Department of Defense and Veterans 

Health Administration, Office of 

Personnel Management, and Peace 

Corps), administering entities and State 

agencies (State Exchanges, Medicaid 

and CHIP agencies), and non-Exchange 

entities. In addition, the requirements 

regarding incident and breach 

management proposed in § 155.280(c)(2) 

are also included in the various data 

sharing agreements enumerated above. 

In these agreements, the definition for 

‘‘breach’’ is taken from OMB’s 

Memorandum on Safeguarding Against 

and Responding to the Breach of 

Personally Identifiable Information, 

dated May 22, 2007 (OMB M–07–16), 

which provides guidance to Federal 

agencies for safeguarding against and 

responding to the breach of PII. The 

definition for ‘‘incident’’ is set forth by 

the Federal emergency response center, 

United States Computer Emergency 

Readiness Team (US–CERT), and is 

derived from the definition of incident 

in the National Institute of Standards 

and Technology Special Publication 

800–61, Revision 2, dated August 2012. 

US–CERT is used as the source of the 

definition, because the Federal 

Information Security Management Act 

of 2002 (Pub. L. 107–347) requires 

Federal agencies to report incidents 

involving PII to US–CERT. We recognize 

that these definitions are based on 

Federal laws, regulations and guidance 

that typically do not extend to States. 

However, the information that State 

exchanges, State agencies, and nonExchange entities will receive pursuant 

to their agreements with CMS is derived 

from Federal sources and requires 

safeguarding that complies with Federal 

standards. CMS acknowledges the 

volume of reports that is anticipated 

will be generated by these definitions 

and will continue to evaluate and 

analyze the definitions as the program 

evolves. Therefore, because uniform 

definitions for incident and breach and 

the requirements for incident or breach 

management have been included in all 

the data sharing agreements required 

under the Affordable Care Act, we are 

not finalizing the definitions for 

incident and breach nor the 

requirements for incident or breach 

management that we had proposed in 

§ 155.280(c)(1)(i), § 155.280(c)(1)(ii), and 

§ 155.280(c)(2). 

Comment: We received many 

comments supporting the proposed 

regulation and requesting additional 

rulemaking to either increase 

transparency for the public at large, or 

further protect the PII of individuals 

applying for eligibility determinations 

and enrolling in insurance affordability 

programs as various individuals or 

entities (such as agents, brokers, 

Navigators, etc.) who provide assistance 

come into contact with the individual’s 

information. To further increase 

transparency for the public, several 

commenters requested that CMS require 

the privacy and security practices 

established by either an FFE or State 

Exchange, which implement the 

requirements of § 155.260, be made 

publicly available. One commenter 

recommended that the final rule should 

state explicitly that there is an incident 

handling protocol for the FFEs. There 

was also a request that § 155.280 ensure 

that consumers are informed when a 

security breach occurs that may affect 

them and their PII. Additionally, one 

commenter requested that annual 

summary reports be made public 

regarding the results of the audit and 

investigatory activities defined under 

§ 155.280(b). 

Response: With respect to requiring 

Exchanges to make privacy and security 

standards publicly available, CMS 

intends to publish the FFE privacy and 

security standards and encourages State 

Exchanges to publish their standards in 

an effort to increase transparency. In 

response to the comment requesting that 

the FFEs have an incident handling 

protocol, we note that the FFEs, as part 

of a CMS-run program, will follow the 

CMS incident handling protocol. NonExchange entities subject to the FFE 

privacy and security standards will be 

required through agreement with CMS 

to implement incident handling and 

breach notification procedures that are 

consistent with CMS’ incident handling 

and breach notification procedures and 

will be required to memorialize them in 

the non-Exchange entity’s own written 

policies and procedures. 

In response to the comment 

requesting that annual summary reports 

be made public, we anticipate future 

rulemaking related to oversight and 

monitoring of privacy and security as it 

relates to both Exchanges and nonExchange entities, and will consider this 

comment at that time. Finally, in 

response to the comment requesting 

consumer notification when a security 

breach occurs, we note that the FFEs’ 

incident handling procedures will 

require CMS to determine whether a 

risk of harm exists and if individuals 

need to be notified. State Exchanges 

would be expected to follow the breach 

notification laws for the State in which 

they operate. 

Comment: Many commenters were 

concerned that the requirement in 

proposed § 155.280(c)(3) that all privacy 

and security incidents and breaches be 

reported to HHS within one hour of 

discovering the breach or incident was 

not practical or workable in the 

Exchange environment. Concerns were 

raised regarding the volume of the 


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reports the requirement would generate 

and whether over-reporting would 

undermine the ability to present a 

thoughtful, comprehensive plan of 

action and result in an overall lowering 

of the security visibility of the system. 

The commenters suggested a range of 

recommended alternatives to allow 

more flexibility in what was reported. 

Additional suggestions for alternatives 

from commenters included aligning the 

proposal with a variety of other Federal 

standards for reporting incidents such 

as the IRS standards, the Medicare two 

day standard, or HIPAA, which allows 

up to 60 days to publicly report an 

incident. 

A number of State Exchanges asked 

for clarification on what the reporting 

requirement meant in terms of their 

obligation to require adherence from the 

non-Exchange entities associated with 

their State Exchange. State Exchanges 

suggested that requirements for States 

should be set as part of the framework 

of the system security template 

developed by HHS. 

Response: Similar to our response to 

the comments regarding the definitions 

of incident and breach above, we note 

that the timeline for reporting privacy 

and security incidents and breaches that 

we proposed to codify in this regulation 

has also been included in the computer 

matching, information exchange and 

other data sharing agreements, as 

authorized under sections 1413(c) and 

1413(d) of the Affordable Care Act. In 

addition, legal agreements executed 

pursuant to § 155.260(b) between CMS 

and non-Exchange entities required to 

comply with the privacy and security 

standards established and implemented 

by an FFE pursuant to § 155.260 include 

the one hour timeframe for reporting all 

privacy and security incidents and 

breaches. Because the one hour incident 

response timeline has been included in 

all the data sharing agreements required 

under the Affordable Care Act, we have 

deleted the timing for incident reporting 

from regulation, proposed in 

§ 155.280(c)(3), and expect it to be 

addressed through separate agreement. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.280 of the proposed 

rule regarding oversight and monitoring 

of privacy and security requirements 

with the following modifications: To 

improve the precision of the language 

used, we are removing references to 

‘‘non-Exchange entities associated with 

the Federally-facilitated Exchanges’’ in 

§ 155.280(a) and are instead referring to 

these entities as ‘‘non-Exchange entities 

required to comply with the privacy and 

security standards established and 

implemented by a Federally-facilitated 

Exchange pursuant to § 155.260.’’ 

Because these standards are included in 

other legal documents, we are not 

finalizing §§ 155.280(c)(1)(i) and 

155.280(c)(1)(ii), which would have 

defined the terms incident and breach; 

§ 155.280(c)(2) which would have 

required an entity where an incident or 

breach occurs to manage the incident or 

breach in accordance with the entity’s 

documented incident handling and 

breach notification procedures; and 

§ 155.280(c)(3), which would have 

required that incidents and breaches be 

reported within one hour of discovery. 

4. Subpart D—Exchange Functions in 

the Individual Market: Eligibility 

Determinations for Exchange 

Participation and Insurance 

Affordability Programs 

a. Eligibility Process (§ 155.310) 

In § 155.310(k), we proposed a 

standardized process for handling 

applications that are submitted without 

information that is necessary for 

determining eligibility. We noted that 

we intended to work with States to 

implement these procedures and in 

2014 to accommodate States with 

processes established for handling 

incomplete applications that did not 

match the process described in these 

regulations. 

Specifically, we proposed that if an 

application filer does not provide 

sufficient information on an application 

for the Exchange to conduct an 

eligibility determination for enrollment 

in a QHP through the Exchange, or for 

insurance affordability programs (if the 

application includes a request for an 

eligibility determination for insurance 

affordability programs), the Exchange 

would provide notice through the 

eligibility determination notice 

described in 45 CFR 155.310(g). The 

notice would indicate that information 

necessary to complete an eligibility 

determination is missing, specify the 

missing information, and include 

instructions on how to provide the 

missing information. 

We proposed that the Exchange 

would provide the applicant with a 

period of no less than 15 days and no 

more than 90 days from the date this 

notice is sent to the applicant to provide 

the necessary information. Further, we 

proposed that during this period, the 

Exchange will not proceed with the 

applicant’s eligibility determination or 

provide eligibility for enrollment in a 

QHP through the Exchange, advance 

payments of the premium tax credit, or 

cost-sharing reductions, unless an 

application filer has provided sufficient 

information to determine his or her 

eligibility for enrollment in a QHP 

through the Exchange, in which case the 

Exchange must make a determination 

for enrollment in a QHP through the 

Exchange. 

We sought comment on this proposal, 

including whether Exchange flexibility 

is appropriate; whether 15 days and 90 

days are appropriate lower and upper 

limits; and whether additional language 

was needed to ensure coordination 

between the Exchange, Medicaid, and 

CHIP. 

Comment: Commenters were 

generally supportive of the flexibility 

offered regarding the timeline for 

handling incomplete applications 

through the Exchange. Some 

commenters suggested 15 days was too 

short of a timeframe and recommended 

a minimum initial timeframe of no less 

than 30 days to account for applicants 

who may need to turn to a third party 

for additional information or assistance. 

Some commenters suggested allowing 

the Exchange to proceed with the 

applicant’s eligibility determination 

even if there is missing information in 

the application. One commenter 

suggested a timeframe of 30 to 45 days 

with the ability for individuals to 

request additional time for good cause. 

Another commenter recommended 

aligning the timeframe for incomplete 

applications with the 90 day 

inconsistency period. One commenter 

requested flexibility to use a shorter 

time period of 10 days to align with 

their current Medicaid program’s 

response deadline. 

Response: We agree with commenters 

in support of maintaining flexibility in 

the timeframe for resolving incomplete 

applications. We also acknowledge that 

States may want to maintain a 

consistent timeframe across the 

Exchange and Medicaid and as such, we 

modify § 155.310(k) to set a lower limit 

of 10 days, rather than 15 days, to 

resolve an incomplete application in 

order to allow for this consistency. As 

indicated in the proposed rule, we 

intend to work with States to implement 

these procedures and in 2014 to 

accommodate States with processes 

established for handling incomplete 

applications that do not match the 

process described in these regulations. 

Comment: Several commenters 

suggested the date the incomplete 

application is received should be 

considered a protected filing date for 

enrollment, or create a special 

enrollment period such that individuals 

who submit an incomplete application 

during open enrollment and receive a 

final determination after open 


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enrollment ends could still select a plan 

and enroll in coverage. 

Some commenters raised concern that 

some employers may refuse to provide 

information to their employees or may 

significantly delay providing the 

necessary information to their 

employees, which could result in the 

employees having difficulty submitting 

complete applications, resulting in such 

individuals not being able to access 

advance payments of the premium tax 

credit or cost-sharing reductions, or to 

access them in a timely fashion. 

Commenters also suggested the 

transition relief provided to employers 

in 2014 with respect to the employer 

reporting and shared responsibility 

provisions under the Code may 

constrain the ability of employees to 

obtain information on employersponsored coverage needed to submit a 

complete application for insurance 

affordability programs. 

Response: We appreciate the 

suggestions from commenters regarding 

the date on which an incomplete 

application is received as a protected 

filing date and the suggestion to create 

a special enrollment period, for the 

purposes of plan selection outside the 

open enrollment period. We note that 

Exchanges retain authority to provide a 

special enrollment period to individuals 

who experience exceptional 

circumstances on a case-by-case basis as 

provided in 45 CFR 155.420(d)(9). We 

also note that the application date is 

used to establish the effective date of 

coverage in Medicaid, and this 

provision does not otherwise modify 

existing Medicaid rules regarding the 

relationship between the application 

filing date and the effective date of 

coverage. 

We continue to work closely with the 

Department of Labor to help educate 

employers about making information 

regarding employer-sponsored coverage 

they offer available to employees for the 

purpose of submitting an application for 

insurance affordability programs in a 

timely fashion. As part of the 

Administration’s efforts to streamline 

employer efforts to educate their 

workforce and meet the requirements 

under section 18B of the Fair Labor 

Standards Act, as added by section 1512 

of the Affordable Care Act, on May 8, 

2013, the Department of Labor released 

a model notice to help employers 

inform their employees of coverage 

options, which can be found at http:// 

www.dol.gov/ebsa/pdf/

FLSAwithplans.pdf. Employers have the 

option of combining the employer 

coverage tool with the section 18B 

notice. 

Comment: One commenter supported 

the provision that requires the Exchange 

to determine eligibility for enrollment in 

a QHP through the Exchange if enough 

information is included in the 

application to do so. Another 

commenter raised concern that QHP 

eligibility without advance payments of 

the premium tax credit or cost-sharing 

reductions may be confusing for some 

individuals. Another commenter 

suggested that some applicants may not 

want to be responsible for full 

premiums while they are working to 

obtain the information needed to obtain 

an eligibility determination for advance 

payments of the premium tax credit. 

Another commenter suggested that 

enrollment in a QHP through the 

Exchange during the timeframe for 

incomplete applications should be 

optional. 

Response: It is important to have clear 

messages so individuals are informed of 

their financial responsibilities at the 

time of plan selection. The Exchange 

will provide actual premium 

information to consumers as part of the 

plan compare and select process, and 

consumers will be provided with this 

information again as a part of the 

premium payment process. While we 

believe it is important to provide 

individuals with the opportunity to 

enroll in a QHP through the Exchange 

if they are otherwise eligible, we 

acknowledge that some individuals may 

not want to purchase an unsubsidized 

QHP and we clarify that enrollment in 

a QHP is always optional and only 

occurs based on a consumer’s choice, 

including when an application does not 

contain the information needed to make 

an eligibility determination for 

insurance affordability programs. 

Comment: One commenter suggested 

that in addition to the notice the 

Exchange sends to individuals who 

have an incomplete application, the 

Exchange be required to make a followup phone call to the application filer to 

attempt to complete the application. 

Another commenter suggested 

additional standards for handling 

incomplete applications, including that 

notices should include language that 

informs individuals that the Exchange 

will assist them in completing the 

application. The commenter suggested 

notices to applicants be provided in 

multiple languages and forms. 

Response: Follow-up by the Exchange 

could be helpful for consumers, 

although we believe that the Exchange 

should have flexibility to develop and 

implement the procedures that are most 

effective and efficient. Accordingly, we 

do not require an Exchange to take steps 

beyond what was proposed. However, 

we encourage Exchanges to explore the 

most effective and efficient approaches 

to reducing the number of incomplete 

applications and facilitating completion 

of incomplete applications, and share 

those best practices with other 

Exchanges. Additionally, we clarify that 

the notice described in § 155.310(k) will 

follow the general standards for notices 

set forth in 45 CFR 155.230, including 

accessibility requirements. 

Comment: One commenter 

recommended more clearly delineated, 

objective standards for determining 

whether or not an application is 

complete. 

Response: We note that an application 

is considered incomplete if information 

necessary for conducting an eligibility 

determination for enrollment in a QHP 

or for insurance affordability programs 

(if requested) is missing, and that these 

eligibility standards are described in 

subpart D of this part. We intend to 

provide instructions to inform 

individuals of the required and optional 

fields on the application, including 

‘‘help text’’ on the dynamic online 

application, and believe these tools will 

help reduce the number of incomplete 

applications submitted to the Exchange. 

Comment: One commenter 

recommended that advance payments of 

the premium tax credit be applied 

prospectively from the date of eligibility 

for advance payments of the premium 

tax credit and not retroactive to 

eligibility determination for enrollment 

in a QHP through the Exchange. 

Response: We clarify that if an 

individual completes an application and 

requests an eligibility determination for 

insurance affordability programs, the 

effective date for advance payments of 

the premium tax credit is not 

retroactive, but follows the effective 

date policy outlined in 45 CFR 

155.330(f). 

Summary of Regulatory Changes 

We are finalizing the provisions in 

§ 155.310(k) as proposed with one 

minor modification. We modified 

paragraph (k)(2) to specify that the 

Exchange must provide the applicant 

with a period of no less than 10 days 

from the date on which the notice is 

sent to the applicant to provide the 

information needed to complete the 

application to the Exchange. 

b. Verification of Eligibility for 

Minimum Essential Coverage Other 

Than Through an Eligible EmployerSponsored Plan (§ 155.320) 

As finalized in the Exchange 

Establishment Rule, § 155.320(b) 

specifies standards related to the 

verification of eligibility for minimum 


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8Medicaid 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 

(July 15, 2013). 

essential coverage other than through an 

eligible employer-sponsored plan. We 

proposed to redesignate paragraph (b)(1) 

as (b)(1)(i) and (b)(2) as (b)(1)(ii) to 

consolidate the standards for Exchange 

responsibilities in connection with 

verification of eligibility for minimum 

essential coverage other than through an 

eligible employer-sponsored plan. In 

paragraph (b)(1)(i), we also proposed to 

add the phrase ‘‘for verification 

purposes’’ to the end of existing text. 

We clarified that the Exchange would 

submit specific identifying information 

to HHS to compare applicant 

information with information from the 

Federal and State agencies or programs 

that provide information regarding 

eligibility for and enrollment in 

minimum essential coverage, including 

but not limited to the Veterans Health 

Administration, TRICARE, and 

Medicare. 

We noted that HHS will work with 

the appropriate Federal and State 

agencies to complete the appropriate 

computer matching agreements, data 

use agreements, and information 

exchange agreements which will 

comply with all appropriate Federal 

privacy and security laws and 

regulations. The information obtained 

from Federal and State agencies will be 

used and re-disclosed by HHS as part of 

the eligibility determination and 

information verification process set 

forth in subpart D of part 155. 

We noted that in connection with the 

proposal to redesignate paragraph (b)(2) 

to paragraph (b)(1)(ii), we did not 

propose any change to the text of the 

provision as previously finalized. 

Consistent with the authorizations for 

the disclosure of certain information 

under 42 CFR 435.945(c) and 

§ 457.300(c), the proposed regulation 

provided for an Exchange to verify 

whether an applicant has already been 

determined eligible for coverage through 

Medicaid, CHIP, or the Basic Health 

Program, if applicable, using 

information obtained from the agencies 

administering such programs. 

Finally, we proposed to add 

paragraph (b)(2) to be consistent with 45 

CFR 164.512(k)(6)(i) and 45 CFR 

155.270. We sought comment on this 

proposal. 

Comment: One commenter expressed 

support for the verification process 

outlined in § 155.320(b). Another 

commenter raised concern that HHS has 

not described how verification 

information described in § 155.320(b) 

will flow between the Exchange and 

QHPs and requested clarification that 

the Exchange will be responsible for 

reporting errors related to eligibility for 

minimum essential coverage and 

assuming any relevant financial liability 

that results from such an error. 

Response: The verification approach 

outlined in § 155.320(b) does not 

provide for an information flow between 

the Exchange and QHPs. As stated in 

previous final rulemaking and also in 

the proposed rule, the Exchange would 

submit specific identifying information 

to HHS, HHS would return information 

from the Federal and State agencies or 

programs that provide eligibility and 

enrollment information regarding 

minimum essential coverage to the 

Exchange, and the Exchange would use 

this information to complete the 

verification as part of the application 

process. 

Summary of Regulatory Changes 

We modify language in paragraph 

(b)(2) to clarify that the disclosure of 

information regarding eligibility and 

enrollment in a health plan is expressly 

authorized, for the purposes of 

verification of applicant eligibility for 

minimum essential coverage, as part of 

the eligibility determination process for 

advance payments of the premium tax 

credit or cost-sharing reductions. We 

note that this provision does not enable 

the disclosure by entities described in 

45 CFR 164.512(k)(6)(i) of clinical or 

other health records to the Exchange, as 

this information is not used in eligibility 

determinations for enrollment in a QHP 

through the Exchange or for insurance 

affordability programs. 

c. Coordination With Medicaid, CHIP, 

the Basic Health Program, and the PreExisting Condition Insurance Plan 

(§ 155.345) 

As finalized in the Exchange 

Eligibility and Enrollment Rule,8

§ 155.345 specifies standards for 

coordination across insurance 

affordability programs. After adding a 

new paragraph (h) regarding the 

Exchange’s adherence to a State 

decision regarding Medicaid and CHIP, 

we noted in the amendatory text that we 

re-designated previous paragraphs (h) 

and (i) as new paragraphs (i) and (j), but 

made a drafting error in failing to 

include these re-designated paragraphs 

as part of the revised regulation text. As 

such, we make a technical correction to 

include new paragraphs (i) and (j) as 

part of the regulation text. Furthermore, 

we make a technical correction in 

paragraph (i)(1) to change the crossreference to § 155.320(b)(1)(ii) in order 

to align with the redesignation of 

§ 155.320(b)(2) finalized in this 

regulation. 

Summary of Regulatory Changes 

We make a technical correction in 

§ 155.345 to clarify that paragraphs (i) 

and (j) are included as part of the 

regulation text, and make a technical 

correction in paragraph (i)(1) to change 

the cross-reference to § 155.320(b)(1)(ii) 

to align with the redesgination within 

§ 155.320(b). 

5. Subpart E—Exchange Functions in 

the Individual Market: Enrollment in 

Qualified Health Plans 

a. Allowing Issuer Customer Service 

Representatives To Assist With 

Eligibility Applications (§ 155.415) 

We proposed to add § 155.415 that 

would, at the Exchange’s option and to 

the extent permitted by State law, 

permit issuer customer service 

representatives who do not meet the 

definition of agent or broker in § 155.20 

to assist qualified individuals in the 

individual market with: (a) applying for 

an eligibility determination or 

redetermination for coverage through 

the Exchange; (b) applying for insurance 

affordability programs; and (c) 

facilitating the selection of a QHP 

offered by the issuer represented by the 

customer service representative, 

provided that such issuer customer 

service representatives meet the 

proposed requirements set forth in 

§ 156.1230(a)(2). 

We received the following comments 

concerning the proposed issuer 

customer service representatives 

provisions. As stated earlier in this 

preamble, for purposes of clarity, we 

will refer to ‘‘issuer customer service 

representatives’’ as ‘‘issuer application 

assisters’’ for the rest if this section. 

Comment: One commenter expressed 

concern regarding excluding agents and 

brokers from acting as issuer application 

assisters. The commenter indicated that 

certain States require an issuer 

application assister that assists in 

enrollment in a health plan to be a 

licensed agent under State law. We 

received another comment 

recommending that we continue to 

ensure that individuals involved with 

assisting applicants and enrollees 

comply with any existing State laws 

related to enrollment assistance. 

Another commenter recommended 

making application assisters a 

requirement for Exchanges. Lastly, we 

received a comment seeking to clarify 

issuer application assisters’ rule in postenrollment activities. 

Response: We introduced the term 

‘‘issuer customer service representative’’ 


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to allow individuals who are not 

licensed as agents or brokers, but 

employed or contracted by an issuer to 

assist applicants and enrollees with the 

application and enrollment process. 

Agents and brokers may also work for 

issuers, as many do today, but they must 

follow the standards set forth in 

§ 155.220. We note that, in some States, 

a license may be required to assist an 

applicant for applying for an eligibility 

determination or redetermination. We 

continue to defer to existing State laws 

related to enrollment assistance when 

deciding which individuals may assist 

applicants and enrollees. If State law 

requires a license to enroll applicants in 

coverage, then issuers would need to 

follow State law for licensure of 

application assisters. 

We note that there are certain 

functions that issuers currently have 

their staff perform, such as answering 

general information about plans, and we 

intend to allow those individuals to 

continue to perform those functions 

without meeting additional standards. 

Rather, if the issuer wants those 

individuals to perform additional 

functions outlined in this section, such 

as helping consumers as they apply for 

an eligibility determination, seek a 

redetermination for coverage through 

the Exchange, and apply for insurance 

affordability programs, those 

individuals will be considered issuer 

application assisters and be subject to 

the standards in section 156.1230(a)(2). 

Accordingly, we are not finalizing the 

language indicating that facilitating 

selection of a QHP would be a function 

of an issuer application assister. Rather, 

we are clarifying that it would be a 

typical function of issuer staff. Issuer 

staff would be able to perform posteligibility functions such as plan 

compare and selection, if permitted by 

State law. However, the issuer staff 

would not be allowed to help QHP 

enrollees with reporting changes to an 

Exchange or be able to support them in 

the redetermination process. Those are 

functions of the issuer application 

assister, agent, broker, or other qualified 

assister. 

Comment: Several commenters stated 

it is essential that issuer application 

assisters who assist applicants and 

enrollees with applications and 

enrollment in QHPs do so without 

imposing discriminatory barriers to 

coverage. Accordingly, they have 

suggested adding nondiscrimination 

standards for issuer application 

assisters. 

Response: We note that § 156.200(e) 

prohibits a QHP issuer, which includes 

issuer application assisters, from 

discriminating against an applicant. For 

this reason, we are not adding 

additional language on 

nondiscrimination standards. 

Comment: We received a comment 

seeking that the Exchange enforce 

parameters to ensure that information 

being provided by issuer application 

assisters is accurate. We also received 

several comments that issuers should be 

held responsible for any misconduct by 

their application assisters assisting 

applicants and enrollees with 

enrollment in addition to strengthening 

conflict of interest standards. 

Response: We plan to consider over 

time, based on experience with this 

function, whether more specific 

standards are needed in these 

regulations. Additionally, 

§ 156.1230(a)(2)(iii) of the final rule 

clarifies that issuer application assisters 

must comply with applicable State and 

Federal laws regarding conflicts of 

interest. We also note that the issuer 

should be monitoring its application 

assisters and that we believe the State 

DOI would act as the primary oversight 

source. 

Comment: One commenter expressed 

concern that an increase in issuer 

involvement would lead to a decrease in 

consumer protections. The commenter 

believed that issuer application assisters 

should only have access to consumer 

information needed to enroll a 

consumer in a QHP. A commenter 

expressed concern that application 

assisters could use PII obtained during 

intake to steer consumers to QHPs 

offered by other issuers. Another 

commenter wanted to clarify that issuer 

application assisters’ compliance with 

FFE privacy and security requirements 

applies only to their FFE assistance 

activities. Additionally, commenters 

wanted clarity on whether information 

given to issuers during the application 

process could be stored in an issuer’s 

database system. If so, commenters 

asked us to clarify whether that would 

be considered HIPAA PHI and those 

issuers would not be expected to create 

and maintain separate, FFE-established 

privacy and security policies and 

procedures for such data. 

Response: In the final rule at 

§ 156.1230(a)(2), we attempt to reduce 

administrative burden imposed by the 

proposed requirement for issuer 

application assisters to comply with the 

terms of an agreement between the 

issuer and the Exchange. We clarify that 

issuers need to ensure its application 

assisters follow the standards outlined 

in the proposed rule, but this would not 

be done through an agreement. The 

agreement in the proposed rule was not 

a privacy agreement and removing this 

agreement in no way weakens 

previously established agreements on 

standards for privacy and security for 

individuals accessing others PII. Issuers 

and their application assisters will still 

be subject to Exchange privacy and 

security standards, as well as all other 

applicable laws and regulations 

protecting consumer information, which 

may include, but is not limited to the 

HIPAA Privacy and Security Rules, as 

applicable. Issuers and their application 

assisters may only use Exchange 

application information for the purposes 

of, and to the extent necessary in, 

ensuring the efficient operation of the 

Exchange, including verifying the 

eligibility of an individual to enroll 

through an Exchange or to claim a 

premium tax credit or cost-sharing 

reduction or the amount of the credit or 

reduction; and may not disclose the 

information to any other person except 

as provided by applicable law or 

regulation in connection with those 

purposes. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.415 of the proposed 

rule, with a few modifications. For 

purposes of clarity, in finalizing this 

policy, we will use the term ‘‘issuer 

application assisters’’ in place of ‘‘issuer 

customer service representatives’’ to 

more clearly articulate the role of such 

individuals and, for consistency, will 

refer to the definition of ‘‘issuer 

application assisters’’ being finalized at 

§ 155.20. Accordingly, we are not 

finalizing the language indicating that 

facilitating selection of a QHP would be 

a function of issuer application 

assisters. 

6. Subpart F—Appeals of Eligibility 

Determinations for Exchange 

Participation and Insurance 

Affordability Programs 

This subpart was proposed to provide 

standards for eligibility appeals, 

including appeals of individual 

eligibility determinations and employer 

determinations as required by section 

1411(f) of the Affordable Care Act, 

which makes clear that the Secretary 

will provide for an appeals process. We 

proposed to provide Exchanges with 

options for coordinated appeals to align 

with the options for eligibility 

determinations. In addition, we 

proposed standards for appeal requests, 

eligibility pending appeal, dismissals, 

informal resolution and hearing 

requirements, expedited appeals, appeal 

decisions, the appeal record, and 

corresponding provisions for employer 

appeals. 

Comment: We received many 

comments in support of subpart F and 


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9 Goldberg v. Kelly, 397 U.S. 254 (1970). 

the proposed eligibility appeals process 

and standards. Many commenters 

encouraged a streamlined, transparent, 

consumer-centric appeals process. In 

addition, we received comments in 

support of the proposed coordination 

measures with Medicaid and CHIP 

agencies and the due process 

protections afforded to appellants. Many 

comments reflected approval of the 

shared requirements between Exchange 

and Medicaid appeals, which 

commenters anticipate will ease the 

implementation of Exchange appeals 

and create efficiencies by having 

matching standards. 

Response: We provided a flexible, 

consumer-friendly process that limits 

the burden on consumers and 

Exchanges. We have also worked to 

develop a process that largely parallels 

the Medicaid fair hearing process and 

standards, including the requirements to 

provide notice of appeals procedures, 

access to the record, and robust due 

process and hearing rights. In the final 

rule, we generally maintain this 

approach while also adding additional 

flexibilities for Exchanges as they 

implement the eligibility appeals 

process. 

Comment: A few commenters, many 

representing States establishing 

Exchanges, encouraged HHS to provide 

additional flexibilities for 

implementation timelines in order to 

allow Exchanges time to establish and 

implement the appeals provisions. For 

example, one comment recommended a 

January 1, 2015 effective date to allow 

Exchanges, including the Federallyfacilitated Exchange, more time to 

complete systems builds and update 

existing appeals processes to meet the 

standards proposed in the January 22, 

2013 proposed rule. Another commenter 

noted that the proposed rule will 

require administrative changes 

including Medicaid State-plan 

amendments, State regulation changes, 

and significant system changes to 

support the new flow of electronic 

information between the Exchange and 

Medicaid. Commenters noted that it 

would be advantageous to have a longer 

period of time to ramp-up to meet the 

appeal requirements. 

Response: We have evaluated the 

provisions of the January 22, 2013 

proposed rule, and after consideration 

of the public comments received, in this 

final rule we are providing additional 

flexibility for Exchanges to implement a 

paper-based appeals process for the first 

year of operations (October 1, 2013 

through December 31, 2014). We 

understand that many Exchanges have 

tight timeframes for system 

development and the paper-based 

process will allow Exchanges to operate 

the appeals process as current business 

requirements allow, while providing a 

timeline to modernize an appeal 

program. We have opted for this 

approach after balancing the interests of 

both appellants and Exchanges. This 

approach will assist Exchanges in 

setting up efficient, effective appeals 

processes that will positively impact 

appellants who use these processes; 

moreover, this flexibility does not 

abridge the rights of appellants provided 

in this rule and we do not anticipate 

that they will be materially adversely 

affected. 

We will continue to work with 

Exchanges to support their appeals 

implementation efforts and ensure 

successful coordination between all 

relevant entities administering 

insurance affordability programs and 

the appeals entities for such programs. 

We will also continue to provide 

guidance and technical assistance to 

Exchanges to promote and facilitate the 

sharing of experiences and best 

practices regarding the establishment 

and implementation of the eligibility 

appeals process. 

Comment: Several commenters 

desired greater clarity about which 

provisions apply to State Exchanges and 

which apply to Federally-facilitated 

Exchanges or to State Partnership 

Exchanges, including determination and 

assessment eligibility models. 

Response: Unless specifically 

indicated in the rule, the standards we 

are finalizing apply equally to all 

Exchanges, or, where a requirement is 

specified to apply to the Exchange 

appeals entity, to all Exchange appeals 

entities, including the HHS appeals 

entity. We have attempted to keep the 

rules uniform whenever possible to 

provide a consumer-friendly, efficient 

process no matter what type of 

Exchange or appeals process is in place 

in a given State and to ensure that 

consumers are protected with a standard 

set of due process rights. 

Comment: Some commenters found 

the interplay between Medicaid and the 

Exchange cumbersome and difficult to 

follow in the proposed rules and 

requested the process be further 

simplified. 

Response: We developed an appeals 

process and standards that closely align 

with Medicaid fair hearing processes in 

hopes of allowing States to leverage 

existing appeals processes and simplify 

implementation. However, alignment 

was not possible in all cases due to 

different statutory requirements and 

operational considerations. In those 

instances, we attempted to provide 

standards that balanced consumer 

protections and process efficiencies. In 

developing the final rule, we have 

worked with the Center for Medicaid 

and CHIP Services (CMCS) to align or 

provide State flexibility where 

appropriate. We encourage States to 

provide questions to CMS about the 

rules and the interaction between 

Exchange and Medicaid appeals, so that 

we may provide further guidance, as 

appropriate. 

Comment: Another comment asked 

that we balance a consumer-friendly 

approach with a process that does not 

impose excessive administrative burden 

on administering agencies. 

Response: As noted above, we 

appreciate the effort and time it takes to 

build and operationalize a new appeals 

process. Where possible, our rules are 

aligned with existing Medicaid fair 

hearing standards to provide Exchange 

appeals entities and consumers a 

consistent, efficient process. In addition, 

we understand that many States will 

leverage existing appeals processes to 

provide Exchange appeals to limit the 

administrative burden and streamline 

processes as they implement Exchange 

appeals processes. Finally, we reiterate 

that Exchange appeals entities will be 

provided flexibility in the first year to 

provide a paper-based appeals process 

in order to complete system builds and 

incorporate modern technology. 

Comment: A few comments 

recommended that the appeals 

standards be specifically aligned with 

the due process protections set forth in 

Goldberg v. Kelly.9 Commenters 

highlighted that Goldberg’s due process 

protections are extended to Medicaid 

beneficiaries and that, because of the 

close alignment and interplay between 

the Exchange and Medicaid programs, 

Exchange appeals should adopt the 

same standards. 

Response: As in the proposed rule, we 

have aligned the majority of our 

Exchange appeals provisions with 

existing or new Medicaid standards. 

Although we do not specifically cite to 

the Goldberg due process standards, the 

final rules provide comprehensive due 

process protections for appellants in the 

tradition of Medicaid fair hearings and 

Goldberg. We have closely analyzed 

specific comments submitted on the 

proposed due process standards and we 

have carefully designed these provisions 

to provide sufficient due process 

protections for appellants throughout 

the process. 

Comment: We received general 

comments recommending that we 

ensure that all notices and appeals 

processes comply with the applicable 


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non-discrimination laws, including 

section 1557 of the Affordable Care Act. 

Response: We note that the all 

Exchange processes, including the 

eligibility appeals processes, are 

required to comply with applicable nondiscrimination laws, including section 

1557 of the Affordable Care Act as 

specified in § 155.120(c). 

Comment: A few commenters sought 

additional guidance on topics that were 

not covered in the proposed rule. For 

example, one sought guidance on 

appealing benefit and service coverage, 

including recourse to a Federal appeals 

process where appropriate. Another 

comment requested strong oversight and 

monitoring of the appeals process. 

Finally, another commenter requested 

training standards on appeals topics for 

consumer assistance entities. 

Response: These comments are 

outside the scope of this final rule and, 

therefore, we decline to address them 

here. 

Comment: One commenter expressed 

general concern over the proposed rule, 

related to the provisions requiring 

coordination between two separate 

programs, Medicaid and the Exchange, 

which are operated by two separate 

agencies. The commenter noted 

instances where the Exchange appeals 

rules appear to differ from what is 

allowed for Medicaid, including the 

reasons an appeal can be dismissed and 

the time to vacate a dismissal, and 

differences in certain timeframes. The 

commenter suggested that after a 

consumer completes the first level of the 

appeals process, the Medicaid and 

Exchange appeals process will diverge, 

regardless of the coordination option 

exercised by the State and that this will 

cause confusion. 

Response: We have addressed 

coordination of the two processes 

throughout the appeals provisions in the 

final rule, including in § 155.510. We 

also encourage States and consumers to 

review the Medicaid rules regarding 

appeals delegation authority at 42 CFR 

431.10, 431.205(b), 431.206(d) and (e), 

431.240. We note that, depending on the 

operational configuration of the 

Exchange, including delegations 

regarding eligibility and the appeals 

process as noted above, the Exchange 

and Medicaid processes may be fully 

integrated, thereby optimizing the 

appellant experience. Even upon 

elevation of an appeal to the HHS 

appeals entity, Medicaid and Exchange 

issues may be reviewed together, 

although State agencies have the option 

to review the HHS appeals entity’s 

application of Federal and State 

Medicaid law pursuant to 42 CFR 

431.10(c)(3)(iii). 

Comment: We received one comment 

suggesting that calendar days should be 

changed to working days for deadlines 

that are less than five days throughout 

the rule. 

Response: The timelines established 

throughout the rule are set in terms of 

calendar days. As a result of 

modifications in this final rule to the 

proposed expedited appeals process in 

§ 155.540, the rule no longer contains 

timeline standards of less than five 

days. 

Comment: Several comments, 

particularly those from the issuer 

community, encouraged HHS to revisit 

timelines associated with the appeals 

process. For example, a few comments 

suggested that providing 90 days to 

request an appeal, 90 days to issue a 

decision, 30 days to elevate a State 

Exchange appeals entity appeal decision 

to the HHS appeals entity, and 45 days 

for Medicaid to render a decision could 

result in a timeline of over 11 months, 

if all timeframes are fully exhausted. We 

were urged to explore alternatives to the 

proposed timeline that might reduce the 

length of the process. 

Response: We anticipate that very few 

appeals will fully exhaust all 

timeframes. Furthermore, we are 

modifying proposed § 155.520 in this 

final rule to provide additional 

flexibility for State Exchanges to adjust 

the timeframe for accepting appeal 

requests, such that States may choose to 

implement a timeframe consistent with 

the State Medicaid agency’s requirement 

for submitting fair hearing requests, 

provided that timeframe is no less than 

30 days. This State option could help 

shorten the overall timeframe for an 

appeal in a State Exchange. We also 

note that although consumers will have 

a specific timeframe in which to request 

an appeal, many will submit appeal 

requests well before the expiration of 

the timeframe. In addition, informal 

resolution processes should assist in 

resolving appeals quickly, before the 90- 

day timeframe to issue an appeal 

decision closes. Finally, many 

appellants may be satisfied with the 

appeal decision made by a State 

Exchange appeals entity and not pursue 

the appeal with the HHS appeals entity. 

Therefore, apart from the modification 

to proposed § 155.520 to provide State 

flexibility for appeal request timeframes, 

we have maintained the majority of the 

other timeframes originally proposed 

and expect most appeals to be resolved 

without fully exhausting the maximum 

possible timeframe. 

Comment: One commenter requested 

that the relationship between the 

inconsistency period described in 

subpart D and appeals be described 

more clearly. 

Response: The inconsistency period is 

an important aspect of the eligibility 

process offering applicants and 

enrollees the opportunity to assist in the 

verification of eligibility information 

before receiving a final eligibility 

determination. Applicants and enrollees 

to whom an inconsistency period 

applies may only appeal upon the 

closure of that period when the 

applicant or enrollee receives a final 

eligibility determination. However, 

because the applicant or enrollee 

provides information directly to the 

Exchange during the inconsistency 

period, we anticipate that this process 

will help alleviate dissatisfaction with 

the final eligibility determination and, 

therefore, will reduce the volume of 

eligibility appeals that would otherwise 

be made, in the absence of an 

inconsistency process. 

Comment: We received a few general 

comments regarding notices. Some 

commenters recommended notices for 

the appeals process be simple, clearly 

written, and shared electronically. We 

also received a comment noting that 

many applicants and enrollees fail to 

report address changes, which increases 

the returned mail rate. The commenter 

recommended finalizing the rule with 

the option for States to eliminate paper 

notices at the consumer’s option. 

Response: Notices must meet the 

standards established in § 155.230. We 

also note that § 155.230(d) specifies that 

electronic notices must be provided at 

the individual’s option but reiterate that 

a paper-based process, as discussed 

above, is acceptable for the first year of 

operations. 

Comment: We received several 

comments recommending that QHP 

issuers should be notified as to the 

status of an appeal at the same time an 

appeal entity sends a notice to an 

Exchange or an individual because an 

issuer will be affected if an enrollee 

enters the appeals process. For example, 

the commenter requested that issuers be 

notified at the time an appeal is 

acknowledged, dismissed, informally 

resolved, and when a decision has been 

made. One comment also specified that 

issuers should not be required to 

respond or otherwise acknowledge 

receipt of the notices, limiting the 

administrative burden on issuers and 

the Exchange. 

Response: We are finalizing the rule 

without providing notice to issuers 

throughout the appeals process. 

Although we acknowledge that issuers 

will be affected by various aspects of the 

appeals process, including whether an 

appellant qualifies for eligibility while 


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an appeal is pending and whether an 

appeal decision provides for retroactive 

enrollment, the communication 

mechanisms already established 

between the Exchange and issuers will 

be sufficient to accommodate issuers’ 

needs for notification. 

Comment: One commenter expressed 

concern that there was minimal 

guidance within the proposed rule 

regarding coordination of modified 

adjusted gross income (MAGI) appeals 

with non-MAGI Medicaid appeals. The 

commenter suggested that HHS should 

require that appeals information 

included in MAGI determination 

notices clearly explain timeframes and 

processes for appealing MAGI decisions 

with respect to an individual whose 

eligibility is concurrently being 

determined, or who subsequently 

wishes to have his or her eligibility 

determined, on the basis of non-MAGI 

criteria for Medicaid eligibility; 

determinations on non-MAGI bases 

should explain the difference between 

appealing a MAGI versus non-MAGI 

eligibility decision, and clarify that only 

a Medicaid agency may hear a nonMAGI appeal. 

Response: The Medicaid eligibility 

contemplated as part of the Exchange 

appeals process is limited to MAGIbased Medicaid eligibility as described 

in § 155.302(b). Non-MAGI Medicaid 

determinations will not be issued by the 

Exchange and, therefore, 

communications regarding those 

determinations will be handled by State 

Medicaid agencies. Exchange eligibility 

determination notices that involve 

eligibility for Medicaid based on MAGI 

will include information about an 

individual’s option to apply for 

Medicaid benefits on a non-MAGI basis, 

including information about eligibility 

under the medically frail category. We 

encourage appeals entities to also 

include this information in appeal 

decisions, where applicable. 

Comment: We received a comment 

requesting clarification that all 

Medicaid appeals can be referred to the 

State for handling according to the 

State’s existing processes, regardless of 

which entity made the eligibility 

determination. Similarly, the 

commenter requested clarification that 

all appeals related to the determination 

of eligibility or amounts of advance 

payments of the premium tax credit or 

cost-sharing reductions could be 

handled by HHS. The commenter 

proposed that the final rule be written 

in a way that allows States to have this 

flexibility and the commenter noted that 

individuals should have the opportunity 

to appeal a determination with the 

entity that ‘‘owns’’ the program in 

question. 

Response: The rules established in 

this final rule, in 45 CFR part 155, 

subpart D, and at 42 CFR 431.10, 

431.206(d) and (e), 431.240, 435.907(h) 

and 457.340(a) provide flexibility for 

States to delegate authority to the 

Exchange to determine Medicaid and 

CHIP eligibility as well as make a 

separate delegation to the Exchange or 

HHS to hear eligibility appeals of those 

determinations. States may choose to 

delegate eligibility determinations and 

appeals to the Exchange or HHS, based 

on an individual State determination. 

Further, we note in response to the 

question above, that appeals of the 

advance payment of the premium tax 

credit and cost-sharing reductions can 

be heard by, or escalated to, the HHS 

appeals entity. 

The foregoing reflects general 

comments we received on the proposed 

rule or that discuss policies that have 

broad implications across the proposed 

appeals rules. Included below is a 

section by section discussion of the 

proposed regulations, and any 

modifications or amendments we are 

making to those proposed regulations in 

this final rule. 

a. Definitions (§ 155.500) 

In § 155.500, we proposed definitions 

for terms used in subpart F of part 155. 

Additionally, we proposed to 

incorporate terms defined in § 155.20 

and § 155.300. The terms we proposed 

to define were ‘‘appeal record,’’ ‘‘appeal 

request,’’ ‘‘appeals entity,’’ ‘‘appellant,’’ 

‘‘de novo review,’’ ‘‘evidentiary 

hearing,’’ and ‘‘vacate.’’ 

Comment: We received several 

comments that broadly supported HHS 

providing definitions for ‘‘appeal 

record,’’ ‘‘appellant,’’ ‘‘de novo review,’’ 

and ‘‘evidentiary hearing.’’ We similarly 

received several comments regarding 

the definition of ‘‘appeal request.’’ Most 

comments indicated approval for the 

inclusion of both oral and written 

expressions to indicate a request to have 

an eligibility determination or 

redetermination reviewed. However, 

one commenter requested that the 

definition of ‘‘appeal request’’ be 

narrowed to only written expressions to 

request an appeal or include oral 

expressions only at State option. 

Response: Defining these terms will 

assist Exchanges and consumers in 

clearly understanding the appeals 

process and standards laid out in 

subpart F. The ability to request an 

appeal orally is a factor that makes 

appeals more accessible to those who 

seek them. Many applicants and 

enrollees may not have easy access to 

computers to submit an electronic 

appeal request or otherwise may not be 

able to submit a written request. In 

addition, it is an important goal of the 

appeals process to provide methods for 

requesting an appeal that mirror the 

methods required for accepting 

Exchange applications, which includes 

both written and telephonic 

submissions. However, we understand 

the concern that accepting oral requests 

for an appeal may be burdensome to 

Exchange appeals entities that do not 

already provide this option as a means 

to appeal other public benefits 

determinations, and we discuss 

additional flexibilities related to this 

requirement for the first year of 

operations in the discussion of 

§ 155.520 in this final rule. We maintain 

the definition for ‘‘appeal request’’ in 

the final rule with both oral and written 

expressions to reflect the variety of 

possibilities for submitting an appeal 

request. 

Comment: We were asked in several 

comments to ensure that all actions that 

can be appealed are included in the 

definitions for ‘‘appeal request’’ and 

‘‘appeal entity.’’ Commenters were 

concerned that the proposed definitions 

were written too narrowly by only 

referencing specific notices rather than 

all actions that are appealable. In 

addition, one commenter recommended 

we also revisit § 155.355 which, similar 

to subpart F’s definitions, specifically 

cites notice provisions rather than 

broadly referring to the actions that are 

appealable. 

Response: In the proposed rule 

definitions for ‘‘appeal request’’ and 

‘‘appeals entity,’’ we referenced 

determinations that are appealable by 

citing to the notices that accompany 

those appealable final determinations. 

We drew the connection to the 

determination notices rather than citing 

directly to the eligibility determinations 

in subparts D and G because the notice 

informs the individual of his or her 

determination, establishes that the 

determination is final, and 

communicates the right to appeal the 

determination. In addition, the original 

eligibility appeals provision in 

§ 155.355 similarly referenced the 

determination notices rather than the 

determination provisions directly. Thus, 

we continue to believe that our 

approach is appropriate, and we are 

finalizing the definitions as proposed in 

this regard. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.500 with the 

following modifications. We modified 

the definition of ‘‘appeal request’’ by 


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removing ‘‘pursuant to future guidance 

on section 1311(d)(4)(H) of the 

Affordable Care Act’’ and replaced it 

with ‘‘§ 155.610(i).’’ This change was 

made to update the reference to 

exemption determinations following the 

publication of the exemptions final rule 

issued on July 1, 2013, codified at 45 

CFR part 155, subpart G. We made a 

similar modification to the definition of 

‘‘appeals entity.’’ We also made a minor 

modification to ‘‘evidentiary hearing’’ 

by removing ‘‘new’’ from the definition 

to clarify the scope of evidence that may 

be presented. 

b. General Eligibility Appeals 

Requirements (§ 155.505) 

In § 155.505, we proposed the general 

standards for eligibility appeals. In 

paragraph (a), we proposed that the 

requirements of subpart F would apply 

to both State Exchange appeals 

processes and the HHS appeals process, 

except where otherwise specified. In 

paragraph (b), we proposed the scope of 

determinations that an applicant or 

enrollee may appeal, including initial 

determinations and redeterminations of 

eligibility made in accordance with 45 

CFR part 155, subpart D; determinations 

for exemptions; or a failure by the 

Exchange to provide timely notice of an 

eligibility determination. Options for 

providing individual eligibility appeals 

processes were proposed in paragraph 

(c). We proposed that appeals may be 

provided by a State that elects to 

provide an appeals process or HHS, if a 

State elects not to provide a process or 

upon exhaustion of a State Exchange 

appeals process. In paragraph (d), we 

proposed standards for entities eligible 

to conduct eligibility appeals. Finally, 

in paragraphs (e) through (g), we 

proposed standards for appellant 

representation in an appeal, 

accessibility requirements for the 

appeals process, and the right to pursue 

judicial review to the extent it is 

available by law. 

Comment: We received comments 

supportive of broadly applying 

consistent appeals standards across 

eligibility appeals processes for the 

individual market, regardless of whether 

the appeals process is conducted by a 

State Exchange appeals entity or the 

HHS appeals entity. 

Response: We are finalizing the 

provisions of paragraph (a) without 

changes from the proposed rule in this 

regard. We intend the State Exchange 

appeals entity and the HHS appeals 

entity to be held to the same standards 

and meet the same requirements except 

where otherwise noted. We believe this 

consistency will provide for a smooth, 

transparent, consumer-friendly process. 

Comment: We received several 

comments that the right to appeal as 

proposed in paragraph (b) is too 

narrowly defined and may limit the 

issues or actions that can be appealed. 

Similar to the comments we received 

about § 155.500 regarding the 

definitions for ‘‘appeal request’’ and 

‘‘appeals entity,’’ some commenters 

expressed concern that, as proposed, 

paragraph (b) does not broadly apply 

appeal rights to all actions taken by the 

Exchange, Medicaid, or CHIP. 

Response: Paragraph (b) details the 

determinations and other circumstances 

that are appealable through the 

eligibility appeals process, including all 

initial determinations and 

redeterminations of eligibility as well as 

failure to take action on the part of the 

Exchange. We are finalizing paragraph 

(b) largely as it was proposed with some 

minor exceptions. In the text of 

paragraph (b), we are removing ‘‘In 

accordance with § 155.355 and future 

guidance on section 1311(d)(4)(H) of the 

Affordable Care Act.’’ We have replaced 

the references to future guidance on 

exemption determinations in paragraphs 

(b)(2) and (3) to refer to the final rules 

published on July 1, 2013, codified at 45 

CFR part 155, subpart G 155.605 and 

155.610(i), respectively. We also added 

new paragraph (b)(4) to clarify that a 

denial of a request to vacate dismissal 

made by a State Exchange appeals entity 

may be appealed. 

Comment: Commenters sought greater 

clarification as to the meaning of a 

‘‘failure by the Exchange to provide 

timely notice of an eligibility 

determination’’ in (b)(3) and, 

specifically, what ‘‘timely’’ means in 

this context. 

Response: The appeal right in 

§ 155.505(b)(3) is based on the 

requirement in § 155.310(g) for 

Exchanges to provide timely written 

notice to an applicant of any eligibility 

determination made in accordance with 

subpart D. Because this provision does 

not define ‘‘timely,’’ we also decline to 

do so in this final rule and are finalizing 

the provision as proposed. 

Comment: A comment requested 

clarification regarding appeals of 

Medicaid determinations through the 

Exchange appeals process. Specifically, 

the commenter questioned whether the 

Exchange appeals process would review 

other components of a Medicaid 

determination beyond the MAGI 

standard. 

Response: The Exchange appeals 

process for eligibility determinations 

does not include review of non-MAGIbased Medicaid eligibility 

determinations. Rather, the scope of the 

Exchange appeals process mirrors the 

scope of the Medicaid eligibility 

determination described in § 155.305(c) 

which is limited to eligibility based on 

MAGI criteria. Non-MAGI-based 

Medicaid eligibility determinations will 

be provided directly by the State 

Medicaid agency, and appeals of these 

eligibility determinations must be 

adjudicated through procedures 

prescribed by the State Medicaid 

agency, not the Exchange appeals 

process. 

Comment: We received many 

comments in general support of the 

flexibility offered to State Exchanges to 

provide an individual eligibility appeals 

process or defer to the HHS appeals 

process. 

Response: Like the commenters, we 

anticipate the opportunity for a ‘‘local’’ 

appeal is beneficial to both the 

Exchange that provided the eligibility 

determination and the appellant, who 

may find it easiest to work directly with 

the Exchange to resolve the issue. We 

are retaining this flexibility in the final 

rule with changes to provide greater 

clarity in response to the comments 

discussed below. 

Comment: Many commenters sought 

clarification regarding paragraph (c)’s 

proposed options and, specifically, 

which appeals processes may be 

delegated to HHS and which must be 

handled by State Exchanges. For 

example, commenters questioned 

whether HHS would review MAGIbased Medicaid and CHIP appeals, 

employer appeals, or SHOP appeals. 

Response: Paragraph (c) provides 

options for individual market eligibility 

appeals. Options for conducting 

employer and SHOP eligibility appeals 

are addressed and discussed in their 

respective sections, § 155.555(b) and 

§ 155.740(b). In terms of individual 

eligibility determinations, we are 

finalizing the rule as proposed, 

providing State Exchanges the option to 

manage an eligibility appeals process 

that would hear appeals prior to the 

HHS appeals process (if an appellant 

elects to proceed to the HHS appeals 

entity), or to delegate the individual 

eligibility appeals function to the HHS 

appeals entity. A State Exchange’s 

appeals process for individual eligibility 

determination would hear appeals of all 

the determinations listed in 

§ 155.505(b)(1)–(3), including Medicaid 

and CHIP eligibility determinations, 

except that a State Exchange appeals 

entity would not hear appeals of 

exemption eligibility determinations 

under § 155.605 and § 155.610(i) if the 

Exchanges elects to delegate exemption 

appeals to the HHS appeals entity 

pursuant to paragraph (c)(2) of this 


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section, as described below. We are 

finalizing § 155.505 with modification. 

Comment: Several commenters sought 

clarification as to whether some 

individual eligibility determination 

appeals could be delegated to HHS. For 

example, a commenter questioned 

whether a State Exchange could opt to 

provide an eligibility appeals process 

for all individual determinations except 

exemption appeals, which would be 

appealed directly to the HHS appeals 

process. Similarly, other commenters 

asked whether a State Exchange with its 

own eligibility appeals process could 

defer questions regarding verification of 

employer-sponsored coverage to the 

HHS appeals process if it is relying on 

HHS to perform verifications of 

employer-sponsored coverage. 

Response: We appreciate the need to 

clarify paragraph (c) with regard to 

which specific individual eligibility 

determinations may be delegated to the 

HHS appeals entity where a State 

Exchange appeals entity is also 

providing some individual eligibility 

appeals. In an efficient appeals process, 

the entity determining eligibility is, 

ideally, also the entity adjudicating an 

appeal of that determination. Therefore, 

we believe that it is more efficient for 

consumers in a State served by a State 

Exchange to appeal exemption 

determinations made by HHS directly to 

HHS, and to permit States to make this 

delegation to the HHS appeals entity. 

We are modifying paragraph (c) to 

provide this option. 

With regard to States choosing to rely 

on HHS to verify enrollment in coverage 

in an eligible employer-sponsored plan 

and eligibility for qualifying coverage in 

an eligible employer-sponsored plan, we 

refer commenters to § 155.320(d), which 

provides standards for this process. We 

note that this option is available for 

eligibility determinations that are 

effective on or after January 1, 2015. 

Because this service will provide 

verification only and not a complete 

eligibility determination, states that 

establish a State Exchange appeals 

process will not be permitted to delegate 

appeals of this verification to the HHS 

appeals entity. The State Exchange 

appeals entity should treat the HHS 

verification as having conclusively 

established the appellant’s enrollment 

in or eligibility for qualifying coverage 

in an eligible employer-sponsored plan 

as a matter of fact; if an appellant 

wishes to contest the HHS verification, 

he or she may do so by escalating the 

appeal. We are finalizing § 155.505(c) as 

proposed in this regard. 

Comment: Some commenters sought 

additional details regarding the HHS 

appeals process, particularly following 

the exhaustion of a State Exchange 

appeal. For example, commenters 

wanted to understand the relationship 

and finality between a decision by a 

State Exchange appeals entity and a 

subsequent decision by the HHS appeals 

entity. This question was of particular 

importance in States where Medicaid 

appellants have additional avenues for 

State judicial review that may only be 

pursued within a specific window of 

time. 

Response: The State Exchange appeals 

entity decision is considered final and 

binding unless the appellant pursues 

the appeal through the HHS process, 

consistent with these final rules. If that 

occurs, the HHS appeals entity will 

review the appellant’s case de novo, as 

specified in § 155.535, and render a new 

decision. The decision of the HHS 

appeals entity is the final administrative 

decision in the matter, and is binding on 

all parties concerned. 

As provided in § 155.505(g) of this 

final rule, appellants may seek judicial 

review to the extent it is available by 

law. We recognize that State law could 

provide for judicial review of State 

Exchange appeals entity decisions even 

where further administrative recourse to 

the HHS appeals entity is available to 

the appellant, and we clarify that 

nothing in this final rule precludes an 

appellant form pursuing any form of 

available judicial review. However, 

regardless of other avenues for obtaining 

review, if an appellant wishes to 

escalate a State Exchange appeals entity 

decision to the HHS appeals entity, the 

appellant must make that appeal request 

to HHS within 30 days of the date of the 

notice of the State Exchange appeals 

entity decision. 

Comment: We received a few 

comments recommending that 

applicants and enrollees should receive 

the same opportunities for initial and 

secondary appeals, regardless of 

whether the Exchange has its own 

appeals process. Another comment 

suggested giving appellants in State 

Exchanges with an eligibility appeals 

process the option to elect pursuing an 

appeal either through the State 

Exchange process or the HHS appeals 

process but not both processes. Finally, 

a commenter requested that appellants 

not be provided with the option to 

appeal to HHS after an SBE appeal and 

that HHS should not be able to override 

an SBE appeal decision. 

Response: We are finalizing 

§ 155.505(c) as proposed, providing 

access to the HHS appeals process to all 

appellants regardless of whether a State 

Exchange, State Partnership Exchange, 

or Federally-facilitated Exchange is 

operating in their State, because section 

1411(f)(1) of the Affordable Care Act 

generally requires that Federal review of 

Exchange individual eligibility 

determinations be available to 

applicants and enrollees. We 

acknowledge that, because of the 

potential for review by a State Exchange 

appeals entity and the HHS appeals 

entity, some appellants will receive two 

levels of review while others will 

receive one; however, we believe all 

appellants, regardless of levels of 

review, will have access to a robust 

appeals process and comprehensive due 

process rights. Therefore, we believe 

§ 155.505(c) provides an appropriate 

level of flexibility for Exchanges and 

appellants while fulfilling the 

requirement of section 1411(f)(1) of the 

Affordable Care Act that Federal review 

of Exchange individual eligibility 

decisions must generally be available to 

applicants and enrollees. 

Comment: One commenter requested 

that paragraph (c)(2) permit States to opt 

out of providing appellants a secondlevel appeal to the HHS appeals entity 

upon a showing that the State Exchange 

appeals entity provides comparable 

measures for administrative or judicial 

review at the State level. The 

commenter highlighted that introducing 

a new Federal level of appeals would 

necessitate changes to States’ 

established review and appeals 

processes to accommodate the Federal 

review and introduce the potential for 

differing decisions at the State and 

Federal level. The commenter suggested 

that, to the extent that States have 

significant numbers of Medicaid-eligible 

individuals whose eligibility 

determinations are made outside of the 

Exchange, the Federal review 

requirement for Medicaid eligibility 

determinations made by the Exchange 

results in inconsistent treatment and 

potential confusion as to which 

procedural rights are available. Finally, 

we also received a comment that 

expressed the belief that HHS will not 

provide administrative review of 

appeals for all types of Exchange 

appeals, specifically Medicaid and CHIP 

determinations. 

Response: First, we clarify that the 

HHS appeals entity may adjudicate 

appeals of all types of eligibility 

determinations, including Medicaid and 

CHIP eligibility determinations where 

the relevant State agency has delegated 

appeals authority to the Exchange. 

Second, we share the concerns that 

State Exchanges have in establishing 

and coordinating Exchange appeals 

processes with existing appeals 

processes. As noted above, we are 

providing Exchanges additional 

flexibility in the first year of operations 


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to complete system builds, develop 

operating protocols, and establish 

secure electronic interfaces that align 

with the requirements of the final rule. 

Moreover, State Exchanges that do not 

wish to operate their own appeals 

process may delegate all individual 

eligibility appeals to the HHS appeals 

entity. In addition, we note that we have 

largely aligned appeals process 

requirements with the existing Medicaid 

fair hearing standards, and we have 

designed this final rule to minimize 

administrative and operational burdens 

to the greatest extent possible. State 

Exchanges are encouraged to leverage 

existing appeals processes and functions 

where possible to ease these burdens. 

However, we are unable to permit State 

Exchanges to opt out of providing 

appellants of individual eligibility 

decisions the opportunity to appeal to 

the HHS appeals entity because section 

1411(f)(1) of the Affordable Care Act 

generally requires that Federal review 

be available to these individuals. 

Therefore, we are finalizing the 

provision as proposed. 

Comment: Commenters questioned 

whether Exchanges would face a cost for 

the appeals conducted by HHS, 

particularly State Exchanges that opt not 

to provide a State Exchange appeals 

process for individual eligibility 

appeals. 

Response: HHS does not intend to 

levy a fee for the costs associated with 

the adjudication of individual eligibility 

appeals from State Exchanges because 

HHS is required by section 1411(f)(1) of 

the Affordable Care Act to provide an 

appeals process. 

Comment: We received several 

comments requesting details on how 

HHS anticipates the escalation process 

from the State Exchange appeals entity 

to the HHS appeals entity will work, 

and what particular information HHS 

may need from a State Exchange in 

order to carry out an individual 

eligibility appeal. 

Response: We appreciate the concerns 

with the operational processes involved 

in adjudicating Exchange appeals and 

will address these technical issues in 

future guidance. 

Comment: We received several 

comments expressing general support 

for the provisions in paragraphs (d) 

through (f). 

Response: We have largely 

maintained these provisions as 

proposed. To the extent we are 

modifying the final provisions, we 

discuss those changes below. 

Comment: We received many 

comments regarding the standards for 

eligible entities under § 155.505(d). 

Foremost, commenters wanted to know 

whether the flexibility offered to States 

Exchanges in paragraph (c) of this 

section to provide a State Exchange 

appeals process included the ability to 

delegate a State Exchange appeals 

process to an entity outside the 

Exchange. Comments in this vein 

included questions about delegation to 

non-governmental entities with CMS 

approval, State Medicaid or CHIP 

agencies, or a State’s central 

administrative hearings office. We also 

received comments supporting the 

prohibition of delegation to entities that 

do not have demonstrated experience in 

making the types of determinations 

subject to appeal. 

Response: The proposed rule did not 

provide direct guidance on the 

Exchange’s ability to delegate the 

appeals function, except to provide that 

an appeals process established under 45 

CFR part 155, subpart D must comply 

with the requirements of 42 CFR 

431.110(c)(2) for Medicaid eligibility 

appeals. However, we are making 

changes to provide greater clarity about 

this issue in the final rule at paragraphs 

(c) and (d) to explicitly allow delegation 

of individual eligibility appeals to an 

eligible entity where specific standards 

are met. 

We are modifying paragraph (c) by 

clarifying paragraph (c)(1) to state that 

the provision is applicable to the ‘‘State 

Exchange appeals entity, or an eligible 

entity described in paragraph (d) of this 

section that is designated by the 

Exchange, if the Exchange establishes an 

appeals process in accordance with the 

requirements of this subpart.’’ In 

paragraph (c)(2), we clarified the ability 

of an Exchange to delegate exemption 

appeals to the HHS appeals entity. Also 

in paragraph (c)(2), we are clarifying 

that appeals may be handled by the 

HHS appeals entity upon exhaustion of 

the State Exchange appeals process, if 

the Exchange has not established an 

appeals process in accordance with the 

requirements, or if the Exchange has 

delegated appeals of exemption 

determinations made by HHS pursuant 

to § 155.625(b) to the HHS appeals 

entity, and the appeal is limited to a 

determination of eligibility for an 

exemption. 

We are modifying paragraph (d) to 

remove references to the Medicaid 

standards and align standards for 

entities eligible to carry out Exchange 

functions under § 155.110(a) because we 

do not want to further limit the ability 

for Exchanges to delegate functions to 

eligible entities. Inclusion of the 

Medicaid standard would prevent 

Exchanges from delegating appeals 

functions to non-governmental entities, 

whereas the Exchange standard that we 

have retained does not include this 

restriction. We think it is in the best 

interest of Exchanges to have this 

flexibility. This means that the entity 

must: (1) Be incorporated under and 

subject to the laws of one or more 

States, including State agencies; (2) 

must have demonstrated experience on 

a State or regional basis in the 

individual and small group health 

insurance markets and in benefits 

coverage; and (3) must not be a health 

insurance issuer, or a member of the 

same controlled group of corporations 

as or under common control with a 

health insurance issuer. We anticipate 

that many State Exchanges will delegate 

the individual eligibility appeals 

function to an eligible entity, such as 

the State Medicaid or CHIP agency or a 

central administrative hearings office 

within the State. An eligible entity may 

be a non-governmental entity. We 

interpret these requirements broadly 

and plan work with states that wish to 

delegate the individual eligibility 

appeals function to ensure that the 

designated entity satisfies these 

requirements. 

Comment: In response to paragraph 

(d), one commenter recommended that 

the rule specify that a State Exchange 

appeals entity can staff hearings with 

contract attorneys or other staff paid on 

a per-case or hourly basis rather than 

full-time Exchange staff. 

Response: We understand that some 

States may currently rely on contracted 

staff to assist with existing appeals 

processes and we acknowledge that 

staffing a new appeals process can be 

difficult when the volume of appeals is 

not yet known. We do not regulate the 

staffing of Exchange appeals entities in 

this final rule but we note that Exchange 

appeals process must meet the same 

standards provided in subpart B of Part 

155 for the establishment of an 

Exchange, including § 155.110 which 

allows the Exchange ‘‘to enter into an 

agreement with an eligible entity to 

carry out one or more responsibilities of 

the Exchange.’’ We are finalizing 

paragraph (d) without changes in this 

regard. 

Comment: We received general 

support for the provisions regarding the 

use of authorized representatives 

proposed in paragraph (e). 

Response: We are modifying the 

provision slightly to provide additional 

clarity. We have retitled the paragraph 

‘‘Representatives’’ and clarified the 

language to state, ‘‘An appellant may 

represent himself or herself, or be 

represented by an authorized 

representative under § 155.227, or by 

legal counsel, a relative, a friend, or 

another spokesperson, during the 


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appeal.’’ The modifications clarify the 

scope of representation and more 

closely parallel Medicaid standards in 

this regard. 

Comment: We received numerous 

comments supporting our accessibility 

standards for individuals with 

disabilities and limited English 

proficiency (LEP) individuals. Many of 

these commenters requested that we 

explicitly include such protections in 

other appeals provisions, apart from our 

specification of these protections in 

§ 155.505(f). Many commenters 

suggested including additional 

accessibility features and protections as 

part of the process. For example, several 

emphasized the need for notices and 

other communications to contain plain 

language for the process to remain 

accessible to appellants with special 

needs. We were encouraged to provide 

clearly written examples of notices and 

seek stakeholder input as materials are 

developed. 

Several commenters requested that 

the appeals process adopt the same 

requirements for accessibility for LEP 

individuals as are provided for 

Exchange programs and consumer 

assistance tools in § 155.205, which 

includes provisions for oral 

interpretation, written translation, and 

taglines. In addition, particular 

accommodations for hearings were 

requested, such as providing 

appropriate augmentative or assistive 

communication devices for individuals 

with disabilities at no cost. 

Response: We appreciate the unique 

and vulnerable position that appellants 

with disabilities and LEP appellants 

face. For that reason, we proposed the 

requirement that all appeals processes 

be accessible to such individuals. We 

are finalizing the rule as proposed 

because the provisions of paragraph (f) 

are sufficient to safeguard against the 

concerns shared by the commenters, 

particularly because it applies to all 

parts of the appeals process. 

Comment: In response to paragraph 

(f), some commenters also requested 

that we ensure that any actions 

undertaken during the appeals process 

that do not comport with the 

accessibility standards must be voided 

and the process cease until cured. 

Similarly, some commenters 

recommended that only where 

meaningful notice has been given (e.g., 

in an LEP individual’s preferred 

language or in an alternative format for 

an individual with a disability who 

cannot read regular print) should the 

notice, or any actions pursuant to it, be 

valid. The commenters viewed this 

approach as comporting with Title VI of 

the Civil Rights Act, the Rehabilitation 

Act of 1973, the Americans with 

Disabilities Act, and section 1557 of the 

Affordable Care Act. 

Response: Individuals with 

disabilities and LEP individuals whose 

distinct needs are not met during the 

appeals process are at risk for suffering 

adverse consequences. The value of an 

appeal is diminished where an 

appellant is unable to fully understand 

or participate in the process because of 

a failure on the part of the appeals entity 

to provide required accommodations. 

However, paragraph (f) and the 

associated statutory provisions noted by 

the commenters provide sufficient 

protection without the need to modify 

paragraph (f). Therefore, we are 

finalizing the provision as proposed. 

Comment: Several commenters 

requested various clarifications to the 

judicial review provision proposed in 

paragraph (g). Many commenters 

focused on clarifying in which court an 

Exchange appellant may seek judicial 

review. Other commenters focused on 

the operational aspects for seeking 

judicial review of an appeal decision by 

the HHS appeals entity. One commenter 

requested the final rules clarify that an 

appellant may either seek judicial 

review or an appeal to the HHS appeals 

entity, but not both. Another commenter 

highlighted the concern that States’ laws 

often provide specific timeframes in 

which an individual may file a State 

judicial action and that these 

timeframes may not match up with the 

timeframe for seeking review of a State 

Exchange appeal decision by the HHS 

appeals entity and receiving an appeal 

decision. The commenter sought further 

clarification on the interaction between 

the State Exchange appeals process, the 

HHS review, and State judicial 

processes including when HHS review 

would commence relative to a State 

judicial review. 

Response: Section 1411(f)(1) of the 

Affordable Care Act generally requires 

that applicants and enrollees be 

afforded the opportunity to access a 

Federal administrative appeals process 

for individual Exchange eligibility 

appeals, without regard to the 

availability of judicial review. 

Accordingly, we are not implementing 

the commenter’s suggestion that review 

by the HHS appeals entity and judicial 

review should be mutually exclusive. 

Additionally, State and Federal law 

regarding judicial review of 

administrative decisions generally 

require the exhaustion of available 

administrative remedies; accordingly, 

we do not expect judicial review of 

individual Exchange eligibility appeal 

decisions generally to be available 

before exhaustion of the administrative 

process, which provides for appeal to 

the HHS appeals entity. We encourage 

the commenters to research applicable 

State and Federal laws regarding 

judicial review of administrative 

decisions to determine under which 

circumstances appellants will have 

access to judicial review. We are 

finalizing the provision as proposed. 

Summary of Regulatory Changes 

We are finalizing the provisions of 

§ 155.505 with modifications to several 

paragraphs. In paragraph § 155.505(a) 

and throughout the provisions of final 

rule, we note that we have replaced 

‘‘State-based’’ with ‘‘State Exchange’’ for 

greater consistency across the Exchange 

rules. In § 155.505(b), we streamlined 

the language by removing ‘‘In 

accordance with § 155.355 and future 

guidance on section 1311(d)(4)(H) of the 

Affordable Care Act.’’ Additionally, we 

edited paragraph (b)(2) to remove ‘‘with 

future guidance on exemptions pursuant 

to section 1311(d)(4)(H) of the 

Affordable Care Act’’ and replaced it 

with a reference to § 155.605. In 

§ 155.505(b)(3), we edited the provision 

to include the additional reference to 

the exemption determination notice by 

inserting, ‘‘or § 155.610(i)’’ at the end of 

the provision. This addition reflects the 

finalization of the exemption rules in 45 

CFR part 155, subpart G. Finally, we are 

adding new paragraph (b)(4) to state that 

‘‘[a] denial of a request to vacate 

dismissal made by a State Exchange 

appeals entity in accordance with 

§ 155.530(d)(2), made pursuant to 

paragraph (c)(2)(i) of this section’’ may 

be appealed. 

We made a minor modification to 

paragraph (c)(1) to provide greater 

clarity that the provision is applicable to 

the ‘‘State Exchange appeals entity, or 

an eligible entity described in paragraph 

(d) of this section that is designated by 

the Exchange, if the Exchange 

establishes an appeals process in 

accordance with the requirements of 

this subpart.’’ We are similarly 

amending paragraph (c)(2) to read ‘‘[t]he 

HHS appeals entity’’ rather than ‘‘HHS.’’ 

In paragraph (c)(2), we specifically 

provided the ability of an Exchange to 

delegate exemption appeals to the HHS 

appeals entity by separating the original 

language into two subparagraphs and 

adding a third subparagraph (c)(2)(iii), 

which reads, ‘‘If the Exchange has 

delegated appeals of exemption 

determinations made by HHS pursuant 

to § 155.625(b) to the HHS appeals 

entity, and the appeal is limited to a 

determination of eligibility for an 

exemption.’’ 

In paragraph (d), we amended the 

requirements that must be met by an 


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entity to be eligible to conduct 

individual eligibility appeals by 

removing reference to Medicaid 

standards at 42 CFR 431.10(c)(2) and 

replacing it with Exchange standards at 

§ 155.110(a). We also streamlined 

paragraph (d) by removing ‘‘the 

requirements of.’’ 

In paragraph (e), we are modifying the 

proposed provision slightly to provide 

additional clarity. We are retitling 

§ 155.505(e) ‘‘Representatives’’ and are 

modifying the provision to state, ‘‘An 

appellant may represent himself or 

herself, or be represented by an 

authorized representative under 

§ 155.227, or by legal counsel, a relative, 

a friend, or another spokesperson, 

during the appeal.’’ We are modifying 

the provision to clarify the scope of 

representation and more fully align with 

Medicaid standards in this regard. 

c. Appeals Coordination (§ 155.510) 

In § 155.510, we proposed 

coordination requirements between the 

Exchange appeals entity and agencies 

administering insurance affordability 

programs in order to minimize burden 

on appellants and ensure prompt 

issuance of appeal decisions. Included 

within this section are proposed 

requirements for agreements between 

the appeals entity or the Exchange and 

agencies administering insurance 

affordability programs regarding appeals 

as well as standards for coordination 

with Medicaid and CHIP appeals, 

including where the relevant State 

agencies have or have not delegated 

Medicaid or CHIP eligibility appeals 

authority to the Exchange appeals 

entity. We sought comment on options 

regarding when to inform the applicant 

or enrollee of his or her right to appeal 

to a denial of Medicaid or CHIP directly 

with the Medicaid or CHIP agency. 

Finally, paragraph (c) of this section 

proposed standards for data exchanges 

as part of the appeals process. 

Comment: Many commenters 

expressed support for paragraph (a), in 

which we proposed to require 

agreements between the Exchange 

appeals entity or the Exchange and 

agencies administering insurance 

affordability programs. Several 

commenters specifically expressed 

support for paragraph (a)(1), in which 

we proposed that the agreements 

minimize the burden on appellants in 

the appeals process. Some commenters 

also shared support for paragraph (a)(2), 

in which we proposed that the 

agreements ensure the prompt issuance 

of appeal decisions. Several commenters 

requested that the agreements be 

available to the public to promote 

accountability and transparency. We 

also received comment requesting that 

HHS make an agreement template 

available for State Exchanges to adopt or 

modify for State-specific circumstances. 

We received one comment 

recommending that the agreement 

explicitly provide for compliance with 

monitoring and reporting requirements 

and the specific information to be 

reported. Finally, we received comment 

on paragraph (a)(3) supporting the 

requirement that agreements comply 

with the Medicaid program’s single 

State agency requirements. 

Response: In the proposed rule, we 

did not specify whether the agreements 

must be public and we are not finalizing 

this provision with any such 

modification. Similarly, in the proposed 

rule, we did not propose to require that 

the agreements include specific 

compliance with monitoring and 

reporting requirements, and we are not 

finalizing the provision with any such 

modification. We anticipate that appeals 

entities or Exchanges may wish to 

include those important issues in the 

agreements. Finally, we do not intend to 

provide a template for the agreements, 

but we may consider providing further 

guidance on this issue at a later date. 

Comment: Some commenters 

requested additional clarification 

regarding the respective roles of 

Medicaid and Exchanges in appeals. 

Response: In both the proposed rule 

and this final rule, CMS has worked to 

ensure that the roles of the Exchange 

and Medicaid in the eligibility appeals 

process are clear throughout the 

Exchange rules and the Medicaid rules. 

We also understand the desire to have 

a simple process for Exchanges to 

implement and appellants to use. We 

have provided the simplest, most 

coordinated options whenever possible. 

Comment: Subparagraph (b)(1) 

proposed that individuals who have 

been denied eligibility for Medicaid or 

CHIP be provided an opportunity to optin to having an appeal of that denial 

heard directly by the Medicaid or CHIP 

agency. We specifically sought comment 

as to when an individual should be 

notified of this option. Some 

commenters responded by endorsing an 

approach where the individual is 

informed at the time the eligibility 

determination is made by the Exchange 

because this option provides greater 

protection for individuals. We also 

received comment that the option for a 

hearing before the State agency could be 

offered during the Exchange appeal 

request. In addition, some commenters 

encouraged us to require that the 

information about opting-in to a hearing 

before the State agency be provided in 

writing. 

Other commenters opposed the option 

entirely and instead supported allowing 

an appellant only one hearing at the 

Exchange. Similarly, a few commenters 

shared their concern that the option to 

appeal a denial of Medicaid, where the 

applicant or enrollee has been 

determined eligible for advance 

payments of the premium tax credit or 

cost-sharing reductions, is inefficient, 

costly, and will cause appellant 

confusion. These commenters requested 

that the provision be struck from the 

rule or that the decision to include the 

option for individuals to opt-in to a 

Medicaid fair hearing be left to the 

States. 

Response: We are required to provide 

applicants and enrollees the option to 

pursue an appeal of a denial of 

eligibility for Medicaid directly with the 

Medicaid agency in accordance with 

section 1902(a)(3) of the Social Security 

Act and 42 CFR 431.10(c)(1)(ii). We note 

that we are modifying the regulation 

text to remove reference to CHIP in this 

provision; the requirement to provide an 

appellant an opportunity to pursue a 

denial of eligibility with the State 

agency is only relevant to Medicaid 

denials. There is no corresponding 

requirement under Federal CHIP laws. 

In order to provide flexibility to 

Exchanges, we have elected not to 

include specific direction as to when 

and how notice of the option to have an 

appeal of a denial of Medicaid eligibility 

heard by the State agency must be 

provided to appellants, though we note 

that the notice, like Exchange notices 

generally, must comport with § 155.230. 

We are finalizing the rule with the 

modification discussed above and also 

note that this provision has been 

relocated to § 155.510(b)(1)(ii). 

Comment: We also received 

comments regarding how the opt-in 

policy should be operationalized. One 

commenter urged us to ensure that 

individuals who pursue an appeal of a 

denial of Medicaid eligibility with the 

Medicaid agency also have the option to 

request that the Medicaid hearing occur 

first to prevent any delays in coverage. 

Response: We are finalizing the rule 

as proposed, continuing to provide 

flexibility for an Exchange to determine 

how to operationalize the requirement 

to make a hearing before the State 

agency available to appellants appealing 

a denial of Medicaid eligibility. 

Exchanges and appeals entities may 

contact us for assistance in this area, as 

required. 

Comment: We received several 

comments about delegation of appeals 

authority. Some commenters expressed 

support for both the flexibility offered to 

States to delegate Medicaid and CHIP 


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appeals to the Exchange, thereby 

allowing States to offer one coordinated 

appeals process across all insurance 

affordability programs, as well as the 

option for State Medicaid and CHIP 

agencies to retain fair hearings at the 

State agency. We were asked to clarify 

that the delegation of appeals authority 

by a Medicaid or CHIP agency is 

separate from the delegation to 

determine Medicaid and CHIP 

eligibility. We were also asked to 

provide information on timeframes and 

information transfers where Medicaid 

and CHIP eligibility appeals authority is 

delegated, and where it is not. Some 

commenters also sought clarification as 

to how the proposed delegation 

provisions impact existing agreements 

of State Medicaid and CHIP agencies, 

including interagency agreements and 

vendor contracts. 

Response: State Medicaid and CHIP 

agencies have the flexibility to delegate 

authority to make eligibility decisions 

and, separately, to conduct eligibility 

appeals. The authority to delegate 

eligibility determinations is located in 

42 CFR 431.10(c)(1)(i) and § 457.1120 

for Medicaid and CHIP, respectively, 

and the authority to delegate eligibility 

appeals is located in 42 CFR 

431.10(c)(1)(ii) and § 457.1120, 

respectively. We anticipate that many 

States may have an interest in 

delegating these two functions in 

tandem; however, we also acknowledge 

that States may wish to retain the 

appeals functions at the relevant State 

agency. More information on 

delegations by the Medicaid and CHIP 

agency can be found in the final rule 

published July 5, 2013 (78 FR 42160). 

We are not providing additional 

guidance in this rule with regard to 

timeframes and data exchanges in the 

delegation context beyond what we 

have already addressed in this subpart 

in order to preserve flexibility for 

Exchanges in these areas. We also note 

that the provisions we are finalizing in 

§ 155.510 do not speak to existing 

agreements between State Medicaid and 

CHIP agencies. 

Comment: A few commenters shared 

support for the acknowledgement 

provided in paragraph (b)(2) that, even 

in cases where the Medicaid or CHIP 

agency has delegated appeals authority 

to the Exchange, the appellant may still 

opt to have a denial of Medicaid or 

CHIP eligibility heard by the Medicaid 

or CHIP agency. We also received 

comment expressing support for the 

requirement that where the Medicaid or 

CHIP agency has delegated appeals 

authority to the Exchange, the Exchange 

will issue a final, binding appeal 

decision, including regarding Medicaid 

or CHIP eligibility. Finally, one 

commenter questioned the use of ‘‘may’’ 

in subparagraph (b)(2), under which 

Exchange appeals entities may include 

in the appeal decision a determination 

of Medicaid and CHIP eligibility under 

specified conditions. 

Response: We appreciate the support 

the delegation provisions in paragraph 

(b)(2) received. We also agree that the 

use of ‘‘may’’ in the proposed provision 

was incorrect, and we are replacing that 

word with ‘‘must’’ in this final rule. In 

addition, we are restructuring 

§ 155.510(b) in this final rule to 

emphasize that the Exchange appeals 

entity will conduct delegated Medicaid 

and CHIP appeals in accordance with 

standards applicable to Medicaid and 

CHIP. 

Comment: We received support for 

the proposed provision in subparagraph 

(b)(2)(ii) proposing that notices required 

in connection with an eligibility 

determination for Medicaid or CHIP 

provided by the Exchange appeals entity 

align with the standards identified in 

subparts D and F, and by the State 

Medicaid or CHIP agency. 

Response: Maintaining the notice 

standards established by Medicaid and 

CHIP agencies is important when 

communicating with appellants about 

Medicaid or CHIP determinations. 

Therefore, we are finalizing this 

provision with minor clarifying 

modifications described below. As 

noted above, the provisions of 

§ 155.510(b) have also been 

restructured, and this provision is now 

located in clause (b)(1)(i)(B). 

Comment: In response to the 

proposed provisions of paragraph (b)(3), 

one commenter recommended a minor 

change to include reference to 

transmitting all ‘‘relevant information’’ 

as part of the ‘‘initial application’’ and 

appeal. The commenter also suggested 

the inclusion of a timeframe for 

transmitting the information. 

Response: We are finalizing the 

provision to provide that the appeals 

entity must transmit the eligibility 

determination and ‘‘all relevant 

information provided as part of the 

initial application or appeal, if 

applicable.’’ We decline to provide a 

more specific timeframe to preserve 

necessary administrative flexibility for 

Exchanges and appeals entities, and we 

anticipate that the Exchange and 

appeals entity will act in good faith to 

transmit such information promptly and 

without undue delay. As noted above, 

the provisions of § 155.510(b) have also 

been restructured, and this provision is 

now located in paragraph (b)(2). 

Comment: We received many 

comments regarding paragraph (b)(4). A 

handful of commenters endorsed the 

proposed provision considering it 

efficient to treat an appellant 

determined or assessed as not 

potentially eligible for Medicaid or 

CHIP to be considered ineligible for 

those programs for purposes of 

determining eligibility for advance 

payments of the premium tax credit. 

We also received many comments 

urging HHS to reconsider this provision, 

as well as the treatment of an appeal of 

an eligibility determination for advance 

payments of the premium tax credit as 

an appeal of the eligibility 

determination for Medicaid and CHIP. 

Some commenters noted that many 

appellants may only be concerned with 

the tax credit, with no interest in or 

connection to Medicaid; these 

commenters feared that this linking of 

tax credits and Medicaid could create a 

burden on States to process appeals for 

individuals who clearly may not be 

eligible for Medicaid or may have been 

satisfied with the Medicaid eligibility 

determination. Some commenters 

suggested that the rules require the 

Exchange to offer the opportunity to file 

an appeal of any Medicaid denial, 

which would be less confusing to 

consumers. A few commenters 

suggested that, if this is not feasible, the 

requirement to treat an appeal of the 

denial of an eligibility determination for 

advance payments of the premium tax 

credit as an appeal of eligibility for 

Medicaid and CHIP should be delayed 

until Jan. 1, 2015. Some commenters felt 

strongly that this ‘‘automatic appeal’’ 

will cause agencies to expend 

significant resources to process appeals 

that are neither intended nor desired by 

the appellant. 

Response: We are finalizing paragraph 

(b)(4) as paragraph (b)(3) as part of the 

restructuring of § 155.510(b). While we 

acknowledge the commenters’ concerns 

regarding the pairing of Medicaid and 

CHIP appeals with appeals concerning 

advance payments of the premium tax 

credit, our goal is to provide a 

streamlined, coordinated appeals 

process for appellants, while 

minimizing the administrative burden 

on the Exchange, appeals entity, and 

State Medicaid and CHIP agencies. We 

believe our approach accomplishes this 

goal and we are finalizing the provision 

as proposed. 

Comment: We received one comment 

regarding the standards for data 

exchange proposed in paragraph (c). 

The commenter was supportive of 

paragraph (c) serving as a goal for 

modernizing appeals processes through 

the use of electronic interfaces but 

expressed concern that the appeals 

systems would not be sufficiently 


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developed to accommodate electronic 

interfaces upon initial open enrollment. 

The commenter recommended a 

phased-in approach to establishing a 

secure electronic interface between the 

Exchange, Exchange appeals entities, 

and other insurance affordability 

programs. 

Response: We understand that many 

Exchange appeals entities may lack the 

system functionality for secure 

electronic data exchanges in current 

system builds for the first year of 

operations. Instead, Exchange appeals 

entities may utilize a secure, paperbased process for exchanging data and 

information that conforms to 

information privacy and security 

standards incorporated in 

§ 155.510(c)(1) for the first year of 

operation. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.510 with the 

following modifications. In 

§ 155.510(a)(3), we deleted ‘‘42 CFR 

431.10(d)’’ and added two new 

subparagraphs, (a)(3)(i) and (ii). New 

subparagraph (a)(3)(i) refers to Medicaid 

standards for delegating appeals 

authority to the Exchange or HHS, 

stating, ‘‘42 CFR 431.10(d), if the State 

Medicaid agency delegates authority to 

hear fair hearings under § 431.10(c)(ii) 

to the Exchange appeals entity.’’ New 

subparagraph (a)(3)(ii) refers to CHIP 

standards for delegating appeals 

authority to the Exchange or HHS, 

stating, ‘‘42 CFR 457.348(b), if the State 

CHIP agency delegates authority to 

review appeals under § 457.1120 to the 

Exchange appeals entity.’’ 

We restructured § 155.510(b) and 

made minor modifications throughout. 

We have moved the requirements 

formerly in (b)(2), with minor changes 

to (b)(1), which now contains two 

subparagraphs. Thus, § 155.510(b)(1) 

and (b)(1)(i) provide, ‘‘Where the 

Medicaid or CHIP agency has delegated 

appeals authority to the Exchange 

appeals entity consistent with 42 CFR 

431.10(c)(1)(ii) or § 457.1120, and the 

Exchange appeals entity has accepted 

such delegation—[t]he Exchange 

appeals entity will conduct the appeal 

in accordance with’’ the standards 

identified in new clauses (A) and (B), 

namely, ‘‘Medicaid and CHIP MAGIbased income standards and standards 

for citizenship and immigration status, 

in accordance with the eligibility and 

verification rules and procedures, 

consistent with 42 CFR parts 435 and 

457’’ and ‘‘Notice standards identified 

in this subpart, subpart D, and by the 

State Medicaid or CHIP agency, 

consistent with applicable law .’’ We 

have moved the opt-in provision 

previously located in § 155.510(b)(1) to 

§ 155.510(b)(1)(ii), and we have made a 

minor modification to remove 

references to CHIP, as the opt-in policy 

does not apply to denials of CHIP 

eligibility. We also clarified ‘‘the 

appellant’’ as ‘‘the appellant who has 

been determined ineligible for 

Medicaid’’ and we have added 

‘‘eligibility’’ before ‘‘determination.’’ 

We are finalizing proposed 

§ 155.510(b)(3), with modification, at 

§ 155.510(b)(2). In this paragraph, we 

are replacing ‘‘appeal’’ with ‘‘initial 

application or appeal, if applicable’’ and 

we are adding the word ‘‘relevant’’ 

before ‘‘information.’’ We are finalizing 

proposed § 155.510(b)(4) at 

§ 155.510(b)(3) without modification. 

Finally, in § 155.510(c)(1), we updated 

the citation from § 155.345(h) to 

§ 155.345(i) to accurately reference the 

current location of the relevant data 

exchange requirements. 

d. Notice of Appeal Procedures 

(§ 155.515) 

In § 155.515, we proposed standards 

for providing notice of appeal 

procedures at both the time of 

application and in the eligibility 

determination notice. This section also 

proposed the content of that notice. 

Comment: Many commenters showed 

support for the notice of appeal 

procedures provisions in § 155.515. We 

received several comments requesting a 

modification to paragraph (a) to require 

that the notice of appeal rights be 

provided in writing. 

Response: In the proposed rule, we 

did not explicitly state that the notice of 

appeals procedures must be provided in 

writing; however, the requirement in 

paragraph (a) states that the appeals 

language appear within specific 

eligibility notices, including eligibility 

determination notices, redetermination 

notices as a result of a mid-year change 

or annual redetermination, and 

exemption determination notices. The 

notice provisions specified in paragraph 

(a) specifically require the notice to be 

written, and § 155.230(a) generally 

requires that any notice sent by an 

Exchange to applicants, qualified 

individuals, enrollees, and others must 

be written. Therefore, it is not necessary 

for § 155.515(a) to reiterate the 

requirement that the notice of appeals 

procedures be provided in writing. 

Comment: Regarding paragraph (b), 

one commenter sought clarification 

regarding the meaning of paragraph 

(b)(5), in which we proposed to require 

the notice of appeals procedures to 

contain an explanation that an appeal 

decision may result in redetermination 

for other household members. Another 

commenter requested the language 

provide more certainty regarding 

whether or not an appeal would result 

in a redetermination for other 

household members. 

Response: During an appeal, 

appellants have the opportunity to 

submit information to be considered by 

the appeals entity. In addition, the 

appeals entity will reexamine the 

information used to make the eligibility 

determination. In some cases, the 

appeals entity will find the eligibility 

determination was incorrect or that 

information, newly supplied by the 

appellant, will result in a change to the 

original determination. Such changes, 

particularly those that impact 

household income information, may 

require an eligibility redetermination for 

all household members whose own 

eligibility was determined by reference 

to the changed information. The 

requirement in paragraph (b)(5) is 

intended to alert individuals that an 

eligibility appeal by one household 

member may impact the eligibility of 

other household members. We agree 

with the commenter that the language 

used in paragraph (b)(5) calls for greater 

clarity regarding whether other 

household members’ eligibility will be 

redetermined as a result of a change in 

an eligibility determination as a result of 

an appeal by one household member. 

Therefore, we are finalizing this 

provision with minor modification to 

clarify that an appeal decision for one 

household member may result in a 

change in eligibility for other household 

members and such changes will be 

handled as a redetermination of 

eligibility for all household members in 

accordance with the standards specified 

in § 155.305. 

Comment: We received comments 

requesting information as to how 

§ 155.515 interacts with the general 

standards for Exchange notices found in 

§ 155.230 and whether the notices 

specified in part 155 subpart F would 

include the content required by 

§ 155.230. 

Response: Section 155.515 provides 

specific requirements regarding when 

notice of appeal rights and procedures 

must be provided to individuals and 

what content that notice must include. 

Section 155.230 provides general 

standards for Exchange notices, which 

includes the notices described in 

subpart F. Thus, notices under subpart 

F must meet the requirements of 

§ 155.230, such as providing contract 

information for customer service 

resources, identifying the regulation 

supporting the action, and conforming 

to accessibility standards. 


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However, we note that the notice 

under § 155.515 does not necessarily 

require a free-standing notice. The 

requirements of § 155.515 may be met 

by providing the required content 

(notice of appeal rights and procedures) 

within another notice. For example, the 

notice of appeal rights and procedures 

may be included within the eligibility 

determination notice and does not need 

to be issued in a separate notice. The 

requirements of § 155.230 are applicable 

to any notice in which the content 

required by § 155.515 (notice of appeal 

rights and procedures) is included. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.515 of the proposed 

rule with the following modifications. 

We are making a minor modification to 

paragraph (a)(2) to include reference to 

the exemption eligibility determination 

notice under § 155.610(i). We are 

modifying paragraph (b)(5) to make the 

provision mandatory rather than 

permissive. We have replaced ‘‘may be 

handled’’ with ‘‘will be handled’’ to 

clarify that the notice of appeal 

procedures must contain an explanation 

that an appeal decision for one 

household member may result in a 

change in eligibility for other household 

members and such a change will be 

handled as a redetermination. We also 

added ‘‘that such a change’’ and ‘‘of 

eligibility for all household members’’ 

to the provision. 

e. Appeal Requests (§ 155.520) 

In § 155.520, we proposed the modes 

through which the Exchange and 

appeals entity must accept appeal 

requests, including requests submitted 

by telephone, by mail, in-person (as 

applicable), and via the internet. 

Additionally, we proposed the 

Exchange and appeals entity must allow 

an applicant or enrollee to request an 

appeal within 90 days of the date of the 

eligibility determination notice or 30 

days from the date of a State Exchange 

appeals entity’s notice of appeal 

decision. We further proposed the 

requirement to issue a notice 

acknowledging the receipt of a valid 

appeal request and requirements to 

obtain and transmit information 

concerning the appeal upon receipt of 

an appeals request, and confirm receipt 

of this information. Finally, we 

proposed that appellants must be 

notified of invalid appeal requests and 

may submit amended appeal requests. 

Comment: Many commenters 

expressed broad support for the 

flexibilities we proposed § 155.520 to 

allow appellants several methods to 

request an appeal. However, many 

States commented with concern that 

accommodating all of the appeal request 

modes would be burdensome and 

require significant administrative 

updates to systems and staffing levels. 

Telephonic appeal requests were 

highlighted as particularly problematic. 

Many States’ Medicaid agencies are not 

currently set up to accept telephonic 

appeal requests and, therefore, do not 

have the sophisticated voicemail 

systems, record keeping protocols, and 

staff training to accommodate 

telephonic appeal requests. Similarly, 

commenters viewed requesting an 

appeal via the Internet as another mode 

that would require significant systems 

development to ensure appeal requests 

and supporting documentation are 

captured and transmitted properly. We 

also received many comments seeking 

an expansion of the modes allowed to 

request an appeal to include via email, 

fax, text, and other commonly available 

electronic means. 

Several commenters expressed 

concern over the implementation of the 

proposed appeal request modes and 

supported allowing additional time for 

Exchange appeals entities to implement 

these provisions. For example, one 

comment suggested that accepting 

appeal requests via internet in the initial 

year will create a large burden on 

Exchange appeals entities because 

system builds and testing schedules are 

already tight. Some commenters 

encouraged us to consider 

implementing the appeal request 

methods under a delayed timeframe or, 

alternatively, eliminating the 

requirement from the rule altogether. 

Response: The proposed rule 

proposed to require an Exchange and 

appeals entity to accept appeal requests 

through a variety of modes in an effort 

to match the avenues through which an 

application for Exchange coverage can 

be submitted. The modes include via 

telephone, mail, in person (as 

applicable), or via the Internet. In 

addition, the proposed rule proposed to 

offer flexibility for Exchange appeals 

entities to provide an in-person route to 

request an appeal only if the Exchange 

or the appeals entity were capable of 

receiving in-person requests, assuming 

that some Exchanges and appeals 

entities might not have a wide 

geographic physical presence. We note 

that the rules of subpart F do not apply 

to Medicaid agencies, except insofar as 

a State may delegate Exchange appeals 

to a State Medicaid agency. We are 

finalizing this provision as proposed but 

reiterate that a paper-based process, as 

discussed above, is acceptable for the 

first year of operations. All other appeal 

request modes may be provided at the 

Exchange appeals entity’s option until 

the second year of operations. 

Comment: We received comments 

requesting that the rule include the 

requirement that Exchanges must accept 

requests for appeals in languages other 

than English. It was noted that without 

such a requirement, Exchanges may 

create a barrier to filing an appeal that 

would result in discrimination. 

Response: As noted above, we 

consider the provisions for accessibility 

in § 155.505(f) to be sufficient protection 

to LEP individuals and individuals with 

disabilities. We intend for Exchanges 

and appeals entities to make 

accommodations for these individuals 

so that the appeals process is accessible 

to all applicants and enrollees. 

Although we are not altering the 

provisions of § 155.520 in this regard, 

we note that appellants to the HHS 

appeals process will be able to submit 

appeal requests in languages other than 

English. Finally, we note that we have 

made a minor modification to paragraph 

(a)(2), changing ‘‘may’’ to ‘‘must’’ to 

require the Exchange and the appeals 

entity to assist the applicant or enrollee 

in making the appeal request, ‘‘if 

requested,’’ as an extra protection for 

applicants and enrollees who may 

require assistance. 

Comment: Many commenters 

provided general support for the 90-day 

timeline to request an appeal. However, 

other commenters also shared 

significant concern about the timing and 

sequencing of appeal requests and 

decisions and the potential length of the 

appeals process. For example, some 

commenters expressed concern that 

Medicaid and Exchanges have different 

timelines for requesting an appeal. 

Specifically, certain State Medicaid 

Agencies have shorter time periods 

during which an individual can submit 

an appeal request, whereas the 

Exchange proposes a 90-day timeframe. 

A few commenters recommended 

limiting the amount of time to request 

an appeal to 30 days. Other commenters 

noted a 90-day request period could 

leave some appellants who have been 

denied eligibility without coverage for 

several months, if the appeal originates 

in a State Exchange appeals process and 

escalates through the HHS appeals 

process. 

Response: We are finalizing the 

provision in paragraph (b) with a 

modification regarding the 90-day 

timeframe. We understand that State 

Medicaid and CHIP agencies may elect 

to set timeframes for requesting an 

appeal shorter than 90 days and that a 

State may want to leverage existing 

appeals processes and infrastructure 

within the State to provide Exchange 


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eligibility appeals or otherwise align 

Exchange and Medicaid appeal 

processes. Therefore, we are modifying 

the provision to provide a choice: the 

Exchange and appeals entity must either 

allow an applicant or enrollee to request 

an appeal within 90 days or within a 

timeframe consistent with the State 

Medicaid agency’s requirement for 

submitting fair hearing requests, 

provided that the timeframe is no less 

than 30 days, measured from the date of 

the notice of eligibility determination. If 

a State agency delegates appeals 

authority to HHS, HHS will provide an 

applicant or enrollee with 90 days to 

request an appeal, in accordance with 

the proposed timeframe. 

Comment: Many commenters 

expressed support for the proposed 

provision in § 155.520(c). However, we 

also received support for a longer 

timeframe for elevating an appeal 

decision of a State Exchange appeals 

entity to the HHS appeals entity. 

Suggested timeframes range from 60 

days to 90 days (the latter in order to 

keep the timeframe uniform with the 

initial appeal request). 

Response: We are finalizing the 

provision in § 155.520(c) as proposed 

without extending the timeframe to 

request an appeal before the HHS 

appeals entity following exhaustion of 

the State Exchange appeals process. We 

consider 30 days to be a fair balance 

between providing the appellant 

sufficient time to determine whether to 

elevate his or her appeal and avoiding 

delay of the resolution of the appeal, 

and implementation of the appeal 

decision. 

Comment: We also received comment 

noting that the proposed rule is silent 

about the interaction of State law and 

the timeline for escalating an appeal 

decision of a State Exchange appeals 

entity to the HHS appeals entity. For 

example, some States currently provide 

an opportunity for administrative or 

judicial reconsideration of a State 

administrative hearing decision but only 

within a specific timeframe, and it was 

not clear in the proposed rule how this 

timeframe might interact with the 

timeframe for elevating an appeal to the 

HHS process. 

Response: We are aware that State law 

may provide appellants additional 

avenues for review, beyond escalating 

their appeal to the HHS appeals entity 

as provided in this final rule, including 

the opportunity to request further State 

administrative or judicial review. Such 

alternative for State-level review follow 

State-specific timeframes and rules, 

which makes it challenging to provide 

a Federal process (as generally required 

for individual Exchange eligibility 

appeals by section 1411(f)(1) of the 

Affordable Care Act) that will 

seamlessly integrate with all States’ 

existing rules and procedures. 

Recognizing the regulatory limitations 

in this area, the procedure for escalating 

of an appeal to the HHS appeals entity 

does not preclude an appellant from 

seeking other avenues for review that 

may be available under State law. 

However, appellants should be mindful 

of the 30-day timeframe for escalating a 

State Exchange appeals entity decision 

to the HHS appeals entity, as this period 

will not be stayed while an appellant 

pursues alternative State law avenues 

for review. If the appellant does request 

an appeal with HHS, the HHS appeals 

entity will review the appellant’s case 

de novo, as specified in § 155.535(f), and 

render a new decision that will 

constitute the final administrative 

decision. 

Comment: We received a few 

comments regarding the use of ‘‘timely’’ 

and ‘‘prompt’’ in several proposed 

provisions, with some commenters 

suggesting the substitution of a specific 

timeframe, such as two business days, 

with the expectation that relevant action 

would be taken sooner, if possible. 

Response: We understand the benefits 

specific timeframes can provide for 

appeals entities, including providing a 

clear window during which actions 

should be completed to provide 

appropriate protections for appellant 

rights. However, we also anticipate that 

appeals entities may require flexibility 

in some cases due to operational 

considerations. The Exchange rules 

sometimes provide timing requirements 

that allow a reasonable amount of 

flexibility, such as ‘‘promptly,’’ 

‘‘without undue delay,’’ and ‘‘timely’’ 

for many transactions that occur 

between administering agencies. The 

transactions that are required in 

§ 155.520 between appeals entities, 

Exchanges, insurance affordability 

programs, and HHS can benefit from a 

reasonable degree of flexibility, and 

therefore, we are finalizing the 

provisions as proposed in this regard 

and note that this is applicable to 

similar requirements in the employer 

and SHOP appeals sections below. 

Comment: A few commenters noted 

that implementing the requirement to 

provide a notice acknowledging the 

receipt of an appeal request creates 

administrative burden and expense. One 

comment viewed the acknowledgement 

notice as duplicative of the notice of 

hearing found in § 155.535(b), which the 

commenter thought acted sufficiently as 

an acknowledgement of receipt. We 

received comment that electronic appeal 

requests should provide confirmation of 

receipt automatically and, if the 

individual prefers to request an appeal 

in writing, he or she should send the 

request by certified mail with a return 

receipt requested as a means to confirm 

the receipt of the request. 

Response: The notices required by the 

rule, including the appeal request 

acknowledgment notice, communicate 

important information to the appellant 

that a certified mail return receipt 

cannot provide. First, the 

acknowledgment confirms that the 

appeal has been accepted and not 

dismissed. Second, it informs the 

appellant of his or her qualification for 

eligibility while the appeal is pending. 

Third, the notice reiterates that any 

advance payments of the premium tax 

credit accepted while an appeal is 

pending are subject to reconciliation. 

Additionally, appeals entities may wish 

to include other information about the 

appeals process or frequently asked 

questions to assist the appellant with 

the process. We disagree with the 

assertion that the acknowledgement 

notice duplicates § 155.535(b)’s notice 

of hearing because, while State 

Exchanges have the option to provide an 

informal resolution process, prehearing, we anticipate that most appeals 

entities will implement such a process 

in order to resolve appeals as efficiently 

and expeditiously as possible. Only 

those appellants who remain 

dissatisfied with the informal resolution 

outcome will then receive the notice of 

hearing; accordingly, the 

acknowledgement of appeal requests is 

not duplicative of the notice of hearing. 

We are finalizing the provision as 

proposed in this regard. 

Comment: We received comment 

questioning the utility of providing a 

transcript, recording, or summary of the 

State Exchange appeal under paragraph 

(d)(4) when the HHS appeals entity will 

be reviewing the appeal de novo. 

Response: We note that paragraph 

(d)(4) requires the transmission of the 

appeal record to the HHS appeals entity 

when an appellant elevates his or her 

appeal from a State Exchange appeals 

entity. The appeal record, as defined in 

§ 155.500, includes information beyond 

the transcript of the State Exchange 

appeals entity hearing. We include this 

requirement to lessen the burden on an 

appellant who is elevating his or her 

appeal to provide duplicative 

information, consistent with § 155.510. 

In addition, the transmission will 

include the information used to make 

the appellant’s initial eligibility 

determination, which the HHS appeals 

entity otherwise would not possess. 

Finally, the transmission of the State 

Exchange appeals entity’s appeal 


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decision and record will include 

evidence presented during the appeal, 

including at hearing. Therefore, we are 

finalizing the provision as proposed in 

this regard. 

Comment: We received comments 

supportive of the proposed provision 

that an applicant or enrollee may cure 

an invalid appeal request. In addition, 

several commenters requested that the 

proposed requirement in paragraph 

(d)(2)(i) regarding the written notice of 

the ‘‘invalid’’ appeal request inform the 

applicant or enrollee that he or she can 

cure the defect and resubmit the appeal 

again as long as the new appeal request 

meets the timeliness requirement in this 

section. 

Response: In addition to protecting 

applicants’ and enrollees’ due process 

rights, the ability for an applicant or 

enrollee to cure an invalid appeal 

request within the 90-day timeframe 

will decrease dismissals and, 

subsequently, requests to vacate 

dismissals, which in turn should lessen 

the burden on appeals entities overall. 

To that end, we agree that the notice 

informing an individual that he or she 

submitted an invalid appeal request 

should also include an explanation that 

he or she may cure the defect and 

resubmit the request within the 

appropriate timeframe. We anticipate 

that the more informed an individual is 

of the appeals process and of the next 

steps applicable to him or her, the less 

time and resources the appeals entity 

will spend per appeal. We are 

modifying the proposed provision to 

include the requirement that the 

applicant or enrollee be informed that 

he or she can cure the defect and 

resubmit the appeal request within the 

applicable timeframe. 

We note that we view this provision 

as a tool to clearly define for appeals 

entities how to handle appeal requests 

that are out of scope, untimely, or 

submitted improperly. We clarify the 

intent of this provision is to address 

these instances and provide a method 

for an individual to resubmit the request 

or, if resubmission is not possible 

because the amended appeal request 

would be untimely, a method to request 

the appeals entity review the dismissal 

of the appeal request. The provision is 

not intended to prevent or limit the 

acceptance of appeal requests for minor 

technical deficiencies, such as an appeal 

request that is missing a phone number 

or does not state why the individual is 

appealing with exacting precision. We 

intend that only more fundamental 

deficiencies should make an appeal 

request invalid, such as where an 

applicant is seeking to appeal a coverage 

claim rather than an eligibility 

determination. 

Comment: We received one comment 

regarding the interaction of the 

acknowledgement of appeal request, the 

ability to cure an invalid appeal request, 

and the dismissal of an invalid appeal. 

The commenter found the provisions to 

be contradictory and suggested that they 

can only be reconciled if there is a time 

limit upon the right to amend an invalid 

appeal request under § 155.520(d)(2)(ii). 

Absent such a deadline, the commenter 

thought an appeals entity that issued a 

notice of a defective appeal request will 

not know when it can comply with its 

obligation to dismiss the appeal for 

being invalid under § 155.530(a)(3) 

without violating its obligation to allow 

an appellant to cure a defective appeal 

request. The commenter suggested that 

HHS either permit the appeals entity to 

impose a reasonable deadline for 

amendment or establish a uniform 

deadline of 15 days after service of 

notice under § 155.520(d)(2)(i). 

Response: The proposed rule 

proposed to require that the appeals 

entity accept an amended appeal 

request only if the amended request met 

‘‘the requirements of this section 

[155.520],’’ including the timing 

requirements in § 155.520(b) or (c), as 

applicable. However, we agree with the 

commenter that an invalid appeal 

request submitted toward the end of the 

90-day appeal request timeframe would 

pose a timing issue in terms of 

informing the individual that he or she 

may cure the defect and dismissing the 

appeal because it does not comport with 

the requirements of a valid appeal 

request. We have revised 

§ 155.520(d)(2)(i)(C) to provide appeals 

entities the flexibility to impose a 

reasonable deadline for amending 

appeal requests. 

Comment: We received comment 

requesting that we clarify which data 

elements and date ranges encompass an 

‘‘eligibility record’’ as described in 

paragraph (d)(3)(ii). 

Response: The eligibility record is 

critical in the adjudication of an appeal 

because it will contain the information 

the appeals entity will need to make an 

accurate appeal decision. We are 

finalizing the definition of ‘‘appeal 

record’’ in § 155.500, and we refer the 

commenter to that definition. 

Comment: The proposed regulations 

establish a requirement that an 

Exchange must transmit the appeal 

record and eligibility record via secure 

electronic interface. However, one 

commenter noted that some Exchanges 

and Medicaid agencies will share a 

single, electronic eligibility system; 

therefore, there is nothing to transmit as 

both entities have access to the single 

system that holds all the relevant 

information. The commenter requested 

that the final language be amended to 

recognize integrated State systems. 

Response: We recognize that States 

may take advantage of the flexibility we 

are providing to structure interactions 

between the agencies administering the 

Exchange and the State Medicaid 

program in different ways. Moreover, 

we recognize that State agencies 

administering the Exchange and the 

State Medicaid program will be 

operating with various information 

technology systems, and some States 

may feature an integrated system that 

serves both the Exchange and Medicaid 

(such as where the same agency 

administers the Exchange and the State 

Medicaid program). However, even 

where this integration exists, it is 

critical that the components responsible 

for eligibility determinations and 

appeals communicate and are granted 

access to the appropriate information. 

Therefore, we decline to modify the 

proposed rule, although we clarify that 

transmission of information is not 

necessary when both the eligibility 

entity and the appeals entity share 

access to systems that store the relevant 

information. 

Comment: A commenter inquired 

whether HHS plans to require State 

Exchange appeals entities to transmit 

the appeal record to HHS exclusively 

through the Hub? 

Response: We will work closely with 

State Exchange appeals entities to 

establish a secure, efficient mechanism 

for exchanging data. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.520 of the proposed 

rule with the following modifications. 

Regarding paragraph (a), we are 

modifying the provision by changing the 

‘‘or’’ preceding § 155.520(a)(1)(v) to 

‘‘and,’’ and the permissive ‘‘[m]ay’’ to 

‘‘[m]ust’’ in § 155.520(a)(2). 

In § 155.520(b), we are adding a new 

provision to allow State Exchanges to 

provide a timeframe for requesting an 

appeal consistent with the State 

Medicaid agency’s requirements for 

submitting a fair hearing request. 

Specifically, we are adding a new 

paragraph at (b)(2) stating that the 

Exchange and the appeals entity must 

allow an applicant or enrollee to request 

an appeal within, ‘‘[a] timeframe 

consistent with the State Medicaid 

agency’s requirement for submitting fair 

hearing requests, provided that 

timeframe is no less than 30 days, 

measured from the date of the notice of 

eligibility determination.’’ In paragraph 


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(c), we are adding language to provide 

that an appeal may be requested at the 

HHS appeals entity within 30 days of 

the date of a State Exchange appeals 

entity’s notice of appeal decision ‘‘or 

notice of denial to vacate a dismissal.’’ 

In paragraph (d)(1), we are amending 

the provision by inserting ‘‘must’’ 

preceding subparagraph (d)(1)(i), and 

removing the word from subparagraphs 

(d)(1)(i) and (d)(1)(ii). In subparagraph 

(d)(2)(i), we added clauses to more 

clearly explain what is required of the 

appeals entity when it receives an 

invalid appeal request. We placed the 

requirement to inform the appellant that 

his or her appeal request has not been 

accepted, which was proposed in the 

proposed rule, in clause (d)(2)(i)(A). 

Similarly, we placed the requirement to 

inform the appellant about the nature of 

the defect in the appeal request, which 

was proposed in the proposed rule, in 

clause (d)(2)(i)(B). Finally, we added 

clause (d)(2)(i)(C) to include a new 

requirement that the appeals entity 

include an explanation ‘‘[t]hat the 

applicant or enrollee may cure the 

defect and resubmit the appeal request 

by the date determined under paragraph 

(b) or (c) of this section, as applicable, 

or within a reasonable timeframe 

established by the appeals entity.’’ This 

new provision addresses situations in 

which an appellant submits an invalid 

appeal request near the end of the 

timeframe to request an appeal, which 

would pose a timing issue in terms of 

providing the individual with an 

opportunity to cure the defect, and 

provides Exchange appeals entities the 

flexibility to impose a reasonable 

deadline for amending appeal requests. 

f. Eligibility Pending Appeal (§ 155.525) 

In § 155.525, we proposed the 

standards by which certain appellants 

may receive benefits while an appeal is 

pending. We proposed that the 

Exchange, or Medicaid or CHIP, as 

applicable, must continue to consider 

an individual eligible if he or she is 

appealing a redetermination, consistent 

with the standards proposed in 

§ 155.525 or as determined by the 

Medicaid or CHIP agency, as applicable. 

Regarding eligibility for enrollment in a 

QHP through the Exchange, advance 

payments of the premium tax credit, 

and cost-sharing reductions, we 

proposed that an appellant or tax payer 

who accepted eligibility pending appeal 

should be pended eligibility in 

accordance with the level of eligibility 

in effect immediately before the 

redetermination being appealed. 

Comment: Several commenters 

expressed support for the provisions 

providing eligibility pending appeal. 

Although a few commenters thought it 

would be advantageous for new 

applicants to receive eligibility pending 

appeal, especially if the applicant 

receives eligibility during the 

inconsistency period, these commenters 

also noted the justifications for not 

doing so. Specifically, these 

commenters highlighted the difference 

between pending benefits for those 

completely new to coverage as opposed 

to those who had been enrolled and 

were redetermined ineligible; for 

example, enrollees have an existing 

relationship with an issuer and can be 

pended in the coverage they already 

receive while new applicants must 

being a relationship with an issuer and 

newly enroll in coverage to obtain 

pended benefits. These commenters also 

thought it should be made clear that, 

after the inconsistency period has 

ended, the applicant’s eligibility will be 

determined, and the applicant will be 

eligible to receive the determined level 

of eligibility while an appeal is pending. 

For example, if an applicant entered an 

inconsistency period after submitting an 

application to the Exchange and, during 

that inconsistency period, was 

determined eligible for advance 

payments of the premium tax credit, 

these commenters thought we should 

clarify that this individual would 

qualify for eligibility pending appeal if 

the individual appealed his or her 

eligibility determination. 

Response: We are finalizing the 

provision as proposed. Because new 

applicants who receive an eligibility 

determination notice under § 155.310(g) 

that they are eligible for enrollment in 

a QHP through the Exchange, advance 

payments of the premium tax credit, 

cost-sharing reductions, or Medicaid or 

CHIP, may remain in coverage while 

they appeal that determination, it is not 

necessary to provide these individuals 

with eligibility pending appeal. In 

accordance with our proposed policy, 

we will not extend pended eligibility to 

new applicants who are denied 

eligibility, either outright upon initial 

application or at the close of an 

inconsistency period. It is not a 

common practice to provide pended 

benefits to new applicants who are not 

currently receiving benefits and we 

model that policy in our final rule. 

Comment: A few commenters 

requested that appellants be explicitly 

informed of the potential for 

reconciliation of advance payments of 

the premium tax credit when accepting 

eligibility pending appeal and that 

pended eligibility may be waived. One 

commenter suggested that confirmation 

that the appellant understands the 

potential tax liability associated with 

benefits pending appeal be part of the 

initial appeal request. Finally, we 

received comment that pended benefits 

should be an elected option, not an 

automatic benefit. Therefore, in the 

example, the individual could opt to 

appeal without receiving eligibility 

while the appeal is pending. 

Response: We share the concerns of 

commenters regarding the choices 

appellants must make regarding pended 

benefits. We noted in the proposed 

rule’s preamble at 78 FR 4651 that 

subpart D’s § 155.310(d)(2) states that 

the Exchange must permit an individual 

to accept less than the maximum 

advance payment of the premium tax 

credit for which the tax filer is 

determined eligible; this includes 

accepting none of the advance payment 

of the premium tax credit. We also 

noted that receipt of advance payments 

of the premium tax credit are subject to 

reconciliation. To illustrate using the 

example from the previous commentresponse: If the individual receives 

advance payments of the premium tax 

credit while the appeal is pending, 

those payments would be subject to IRS 

reconciliation after the close of the tax 

year, and the individual could be liable 

to repay tax credits received on an 

advance basis for which the IRS 

determines the individual was not 

eligible (the individual could also 

receive a tax refund if the IRS 

determines that he or she was eligible 

for a larger premium tax credit). 

We agree that the proposed regulation 

language did not state that receipt of 

pended eligibility is at the option of the 

appellant and are modifying the text of 

§ 155.525(b) in the final rule to require 

that pended eligibility must be 

continued only if the tax filer or 

appellant accepts eligibility pending the 

appeal. Our intent is to ensure that 

appellants receive the choice to accept 

pended eligibility and that the Exchange 

does not pend eligibility that will 

include advance payments of the 

premium tax credit unless the tax filer 

affirmatively elects to receive them 

during the appeal. We agree that tax 

filers must be notified that receipt of 

advance payments of the premium tax 

credit is subject to reconciliation; 

however, we decline to add specific 

language to § 155.525 because informing 

individuals of this information is 

already required by § 155.310(d)(2)(ii). 

Comment: A few commenters noted 

the proposed provision’s relationship 

with Medicaid and CHIP. Commenters 

noted a discrepancy between Medicaid 

and Exchange pended eligibility rules in 

that, unlike Medicaid, the Exchange 

does not limit pended eligibility to 

those appellants who request it within 


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10 days of an appealable action. In 

Medicaid, an appeal must be requested 

within 10 days of the action, and 

benefits continue until the end of the 

10-day period to ensure there is no 

break in coverage if a beneficiary 

requests an appeal during the 10-day 

period. Under the Exchange provision, 

the decision to terminate advance 

payments of the premium tax credit and 

cost-sharing reductions could have been 

effectuated by the time the individual 

requests an appeal. We also received 

comment questioning why Medicaid 

and CHIP are referenced in the proposed 

provision when the provision applies to 

annual or mid-year redeterminations 

conducted by Exchanges; the 

commenter noted that once an 

individual is determined eligible for 

Medicaid, the Medicaid agency will 

control the case and conduct 

redeterminations. Finally, one 

commenter sought clarification of the 

pended eligibility policy where a 

redetermination is initiated in 

Medicaid, which results in a Medicaid 

denial, and then the account is 

transferred to the Exchange for an 

eligibility determination, which also 

results in a denial. The commenter 

questioned which benefits the appellant 

would receive while the appeal is 

pending. The commenter expressed 

concern that the State would not have 

a mechanism to audit and verify when 

Exchange appeals are completed if the 

appellant is supposed to receive 

Medicaid benefits while the appeal is 

pending. 

Response: We have coordinated the 

Exchange appeals provisions with the 

Medicaid fair hearing rules whenever 

possible. However, we determined that 

it would be in the best interest of 

appellants to provide a pended benefits 

policy that does not incorporate a 

window in which an appellant must 

request pended benefits that is shorter 

than the overall timeframe for 

requesting an appeal. Therefore, we 

offer pended benefits on appeal of a 

redetermination, regardless of when the 

appellant requests the appeal within the 

90-day appeal request timeframe and we 

are finalizing the provision as proposed 

in this regard. We included reference to 

Medicaid and CHIP because our rules 

provide flexibility for States to choose to 

fully integrate Exchange and Medicaid 

and CHIP operations, and we wanted to 

highlight that, in such situations, 

Medicaid and CHIP-specific rules must 

still be followed where applicable. 

We appreciate the comment seeking 

greater clarity on the approach for 

handling pended benefits when a 

redetermination of Medicaid eligibility 

results in a denial and the transfer of the 

account to the Exchange, where 

eligibility to purchase a QHP through 

the Exchange and/or for advance 

payments of the premium tax credit and 

cost-sharing reductions is also denied. 

This comment highlights the 

intersection of the Exchange and 

Medicaid rules. In a situation where a 

Medicaid recipient is ineligible for 

Medicaid upon redetermination, the 

individual is afforded appeal rights with 

the State Medicaid agency and the State 

Medicaid agency’s rules for pended 

eligibility apply. When the State 

Medicaid agency transfers the 

individual’s account to the Exchange to 

determine eligibility for enrollment in a 

QHP through the Exchange, advance 

payments of the premium tax credit, 

and cost-sharing reductions, the 

Exchange must determine the 

individual’s eligibility as an initial 

application. If the individual is 

determined ineligible to participate in 

the Exchange or for Exchange insurance 

affordability programs, the individual is 

generally afforded appeal rights through 

the Exchange. However, the individual 

would not be eligible for pended 

benefits from the Exchange, as initial 

applicants to the Exchange are not 

eligible for pended benefits during 

appeal. We understand that not all 

States will delegate authority for 

Medicaid and CHIP eligibility 

determinations and appeals similarly 

and, therefore, States may have a variety 

of questions about how the intersection 

of Exchange and Medicaid and CHIP 

appeals policies impacts their specific 

State arrangement. We encourage States 

to contact us so that we can address 

questions as they relate to each State’s 

delegation choices. 

Comment: One commenter noted that, 

depending on how the pended 

eligibility provisions are administered, 

individuals might be permitted to 

migrate between different QHPs during 

an appeal, or in and out of Medicaid or 

CHIP coverage, which would not be in 

the best interest of individuals and 

might serve to undermine the goal of the 

provision. The commenter expressed 

concern that this could lead to an 

appellant experiencing discontinuity of 

coverage and could create 

administrative challenges for any the 

issuers involved. The commenter urged 

HHS to consider placing additional 

parameters around the provisions of 

§ 155.525 to avoid unnecessary 

discontinuities in coverage. 

Response: Receiving eligibility while 

an appeal is pending does not provide 

an individual with an unchecked ability 

to enroll in new coverage or make 

changes to existing coverage. 

Enrollment is regulated by the 

provisions of subpart E. 

Comment: Many of the comments we 

received regarding pended eligibility 

during an appeal related to how such a 

benefit would be implemented. 

Commenters expressed concern for the 

operational aspects of the proposed 

provision. For example, we received a 

comment recommending that pended 

benefits should not be implemented 

until after the appellant has paid his or 

her portion of the coverage premium, 

including any retroactive payments for 

pended eligibility in cases where an 

appellant’s pended eligibility is not 

immediately implemented at the time of 

the appeal request and must be 

retroactively implemented; for example, 

where there is some delay because the 

tax filer must decide whether to accept 

pended eligibility that includes advance 

payments of the premium tax credit. 

Similarly, a commenter questioned how 

non-payment of premiums affects 

pended eligibility and recommended 

that QHP issuers be allowed to proceed 

with a non-payment termination 

regardless of an individual’s pended 

status. 

Response: Pended eligibility is a 

status that we intend for the Exchange, 

or Medicaid or CHIP, as applicable, to 

implement when the appeals entity 

indicates the appellant qualifies for it 

and the appellant or tax filer, as 

applicable, has accepted it. However, for 

an appellant who is pended eligibility to 

receive coverage, the appellant must 

enroll in coverage and pay premiums, as 

would any other enrollee. Consequently, 

if an individual receives pended 

eligibility, enrolls in coverage, but fails 

to pay premiums, the issuer may 

terminate coverage as provided in 

§ 155.430(b)(2)(ii). 

Comment: We received one comment 

expressing concern that the timing and 

sequencing of pended eligibility will 

lead to applicants and enrollees with 

overlapping program eligibility, such as 

simultaneous eligibility for Medicaid 

and for Exchange insurance affordability 

programs, which will result in 

confusion about payment 

responsibilities. The commenter 

requested that HHS issue guidance 

about how costs and payment of 

services will be handled when 

overlapping program eligibility occurs. 

Response: We do not share the 

commenter’s concern that pended 

eligibility will lead to overlapping 

program eligibility. Individuals can 

never qualify for Medicaid and advance 

payments of the premium tax credit or 

cost-sharing reductions simultaneously. 

Section 155.305(f)(1)(ii)(B) establishes 

that advance payments of the premium 


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tax credit and cost-sharing reductions 

are not available to support the 

purchase of coverage for an individual 

who is eligible for other minimum 

essential coverage, with the exception of 

coverage in the individual market in 

accordance with section 26 CFR 1.36B– 

2(a)(2) and (c), or coverage in an 

eligible-employer sponsored plan that is 

unaffordable or does not meet the 

minimum value standard. Therefore, 

advance payments of the premium tax 

credit and cost-sharing reductions 

would not be provided to support the 

purchase of coverage for an individual 

enrolled in Medicaid, including while 

his or her Medicaid fair hearing is 

pending. We are confident that, 

regardless of the particular coordination 

arrangement for the Exchange and 

Medicaid in a State, there are sufficient 

requirements to prevent overlapping 

eligibility. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.525 of the proposed 

rule with the following modifications. 

In § 155.525(b), we are adding, ‘‘If the 

tax filer or appellant, as applicable, 

accepts eligibility pending an appeal,’’ 

to indicate that pended eligibility must 

be afforded only if the tax filer or 

appellant accepts eligibility pending the 

appeal. 

g. Dismissals (§ 155.530) 

In § 155.530, we proposed the 

circumstances under which an appeals 

entity must dismiss an appeal, 

including when the appellant 

withdraws the appeal request in writing, 

fails to appear at a scheduled hearing, 

fails to submit a valid appeal request, or 

dies while the appeal is pending. We 

also proposed the content for dismissal 

notices provided to the appellant and to 

the Exchange, or Medicaid or CHIP 

agency, as applicable. Finally, we 

proposed the appeals entity may vacate 

a dismissal if an appellant submits a 

written request to vacate the dismissal 

within 30 days of the date of the 

dismissal notice and shows good cause. 

Comment: We received general 

support for the provisions of § 155.530. 

Several commenters noted the proposed 

provisions provide crucial protections 

against inappropriate dismissals. We 

also received comments noting that the 

Exchange appeals provisions provide 

more reasons to dismiss an appeal than 

the current Medicaid rules and the 

commenter recommended that the two 

rules be reconciled. 

Response: We are making only minor 

modifications to the proposed rule, in 

response to the comments below. 

Comment: We received comments 

requesting additional protections from 

dismissals for all appellants as well as 

appellants with special needs. For 

example, before allowing a dismissal as 

a result of a withdrawal or failure to 

appear, some commenters suggested 

that the appeals entity should confirm 

that necessary information was 

provided to the appellant in a language 

he or she understands. Several 

commenters also suggested that for an 

appellant who has indicated that 

English is not his or her preferred 

language, the appeals entity must 

document in the appellant’s record what 

appropriate language services were 

provided before permitting the 

dismissal of such an appellant’s appeal. 

Similarly, we received one comment 

that no appellant should be allowed to 

withdraw his or her appeal without 

proof that the appellant was provided 

information about his or her rights in 

the appeals process. Finally, a 

commenter requested that no dismissals 

for failure to appear be allowed unless 

an appellant is first provided notice and 

a hearing to address the dismissal. 

Response: As noted above, we 

received many comments requesting 

that provisions providing special 

accommodations for limited English 

proficient (LEP) and disabled 

individuals be included in various 

provisions in subpart F in part 155. We 

appreciate the difficulties individuals 

with special needs face during an 

administrative process. We are 

modifying paragraph (a)(2) by adding 

‘‘without good cause’’ to the end of the 

provision requiring an appeal be 

dismissed if the appellant fails to appear 

at hearing in order to provide additional 

protection to appellants who have a 

compelling reason for missing a 

scheduled hearing. We also believe the 

requirements of § 155.505(f) provide 

sufficient protection to such individuals 

throughout the appeals process. Section 

155.505(f) requires the appeals process 

comply with the accessibility 

requirements of § 155.205(c). Section 

155.205(c) requires information be 

provided in plain language and in a 

manner that is accessible and timely to 

individuals with disabilities, including 

accessible Web sites and the provision 

of auxiliary aids and services in 

accordance with the Americans with 

Disabilities Act and section 504 of the 

Rehabilitation Act, and individuals who 

are limited English proficient, including 

oral interpretations, written translations, 

an taglines in non-English languages. 

We are finalizing the provisions of this 

section with modification as noted 

above. 

Similarly, we are not modifying the 

dismissal process to require proof that 

the appellant was provided information 

about his or her rights in the appeals 

process or to require that appellants be 

permitted a hearing to address 

dismissals. The rule already provides 

for notice of appeal rights and 

procedures per § 155.515, which 

requirement is sufficient for this 

purpose. In addition, appellants will be 

notified of the dismissal of their appeal, 

which notice must contain specific 

information about the reason for the 

dismissal as well as information about 

the process to vacate a dismissal. 

Therefore, we anticipate that the 

appellant will receive adequate 

information from the appeals entity and 

can also seek assistance from the 

appropriate customer service center or 

legal counsel. Given the required notice 

and opportunities for additional 

assistance, counsel, and vacating the 

dismissal, the protective measures we 

have provided for appellants whose 

appeals are dismissed are adequate. 

Comment: Commenters supplied 

several recommendations for 

modification for paragraph (b). One 

comment recommended that the notice 

of dismissal not have to be in writing to 

ease the burden on appeals entities 

while ensuring that notice is provided. 

Alternatively, we received several 

comments that the notice should be in 

writing and understandable by LEP and 

disabled individuals. Another 

commenter focused on the content of 

the notice and requested that we amend 

paragraph (b)(3) to state that the 

explanation of the dismissal should 

include examples of any pertinent 

materials related to the individual’s case 

that would assist the applicant in 

proving good cause for vacating a 

dismissal. 

Response: We agree with the 

comment that notice of dismissal should 

be provided in writing because the 

dismissal of an appeal is a significant 

action of which an appellant should 

have record that he or she can easily 

reference, if needed. Appellants, 

particularly those who have special 

needs or may have limited 

understanding of administrative 

proceedings, will benefit from having a 

hard copy or electronic notice that 

shows the date of the dismissal, the 

reason, and an explanation of how he or 

she may request the dismissal be 

vacated. Therefore, we are finalizing the 

provision with a corresponding 

modification to require written notice. 

However, we are not requiring that 

dismissal notices provide examples of 

materials that might assist the appellant 

in requesting to vacate the dismissal. 


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Appeals entities may independently opt 

to provide additional information as a 

customer service function. 

Comment: We received several 

comments requesting that we clarify the 

meaning of ‘‘timely notice’’ as used in 

the proposed provisions of § 155.530. 

Response: We are confident that the 

requirement that the dismissal notice be 

‘‘timely’’ will help ensure that 

appellants’ due process rights are not 

compromised. We note that ‘‘timely 

notice’’ is used throughout the Exchange 

provisions and in many public benefit 

programs; therefore, we anticipate that 

Exchanges are prepared to establish 

operating rules that implement 

appropriate timeliness requirements 

across the Exchange functions to ensure 

compliance. We are finalizing the 

provision as proposed in this regard, 

without providing specific timeframes 

for the dismissal notice, in order to 

leave appeals entities the flexibility to 

operationalize these requirements in the 

way that works best for them and the 

appellants they serve, but we note that 

we are modifying paragraph (c)(2), by 

adding ‘‘if applicable’’ to the provision 

to discontinue eligibility pending an 

appeal in the case of a dismissal. 

Comment: We received several 

comments regarding the timeline we 

proposed for an appellant to request that 

a dismissal be vacated. A few 

commenters suggested that the proposed 

timeframe is too short, particularly for 

individuals who seek such a remedy 

where they may be incapacitated or 

otherwise justified in receiving more 

time. One commenter recommended the 

provision be modified to allow 90 days 

to make the request to vacate. 

Alternatively, we received one comment 

that 10 days is sufficient to request that 

a dismissal be vacated. The commenter 

noted that a shorter timeframe promotes 

efficient disposition of cases and will 

help to shorten the overall timeline for 

appeals. 

Response: We share the concern that 

the appeals process not be unnecessarily 

prolonged, which could create 

unintended coverage issues for 

appellants and be burdensome on 

administering agencies. To extend this 

window of time to the suggested 90 days 

would prolong the appeals process 

excessively; 30 days is sufficient for an 

appellant to provide the appeals entity 

a written request demonstrating good 

cause to vacate the dismissal of an 

appeal. Therefore, we are finalizing the 

timeframe in paragraph (d) as proposed. 

Comment: Commenters provided 

several suggestions regarding technical 

aspects of vacating dismissals. We 

received comment suggesting that 

vacating dismissals should be 

mandatory if the appellant makes a 

timely request and shows good cause. In 

addition, one commenter questioned the 

use of ‘‘may’’ in paragraph (d) and urged 

HHS to use ‘‘shall,’’ suggesting that, if 

good cause is shown, there is no reason 

to not vacate the dismissal. Finally, a 

commenter noted that the proposed rule 

did not include an opportunity to 

oppose the showing of good cause. 

Response: We agree that the 

permissive language used in the 

proposed provision should be replaced 

with mandatory language. If an 

appellant successfully demonstrates 

good cause for vacating a dismissal 

within the appropriate timeframe, the 

appeals entity must vacate the 

dismissal. However, we are not 

modifying the provision to provide an 

opportunity for an adverse party to 

oppose the showing of good cause by an 

appellant. A request to vacate a 

dismissal is not intended to be an 

adversarial process, but simply an 

opportunity to ensure that the appellant 

receives due process. If the appeals 

entity determines that the appellant has 

not shown good cause why the 

dismissal should be vacated, the appeals 

entity will not reinstate the appeal. We 

are finalizing paragraph (d) with a 

minor modification in this regard at 

paragraph (d)(1). We also note we are 

adding a new provision at 

§ 155.530(d)(2) which states the appeals 

entity must ‘‘provide timely written 

notice of the denial of a request to 

vacate a dismissal to the appellant.’’ 

Comment: We received one comment 

requesting clarification as to how a 

request to vacate a dismissal with a 

State Exchange appeals entity impacts 

the timeline for appealing an adverse 

decision from the State Exchange 

appeals entity to the HHS appeals 

entity. 

Response: Sections 155.505(c)(2) 

provides that an appellant may escalate 

an appeal to the HHS appeals entity 

upon exhaustion of the State Exchange 

appeals process. A refusal by the State 

Exchange appeals entity to reinstate a 

dismissed appeal constitutes exhaustion 

of the State Exchange appeals process; 

accordingly, an appellant may escalate 

his or her appeal to the HHS appeals 

entity upon such a refusal. We are 

modifying the final rule to specifically 

permit this by adding § 155.505(b)(4), as 

noted above. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.530 of the proposed 

rule with the following modifications. 

We are modifying paragraph (a)(2) to 

align more closely with Medicaid fair 

hearing rules by adding ‘‘without good 

cause’’ to the end of the provision 

requiring that appeals be dismissed if 

the appellant fails to appear at a 

scheduled hearing. In paragraph (b), we 

are inserting ‘‘written’’ into the 

provision to clarify that notice of 

dismissal to the appellant must be 

provided in writing. In paragraph (c)(2), 

we are amending the paragraph about by 

adding ‘‘if applicable’’ to the provision 

requiring instructions about 

discontinuing eligibility pending appeal 

in the case of a dismissal. In paragraph 

(d), we are replacing ‘‘may’’ with 

‘‘must’’ to indicate that the appeals 

entity is required to vacate a dismissal 

if the appellant makes a written request 

within 30 days of the date of the notice 

of dismissal showing good cause why 

the dismissal should be vacated, as 

determined by the appeals entity. We 

are also splitting § 155.530(d) into two 

subsections, (d)(1) and (2). Section 

155.530(d)(1) codifies the requirement 

just described, § 155.530(d)(2) requires 

that the appeals entity must ‘‘[p]rovide 

timely written notice of the denial of a 

request to vacate a dismissal to the 

appellant, if the request is denied.’’ This 

new requirement facilitates providing 

appellants from State Exchange appeals 

entities notice that they may elevate the 

dismissal of their appeals to the HHS 

appeals entity for review as stated in 

§ 155.505(b)(4). 

h. Informal Resolution and Hearing 

Requirements (§ 155.535) 

In § 155.535, we proposed informal 

resolution and hearing requirements for 

adjudicating individual eligibility 

appeals. We proposed that informal 

resolution will be offered to appellants 

in the HHS appeals process, and may be 

offered to appellants in a State Exchange 

appeals process. We proposed standards 

for the provision of an informal 

resolution process in § 155.535(a). In 

§ 155.535(b), we proposed that, when a 

hearing is scheduled, the appeals entity 

must send written notice to the 

appellant no later than 15 days prior to 

the date of the hearing. In paragraph (c), 

we proposed requirements for 

conducting hearings and in paragraph 

(d) we proposed the procedural rights 

afforded to an appellant in connection 

with the hearing. We proposed, in 

paragraph (e), that the appeals entity 

must consider the information used to 

determine the appellant’s eligibility and 

any relevant evidence presented during 

the course of the appeal, including at 

the hearing. Finally, in paragraph (f), we 

proposed that the appeals entity must 

review appeals de novo. 

Comment: We received a variety of 

comments supporting the provision of 

an informal resolution process. We also 


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received many comments submitting 

questions or requesting modification to 

the proposed provision for the informal 

resolution process. For example, we 

received comment questioning whether 

State Exchanges will have control or 

input on how to conduct the informal 

resolution process within a State 

Exchange. 

Response: We note that States do have 

flexibility to implement an informal 

resolution process in the way that best 

fits each State’s needs, to the extent the 

process meets the standards provided in 

this final rule and in any future 

guidance. States with questions about 

the implementation of an informal 

resolution process may contact CMS for 

technical guidance. 

Comment: We also received a 

comment requesting that we ensure that 

agencies are bound to follow a 

determination made through the 

informal resolution process, and 

particularly those that reverse a 

determination made by that agency. 

Another commenter thought the 

informal resolution decision should 

only be final and binding if the 

appellant agrees to it. We were also 

encouraged to reiterate in regulation 

that the appellant’s right to a hearing is 

preserved regardless of participation in, 

or the outcome of, an informal 

resolution process. 

Response: We appreciate the 

comment that informal resolution 

decisions must be final and binding on 

the Exchange and agencies 

administering insurance affordability 

programs; this was our intent in the 

proposed rule. We included language to 

this effect in the proposed rule in 

§ 155.535(a)(4), which we are finalizing 

without modification. We also note that 

the proposed rule included in 

§ 155.535(a)(2) the requirement that the 

appellant may advance to hearing if he 

or she is dissatisfied with the informal 

resolution decision. We believe the 

appellant is in the best position to 

determine whether further review after 

the informal resolution is appropriate. 

Comment: Several commenters also 

requested clarification that the informal 

resolution process does not cause the 

applicant to lose any rights to timely 

request a separate Medicaid fair hearing. 

Response: As discussed in § 155.510 

and in 42 CFR 431.10(c)(ii), where an 

individual has both Medicaid and 

Exchange appeal rights, the individual 

will be presented the option to pursue 

an appeal of a denial of Medicaid 

eligibility directly with the Medicaid 

agency. (We note an exception that, 

where States delegate Medicaid appeals 

to the Exchange through an 

Intergovernmental Cooperation Act 

process, Federal law does not require 

that the appellant be provided an option 

to pursue his or her appeal of the denial 

of Medicaid eligibility directly with the 

State agency.) If the individual does opt 

to pursue two separate appeals 

(Medicaid eligibility before the relevant 

agency, and all other aspects of the 

appeal before the Exchange), we are 

maintaining flexibility in this final rule 

for States to determine how best to 

sequence the appeals. 

Comment: A commenter found 

paragraph (a)(4) confusing and 

questioned whether failure to appear is 

the same thing as an appeal that does 

not advance to hearing. 

Response: We note the provision in 

§ 155.530 that allows dismissal for 

failure to appear is intended to address 

situations in which the appellant fails to 

appear at a scheduled hearing without 

good cause. An appellant who accepts 

an informal resolution decision and 

does not wish to pursue the appeal 

through to the hearing stage is not 

required to request a hearing and will 

not be subject to this ground for 

dismissal. 

Comment: Commenters provided 

several thoughts about the timeframe of 

the informal resolution process. One 

commenter requested modification to 

the rule to indicate that informal 

resolution may not consume the entire 

90-day period under proposed 

§ 155.545(b)(1) . Another commenter 

suggested that the 90-day appeal period 

does not provide sufficient time to 

conduct a comprehensive informal 

process while ensuring the appellant’s 

right to a formal hearing. The 

commenter suggested that a minimum 

of 60 days to conduct an adequate 

informal resolution process and 

requested that we extend the overall 

timeframe for an appeal to conclude 

within 120 days. 

Response: The 90-day timeframe 

provided to resolve an appeal is 

intended to encompass both the time 

spent on both informal resolution and a 

hearing, as applicable. If a State 

Exchange appeals entity opts to provide 

an informal resolution process, prehearing, we provide the appeals entity 

flexibility to determine how to 

operationally apportion the 90-day 

timeframe between the two processes. 

We anticipate that the informal 

resolution process will provide an 

efficient means to resolve appeals but 

caution State Exchange appeals entities 

to preserve enough time to schedule and 

conduct a hearing, and issue an appeal 

decision, should the appeal involve a 

hearing. We decline to extend the 

timeframe to resolve an appeal and are 

finalizing the informal resolution 

provision as proposed. 

Comment: We received many 

comments concerning the notice of 

hearing required in paragraph (b). We 

received comments supportive of the 

15-day timeframe proposed for sending 

notice of the hearing to appellants. We 

also received comments supportive of 

the preamble discussion of acceptable 

hearing formats, including telephone 

and video teleconference, which an 

appeals entity may want to utilize and 

we were encouraged to include 

regulation text specifying that hearings 

may be offered in multiple formats. 

Response: We appreciate the support 

we received for this provision and the 

proposed timeframe of 15 days to send 

notice of the hearing to appellants. We 

also encourage appeals entities to 

consider alternative hearing formats as 

noted in the preamble, such as inperson, telephonic, and video 

teleconference, but decline to provide 

that level of operational specificity in 

the final rule. 

Comment: We also received many 

comments urging the treatment of an 

appeal request as a request for a hearing. 

Some commenters expressed concern 

that the proposed approach to schedule 

a hearing following an appellant’s 

indication that he or she is dissatisfied 

with the informal resolution decision, if 

an informal process is offered, would 

delay the appellant’s right to a hearing. 

Similarly, some commenters requested 

that the informal resolution process 

timeline run concurrently with the 

hearing timeline unless the appellant 

withdraws the hearing request; thus, the 

appeals entity would provide an 

informal resolution process while 

simultaneously preparing for a hearing, 

unless the appellant indicated that he or 

she did not wish to continue on to the 

hearing and ended the appeal by 

withdrawing the request for hearing. 

These commenters saw this as critical to 

ensure that the informal process does 

not delay the appellant’s due process 

right to a hearing or cause the appellant 

to stop pursuing the appeal. 

Response: We understand that in the 

Medicaid fair hearing context, a request 

for an appeal is the functional 

equivalent of a request for hearing. In 

Exchanges that do not establish an 

informal resolution process, we intend 

appeal requests to be treated as requests 

for hearing. We note the value of 

informal resolution processes in terms 

of efficiency and cost for the appeals 

entity as well as the ease that such a 

process may provide to the appellant as 

compared to a formal hearing and, 

therefore, we encourage appeals entities 

and appellants to take advantage of the 


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informal resolution process prior to a 

hearing. We have also taken precautions 

in our requirements for the informal 

resolution process as described in 

paragraph (a) to ensure that 

participation in the informal resolution 

process does not in any way prevent an 

appellant from proceeding to a hearing. 

In response to these comments to the 

proposed rule, we will consider an 

appeal request a request for a hearing, 

but the option to offer the informal 

resolution process prior to the hearing is 

retained. Flexibility is provided to the 

appeals entities to determine whether 

the hearing is scheduled prior to or after 

informal resolution. 

Comment: We received several 

comments on paragraph (b) regarding 

the scheduling of a hearing. Several 

commenters expressed concern about 

the ability of a hearing to be 

rescheduled if the original date or time 

is prohibitive of participation. Several 

comments noted concern with the 

preamble discussion providing that an 

appeals entity is expected to work with 

the appellant to set a ‘‘reasonable and 

mutually convenient date and time.’’ 

Some commenters cautioned that the 

preamble language broadened the 

common standard of ‘‘reasonable date’’ 

to ‘‘mutually convenient date,’’ which 

could encourage fraudulent delay of the 

hearing by an appellant in order to 

continue to receive pended benefits. 

Response: The preamble discussion 

regarding the scheduling of hearings 

was meant to ensure that appellants are 

provided a reasonable opportunity to 

participate in the hearing. We share the 

concern regarding inappropriate 

dilatory tactics and understand that a 

‘‘mutually convenient date and time’’ 

may not reflect a clear standard. 

Therefore, we are clarifying in this final 

rule that if the appellant informs the 

appeals entity that the designated date 

and time for the hearing are prohibitive 

of participation, we expect that the 

appeals entity will work with the 

appellant to set a reasonable date and 

time for the hearing. 

Comment: Many commenters 

expressed general support for the 

provisions of paragraph (c), which we 

largely modeled after the Medicaid fair 

hearing provisions. With regard to these 

provisions, one commenter sought 

clarification as to whether appellants in 

States where an FFE is operating will 

receive in-person hearings. One 

commenter was concerned with the 

exact meaning of ‘‘in the same matter’’ 

as used in subparagraph (c)(4). The 

commenter thought the phrase could 

become a point of legal dispute in 

subsequent judicial reviews of hearing 

decisions and could lead to Exchange 

decisions being overturned in court on 

strictly procedural grounds just because 

an official was in some arguable way 

involved in a prior Exchange decision 

‘‘in the same matter.’’ The commenter 

recommended that the rule simply state 

that all hearings must be conducted by 

one or more impartial officials who have 

not been directly involved in the 

eligibility determination. Similarly, 

another commenter did not see a reason 

for requiring a hearing to be conducted 

by an official who has not been involved 

in ‘‘any prior Exchange appeal decisions 

in the same matter.’’ The commenter 

noted that if a decision is remanded to 

the Exchange and an appeal is filed after 

the decision on remand, it would be 

more efficient to assign the same official 

to decide the new appeal. The 

commenter requested that the rule 

require only that an ‘‘impartial official’’ 

decide. 

Response: In response to the 

commenter’s question about in-person 

hearings, we note that the appellants to 

the HHS appeals entity, regardless of 

whether they are appealing from an 

eligibility determination by an 

Federally-facilitated Exchange or an 

appeal decision by a State Exchange 

appeals entity, will most often receive a 

hearing via telephone or video 

teleconference. Within State Exchange 

appeals entities, we leave the hearing 

format to the discretion of appeals 

entity. With regard to the comments 

about the use of ‘‘in the same matter’’ 

in subparagraph (c)(4), we do not share 

the commenters’ concerns. This 

provision mirrors the requirements for 

impartial review in the Medicaid fair 

hearing context and is meant to ensure 

that the appellant receives an 

independent and unbiased review of his 

or her eligibility determination. We are 

finalizing the provision as proposed. 

Comment: We received a few 

comments indicating general support for 

the provisions proposed in paragraphs 

(d) through (f), including the procedural 

rights of the appellant, information and 

evidence to be considered, and the 

standard of review for appeals. 

Response: We are finalizing these 

provisions as proposed, as we explain 

below. 

Comment: We received many 

comments on the provisions proposed 

in paragraph (d). We received a general 

comment advising HHS against 

extending a Medicaid fair hearing 

process to non-Medicaid appellants. In 

contrast, another commenter 

recommend including language in 

paragraph (d) stating that a State 

Exchange shall provide all procedural 

due process afforded Medicaid 

recipients in the State. 

Response: We determined that 

aligning our Exchange appeal 

requirements with Medicaid’s fair 

hearing standards would create process 

efficiencies because States are already 

operating Medicaid fair hearing 

processes. In addition, we support the 

protections to the appellant that are 

provided through the Medicaid fair 

hearing process and believe that they 

are important when an appeal concerns 

eligibility to purchase a QHP through 

the Exchange and related insurance 

affordability programs, as well. We 

agree that flexible standards often result 

in innovative and efficient processes; 

however, in this context, where the due 

process rights involved are related to 

access to affordable, quality health care 

coverage, we consider it important to 

implement a standard framework for 

appeals processes with explicit 

appellant rights and protections to 

ensure that appellants receive full and 

fair review. Therefore, we are 

maintaining the alignment with 

Medicaid fair hearing rights and are 

finalizing the provisions as proposed. 

Comment: We received comment on 

the issues of burden of proof and, 

relatedly, the role of representatives of 

the entity that made the eligibility 

determination in an appeal. Some 

commenters noted that eligibility 

representatives are occasionally part of 

Medicaid fair hearings and did not want 

the Exchange rule to foreclose the 

possibility of cross examination in cases 

where an adverse witness is present. We 

also received a comment noting a State’s 

intent to have government attorneys 

present to participate in Medicaid 

hearings and to process new 

information presented by the appellant 

at hearings. Another commenter wanted 

clarification that eligibility 

representatives could be present where 

State law either mandates the presence 

of an adverse party who has the burden 

of proof or requires a hearing officer to 

give significantly less weight to certain 

types of evidence if it is contradicted by 

live testimony of a witness who is 

available for cross-examination. Finally, 

a commenter suggested that an 

applicant bear the burden of proof in 

any challenge to an initial eligibility 

determination, but that the Exchange 

bear the burden of proof in any 

challenge to a redetermination of 

eligibility or to a failure to provide 

timely notice. 

Response: Eligibility determinations 

are based on clear statutory and 

regulatory requirements and the appeals 

process will resolve appeals by applying 

these rules to the eligibility information 

before it, including the information used 

to make the eligibility determination 


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and any relevant information provided 

by the appellant during the appeals 

process. As a result, and as noted in the 

preamble to our proposed rule at 78 FR 

4652, we anticipate that most hearings 

will be conducted in a non-adversarial 

manner and see no need for Exchange 

representation in an appeal of an 

Exchange determination. 

We understand that Medicaid and 

CHIP fair hearings sometimes do 

include representatives of the State 

agency and we anticipate that States 

may want to continue that practice. We 

also understand the benefits to the 

integrity of the process and to the 

appellant to have a representative of the 

entity that made the eligibility 

determination present and available to 

participate at a hearing, and our 

provisions do not foreclose the use of 

such representatives or the ability for 

the appellant or the hearing officer to 

examine them. However, we will not 

require that a representative of the 

eligibility entity must be present at 

eligibility hearings for the reasons stated 

above and we are finalizing the appeals 

rules without such a requirement. We 

similarly decline to provide guidance 

regarding burdens of proof; instead, we 

reiterate that the appeals entity will 

conduct a de novo review of the appeal 

and will proceed as though it were the 

first decision-maker in the matter, 

considering all the information in the 

eligibility and appeal records, as 

applicable, as well as any additional 

relevant evidence adduced before it 

during the appeal. Appellants should 

provide as much relevant information as 

possible to ensure that an accurate 

appeal decision can be rendered 

expeditiously. 

Comment: We received a few 

comments about the appellant’s right to 

access the appeal record, as proposed in 

subparagraph (d)(1). One commenter 

recommended that the phrase ‘‘appeal 

record’’ be deleted as legally incorrect 

because the commonly understood term 

‘‘appeal record’’ refers to documents 

that have been entered into evidence 

during an appeals process. The 

commenter suggested the key due 

process element is met by eliminating 

the term ‘‘appeal record.’’ We also 

received comment on the same 

provision recommending that the 

appellant be able to access to his or her 

electronic account in the same way 

Medicaid appellants have had access to 

a written case file. 

Response: We understand that 

‘‘appeal record’’ may have a different 

meaning outside the Exchange context. 

However, we do not believe that the 

difference is so great that it will cause 

significant confusion for appellants, 

appellants’ representatives, or appeals 

entities, and we are finalizing paragraph 

(d)(1), as proposed. ‘‘Appeal record’’ is 

defined in § 155.500 as ‘‘the appeal 

decision, all papers and requests filed in 

the proceeding, and, if a hearing was 

held, the transcript or recording of 

hearing testimony or an official report 

containing the substance of what 

happened at the hearing, and any 

exhibits introduced at the hearing.’’ In 

the context of § 155.535(d)(1), this term 

means the appeal record as it exists as 

of the relevant date. For example, a 

transcript or recording of hearing 

testimony will not exist before the 

hearing is held, but the appellant still 

must be permitted to examine all papers 

and requests filed in the proceeding to 

date, including the eligibility record 

relied upon for the initial eligibility 

decision, at a reasonable time before the 

date of the hearing and during the 

hearing. Finally, we appreciate the 

comment that electronic access to files 

is ideal in terms of saving space, time, 

and cost, but we decline to add that 

level of specificity to this final rule; we 

leave such operational decisions to 

appeal entities. 

Comment: A few commenters sought 

modification of the provision for the 

appeal standard of review. Some 

commenters shared the opinion that the 

de novo standard should be used at the 

election of the appellant, assuming that 

the appellant best knows whether to 

have past relevant information used in 

the process. Another commenter 

suggested there may be instances where 

the appeals entity finds that deference 

to a prior decision would be appropriate 

and a de novo hearing would not be 

needed; therefore, the commenter 

recommended that the review should be 

de novo, unless the appeals entity 

determines that a de novo hearing is not 

needed. 

Response: We do not anticipate that 

most appellants will be in a position to 

determine the appropriate standard of 

review for their appeal. Many appellants 

will neither be familiar with the concept 

nor understand the impact of selecting 

one standard over another. We also 

disagree that the standard of review 

should be at the discretion of the 

appeals entity. We believe it is in the 

best interest of both appellants and 

appeals entities to use a consistent 

standard. The de novo standard of 

review protects the integrity of the 

process and ensures the fairest review 

for the appellant. We are finalizing the 

provision as proposed. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.535 of the proposed 

rule with the following modification. In 

§ 155.535(e) and (f), we are changing 

‘‘appeal’’ to ‘‘appeals process’’ for 

additional clarity. 

i. Expedited Appeals (§ 155.540) 

In § 155.540, we proposed the 

standards for expedited appeals. 

Specifically, we proposed that the 

appeals entity must establish and 

maintain an expedited appeals process 

for appellants to request where there is 

an immediate need for health services 

because a standard appeal could 

seriously jeopardize the appellant’s life 

or health or ability to attain, maintain, 

or regain maximum function. We also 

proposed that if an appeal entity denies 

a request for an expedited appeal, it 

must handle the appeal under the 

standard process and notify the 

appellant of the denial. 

Comment: We received general 

support for the inclusion of an 

expedited appeals process in the 

proposed rule from many commenters. 

Supporters viewed the provision as 

preventing gaps in coverage or access to 

vital care while the appeal is being 

adjudicated. However, we also received 

comments that the expedited appeal 

provisions should be removed or, 

alternatively, offered as a State option. 

Many of these commenters shared a 

variety of concerns. For example, some 

commenters expressed concern that the 

availability of an expedited process may 

create an unchecked incentive for 

individuals to claim medical need in 

order to expedite an appeal, thereby 

increasing the volume and burden 

associated with the expedited process. 

We received comment that the 

definition of those who qualify for 

expedited hearings is too broad and 

should be removed from the rule. 

Another commenter noted that the 

proposed process does not parallel 

Medicaid’s provisions because, unlike 

Medicaid, the Exchange facilitates the 

purchase of coverage rather than 

providing it directly. Finally, we 

received comment that the expedited 

appeals process would require the 

appeals entity to evaluate questions of 

fact (whether there is actually an 

immediate need for health services, as 

contemplated in the proposed rule, 

which the commenter viewed as having 

no relation to the appellant’s eligibility; 

thus, the expedited process would 

unnecessarily deplete resources and 

distract from the main purpose of the 

appeals entity. 

Response: We consider access to and 

continuity of coverage to be an 

important factor in health care, 

particularly for those individuals who 

require immediate care. Many 


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individuals will not be able to pay for 

urgently needed health services without 

coverage, and will not be able to access 

affordable coverage except through an 

Exchange eligibility determination; 

therefore, we see a clear link between 

eligibility appeals and the need to offer 

an expedited timeframe for those 

individuals facing an immediate need 

for health care services. However, 

maintaining an appeals process to 

address these situations requires 

significant investment by the appeals 

entity first to determine which cases fit 

the standards for an expedited appeal, 

and then to swiftly adjudicate the 

appeal. As a result, we are finalizing the 

expedited appeals provisions with 

modification, requiring Exchange 

appeals entities to provide an expedited 

appeal process, but removing the twoday timeframe to issue notices of the 

denial of a request for an expedited 

appeal and requiring instead that the 

notice be issued ‘‘within the timeframe 

established by the Secretary.’’ We will 

publish guidance regarding the 

establishment of an expedited appeal 

timeframe that recognizes the 

appellant’s immediate need for health 

services while acknowledging 

administrative constraints. 

Comment: Several commenters 

provided many suggestions as to how 

the expedited appeals process could be 

modified. For example, one commenter 

proposed that the informal resolution 

process could be used as a venue to 

quickly address an expedited appeal 

request and help appellants understand 

why an eligibility decision was made. 

Response: Although we see the 

advantages to quick resolution through 

the informal resolution process, the 

expedited appeals process should 

provide the same level of due process as 

the standard appeals process. Therefore, 

we clarify that the expedited process 

must make the right to a hearing 

available to the appellant. 

Comment: Another commenter 

recommended that the rule for 

expedited appeals state that the 

appellant bears the burden to 

demonstrate that he or she meets the 

definition for an expedited appeal and 

must provide medical documentation to 

that effect. Similarly, one commenter 

suggested that any person seeking an 

expedited appeal should be required to 

submit specific information, including 

medical documentation, showing how 

he or she satisfies the standard, subject 

to a page limit or other limitation on the 

amount of documentation submitted to 

avoid inundating the appeals entity 

with material as it makes its decision 

whether to expedite the appeal. 

Response: We agree that an appellant 

requesting an expedited appeal must 

provide sufficient information to the 

appeals entity to enable to enable the 

appeals entity to determine whether the 

appellant meets the standard for an 

expedited appeal. We are not providing 

specific regulatory language specifying 

the information or types of information 

an appellant must provide to 

substantiate an expedited appeal 

request. We expect appeals entities to 

establish appropriate measures to 

determine which appellants seeking an 

expedited appeal meet the standard for 

an expedited appeal. 

Comment: We received comments 

seeking examples of situations that 

qualify for expedited appeals. 

Response: We expect appeals entities 

to make decisions about requests for 

expedited appeals on a case-by-case 

basis, based on the totality of all the 

relevant information provided to the 

appeals entity about the need for 

immediate health services. Because each 

case must be judged on an individual 

basis, we decline to provide specific 

examples of situations that would 

qualify for an expedited appeal. 

Comment: We received many 

comments requesting that access to the 

expedited appeals process be limited. 

One commenter recommended that 

expedited appeals be limited to initial 

denials of eligibility or redeterminations 

resulting in a loss of eligibility to more 

adequately address the issue of 

continuity of coverage. We also received 

a few comments that expedited appeals 

should not be available for individuals 

who receive determinations for advance 

payments of the premium tax credit or 

cost-sharing reductions. Finally, a 

request was made to delineate that 

individuals with serious and complex 

medical conditions, including HIV and 

viral hepatitis, automatically qualify for 

an expedited process because delaying 

or disrupting treatment or access to 

affordable medications can result in 

serious medical consequences for these 

individuals. 

Response: We understand that 

expedited appeals will require an 

investment of resources by the appeals 

entity and, consequently, understand 

the desire to limit the volume of 

expedited appeal requests. However, 

expedited appeals can provide an 

important mode of access to coverage 

and care that some individuals will be 

heavily reliant upon for immediate or 

continuing care. We encourage appeals 

entities to educate consumers on the 

purpose of an expedited appeal so that 

individuals can assess which process is 

appropriate for their situation. An 

expedited appeal is meant to assist 

individuals whose health might be 

harmed by the length of time required 

for the standard appeal process, and we 

do not anticipate that such harm will be 

limited to individuals who have 

received specific eligibility or 

ineligibility determinations. We note 

that we are finalizing the provision with 

minor modification by removing 

‘‘seriously’’ from § 155.540(a) because 

we believe ‘‘jeopardize the appellant’s 

life’’ sufficiently states the standard for 

an expedited appeal. 

Comment: We received many 

comments regarding the timeframe for 

denying requests for expedited appeals. 

Some commenters supported the 

proposed two-day timeframe. Other 

commenters expressed concern over the 

proposed timeframe and how its brevity 

might limit effective review of the 

expedited appeal request. Some 

commenters recommended alternative 

timeframes ranging from three to seven 

days. Finally, we received a comment 

requesting that we specify the timeframe 

for denying expedited appeal requests 

in paragraph (b)(2) in terms of business 

days rather than calendar days. 

Response: As noted above, we are 

modifying the final rule from the 

proposed rule by eliminating the twoday requirement and requiring instead 

that the notice of denial of an expedited 

appeal request be issued ‘‘within the 

timeframe established by the Secretary.’’ 

Comment: With regard to the content 

of the notice denying a request for an 

expedited appeal, we received 

comments requesting that we require 

such notice to state the reason for the 

denial, the fact that the appeal will be 

heard on the standard timeframe, and 

any options the appellant may have if 

he or she disagrees with the decision. 

Response: Notices provide valuable 

information to individuals about the 

actions being taken, the reason for 

actions taken, the individual’s rights 

and available protections, as well as 

next steps. We agree that individuals 

who are denied an expedited appeal 

would benefit from a detailed denial 

notice. Paragraph (b) proposed that 

notice of a denial could be provided 

orally or electronically as long as the 

appeals entity followed oral notification 

with a written notice within two days of 

the denial. We are modifying paragraph 

(b) to require specific content in the 

written notice for the denial of an 

expedited appeal request, including the 

reason for the denial, an explanation 

that the appeal request will be 

transferred to the standard process, and 

an explanation of the appellant’s rights 

under the standard process. We are not 

modifying this provision to require the 

appeals entity to include in the notice 


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an explanation of the options available 

to the appellant if he or she disagrees 

with the decision regarding the request 

for an expedited appeal, because there 

is no administrative appeal of the denial 

of an expedited appeal request. 

Although nothing in this final rule 

limits any judicial review that may be 

available under the law, we note that 

the appellant will likely receive the 

quickest relief through the standard 

appeal process. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.540 of the proposed 

rule with the following modifications. 

In paragraph (a), we are removing 

‘‘seriously’’ from the standard for an 

expedited appeal because meeting the 

requirement that a standard appeal 

could ‘‘jeopardize the appellant’s life’’ is 

sufficient. In subparagraph (b)(2), we 

restructured the provision and removed 

the proposed requirement that the 

written follow-up notice after oral 

notification of the denial of an 

expedited appeal request be provided 

within ‘‘2 days of the denial.’’ We are 

replacing this proposed timeframe with 

the requirement that the notice be 

issued ‘‘within the timeframe 

established by the Secretary.’’ We are 

also replacing, ‘‘if notified orally’’ with 

‘‘if notification is oral,’’ for clarity. The 

provision now states, ‘‘Inform the 

appellant, promptly and without undue 

delay, through electronic or oral 

notification, if possible, of the denial 

and, if notification is oral, follow up 

with the appellant by written notice, 

within the timeframe established by the 

Secretary. Written notice of the denial 

must include—.’’ We are adding a new 

subparagraph (b)(2)(i) to require that the 

written notice of the denial include the 

reason for the denial of the expedited 

appeal request. Similarly, new 

subparagraph (b)(2)(ii) requires that the 

written denial notice contain an 

explanation that the appeal request will 

be transferred to the standard appeals 

process and new subparagraph (b)(2)(iii) 

requires that the denial notice include 

an explanation of the appellant’s rights 

under the standard process. 

j. Appeal Decisions (§ 155.545) 

In § 155.545, we proposed 

requirements for the basis, content, 

notice, and implementation of appeal 

decisions. In § 155.545(a), we proposed 

standards for appeal decisions, 

including the scope of information a 

decision may be based upon and the 

decision content. In § 155.545(b), we 

proposed timeframes for issuing notice 

of the appeal decision and instructions 

for sending the appeal decision to the 

appellant and to the Exchange or 

Medicaid or CHIP agency, as applicable. 

Finally, in § 155.545(c), we proposed 

standards for implementing appeal 

decisions, including the effective date of 

implementation, as well as requirements 

for redetermining eligibility for other 

household members whose eligibility 

may be affected by the appeal decision. 

Comment: We received support for 

the appeals provisions in § 155.545(a). A 

few commenters recommended the 

contents of the appeal decision also 

include language explaining the time 

limits to escalate an appeal from a State 

Exchange appeals entity to HHS. 

Another commenter encouraged us to 

require State Exchange appeals entities 

to include information that the decision 

is final, unless the individual pursues 

further review by HHS. 

Response: We agree with commenters’ 

suggestions, and are finalizing the 

provisions of § 155.545(a) with minor 

modification in response to the 

comments above. We are moving the 

proposed requirement to provide an 

explanation of the right to pursue the 

appeal at HHS, including the applicable 

timeframe, to new subparagraph, 

§ 155.545(a)(6)(i). In addition, we are 

adding new subparagraph 

§ 155.545(a)(6)(ii) to require appeal 

decisions from State Exchange appeals 

entities to indicate that the decision is 

final unless the appellant escalates the 

appeal to the HHS appeals entity. We 

anticipate that this additional 

information will assist an appellant in a 

State Exchange appeals process to better 

understand the impact of the escalation 

decision and his or her options for 

further to appeal to HHS. Finally, we 

also note we are modifying paragraph 

(a)(1) by adding reference to subpart G 

and ‘‘and if the Medicaid or CHIP 

agencies delegate authority to conduct 

the Medicaid fair hearing or CHIP 

review to the appeals entity in 

accordance with 42 CFR 431.10(c)(1)(ii) 

or 457.1120, the eligibility requirements 

under 42 CFR parts 435 and 457, as 

applicable’’ to address appeal decisions 

involving appeals delegated by State 

Medicaid or CHIP agencies. 

Comment: We received many 

comments on the proposed timeframe 

for adjudicating eligibility appeals in 

§ 155.545(b)(1). Some commenters 

suggested a longer timeframe, while 

others recommended a shorter 

timeframe; many commenters indicated 

support for State flexibility in this area. 

Some commenters indicated that the 90- 

day timeframe to resolve an appeal is 

not sufficient to conduct a 

comprehensive informal process while 

ensuring the appellant’s right to a 

formal hearing. We received the 

recommendation that appeals entities be 

provided 120 days to issue the final 

appeal decision. Alternatively, one 

commenter urged us to limit the 

timeframe for issuing an appeals 

decision in order to mitigate the adverse 

effects of a prolonged appeals process 

and lessen the period of uncertainty for 

an appellant. Similarly, one commenter 

recommended the timeframe be 

shortened to less than 90 days as a 

means to limit the amount of retroactive 

adjustments in eligibility, as discussed 

below. Finally, other commenters 

supported the proposed 90-day 

timeframe, and some encouraged us to 

require decisions to be made as 

expeditiously as possible within the 

required timeframe. 

Response: Because we must balance 

the pressing interests of the appellant 

and the administrative concerns of the 

appeals entity, we are finalizing the 

provision as proposed with the 90-day 

timeframe. This aligns with the current 

Medicaid fair hearing timeframe for 

issuing appeal decisions and provides 

an adequate timeframe in which the 

appeals entity can complete its review 

while not delaying resolution beyond 

acceptable limits. We understand that 

appellants who elevate State Exchange 

appeal decisions to HHS may face 

longer timeframes for resolution due to 

the second level of appeal, but we 

reiterate that section 1411(f)(1) of the 

Affordable Care Act requires this 

Federal review to be available for 

individual eligibility appeal decisions 

by State Exchange appeals entities, for 

appellants who choose to avail 

themselves of it. In all cases, we 

encourage appeals entities to resolve 

appeals as expeditiously as possible. 

Comment: Commenters did not 

support the inclusion of the phrase ‘‘as 

administratively feasible’’ in 

§ 155.545(b)(1). Commenters saw the 

phrase as creating a loophole that allows 

standards to be ignored. In addition, 

commenters saw this as creating 

problems in getting a timely Medicaid 

fair hearing decision, for example when 

the appellant opts to pursue a Medicaid 

appeal before the State Medicaid agency 

instead of the Exchange appeals entity. 

Commenters urged HHS to maintain the 

standard for completing the appeal 

within 90 days of the date of the 

request. Some commenters also 

encouraged us to add language to 

establish an expectation for timely 

decision-making to ensure an efficient 

process. 

Response: We share the commenters’ 

concerns for timely adjudication of 

appeals. As noted in our discussion of 

other sections in this final rule, we also 

understand the pressures Exchanges 


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face to build appeals systems, connect 

with the Federal process and other 

agencies administering insurance 

affordability programs, establish appeals 

protocols, and ultimately process 

appeals, the volume of which is not yet 

known and many of which may be 

complex. Because administrative 

realities must be taken into account, we 

are finalizing the provisions as proposed 

in this regard, allowing some reasonable 

administrative flexibility as concerns 

the 90-day timeframe for issuing an 

appeal decision. However, we note that, 

though we are maintaining this 

administrative flexibility, we fully 

expect appeals entities to adjudicate 

appeals within the 90-day timeframe in 

every case in which it is reasonably 

administratively feasible to do so. 

Comment: One commenter noted that 

if a State does not delegate Medicaid or 

CHIP appeals authority to the Exchange, 

States require additional guidance to 

define the State’s responsibility for 

these types of appeals when the 

Exchange appeals entity cannot issue an 

appeal decision within 90 days. 

Response: We encourage those States 

that do not delegate Medicaid or CHIP 

appeals authority to the Exchange to 

anticipate situations where the nondelegation may jeopardize the efficiency 

of administrative processes and work to 

ensure adequate communication and 

timely processes to prevent unnecessary 

delay for the appellant and the agencies 

and appeals entities concerned. 

Comment: The proposed timeframe 

for issuing an expedited appeal decision 

received many comments. We received 

support for the proposed timeframe of 

three working days as well as many 

recommendations to lengthen the 

timeframe. Some commenters noted that 

three working days is too short to allow 

time for the appellant and the agency to 

prepare properly for the appeal, 

including gathering the relevant 

information and providing a hearing. 

One commenter recommended the 

expedited timeframe for a decision be 

no less than 45 days. Finally, we 

received a request to clarify whether the 

three day timeframe begins from the 

date of the request for appeal or from 

the date an expedited hearing is held. 

Response: We received many 

comments from States that it would not 

be administratively possible to provide 

an appellant a hearing and generate an 

appeal decision within the proposed 

three-day timeframe for expedited 

appeals. Commenters did not address an 

alternative, reasonable timeframe. In 

response to the comments received, we 

are modifying the proposed rule by 

eliminating the three-day requirement, 

and instead, in this final rule, we are 

requiring that the timeframe for issuing 

expedited appeal decisions be ‘‘as 

expeditiously as reasonably possible, 

consistent with the timeframe 

established by the Secretary.’’ We will 

publish guidance regarding the 

establishment of an expedited appeal 

timeframe that recognizes the 

appellant’s immediate need for health 

services while acknowledging 

administrative constraints. 

Comment: One commenter requested 

more information about what would 

happen if an appeal crosses over benefit 

years. 

Response: Although not addressed in 

the final rule, it is our intention that an 

appeal that crosses over benefit years 

will be treated like any other appeal. 

Comment: Several commenters 

recommended that tax filers who rely in 

good faith on an eligibility 

determination by the Exchange or 

appeals entity should be granted a safe 

harbor from having to pay back some or 

all of any advance payments of the 

premium tax credit they may receive for 

a coverage year during tax 

reconciliation, to the extent that the IRS 

may take a different view regarding the 

tax filer’s eligibility for premium tax 

credits. 

Response: The Exchange’s 

determination takes a prospective look 

at an applicant’s anticipated household 

income for a coverage year to determine 

eligibility for advance payments of the 

premium tax credit. The eligibility 

appeals process uses the same standards 

to examine eligibility for advance 

payments of the premium tax credit, 

taking into account any new, relevant 

evidence an appellant may provide. The 

appeal decision will provide an 

eligibility determination that is accurate 

based on the eligibility information to 

which the appeals entity has access; 

however, the IRS reconciliation process 

(which is regulated and administered by 

the IRS and is outside the scope of these 

final rules) looks retrospectively at a tax 

filer’s actual income for the tax year to 

accurately determine the premium tax 

credit for which the tax filer is eligible. 

The IRS is the sole authority on the tax 

reconciliation process that occurs after 

the close of a tax year. 

Comment: A few commenters found it 

difficult to determine the decision 

effective date based on the proposed 

appeal decision implementation 

provisions in § 155.545(c)(1). Some 

commenters found the reference to 

§ 155.330(f) confusing. We received the 

recommendation that § 155.545(c)(1) 

should require that the effective date of 

the appeals decision be the date that the 

incorrect eligibility determination was 

made or other adverse action was taken, 

so as to fully remedy the error. 

Response: Section 155.330(f) requires 

Exchanges to implement changes 

resulting from an appeal decision, ‘‘on 

the date specified in the appeal 

decision.’’ In addition, we have slightly 

modified proposed § 155.545(c)(1) in 

this final rule to provide that eligibility 

resulting from an appeal be 

implemented prospectively, beginning 

on the first day of the month following 

the date of the notice of the appeal 

decision, or retroactively, to the date the 

incorrect eligibility determination was 

made, or at the option of the appellant. 

If an eligibility determination was made 

in error, the notice of the appeal 

decision will provide the appellant with 

the opportunity to choose a retroactive 

effective date for the correct the 

eligibility determination, in order to 

make the appellant whole. If an 

eligibility determination was correct 

when made, but new, relevant 

information provided during the course 

of the appeal establishes that a different 

eligibility determination is correct at the 

time of the appeal, the appeal decision 

will provide a prospective effective 

date. 

Comment: We received many 

comments reflecting a spectrum of 

opinions for the proposed requirement 

to implement certain appeal decisions 

retroactively. We note that many of 

these comments also apply to the 

pended eligibility provisions proposed 

in § 155.525, which may require 

retroactive enrollment, such as where 

there is a delay between the appellant’s 

appeal request and the tax filer’s 

notification to the appeals entity that he 

or she wishes to accept pended 

eligibility, if applicable. 

Many commenters supporting 

retroactive effect for individual 

eligibility appeal decisions noted that 

retroactivity can be critical to appellants 

receiving due process because 

retroactive effect can serve as both an 

important consumer protection and a 

corrective mechanism. In addition, 

these commenters supported retroactive 

effect for individual eligibility appeal 

decisions because it prevents appellants 

from being harmed by the time required 

to complete the appeals process. 

Several commenters responded to 

preamble discussion regarding ways to 

limit the applicability of retroactivity. A 

handful of commenters recommended 

that appellants be allowed to ‘‘opt out’’ 

of retroactive effect because some 

appellants might not wish to pay back 

premiums for coverage, such as those 

who may not have incurred medical 

expenses for which they might want to 

be reimbursed. Comments considering 


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this option questioned the timeframe in 

which an appellant who opted for 

retroactive eligibility would be expected 

to pay back premiums to the issuer. In 

addition, one commenter recommended 

that we waive payment of premiums for 

the appellants who are retroactively 

enrolled in a QHP through the Exchange 

because the need for retroactive 

enrollment is not the fault of the 

appellant. We also received support for 

the preamble proposal to limit 

retroactive effect for appeal decisions to 

those already enrolled in coverage. 

Another commenter recommended 

limiting retroactive effect to only those 

appellants who do not qualify for 

eligibility pending appeal. A few 

commenters noted that, if an appellant 

opts for retroactive effect for the appeal 

decision, corresponding benefits should 

only be made available after the 

appellant has paid the premium 

covering the entire period of retroactive 

effect. We received another comment 

that retroactive effect for appeal 

decisions should be optional for 

Exchanges to implement or, in the 

alternative, Exchanges should be 

afforded flexibility in implementing 

retroactivity. 

Comments opposing the proposed 

provision on retroactive effect for appeal 

decisions provision largely focused on 

the operational difficulties associated 

with retroactive enrollment in a QHP, 

reimbursements for past health care 

expenditures, and payment of back 

premiums, but did not question that 

retroactive effect for appeal decisions 

may be, in some cases, a fundamental 

due process right. First, some 

commenters felt that retroactive effect 

will result in unnecessary confusion 

and complexity for consumers, issuers, 

and providers, and would add 

administrative burden and costs to the 

system. Several commenters specifically 

mentioned complexity where the 

appellant was not enrolled in coverage 

before the appeal decision, and the 

appeal decision provides the appellant 

the opportunity to elect retroactive 

effect. Second, several commenters 

noted retroactive effect for appeal 

decisions could result in some adverse 

selection because many individuals 

eligible to retroactively enroll in 

coverage would choose to do so only 

when they have already incurred claims 

for medical services. Third, some 

commenters expressed concern for the 

timeframe that retroactive effect for an 

appeal decision could encompass, citing 

the 90-day period to request an appeal, 

the 90-day period to issue an appeal 

decision, and the additional 30 days and 

90 days possible in the case of an 

escalation appeal to HHS, if the 

appellant elevates the appeal from a 

State Exchange appeals entity. These 

commenters pointed out that issuers 

could be faced with collecting back 

premium and reimbursing for past 

services going back several months. 

Some commenters recommended 

shortening the timeframe for which 

retroactive effect could be given to an 

appeal decision to only 90 days, rather 

than back to the date of the incorrect 

eligibility determination. Similarly, we 

received comments that some State laws 

may limit the extent to which these 

retroactive collections and 

reimbursements can be made, and these 

State law timeframes may be shorter 

than the total timeframe possible in the 

case of an individual eligibility appeal. 

Finally, some commenters expressed 

concern about complexity involved in 

payments to providers that may be 

affected by retroactive enrollment in a 

QHP through the Exchange, and the 

intersection of this policy with other 

enrollment policies in the Exchange 

rules. These comments are further 

detailed below. 

Response: Although we recognize the 

operational complexities involved with 

giving retroactive effect to an individual 

eligibility appeal decision, we are 

finalizing proposed § 155.545(c) with 

only minor modification, and we are 

retaining the concept of retroactive 

implementation. We believe that 

appellants must be given the option to 

choose to give effect to an appeal 

decision that alters the appellant’s 

original eligibility determination, 

retroactive to the date that the incorrect 

eligibility determination was made. The 

purpose of an appeal is to ensure the 

appellant receives the appropriate 

eligibility determination. Thus, in the 

Medicaid context, State agencies are 

directed to make corrective payments 

retroactive to the date an incorrect 

action was taken under 42 CFR 431.246. 

Retroactive appeal decisions can also 

protect appellants from unfairly having 

to pay the individual responsibility 

penalty under § 5000A of the Internal 

Revenue Code, which might otherwise 

apply if the appellant does not maintain 

coverage throughout the year. 

As noted above, we presented in 

preamble to the proposed rule at 78 FR 

4653 the option that an appellant could 

choose not to retroactively enroll in 

coverage to avoid paying past 

premiums. In response to the comments 

discussed above, we are now modifying 

the proposed provision to allow an 

appellant whose appeal decision reflects 

that the eligibility determination being 

appealed was incorrect to choose to 

have effect given to the appeal decision, 

retroactive to the date of the incorrect 

eligibility determination. This 

modification is implemented in new 

§ 155.545(c)(1)(ii). Appellants who opt 

for retroactive effect will be required to 

pay applicable back-premiums for 

retroactive coverage to be effective. The 

technical aspects of this approach will 

be addressed in future guidance. 

Appellants who do not opt for 

retroactive effect will be offered a 

hardship exemption pursuant to 

§ 155.605(g)(1) and as described in the 

Center for Consumer Information & 

Insurance Oversight, Guidance on 

Hardship Exemption Criteria and 

Special Enrollment Periods (June 26, 

2013), so that these appellants will not 

be liable to pay the individual 

responsibility penalty under § 5000A of 

the Internal Revenue Code for a failure 

to maintain minimum essential coverage 

that was associated with an erroneous 

eligibility determination. Finally, we 

note a modification to § 155.545(c) in 

which we removed ‘‘or the Medicaid 

and CHIP agency, as applicable’’ and 

‘‘in accordance with the applicable 

Medicaid or CHIP standards in 42 CFR 

parts 435 and 457, as applicable’’ in 

subparagraph (c)(1)(iii) to clarify that 

the provision relates to only the 

Exchange and State Medicaid and CHIP 

agencies will follow their respective 

rules for implementation following 

receipt of the appeal decision notice. 

Comment: We received many 

comments regarding how issuers would 

manage retroactive enrollments and 

related payments or reimbursements. 

Some commenters expressed concern 

that retroactive eligibility would place 

liability for inaccurate eligibility 

determinations made by the Exchange 

on the issuer. Some commenters 

focused on the impact retroactive 

eligibility could have on financial 

management, including cost-sharing 

reductions, reinsurance, and risk 

adjustment. Some commenters also 

noted that retroactive changes may 

result in inaccurate calculations for the 

Medical Loss Ratio (MLR) and risk 

corridor programs, resulting in 

inaccurate payments to enrollees, and 

noted that appellants may have a 

significant volume of retroactive claims 

to address, given the timeframe 

potentially involved in an individual 

eligibility appeal. 

Response: We are finalizing the rule 

without limiting the ability of an 

appellant who meets the standards for 

retroactive eligibility to choose to give 

his or her appeal decision full 

retroactive effect. However, we will 

consider providing further operational 

guidance on the issues noted above by 

commenters. 


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Comment: Regarding implementation 

of expedited appeal decisions, a 

commenter recommended that the final 

rule address the timeline for QHPs to 

effectuate coverage resulting from an 

expedited appeal decision to minimize 

QHP liability to pay for services 

rendered during the appeals process but 

for which an expedited appeal process 

may determine the individual was not 

eligible. 

Response: We neither proposed nor 

provide for an expedited enrollment 

process following an expedited appeal 

decision in the final rule and direct 

commenters to the standards for 

enrollment periods established in in 

part 155 subpart E. 

Comment: Several commenters 

supported the proposed requirement in 

§ 155.545(c)(2) that an appellant’s 

household members’ eligibility be 

redetermined if the appeal decision has 

implications for the eligibility of other 

members of the household. These 

commenters noted that this policy may 

protect the tax filer from having to pay 

back advance payments of the premium 

tax credit made on behalf of other 

household members at reconciliation. 

Response: We are finalizing the 

provision in § 155.545(c)(2) as proposed. 

This policy will help ensure that the 

Exchange provides accurate eligibility 

determinations for all household 

members, which is a protective measure 

for the tax payer as concerns the 

reconciliation process. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.545 of the proposed 

rule with the following modifications. 

In paragraph (a)(1), we are adding 

reference to subpart G to ensure that 

appeal decisions concerning exemptions 

must be based on the eligibility 

requirements set forth in that subpart. 

We are also modifying this § 155.545(a) 

to provide greater clarity regarding 

appeal decisions involving appeals 

delegated by State Medicaid or CHIP 

agencies. Paragraph (a)(1) now provides 

that appeal decisions must ‘‘[b]e based 

exclusively on the information and 

evidence specified in § 155.535(e) and 

the eligibility requirements under 

subpart D or G of this part, as 

applicable, and if the Medicaid or CHIP 

agencies delegate authority to conduct 

the Medicaid fair hearing or CHIP 

review to the appeals entity in 

accordance with 42 CFR 431.10(c)(1)(ii) 

or 457.1120, the eligibility requirements 

under 42 CFR parts 435 and 457, as 

applicable.’’ We are moving the 

requirement originally proposed in 

§ 155.545(a)(6) to new 

subparagraph(a)(6)(i) and inserting 

language to require that the notice of 

appeal decision provided by a State 

Exchange appeals entity must include 

an explanation of the appellant’s right to 

pursue the appeal before the HHS 

appeals entity, ‘‘including the 

applicable timeframe’’ to submit such 

an appeal request. We are also adding 

new subparagraph § 155.545(a)(6)(ii) to 

require that a notice of appeal decision 

provided by a State Exchange appeals 

entity ‘‘[i]ndicate that the decision of 

the State Exchange appeals entity is 

final, unless the appellant pursues the 

appeal before the HHS appeals entity.’’ 

In paragraph (b)(1), we are making a 

minor change to add ‘‘of’’ between 

‘‘date’’ and ‘‘an.’’ In § 155.545(b)(2), we 

are removing the timeframe for 

providing an expedited appeal decision; 

the provision now states that expedited 

appeal decisions must be issued ‘‘as 

expeditiously as reasonably possible, 

consistent with the timeframe 

established by the Secretary.’’ 

We are removing from § 155.545(c) 

‘‘or the Medicaid and CHIP agency, as 

applicable’’ along with ‘‘in accordance 

with the applicable Medicaid or CHIP 

standards in 42 CFR parts 435 and 457, 

as applicable’’ in subparagraph (c)(1)(iii) 

to clarify that the provision relates to 

only the Exchange. We are modifying 

proposed § 155.545(c) regarding the 

implementation date for appeals 

decisions. In § 155.545(c)(1), we are 

including language so that the provision 

now reads, ‘‘Implement the appeal 

decision effective[,]’’ followed by new 

subparagraph (c)(1)(i), which states, 

‘‘[p]rospectively, on the first day of the 

month following the date of the notice 

of appeal decision, or consistent with 

§ 155.330(f)(2) or (f)(3), if applicable[.]’’ 

New subparagraph (c)(1)(ii) further 

provides that an appeal decision may be 

implemented ‘‘[r]etroactively to the date 

the incorrect eligibility determination 

was made, at the option of the 

appellant.’’ 

k. Appeal Record (§ 155.550) 

In § 155.550, we proposed 

requirements for accessing the appeal 

record. The proposed requirements 

included both appellant and public 

access to the appeals records. We 

proposed that all access would be 

subject to applicable laws regarding 

privacy, confidentiality, disclosure, and 

personally identifiable information. 

Comment: In response to § 155.550, 

we received several comments offering 

general support for the proposed 

provisions. Some commenters stated 

that access to the appeals record 

promotes transparency and 

accountability in the eligibility appeals 

process. 

Response: We are finalizing § 155.550 

with minor modification as outlined 

below. We consider access to the appeal 

record to be an important tool for 

appellants in order to understand the 

eligibility and appeals process, and their 

appeal decision. In addition, we agree 

that public access, subject to laws 

concerning privacy, confidentiality, 

disclosure, and personally identifiable 

information, promotes transparency and 

accountability, program integrity, and 

quality. 

Comment: We received one comment 

requesting that we confirm that 

providing a digital audio recording of 

the hearing is sufficient to satisfy the 

requirements of § 155.550(a) to make the 

appeal record available to the appellant. 

The commenter expressed concern 

about increased costs if written 

transcripts must be provided. 

Response: The appeals record is 

defined in § 155.500. The definition 

specifies that the appeals record 

includes ‘‘the appeal decision, all 

papers and requests filed in the 

proceeding, and, if a hearing was held, 

the transcript or recording of hearing 

testimony or an official report 

containing the substance of what 

happened at the hearing, and any 

exhibits introduced at the hearing.’’ 

Therefore, an audio recording of the 

hearing is sufficient to meet the 

requirement that a transcript or 

recording of hearing testimony be 

included in the appeal record, when a 

hearing is held. We note that the record 

must not be limited to an audio 

recording or transcript of the hearing 

and must fully comport with the 

regulatory definition of ‘‘appeal record.’’ 

Appeals entities that wish to include 

only an audio recording of any hearing 

in the appeal record should take into 

account the needs of appellants who 

may encounter difficulties accessing or 

re-playing audio recordings, and make 

appropriate efforts to ensure that 

appellants who encounter these barriers 

are able to meaningfully access their 

appeal record, consistent with this final 

rule. 

Comment: We received a few 

comments requesting modifications to 

155.550(b) of the proposed rule. Several 

commenters recommended that the 

Medicaid fair hearing rules regarding 

public access to the appeals record be 

followed to align the programs, 

including limiting public access to only 

the redacted appeal decision. A few 

commenters cited consequences of 

allowing public access, including 

discouraging individuals from appealing 

for fear that information, even if 

redacted, could be access by anyone and 

the increased labor and costs associated 


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with redacting appeal records. 

Similarly, we received several 

comments requesting that we confirm 

that an appeals entity may require the 

public to reimburse the appeals entity 

for costs associated with compliance 

with § 155.550(b). 

Response: In response to comments 

requesting closer alignment with 

Medicaid rules and concerns about 

increased costs and burden on appeals 

entities, we are modifying § 155.550(b) 

to allow public access to only the appeal 

decision, subject to all applicable laws 

concerning privacy, confidentiality, 

disclosure, and personally identifiable 

information. We believe this approach 

will balance the interests of the 

appellant, appeals entity, and the public 

to protect information, not overburden 

appeals entities, and provide for 

transparency and accountability in the 

appeals process. Finally, in response to 

comments regarding reimbursement for 

costs associated with compliance with 

§ 155.550(b), we note these comments 

are outside the scope of the proposed 

rule. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.550 of the proposed 

rule with the following modifications. 

We are modifying the title of 

§ 155.550(b) to read ‘‘Public access to 

the appeal decision,’’ thereby limiting 

the scope of public access to decisions 

and not full appeal records. Similarly, 

we are modifying the text of 

§ 155.550(b) by replacing ‘‘records’’ with 

‘‘decisions’’ to specify that the public 

will only have access to appeal 

decisions, subject to all applicable 

Federal and State laws regarding 

privacy, confidentiality, disclosure, and 

personally identifiable information. 

l. Employer Appeals Process (§ 155.555) 

In § 155.555, we proposed that an 

appeals process be established through 

which an employer may appeal, in 

response to a notice under § 155.310(h) 

regarding an employer’s potential 

liability for the shared responsibility 

payment under section 4980H of the 

Code, a determination that the employer 

does not provide minimum essential 

coverage through an eligible employersponsored plan or that the employer 

does provide such coverage but it is not 

affordable coverage with respect to the 

employee referenced in the notice. We 

proposed that a State Exchange has the 

flexibility to establish an appeals 

process for employers and, if the State 

chooses not to establish an employer 

appeals process, that HHS would 

provide the process. Unlike individual 

eligibility appeals, we did not propose 

that employers be allowed to escalate an 

appeal to HHS if the employer is 

dissatisfied with the appeal decision of 

a State Exchange appeals entity. 

We proposed the process and 

standards for requesting an appeal and 

the standards for providing notice of the 

appeal request to the employee and to 

the Exchange. We proposed 

requirements for transmitting and 

receiving information related to the 

appeal between the Exchange and the 

appeals entity. We proposed standards 

for dismissing employer appeals and a 

process for an employer to request that 

a dismissal be vacated. We proposed the 

procedural rights of the employer, 

including the scope of information the 

employer may review as part of the 

appeal and the requirement that the 

Exchange and appeals entity may not 

share an employee’s tax information 

with an employer. Finally, we proposed 

standards for adjudication of the appeal, 

the content and notice of the appeal 

decision, implementation of the appeal 

decision, and the appeal record. 

Comment: One commenter 

recommended that Exchanges 

coordinate the notice under § 155.310(h) 

with the IRS. The commenter suggested 

that notices from an Exchange regarding 

employer liability will cause confusion 

for employers and unnecessary 

administrative burden on the Exchange. 

The commenter recommended a process 

where the Exchange verifies an 

employer’s tax liability with the IRS 

prior to the delivery of any liability 

notice to an employer. 

Response: We maintain the existing 

language in § 155.310(h), which 

specifies that when an employee has 

been determined eligible for advance 

payments of the premium tax credit or 

cost-sharing reductions, the Exchange 

will notify the employee’s employer, in 

accordance with section 

1411(e)(4)(B)(iii) of the Affordable Care 

Act. Specifically, § 155.310(h) provides 

that the notice to the employer will: (1) 

Identify the employee; (2) indicate that 

the employee has been determined 

eligible for advance payments of the 

premium tax credit; (3) indicate that if 

the employer has 50 or more full-time 

employees, the employer may be liable 

for the payment assessed under section 

4980H of the Code; and (4) notify the 

employer of the right to appeal the 

determination. IRS will be determining 

employer liability under section 4980H 

of the Code after tax returns are filed. 

We clarify that for efficiency in 

operations, the Exchange can either 

send the employer notice under 

§ 155.310(h) on an employee-byemployee basis as eligibility 

determinations are made, or send it to 

employers for groups of employees. We 

also note that the Exchange should 

adjust notice language to reflect that the 

employer will not be liable for the 

payment assessed under section 4980H 

of the Code for 2014. 

Comment: We received a comment 

sharing concern about the potential 

impact on employees of a decision that 

the employer coverage is both affordable 

and meets minimum value standards, 

resulting in the employee being 

redetermined ineligible for advance 

payments of the premium tax credit and 

cost-sharing reductions. Specifically, 

the commenter noted that because of 

limited open enrollment periods, such 

an employee might not be able to enroll 

in the health coverage offered by the 

employer when the employer appeal 

decision is issued. The commenter 

recommended that employees in this 

circumstance be allowed to stay in a 

QHP and continue to receive advance 

payments of the premium tax credit and 

cost-sharing reductions until the next 

opportunity to enroll in the employer 

plan. The commenter argued that 

because the Exchange initially 

determined that the employer coverage 

was unaffordable at the time of the 

employee’s eligibility determination, the 

safe harbor provisions in section 1.36B– 

2(c)(3) of the Code should apply to 

employees at reconciliation. The 

commenter suggested that the Exchange 

should complete a full redetermination 

of the employee’s eligibility when an 

employer’s appeal is successful to 

ensure that the employee may continue 

to receive any benefits under insurance 

affordability programs for which he or 

she may qualify. 

Response: We encourage employers to 

educate their employees about the 

details of health coverage offered to 

them and to assist employees in 

providing information regarding the 

employer-sponsored coverage available 

to the employee through the Employer 

Coverage Tool as part of the singlestreamlined application. Additionally, 

employers should use the Fair Labor 

Standards Act (FLSA) notice to provide 

information to employees. Accurate 

information about employer-sponsored 

coverage available to the employee 

helps the Exchange make an accurate 

determination of the employee’s 

eligibility for insurance affordability 

programs. If an employee is determined 

eligible for advance payments of the 

premium tax credit or cost-sharing 

reductions, the employer appeal is the 

opportunity for an employer to correct 

information about employer-sponsored 

coverage offered to the employee and for 

the Exchange to use any additional 

relevant information provided by the 


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employer to confirm that the employee’s 

eligibility determination for insurance 

affordability programs is correct. This 

process will help to minimize the 

employee’s potential liability to repay 

advance payments of the premium tax 

credit that he or she was not eligible to 

receive, and will help to protect the 

employer from being incorrectly 

assessed a tax penalty. Administration 

of the reconciliation process, employer 

responsibility payments, and the 

provisions of section 1.36B–2(c)(3) of 

the Code are under the jurisdiction of 

the IRS. Finally, we note that employers 

can develop policies to allow an 

employee to enroll in employersponsored coverage outside an open 

enrollment period when the employee is 

redetermined as ineligible for advance 

payments of the premium tax credit or 

cost sharing reductions as a result of an 

employer appeal decision. 

Comment: We received several 

comments regarding the option for a 

State Exchange to provide an employer 

appeals process, or to defer to HHS to 

provide the process, as provided in 

§ 155.555(b). One commenter sought 

clarification about the ability for State 

Exchanges to provide this appeals 

process. In addition, several 

commenters requested that the final rule 

provide the option for employers to 

elevate their appeal from a State 

Exchange appeals entity to the HHS 

appeals entity, similar to the option 

permitted to individuals in § 155.505. 

One commenter suggested that not 

providing an option to an employer to 

elevate an appeal to the HHS appeals 

process, while allowing an employee 

who receives financial assistance 

through the Exchange to do so in an 

individual appeal, is unfair. The 

commenter recommended a process in 

which both employers and employees 

have equal opportunities to have 

appeals heard by the HHS appeals 

entity. Another commenter 

recommended that HHS establish an 

employer appeals process for all 

Exchanges, rather than allow Exchanges 

the option to establish their own 

appeals processes. We also received 

comment in support of the ability for 

employers to appeal to the HHS appeals 

process where a State Exchange has 

elected not to establish an employer 

appeals process. 

Response: Unlike the individual 

eligibility appeals process, the 

Affordable Care Act does not require a 

Federal process be available to hear 

employer appeals. Therefore, we have 

provided States the flexibility to provide 

a State Exchange appeals process for 

employers or to defer these appeals to 

the HHS appeals process. We consider 

State Exchanges that have made the 

employee’s eligibility determination to 

be in the best position to adjudicate an 

employer’s appeal related to that 

determination. However, the HHS 

appeals process will be available to 

employers in those State Exchanges that 

elect not to provide an employer 

appeals process. We are finalizing 

§ 155.555(b) as proposed. 

Comment: A few commenters 

expressed concern that giving States the 

option to provide an employer appeals 

process may result in disparate 

outcomes for employers that operate in 

multiple States. These commenters 

noted having many State Exchanges 

adjudicating employer appeals will add 

complexity to the appeals process and 

administrative burden for large 

employers. 

Response: We generally consider it a 

best practice, in terms of safeguarding 

efficiency and process integrity, to have 

appeals heard by the entity issuing the 

eligibility determination concerned in 

the appeal, wherever possible. We also 

wish to provide State Exchanges 

flexibility regarding the process for 

adjudicating appeals of determinations 

they have made, given the many 

operational requirements and 

considerations involved in developing 

new eligibility and appeals processes. 

Because the final rules provide a 

uniform process and standards by 

which appeals are adjudicated, we 

expect appeal decisions to be 

consistently accurate regardless of 

whether an appeal decision is issued by 

a State Exchange appeals entity or the 

HHS appeals entity. Therefore, we are 

finalizing § 155.555(b) as proposed, 

without modification. 

Comment: One commenter sought 

clarification about the timeframe and 

process for how HHS will relay appeals 

information to State Exchanges that 

choose to delegate employer appeals to 

HHS. 

Response: The HHS appeals entity 

and State Exchange appeals entities are 

subject to same requirements set forth in 

§ 155.555. If the HHS appeals entity 

hears an employer appeal from a State 

that does not elect to provide its own 

employer appeals process, HHS will 

communicate information about the 

appeal and request information from the 

Exchange through the processes 

described throughout § 155.555, 

including paragraphs (d), (f), (k), and (l). 

Comment: We received comment 

recommending that the final rule 

provide employees the right to appoint 

a representative during an employer 

appeal. 

Response: The proposed rule in 

§ 155.555(b) addressed the ability of the 

employer to designate an authorized 

representative pursuant to the provision 

in § 155.505(e), but did not expressly 

address the ability of the employee to 

designate an authorized representative. 

We are modifying § 155.555(b) to 

remove the reference to§ 155.505(e), 

retitled ‘‘Representatives,’’ because 

§ 155.227 does not contemplate 

representation for employers. However, 

we note that nothing in § 155.555 

prevents employers or employees from 

relying on a representative or other 

assistance from a third party during the 

employer appeal. 

Comment: Similar to the comments 

we received for § 155.520, we received 

comment expressing concern over the 

modes proposed to accept employer 

appeal requests, which included via 

telephone, mail, in person, and via the 

Internet. The comment specifically 

requested that the requirement to accept 

appeal requests by telephone be 

removed from the final rule or left to 

State option to reduce the burden on 

appeals entities. 

Response: Consistent with our 

approach to individual eligibility appeal 

requests in § 155.520(a), we are 

finalizing § 155.555(c) as proposed; 

however, as we note above, during the 

first year of operations, Exchange 

appeals entities may use a paper-based 

process to accept employer appeal 

requests via mail; all other appeal 

request modes may be provided at the 

option of the appeals entity until the 

second year of operations. 

Comment: We received one comment 

regarding the intersection between 

acknowledging appeal requests, the 

ability to cure a defective appeal 

request, and dismissing appeals. The 

commenter recommended, first, that 

employers be notified of the ability to 

cure a defective appeal request and, 

second, that HHS permit the appeals 

entity to impose a reasonable deadline 

for amendment of a defective appeal 

request. Absent such a deadline, the 

commenter indicated that an appeals 

entity would not know when it could 

comply with its obligation to dismiss 

the appeal for being invalid under 

§ 155.555(f)(1). 

Response: The proposed rule 

proposed to require that the appeals 

entity accept an amended appeal 

request only if the amended request met 

‘‘the requirements of this section 

[155.555],’’ including the timing 

requirements in § 155.555(c). However, 

we agree that employers who submit 

invalid appeal requests toward the end 

of the appeal request timeframe will 

likely not have sufficient opportunity to 

cure the defect in their appeal request 

and resubmit it within the time 


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remaining to request an appeal. 

Therefore, we are finalizing 

§ 155.555(d)(4) with modification to 

provide specifically that the appeals 

entity must inform the employer of the 

ability to cure the defect and we have 

provided appeals entities the flexibility 

to impose a reasonable deadline for 

submitting an amended appeal request. 

Comment: One commenter 

recommended that the scope of the 

employer appeals process be limited 

only to appeals concerning whether the 

employer offered insurance to the 

employee-applicant that constitutes 

minimum value, and the employee 

share of the premium cost. The 

commenter suggested that appeals 

concerning whether the coverage was 

affordable implicates confidential 

information about the employee’s 

income and should not be a part of the 

employer appeal because the employer 

does not have access to the employee’s 

household income information. 

Response: The scope of employer 

appeals process is defined consistent 

with the requirements of section 

1411(f)(2) of the Affordable Care Act, 

which requires an appeal process for 

employers that are notified there has 

been a determination that the employer 

does not provide minimum essential 

coverage through an eligible employersponsored plan, or that the employer 

does provide that coverage but it is not 

affordable coverage with respect to an 

employee. We have delineated 

standards for an appeals process that 

comports with this requirement. Section 

155.555(g) explains the information an 

employer may review as part of an 

employer appeal, and § 155.555(h) 

safeguards employee information, 

including the confidential income 

information about which the commenter 

expressed concern, by requiring that 

neither the Exchange nor the appeals 

entity may disclose an employee’s tax 

return information to an employer. 

These provisions adequately protect 

confidential employee information 

during the employer appeal process. We 

are finalizing the provisions of § 155.555 

as proposed in this regard. 

Comment: Several commenters 

opposed the requirement in 

§ 155.555(g)(2)(iii) that the appeals 

entity must provide the employer an 

opportunity to review ‘‘other data used 

to make the determination described in 

§ 155.305(f) or (g) to the extent allow by 

law.’’ The commenters suggested that 

‘‘other data’’ is overly broad and makes 

it unclear whether the employer has the 

right to review eligibility information 

for the employee or the employee’s 

entire household. The commenters 

recommended deleting 

§ 155.555(g)(2)(iii). 

Response: Section 1411(f)(2)(A)(ii) of 

the Affordable Care Act requires that an 

appealing employer be provided ‘‘access 

to the data used to make the 

determination [about the employer’s 

failure to provide qualifying coverage or 

affordable qualifying coverage] to the 

extent allowable by law.’’ The statutory 

limitation is reflected in the regulatory 

text we are finalizing in this final rule 

at § 155.555(g). As noted in the 

preamble to the proposed rule at 78 FR 

4655, the amount of information an 

employer may access is limited, 

including by section 1411(f)(2)(B) of the 

Affordable Care Act, which generally 

prohibits disclosure of taxpayer return 

information with respect to an employee 

in the course of an employer appeal. 

Accordingly, the employer’s right to 

review information about the 

employee’s eligibility is minimal, as 

noted in § 155.555(g) and (h). We are 

finalizing the provisions of § 155.555(g) 

and (h), as proposed. 

Comment: We received many 

comments supportive of § 155.555(h), in 

which we proposed that the Exchange 

and the appeals entity may not share tax 

return information with an employer in 

the course of an employer appeal. 

Response: We are finalizing the 

provisions of § 155.555(h) without 

modification. As noted above, the scope 

of information available to an employer 

as part of the appeal is limited by 

section 1411(f)(2) of the Affordable Care 

Act and implementing regulations. 

Safeguarding personal information 

provided as part of the eligibility 

determination process is an integral 

aspect of all Exchange processes. 

Comment: We received a comment 

regarding the standards proposed for the 

officials reviewing employer appeals. 

One commenter recommended deleting 

the term ‘‘implicated in the appeal’’ in 

§ 155.555(i)(1) because the phrase may 

become a possible point of legal dispute 

in subsequent judicial reviews. The 

commenter noted that a court may 

overturn an Exchange decision on 

strictly procedural grounds because an 

official was in some arguable way 

involved in the Exchange determination 

that is subject to the appeal. 

Response: This provision helps 

ensure an independent and unbiased 

review of the employer appeal. We are 

finalizing the provision as proposed. 

Comment: One commenter sought 

modification of the provision for the 

appeal standard of review. The 

commenter recommended that the de 

novo standard should be used unless the 

appeals entity finds that a de novo 

hearing would not be needed. 

Response: We disagree that the 

standard of review should be at the 

discretion of the appeals entity. We 

believe it is in the best interest of the 

employer, employee, and the appeals 

entity to use a consistent standard that 

does not give deference to prior 

decisions in the same matter. This 

standard protects the integrity of the 

process and helps ensure that the appeal 

will receive fair review. We are 

finalizing the provision as proposed. 

Comment: We received many 

comments in response to the two 

options we proposed in preamble 

regarding the employee’s ability to 

appeal a redetermination following an 

employer appeal decision. Comments 

were received in support of both 

options, but the majority favored 

allowing the employee to appeal the 

redetermination. Those in favor of 

allowing the employee to appeal 

highlighted that while an employee can 

participate in the appeal, he or she may 

not understand the significance of the 

process until he or she receives a 

redetermination notice. Also, while the 

employee has the opportunity to 

participate in the employer appeal, 

other family members do not and may 

not understand the impact of the appeal 

until redetermination occurs. 

Conversely, other commenters saw the 

ability to submit evidence as part of the 

employer appeal as sufficient to 

safeguard the employee’s due process 

rights. 

Response: In response to the 

comments received, we are modifying 

the final rule to permit employees 

whose eligibility is redetermined as a 

result of an employer appeal to appeal 

that redetermination in accordance with 

the provisions governing individual 

eligibility appeals in subpart F of part 

155. We do not anticipate many appeals 

as a result of this provision, but we 

consider it important to provide the 

appeal right to the employee and his or 

her household members because they 

may not understand the potential 

impact of an employer appeal at the 

time when the employee has the 

opportunity to participate. Furthermore, 

the appeal provides the employee’s 

household members the opportunity to 

dispute a redetermination that occurs as 

a result of an employer appeal process 

about which they may not have been 

aware and that did not provide for their 

participation. Finally, should an appeal 

of a redetermination find an employee 

eligible for the advance payment of the 

premium tax credit and cost-sharing 

reductions, thus implicating potential 

employer liability a second time, the 

employer will have recourse through the 

IRS appeals process if a penalty is later 


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levied, consistent with section 

1411(f)(2)(A) of the Affordable Care Act. 

Comment: Regarding the ability for 

employers and employees to appeal the 

same determination, a commenter 

sought clarification as to the sequencing 

of the employer appeals process if the 

employee also appeals his or her 

eligibility determination through the 

individual appeals process. 

Response: An employee determined 

eligible for financial assistance through 

the Exchange may appeal that 

determination through the individual 

appeals process pursuant to the 

requirements in 45 CFR part 155, 

subpart F. Because of the employer 

notification required in some 

circumstances under § 155.310(h), it is 

possible that an employee and an 

employer could request appeals 

concerning the same eligibility 

determination simultaneously, although 

we note that this is likely to be a rare 

occurrence. We did not address this 

situation in the proposed rule and we 

decline to do so in the final rule. 

Instead, we provide flexibility to the 

State Exchange to determine how best to 

sequence the appeals. 

Comment: We received support for 

our approach to notices in the employer 

appeals provisions. One commenter 

particularly supported the proposed 

content required for the notice of appeal 

decision in § 155.555(k), including the 

requirement for the notice to include an 

explanation of the appeal decision, 

factual findings relevant to the decision, 

and citations to the relevant regulations 

that support the decision. The 

commenter also supported the preamble 

discussion about the need to educate 

employers about the purpose and scope 

of the Exchange appeal versus actions 

taken by the IRS regarding assessment of 

the employer shared responsibility 

payment. In addition, the commenter 

appreciated the preamble discussion 

about developing notices to help 

employers understand their potential 

tax liabilities. 

Response: We are finalizing the notice 

provisions as proposed. We also note 

that a paper-based process, as discussed 

above, is acceptable for the first year of 

operations with regard to notices. 

Comment: We received comments 

recommending that an employee whose 

eligibility may be affected by the 

outcome of an employer appeal be 

granted more substantial rights in the 

employer appeal proceeding, including 

the right to review the full record before 

submitting additional evidence. 

Response: We are finalizing the rule 

as proposed with regard to the 

procedural rights of the employee and 

employer. We have not included 

additional provisions allowing either 

party to view or respond to the 

information submitted by the other. 

Only limited information is relevant to 

an employer appeal such as, 

information about what coverage (if any) 

the employer makes available to the 

employee and what the cost of such 

coverage (if any) is to the employee. We 

expect the notices sent by the Exchange 

or appeals entity to the employer and 

the employee to make clear that only 

information addressing these items is 

relevant to the employer appeal. We 

also expect that the employee already 

will have submitted all or nearly all 

available, relevant information as part of 

the eligibility determination process; 

however, we anticipate that 

communications from the Exchange and 

appeals entity will help the employee 

understand the information that the 

appeals entity will be considering, and 

what additional information it might be 

helpful for the employee to submit. We 

note that, as relevant to household 

income, the employer will only be in a 

position to submit information about 

compensation the employer pays to the 

employee concerned. Moreover, as 

explained in preamble to § 155.555(k), 

the employee and members of his or her 

household, if applicable, will have the 

right to appeal a redetermination that 

results from an employer appeal 

decision, which is an important 

additional protection for the due 

process rights of the employee and 

members of his or her household, if 

applicable. If the employee or a member 

of the employee’s household does 

appeal the redetermination, he or she 

will have access to the information used 

in that redetermination, which will 

include information about employersponsored coverage. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.555 of the proposed 

rule with the following modifications. 

In § 155.555(b), we are removing the 

references to § 155.505(e) to eliminate 

the cross-reference to standards for 

representatives that do not contemplate 

application to employers. 

In § 155.555(d)(4), we are modifying 

the language using three subparagraphs 

to provide additional detail about the 

process for an appeals entity to send a 

notice of an invalid appeal request to an 

employer. Paragraph (d)(4) provides, 

‘‘[p]romptly and without undue delay 

send written notice to the employer of 

an appeal request that is not valid 

because it fails to meet the requirements 

of this section. The written notice must 

inform the employer—[.]’’ Subparagraph 

(d)(4)(i) has been modified to require the 

notice inform the employer ‘‘[t]hat the 

appeal request has not been accepted[.]’’ 

We are modifying subparagraph 

(d)(4)(ii) to require the notice inform the 

employer ‘‘[a]bout the nature of the 

defect in the appeal request[.]’’ New 

subparagraph (d)(4)(iii) requires the 

notice inform the employer ‘‘[t]hat the 

employer may cure the defect and 

resubmit the appeal request by the date 

determined under paragraph (c) of this 

section, or within a reasonable 

timeframe established by the appeals 

entity.’’ These changes mirror similar 

modifications made in the individual 

Exchange eligibility appeals provisions. 

We are modifying paragraph (f)(3) to 

include ‘‘as to’’ before ‘‘why,’’ and 

paragraph (j)(1) to include ‘‘of this 

section’’ after ‘‘paragraph (i)(2).’’ In 

paragraph (l), we are modifying the 

provision by adding ‘‘and the eligibility 

of the employee’s household members, 

if applicable,’’ for additional clarity. 

Finally, we are modifying 

§ 155.555(k)(2) to require the inclusion 

of additional content in the notice of 

employer appeal decision to the 

employee, specifically ‘‘[a]n explanation 

that the employee and his or her 

household members, if applicable, may 

appeal a redetermination of eligibility 

that occurs as a result of the appeal 

decision.’’ This modification reflects our 

policy to provide an employee or a 

member of an employee’s household, if 

applicable, who receives an adverse 

redetermination of eligibility as a result 

of an employer appeal, the ability to 

appeal that redetermination through the 

process provided in 45 CFR part 155, 

subpart F. 

7. Subpart H—Exchange Functions: 

Small Business Health Options Program 

(SHOP) 

a. Standards for the Establishment of a 

SHOP (§ 155.700) 

We proposed to amend § 155.700 by 

defining ‘‘SHOP application filer’’ to 

mean an applicant, an authorized 

representative, an agent or broker of the 

employer, or an employer filing for its 

employees where not prohibited by 

other law. 

Comment: Several commenters to 

proposed § 155.700 supported the 

amendment of the definition of ‘‘SHOP 

application filer’’ to include entities that 

have traditionally assisted employees in 

filing applications to provide such 

assistance, such as authorized 

representatives, agents or brokers of an 

employer, or an employer on behalf of 

its employees. One commenter 

recommended adding Navigators to the 

definition. 


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Response: We disagree with the 

commenter that Navigators should be 

included in the definition of ‘‘SHOP 

application filer.’’ Navigators can 

provide important assistance in helping 

an employer or employee in filling out 

an application, but generally speaking a 

Navigator cannot actually file the 

application for an employer or 

employee because under existing 

guidance, a Navigator generally cannot 

select a QHP for an applicant—an 

inherent aspect of filing a SHOP 

applications. 

Summary of Regulatory Changes 

We are finalizing the provision as 

proposed. 

b. Functions of a SHOP (§ 155.705) 

In § 155.705, we re-proposed a new 

paragraph (c) to coordinate SHOP 

functions with the functions of the 

individual market Exchange for 

determining eligibility for insurance 

affordability programs with an 

exemption for a State operating a SHOP 

independently of an individual market 

Federally-facilitated Exchange. 

Specifically, we proposed that except in 

the case where a State is operating only 

a SHOP, a SHOP must provide data to 

the State’s corresponding individual 

market Exchange related to eligibility 

and enrollment of qualified employees 

in the SHOP. This data sharing may 

improve the accuracy of the individual 

market Exchange’s eligibility 

determinations for affordability 

programs. 

In § 155.705(d), we proposed that 

when a State establishes and operates a 

SHOP independently of an individual 

market Federally-facilitated Exchange, 

the SHOP would have the flexibility to 

allow SHOP Navigators to fulfill their 

statutory and regulatory obligations 

under section 1311(i) of the Affordable 

Care Act and 45 CFR 155.210 to 

facilitate enrollment in QHPs, and to 

refer consumers with complaints, 

questions, and grievances to applicable 

offices of health insurance consumer 

assistance or ombudsmen, by referring 

small businesses to agents and brokers 

for these types of assistance, so long as 

State law permits agents and brokers to 

carry out these functions. 

We intend to finalize proposed 

§ 155.705(b)(6)(i) in future rulemaking 

when we finalize the provisions 

proposed in § 156.80(d) regarding the 

frequency of rate updates in the small 

group market, including coverage 

offered through the SHOPs. 

Comment: Some commenters to 

proposed § 155.705(c) opposed the 

exemption from the requirement for 

SHOPs to share eligibility and 

enrollment information of qualified 

employees with the individual market 

Exchange in States that operate only a 

SHOP. Commenters believe that such 

coordination is necessary even in a 

bifurcated model where different 

entities are operating the SHOP and 

individual market Exchanges. 

Response: We note there are technical 

challenges to seamlessly transmitting 

such information where the individual 

market Exchange is Federally operated 

and the SHOP is State-operated. 

Additionally, an individual market 

Federally-facilitated Exchange will still 

have the capability to retrieve the 

necessary individual application and 

enrollment information through other 

methods, such as paper notifications. As 

such, we are finalizing this provision as 

proposed. 

Comment: Some commenters to 

proposed § 155.705(d) opposed allowing 

certain Navigator duties in the SHOP to 

be fulfilled through referrals to agents 

and brokers, because they thought this 

would weaken standards for Navigators 

by reducing Navigators’ role in assisting 

small businesses. Some commenters 

were concerned that some small 

businesses would not have adequate 

assistance enrolling and maintaining 

coverage that meets their needs in States 

that took this option. These commenters 

recommended that all Navigators must 

perform all the Navigator duties. If the 

proposed policy is retained, some 

commenters recommend that States that 

take this option be required to 

demonstrate how the other Navigator 

duties will be provided. Other 

commenters supported the provision as 

proposed. 

Response: Navigators in State SHOPonly Exchanges will still perform 

directly the duties set forth in 45 CFR 

155.210(e)(1), (2), and (5), namely 

conducting public education activities; 

providing information and services in a 

fair, accurate, and impartial manner; 

and providing information in a 

culturally and linguistically appropriate 

manner and ensuring access for 

individuals with disabilities. SHOP 

Navigators in such Exchanges will also 

be required to comply with 45 CFR 

155.210(e)(3) and (4) by providing 

appropriate referrals to state-licensed 

agents or brokers for consumers seeking 

help with selection of a QHP or seeking 

a referral of a complaint, question, or 

grievance to applicable offices of health 

insurance consumer assistance or 

ombudsmen. The individual market 

Exchanges in States operating only a 

SHOP Exchange that elect this option 

will be Federally-facilitated, and HHS 

will award and manage the grants to 

those individual market Navigators who 

will be required to perform directly all 

the duties set forth in 45 CFR 

155.210(e). 

Summary of Regulatory Changes 

We are finalizing 155.705(c) and (d) as 

proposed. 

c. Application Standards for SHOP 

(§ 155.730) 

In § 155.730, we proposed amending 

the SHOP application filing standard to 

relieve SHOPs of having to accept paper 

applications and accept applications by 

telephone. In proposed 155.730(f), we 

also clarified that an employer or an 

employee application may be filed by a 

‘‘SHOP application filer.’’ 

Comment: Some commenters to 

proposed § 155.730 opposed the 

amendment that would no longer 

require SHOPs to accept paper 

applications or applications by 

telephone. Commenters were concerned 

that this proposal would 

disproportionately harm low-wage, 

rural, minority, and immigrant 

businesses and would be unfriendly to 

consumers, especially those without 

access to computers, resulting in 

decreased accessibility to the SHOP. 

Some commenters recommended 

delaying the provision for a year. One 

commenter supported the proposal. 

Response: We believe that small 

businesses and employees have options 

to use in-person assisters, such as 

Navigators, agents, or brokers for help in 

completing a SHOP application when a 

paper or telephone option is not 

available. Additionally, we believe that 

making paper and telephone 

applications optional provides States 

with more flexibility to receive 

applications in a way that makes the 

most sense for the State’s applicants, 

and that this flexibility could reduce 

operational costs. Finally we believe the 

inherent limitations of paper 

applications, such as the inability to 

provide real time rate quotes and to 

complete the enrollment process at the 

same time the application is completed, 

may lead to low usage of paper 

applications. 

Summary of Regulatory Changes 

We are finalizing the provision with 

a correction to paragraph (f), adding to 

the final language the provision title 

‘‘Filing’’ that is in current regulation but 

was mistakenly omitted from the 

proposed rule. 

d. Termination of Coverage (§ 155.735) 

In § 155.735, we proposed that each 

SHOP would be required to develop 

uniform standards for the termination of 

coverage in a QHP, clarified the 


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authority for SHOPs to establish 

termination standards, and set such 

standards for the FF–SHOP. 

Comment: Many commenters 

supported proposed § 155.735 on 

terminations and grace periods. One 

commenter recommended that we 

clarify termination and reinstatement 

policies and recommended that SHOPs 

establish different standards depending 

on whether a participating employer 

offers its employees only one 

comprehensive medical plan or all 

plans at one metal level. One 

commenter requested that we clarify 

which termination and grace period 

provisions would be effective in 2014. 

Response: We believe that grace 

periods and termination procedures 

must be standardized in all FF–SHOPs, 

even after employee choice is 

implemented in 2015, regardless of 

whether a participating employer offers 

its employees only one comprehensive 

medical plan or all plans at one metal 

level. Standardizing the timing, form, 

and manner of a group’s termination 

from the FF–SHOP will simplify the 

complexity of QHP administration 

while ensuring that an employer 

offering coverage will be subject to 

uniform, predictable termination 

policies regardless of what coverage 

options the employer elects to offer its 

employees. Further, creating uniform 

termination policies for all FF–SHOPs 

will reduce the complexity of systems 

interactions with QHP issuers and 

therefore ease QHP issuer compliance 

with FF–SHOP termination polices 

policies. 

In 2014, for the FF–SHOP and States 

not implementing employee choice, 

§ 156.285(d)(1)(i)(B) and (d)(1)(iii)(B) 

reference the requirements in 45 CFR 

156.270 as governing termination of 

coverage. 

Summary of Regulatory Changes 

We are finalizing the provision as 

proposed. 

e. SHOP Employer and Employee 

Eligibility Appeals Requirements 

(§ 155.740) 

In § 155.740, we proposed standards 

for SHOP employer and employee 

eligibility appeals We proposed that a 

State that operates a SHOP must provide 

a SHOP eligibility appeals process and 

that the HHS appeals entity will provide 

a SHOP appeals process for States that 

do not elect to establish and operate a 

SHOP. As with employer appeals in 

§ 155.555, we did not propose that 

SHOP employers and employees be 

permitted to elevate an appeal to HHS 

if the State operates a SHOP and 

provides a SHOP eligibility appeals 

process. 

We proposed the process and 

standards for requesting an appeal and 

the standards for providing notice of the 

appeal request to the SHOP employer or 

employee and to the SHOP. We 

proposed requirements for transmitting 

and receiving records related to the 

appeal between the SHOP and the 

appeals entity. We also provided 

standards for dismissing SHOP appeals 

and providing an opportunity for a 

SHOP appellant to request a dismissal 

be vacated. We proposed procedural 

rights for SHOP appellants. Finally, we 

proposed standards for reviewing the 

appeal, the content and notice of the 

appeal decision, and implementing the 

appeal decision. 

Comment: One commenter supported 

our proposal to enable SHOP employers 

and employees to appeal determinations 

of ineligibility even though SHOP 

appeals were not specifically stipulated 

in section 1411(f) of the Affordable Care 

Act. 

Response: We are finalizing the 

requirement to provide an eligibility 

appeals process for SHOP employers 

and employees as proposed in 

§ 155.740(b). 

Comment: We received comments 

about which entity should be 

responsible for providing a SHOP 

eligibility appeals process. One 

commenter sought clarification as to 

whether the SHOP appeals process can 

be delegated to HHS. Similarly, one 

commenter recommended that HHS 

consider performing eligibility appeals 

for all SHOPs regardless of whether the 

State operates its own SHOP. The 

commenter noted that allowing all 

States to defer SHOP eligibility appeals 

to HHS would provide for a streamlined 

appeals process, particularly where 

States take advantage of the flexibility 

provided in the operation of individual 

and employer appeals processes 

pursuant to § 155.505(c) and 

§ 155.555(b) respectively. 

Response: The entity that determined 

an employer’s or employee’s eligibility 

to participate in the SHOP will be in the 

best position to provide an effective 

appeal of that determination. We 

anticipate that the volume of SHOP 

appeals will be small, and due to the 

nature of the SHOP eligibility criteria, 

the appeals will not be complex. In 

addition, the SHOP was designed with 

flexibility to meet the individual needs 

of States. For example, the SHOP 

eligibility standards allow for a State to 

require additional verification before 

providing the employer or employee 

with an eligibility determination. 

Therefore, we anticipate that each SHOP 

will be in the best position to adjudicate 

SHOP eligibility appeals. We are 

finalizing the provisions of 

§ 155.740(b)(1) as proposed. 

Comment: We received comment 

regarding the proposed requirements for 

accepting SHOP appeal requests. 

Specifically, one commenter expressed 

concern over the modes proposed for 

accepting appeal requests. The 

commenter noted that the requirement 

to accept requests by telephone should 

be removed, or provided only at State 

option. 

Response: As with the individual 

eligibility appeals rules we are 

finalizing in subpart F of part 155, we 

are finalizing § 155.740 as proposed; 

however, as noted above, appeals 

entities may use a paper-based process 

for the first year of operations. By the 

second year of operations, all SHOPs 

and appeals entities must accept appeal 

requests in accordance with the final 

rule. 

Comment: We received one comment 

regarding the intersection between 

acknowledging appeal requests, the 

ability to cure a defective appeal 

request, and dismissing appeals. The 

commenter recommended, first, that 

SHOP employers and employees be 

notified that they can cure a defective 

appeal request and, second, that HHS 

permit the appeals entity to impose a 

reasonable deadline for amendment of 

an appeal request. Absent such a 

deadline, the commenter indicated that 

an appeals entity that issued a notice of 

a defective appeal request will not know 

when it can comply with its obligation 

to dismiss the appeal for being invalid 

under § 155.740(i). 

Response: We agree that invalid 

appeal requests submitted toward the 

end of the 90-day appeal request 

timeframe creates this risk that the 

SHOP employer or employee will not 

have time to cure the error before the 

90-day window closes. We are 

modifying final § 155.740(g)(3) to 

specifically provide that the SHOP or 

appeals entity must inform the SHOP 

employer or employee that they have an 

opportunity to cure the error and may 

resubmit the appeal request if it meets 

the timeliness requirements of 

paragraph (f), or within a reasonable 

timeframe established by the appeals 

entity. 

Comment: Commenters cited 

operational difficulties in implementing 

retroactive eligibility for the SHOP and 

requested that retroactive eligibility be 

limited to specific situations. For 

example, one commenter suggested that 

retroactive eligibility should be 

permitted only for employers already 

enrolled in coverage, so that issuers will 


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10Medicaid 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 

(July 15, 2013). 

not have to cancel coverage for that 

employer and all of its covered 

employees, and refund payments for 

claims submitted. Similarly, another 

commenter noted that retroactive 

effective dates should not be applied in 

the case of an appeal decision that 

would reinstate an entire group. Finally, 

one commenter requested that initial 

applicants not be permitted retroactive 

eligibility. 

Response: We anticipate the volume 

of SHOP appeals, as well as the number 

of SHOP appeals resulting in 

retroactivity, will be small given the 

minimal and straightforward nature of 

SHOP eligibility for both employers and 

employees. Because of the SHOP rules 

provide for rolling enrollment, 

employers who are denied eligibility for 

the SHOP will have the ability to 

reapply immediately upon receiving a 

denial, which may be quicker than 

requesting an appeal. For these reasons, 

we are finalizing the requirements as 

proposed, offering retroactive eligibility 

if an employer or employee is 

determined eligible upon appeal 

because we consider retroactivity to be 

an important protective feature of the 

appeals process. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 155.740 of the proposed 

rule with the following modifications. 

In paragraph (b)(2), we are adding the 

phrases ‘‘that provides for the 

establishment of a SHOP’’ in two places 

to reflect that some States may establish 

and operate only a SHOP Exchange, 

while HHS establishes and operates the 

corresponding individual market 

Exchange. We are also making this same 

addition to § 155.740(f)(1)(ii). In 

paragraph § 155.740(b)(2), we are 

removing the word ‘‘SHOP’’ and leaving 

the requirement directed at the ‘‘appeals 

entity.’’ We are correcting subparagraph 

(f)(1)(ii) to change the period to a 

semicolon. 

In § 155.740(g)(3)(i), we are modifying 

the language to provide additional detail 

about what happens when an appeals 

entity sends notice of an invalid appeal 

request. We are adding three 

subparagraphs to delineate the content 

requirements, including the addition 

that the notice must include ‘‘an 

explanation that the employer or 

employee may cure the defect and 

resubmit the appeal request if it meets 

the timeliness requirements of 

paragraph (f) of this section, or within 

a reasonable timeframe established by 

the appeals entity.’’ These changes 

mirror similar modifications made in 

the individual and employer appeals 

provisions in this final rule. Finally, we 

are modifying subparagraph (i)(1)(ii) to 

remove the reference to (f)(1) and 

replace it with a reference to (f) as a 

whole. 

D. Part 156—Health Insurance Issuer 

Standards Under the Affordable Care 

Act, Including Standards Related to 

Exchanges 

1. Subpart A—General Provisions 

a. Definitions (§ 156.20) 

We proposed amending 45 CFR 

156.20 by adding the definition for 

‘‘Exchanges’’ and adding the definitions 

for ‘‘Delegated entity’’ and 

‘‘Downstream entity.’’ 

We received no direct comment on 

the definition of ‘‘Exchange,’’ though we 

did receive several general comments 

and comments to § 155.100 in support 

of permitting a State to elect to establish 

just a SHOP. 

Comment: One commenter 

recommended that we broaden the 

definitions of delegated and 

downstream entities to include 

nonprofit community-based 

organizations whose purpose is health 

care consumer education and advocacy. 

The commenter expressed concern that 

the proposed definitions contemplate 

oversight of brokers and agents by 

carriers that may introduce a potential 

conflict of interest in directly providing 

administrative services or health care 

services to qualified individuals, 

qualified employers, or qualified 

employees and their dependents. 

Response: We believe that broadening 

the definitions of delegated and 

downstream entities to include 

nonprofit community-based 

organizations whose purpose is health 

care consumer education and advocacy 

could be potentially unduly 

burdensome, as many nonprofit 

community-based organizations are not 

currently subject to all regulatory 

requirements applicable to delegated 

and downstream entities, due to the 

limited applicability of such 

requirements to the activities of these 

entities. In contrast, the activities of 

brokers and agents are subject to such 

regulatory requirements. 

Summary of Regulatory Changes 

We are finalizing this provision as 

proposed. 

2. Subpart C—Qualified Health Plan 

Minimum Certification Standards 

a. Termination of Coverage for Qualified 

Individuals (§ 156.270) 

As finalized in the Exchange 

Eligibility and Enrollment Rule,10

§ 156.270 specifies standards for QHP 

issuers regarding the termination of 

coverage for individuals enrolled in 

QHPs through the Exchange. In 

paragraph (b), we made a drafting error 

in providing that if a QHP issuer 

terminates an enrollee’s coverage in 

accordance with § 155.430(b)(1)(i), (ii), 

or (iii), the QHP issuer must, promptly 

and without undue delay, provide the 

enrollee with a notice of termination of 

coverage that includes the termination 

effective date and reason for 

termination. Rather, the appropriate 

cross-reference in § 156.270(b) should 

refer to § 155.430(b)(2)(i), (ii), or (iii), in 

order to accurately describe situations 

where the QHP issuer may terminate an 

enrollee’s coverage, and as such, we 

make the necessary technical correction. 

Summary of Regulatory Changes 

We make a technical correction in 

paragraph (b) to appropriately refer to 

situations where the QHP issuer may 

terminate an enrollee’s coverage. 

b. Additional Standards Specific to 

SHOP (§ 156.285) 

We proposed to amend § 156.285 to 

ensure that all QHP issuers offering 

coverage in a SHOP comply with the 

termination of coverage requirements 

proposed at § 155.735 as a condition of 

certification for plan years beginning on 

or after January 1, 2015, when § 155.735 

will apply to all SHOPs. Some SHOPs 

may decide to implement employee 

choice and premium aggregation before 

January 1, 2015, and § 155.735 would 

apply in such SHOPs as an operational 

requirement. 

Although we did not receive 

comments directly on this provision, we 

received several comments to proposed 

§ 155.735 regarding SHOP termination 

policies. Those comments are addressed 

in the discussion of § 155.735 above. 

Summary of Regulatory Changes 

We finalize the provision as proposed 

with a technical correction to a drafting 

error in proposed § 156.285(d)(1)(i)(B). 

Section 156.285(d)(1)(i)(B) is finalized 

to properly reference § 156.270(a) and 

not § 155.270. 


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3. Subpart D—Federally-Facilitated 

Exchange Qualified Health Plan Issuer 

Standards 

a. Standards for Downstream and 

Delegated Entities (§ 156.340) 

We proposed in § 156.340 standards 

for delegated and downstream entities, 

similar to existing standards for such 

entities that contract with Medicare 

Advantage organizations, described at 

42 CFR 422.504(i)(3)–(4). In 

§ 156.340(a), we proposed the general 

requirement that, notwithstanding any 

relationship(s) that a QHP issuer may 

have with delegated or downstream 

entities, the QHP issuer maintains 

responsibility for its compliance and the 

compliance of any of its delegated or 

downstream entities, with all applicable 

standards, including those we proposed 

at § 156.340(a)(1)–(4). In paragraphs 

(a)(1) through (a)(4), we proposed that 

the QHP issuer be required to comply 

with Federal standards, specifically the 

obligations as set forth under: subpart C 

of part 156, which governs QHP 

minimum certifications standards; 

subpart K of part 155, which governs 

Exchange functions pertaining to QHP 

certification; subpart H of part 155, 

which governs the Exchange functions 

of the SHOP; standards in § 155.220 

with respect to assisting with 

enrollment in QHPs; and standards in 

§ 156.705 and § 156.715 for maintenance 

of records and compliance reviews for 

QHP issuers operating in an FFE and an 

FF–SHOP. 

In addition, in § 156.340(b)(1)–(2), we 

proposed that all agreements among the 

QHP issuer’s delegated and downstream 

entities be required to specify delegated 

activities and reporting standards, and 

either provide for revocation of the 

delegated activities and reporting 

standards, or specify other remedies in 

instances where HHS or the QHP issuer 

determines that such parties have not 

performed satisfactorily. 

Furthermore, we proposed in 

§ 156.340(b)(3) that all agreements 

among the QHP issuer’s delegated and 

downstream entities be required to 

specify that the delegated or 

downstream entity must comply with 

all applicable laws and regulations 

relating to the standards specified under 

paragraph (a) of this section. In 

§ 156.340(b)(4), we proposed that the 

QHP issuer’s agreement with any 

delegated or downstream entity must 

specify that the delegated or 

downstream entity must permit access 

by the Secretary and the OIG or their 

designees in connection with their right 

to evaluate through audit, inspection, or 

other means, to the delegated or 

downstream entity’s books, contracts, 

computers, or other electronic systems, 

including medical records and 

documentation, relating to the QHP 

issuer’s obligations in accordance with 

Federal standards under paragraph (a) of 

this section until 10 years from the final 

date of the agreement period. 

Finally, we proposed in 

§ 156.340(b)(5) that all existing 

agreements contain specifications 

described in paragraph (b) of this 

section by no later than January 1, 2015. 

For agreements that are newly entered 

into as of October 1, 2013, we proposed 

an effective date for the specifications 

described in paragraph (b) of this 

section to be no later than the effective 

date of the agreement. 

Comment: One commenter suggested 

that health plans have the flexibility to 

ensure compliance with all applicable 

requirements, rather than requiring 

compliance with all existing Exchange 

regulatory requirements. Furthermore, 

the commenter recommended that 

health plans have the ability to tailor 

their agreements to the scope of the 

entity’s work for the issuer. 

Response: In § 156.340(a), we 

proposed that a QHP issuer maintains 

responsibility for its compliance and the 

compliance of any of its delegated or 

downstream entities, as applicable, with 

all applicable standards. We believe that 

the proposed inclusion of ‘‘as 

applicable, with all applicable 

standards’’ in this section of the 

regulation addresses the commenter’s 

suggestion. In addition, we believe that 

the regulation allows a health plan to 

tailor its agreement with a delegated or 

downstream entity to the scope of the 

entity’s work for the issuer. 

Comment: One commenter expressed 

concern that the proposed effective date 

of October 1, 2013, is too soon for 

compliance with specifications 

described in paragraph (b) of this 

section, for the reason that issuers may 

not know by that time which 

downstream and delegated entities with 

which they will enter into contracts to 

meet QHP requirements. 

Response: In § 156.340(b)(5), we 

proposed that all existing agreements 

contain specifications described in 

paragraph (b) of this section by no later 

than January 1, 2015 for existing 

agreements, and no later than the 

effective date of the agreement for 

agreements that are newly entered into 

as of October 1, 2013. We believe that 

the proposed inclusion of ‘‘no later than 

the effective date of the agreement for 

agreements that are newly entered into 

as of October 1, 2013,’’ addresses the 

commenter’s concern, in that the 

effective date of compliance with 

specifications described in paragraph (b) 

becomes the effective date of the 

agreement for agreements newly entered 

into after October 1, 2013. 

Comment: Two commenters urged 

CMS to rescind the proposed 

regulations under § 156.340(b), 

expressing concern that such 

requirements would unduly burden 

physician and medical group practices 

and negatively affect access to care. 

Response: In § 156.340(b), we 

proposed that all agreements among a 

QHP issuer’s delegated and downstream 

entities, including entities that provide 

health care services, be required to 

specify: 1) Delegated activities, 

reporting responsibilities; 2) and 

remedies for noncompliance; 3) 

mandatory compliance with all 

applicable laws and regulations related 

to the QHP issuer’s obligations under 

156.340(a); and 4) permission for the 

Secretary, OIG, or their designees to 

audit or inspect the entity’s books, 

contracts, computers, or other electronic 

systems, including medical records and 

documentation, relating to the QHP 

issuer’s obligations under 45 CFR 

156.340(a) for 10 years from the final 

date of the agreement period. In 

§ 156.340(a), we proposed that a QHP 

issuer maintains responsibility for its 

compliance and the compliance of any 

of its delegated or downstream entities, 

as applicable, with all applicable 

standards. We believe that the proposed 

inclusion of ‘‘as applicable, with all 

applicable standards’’ in this section of 

the regulation means that health care 

providers that have entered into 

agreements with QHP issuers must 

comply with only those QHP standards 

that would be directly applicable to 

health care providers. We agree with the 

commenters that health care providers 

generally not be subject to many of the 

requirements for QHP issuers in the 

FFEs, unless the QHP issuer has 

delegated its responsibilities to the 

health care provider. 

Comment: Many commenters strongly 

supported the proposed provisions of 

§ 156.340, stating that the provisions 

provide greater support for the 

enforcement of Federal standards that 

protect consumers, including 

nondiscrimination protections that 

ensure equal access to care and 

coverage. 

Response: We agree that the 

provisions will implement greater 

protections for consumers to receive 

equal access to care and coverage. 

Summary of Regulatory Changes 

We are finalizing the provision as 

proposed. 


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4. Subpart I—Enforcement Remedies in 

Federally-Facilitated Exchanges 

a. Available Remedies; Scope 

(§ 156.800) 

In § 156.800, we proposed that HHS 

may impose civil money penalties 

(CMPs) on QHP issuers that are not in 

compliance with FFE standards and 

decertify QHPs offered by noncompliant QHP issuers. We sought 

comments on the use of these proposed 

compliance tools. 

Comment: We received a comment 

requesting a moratorium on 

enforcement actions and a two year 

enforcement safe harbor for QHP issuers 

acting in good faith to comply with QHP 

requirements. The commenter explained 

that the safe harbor would give 

stakeholders additional time to come 

into compliance with FFE standards and 

the moratorium would allow HHS extra 

time to make sure that its technology 

and program infrastructure are working 

appropriately. Separately, we received 

another comment requesting a one year 

good faith enforcement safe harbor. 

Response: QHP issuers are expected 

to be in compliance with standards 

applicable to QHP issuers at the time of 

certification and on an ongoing basis. As 

we stated in the preamble to the 

proposed rule, we expect QHP issuers in 

the FFEs to cooperate with HHS in 

resolving any issues of non-compliance 

that are identified during the plan 

benefit year. We also noted that HHS 

would take enforcement actions only in 

egregious circumstances and as such, 

we expect few, if any, decertifications, 

especially in the first year. 

In response to the comments received, 

we now modify the regulation text to 

clarify that if CMS is able to determine 

that an issuer offering QHPs in an FFE 

is making good faith efforts to comply 

with Exchange standards applicable to 

issuers offering QHPs in the FFEs, we 

will not, under this subpart, seek to 

impose CMPs, or initiate 

decertifications during 2014. At the 

appropriate time we will consider 

extending this good-faith compliance 

through 2015. 

We note that the determination of 

good faith may require issuers to allow 

CMS to conduct reviews of QHP 

materials and to make good faith efforts 

to comply with plans of correction. We 

will coordinate closely with States to 

avoid unnecessary duplication of 

monitoring and oversight efforts. 

Summary of Regulatory Changes 

We are adding a new paragraph (c) to 

§ 156.800 to implement the good faith 

compliance policy described above. 

b. Bases and Process for Imposing Civil 

Money Penalties in Federally-Facilitated 

Exchanges (§ 156.805) 

In § 156.805, we proposed the bases 

and process for imposing a CMP in 

FFEs. We received general comments 

supporting our proposed enforcement of 

FFE standards through CMPs and 

decertifications but did not receive any 

comments regarding the specific bases 

for CMPs. 

Summary of Regulatory Changes 

We are making technical edits to 

§§ 156.805(d)(1)(v) and 156.805(e)(3) to 

reflect that the proposed administrative 

hearing process for enforcement actions 

under subpart I is not being finalized in 

this rule. We are finalizing the rest of 

this section as proposed. 

c. Bases and Process for Decertification 

of a QHP Offered by an Issuer Through 

the Federally-Facilitated Exchanges 

(§ 156.810) 

In § 156.810, we proposed the bases 

for decertifying QHPs in the FFEs and 

standard and expedited processes for 

decertification. We proposed that when 

decertification is based on 

§ 156.810(a)(7), (8) or (9), HHS may 

pursue the decertification on an 

expedited process. We sought comments 

on whether additional bases should be 

added. 

Comment: We received comments in 

support of our proposed bases for 

decertification and the separate 

processes for standard and expedited 

decertification. One commenter 

recommended that we add 

§ 156.810(a)(4) to the grounds for 

expedited decertification, citing the 

negative impacts that repeated, 

systematic, and willful violation of this 

standard would have on enrollees. We 

did not receive any comments opposing 

these two proposed processes. 

Response: We proposed in 

§ 156.810(a)(4) that a QHP may be 

decertified on the basis that the QHP 

issuer substantially fails to comply with 

the standards regarding advance 

payments of the premium tax credit and 

cost-sharing in Subpart E of Part 156. 

We agree with the commenter that 

violation of this standard may have 

negative impacts on enrollees; however, 

we envision expedited decertification to 

be reserved for the most serious 

instances of non-compliance that could 

present a risk to enrollees’ ability to 

access needed health items or services 

and those that may substantially 

compromise the integrity of an FFE. 

After careful consideration, we will not 

add § 156.810(a)(4) to the bases for 

expedited decertification at this time; 

however, we will continue to assess the 

appropriateness of adding this as a basis 

for expedited decertification. 

Comment: One commenter 

recommended that rather than pursuing 

decertification when a QHP issuer 

substantially fails to meet the 

requirements under § 156.230 related to 

network adequacy standards, or 

§ 156.235 related to the inclusion of 

essential community providers, HHS 

require QHP issuer networks to include 

a number of advanced practice 

registered nurses that is no less than 10 

percent of the number of independently 

practicing advanced practice registered 

nurses enrolled as Medicare Part B 

providers who have provided one or 

more services to Medicare fee-forservice beneficiaries in the most recent 

year for which CMS provider data are 

available. 

Response: We will continue assessing 

whether it is appropriate to require QHP 

issuers to contract with certain health 

care providers but not others as a 

certification requirement, but will be 

not make this change to the certification 

requirements at this time. 

Summary of Regulatory Changes 

We are making a change to 

§ 156.810(e) to reflect that the proposed 

administrative hearing process for 

enforcement actions under subpart I is 

not being finalized in this rule. We are 

making a technical correction to a 

typographical error in subparagraph 

(b)(2) and a technical correction to add 

violation of privacy or security 

standards, proposed as a basis for 

decertification in the preamble to the 

proposed rule, to the list of bases in the 

regulation text. 

5. Subpart K—Cases Forwarded to 

Qualified Health Plans and Qualified 

Health Plan Issuers in FederallyFacilitated Exchanges by HHS 

a. Standards (§ 156.1010) 

We proposed in § 156.1010 to set 

requirements for resolving cases 

forwarded by HHS to a QHP issuer 

operating in an FFE. We proposed the 

definition of a case as a communication 

brought by a complainant that expresses 

dissatisfaction with a specific person or 

entity subject to State or Federal laws 

regulating insurance, concerning the 

person or entity’s activities related to 

the offering of insurance, other than a 

communication with respect to an 

adverse benefit determination as 

defined in 45 CFR 147.136(a)(2)(i). For 

a case forwarded by a State to a QHP 

issuer operating in an FFE, we proposed 

that the QHP issuer be required to 

comply with applicable State laws and 


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regulations. We proposed that cases 

received by a QHP issuer operating in 

an FFE directly from a complainant or 

the complainant’s authorized 

representative be handled by the issuer 

through its internal customer service 

process. For cases received by a QHP 

issuer operating in an FFE from HHS, 

we proposed that the QHP issuer be 

required to investigate and resolve 

cases, as appropriate, pursuant to the 

proposed standards in § 156.1010. 

In § 156.1010(a), we proposed the 

definition of a case. In § 156.1010(b), we 

proposed that QHP issuers operating in 

an FFE must investigate and resolve, as 

appropriate, cases brought by a 

complainant or the complainant’s 

authorized representative and 

forwarded to the issuer by HHS. We 

proposed that this subsection would not 

apply to adverse benefit determinations 

as defined in 45 CFR 147.136(a)(2)(i), 

which are subject to the regulations 

governing internal claims appeals and 

external review in 45 CFR 147.136. 

Section 156.1010(c) proposed that 

cases may be forwarded to a QHP issuer 

operating in an FFE through a casework 

tracking system developed by HHS, or 

through other means as determined by 

HHS. Section 156.1010(d) proposed that 

cases forwarded by HHS to a QHP issuer 

operating in an FFE must be resolved 

within fifteen calendar days of receipt of 

the case. We proposed that such cases 

involving an immediate need for health 

services, as defined in § 156.1010(e), 

must be resolved no later than 72 hours 

after receipt of the case, unless a State 

law or regulation established a stricter 

timeframe, which would then control. 

In § 156.1010(e) we proposed that an 

urgent case is one in which there is an 

immediate need for health services 

because the non-urgent standard could 

seriously jeopardize the enrollee’s or 

potential enrollee’s life, or health or 

ability to attain, maintain, or regain 

maximum function. 

In § 156.1010(f), we proposed that, for 

cases forwarded by HHS, QHP issuers 

operating in an FFE are required to 

provide notice to complainants 

regarding the disposition of a case as 

soon as possible upon resolution of the 

case, but in no event later than seven 

business days after the case is resolved 

and that such notification may be by 

verbal or written means as determined 

most appropriate by the QHP issuer. In 

§ 156.1010(g), we proposed that a QHP 

issuer operating in an FFE must 

document in a casework tracking system 

developed by HHS, or by other means 

as determined by HHS, that the case has 

been resolved, no later than seven 

business days after resolution of the 

case, and that the resolution record 

must include a clear and concise 

narrative explaining how the case was 

resolved including information about 

how and when the complainant was 

notified of the resolution. 

In § 156.1010(h) we proposed that 

cases received by a QHP issuer 

operating in an FFE from a State in 

which the issuer offers QHPs must be 

investigated and resolved according to 

applicable State laws and regulations 

and that QHP issuers operating in an 

FFE must cooperate fully with the State, 

HHS, or any other appropriate 

regulatory authority that is handling a 

case. 

Comment: Several commenters 

requested clarification regarding the 

definition of ‘‘case’’ and the types of 

cases that are subject to this subsection, 

and two commenters recommended that 

this subsection apply only to cases 

related to the advance payments of the 

premium tax credit and cost sharing 

reductions. Two commenters 

recommended that cases related to any 

health care services be excluded 

because they would necessarily be 

subject to the regulations governing 

internal claims appeals and external 

review in 45 CFR 147.136. Several 

commenters recommended that the 

definition of ‘‘urgent case’’ be expanded 

to include cases in which using the 

standard timeframe would jeopardize an 

individual’s access to coverage. 

Response: In response to comments 

received, we are adding language to 

§ 156.1010(a) to provide that this 

subsection excludes cases related to 

eligibility determination processes, 

eligibility appeals, and other issues 

subject to Subpart F of this rule. We 

agree that some cases involving health 

care services should not be covered by 

this subsection, and explicitly exclude 

cases otherwise covered by 45 CFR 

147.136. However, we do not agree that 

this subsection should explicitly 

exclude all cases related to health care 

services, and we also disagree that this 

subsection should apply only to cases 

related to the advance payments of the 

premium tax credit and cost-sharing 

reductions. Although complainants may 

bring some issues regarding advance 

payments of the premium tax credit and 

cost-sharing reductions to HHS’ 

attention that will call for direct 

resolution or more intensive handling 

by HHS, we believe there are many 

areas in which HHS can act in the 

consumer’s best interest by forwarding 

the consumer’s case to the QHP issuer, 

as appropriate, including cases that may 

involve health care services but in 

which external review under 45 CFR 

147.136 would not apply. For example, 

this would include a situation in which 

the consumer contacts HHS because the 

QHP issuer has denied a serviced based 

on their assessment that the service is 

not a covered service. In this scenario, 

a consumer may disagree with a QHP 

issuer’s determination that the matter is 

not eligible for external review. There 

are a number of issues—including 

deductibles, application of co-payments, 

and coverage of a specific service—that 

may not fall within the scope of 45 CFR 

147.136 for external review purposes, 

but we believe that such cases should 

also be resolved in a timely fashion. 

We agree with commenters who noted 

that some cases may qualify as urgent 

even where there is not necessarily an 

immediate need for health services, 

such as where a consumer encounters 

difficulties with enrollment near the 

end of an open enrollment period and 

is put at risk of not being able to enroll 

in coverage in a QHP offered through 

the Exchange. In such cases, it is 

important that the issuer respond 

quickly so as to not jeopardize 

consumers’ ability to enroll in coverage. 

Accordingly, we are adding language 

that expands the definition of ‘‘urgent 

case’’ to include instances in which the 

standard timeframe for case resolution 

would jeopardize a consumer’s ability to 

enroll in a QHP through the FFE. 

Comment: Several commenters 

addressed the proposed timeframes and 

notification requirements for the 

resolution of cases forwarded by HHS to 

QHP issuers operating in an FFE, 

including two commenters who 

recommended that the timeframes either 

be removed or lengthened and several 

commenters who supported the 

proposed timeframes or suggested 

imposing more stringent requirements. 

One commenter recommended that 

issuers be required to notify a consumer 

of the resolution of a case in writing in 

order to ensure documentation of the 

resolution for the consumer, and 

another commenter requested 

clarification regarding the penalties that 

would apply to a QHP issuer operating 

in the FFE in the event that the issuer 

does not meet the regulatory 

timeframes. Several commenters 

requested clarification regarding the 

information that QHP issuers will be 

required to enter into the tracking 

system. 

Response: Because we expect that 

consumer cases may often involve a 

consumer’s ability to access to 

coverage—and, relatedly, health care 

services—on a timely basis, we believe 

it is important that cases be resolved in 

an expedient manner. We are therefore 

retaining the fifteen-day required 

response time for consumer cases 

forwarded by HHS to QHP issuers 


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operating in an FFE, with the exception 

of urgent cases as defined in this final 

rule, which require a resolution no later 

than 72 hours after the case is received. 

We expect QHP issuers operating in an 

FFE to resolve the urgent case as quickly 

as required by the severity of the case, 

but in no event later than the 72-hour 

timeframe provided. Additionally, we 

agree with commenters who indicated 

that a seven-day timeframe for 

notification to the complainant of the 

resolution of the case may create a 

significant burden on consumers while 

not meaningfully reducing burden on 

QHP issuers operating in an FFE as 

compared to a shorter timeframe; 

therefore, in response to these 

comments, we are shortening the case 

disposition notification requirement 

from seven business days to three 

business days. We also agree with 

commenters who noted that 

documentation of the case resolution is 

important for consumers to have, and 

we are modifying the final rule to 

require issuers to provide consumers 

with written notification of the case 

disposition. Written notification is not 

required to satisfy the three business 

day timeframe for case resolution 

notification; verbal notification can be 

used to meet this requirement so long as 

such notification is followed by written 

notification in a timely manner, 

pursuant to § 156.1010(f)(2). 

Further, we are restructuring 

§ 156.1010(g), including by adding three 

new paragraphs. We are adding 

§ 156.1010(g)(1) to provide that for cases 

forwarded by HHS, a QHP issuer 

operating in an FFE must use the HHSdeveloped tracking system to document 

the date of resolution of a case. Section 

156.1010(g)(2) contains the proposed 

requirement that a QHP issuer use the 

HHS-developed tracking system to 

document the case resolution summary 

no later than seven business days after 

resolution of the case, including a clean 

and concise narrative with specified 

content. We are also adding 

§ 156.1010(g)(3) to provide that for cases 

forwarded by HHS and which have 

involved an investigation by a State 

agency, including but not limited to a 

State DOI, a QHP issuer operating in an 

FFE must use the HHS-developed 

tracking system to document ‘‘any 

compliance issues identified by the 

State agency implicating the QHP or 

QHP issuer.’’ 

We remind QHP issuers operating in 

an FFE that compliance with all 

applicable Federal standards, including 

those related to case resolution and 

notification, is a condition for QHP 

issuers to continue participating in an 

FFE. We expect QHP issuers will make 

a good faith effort to comply with all 

applicable requirements. As such, as 

described below, during the 2014 plan 

year, we do not anticipating decertifying 

QHPs under 45 CFR 156.810(a)(1), nor 

pursuing civil money penalties under 45 

CFR 156.805(a)(1) for non-compliance 

with these requirements except in the 

most egregious cases. 

Comment: Several commenters 

suggested that HHS require States, 

issuers, and Exchanges to provide 

reports about consumer complaints and 

to make reports about consumer cases 

and complaints publicly available. 

Response: HHS agrees that data 

regarding consumer complaints about 

an issuer is a critically important 

element of issuer oversight, and we 

intend to use the HHS tracking system 

to provide insight into such consumer 

complaints. HHS anticipates that we 

will be making reports and information 

publicly available that include analysis 

of the data we have collected in the 

HHS tracking system. However, we 

disagree with the recommendation that 

we require all States, issuers and 

Exchanges to provide such information. 

Many States already produce public 

reports regarding consumer complaints, 

and additional HHS requirements in 

this area would be duplicative in many 

instances. Additionally, we believe the 

enrollee satisfaction survey required by 

section 1311(c)(4) of the Affordable Care 

Act can provide HHS and consumers 

with the type of information that the 

commenters believe should be made 

publicly available by requiring 

Exchanges to publish information about 

enrollee satisfaction. HHS will also 

explore this issue as we receive cases to 

help us determine if requiring 

additional reporting in the future will 

help increase the effectiveness of issuer 

oversight. 

Comment: Many commenters 

recommended changes related to the 

HHS tracking system and processes. 

Comments included requests for more 

specificity regarding issuer and State 

access to the system; requests for 

clarification regarding other methods 

that HHS may use to forward cases to 

QHP issuers operating in an FFE; and 

recommendations that issuers be 

required to track all consumer cases in 

the HHS tracking system, not simply 

those forwarded by HHS. We also 

received requests for clarification 

regarding the process that QHP issuers 

operating in an FFE are required to use 

to forward cases to the FFE. 

Response: We anticipate that HHS 

will be using a tracking system for 

forwarding cases to QHP issuers 

operating in an FFE, and do not intend 

to routinely use alternate mechanisms to 

do so. However, we retain the language 

about alternate mechanisms in order to 

allow HHS to use other methods if the 

need arises, such as where the tracking 

system is unavailable for an extended 

period of time. HHS intends to provide 

limited access to the tracking system to 

State DOIs in order to ensure that 

departments of insurance are able to 

access cases that fall under their 

jurisdiction. HHS also intends to 

provide limited access to the tracking 

system to QHP issuers operating in an 

FFE to ensure that QHP issuers can 

access cases that concern them on a 

timely basis so that they are able to 

identify and resolve such cases. We 

anticipate providing more information 

about access to this system in 

forthcoming guidance. 

HHS acknowledges that issuers will 

receive cases directly from consumers 

and that such cases could be an 

important source of data, but we are not 

requiring QHP issuers to track all cases 

in the HHS tracking system. We believe 

that the enrollee satisfaction survey 

required by § 1311(c)(4) of the 

Affordable Care Act will be an 

appropriate way to track consumer cases 

received directly by QHP issuers. 

Additionally, we are not accepting the 

recommendation that HHS should 

operate a centralized tracking system for 

all consumer cases because State DOIs 

currently operate independent tracking 

systems and the creation of an 

additional, centralized system may be 

duplicative by necessarily including 

information about cases already existing 

in State tracking systems. Although the 

current model will undoubtedly result 

in some overlap with State systems, 

there will be a significant number of 

cases that are not accounted for in any 

State system. Rather than develop one 

centralized system operated by HHS, we 

will continue to explore ways to ensure 

that multiple systems can interact so 

that there is minimal duplication of 

cases across systems and that also meets 

appropriate security and privacy 

standards. Additionally, we will 

continue to monitor these issues to 

ensure that the HHS and State tracking 

systems as well as the information 

contained in enrollee satisfaction 

surveys provide HHS and consumers 

with adequate data about consumer 

cases to assess QHP issuer performance 

and conduct oversight of QHP issuers 

operating in an FFE. 

For those cases best addressed by the 

FFE in which a consumer directly 

contacts the issuer, such as cases 

involving eligibility determinations or 

the amount of an advance premium tax 

credit, QHP issuers operating in the FFE 

should refer the consumer to the FFE 


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Call Center in order to allow the FFE to 

triage the case and resolve it 

appropriately. 

Comment: Several commenters 

discussed the privacy and security 

standards related to the HHS tracking 

system, including an expression of 

opposition to the sharing of any 

personally identifiable information (PII) 

as well as requests for clarification 

about the consumer permission and 

consent necessary for the FFE to share 

case information with QHP issuers 

operating in an FFE and for those 

issuers to share case information with 

the FFE. 

Response: QHP issuers operating in 

an FFE are required to meet the same 

privacy and security standards with 

respect to the HHS tracking system that 

they are required to meet as a condition 

of offering a QHP in an FFE. 

Additionally, FFEs will obtain 

consumer consent before sharing any 

information with QHP issuers operating 

in an FFE or with State DOIs in order 

to resolve the case. We understand 

concerns about the privacy and security 

of PII, including information about 

health; consumer consent represents a 

consumer’s agreement to have such 

information shared with appropriate 

entities in order to help resolve the 

consumer’s case. When such consent is 

obtained, the information will be shared 

in a manner that appropriately protects 

PII and, where applicable, personal 

health information (PHI), so that such 

information is not shared with other 

entities that should not have access to 

that information. We anticipate that the 

information shared with the appropriate 

QHP issuer will include the consumer 

name, contact information, and details 

about the case provided by the 

consumer to HHS. 

Comment: One commenter expressed 

concern with the proposed approach to 

send consumers to issuers of the QHPs 

in which they are enrolled in cases 

where the consumer has already 

reached out to the issuer, and another 

commenter recommended that the 

proposed processes and timeframes 

apply to all consumer cases in all 

Exchanges. 

Response: We understand the concern 

that, in this circumstance, this approach 

might not seem to offer the consumer 

additional assistance. However, our 

experience with Medicare Advantage 

and Part D complaints has demonstrated 

that we are often able to facilitate 

tangible results for beneficiaries when 

HHS sends a case directly to the 

applicable issuer, including in instances 

where the beneficiary has already 

reached out to the issuer. This approach 

also allows for a more streamlined 

process in which the consumer’s case 

may be dealt with more rapidly than an 

alternate process calling for intensive 

HHS involvement in every case in 

which a consumer has already reached 

out to the issuer. 

Additionally, while we understand 

the argument for consistency across all 

casework systems and processes, and 

the compromises inherent in providing 

different resolution processes and 

timeframes for consumers depending on 

where they first report their case, we are 

not expanding this final rule to include 

Exchange- and QHP-related cases other 

than those which HHS forwards to QHP 

issuers operating in an FFE because we 

want to respect the State laws and 

regulations that currently apply to such 

cases. While in the absence of this final 

rule those laws and regulations would 

also apply to some of the cases that HHS 

forwards to QHP issuers operating in an 

FFE, we believe it is appropriate to 

establish additional timeframes and 

processes because there may be cases 

which are not subject to timeframes set 

forth by State laws and regulations, such 

as cases related to Exchange-specific 

requirements that apply to QHP issuers 

operating in an FFE. 

Comment: One commenter 

recommended that the final rule require 

issuers to use processes and means of 

communication for resolving cases that 

are accessible to individuals with 

limited English proficiency and those 

with disabilities. 

Response: We agree that it is 

important for consumers to receive 

assistance and information in a way that 

they can access and understand, 

including individuals with limited 

English proficiency and individuals 

with disabilities. However, we are not 

accepting the recommendation to 

include additional, specific language in 

this regulation because QHP issuers 

operating in an FFE are already required 

to provide accessible notices to 

enrollees pursuant to 45 CFR 156.250, 

which applies to communications 

regarding consumer cases. We will 

monitor this area carefully to assess 

whether additional guidance is 

necessary in order to ensure that all 

individuals have adequate and 

appropriate access to the information 

and tools needed to have cases resolved. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 156.1010 of the proposed 

rule, with the following modifications. 

We are amending § 156.1010(a) to 

provide that this section does not 

include cases otherwise addressed in 

Subpart F of this rule. In § 156.1010(e), 

we are expanding the definition of 

‘‘urgent case’’ to include instances in 

which application of the non-urgent 

standard would jeopardize a consumer’s 

ability to enroll in a QHP through the 

Federally-facilitated Exchange. In 

§ 156.1010(f) and new paragraph (f)(1), 

we are requiring issuers to provide 

notification to consumers about the 

disposition of a case within three 

business days of the resolution, by 

verbal or written means as determined 

most appropriate by the QHP issuer 

operating in an FFE. In new paragraph 

(f)(2), we are requiring that in instances 

when a QHP issuer operating in an FFE 

notifies the consumer about the 

disposition of a case using non-written 

means, the issuer must provide the 

consumer with written notification of 

the disposition in a timely manner 

following the verbal communication. In 

new paragraph (g)(1), we are requiring 

that a QHP issuer operating in an FFE 

provide the date of resolution of a case 

in the HHS-developed tracking system; 

§ 156.1010(g)(2) contains the proposed 

requirement that a QHP issuer 

document the case resolution summary 

no later than seven business days after 

resolution of the case, including a clean 

and concise narrative with specified 

content; and in new paragraph (g)(3) we 

are requiring that a QHP issuer 

operating in an FFE provide information 

in the HHS-developed tracking system 

about any compliance issues found as 

part of an investigation of a case by a 

State agency, including but not limited 

to a State DOI. 

6. Subpart M—Qualified Health Plan 

Issuer Responsibilities 

a. Direct Enrollment With the QHP 

Issuer in a Manner Considered To Be 

Through the Exchange (§ 156.1230) 

We proposed to add paragraph 

§ 156.1230(a)(1)(i) that would allow, at 

the Exchange’s option, a QHP issuer to 

enroll an applicant who initiates 

enrollment directly with the QHP issuer 

in a manner that is considered 

enrollment through the Exchange if the 

QHP issuer follows the enrollment 

process for qualified individuals set 

forth in § 156.265. 

We proposed paragraph 

§ 156.1230(a)(1)(ii) to ensure that QHP 

issuers that seek to directly enroll 

qualified individuals in a manner 

considered to be through the Exchange 

provide applicants the ability to view 

the QHPs offered by the issuer with data 

elements set forth at 45 CFR 

155.205(b)(1). 

We proposed in paragraph 

§ 156.1230(a)(1)(iii) that QHP issuers 

that seek to directly enroll qualified 

individuals in a manner considered to 


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be through the Exchange using the 

issuer’s Web site must clearly 

distinguish between QHPs for which the 

consumer is eligible and non-QHPs that 

the issuer may offer. We proposed that 

this distinction must also clearly 

articulate that advance payments of the 

premium tax credit and cost-sharing 

reductions apply only to QHPs offered 

through the Exchange. 

In § 156.1230(a)(1)(iv), we proposed 

that QHP issuers that seek to directly 

enroll qualified individuals in a manner 

considered to be through the Exchange 

be required to notify applicants of the 

availability of other QHP products 

offered through the Exchange to 

consumers, regardless of whether they 

apply through a Web site, in-person or 

by phone. The QHP issuer would also 

be required to display the Web link to 

or describe how to access the Exchange 

Web site. We sought comment if HHS 

should require a universal disclaimer to 

be displayed by the issuer that informs 

applicants that other coverage options 

exist in the Exchange and that not all 

coverage options are displayed. 

In § 156.1230(a)(1)(v), we proposed 

that a QHP issuer be required to ensure 

that, when an applicant initiates 

enrollment directly with the QHP issuer 

and the QHP issuer seeks to directly 

enroll the applicant in a manner 

considered to be through the Exchange, 

the applicant is allowed to select an 

advance payment of the premium tax 

credit amount, if applicable, in 

accordance with § 155.310(d)(2), 

provided that the applicant makes the 

attestations required by 

§ 155.310(d)(2)(ii). 

In § 156.1230(a)(2), we proposed that, 

if permitted by the Exchange pursuant 

to § 155.415, a QHP issuer seeking to 

directly enroll applicants in a manner 

considered to be through the Exchange 

enter into an agreement with the 

Exchange prior to allowing any of its 

customer service representatives to 

assist qualified individuals with certain 

application tasks whereby the QHP 

issuer would agree to require each of its 

customer service representatives to at a 

minimum: (i) Receive training on QHP 

options and insurance affordability 

programs, eligibility, and benefits rules 

and regulations; (ii) comply with the 

Exchange’s privacy and security 

standards adopted consistent with 

§ 155.260; and (iii) comply with 

applicable State law related to the sale, 

solicitation, and negotiation of health 

insurance products, including 

applicable State law related to agent, 

broker, and producer licensure; 

confidentiality; and conflicts of interest. 

We solicited comments on these 

proposals. 

We also proposed to add 

§ 156.1230(a)(3) to ensure that the 

premium that a QHP issuer charges to 

a qualified individual or enrollee is the 

same as was accepted by the Exchange 

in its certification of the QHP issuer 

after accounting for any advance 

payments of the premium tax credit. We 

proposed that if the QHP issuer 

identifies an error in the amount it has 

charged the qualified individual, the 

QHP issuer must retroactively correct 

the error no later than 30 calendar days 

after its discovery. We also proposed 

that for issuers of QHPs in the FFE, HHS 

may review the premiums charged to 

qualified individuals through the 

compliance reviews proposed in 

§ 156.715(a). 

Finally, in § 156.1230(b), we proposed 

that the individual market FFEs would 

permit the conduct set forth in this 

section, to the extent permitted by 

applicable State law. As stated earlier in 

the preamble, for purposes of clarity, we 

will refer to ‘‘issuer customer service 

representatives’’ as ‘‘issuer application 

assisters’’ for the rest of this section. 

We received the following comments 

concerning the proposed enrollment 

process provisions. 

Comment: Many commenters 

endorsed the use of a universal 

disclaimer to be displayed by issuers 

that informs applicants that other 

coverage options exist in the Exchange 

and that not all coverage options are 

displayed. Almost all the commenters 

echoed that they believed it was 

important that all applicants understand 

the coverage options available to them. 

One commenter recommended giving 

issuers the flexibility on how to inform 

applicants about the availability of other 

QHPs offered through the Exchange and 

expressed the operational difficulty in 

adding a universal disclaimer. 

Response: In response to all the 

comments, we agree that a universal 

disclaimer would allow an applicant to 

make a more informed decision by 

informing applicants where to find 

information on all available QHPs 

including language that selecting 

multiple enrollment groups and 

catastrophic plans may only be 

supported through the FFM. 

Accordingly, we modified 

§ 156.1230(a)(1)(iv) to clarify that 

issuers must use an HHS-approved 

universal disclaimer about the 

availability of other QHPs offered 

through the Exchange. We note that this 

disclaimer must be made available to 

applicants regardless of how consumers 

communicate with the issuer (Web site, 

phone, in-person, etc.). We expect that 

issuers will make this available at the 

beginning of the plan comparison 

process and if an applicant is using an 

issuer’s Web site, the issuer must 

prominently display this disclaimer 

when displaying plans to the applicant. 

Comment: We received many 

comments supporting the proposed 

consumer protections requirements for 

direct enrollment. However, some 

commenters recommended adding 

additional disclosures such as informing 

applicants that other coverage options 

exist, requiring issuers to list all QHPs, 

and information on how to access 

available Navigators. One commenter 

wanted to eliminate direct enrollment 

altogether since the commenter believed 

the process would prevent applicants 

from receiving unbiased information 

from which to choose a health plan that 

best meets their needs. 

Response: We recognize that direct 

enrollment may cause some confusion 

for the applicant, but believe the value 

of consumer choice outweighs potential 

confusion. Accordingly, in the final 

rule, we are finalizing § 156.1230(a)(1) 

to establish consumer protections. As 

explained previously, these protections 

will now include providing an HHSapproved universal disclaimer 

informing applicants of other coverage 

options. We note that the data elements 

displayed consistent with 

§ 156.1230(a)(1)(ii) must provide the 

same information as that on the 

Exchange Web site and not all the data 

elements submitted to the Exchange on 

the issuer’s QHP data templates. We do 

not believe that issuers should be 

required to give information about 

access to Navigators since applicants 

would have come to the issuer directly 

and direct enrollment would provide 

one of many ways in which an applicant 

can enroll in a QHP. 

Comment: We received numerous 

comments on the training requirements 

and standards for issuer application 

assisters. A number of commenters were 

concerned that direct enrollment could 

lead to consumer confusion and 

suggested that application assisters go 

through the same training as certified 

application counselors (CACs). Some 

commenters recommended these 

individuals meet the same standards as 

the ones applicable to other assisters, 

such as Navigators, CACs, and agents/

brokers, and be trained and certified by 

the Exchange. One commenter 

recommended that issuers be 

responsible for the requirements related 

to training. 

Response: We intend for issuers to 

provide the training to their own 

customer service representatives. We 

also expect the Exchange to provide the 

agent/broker or other related assister 

training curriculum to issuers so they 


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can utilize those materials while 

conducting their training. We leave the 

decision on whether to establish a 

program for certifying these individuals 

up to the Exchange. The FFEs do not 

intend to permit issuers to allow their 

application assisters to perform the 

assistance functions set forth in this 

section in the first year of Exchange 

operations. We will evaluate whether to 

implement a certification requirement, 

which would be done through 

rulemaking, for future years. 

Comment: Some commenters 

recommended that issuer application 

assisters ensure that individuals who 

are ineligible for QHPs receive the 

information necessary to follow up with 

programs that they may be eligible for 

such as Medicaid or CHIP. 

Response: We expect that issuer 

application assisters who are 

approached by individuals and families 

looking for assistance with Exchange 

enrollment will work with all 

applicants, including individuals who 

are ultimately determined to be eligible 

for Medicaid or CHIP. Any applicant 

who is working with an issuer 

application assister and is determined 

by an Exchange to be eligible for 

Medicaid or CHIP will receive an 

appropriate notice of assessment or 

determination of Medicaid/CHIP 

eligibility from the Exchange. In such 

cases, we expect that the issuer 

application assister would refer the 

individual to the applicable State 

agency. We anticipate that issuer 

application assister training will 

provide information on where to direct 

Medicaid or CHIP-eligible individuals. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 156.1230 of the proposed 

rule, with a few modifications. We 

modified language in 

§ 156.1230(a)(1)(iv) to clarify that 

issuers must use an HHS-approved 

universal disclaimer about the 

availability of other QHPs offered 

through the Exchange. We also made a 

technical correction in paragraph 

(a)(1)(iv) replacing ‘‘or’’ with ‘‘and.’’ As 

described in Part C(5) of this rule, we 

will use the term ‘‘issuer application 

assisters’’ in place of ‘‘issuer customer 

service representatives’’ to more clearly 

articulate the role of such individuals 

and for consistency, will refer to the 

definition of ‘‘issuer application 

assisters’’ being finalized at § 155.20. 

We also modified § 156.1230(a)(2) to 

remove the express requirement for an 

agreement between an issuer and the 

Exchange for its issuer application 

assisters, but still require that issuers 

ensure their application assisters 

comply with § 156.1230(a)(2)(i) through 

(a)(2)(iii). Lastly, we are not finalizing 

subparagraph § 155.1230(a)(3) regarding 

premium accuracy requirements at this 

time because we intend to address that 

provision in future rulemaking. 

b. Enrollment Process for Qualified 

Individuals (§ 156.1240) 

We proposed to require that QHP 

issuers, at a minimum, accept a variety 

of payment formats so that individuals 

without a bank account or a credit card 

will have readily available options for 

making monthly premium payments. 

We gave examples of methods 

including, but not limited to, paper 

checks, cashier’s checks, money orders, 

replenishable pre-paid debit cards, 

electronic funds transfer from a bank 

account, and an automatic deduction 

from a credit or debit card. We sought 

comment on this proposal and whether 

other payment methods should be 

included. 

We received the following comments 

concerning the proposed enrollment 

process provisions. 

Comment: A majority of commenters 

were in favor of requiring QHP issuers 

to accept methods of payment 

customarily used by people without 

bank accounts or credit cards. 

Furthermore, commenters 

recommended codifying in the 

regulation text the specific payment 

methods options yielding an illustrative 

list of payment methods. This would 

ensure that issuers accept a range of 

payment methods instead of just one in 

addition to a bank account or credit card 

depending on an issuer’s operations. 

Other commenters recommended that 

the rule not require an exhaustive list of 

payment methods, but rather establish a 

baseline for payment methods and allow 

issuers to include other forms of 

payment based on their market needs. 

Response: We are finalizing a revised 

§ 156.1240(a)(2), which lists the 

payment methods that QHP issuers 

must accept at a minimum. This will 

provide a range of options for those 

individual with and without banking 

accounts and/or credit cards. Most 

issuers already have the capability to 

accept these payment options. 

Comment: We received several 

comments suggesting that we should 

clarify that QHP issuers must accept the 

proposed payment methods for all 

premium payments, including the 

initial premium payment. Commenters 

stated that applicants would not be able 

to enroll and maintain health coverage 

if their principal payment option is not 

available for all payments. Other 

commenters recommended using 

electronic payments for initial payments 

due to longer processing times needed, 

higher transaction fees, and a delay in 

effectuate coverage for certain payment 

methods. 

Response: The requirement to accept 

the stated payment methods must apply 

to all payments including initial 

premium. Interpreting this rule any 

other way would defeat the purpose of 

this section as explained in the 

proposed rule, because individuals who 

would benefit from the protections in 

this section would likely not be able to 

effectuate coverage to make monthly 

premiums thereafter. Issuers should 

work with individuals to make them 

aware that certain payment methods 

take longer to process and plan 

accordingly. In this final rule, we are 

finalizing a revised § 156.1240(a)(2), 

which clarifies that this provision 

applies to all payments. 

Comment: We received a comment to 

clarify whether this is a requirement in 

all Exchanges and whether this is 

specific to the individual market. 

Response: This provision applies only 

in the individual market and we have 

indicated this in § 155.1240(a)(2) of the 

final rule. We also note that this applies 

to all Exchanges, including State 

Exchanges. 

Comment: One commenter 

recommended that we avoid partnering 

with payment service companies that 

will profit from payment fees since 

some pre-paid debit cards and money 

transfer programs require additional fees 

to consumers. That commenter also 

recommended that we partner with 

reputable non-profit organizations that 

will provide safe and affordable services 

such as non-profit enrollment assisters. 

Another commenter suggested that we 

limit which pre-paid debit cards may be 

used in order to limit the transaction fee 

for both the consumer and issuer. 

Response: We will leave it up to each 

Exchange on whether or not to partner 

with particular payment service 

companies. FFEs will not partner with 

any payment service companies for the 

first year. We will subsequently evaluate 

the value of having a relationship with 

such partner. 

Comment: We received some 

comments suggesting that we maximize 

the range of payment options offered to 

applicants. Commenters noted that 

issuers should offer electronic funds 

transfer (EFT) for individuals with bank 

accounts using Automated Clearing 

House payments including direct 

deposits. Other commenters 

recommended that applicants be made 

aware of all their payment options by 

mail and information displayed to the 

applicant on the Web site. In particular, 

issuers should ensure that consumers 


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11BLS March 2013 Employer Costs for Employee 

Compensation Report (March 12, 2013). Available 

at http://www.bls.gov/news.release/ecec.toc.htm. 

are aware of all alternative payment 

methods. 

Response: In this final rule, we are 

including EFT as a payment method 

that issuers must accept. While we 

believe many individuals with bank 

accounts will select this option, the 

requirement to accept a variety of 

payment methods, as proposed in the 

proposed rule and as being finalized 

here, necessitates that issuers inform the 

consumer of all payment options when 

a consumer needs to make a payment, 

whether in the mail or on the issuer’s 

Web site. We are therefore making 

explicit in this final rule that, when 

collecting payment, all payment method 

options must be equally presented to the 

consumer. 

Comment: We received numerous 

comments on what payment methods 

QHP issuers should be required to 

accept. Many commenters supported the 

methods provided in the preamble of 

the proposed rule. Some commenters 

suggested the use of all general-purpose 

pre-paid debit cards instead of just 

reloadable or replenishable pre-paid 

debit cards to be more inclusive and 

since it doesn’t make a difference 

operationally. Other commenters 

recommended money transfer platforms, 

the ability to deduct from an enrollee’s 

paycheck, and automatic deductions 

from credit or debit cards. However, 

other commenters expressed concern on 

whether all issuers would be able to 

support credit or debit card payments as 

well as ongoing automatic deductions 

from credit or debit cards. We received 

some comments that issuers should 

mimic CHIP programs and accept 

multiple methods of payment from 

multiple locations, most importantly 

accepting cash by establishing payment 

providers throughout communities. 

Lastly, many commenters were 

concerned about additional 

administrative and transactional fees 

depending on which payment methods 

would be required, whether the fees be 

assessed on the issuer, Exchange, or 

consumer. 

Response: Due to the overwhelming 

support for pre-paid debit cards, we 

have included all general-purpose prepaid debit cards as a payment method 

that issuers are required to accept. 

Because many issuers accept debit 

cards, this requirement should not cause 

administrative or operational issues. At 

this time, we will allow issuers to 

decide whether or not to accept 

automatic deductions from credit or 

debit cards. We also think that requiring 

issuers to accept cash would not be 

operationally possible given the 

resource and time restraint to establish 

the necessary relationship with payment 

providers. However, we are still 

requiring issuers to accept other paper 

payment methods described in the 

preamble of the proposed rule including 

paper checks, money orders, and 

cashier’s checks. 

Summary of Regulatory Changes 

We are finalizing the provisions 

proposed in § 156.1240 of the proposed 

rule, with a few modifications. We 

revised paragraph (a)(2) to include the 

minimum payment methods that issuers 

must accept. Additionally, we clarified 

that these methods must be accepted for 

all payments. We also clarified that this 

applies to the individual market only. 

Lastly, we added language to reflect that 

all payment method options must be 

presented equally for a consumer to 

select their preferred payment method. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 30- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 (PRA) requires 

that we solicit comment on the 

following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

The following sections of this 

document contain estimates of burden 

imposed by the associated information 

collection requirements (ICRs); 

however, not all of these estimates are 

subject to the ICRs under the PRA for 

the reasons noted. Estimated salaries for 

the positions cited were mainly taken 

from the Bureau of Labor Statistics 

(BLS) Web site (http://www.bls.gov/oco/ 

ooh_index.htm). 

The estimated salaries for the health 

policy analyst and the senior manager 

were taken from the Office of Personnel 

Management Web site. Fringe Benefits 

estimates were taken from the BLS 

March 2013 Employer Costs for 

Employee Compensation Report.11

A. ICRs Related to the Risk Corridors 

Program (§ 153.500) 

In this final rule, we amend the 

definition of a QHP in § 153.500 for the 

purposes of the risk corridors program. 

We provide that a plan will be subject 

to the risk corridors program if it is (a) 

A QHP, as defined in 45 CFR 155.20; (b) 

a plan offered outside the Exchange that 

is the same plan as a QHP, as defined 

in 45 CFR 155.20, offered through the 

Exchange by the same issuer, pursuant 

to the criteria finalized in Part C(1)(a) of 

this rule; or (c) a plan offered outside 

the Exchange that is substantially the 

same as a QHP, as defined in 45 CFR 

155.20, offered through the Exchange by 

the same issuer, pursuant to the criteria 

finalized in Part B(1)(a) of this rule. 

In this final rule, we note that we 

intend to issue guidance on the 

operational aspects of this standard, 

including with respect to how HHS and 

issuers will identify plans submissions 

(including those submitted for the 2014 

benefit year) that are ‘‘substantially the 

same’’ as a QHP offered through an 

Exchange for the purposes of 

determining whether the plan will 

participate in the risk corridors 

program. QHP issuers may be required 

to submit plan identification 

information to HHS as part of HHS’s 

determination of which plans offered 

outside of the Exchange will participate 

in the risk corridors program. We intend 

to account for this information 

collection requirement in a PRA 

package that we will publish for public 

comment and advance for OMB 

approval in the future. Information 

related to the requirement will not be 

effective until comment is sought and 

the collection is approved by OMB. 

B. ICRs Related to Ability of States To 

Permit Agents and Brokers To Assist 

Qualified Individuals, Qualified 

Employers, or Qualified Employees 

Enrolling in Qualified Health Plans in 

the Federally-Facilitated Exchange 

(§ 155.220) 

In § 155.220(c)(3)(i), we amend the 

provision to require Web-brokers to 

display all QHP information provided 

by the Exchange or directly by QHP 

issuers consistent with the requirements 

of § 155.205(b)(1) and § 155.205(c), and 

to the extent that not all information 

required under § 155.205(b)(1) is 

displayed on the agent or broker’s 

Internet Web site for a QHP, 


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prominently display a standardized 

disclaimer provided by HHS stating that 

information required under 

§ 155.205(b)(1) for the QHP is available 

on the Exchange Web site, and provide 

a Web link to the Exchange Web site. To 

comply with this requirement, each 

Web-broker will have to program its 

Web site to display the standardized 

disclaimer language in the event that it 

cannot display plan information 

required under § 155.205(b)(1) for a 

particular QHP. The Web-broker will 

also have to include a Web link to the 

Exchange Web site. We estimate that it 

will take up to 12 hours at an hourly 

cost of $52.50 for a computer 

programmer to perform the necessary 

programming, and 4 hours at an hourly 

cost of $79.08 for a senior manager to 

review the Web site display, for a total 

cost of approximately $950 per Webbroker. Assuming that approximately 50 

Web-brokers elect to access the FFE’s 

application programming interface and 

that each Web-broker will have to 

display the standardized disclaimer 

language and Web link, we estimate that 

this provision would increase the 

overall burden estimate by 

approximately $47,300. 

Section 155.220(c)(3)(vii) requires 

each Web-broker in FFE states to 

display on its Web site a standardized 

disclaimer provided by HHS and a link 

to the FFE Web site. To comply with 

this requirement, each Web-broker will 

have to program its Web site to display 

the standardized disclaimer and a Web 

link to the Exchange Web site. We 

estimate that it will take up to 12 hours 

at an hourly cost of $52.50 for a 

computer programmer to perform the 

necessary programming, and 4 hours at 

an hourly cost of $79.08 for a senior 

manager to review the Web site display, 

for a total cost of approximately $950 

per Web-broker. At this time, we 

anticipate that all Web-brokers will be 

participating in FFE states. Assuming 

that approximately 50 Web-brokers elect 

to access the FFE’s application 

programming interface and that each 

Web-broker will have to display the 

standardized disclaimer language and 

Web link, we estimate that this 

provision would increase the burden 

estimate by approximately $47,300. 

Section 155.220(c)(4) requires a Webbroker to comply with several standards 

when the Web-broker permits other 

agents and brokers to use its Web site to 

enroll a consumer through the FFE, 

pursuant to a contractual or other 

arrangement between the Web-broker 

and the other agent or broker. One of the 

standards requires the Web-broker to 

provide to the FFE a list of agents or 

brokers who enter into such an 

arrangement, if requested by HHS. We 

understand that Web-brokers who work 

with other agents and brokers typically 

obtain and manage information on each 

of its agents or brokers as part of an 

agent onboarding process. As a result, 

Web-brokers already have the necessary 

data to list each of their agents or 

brokers that it contracts with under such 

arrangements. We estimate that it will 

take up to 48 hours at an hourly cost of 

$52.50 for a computer programmer to 

perform the necessary programming, 

and 4 hours at an hourly cost of $79.08 

for a senior manager to develop a listing 

of affiliated third-party agents and 

brokers, $3,150 per Web-broker. 

Assuming that approximately 50 Webbrokers elect to access the FFE’s 

application programming interface and 

that each has allows third-party agents 

to access their Web sites, we estimate 

that this provision would increase the 

burden estimate by approximately 

$157,600. Section 155.220(g) authorizes 

HHS to terminate an agent’s or broker’s 

agreement with an FFE if HHS 

determines that the agent or broker is 

out of compliance with the standards 

outlined in 45 CFR 155.220. Section 

155.220(h) sets forth the process 

whereby an agent or broker can request 

reconsideration of HHS’s termination. 

Specifically, the agent or broker must 

submit the request for reconsideration 

within 30 calendar days of receipt of the 

date of the notice of termination. 

Because we are finalizing this provision 

as proposed, and did not receive 

comments on our estimates, we 

continue to use our estimates from the 

proposed rule. 

C. ICRs Related to the Eligibility Process 

(§ 155.310) 

Section 155.310(k) provides that if an 

Exchange does not have enough 

information to conduct an eligibility 

determination for advance payments of 

the premium tax credit or cost-sharing 

reductions, the Exchange must provide 

notice to the applicant regarding the 

incomplete application. We anticipate 

that this notice requirement is not a 

separate notice to an individual but text 

within the eligibility determination 

notice described in § 155.310(g) and 

discussed in a separate information 

collection request that is associated with 

the notice of proposed rulemaking 

(January 22, 2013 (78 FR 4594)). We 

therefore do not include a separate 

burden estimate to develop this notice 

but the time and cost associated with 

this notice is included within the 

estimate in § 155.310(g). 

Section 155.310(k)(2) provides that 

the Exchange must provide the 

applicant with a period of no less than 

10 days and no more than 90 days from 

the date on which the notice is sent to 

the applicant to provide the information 

needed to complete the application to 

the Exchange. Because we are finalizing 

these provisions with only a minor 

modification to the lower limit of time 

that the Exchange must provide to the 

applicant to complete an application, 

and did not receive comments on our 

estimates, we continue to use our 

estimates from the proposed rule. For a 

detailed explanation of burden hour and 

cost please refer to the associated 

supporting statement at http://

www.cms.gov/Regulations-andGuidance/Legislation/

PaperworkReductionActof1995/PRAListing-Items/

CMS%E2%80%9310490.html. 

Part 155—Exchange Establishment 

Standards and Other Related Standards 

Under the Affordable Care Act 

It is important to note that these 

regulations involve several information 

collections that will occur through the 

single, streamlined application for 

enrollment in a QHP and for insurance 

affordability programs described in 45 

CFR 155.405. We have accounted for the 

burden associated with these collections 

in the Supporting Statement for Data 

Collection to Support Eligibility 

Determinations for Insurance 

Affordability Programs and Enrollment 

through Health Benefits Exchanges, 

Medicaid, and Children’s Health 

Insurance Program Agencies (OMB 

control number 0938–1191/CMS– 

10440). 

D. ICRs Regarding Appeals (§§ 155.505, 

155.510, 155.520, 155.530, 155.535, 

155.540, 155.545, 155.550, 155.555, 

155.740) 

The eligibility appeals provisions in 

subparts F and H include requirements 

for the collection of information that 

will support processing and 

adjudicating appeals for individuals, 

employers facing potential tax liability, 

and SHOP employers and employees. 

The information collection will be 

largely the same for each type of appeal 

and includes the appeal request, 

expedited appeal request, appeal 

withdrawal, request to vacate, request 

for additional information, special 

considerations form, and appointment 

and removal of authorized 

representative. Because we are 

finalizing these provisions as proposed, 

and did not receive comments on our 

estimates, we continue to use our 

estimates from the proposed rule. For a 

detailed explanation of burden hour and 

cost please refer to the associated 

supporting statement at http://


tkelley on DSK3SPTVN1PROD with RULES3
Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54129 

www.cms.gov/Regulations-andGuidance/Legislation/

PaperworkReductionActof1995/PRAListing-Items/

CMS%E2%80%9310490.html. 

E. ICRs Regarding Consumer Cases 

Related to Qualified Health Plans and 

Qualified Health Plan Issuers 

(§ 156.1010) 

In subpart K of part 156, we describe 

the information collection requirements 

that pertain to the resolution of 

consumer cases related to QHPs and 

QHP issuers. Section 156.1010(g)(1) 

states that QHP issuers must include the 

date of case resolution, § 156.1010(g)(2) 

states that QHP issuers must record a 

clear and concise narrative documenting 

the resolution of a consumer case in the 

HHS-developed casework tracking 

system, and § 156.1010(g)(3) states that 

QHP issuers must provide information 

about compliance issues found by a 

State during the investigation of a case. 

The additional information required by 

§ 156.1010(g)(1) and § 156.1010(g)(3) are 

clarifications of the original proposed 

requirements and do not represent an 

additional burden. Because we are 

finalizing these provisions as proposed, 

and did not receive comments on our 

estimates, we continue to use our 

estimates from the proposed rule. 

For a detailed explanation of burden 

hour and cost please refer to the 

associated supporting statement at 

http://www.cms.gov/Regulations-andGuidance/Legislation/

PaperworkReductionActof1995/PRAListing-Items/

CMS%E2%80%9310490.html. 

F. ICRs Related to Enrollment Process 

for Qualified Individuals (§ 156.1230) 

Section § 156.1230(a)(1)(ii), issuers 

would be required provide information 

on available QHPs when they choose to 

use their Web site to directly enroll 

qualified individuals into QHPs in a 

manner considered to be through the 

Exchange. The QHP information 

required to be posted on the Web site 

would include premium and costsharing information, the summary of 

benefits and coverage, levels of coverage 

(‘‘metal levels’’) for each QHP, results of 

the enrollee satisfaction survey, quality 

ratings, medical loss ratio information, 

transparency of coverage measures, and 

a provider directory. Section 

§ 156.1230(a)(1)(i) requires an issuer to 

direct an individual to complete an 

application with the Exchange and 

receive eligibility determinations from 

the Exchange to allow for an accurate 

plan selection process. Additionally, 

section § 156.1230(a)(1)(iv) would 

require the issuer Web site to inform 

applicants about the availability of other 

QHP products available through an 

Exchange and to display a Web site link 

to the appropriate Exchange Web site. 

An issuer would also submit enrollment 

information back to the Exchange 

including the APTC amount and 

attestation from an individual as 

required by § 156.1230(a)(1)(v). 

Section 156.1230(a)(2) would allow 

qualified individuals to apply for an 

eligibility determination or 

redetermination for coverage through 

the Exchange and insurance 

affordability programs with the 

assistance of an issuer application 

assister if the issuer ensures its 

application assisters’ compliance with 

requirements, including training and 

privacy and security standards. 

We are finalizing these provisions 

with a few modifications. Since we are 

no longer requiring an additional 

requirement for the issuer agreement, 

the burden associated with amending 

the agreement between the issuer and 

the Exchange if the Exchange 

implements this provision is no longer 

applicable. The burden associated with 

the rest of these provisions remains the 

same as the proposed rule. For a 

detailed explanation of burden hour and 

cost please refer to the associated 

supporting statement at http://

www.cms.gov/Regulations-andGuidance/Legislation/

PaperworkReductionActof1995/PRAListing-Items/

CMS%E2%80%9310490.html. We 

clarified that the burden in 

§ 156.1230(a)(1) took into account an 

issuer needing to distinguish between 

QHPs for which a consumer is eligible 

and other non-QHPs that an issuer may 

offer as required by § 156.1230(a)(1)(iii). 

We have submitted an information 

collection request to OMB for review 

and approval of the ICRs contained in 

this final rule. The requirements are not 

effective until approved by OMB and 

assigned a valid OMB control number. 

If you comment on these information 

collection and recordkeeping 

requirements, please do the following: 

Submit your comments to the Office 

of Information and Regulatory Affairs, 

Office of Management and Budget, 

Attention: CMS Desk Officer, [CMS– 

9957–F], Fax: (202) 395–6974; or Email: 

OIRA_submission@omb.eop.gov. 

IV. Regulatory Impact Analysis 

In accordance with the provisions of 

Executive Order 12866, this rule was 

reviewed by OMB. 

A. Summary 

This final rule outlines Exchange 

standards with respect to eligibility 

appeals, agents and brokers, direct 

enrollment, the handling of consumer 

cases, imposing CMPs in FFEs; and 

decertification of a QHP offered by an 

issuer through a FFE. It also sets forth 

standards with respect to a State’s 

operation of an Exchange and SHOP. 

HHS has crafted this final rule to 

implement the protections intended by 

Congress in an economically efficient 

manner. We have examined the effects 

of this final rule as required by 

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)). In accordance with OMB 

Circular A–4, HHS has quantified the 

benefits and costs where possible, and 

has also provided a qualitative 

discussion of some of the benefits and 

costs that may stem from this final rule. 

B. Executive Orders 13563 and 12866 

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 

final 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 

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 major rules with 


tkelley on DSK3SPTVN1PROD with RULES3
54130 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

12 ‘‘Effects on Health Insurance and the Federal 

Budget for the Insurance Coverage Provisions in the 

Affordable Care Act—May 2013 Baseline,’’ 

Congressional Budget Office, May 14, 2013. 

economically significant effects ($100 

million or more in any 1 year), and a 

‘‘significant’’ regulatory action is subject 

to review by the OMB. HHS has 

concluded that this final 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. HHS has, 

however, provided an assessment of the 

potential costs and benefits associated 

with this final regulation. 

1. Need for Regulatory Action 

Starting in 2014, qualified individuals 

and qualified employers will be able to 

use coverage provided by QHPs— 

private health insurance that has been 

certified as meeting certain standards— 

through Exchanges. This final rule sets 

forth standards related to eligibility, 

including standards for eligibility 

appeals, verification of eligibility for 

minimum essential coverage, and 

treatment of incomplete applications. It 

also establishes consumer protections 

regarding privacy and security, clarifies 

the role of agents, brokers, and issuer 

application assisters; consumer cases; 

methods of premium payment; 

enforcement actions such as CMPs and 

decertification of a QHP in a FFE. 

Finally, it sets forth provisions 

regarding a State’s operation of a SHOP. 

2. Summary of Impacts 

In accordance with OMB Circular A– 

4, Table IV.1 below depicts an 

accounting statement summarizing 

HHS’s assessment of the benefits and 

costs associated with this regulatory 

action. The period covered by the RIA 

is 2014—2017. 

HHS anticipates that the provisions of 

this final rule will ensure smooth 

operation of Exchanges and provide 

consumer protections. The eligibility 

appeals process and the notice 

standards included in this final rule will 

support the development and 

implementation of a streamlined 

eligibility process, and in doing so, will 

increase enrollment in health insurance. 

Affected entities such as States, QHP 

issuers, agents, and brokers will incur 

costs to submit reports to HHS and 

Exchanges, to comply with privacy and 

security standards for PII, and to comply 

with enforcement actions. In accordance 

with Executive Order 12866, HHS 

believes that the benefits of this 

regulatory action justify the costs. 

TABLE IV.1: ACCOUNTING TABLE

Benefits: 

Qualitative: 

* Ensure smooth functioning of State Exchanges and FFEs 

* Increased access to fair and unbiased customer assistance and information about coverage options for consumers, enabling consumers 

to make informed decisions 

* Ensure privacy and data security protections 

* Improve access to health insurance, by ensuring accurate and fair appeals of eligibility determinations 

* Improve program performance, reduce non-compliance by QHPs and agents and brokers, and decrease the likelihood of errors and adverse outcomes for consumers 

Costs Estimate Year Discount Rate Period 

Annualized ........................ $17.64 million .............................................................. 2013 7 2014–2017 

Monetized ($/year) ........... $17.64 million .............................................................. 2013 3 2014–2017 

Annual costs related to eligibility appeals; enrollment process for Qualified Individuals; documentation of resolution of consumer cases; costs to 

agents and brokers and QHPs related to enforcement actions.1

Qualitative: 

* Costs to Exchanges and non-Exchange entities subject to FFE privacy and data security standards to comply with privacy and data security standards 

* Possible reduction in costs for SHOPs due to elimination of the requirement to accept paper applications and applications by telephone 

* Cost incurred by SHOPs to develop uniform standards for the termination of a group’s coverage in a QHP and to keep sufficient records 

of terminations and reasonable accommodations 

* Eligibility appeals process may reduce administrative costs, by providing resolution options that enable the vast majority of issues to be 

resolved by lower-level staff 

Note: 1. The bases for these costs are discussed in the Paperwork Reduction Act sections of the proposed rules associated with this final 

rule. 

3. Anticipated Benefits and Costs 

Starting in 2014, qualified individuals 

and qualified employers will be able to 

use health coverage obtained through 

Exchanges. The Congressional Budget 

Office estimated that the number of 

people enrolled in coverage through 

Exchanges will increase from 7 million 

in 2014 to 24 million in 2017.12

Exchanges will create competitive 

marketplaces where qualified 

individuals and qualified employers can 

shop for insurance coverage, and are 

expected to reduce the unit price of 

quality insurance for the average 

consumer by pooling risk and 

promoting competition. 

The final rule specifies the standards 

and processes for the oversight and 

accountability of entities responsible for 

certain operations of the Exchanges. 

Affected entities include States, in their 

roles of establishing and operating 

Exchanges and SHOPs; FFEs and FF– 

SHOPs; issuers of QHPs; Exchange 

appeals entities; and insurance agents 

and brokers. 

a. Benefits 

This final rule implements provisions 

that will ensure smooth functioning of 

State Exchanges and FFEs, improve 

access to health insurance and customer 

service, and establish consumer 

protection measures. 

The final rule provides that, for 

individual eligibility determinations, 

applicants and enrollees may appeal 

eligibility determinations made through 

the eligibility process at the State level, 

if the State opts to establish an appeals 

process, or at the Federal level, if the 

State opts not to establish an appeals 

process or upon exhaustion of a State 


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Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54131 

based appeals process. An effective 

eligibility appeals process improves 

access to health insurance, by providing 

recourse for issues that arise in the 

eligibility process that can disrupt 

coverage. The appeals process is based 

on best practices to provide flexible, 

transparent, and consumer-centric 

appeals review and resolution. By 

providing an efficient, but 

comprehensive appeals process, the 

provisions of this final rule will ensure 

accurate and fair appeals of eligibility 

determinations. In addition, by 

providing a separate appeals process for 

small businesses, the provisions of this 

final rule will help ensure that accurate 

and satisfactory determinations are 

made for small businesses. 

The final rule also allows a State to 

operate only a State-based SHOP while 

the individual market Exchange is 

operated as an FFE. This will enable the 

State to focus on effective 

implementation of the SHOP. Each 

SHOP is also required to develop 

uniform standards for the termination of 

coverage in a QHP, starting in 2015, 

unless the SHOP offers employers the 

opportunity to give their employees a 

choice of plans at one actuarial value 

level (‘‘employee choice’’) before then. 

Standardizing the timing, form, and 

manner of a group’s termination in the 

SHOP ensures that an employer offering 

coverage through multiple health 

insurance issuers (under the SHOP 

‘‘employee choice’’ model) will be 

subject to uniform, predictable 

termination policies. 

The final rule implements consumer 

protections designed to ensure privacy 

and security of PII, increased access to 

customer assistance, greater information 

about coverage options, and more 

informed coverage decisions by 

consumers. Permitting issuer 

application assisters to assist 

individuals with applying for eligibility 

determinations or redeterminations for 

coverage through the Exchange will 

increase assistance available to 

consumers, while the training and 

compliance standards will ensure that 

such assistance is fair and unbiased. 

The final rule establishes requirements 

for issuer application assisters and 

agents and brokers who assist 

consumers, requiring them to comply 

with registration and training 

requirements. The final rule also 

establishes standards under which HHS 

can terminate its relationship with 

agents and brokers in the FFE, to help 

ensure that agents and brokers continue 

to meet Exchange standards. The final 

rule also amends and establishes 

additional standards for Web-brokers. In 

addition, the requirement for QHP 

issuers conducting direct enrollment, in 

a manner considered to be through an 

Exchange, to provide standardized 

comparative information on their Web 

sites ensures that consumers can readily 

differentiate and compare plan choices 

leading to informed decisions. 

Consumers without bank accounts will 

also have a variety of payment options. 

Oversight and enforcement actions 

such as CMPs and decertification of a 

QHP, termination of an agent and broker 

agreement for participation in the 

individual market of an FFE, will 

improve program performance, reduce 

non-compliance by QHPs and agents 

and brokers, and decrease the likelihood 

of errors and adverse outcomes for 

consumers. 

b. Costs 

Affected entities will incur costs to 

comply with the provisions of this final 

rule. Costs related to information 

collection requirements subject to PRA 

are discussed in detail in section III and 

include administrative costs incurred by 

States, issuers and agents and brokers 

related to notice and reporting 

requirements; enforcement actions; 

enrollment process for qualified 

individuals; and training requirements. 

In this section we discuss other costs 

related to the provisions in this final 

rule. 

A State that establishes an eligibility 

appeals process, an employer appeals 

process, or a SHOP eligibility appeals 

process will incur related administrative 

costs. However, HHS will provide such 

processes if States fail to do so. In 

addition, an effective eligibility process 

will reduce administrative costs, by 

providing resolution options that enable 

the vast majority of issues to be resolved 

by lower-level staff. 

Exchanges and agents and brokers 

permitted by States to assist consumers 

will incur costs to comply with 

additional standards for display of 

QHPs when using their Web sites as 

Web-brokers to assist consumers select 

a QHP, comply with the Exchange’s 

privacy and security standards as 

required in an agreement with HHS, and 

to submit a request for reconsideration 

if HHS terminates its agreement with 

the agent or broker. Issuers will also 

incur expenses to provide privacy and 

security training to their customer 

service representatives. It is anticipated 

that Exchanges and issuers’ IT systems 

will need minimal changes to comply 

with these provisions, particularly 

because they must already comply with 

similar standards regarding protected 

health information. 

The final rule also amends existing 

requirements so that SHOPs are no 

longer be required to accept paper 

applications and applications by 

telephone. This may reduce the cost of 

operating a SHOP. A SHOP will also 

incur costs to develop uniform 

standards for the termination of a 

group’s coverage in a QHP and to keep 

sufficient records of terminations and 

reasonable accommodations. 

C. Regulatory Alternatives 

Under the Executive Order, HHS is 

required to consider alternatives to 

issuing rules and alternative regulatory 

approaches. 

One alternative considered was to 

establish only a Federal eligibility 

appeals process and not to offer State 

Exchanges the option to establish their 

own appeals processes. This alternative, 

however, was not selected because it 

would limit State flexibility and negate 

the administrative efficiencies available 

through the use of existing appeals 

processes. HHS believes that the option 

adopted for this final rule strikes the 

best balance of ensuring efficient 

operation and integrity of Exchanges 

while providing flexibility to the States 

and minimizing the burden on States. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

requires agencies that issue a rule 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 

percent to 5 percent. HHS anticipates 

that the final rule would not have a 

significant economic impact on a 

substantial number of small entities. 

As discussed in the Web Portal final 

rule published on May 5, 2010 (75 FR 

24481), HHS examined the health 

insurance industry in depth in the RIA 

we prepared for the final rule on 

establishment of the Medicare 

Advantage program (69 FR 46866, 

August 3, 2004). In that analysis it was 

determined that there were few, if any, 

insurance firms underwriting 

comprehensive health insurance 

policies (in contrast, for example, to 

travel insurance policies or dental 

discount policies) that fell below the 


tkelley on DSK3SPTVN1PROD with RULES3
54132 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

13 ‘‘Table of Size Standards Matched To North 

American Industry Classification System Codes,’’ 

effective January 7, 2013, U.S. Small Business 

Administration, available at http://www.sba.gov. 

size thresholds for ‘‘small’’ business 

established by the SBA (currently $7 

million in annual receipts for health 

issuers).13 In addition, HHS used the 

data from Medical Loss Ratio (MLR) 

annual report submissions for the 2011 

MLR reporting year to develop an 

estimate of the number of small entities 

that offer comprehensive major medical 

coverage. These estimates may overstate 

the actual number of small health 

insurance issuers that would be 

affected, since they do not include 

receipts from these companies’ other 

lines of business. It is estimated that out 

of 466 issuers nationwide, there are 22 

small entities each with less than $7 

million in earned premiums that offer 

individual or group health insurance 

coverage and would therefore be subject 

to the requirements of this final 

regulation. Thirty six percent of these 

small issuers belong to larger holding 

groups, and many if not all of these 

small issuers are likely to have other 

lines of business that would result in 

their revenues exceeding $7 million. It 

is uncertain how many of these 466 

issuers will offer QHPs and be subject 

to the provisions of this final rule. Based 

on this analysis, however, HHS expects 

that this final rule will not affect small 

issuers. 

Some of the agents and brokers 

affected by the provisions of this final 

rule may be small entities and will incur 

costs to comply with the provisions of 

this final rule. The size threshold for 

‘‘small’’ business established by the 

SBA is currently $7 million in annual 

receipts for insurance agencies and 

brokerages. We anticipate that agents 

and brokers will continue to be an 

important source of assistance for many 

consumers seeking access to health 

insurance coverage through an 

Exchange, including those who own 

and/or are employed by small 

businesses. Due to lack of data, HHS is 

unable to estimate how many agents and 

brokers permitted by States to assist 

consumers would be small entities. 

This final rule establishes an appeals 

process through which an employer 

may appeal a determination that the 

employer does not provide qualifying 

coverage in an eligible employersponsored plan with respect to the 

employee referenced in the notice 

pursuant to section 1411(f)(2) of the 

Affordable Care Act, or an eligibility 

determination for SHOP. This rule 

establishes standards for employers that 

choose to participate in a SHOP. The 

SHOP is limited by statute to employers 

with at least one but not more than 100 

employees. For this reason, we expect 

that many employers eligible to 

participate in the SHOP would meet the 

SBA standard for small entities. 

However, since participation in the 

SHOP is voluntary, this final rule does 

not place any requirements on small 

employers. 

E. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act (UMRA) of 1995 

requires that agencies assess anticipated 

costs and benefits before issuing any 

final 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 2013, that 

threshold level is approximately $141 

million. 

UMRA does not address the total cost 

of a final 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. 

The final rule directs States to 

undertake activities for State Exchanges. 

There are no mandates on local or tribal 

governments. The private sector, for 

example, QHP issuers and agents and 

brokers, will incur costs to comply with 

the requirements set forth in this final 

rule. The related costs are estimated to 

be approximately $17.5 million in 2014. 

However, consistent with policy 

embodied in UMRA, this final rule has 

been designed to be a low-burden 

alternative for State, local and tribal 

governments, and the private sector 

while achieving the objectives of the 

Affordable Care Act. 

F. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a final 

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. States will 

continue to apply State laws regarding 

health insurance coverage. 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 be not be 

preempted by this final rule. 

Accordingly, States have significant 

latitude to impose requirements with 

respect to health insurance coverage 

that are more restrictive than the 

Federal law. 

States will continue to license, 

monitor and regulate all agents and 

brokers, both inside and outside of 

Exchanges. All State laws related to 

agents and brokers, including State laws 

related to appointments, contractual 

relationships with issuers, and licensing 

and marketing requirements, will 

continue to apply. Under the final rule, 

States have the option to establish and 

operate only a State-based SHOP while 

the individual market Exchange is 

operated as an FFE. The final rule also 

provides additional flexibility to States 

with respect to the operation of a SHOPspecific Navigator program when the 

State establishes and operates only a 

SHOP Exchange. HHS would coordinate 

enforcement actions for QHP issuers 

with State efforts in order to streamline 

the oversight of QHP issuers by States 

and to avoid inappropriate duplication 

of enforcement actions. Because QHPs 

are one of several commercial market 

insurance products operating in State 

markets, HHS would not seek to 

inappropriately duplicate or interfere 

with the traditional regulatory roles 

played by the State departments of 

insurance. HHS would generally confine 

its QHP oversight to Exchange-specific 

requirements and attributes. HHS would 

also seek to work collaboratively with 

State DOIs on topics of mutual concern, 

in the interest of efficiently deploying 

oversight resources and avoiding 

needlessly duplicative regulatory roles. 

HHS may consider the regulatory action 

taken by a State against a QHP issuer as 

a factor in determining whether to 

decertify a QHP. HHS recognizes that 

States play an important role in 

handling consumer cases related to 

health insurance and HHS anticipates 

that States will continue to assist 

consumers with these grievances and 

complaints. QHP issuers are expected to 

comply with standards established by 

State law and regulation for cases 

forwarded to an issuer by a State in 

which it offers QHPs. States may opt to 

establish an eligibility appeals process 

and an employer appeals process or 

HHS will provide such a process if a 

State fails to do so. 

The requirements specified in this 

final rule will impose direct costs on 

State and local governments and HHS 

has made every effort to minimize those 

costs. In compliance with the 

requirement of Executive Order 13132 


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Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54133 

that agencies examine closely any 

policies that may have Federalism 

implications or limit the policymaking 

discretion of the States, HHS has 

engaged in efforts to consult with and 

work cooperatively with affected States. 

Throughout the process of developing 

this final rule, HHS has attempted to 

balance the States’ interests in 

regulating health insurance issuers, and 

Congressional intent to provide uniform 

protections to consumers in every State. 

By doing so, it is HHS’s view that it has 

complied with the requirements of 

Executive Order 13132. Under the 

requirements set forth in section 8(a) of 

Executive Order 13132, and by the 

signatures affixed to this rule, HHS 

certifies that the CMS Center for 

Consumer Information and Insurance 

Oversight has complied with the 

requirements of Executive Order 13132 

for the attached final rule in a 

meaningful and timely manner. 

G. Congressional Review Act 

This final 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 along with 

other specified information, and has 

been transmitted to the Congress and 

the Comptroller General for review. 

List of Subjects 

45 CFR Part 147 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements, and State regulation of 

health insurance. 

45 CFR Part 153 

Administrative practice and 

procedure, Adverse selection, Health 

care, Health insurance, Health records, 

Organization and functions 

(Government agencies), Premium 

stabilization, Reporting and 

recordkeeping requirements, 

Reinsurance, Risk adjustment, Risk 

corridors, Risk mitigation, State and 

local governments. 

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, Plan variations, Actuarial 

value. 

45 CFR Part 156 

Administrative practice and 

procedure, Advertising, Advisory 

Committees, Brokers, Conflict of 

interest, Consumer protection, Grant 

programs-health, Grants administration, 

Health care, Health insurance, Health 

maintenance organization (HMO), 

Health records, Hospitals, American 

Indian/Alaska Natives, Individuals with 

disabilities, Loan programs-health, 

Organization and functions 

(Government agencies), Medicaid, 

Public assistance programs, Reporting 

and recordkeeping requirements, State 

and local governments, Sunshine Act, 

Technical assistance, Women, and 

Youth. 

For the reasons set forth in the 

preamble, the Department of Health and 

Human Services amends 45 CFR parts 

147, 153, 155, and 156 as set forth 

below: 

PART 147—HEALTH INSURANCE 

REFORM REQUIREMENTS FOR THE 

GROUP AND INDIVIDUAL HEALTH 

INSURANCE MARKETS 

■ 1. The authority citation for part 147 

continues to read as follows: 

Authority: Secs. 2701 through 2763, 2791, 

and 2792 of the Public Health Service Act (42 

U.S.C. 300gg through 300gg–63, 300gg–91, 

and 300gg–92), as amended. 

■ 2. Section 147.102 is amended by 

revising paragraph (a) introductory text 

and adding two sentences at the end of 

paragraph (a)(1)(ii) to read as follows: 

§ 147.102 Fair health insurance premiums. 

(a) In general. With respect to the 

premium rate charged by a health 

insurance issuer in accordance with 

§ 156.80 of this subchapter for health 

insurance coverage offered in the 

individual or small group market— 

(1) * * * 

(ii) * * * For purposes of this 

paragraph, rating area is determined in 

the small group market using the group 

policyholder’s principal business 

address and in the individual market 

using the primary policyholder’s 

address. For plans (other than qualified 

health plans offered through the 

Federally-facilitated Small Business 

Health Options Program) for which an 

issuer can demonstrate that it relied in 

good faith on guidance from an 

applicable State authority issued before 

August 28, 2013, that differs from this 

paragraph (a)(1)(ii), the preceding 

sentence will not apply until the first 

plan year beginning on or after January 

1, 2015 with respect to coverage in the 

small group market. 

* * * * * 

PART 153—STANDARDS RELATED TO 

REINSURANCE, RISK CORRIDORS, 

AND RISK ADJUSTMENT UNDER THE 

AFFORDABLE CARE ACT 

■ 3. Authority citation for part 153 is 

revised to read as follows: 

Authority: Secs. 1311, 1321, 1341–1343, 

Pub. L. 111–148, 24 Stat. 119. 

§ 153.20 [Amended] 

■ 4. Section 153.20 is amended by 

removing the definition of ‘‘Qualified 

health plan or QHP’’. 

■ 5. Section 153.500 is amended by 

adding a definition of ‘‘Qualified health 

plan or QHP’’ to read as follows: 

§ 153.500 Definitions. 

* * * * * 

Qualified health plan or QHP means, 

with respect to the risk corridors 

program only — 

(1) A qualified health plan, as defined 

at § 155.20 of this subchapter; 

(2) A health plan offered outside the 

Exchange by an issuer that is the same 

plan as a qualified health plan, as 

defined at § 155.20 of this subchapter, 

offered through the Exchange by the 

issuer. To be the same plan as a 

qualified health plan (as defined at 

§ 155.20 of this subchapter) means that 

the health plan offered outside the 

Exchange has identical benefits, 

premium, cost-sharing structure, 

provider network, and service area as 

the qualified health plan (as defined at 

§ 155.20 of this subchapter); or 

(3) A health plan offered outside the 

Exchange that is substantially the same 

as a qualified health plan, as defined at 

§ 155.20 of this subchapter, offered 

through the Exchange by the issuer. To 

be substantially the same as a qualified 

health plan (as defined at § 155.20 of 

this subchapter) means that the health 

plan meets the criteria set forth in 

paragraph (2) of this definition with 

respect to the qualified health plan, 

except that its benefits, premium, costsharing structure, and provider network 

may differ from those of the qualified 

health plan (as defined at § 155.20 of 

this subchapter) provided that such 

differences are tied directly and 

exclusively to Federal or State 

requirements or prohibitions on the 

coverage of benefits that apply 

differently to plans depending on 

whether they are offered through or 

outside an Exchange. 

* * * * * 


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PART 155—EXCHANGE 

ESTABLISHMENT STANDARDS AND 

OTHER RELATED STANDARDS 

UNDER THE AFFORDABLE CARE ACT 

■ 6. 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, 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. 

■ 7. Section 155.20 is amended by 

revising the definition for ‘‘Exchange’’ 

and by adding a definition for ‘‘Issuer 

application assister’’ to read as follows: 

§ 155.20 Definitions. 

* * * * * 

Exchange means a governmental 

agency or non-profit entity that meets 

the applicable standards of this part and 

makes QHPs available to qualified 

individuals and/or qualified employers. 

Unless otherwise identified, this term 

includes an Exchange serving the 

individual market for qualified 

individuals and a SHOP serving the 

small group market for qualified 

employers, regardless of whether the 

Exchange is established and operated by 

a State (including a regional Exchange 

or subsidiary Exchange) or by HHS. 

* * * * * 

Issuer application assister means an 

employee, contractor, or agent of a QHP 

issuer who is not licensed as an agent, 

broker, or producer under State law and 

who assists individuals in the 

individual market with applying for a 

determination or redetermination of 

eligibility for coverage through the 

Exchange or for insurance affordability 

programs. 

* * * * * 

■ 8. Section 155.100 is amended by 

revising paragraph (a), by redesignating 

paragraph (b) as paragraph (c) and by 

adding a new paragraph (b) to read as 

follows: 

§ 155.100 Establishment of a State 

Exchange. 

(a) General requirements. Each State 

may elect to establish: 

(1) An Exchange that facilitates the 

purchase of health insurance coverage 

in QHPs in the individual market and 

that provides for the establishment of a 

SHOP; or 

(2) An Exchange that provides only 

for the establishment of a SHOP. 

(b) Timing. For plan years beginning 

before January 1, 2015, only States that 

provide reasonable assurances to CMS 

that they will be in a position to 

establish and operate only a SHOP for 

2014 may elect to establish an Exchange 

that provides only for the establishment 

of a SHOP, pursuant to the process in 

§ 155.105(c), (d), and/or (e), whichever 

is applicable. For plan years beginning 

on or after January 1, 2015, any State 

may elect to establish an Exchange that 

provides only for the establishment of a 

SHOP, pursuant to the process in 

§ 155.106(a). 

* * * * * 

■ 9. Section 155.105 is amended by 

revising paragraphs (b)(1) and (2) and (f) 

to read as follows: 

§ 155.105 Approval of a State Exchange. 

* * * * * 

(b) * * * 

(1) The Exchange is able to carry out 

the required functions of an Exchange 

consistent with subparts C, D, E, F, G, 

H, and K of this part unless the State is 

approved to operate only a SHOP by 

HHS pursuant to § 155.100(a)(2), in 

which case the Exchange must perform 

the minimum functions described in 

subpart H and all applicable provisions 

of other subparts referenced therein; 

(2) The Exchange is capable of 

carrying out the information reporting 

requirements in accordance with section 

36B of the Code, unless the State is 

approved to operate only a SHOP by 

HHS pursuant to § 155.100(a)(2); and 

* * * * * 

(f) HHS operation of an Exchange. (1) 

If a State does not elect to operate an 

Exchange under § 155.100(a)(1) or an 

electing State does not have an 

approved or conditionally approved 

Exchange pursuant to § 155.100(a)(1) by 

January 1, 2013, HHS must (directly or 

through agreement with a not-for-profit 

entity) establish and operate such 

Exchange within the State. In this case, 

the requirements in § 155.120(c), 

§ 155.130 and subparts C, D, E, F, G, H, 

and K of this part will apply. 

(2) If an electing State has an 

approved or conditionally approved 

Exchange pursuant to § 155.100(a)(2) by 

January 1, 2013, HHS must (directly or 

through agreement with a not-for-profit 

entity) establish and operate an 

Exchange that facilitates the purchase of 

health insurance coverage in QHPs in 

the individual market and operate such 

Exchange within the State. In this case, 

the requirements in § 155.120(c), 

§ 155.130 and subparts C, D, E, F, G, and 

K of this part will apply to the Exchange 

operated by HHS. 

■ 10. Section 155.140 is amended by 

revising paragraph (c)(2)(ii) to read as 

follows: 

§ 155.140 Establishment of a regional 

Exchange or subsidiary Exchange. 

* * * * * 

(c) * * * 

(2) * * * 

(ii) Encompass the same geographic 

area for its regional or subsidiary SHOP 

and its regional or subsidiary Exchange 

except: 

(A) In the case of a regional Exchange 

established pursuant to § 155.100(a)(2), 

the regional SHOP must encompass a 

geographic area that matches the 

combined geographic areas of the 

individual market Exchanges 

established to serve the same set of 

States establishing the regional SHOP; 

and 

(B) In the case of a subsidiary 

Exchange established pursuant to 

§ 155.100(a)(2), the combined 

geographic area of all subsidiary SHOPs 

established in the State must encompass 

the geographic area of the individual 

market Exchange established to serve 

the State. 

■ 11. Section 155.200 is amended by 

revising paragraph (a) to read as follows: 

§ 155.200 Functions of an Exchange. 

(a) General requirements. The 

Exchange must perform the minimum 

functions described in this subpart and 

in subparts D, E, F, G, H, and K of this 

part unless the State is approved to 

operate only a SHOP by HHS pursuant 

to § 155.100(a)(2), in which case the 

Exchange operated by the State must 

perform the minimum functions 

described in subpart H and all 

applicable provisions of other subparts 

referenced therein while the Exchange 

operated by HHS must perform the 

minimum functions described in this 

subpart and in subparts D, E, F, G, and 

K of this part. 

* * * * * 

■ 12. Section 155.220 is amended by: 

■ a. Revising paragraph (c)(3)(i); 

■ b. Removing the word ‘‘and’’ from the 

end of paragraph (c)(3)(v) and removing 

the period at the end of paragraph 

(c)(3)(vi) and adding ‘‘; and’’ in its place; 

■ c. Adding paragraphs (c)(3)(vii) and 

(c)(4); 

■ d. Revising paragraph (d)(3); and 

■ e. Adding paragraphs (f), (g), and (h). 

The revisions and additions read as 

follows: 

§ 155.220 Ability of States to permit agents 

and brokers to assist qualified individuals, 

qualified employers, or qualified employees 

enrolling in QHPs. 

* * * * * 

(c) * * * 

(3) * * * 

(i) Disclose and display all QHP 

information provided by the Exchange 


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Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 54135 

or directly by QHP issuers consistent 

with the requirements of § 155.205(b)(1) 

and § 155.205(c), and to the extent that 

not all information required under 

§ 155.205(b)(1) is displayed on the agent 

or broker’s Internet Web site for a QHP, 

prominently display a standardized 

disclaimer provided by HHS stating that 

information required under 

§ 155.205(b)(1) for the QHP is available 

on the Exchange Web site, and provide 

a Web link to the Exchange Web site; 

* * * * * 

(vii) For the Federally-facilitated 

Exchange, prominently display a 

standardized disclaimer provided by 

HHS, and provide a Web link to the 

Exchange Web site. 

(4) When an agent or broker, through 

a contract or other arrangement, uses the 

Internet Web site of another agent or 

broker to help an applicant or enrollee 

complete a QHP selection in the 

Federally-facilitated Exchange, and the 

agent or broker accessing the Web site 

pursuant to the arrangement is listed as 

the agent of record on the enrollment: 

(i) The agent or broker who makes the 

Web site available must: 

(A) Provide HHS with a list of agents 

and brokers who enter into such an 

arrangement to the Federally-facilitated 

Exchange, if requested by HHS; 

(B) Verify that any agent or broker 

accessing or using the Web site pursuant 

to the arrangement is licensed in the 

State in which the consumer is selecting 

the QHP; and has completed training 

and registration and has signed all 

required agreements with the Federallyfacilitated Exchange pursuant to 

paragraph (d) of this section and 

§ 155.260(b); 

(C) Ensure that its name and any 

identifier required by HHS prominently 

appears on the Internet Web site and on 

written materials containing QHP 

information that can be printed from the 

Web site, even if the agent or broker that 

is accessing the Internet Web site is able 

to customize the appearance of the Web 

site; 

(D) Terminate the agent or broker’s 

access to its Web site if HHS determines 

that the agent or broker is in violation 

of the provisions of this section and/or 

HHS terminates any required agreement 

with the agent or broker; 

(E) Report to HHS and applicable 

State departments of insurance any 

potential material breach of the 

standards in paragraphs (c) and (d) of 

this section, or the agreement entered 

into pursuant to § 155.260(b), by the 

agent or broker accessing the Internet 

Web site, should it become aware of any 

such potential breach. 

(ii) HHS retains the right to 

temporarily suspend the ability of the 

agent or broker making its Web site 

available to transact information with 

HHS, if HHS discovers a security and 

privacy incident or breach, for the 

period in which HHS begins to conduct 

an investigation and until the incident 

or breach is remedied to HHS’ 

satisfaction. 

* * * * * 

(f) Termination notice to HHS. (1) An 

agent or broker may terminate its 

agreement with HHS by sending to HHS 

a written notice at least 30 days in 

advance of the date of intended 

termination. 

(2) The notice must include the 

intended date of termination, but if it 

does not specify a date of termination, 

or the date provided is not acceptable to 

HHS, HHS may set a different 

termination date that will be no less 

than 30 days from the date on the 

agent’s or broker’s notice of termination. 

(3) Prior to the date of termination, an 

agent or broker should— 

(i) Notify applicants, qualified 

individuals, or enrollees that the agent 

or broker is assisting, of the agent’s or 

broker’s intended date of termination; 

(ii) Continue to assist such 

individuals with Exchange-related 

eligibility and enrollment services up 

until the date of termination; and 

(iii) Provide such individuals with 

information about alternatives available 

for obtaining additional assistance, 

including but not limited to the 

Federally-facilitated Exchange Web site. 

(4) When termination becomes 

effective under paragraph this paragraph 

(f) or paragraph (g) of this section, the 

agent or broker will not be able to assist 

any individual through the Federallyfacilitated Exchange, and the agent’s or 

broker’s agreement with the Exchange 

pursuant to § 155.260(b) will also be 

terminated through the termination 

without cause process set forth in that 

agreement. The agent or broker must 

continue to protect any personally 

identifiable information accessed during 

the term of either of these agreements 

with the Federally-facilitated Exchange. 

(g) Standards for termination for 

cause from the Federally-facilitated 

Exchange. (1) If, in HHS’s 

determination, a specific finding of 

noncompliance or pattern of 

noncompliance is sufficiently severe, 

HHS may terminate an agent’s or 

broker’s agreement with the Federallyfacilitated Exchange for cause. 

(2) An agent or broker may be 

determined noncompliant if HHS finds 

that the agent or broker violated— 

(i) Any standard specified under this 

section; 

(ii) Any term or condition of its 

agreement with the Federally-facilitated 

Exchange required under paragraph (d) 

of this section, or if the agreement with 

the Federally-facilitated Exchange under 

§ 155.260(b) is terminated; 

(iii) Any State law applicable to 

agents or brokers, as required under 

paragraph (e) of this section, including 

but not limited to State laws related to 

confidentiality and conflicts of interest; 

or 

(iv) Any Federal law applicable to 

agents or brokers. 

(3) HHS will notify the agent or broker 

of the specific finding of noncompliance 

or pattern of noncompliance, and after 

30 days from the date of the notice, may 

terminate the agreement for cause if the 

matter is not resolved to the satisfaction 

of HHS. 

(4) After the period in paragraph (g)(3) 

of this section has elapsed, the agent or 

broker will no longer be registered with 

the Federally-facilitated Exchange or 

able to transact information with HHS 

(h) Request for reconsideration of 

termination for cause from the 

Federally-facilitated Exchange. (1) 

Request for reconsideration. An agent or 

broker whose agreement with the 

Federally-facilitated Exchange has been 

terminated may request reconsideration 

of such action in the manner and form 

established by HHS. 

(2) Timeframe for request. The agent 

or broker must submit a request for 

reconsideration to the HHS 

reconsideration entity within 30 

calendar days of the date of the written 

notice from HHS. 

(3) Notice of reconsideration decision. 

The HHS reconsideration entity will 

provide the agent or broker with a 

written notice of the reconsideration 

decision within 30 calendar days of the 

date it receives the request for 

reconsideration. This decision will 

constitute HHS’s final determination. 

■ 13. Section 155.270 is amended by 

revising paragraph (a) to read as follows: 

§ 155.270 Use of standards and protocols 

for electronic transactions. 

(a) HIPAA administrative 

simplification. To the extent that the 

Exchange performs electronic 

transactions with a covered entity, the 

Exchange must use standards, 

implementation specifications, 

operating rules, and code sets that are 

adopted by the Secretary in 45 CFR 

parts 160 and 162 or that are otherwise 

approved by HHS. 

* * * * * 

■ 14. Section 155.280 is added to 

subpart C to read as follows: 


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54136 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

§ 155.280 Oversight and monitoring of 

privacy and security requirements. 

(a) General. HHS will oversee and 

monitor the Federally-facilitated 

Exchanges and non-Exchange entities 

required to comply with the privacy and 

security standards established and 

implemented by a Federally-facilitated 

Exchange pursuant to § 155.260 for 

compliance with those standards. HHS 

will oversee and monitor State 

Exchanges for compliance with the 

standards State Exchanges establish and 

implement pursuant to § 155.260. State 

Exchanges will oversee and monitor 

non-Exchange entities required to 

comply with the privacy and security 

standards established and implemented 

by a State Exchange pursuant to 

§ 155.260. 

(b) Audits and investigations. HHS 

may conduct oversight activities that 

include but are not limited to the 

following: audits, investigations, 

inspections, and any reasonable 

activities necessary for appropriate 

oversight of compliance with the 

Exchange privacy and security 

standards. HHS may also pursue civil, 

criminal or administrative proceedings 

or actions as determined necessary. 

■ 15. Section 155.310 is amended by 

adding paragraph (k) to read as follows: 

§ 155.310 Eligibility process. 

* * * * * 

(k) Incomplete application. If an 

application filer submits an application 

that does not include sufficient 

information for the Exchange to conduct 

an eligibility determination for 

enrollment in a QHP through the 

Exchange or for insurance affordability 

programs, if applicable, the Exchange 

must— 

(1) Provide notice to the applicant 

indicating that information necessary to 

complete an eligibility determination is 

missing, specifying the missing 

information, and providing instructions 

on how to provide the missing 

information; and 

(2) Provide the applicant with a 

period of no less than 10 days and no 

more than 90 days from the date on 

which the notice described in paragraph 

(k)(1) of this section is sent to the 

applicant to provide the information 

needed to complete the application to 

the Exchange. 

(3) During the period described in 

paragraph (k)(2) of this section, the 

Exchange must not proceed with an 

applicant’s eligibility determination or 

provide advance payments of the 

premium tax credit or cost-sharing 

reductions, unless an application filer 

has provided sufficient information to 

determine his or her eligibility for 

enrollment in a QHP through the 

Exchange, in which case the Exchange 

must make such a determination for 

enrollment in a QHP. 

■ 16. Section 155.320 is amended by 

revising the section heading and 

paragraph (b) to read as follows: 

§ 155.320 Verification of eligibility for 

minimum essential coverage other than 

through an eligible employer-sponsored 

plan. 

* * * * * 

(b) Verification of eligibility for 

minimum essential coverage other than 

through an eligible employer-sponsored 

plan. (1)(i) The Exchange must verify 

whether an applicant is eligible for 

minimum essential coverage other than 

through an eligible employer-sponsored 

plan, Medicaid, CHIP, or the BHP, using 

information obtained by transmitting 

identifying information specified by 

HHS to HHS for verification purposes. 

(ii) The Exchange must verify whether 

an applicant has already been 

determined eligible for coverage through 

Medicaid, CHIP, or the BHP, if a BHP 

is operating in the service area of the 

Exchange, within the State or States in 

which the Exchange operates using 

information obtained from the agencies 

administering such programs. 

(2) Consistent with § 164.512(k)(6)(i) 

of this subchapter, the disclosure to 

HHS of information regarding eligibility 

for and enrollment in a health plan, 

which may be considered protected 

health information, as that term is 

defined in § 160.103 of this subchapter, 

is expressly authorized, for the purposes 

of verification of applicant eligibility for 

minimum essential coverage as part of 

the eligibility determination process for 

advance payments of the premium tax 

credit or cost-sharing reductions. 

* * * * * 

■ 17. Section 155.345 is amended by 

revising paragraphs (i) and (j) to read as 

follows: 

§ 155.345 Coordination with Medicaid, 

CHIP, the Basic Health Program, and the 

Pre-existing Condition Insurance Plan. 

* * * * * 

(i) Standards for sharing information 

between the Exchange and the agencies 

administering Medicaid, CHIP, and the 

BHP. (1) The Exchange must utilize a 

secure electronic interface to exchange 

data with the agencies administering 

Medicaid, CHIP, and the BHP, if a BHP 

is operating in the service area of the 

Exchange, including to verify whether 

an applicant for insurance affordability 

programs has been determined eligible 

for Medicaid, CHIP, or the BHP, as 

specified in § 155.320(b)(1)(ii), and for 

other functions required under this 

subpart. 

(2) Model agreements. The Exchange 

may utilize any model agreements as 

established by HHS for the purpose of 

sharing data as described in this section. 

(j) Transition from the Pre-existing 

Condition Insurance Plan (PCIP). The 

Exchange must follow procedures 

established in accordance with 45 CFR 

152.45 to transition PCIP enrollees to 

the Exchange to ensure that there are no 

lapses in health coverage. 

■ 18. Section 155.415 is added to read 

as follows: 

§ 155.415 Allowing issuer application 

assisters to assist with eligibility 

applications. 

(a) Exchange option. An Exchange, to 

the extent permitted by State law, may 

permit issuer application assisters, as 

defined at § 155.20, to assist individuals 

in the individual market with applying 

for a determination or redetermination 

of eligibility for coverage through the 

Exchange and insurance affordability 

programs, provided that such issuer 

application assisters meet the 

requirements set forth in 

§ 156.1230(a)(2) of this subchapter. 

(b) [Reserved] 

■ 19. Add Subpart F to read as follows: 

Subpart F—Appeals of Eligibility 

Determinations for Exchange Participation 

and Insurance Affordability Programs 

Sec. 

155.500 Definitions. 

155.505 General eligibility appeals 

requirements. 

155.510 Appeals coordination. 

155.515 Notice of appeal procedures. 

155.520 Appeal requests. 

155.525 Eligibility pending appeal. 

155.530 Dismissals. 

155.535 Informal resolution and hearing 

requirements. 

155.540 Expedited appeals. 

155.545 Appeal decisions. 

155.550 Appeal record. 

155.555 Employer appeals process. 

Subpart F—Appeals of Eligibility 

Determinations for Exchange 

Participation and Insurance 

Affordability Programs 

§ 155.500 Definitions. 

In addition to those definitions in 

§§ 155.20 and 155.300, for purposes of 

this subpart and § 155.740 of subpart H, 

the following terms have the following 

meanings: 

Appeal record means the appeal 

decision, all papers and requests filed in 

the proceeding, and, if a hearing was 

held, the transcript or recording of 

hearing testimony or an official report 

containing the substance of what 

happened at the hearing, and any 

exhibits introduced at the hearing. 


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Appeal request means a clear 

expression, either orally or in writing, 

by an applicant, enrollee, employer, or 

small business employer or employee to 

have any eligibility determination or 

redetermination contained in a notice 

issued in accordance with §§ 155.310(g), 

155.330(e)(1)(ii), 155.335(h)(1)(ii), 

155.610(i), or 155.715(e) or (f), reviewed 

by an appeals entity. 

Appeals entity means a body 

designated to hear appeals of eligibility 

determinations or redeterminations 

contained in notices issued in 

accordance with §§ 155.310(g), 

155.330(e)(1)(ii), 155.335(h)(1)(ii), 

155.610(i), or 155.715(e) and (f). 

Appellant means the applicant or 

enrollee, the employer, or the small 

business employer or employee who is 

requesting an appeal. 

De novo review means a review of an 

appeal without deference to prior 

decisions in the case. 

Evidentiary hearing means a hearing 

conducted where evidence may be 

presented. 

Vacate means to set aside a previous 

action. 

§ 155.505 General eligibility appeals 

requirements. 

(a) General requirements. Unless 

otherwise specified, the provisions of 

this subpart apply to Exchange 

eligibility appeals processes, regardless 

of whether the appeals process is 

provided by a State Exchange appeals 

entity or by the HHS appeals entity. 

(b) Right to appeal. An applicant or 

enrollee must have the right to appeal— 

(1) An eligibility determination made 

in accordance with subpart D, 

including— 

(i) An initial determination of 

eligibility, including the amount of 

advance payments of the premium tax 

credit and level of cost-sharing 

reductions, made in accordance with 

the standards specified in § 155.305(a) 

through (h); and 

(ii) A redetermination of eligibility, 

including the amount of advance 

payments of the premium tax credit and 

level of cost-sharing reductions, made in 

accordance with §§ 155.330 and 

155.335; 

(2) An eligibility determination for an 

exemption made in accordance 

§ 155.605; 

(3) A failure by the Exchange to 

provide timely notice of an eligibility 

determination in accordance with 

§§ 155.310(g), 155.330(e)(1)(ii), 

155.335(h)(1)(ii), or 155.610(i); and 

(4) A denial of a request to vacate 

dismissal made by a State Exchange 

appeals entity in accordance with 

§ 155.530(d)(2), made pursuant to 

paragraph (c)(2)(i) or this section; and 

(c) Options for Exchange appeals. 

Exchange eligibility appeals may be 

conducted by— 

(1) A State Exchange appeals entity, 

or an eligible entity described in 

paragraph (d) of this section that is 

designated by the Exchange, if the 

Exchange establishes an appeals process 

in accordance with the requirements of 

this subpart; or 

(2) The HHS appeals entity— 

(i) Upon exhaustion of the State 

Exchange appeals process; 

(ii) If the Exchange has not 

established an appeals process in 

accordance with the requirements of 

this subpart; or 

(iii) If the Exchange has delegated 

appeals of exemption determinations 

made by HHS pursuant to § 155.625(b) 

to the HHS appeals entity, and the 

appeal is limited to a determination of 

eligibility for an exemption. 

(d) Eligible entities. An appeals 

process established under this subpart 

must comply with § 155.110(a). 

(e) Representatives. An appellant may 

represent himself or herself, or be 

represented by an authorized 

representative under § 155.227, or by 

legal counsel, a relative, a friend, or 

another spokesperson, during the 

appeal. 

(f) Accessibility requirements. 

Appeals processes established under 

this subpart must comply with the 

accessibility requirements in 

§ 155.205(c). 

(g) Judicial review. An appellant may 

seek judicial review to the extent it is 

available by law. 

§ 155.510 Appeals coordination. 

(a) Agreements. The appeals entity or 

the Exchange must enter into 

agreements with the agencies 

administering insurance affordability 

programs regarding the appeals 

processes for such programs as are 

necessary to fulfill the requirements of 

this subpart. Such agreements must 

include a clear delineation of the 

responsibilities of each entity to support 

the eligibility appeals process, and 

must— 

(1) Minimize burden on appellants, 

including not asking the appellant to 

provide duplicative information or 

documentation that he or she already 

provided to an agency administering an 

insurance affordability program or 

eligibility appeals process; 

(2) Ensure prompt issuance of appeal 

decisions consistent with timeliness 

standards established under this 

subpart; and 

(3) Comply with the requirements set 

forth in— 

(i) 42 CFR 431.10(d), if the state 

Medicaid agency delegates authority to 

hear fair hearings under 42 CFR 

431.10(c)(ii) to the Exchange appeals 

entity; or 

(ii) 42 CFR 457.348(b), if the state 

CHIP agency delegates authority to 

review appeals under § 457.1120 to the 

Exchange appeals entity. 

(b) Coordination for Medicaid and 

CHIP appeals. (1) Where the Medicaid 

or CHIP agency has delegated appeals 

authority to the Exchange appeals entity 

consistent with 42 CFR 431.10(c)(1)(ii) 

or 457.1120, and the Exchange appeals 

entity has accepted such delegation— 

(i) The Exchange appeals entity will 

conduct the appeal in accordance 

with— 

(A) Medicaid and CHIP MAGI-based 

income standards and standards for 

citizenship and immigration status, in 

accordance with the eligibility and 

verification rules and procedures, 

consistent with 42 CFR parts 435 and 

457. 

(B) Notice standards identified in this 

subpart, subpart D, and by the State 

Medicaid or CHIP agency, consistent 

with applicable law. 

(ii) Consistent with 42 CFR 

431.10(c)(1)(ii), an appellant who has 

been determined ineligible for Medicaid 

must be informed of the option to opt 

into pursuing his or her appeal of the 

adverse Medicaid eligibility 

determination with the Medicaid 

agency, and if the appellant elects to do 

so, the appeals entity transmits the 

eligibility determination and all 

information provided via secure 

electronic interface, promptly and 

without undue delay, to the Medicaid 

agency. 

(2) Where the Medicaid or CHIP 

agency has not delegated appeals 

authority to the appeals entity and the 

appellant seeks review of a denial of 

Medicaid or CHIP eligibility, the 

appeals entity must transmit the 

eligibility determination and all relevant 

information provided as part of the 

initial application or appeal, if 

applicable, via secure electronic 

interface, promptly and without undue 

delay, to the Medicaid or CHIP agency, 

as applicable. 

(3) The Exchange must consider an 

appellant determined or assessed by the 

appeals entity as not potentially eligible 

for Medicaid or CHIP as ineligible for 

Medicaid and CHIP based on the 

applicable Medicaid and CHIP MAGIbased income standards for purposes of 

determining eligibility for advance 

payments of the premium tax credit and 

cost-sharing reductions. 

(c) Data exchange. The appeals entity 

must— 

(1) Ensure that all data exchanges that 

are part of the appeals process, comply 


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with the data exchange requirements in 

§§ 155.260, 155.270, and 155.345(i); and 

(2) Comply with all data sharing 

requests made by HHS. 

§ 155.515 Notice of appeal procedures. 

(a) Requirement to provide notice of 

appeal procedures. The Exchange must 

provide notice of appeal procedures at 

the time that the— 

(1) Applicant submits an application; 

and 

(2) Notice of eligibility determination 

is sent under §§ 155.310(g), 

155.330(e)(1)(ii), 155.335(h)(1)(ii), and 

155.610(i). 

(b) General content on right to appeal 

and appeal procedures. Notices 

described in paragraph (a) of this 

section must contain— 

(1) An explanation of the applicant or 

enrollee’s appeal rights under this 

subpart; 

(2) A description of the procedures by 

which the applicant or enrollee may 

request an appeal; 

(3) Information on the applicant or 

enrollee’s right to represent himself or 

herself, or to be represented by legal 

counsel or another representative; 

(4) An explanation of the 

circumstances under which the 

appellant’s eligibility may be 

maintained or reinstated pending an 

appeal decision, as described in 

§ 155.525; and 

(5) An explanation that an appeal 

decision for one household member 

may result in a change in eligibility for 

other household members and that such 

a change will be handled as a 

redetermination of eligibility for all 

household members in accordance with 

the standards specified in § 155.305. 

§ 155.520 Appeal requests. 

(a) General standards for appeal 

requests. The Exchange and the appeals 

entity— 

(1) Must accept appeal requests 

submitted— 

(i) By telephone; 

(ii) By mail; 

(iii) In person, if the Exchange or the 

appeals entity, as applicable, is capable 

of receiving in-person appeal requests; 

and 

(iv) Via the Internet. 

(2) Must assist the applicant or 

enrollee in making the appeal request, if 

requested; 

(3) Must not limit or interfere with the 

applicant or enrollee’s right to make an 

appeal request; and 

(4) Must consider an appeal request to 

be valid for the purpose of this subpart, 

if it is submitted in accordance with the 

requirements of paragraphs (b) and (c) of 

this section and § 155.505(b). 

(b) Appeal request. The Exchange and 

the appeals entity must allow an 

applicant or enrollee to request an 

appeal within— 

(1) 90 days of the date of the notice 

of eligibility determination; or 

(2) A timeframe consistent with the 

state Medicaid agency’s requirement for 

submitting fair hearing requests, 

provided that timeframe is no less than 

30 days, measured from the date of the 

notice of eligibility determination. 

(c) Appeal of a State Exchange 

appeals entity decision to HHS. If the 

appellant disagrees with the appeal 

decision of a State Exchange appeals 

entity, he or she may make an appeal 

request to the HHS appeals entity 

within 30 days of the date of the State 

Exchange appeals entity’s notice of 

appeal decision or notice of denial of a 

request to vacate a dismissal. 

(d) Acknowledgement of appeal 

request. (1) Upon receipt of a valid 

appeal request pursuant to paragraph 

(b), (c), or (d)(3)(i) of this section, the 

appeals entity must— 

(i) Send timely acknowledgment to 

the appellant of the receipt of his or her 

valid appeal request, including— 

(A) Information regarding the 

appellant’s eligibility pending appeal 

pursuant to § 155.525; and 

(B) An explanation that any advance 

payments of the premium tax credit 

paid on behalf of the tax filer pending 

appeal are subject to reconciliation 

under 26 CFR 1.36B–4. 

(ii) Send timely notice via secure 

electronic interface of the appeal request 

and, if applicable, instructions to 

provide eligibility pending appeal 

pursuant to § 155.525, to the Exchange 

and to the agencies administering 

Medicaid or CHIP, where applicable. 

(iii) If the appeal request is made 

pursuant to paragraph (c) of this section, 

send timely notice via secure electronic 

interface of the appeal request to the 

State Exchange appeals entity. 

(iv) Promptly confirm receipt of the 

records transferred pursuant to 

paragraph (d)(3) or (4) of this section to 

the Exchange or the State Exchange 

appeals entity, as applicable. 

(2) Upon receipt of an appeal request 

that is not valid because it fails to meet 

the requirements of this section or 

§ 155.505(b), the appeals entity must— 

(i) Promptly and without undue 

delay, send written notice to the 

applicant or enrollee informing the 

appellant: 

(A) That the appeal request has not 

been accepted; 

(B) About the nature of the defect in 

the appeal request; and 

(C) That the applicant or enrollee may 

cure the defect and resubmit the appeal 

request by the date determined under 

paragraph (b) or (c) of this section, as 

applicable, or within a reasonable 

timeframe established by the appeals 

entity. 

(ii) Treat as valid an amended appeal 

request that meets the requirements of 

this section and § 155.505(b). 

(3) Upon receipt of a valid appeal 

request pursuant to paragraph (b) of this 

section, or upon receipt of the notice 

under paragraph (d)(1)(ii) of this 

section, the Exchange must transmit via 

secure electronic interface to the 

appeals entity— 

(i) The appeal request, if the appeal 

request was initially made to the 

Exchange; and 

(ii) The appellant’s eligibility record. 

(4) Upon receipt of the notice 

pursuant to paragraph (d)(1)(iii) of this 

section, the State Exchange appeals 

entity must transmit via secure 

electronic interface the appellant’s 

appeal record, including the appellant’s 

eligibility record as received from the 

Exchange, to the HHS appeals entity. 

§ 155.525 Eligibility pending appeal. 

(a) General standards. After receipt of 

a valid appeal request or notice under 

§ 155.520(d)(1)(ii) that concerns an 

appeal of a redetermination under 

§ 155.330(e) or § 155.335(h), the 

Exchange or the Medicaid or CHIP 

agency, as applicable, must continue to 

consider the appellant eligible while the 

appeal is pending in accordance with 

standards set forth in paragraph (b) of 

this section or as determined by the 

Medicaid or CHIP agency consistent 

with 42 CFR parts 435 and 457, as 

applicable. 

(b) Implementation. If the tax filer or 

appellant, as applicable, accepts 

eligibility pending an appeal, the 

Exchange must continue the appellant’s 

eligibility for enrollment in a QHP, 

advance payments of the premium tax 

credit, and cost-sharing reductions, as 

applicable, in accordance with the level 

of eligibility immediately before the 

redetermination being appealed. 

§ 155.530 Dismissals. 

(a) Dismissal of appeal. The appeals 

entity must dismiss an appeal if the 

appellant— 

(1) Withdraws the appeal request in 

writing; 

(2) Fails to appear at a scheduled 

hearing without good cause; 

(3) Fails to submit a valid appeal 

request as specified in § 155.520(a)(4); 

or 

(4) Dies while the appeal is pending. 

(b) Notice of dismissal to the 

appellant. If an appeal is dismissed 

under paragraph (a) of this section, the 


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appeals entity must provide timely 

written notice to the appellant, 

including— 

(1) The reason for dismissal; 

(2) An explanation of the dismissal’s 

effect on the appellant’s eligibility; and 

(3) An explanation of how the 

appellant may show good cause why the 

dismissal should be vacated in 

accordance with paragraph (d) of this 

section. 

(c) Notice of the dismissal to the 

Exchange, Medicaid, and CHIP. If an 

appeal is dismissed under paragraph (a) 

of this section, the appeals entity must 

provide timely notice to the Exchange, 

and to the agency administering 

Medicaid or CHIP, as applicable, 

including instruction regarding— 

(1) The eligibility determination to 

implement; and 

(2) Discontinuing eligibility provided 

under § 155.525, if applicable. 

(d) Vacating a dismissal. The appeals 

entity must— 

(1) Vacate a dismissal and proceed 

with the appeal if the appellant makes 

a written request within 30 days of the 

date of the notice of dismissal showing 

good cause why the dismissal should be 

vacated; and 

(2) Provide timely written notice of 

the denial of a request to vacate a 

dismissal to the appellant, if the request 

is denied. 

§ 155.535 Informal resolution and hearing 

requirements. 

(a) Informal resolution. The HHS 

appeals process will provide an 

opportunity for informal resolution and 

a hearing in accordance with the 

requirements of this section. A State 

Exchange appeals entity may also 

provide an informal resolution process 

prior to a hearing, provided that— 

(1) The process complies with the 

scope of review specified in paragraph 

(e) of this section; 

(2) The appellant’s right to a hearing 

is preserved in any case in which the 

appellant remains dissatisfied with the 

outcome of the informal resolution 

process; 

(3) If the appeal advances to hearing, 

the appellant is not asked to provide 

duplicative information or 

documentation that he or she previously 

provided during the application or 

informal resolution process; and 

(4) If the appeal does not advance to 

hearing, the informal resolution 

decision is final and binding. 

(b) Notice of hearing. When a hearing 

is scheduled, the appeals entity must 

send written notice to the appellant of 

the date, time, and location or format of 

the hearing no later than 15 days prior 

to the hearing date. 

(c) Conducting the hearing. All 

hearings under this subpart must be 

conducted— 

(1) At a reasonable date, time, and 

location or format; 

(2) After notice of the hearing, 

pursuant to paragraph (b) of this section; 

(3) As an evidentiary hearing, 

consistent with paragraph (e) of this 

section; and 

(4) By one or more impartial officials 

who have not been directly involved in 

the eligibility determination or any prior 

Exchange appeal decisions in the same 

matter. 

(d) Procedural rights of an appellant. 

The appeals entity must provide the 

appellant with the opportunity to— 

(1) Review his or her appeal record, 

including all documents and records to 

be used by the appeals entity at the 

hearing, at a reasonable time before the 

date of the hearing as well as during the 

hearing; 

(2) Bring witnesses to testify; 

(3) Establish all relevant facts and 

circumstances; 

(4) Present an argument without 

undue interference; and 

(5) Question or refute any testimony 

or evidence, including the opportunity 

to confront and cross-examine adverse 

witnesses. 

(e) Information and evidence to be 

considered. The appeals entity must 

consider the information used to 

determine the appellant’s eligibility as 

well as any additional relevant evidence 

presented during the course of the 

appeals process, including at the 

hearing. 

(f) Standard of review. The appeals 

entity will review the appeal de novo 

and will consider all relevant facts and 

evidence adduced during the appeals 

process. 

§ 155.540 Expedited appeals. 

(a) Expedited appeals. The appeals 

entity must establish and maintain an 

expedited appeals process for an 

appellant to request an expedited 

process where there is an immediate 

need for health services because a 

standard appeal could jeopardize the 

appellant’s life, health, or ability to 

attain, maintain, or regain maximum 

function. 

(b) Denial of a request for expedited 

appeal. If the appeals entity denies a 

request for an expedited appeal, it 

must— 

(1) Handle the appeal request under 

the standard process and issue the 

appeal decision in accordance with 

§ 155.545(b)(1); and 

(2) Inform the appellant, promptly 

and without undue delay, through 

electronic or oral notification, if 

possible, of the denial and, if 

notification is oral, follow up with the 

appellant by written notice, within the 

timeframe established by the Secretary. 

Written notice of the denial must 

include— 

(i) The reason for the denial; 

(ii) An explanation that the appeal 

request will be transferred to the 

standard process; and 

(iii) An explanation of the appellant’s 

rights under the standard process. 

§ 155.545 Appeal decisions. 

(a) Appeal decisions. Appeal 

decisions must— 

(1) Be based exclusively on the 

information and evidence specified in 

§ 155.535(e) and the eligibility 

requirements under subpart D or G of 

this part, as applicable, and if the 

Medicaid or CHIP agencies delegate 

authority to conduct the Medicaid fair 

hearing or CHIP review to the appeals 

entity in accordance with 42 CFR 

431.10(c)(1)(ii) or 457.1120, the 

eligibility requirements under 42 CFR 

parts 435 and 457, as applicable; 

(2) State the decision, including a 

plain language description of the effect 

of the decision on the appellant’s 

eligibility; 

(3) Summarize the facts relevant to 

the appeal; 

(4) Identify the legal basis, including 

the regulations that support the 

decision; 

(5) State the effective date of the 

decision; and 

(6) If the appeals entity is a State 

Exchange appeals entity— 

(i) Provide an explanation of the 

appellant’s right to pursue the appeal 

before the HHS appeals entity, 

including the applicable timeframe, if 

the appellant remains dissatisfied with 

the eligibility determination; and 

(ii) Indicate that the decision of the 

State Exchange appeals entity is final, 

unless the appellant pursues the appeal 

before the HHS appeals entity. 

(b) Notice of appeal decision. The 

appeals entity— 

(1) Must issue written notice of the 

appeal decision to the appellant within 

90 days of the date of an appeal request 

under § 155.520(b) or (c) is received, as 

administratively feasible. 

(2) In the case of an appeal request 

submitted under § 155.540 that the 

appeals entity determines meets the 

criteria for an expedited appeal, must 

issue the notice as expeditiously as 

reasonably possible, consistent with the 

timeframe established by the Secretary. 

(3) Must provide notice of the appeal 

decision and instructions to cease 

pended eligibility to the appellant, if 

applicable, via secure electronic 


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54140 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

interface, to the Exchange or the 

Medicaid or CHIP agency, as applicable. 

(c) Implementation of appeal 

decisions. The Exchange, upon 

receiving the notice described in 

paragraph (b), must promptly— 

(1) Implement the appeal decision 

effective— 

(i) Prospectively, on the first day of 

the month following the date of the 

notice of appeal decision, or consistent 

with § 155.330(f)(2) or (3), if applicable; 

or 

(ii) Retroactively, to the date the 

incorrect eligibility determination was 

made, at the option of the appellant. 

(2) Redetermine the eligibility of 

household members who have not 

appealed their own eligibility 

determinations but whose eligibility 

may be affected by the appeal decision, 

in accordance with the standards 

specified in § 155.305. 

§ 155.550 Appeal record. 

(a) Appellant access to the appeal 

record. Subject to the requirements of 

all applicable Federal and State laws 

regarding privacy, confidentiality, 

disclosure, and personally identifiable 

information, the appeals entity must 

make the appeal record accessible to the 

appellant at a convenient place and 

time. 

(b) Public access to the appeal 

decision. The appeals entity must 

provide public access to all appeal 

decisions, subject to all applicable 

Federal and State laws regarding 

privacy, confidentiality, disclosure, and 

personally identifiable information. 

§ 155.555 Employer appeals process. 

(a) General requirements. The 

provisions of this section apply to 

employer appeals processes through 

which an employer may, in response to 

a notice under § 155.310(h), appeal a 

determination that the employer does 

not provide minimum essential 

coverage through an employersponsored plan or that the employer 

does provide that coverage but it is not 

affordable coverage with respect to an 

employee. 

(b) Exchange employer appeals 

process. An Exchange may establish an 

employer appeals process in accordance 

with the requirements of this section, 

§ 155.505(f) through (g), and 

§ 155.510(a)(1), (a)(2), and (c). Where an 

Exchange has not established an 

employer appeals process, HHS will 

provide an employer appeals process 

that meets the requirements of this 

section, §§ 155.505(f) through (g), and 

155.510(a)(1), (a)(2), and (c). 

(c) Appeal request. The Exchange and 

appeals entity, as applicable, must— 

(1) Allow an employer to request an 

appeal within 90 days from the date the 

notice described under § 155.310(h) is 

sent; 

(2) Allow an employer to submit 

relevant evidence to support the appeal; 

(3) Allow an employer to submit an 

appeal request to— 

(i) The Exchange or the Exchange 

appeals entity, if the Exchange 

establishes an employer appeals 

process; or 

(ii) The HHS appeals entity, if the 

Exchange has not established an 

employer appeals process; 

(4) Comply with the requirements of 

§ 155.520(a)(1) through (3); and 

(5) Consider an appeal request valid if 

it is submitted in accordance with 

paragraph (c)(1) of this section and with 

the purpose of appealing the 

determination identified in the notice 

specified in § 155.310(h). 

(d) Notice of appeal request. Upon 

receipt of a valid appeal request, the 

appeals entity must— 

(1) Send timely acknowledgement of 

the receipt of the appeal request to the 

employer, including an explanation of 

the appeals process; 

(2) Send timely notice to the 

employee of the receipt of the appeal 

request, including— 

(i) An explanation of the appeals 

process; 

(ii) Instructions for submitting 

additional evidence for consideration by 

the appeals entity; and 

(iii) An explanation of the potential 

effect of the employer’s appeal on the 

employee’s eligibility. 

(3) Promptly notify the Exchange of 

the appeal, if the employer did not 

initially make the appeal request to the 

Exchange. 

(4) Promptly and without undue delay 

send written notice to the employer of 

an appeal request that is not valid 

because it fails to meet the requirements 

of this section. The written notice must 

inform the employer— 

(i) That the appeal request has not 

been accepted; 

(ii) About the nature of the defect in 

the appeal request; and 

(iii) That the employer may cure the 

defect and resubmit the appeal request 

by the date determined under paragraph 

(c) of this section, or within a reasonable 

timeframe established by the appeals 

entity. 

(iv) Treat as valid an amended appeal 

request that meets the requirements of 

this section, including standards for 

timeliness. 

(e) Transmittal and receipt of records. 

(1) Upon receipt of a valid appeal 

request under this section, or upon 

receipt of the notice under paragraph 

(d)(3) of this section, the Exchange must 

promptly transmit via secure electronic 

interface to the appeals entity— 

(i) The appeal request, if the appeal 

request was initially made to the 

Exchange; and 

(ii) The employee’s eligibility record. 

(2) The appeals entity must promptly 

confirm receipt of records transmitted 

pursuant to paragraph (e)(1) of this 

section to the entity that transmitted the 

records. 

(f) Dismissal of appeal. The appeals 

entity— 

(1) Must dismiss an appeal under the 

circumstances specified in 

§ 155.530(a)(1) or if the request fails to 

comply with the standards in paragraph 

(c)(4) of this section. 

(2) Must provide timely notice of the 

dismissal to the employer, employee, 

and Exchange including the reason for 

dismissal; and 

(3) May vacate a dismissal if the 

employer makes a written request 

within 30 days of the date of the notice 

of dismissal showing good cause as to 

why the dismissal should be vacated. 

(g) Procedural rights of the employer. 

The appeals entity must provide the 

employer the opportunity to— 

(1) Provide relevant evidence for 

review of the determination of an 

employee’s eligibility for advance 

payments of the premium tax credit or 

cost-sharing reductions; 

(2) Review— 

(i) The information described in 

§ 155.310(h)(1); 

(ii) Information regarding whether the 

employee’s income is above or below 

the threshold by which the affordability 

of employer-sponsored minimum 

essential coverage is measured, as set 

forth by standards described in 26 CFR 

1.36B; and 

(iii) Other data used to make the 

determination described in § 155.305(f) 

or (g), to the extent allowable by law, 

except the information described in 

paragraph (h) of this section. 

(h) Confidentiality of employee 

information. Neither the Exchange nor 

the appeals entity may make available to 

an employer any tax return information 

of an employee as prohibited by section 

6103 of the Code. 

(i) Adjudication of employer appeals. 

Employer appeals must— 

(1) Be reviewed by one or more 

impartial officials who have not been 

directly involved in the employee 

eligibility determination implicated in 

the appeal; 

(2) Consider the information used to 

determine the employee’s eligibility as 

well as any additional relevant evidence 

provided by the employer or the 

employee during the course of the 

appeal; and 


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(3) Be reviewed de novo. 

(j) Appeal decisions. Employer appeal 

decisions must— 

(1) Be based exclusively on the 

information and evidence described in 

paragraph (i)(2) of this section and the 

eligibility standards in 45 CFR part 155, 

subpart D; 

(2) State the decision, including a 

plain language description of the effect 

of the decision on the employee’s 

eligibility; and 

(3) Comply with the requirements set 

forth in § 155.545(a)(3) through (5). 

(k) Notice of appeal decision. The 

appeals entity must provide written 

notice of the appeal decision within 90 

days of the date the appeal request is 

received, as administratively feasible, 

to— 

(1) The employer. Such notice must 

include— 

(i) The appeal decision; and 

(ii) An explanation that the appeal 

decision does not foreclose any appeal 

rights the employer may have under 

subtitle F of the Code. 

(2) The employee. Such notice must 

include— 

(i) The appeal decision; and 

(ii) An explanation that the employee 

and his or her household members, if 

applicable, may appeal a 

redetermination of eligibility that occurs 

as a result of the appeal decision. 

(3) The Exchange. 

(l) Implementation of the appeal 

decision. After receipt of the notice 

under paragraph (k)(3) of this section, if 

the appeal decision affects the 

employee’s eligibility, the Exchange 

must promptly redetermine the 

employee’s eligibility and the eligibility 

of the employee’s household members, 

if applicable, in accordance with the 

standards specified in § 155.305. 

(m) Appeal record. Subject to the 

requirements of § 155.550 and 

paragraph (h) of this section, the appeal 

record must be accessible to the 

employer and to the employee in a 

convenient format and at a convenient 

time. 

■ 14. In § 155.700, paragraph (b) is 

amended by adding the definition of 

‘‘SHOP application filer’’ in alphabetical 

order to read as follows: 

§ 155.700 Standards for the establishment 

of a SHOP. 

* * * * * 

(b) * * * 

SHOP application filer means an 

applicant, an authorized representative, 

an agent or broker of the employer, or 

an employer filing for its employees 

where not prohibited by other law. 

■ 15. Section 155.705 is amended by 

adding paragraphs (c) and (d) to read as 

follows: 

§ 155.705 Functions of a SHOP. 

* * * * * 

(c) Coordination with individual 

market Exchange for eligibility 

determinations. A SHOP must provide 

data related to eligibility and enrollment 

of a qualified employee to the 

individual market Exchange that 

corresponds to the service area of the 

SHOP, unless the SHOP is operated 

pursuant to § 155.100(a)(2). 

(d) Duties of Navigators in the SHOP. 

In States that have elected to operate 

only a SHOP pursuant to 

§ 155.100(a)(2), at State option and if 

State law permits the Navigator duties 

described in § 155.210(e)(3) and (4) may 

be fulfilled through referrals to agents 

and brokers. 

■ 16. Section 155.730 is amended by 

revising paragraph (f) to read as follows: 

§ 155.730 Application standards for SHOP. 

* * * * * 

(f) Filing. The SHOP must: 

(1) Accept applications from SHOP 

application filers; and 

(2) Provide the tools to file an 

application via an Internet Web site. 

* * * * * 

■ 17. Section 155.735 is added to 

subpart H to read as follows: 

§ 155.735 Termination of coverage. 

(a) General requirements. The SHOP 

must determine the timing, form, and 

manner in which coverage in a QHP 

may be terminated. 

(b) Termination of employer group 

health coverage at the request of the 

employer. (1) The SHOP must establish 

policies for advance notice of 

termination required from the employer 

and effective dates of termination. 

(2) In the FF–SHOP, an employer may 

terminate coverage for all enrollees 

covered by the employer group health 

plan effective on the last day of any 

month, provided that the employer has 

given notice to the FF–SHOP on or 

before the 15th day of any month. If 

notice is given after the 15th of the 

month, the FF–SHOP may terminate the 

coverage on the last day of the following 

month. 

(c) Termination of employer group 

health coverage for non-payment of 

premiums. (1) The SHOP must establish 

policies for termination for nonpayment of premiums, including but not 

limited to policies regarding due dates 

for payment of premiums to the SHOP, 

grace periods, employer and employee 

notices, and reinstatement provisions. 

(2) In an FF–SHOP— 

(i) For a given month of coverage, 

premium payment is due by the first 

day of the coverage month. 

(ii) If premium payment is not 

received 31 days from the first of the 

coverage month, the FF–SHOP may 

terminate the qualified employer for 

lack of payment. 

(iii) If a qualified employer is 

terminated due to lack of premium 

payment, but within 30 days following 

its termination the qualified employer 

requests reinstatement, pays all 

premiums owed including any prior 

premiums owed for coverage during the 

grace period, and pays the premium for 

the next month’s coverage, the FF– 

SHOP must reinstate the qualified 

employer in its previous coverage. 

(d) Termination of employee or 

dependent coverage. (1) The SHOP must 

establish consistent policies regarding 

the process for and effective dates of 

termination of employee or dependent 

coverage in the following 

circumstances: 

(i) The employee or dependent is no 

longer eligible for coverage under the 

employer’s group health plan; 

(ii) The employee requests that the 

SHOP terminate the coverage of the 

employee or a dependent of the 

employee under the employer’s group 

health plan; 

(iii) The QHP in which the employee 

is enrolled terminates or is decertified 

as described in § 155.1080; 

(iv) The enrollee changes from one 

QHP to another during the employer’s 

annual open enrollment period or 

during a special enrollment period in 

accordance with § 155.725(j); or 

(v) The enrollee’s coverage is 

rescinded in accordance with § 147.128 

of this subtitle. 

(2) In the FF–SHOP, termination is 

effective on the last day of the month in 

which the FF–SHOP receives notice of 

an event described in paragraph (d)(1) of 

this section, and notice must have been 

received by the FF–SHOP prior to the 

proposed date of termination. 

(e) Termination of coverage tracking 

and approval. The SHOP must comply 

with the standards described in 

§ 155.430(c). 

(f) Applicability date. The provisions 

of this section apply to coverage— 

(1) Beginning on or after January 1, 

2015; and 

(2) In any SHOP providing qualified 

employers with the option described in 

§ 155.705(b)(2) or the option described 

in § 155.705(b)(4) before January 1, 

2015, beginning with the date that 

option is offered. 

■ 20. Section 155.740 is added to 

Subpart H to read as follows: 


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§ 155.740 SHOP employer and employee 

eligibility appeals requirements. 

(a) Definitions. The definitions in 

§§ 155.20, 155.300, and 155.500 apply 

to this section. 

(b) General requirements. (1) A State, 

establishing an Exchange that provides 

for the establishment of a SHOP 

pursuant to § 155.100 must provide an 

eligibility appeals process for the SHOP. 

Where a State has not established an 

Exchange that provides for the 

establishment of a SHOP pursuant to 

§ 155.100, HHS will provide an 

eligibility appeals process for the SHOP 

that meets the requirements of this 

section and the requirements in 

paragraph (b)(2) of this section. 

(2) The appeals entity must conduct 

appeals in accordance with the 

requirements established in this section, 

§§ 155.505(e) through (g), and 

155.510(a)(1), (a)(2), and (c). 

(c) Employer right to appeal. An 

employer may appeal— 

(1) A notice of denial of eligibility 

under § 155.715(e); or 

(2) A failure of the SHOP to make an 

eligibility determination in a timely 

manner. 

(d) Employee right to appeal. An 

employee may appeal— 

(1) A notice of denial of eligibility 

under § 155.715(f); or 

(2) A failure of the SHOP to make an 

eligibility determination in a timely 

manner. 

(e) Appeals notice requirement. 

Notices of the right to appeal a denial 

of eligibility under § 155.715(e) or (f) 

must be written and include— 

(1) The reason for the denial of 

eligibility, including a citation to the 

applicable regulations; and 

(2) The procedure by which the 

employer or employee may request an 

appeal of the denial of eligibility. 

(f) Appeal request. The SHOP and 

appeals entity must— 

(1) Allow an employer or employee to 

request an appeal within 90 days from 

the date of the notice of denial of 

eligibility to— 

(i) The SHOP or the appeals entity; or 

(ii) HHS, if no State Exchange that 

provides for establishment of a SHOP 

has been established; 

(2) Accept appeal requests submitted 

through any of the methods described in 

§ 155.520(a)(1); 

(3) Comply with the requirements of 

§ 155.520(a)(2) and (3); and 

(4) Consider an appeal request valid if 

it is submitted in accordance with 

paragraph (f)(1) of this section. 

(g) Notice of appeal request. Upon 

receipt of a valid appeal request, the 

appeals entity must— 

(1) Send timely acknowledgement to 

the employer, or employer and 

employee if an employee is appealing, 

of the receipt of the appeal request, 

including— 

(i) An explanation of the appeals 

process; and 

(ii) Instructions for submitting 

additional evidence for consideration by 

the appeals entity. 

(2) Promptly notify the SHOP of the 

appeal, if the appeal request was not 

initially made to the SHOP. 

(3) Upon receipt of an appeal request 

that is not valid because it fails to meet 

the requirements of this section, the 

appeals entity must— 

(i) Promptly and without undue 

delay, send written notice to the 

employer or employee that is appealing 

that— 

(A) The appeal request has not been 

accepted, 

(B) The nature of the defect in the 

appeal request; and 

(C) An explanation that the employer 

or employee may cure the defect and 

resubmit the appeal request if it meets 

the timeliness requirements of 

paragraph (f) of this section, or within 

a reasonable timeframe established by 

the appeals entity. 

(ii) Treat as valid an amended appeal 

request that meets the requirements of 

this section. 

(h) Transmittal and receipt of records. 

(1) Upon receipt of a valid appeal 

request under this section, or upon 

receipt of the notice under paragraph 

(g)(2) of this section, the SHOP must 

promptly transmit, via secure electronic 

interface, to the appeals entity— 

(i) The appeal request, if the appeal 

request was initially made to the SHOP; 

and 

(ii) The eligibility record of the 

employer or employee that is appealing. 

(2) The appeals entity must promptly 

confirm receipt of records transmitted 

pursuant to paragraph (h)(1) of this 

section to the SHOP that transmitted the 

records. 

(i) Dismissal of appeal. The appeals 

entity— 

(1) Must dismiss an appeal if the 

employer or employee that is 

appealing— 

(i) Withdraws the request in writing; 

or 

(ii) Fails to submit an appeal request 

meeting the standards specified in 

paragraph (f) of this section. 

(2) Must provide timely notice to the 

employer or employee that is appealing 

of the dismissal of the appeal request, 

including the reason for dismissal, and 

must notify the SHOP of the dismissal. 

(3) May vacate a dismissal if the 

employer or employee makes a written 

request within 30 days of the date of the 

notice of dismissal showing good cause 

why the dismissal should be vacated. 

(j) Procedural rights of the employer 

or employee. The appeals entity must 

provide the employer, or the employer 

and employee if an employee is 

appealing, the opportunity to submit 

relevant evidence for review of the 

eligibility determination. 

(k) Adjudication of SHOP appeals. 

SHOP appeals must— 

(1) Comply with the standards set 

forth in § 155.555(i)(1) and (3); and 

(2) Consider the information used to 

determine the employer or employee’s 

eligibility as well as any additional 

relevant evidence submitted during the 

course of the appeal by the employer or 

employee. 

(l) Appeal decisions. Appeal 

decisions must— 

(1) Be based solely on— 

(i) The evidence referenced in 

paragraph (k)(2) of this section; 

(ii) The eligibility requirements for 

the SHOP under § 155.710(b) or (e), as 

applicable. 

(2) Comply with the standards set 

forth in § 155.545(a)(2) through (5); and 

(3) Be effective retroactive to the date 

the incorrect eligibility determination 

was made, if the decision finds the 

employer or employee eligible, or 

effective as of the date of the notice of 

the appeal decision, if eligibility is 

denied. 

(m) Notice of appeal decision. The 

appeals entity must issue written notice 

of the appeal decision to the employer, 

or to the employer and employee if an 

employee is appealing, and to the SHOP 

within 90 days of the date the appeal 

request is received. 

(n) Implementation of SHOP appeal 

decisions. The SHOP must promptly 

implement the appeal decision upon 

receiving the notice under paragraph 

(m) of this section. 

(o) Appeal record. Subject to the 

requirements of § 155.550, the appeal 

record must be accessible to the 

employer, or employer and employee if 

an employee is appealing, in a 

convenient format and at a convenient 

time. 

PART 156—HEALTH INSURANCE 

ISSUER STANDARDS UNDER THE 

AFFORDABLE CARE ACT, INCLUDING 

STANDARDS RELATED TO 

EXCHANGES 

■ 21. The authority citation for part 156 

continues to read as follows: 

Authority: Title I of the Affordable Care 

Act, sections 1301–1304, 1311–1313, 1321, 

1322, 1324, 1334, 1342–1343, and 1401– 

1402, Pub. L. 111–148, 124 Stat. 119 (42 

U.S.C. 18042). 

■ 22. Section 156.20 is amended by 

adding definitions for ‘‘Delegated 


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entity’’ and ‘‘Downstream entity’’ to read 

as follows: 

§ 156.20 Definitions. 

* * * * * 

Delegated entity means any party, 

including an agent or broker, that enters 

into an agreement with a QHP issuer to 

provide administrative services or 

health care services to qualified 

individuals, qualified employers, or 

qualified employees and their 

dependents. 

Downstream entity means any party, 

including an agent or broker, that enters 

into an agreement with a delegated 

entity or with another downstream 

entity for purposes of providing 

administrative or health care services 

related to the agreement between the 

delegated entity and the QHP issuer. 

The term ‘‘downstream entity’’ is 

intended to reach the entity that directly 

provides administrative services or 

health care services to qualified 

individuals, qualified employers, or 

qualified employees and their 

dependents. 

* * * * * 

■ 23. Section 156.270 is amended by 

revising paragraph (b) introductory text 

to read as follows: 

§ 156.270 Termination of coverage for 

qualified individuals. 

* * * * * 

(b) Termination of coverage notice 

requirement. If a QHP issuer terminates 

an enrollee’s coverage in accordance 

with § 155.430(b)(2)(i), (ii), or (iii), the 

QHP issuer must, promptly and without 

undue delay: 

* * * * * 

■ 24. Section 156.285 is amended by 

revising paragraphs (d)(1)(i) and (iii) to 

read as follows: 

§ 156.285 Additional standards specific to 

SHOP. 

* * * * * 

(d) * * * 

(1)* * * 

(i)(A) Effective in plan years 

beginning on or after January 1, 2015, 

requirements regarding termination of 

coverage established in § 155.735 of this 

subchapter, if applicable to the coverage 

being terminated; otherwise 

(B) General requirements regarding 

termination of coverage established in 

§ 156.270(a) of this subchapter. 

* * * * * 

(iii)(A) Effective in plan years 

beginning on or after January 1, 2015, 

requirements regarding termination of 

coverage effective dates as set forth in 

§ 155.735 of this subchapter, if 

applicable to the coverage being 

terminated; otherwise 

(B) Requirements regarding 

termination of coverage effective dates 

as set forth in § 156.270(i). 

* * * * * 

■ 25. Subpart D is added to read 

follows: 

Subpart D—Federally-Facilitated 

Exchange Qualified Health Plan Issuer 

Standards 

§ 156.340 Standards for downstream and 

delegated entities. 

(a) General requirement. Effective 

October 1, 2013, notwithstanding any 

relationship(s) that a QHP issuer may 

have with delegated and downstream 

entities, a QHP issuer maintains 

responsibility for its compliance and the 

compliance of any of its delegated or 

downstream entities, as applicable, with 

all applicable standards, including— 

(1) Standards of subpart C of part 156 

with respect to each of its QHPs on an 

ongoing basis; 

(2) Exchange processes, procedures, 

and standards in accordance with 

subparts H and K of part 155 and, in the 

small group market, § 155.705 of this 

subchapter; 

(3) Standards of § 155.220 of this 

subchapter with respect to assisting 

with enrollment in QHPs; and 

(4) Standards of §§ 156.705 and 

156.715 for maintenance of records and 

compliance reviews for QHP issuers 

operating in a Federally-facilitated 

Exchange or FF–SHOP. 

(b) Delegation agreement 

specifications. If any of the QHP issuer’s 

activities or obligations, in accordance 

with paragraph (a) of this section, are 

delegated to other parties, the QHP 

issuer’s agreement with any delegated or 

downstream entity must— 

(1) Specify the delegated activities 

and reporting responsibilities; 

(2) Provide for revocation of the 

delegated activities and reporting 

standards or specify other remedies in 

instances where HHS or the QHP issuer 

determines that such parties have not 

performed satisfactorily; 

(3) Specify that the delegated or 

downstream entity must comply with 

all applicable laws and regulations 

relating to the standards specified under 

paragraph (a) of this section; 

(4) Specify that the delegated or 

downstream entity must permit access 

by the Secretary and the OIG or their 

designees in connection with their right 

to evaluate through audit, inspection, or 

other means, to the delegated or 

downstream entity’s books, contracts, 

computers, or other electronic systems, 

including medical records and 

documentation, relating to the QHP 

issuer’s obligations in accordance with 

Federal standards under paragraph (a) of 

this section until 10 years from the final 

date of the agreement period; and 

(5) Contain specifications described in 

paragraph (b) of this section by no later 

than January 1, 2015, for existing 

agreements; and no later than the 

effective date of the agreement for 

agreements that are newly entered into 

as of October 1, 2013. 

■ 26. Subpart I is added to read as 

follows: 

Subpart I—Enforcement Remedies in 

Federally-Facilitated Exchanges 

Sec. 

156.800 Available remedies; Scope. 

156.805 Bases and process for imposing 

civil money penalties in Federallyfacilitated Exchanges. 

156.810 Bases and process for 

decertification of a QHP offered by an 

issuer through a Federally-facilitated 

Exchange. 

Subpart I—Enforcement Remedies in 

Federally-Facilitated Exchanges 

§ 156.800 Available remedies; Scope. 

(a) Kinds of sanctions. HHS may 

impose the following types of sanctions 

on QHP issuers in a Federally-facilitated 

Exchange that are not in compliance 

with Exchange standards applicable to 

issuers offering QHPs in the Federallyfacilitated Exchange: 

(1) Civil money penalties as specified 

in § 156.805; and 

(2) Decertification of a QHP offered by 

the non-compliant QHP issuer in a 

Federally-facilitated Exchange as 

described in § 156.810. 

(b) Scope. Sanctions under subpart I 

are applicable only for non-compliance 

with QHP issuer participation standards 

and other standards applicable to 

issuers offering QHPs in a Federallyfacilitated Exchange. 

(c) Compliance standard. For 2014, 

sanctions under this subpart will not be 

imposed if the QHP issuer has made 

good faith efforts to comply with 

applicable requirements. 

§ 156.805 Bases and process for imposing 

civil money penalties in Federally-facilitated 

Exchanges. 

(a) Grounds for imposing civil money 

penalties. Civil money penalties may be 

imposed on an issuer in a Federallyfacilitated Exchange by HHS if, based on 

credible evidence, HHS has reasonably 

determined that the issuer has engaged 

in one or more of the following actions: 

(1) Misconduct in the Federallyfacilitated Exchange or substantial noncompliance with the Exchange 

standards applicable to issuers offering 

QHPs in the Federally-facilitated 

Exchange under subparts C through G of 

part 153 of this subchapter; 


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(2) Limiting the QHP’s enrollees’ 

access to medically necessary items and 

services that are required to be covered 

as a condition of the QHP issuer’s 

ongoing participation in the Federallyfacilitated Exchange, if the limitation 

has adversely affected or has a 

substantial likelihood of adversely 

affecting one or more enrollees in the 

QHP offered by the QHP issuer; 

(3) Imposing on enrollees premiums 

in excess of the monthly beneficiary 

premiums permitted by Federal 

standards applicable to QHP issuers 

participating in the Federally-facilitated 

Exchange; 

(4) Engaging in any practice that 

would reasonably be expected to have 

the effect of denying or discouraging 

enrollment into a QHP offered by the 

issuer (except as permitted by this part) 

by qualified individuals whose medical 

condition or history indicates the 

potential for a future need for significant 

medical services or items; 

(5) Intentionally or recklessly 

misrepresenting or falsifying 

information that it furnishes— 

(i) To HHS; or 

(ii) To an individual or entity upon 

which HHS relies to make its 

certifications or evaluations of the QHP 

issuer’s ongoing compliance with 

Exchange standards applicable to 

issuers offering QHPs in the Federallyfacilitated Exchange; 

(6) Failure to remit user fees assessed 

under § 156.50(c); or 

(7) Failure to comply with the costsharing reductions and advance 

payments of the premium tax credit 

standards of subpart E of this Part. 

(b) Factors in determining the amount 

of civil money penalties assessed. In 

determining the amount of civil money 

penalties, HHS may take into account 

the following: 

(1) The QHP issuer’s previous or 

ongoing record of compliance; 

(2) The level of the violation, as 

determined in part by— 

(i) The frequency of the violation, 

taking into consideration whether any 

violation is an isolated occurrence, 

represents a pattern, or is widespread; 

and 

(ii) The magnitude of financial and 

other impacts on enrollees and qualified 

individuals; and 

(3) Aggravating or mitigating 

circumstances, or other such factors as 

justice may require, including 

complaints about the issuer with regard 

to the issuer’s compliance with the 

medical loss ratio standards required by 

the Affordable Care Act and as codified 

by applicable regulations. 

(c) Maximum penalty. The maximum 

amount of penalty imposed for each 

violation is $100 for each day for each 

QHP issuer for each individual 

adversely affected by the QHP issuer’s 

non-compliance; and where the number 

of individuals cannot be determined, 

HHS may estimate the number of 

individuals adversely affected by the 

violation. 

(d) Notice of intent to issue civil 

money penalty. If HHS proposes to 

assess a civil money penalty in 

accordance with this part, HHS will 

send a written notice of this decision 

to— 

(1) The QHP issuer against whom the 

civil money penalty is being imposed, 

whose notice must include the 

following: 

(i) A description of the basis for the 

determination; 

(ii) The basis for the penalty; 

(iii) The amount of the penalty; 

(iv) The date the penalty is due; 

(v) An explanation of the issuer’s right 

to a hearing under an applicable 

administrative hearing process; and 

(vi) Information about where to file 

the request for hearing. 

(2) [Reserved] 

(e) Failure to request a hearing. (1) If 

the QHP issuer does not request a 

hearing within 30 days of the issuance 

of the notice described in paragraph 

(d)(1) of this section, HHS may assess 

the proposed civil money penalty. 

(2) HHS will notify the QHP issuer in 

writing of any penalty that has been 

assessed and of the means by which the 

responsible entity may satisfy the 

judgment. 

(3) The QHP issuer has no right to 

appeal a penalty with respect to which 

it has not requested a hearing in 

accordance with the requirements of the 

applicable administrative hearing 

process unless the QHP issuer can show 

good cause, as determined under 

§ 156.905(b), for failing to timely 

exercise its right to a hearing. 

§ 156.810 Bases and process for 

decertification of a QHP offered by an 

issuer through a Federally-facilitated 

Exchange. 

(a) Bases for decertification. A QHP 

may be decertified on one or more of the 

following grounds: 

(1) The QHP issuer substantially fails 

to comply with the Federal laws and 

regulations applicable to QHP issuers 

participating in the Federally-facilitated 

Exchange; 

(2) The QHP issuer substantially fails 

to comply with the standards related to 

the risk adjustment, reinsurance, or risk 

corridors programs under 45 CFR part 

153, including providing HHS with 

valid risk adjustment, reinsurance or 

risk corridors data; 

(3) The QHP issuer substantially fails 

to comply with the transparency and 

marketing standards in §§ 156.220 and 

156.225; 

(4) The QHP issuer substantially fails 

to comply with the standards regarding 

advance payments of the premium tax 

credit and cost-sharing in subpart E of 

this part; 

(5) The QHP issuer is operating in the 

Federally-facilitated Exchange in a 

manner that hinders the efficient and 

effective administration of the 

Exchange; 

(6) The QHP no longer meets the 

conditions of the applicable certification 

criteria; 

(7) Based on credible evidence, the 

QHP issuer has committed or 

participated in fraudulent or abusive 

activities, including submission of false 

or fraudulent data; 

(8) The QHP issuer substantially fails 

to meet the requirements under 

§ 156.230 related to network adequacy 

standards or, § 156.235 related to 

inclusion of essential community 

providers; 

(9) The QHP issuer substantially fails 

to comply with the law and regulations 

related to internal claims and appeals 

and external review processes; or 

(10) The State recommends to HHS 

that the QHP should no longer be 

available in a Federally-facilitated 

Exchange. 

(11) The QHP issuer substantially fails 

to comply with the privacy or security 

standards set forth in § 156.260. 

(b) State sanctions and 

determinations. (1) State sanctions. 

HHS may consider regulatory or 

enforcement actions taken by a State 

against a QHP issuer as a factor in 

determining whether to decertify a QHP 

offered by that issuer. 

(2) State determinations. HHS may 

decertify a QHP offered by an issuer in 

a Federally-facilitated Exchange based 

on a determination or action by a State 

as it relates to the issuer offering QHPs 

in a Federally-facilitated Exchange, 

including when a State places an issuer 

or its parent organization into 

receivership or when the State 

recommends to HHS that the QHP no 

longer be available in a Federallyfacilitated Exchange. 

(c) Standard decertification process. 

For decertification actions on grounds 

other than those described in 

paragraphs (a)(7), (8), or (9) of this 

section, HHS will provide written 

notices to the QHP issuer, enrollees in 

that QHP, and the State department of 

insurance in the State in which the QHP 

is being decertified. The written notice 

must include the following: 


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(1) The effective date of the 

decertification, which will be a date 

specified by HHS that is no earlier than 

30 days after the date of issuance of the 

notice; 

(2) The reason for the decertification, 

including the regulation or regulations 

that are the basis for the decertification; 

(3) For the written notice to the QHP 

issuer, information about the effect of 

the decertification on the ability of the 

issuer to offer the QHP in the Federallyfacilitated Exchange and must include 

information about the procedure for 

appealing the decertification by making 

a hearing request; and 

(4) The written notice to the QHP 

enrollees must include information 

about the effect of the decertification on 

enrollment in the QHP and about the 

availability of a special enrollment 

period, as described in § 155.420 of this 

subchapter. 

(d) Expedited decertification process. 

For decertification actions on grounds 

described in paragraphs (a)(7), (8), or (9) 

of this section, HHS will provide 

written notice to the QHP issuer, 

enrollees, and the State department of 

insurance in the State in which the QHP 

is being decertified. The written notice 

must include the following: 

(1) The effective date of the 

decertification, which will be a date 

specified by HHS; and 

(2) The information required by 

paragraphs (c)(2) through (4) of this 

section. 

(e) Appeals. An issuer may appeal the 

decertification of a QHP offered by that 

issuer under paragraph (c) or (d) of this 

section by filing a request for hearing 

under an applicable administrative 

hearing process. 

(1) Effect of request for hearing. If an 

issuer files a request for hearing under 

this paragraph, 

(i) If the decertification is under 

paragraph (c) of this section, the 

decertification will not take effect prior 

to the issuance of the final 

administrative decision in the appeal, 

notwithstanding the effective date 

specified in the notice under paragraph 

(c)(1) of this section. 

(ii) If the decertification is under 

paragraph (d) of this section, the 

decertification will be effective on the 

date specified in the notice of 

decertification, but the certification of 

the QHP may be reinstated immediately 

upon issuance of a final administrative 

decision that the QHP should not be 

decertified. 

(2) [Reserved] 

■ 27. Subpart K is added to read as 

follows: 

Subpart K–Cases Forwarded to 

Qualified Health Plans and Qualified 

Health Plan Issuers in Federallyfacilitated Exchanges 

§ 156.1010 Standards. 

(a) A case is a communication brought 

by a complainant that expresses 

dissatisfaction with a specific person or 

entity subject to State or Federal laws 

regulating insurance, concerning the 

person or entity’s activities related to 

the offering of insurance, other than a 

communication with respect to an 

adverse benefit determination as 

defined in § 147.136(a)(2)(i) of this 

subchapter. Issues related to adverse 

benefit determinations are not 

addressed in this section and are subject 

to the provisions in § 147.136 of this 

subchapter governing internal claims 

appeals and external review. Issues 

related to eligibility determination 

processes and appeals are not addressed 

in this section and are subject to the 

provisions in Subpart F of Part 155. 

(b) QHP issuers operating in a 

Federally-facilitated Exchange must 

investigate and resolve, as appropriate, 

cases from the complainant forwarded 

to the issuer by HHS. Cases received by 

a QHP issuer operating in a Federallyfacilitated Exchange directly from a 

complainant or the complainant’s 

authorized representative will be 

handled by the issuer through its 

internal customer service process. 

(c) Cases may be forwarded to a QHP 

issuer operating in a Federallyfacilitated Exchange through a casework 

tracking system developed by HHS or 

other means as determined by HHS. 

(d) Cases received by a QHP issuer 

operating in a Federally-facilitated 

Exchange from HHS must be resolved 

within 15 calendar days of receipt of the 

case. Urgent cases as defined in 

paragraph (e) of this section that do not 

otherwise fall within the scope of 

§ 147.136 of this subchapter must be 

resolved no later than 72 hours after 

receipt of the case. Where applicable 

State laws and regulations establish 

timeframes for case resolution that are 

stricter than the standards contained in 

this paragraph, QHP issuers operating in 

a Federally-facilitated Exchange must 

comply with such stricter laws and 

regulations. 

(e) For cases received from HHS by a 

QHP issuer operating in a Federallyfacilitated Exchange, an urgent case is 

one in which there is an immediate 

need for health services because the 

non-urgent standard could seriously 

jeopardize the enrollee’s or potential 

enrollee’s life, or health or ability to 

attain, maintain, or regain maximum 

function; or one in which the process 

for non-urgent cases would jeopardize 

the enrollee’s or potential enrollee’s 

ability enroll in a QHP through the 

Federally-facilitated Exchange. 

(f) For cases received from HHS, QHP 

issuers operating in a Federallyfacilitated Exchange are required to 

notify complainants regarding the 

disposition of the as soon as possible 

upon resolution of the case, but in no 

event later than three (3) business days 

after the case is resolved. 

(1) For the purposes of meeting the 

requirement in this paragraph (f), 

notification may be by verbal or written 

means as determined most appropriate 

by the QHP issuer. 

(2) In instances when the initial 

notification of a case’s disposition is not 

written, written notification must be 

provided to the consumer in a timely 

manner. 

(g) For cases received from HHS, QHP 

issuers operating in a Federallyfacilitated Exchange must use the 

casework tracking system developed by 

HHS, or other means as determined by 

HHS, to document the following: 

(1) The date of resolution of a case 

received from HHS; 

(2) A resolution summary of the case 

no later than seven (7) business days 

after resolution of the case. The record 

must include a clear and concise 

narrative explaining how the case was 

resolved including information about 

how and when the complainant was 

notified of the resolution; and 

(3) For a case in which a State agency, 

including but not limited to a State 

department of insurance, conducts an 

investigation related to that case, any 

compliance issues identified by the 

State agency implicating the QHP or 

QHP issuer. 

(h) Cases received by a QHP issuer 

operating in a Federally-facilitated 

Exchange from a State in which the 

issuer offers QHPs must be investigated 

and resolved according to applicable 

State laws and regulations. With respect 

to cases directly handled by the State, 

HHS or any other appropriate regulatory 

authority, QHP issuers operating in a 

Federally-facilitated Exchange must 

cooperate fully with the efforts of the 

State, HHS, or other regulatory authority 

to resolve the case. 

■ 28. Subpart M is added to read as 

follows: 

Subpart M—Qualified Health Plan Issuer 

Responsibilities 

Sec. 

156.1230 Direct enrollment with the QHP 

issuer in a manner considered to be 

through the Exchange. 

156.1240 Enrollment process for qualified 

individuals. 


tkelley on DSK3SPTVN1PROD with RULES3
54146 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations 

Subpart M—Qualified Health Plan 

Issuer Responsibilities 

§ 156.1230 Direct enrollment with the QHP 

issuer in a manner considered to be 

through the Exchange. 

(a) A QHP issuer that is directly 

contacted by a potential applicant may, 

at the Exchange’s option, enroll such 

applicant in a QHP in a manner that is 

considered through the Exchange. In 

order for the enrollment to be made 

directly with the issuer in a manner that 

is considered to be through the 

Exchange, the QHP issuer needs to 

comply with at least the following 

requirements: 

(1) QHP issuer general requirements. 

(i) The QHP issuer follows the 

enrollment process for qualified 

individuals consistent with § 156.265. 

(ii) The QHP issuer’s Web site 

provides applicants the ability to view 

QHPs offered by the issuer with the data 

elements listed in § 155.205(b)(1)(i) 

through (viii) of this subchapter. 

(iii) The QHP issuer’s Web site clearly 

distinguishes between QHPs for which 

the consumer is eligible and other nonQHPs that the issuer may offer, and 

indicate that advance payments of the 

premium tax credit and cost sharing 

reductions apply only to QHPs offered 

through the Exchange. 

(iv) The QHP issuer informs all 

applicants of the availability of other 

QHP products offered through the 

Exchange through an HHS-approved 

universal disclaimer and displays the 

Web link to and describes how to access 

the Exchange Web site. 

(v) The QHP issuer’s Web site allows 

applicants to select and attest to an 

advance payment of the premium tax 

credit amount, if applicable, in 

accordance with § 155.310(d)(2) of this 

subchapter. 

(2) QHP issuer application assister 

eligibility application assistance 

requirements. If permitted by the 

Exchange pursuant to § 155.415 of this 

subchapter, and to the extent permitted 

by State law, a QHP issuer may permit 

its issuer application assisters, as 

defined at § 155.20, to assist individuals 

in the individual market with applying 

for a determination or redetermination 

of eligibility for coverage through the 

Exchange and for insurance affordability 

programs, provided that such issuer 

ensures that each of its application 

assisters at least- 

(i) Receives training on QHP options 

and insurance affordability programs, 

eligibility, and benefits rules and 

regulations; 

(ii) Complies with the Exchange’s 

privacy and security standards adopted 

consistent with § 155.260 of this 

subchapter; and 

(iii) Complies with applicable State 

law related to the sale, solicitation, and 

negotiation of health insurance 

products, including applicable State law 

related to agent, broker, and producer 

licensure; confidentiality; and conflicts 

of interest. 

(b) Direct enrollment in a Federallyfacilitated Exchange. The individual 

market Federally-facilitated Exchanges 

will permit issuers of QHPs in each 

Federally-facilitated Exchange to 

directly enroll applicants in a manner 

that is considered to be through the 

Exchange, pursuant to paragraph (a) of 

this section, to the extent permitted by 

applicable State law. 

§ 156.1240 Enrollment process for 

qualified individuals. 

(a) Premium payment. A QHP issuer 

must— 

(1) Follow the premium payment 

process established by the Exchange in 

accordance with § 155.240. 

(2) At a minimum, for all payments in 

the individual market, accept paper 

checks, cashier’s checks, money orders, 

EFT, and all general-purpose pre-paid 

debit cards as methods of payment and 

present all payment method options 

equally for a consumer to select their 

preferred payment method. 

(b) [Reserved] 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: August 13, 2013. 

Marilyn Tavenner, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: August 15, 2013. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2013–21338 Filed 8–28–13; 4:15 pm] 

BILLING CODE 4120–01–P 


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