[Federal Register Volume 86, Number 124 (Thursday, July 1, 2021)]
[Proposed Rules]
[Pages 35156-35216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13993]



[[Page 35155]]

Vol. 86

Thursday,

No. 124

July 1, 2021

Part II





Department of the Treasury





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31 CFR Part 33





Department of Health and Human Services





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 Centers for Medicare & Medicaid Services





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45 CFR Parts 147, 155 and 156





Patient Protection and Affordable Care Act; Updating Payment 
Parameters, Section 1332 Waiver Implementing Regulations, and Improving 
Health Insurance Markets for 2022 and Beyond Proposed Rule; Proposed 
Rule

Federal Register / Vol. 86 , No. 124 / Thursday, July 1, 2021 / 
Proposed Rules

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DEPARTMENT OF THE TREASURY

31 CFR Part 33

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

45 CFR Parts 147, 155 and 156

[CMS-9906-P]
RIN 0938-AU60


Patient Protection and Affordable Care Act; Updating Payment 
Parameters, Section 1332 Waiver Implementing Regulations, and Improving 
Health Insurance Markets for 2022 and Beyond Proposed Rule

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. Department 
of the Treasury.

ACTION: Proposed rule.

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SUMMARY: This proposed rule sets forth proposed revised 2022 user fee 
rates for issuers offering qualified health plans (QHPs) through 
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the 
Federal platform (SBE-FPs); proposes repeal of separate billing 
requirements related to the collection of separate payments for the 
portion of QHP premiums attributable to coverage for certain abortion 
services; proposes to expand the annual open enrollment period and 
Navigator duties; proposes a new monthly special enrollment period for 
qualified individuals or enrollees, or the dependents of a qualified 
individual or enrollee, who are eligible for advance payments of the 
premium tax credit (APTC) and whose household income does not exceed 
150 percent of the federal poverty level (FPL); proposes to repeal the 
recent establishment of a Direct Enrollment option for Exchanges; and 
proposes to modify regulations and policies related to section 1332 
waivers.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by July 28, 2021.

ADDRESSES: In commenting, please refer to file code CMS-9906-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-9906-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-9906-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: 
    Alper Ozinal, (301) 492-4178, Adrianne Patterson, (410) 786-4178, 
Jacquelyn Rudich, (301) 492-5211, or Nora Simmons, (410) 786-1981, for 
general information.
    Gian Johnson, (301) 492-4323, or Meredyth Woody, (301) 492-4404, 
for matters related to Navigator program standards.
    Robert Yates, (301) 492-5151, for matters related to the Exchange 
Direct Enrollment option for Federally-facilitated Exchanges, State-
based Exchanges on the Federal platform, and State Exchanges.
    Carly Rhyne, (301) 492-4188, or Aziz Sandhu, (301) 492-4437, for 
matters related to open enrollment.
    Carolyn Kraemer, (301) 492-4197, for matters related to special 
enrollment periods for Exchange enrollment under parts 147 and 155.
    Nikolas Berkobien, (989) 395-1836, for matters related to 
standardized options.
    Aaron Franz, (410) 786-8027, or Nora Simmons, (410) 786-1981, for 
matters related to user fees.
    Rebecca Bucchieri, (301) 492-4341, for matters related to provision 
of essential health benefits and separate billing and segregation of 
funds for abortion services.
    Erika Melman, (301) 492-4348, Deborah Hunter, (410) 786-0625, or 
Emily Martin, (301) 492-4400, for matters related to network adequacy.
    Lina Rashid, (202) 260-6098, Michelle Koltov, (301) 492-4225, or 
Kimberly Koch, (202) 622-0854 for matters related to section 1332 
waivers.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post comments received before the close of the comment period on the 
following website as soon as possible after they have been received: 
http://www.regulations.gov. Follow the search instructions on that 
website to view public comments. CMS will not post on Regulations.gov 
public comments that make threats to individuals or institutions or 
suggest that the individual will take actions to harm the individual. 
CMS continues to encourage individuals not to submit duplicative 
comments. We will post acceptable comments from multiple unique 
commenters even if the content is identical or nearly identical to 
other comments.

Table of Contents

I. Executive Summary
II. Background
    A. Legislative and Regulatory Overview
    B. Stakeholder Consultation and Input
    C. Structure of Proposed Rule
III. Provisions of the Updating Payment Parameters and Improving 
Health Insurance Markets for 2022 and Beyond Proposed Rule
    A. Part 147--Health Insurance Reform Requirements for the Group 
and Individual Health Insurance Markets
    B. Part 155--Exchange Establishment Standards and Other Related 
Standards Under the Affordable Care Act
    C. Part 156--Health Insurance Issuer Standards Under the 
Affordable Care Act, Including Standards Related to Exchanges
IV. Provisions of the Proposed Rule for Section 1332 Waivers
    A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
V. Collection of Information Requirements
    A. ICRs Regarding Navigator Program Standards (Sec.  155.210)
    B. ICRs Regarding Segregation of Funds for Abortion Services 
(Sec.  156.280)
    C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45 
CFR Part 155)
    D. Submission of PRA Related Comments
VI. Response to Comments
VII. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Impact Estimates of the Payment Notice Provisions and 
Accounting Table
    D. Regulatory Alternatives Considered
    E. Regulatory Flexibility Act
    F. Unfunded Mandates
    G. Federalism
    H. Congressional Review Act

I. Executive Summary

    American Health Benefit Exchanges, or ``Exchanges,'' are entities 
established under the Patient Protection and Affordable Care Act (ACA) 
\1\ through

[[Page 35157]]

which qualified individuals and qualified employers can purchase 
comprehensive health insurance coverage through qualified health plans 
(QHPs). Many individuals who enroll in QHPs through individual market 
Exchanges are eligible to receive a premium tax credit (PTC) to reduce 
their costs for health insurance premiums and to receive reductions in 
required cost-sharing payments to reduce out-of-pocket expenses for 
health care services. This notice proposes rules and policies designed 
to promote greater access to comprehensive health insurance coverage 
through the Exchanges, consistent with applicable law and with the 
administration's policy priorities detailed in recent Presidential 
executive orders.
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    \1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare and Education 
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and 
revised several provisions of the Patient Protection and Affordable 
Care Act, was enacted on March 30, 2010. In this proposed rule, we 
refer to the two statutes collectively as the ``Affordable Care 
Act'' or ``ACA.''
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    On January 28, 2021, the President issued Executive Order 14009, 
``Executive Order on Strengthening Medicaid and the Affordable Care 
Act'' (E.O. 14009), which stated the Administration's policy to protect 
and strengthen the ACA and to make high-quality health care accessible 
and affordable for every American.\2\ This Executive Order instructed 
the Secretary of Health and Human Services (hereinafter referred to as 
``the Secretary''), along with the Secretaries of the Departments of 
Labor and the Treasury, to review all existing regulations, guidance 
documents, and other agency actions to determine whether they are 
consistent with the aforementioned policy, and to consider whether to 
suspend, revise, or rescind any agency actions that are inconsistent 
with it.
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    \2\ 86 FR 7793 (Feb. 2, 2021).
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    On January 20, 2021, President Biden issued Executive Order 13985, 
``On Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government'' (E.O. 13985),\3\ directing that as a 
policy matter, the federal government should pursue a comprehensive 
approach to advancing equity for all, including people of color and 
others who have been historically underserved, marginalized, and 
adversely affected by persistent poverty and inequality. E.O. 13985 
also directs HHS to assess whether, and to what extent, its programs 
and policies perpetuate systemic barriers to opportunities and benefits 
for people of color and other underserved groups.
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    \3\ 86 FR 7009 (Jan. 25, 2021).
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    Today, of the 30 million uninsured, half are people of color.\4\ Of 
those that have insurance, there are frequently barriers to using 
insurance because of affordability concerns related to premiums, 
deductibles, copayments, and coinsurance, as well as challenges related 
to health literacy and the ability for the insured to find and access 
in-network providers. These barriers to using insurance are 
particularly problematic for those with chronic conditions and 
individuals with social risk factors (such as poverty, minority race 
and/or ethnicity, social isolation, and limited community 
resources),\5\ which also includes members of underserved communities, 
people of color, and others who have been historically underserved, 
marginalized, and adversely affected by persistent poverty and 
inequality. The COVID-19 public health emergency (PHE) has highlighted 
the negative effects of these circumstances as COVID-19 has unequally 
affected many racial and ethnic minority groups, putting them more at 
risk of getting sick and dying from COVID-19.\6\
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    \4\ ``Health Insurance Coverage: Early Release of Estimates From 
the National Health Interview Survey, January-June 2020,'' National 
Center for Health Statistics, February 2021, available at https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202102-508.pdf.
    \5\ See ``Social Risk Factors and Medicare's Value-Based 
Purchasing Programs,'' HHS Office of the Secretary of Planning and 
Evaluation, available at https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs.
    \6\ See Centers for Disease Control and Prevention, ``Health 
Equity Considerations and Racial and Ethnic Minority Groups,'' 
updated April 19, 2021, available at https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#print.
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    As part of its review of regulations and policies under the 
Executive Orders described in the preceding paragraphs, HHS examined 
certain policies and requirements addressed in this proposed rule to 
analyze whether they are consistent with policy goals outlined in the 
Executive Orders, including whether they might create or perpetuate 
systemic barriers to obtaining health insurance coverage. The results 
of our examinations and analyses led to the policies and rules proposed 
in this rule.
    In previous rulemakings, HHS established provisions and parameters 
to implement many ACA requirements and programs. In this proposed rule, 
we propose to amend and repeal some of these provisions and parameters, 
with a focus on making high-quality health care accessible and 
affordable for consumers. These proposed changes would provide 
consumers greater access to coverage through, for example, greater 
education and outreach, improve affordability for consumers, reduce 
administrative burden for issuers and consumers, and improve program 
integrity. As discussed more fully later in the preamble, each of these 
measures would strengthen the ACA or otherwise promote the policy goals 
outlined in the Executive Orders described above.\7\
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    \7\ Although many of the policies proposed in this rule support 
the goals outlined in recent Executive Orders, as described later in 
the preamble discussions related to individual proposals, each of 
the proposals is supported by statutory authority independent of the 
Executive Orders.
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    We propose to amend Sec.  147.104(b)(2) to specify that issuers are 
not required to provide a special enrollment period in the individual 
market with respect to coverage offered outside of an Exchange to 
qualifying individuals who would be eligible for the proposed special 
enrollment period triggering event at Sec.  155.420(d)(16) described 
below.
    We also propose to amend Sec.  155.210(e)(9) to reinstitute 
previous requirements that Navigators in FFEs be required to provide 
consumers with information and assistance on certain post-enrollment 
topics, such as the Exchange eligibility appeals process, the Exchange-
related components of the PTC reconciliation process, and the basic 
concepts and rights of health coverage and how to use it.
    We also propose to remove Sec.  155.221(j) and repeal the Exchange 
Direct Enrollment option which establishes a process for State 
Exchanges, State-based Exchanges on the Federal platform, and 
Federally-facilitated Exchanges to work directly with private sector 
entities (including QHP issuers, web-brokers, and agents and brokers) 
to operate enrollment websites through which consumers can apply for 
coverage, receive an eligibility determination from the Exchange, and 
purchase an individual market QHP offered through the Exchange with 
APTC and cost-sharing reductions (CSRs), if otherwise eligible.
    For the 2022 coverage year and beyond, we propose to amend Sec.  
155.410(e) to lengthen the annual open enrollment period for coverage 
through all Exchanges to November 1 through January 15, as compared to 
the current annual open enrollment period of November 1 through 
December 15.
    We propose to add a new paragraph at Sec.  155.420(d)(16) to 
establish a monthly special enrollment period for qualified individuals 
or enrollees, or the dependents of a qualified individual or enrollee, 
who are eligible for APTC, and whose household income does not exceed 
150 percent of the FPL, in order to provide low-income individuals who 
generally will have access to a

[[Page 35158]]

premium-free silver plan with a 94 percent actuarial value (AV) with 
more opportunities to enroll in coverage. We also propose to clarify, 
for purposes of the special enrollment periods provided at Sec.  
155.420(d), that a qualified individual who meets the criteria at Sec.  
155.305(f), but who qualifies for a maximum APTC amount of zero 
dollars, is not considered APTC eligible. This approach would ensure 
that Sec.  155.420 very clearly reflects appropriate special enrollment 
period eligibility for qualifying individuals who qualify for a maximum 
APTC amount of zero dollars and for those who become eligible for APTC 
amounts greater than zero.
    In addition, to reflect updated analysis of enrollment and the cost 
of expanded services offered through the Federal platform, we propose 
to set the 2022 user fee rate at 2.75 percent of total monthly premiums 
charged by the issuer for each policy under plans offered through an 
FFE, and 2.25 percent of the total monthly premiums charged by the 
issuer for each policy under plans offered through an SBE-FP (rather 
than 2.25 and 1.75 percent of the total monthly premiums charged by the 
issuer for each policy under plans offered through an FFE or SBE-FP, 
respectively, as finalized in part 1 of the 2022 Payment Notice final 
rule). These proposed 2022 user fee rates are still less than the 2021 
user fees currently being collected--3.0 and 2.5 percent of the total 
monthly premiums charged by the issuer for each policy under plans 
offered through an FFE or SBE-FP, respectively.
    We also propose a technical amendment to requirements at Sec.  
156.115(a)(3) pertaining to the provision of the essential health 
benefits (EHB), to include a cross-reference to the Public Health 
Service (PHS) Act to make clear that health plans subject to EHB 
requirements must comply with all of the requirements under Mental 
Health Parity and Addiction Equity Act of 2008 (MHPAEA), including any 
amendments to MHPAEA.
    We also propose to repeal the separate billing regulation at Sec.  
156.280(e)(2), which requires individual market QHP issuers that offer 
coverage of abortion services \8\ for which federal funds are 
prohibited to separately bill for this portion of the policy holder's 
premium and to instruct the policy holder to pay for the separate bill 
in a separate transaction. Specifically, we are proposing to revert to 
and codify prior policy finalized in the 2016 Payment Notice \9\ such 
that QHP issuers offering coverage of abortion services for which 
federal funds are prohibited again have flexibility in selecting a 
method to comply with the separate payment requirement in section 1303 
of the ACA. Under this proposal, individual market QHP issuers covering 
abortion services for which federal funds are prohibited would still be 
expected to comply with all statutory requirements in section 1303 of 
the ACA and all applicable regulatory requirements codified at Sec.  
156.280.
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    \8\ These abortion services refer to abortion coverage that is 
subject to the Hyde Amendment's funding limitations which prohibit 
the use of federal funds for such coverage.
    \9\ 80 FR 10750.
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    This proposed rule also proposes modifications to the section 1332 
Waivers for State Innovation (referred to throughout the preamble to 
this proposed rule as section 1332 waivers) implementing regulations, 
including changes to many of the policies and interpretations of the 
guardrails recently codified in regulation. As outlined in this 
proposed rule, the policies and interpretations proposed in this rule, 
if finalized, would supersede and rescind those outlined in the October 
2018 ``State Relief and Empowerment Waivers'' guidance \10\ 
(hereinafter referred to as the ``2018 Guidance'') and repeal the 
previous codification of the interpretations of statutory guidelines in 
part 1 of the 2022 Payment Notice final rule. HHS and the Department of 
the Treasury (collectively, the Departments) also propose to modify 
regulations to set forth flexibilities in the public notice 
requirements and post award public participation requirements for 
section 1332 waivers under certain emergent situations. The Departments 
also propose in this rule processes and procedures for amendments and 
extensions for approved waiver plans.
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    \10\ 83 FR 53575.
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II. Background

A. Legislative and Regulatory Overview

    Title I of the Health Insurance Portability and Accountability Act 
of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish 
various reforms to the group and individual health insurance markets.
    These provisions of the PHS Act were later augmented by other laws, 
including the ACA. Subtitles A and C of title I of the ACA reorganized, 
amended, and added to the provisions of part A of title XXVII of the 
PHS Act relating to group health plans \11\ and health insurance 
issuers in the group and individual markets. The term ``group health 
plan'' includes both insured and self-insured group health plans.
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    \11\ The term ``group health plan'' is used in title XXVII of 
the PHS Act and is distinct from the term ``health plan'' as used in 
other provisions of title I of ACA. The term ``health plan'' does 
not include self-insured group health plans.
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    Section 2702 of the PHS Act, as added by the ACA, establishes 
requirements for guaranteed availability of coverage in the group and 
individual markets.\12\
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    \12\ Before enactment of the ACA, HIPAA amended the PHS Act 
(formerly section 2711) to generally require guaranteed availability 
of coverage for employers in the small group market.
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    Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to 
cover the EHB package described in section 1302(a) of the ACA, 
including coverage of the services described in section 1302(b) of the 
ACA, adherence to the cost-sharing limits described in section 1302(c) 
of the ACA, and meeting the actuarial value (AV) levels established in 
section 1302(d) of the ACA. Section 2707(a) of the PHS Act, which is 
effective for plan or policy years beginning on or after January 1, 
2014, extends the requirement to cover the EHB package to non-
grandfathered individual and small group health insurance coverage, 
irrespective of whether such coverage is offered through an Exchange. 
In addition, section 2707(b) of the PHS Act directs non-grandfathered 
group health plans to ensure that cost sharing under the plan does not 
exceed the limitations described in sections 1302(c)(1) of the ACA.
    Section 1302 of the ACA provides for the establishment of an EHB 
package that includes coverage of EHBs (as defined by the Secretary), 
cost-sharing limits, and AV requirements. Section 1302(b) of the ACA 
directs that EHBs be equal in scope to the benefits provided under a 
typical employer plan, and that they cover at least the following 10 
general categories: Ambulatory patient services; emergency services; 
hospitalization; maternity and newborn care; mental health and 
substance use disorder services, including behavioral health treatment; 
prescription drugs; rehabilitative and habilitative services and 
devices; laboratory services; preventive and wellness services and 
chronic disease management; and pediatric services, including oral and 
vision care.
    Section 1302(d) of the ACA describes the various levels of coverage 
based on their AV. Consistent with section 1302(d)(2)(A) of the ACA, AV 
is calculated based on the provision of EHB to a standard population. 
Section 1302(d)(3) of the ACA directs the Secretary to develop 
guidelines that allow for de minimis variation in AV calculations.

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    Section 1303 of the ACA, as implemented in 45 CFR 156.280, 
specifies standards for issuers of QHPs through the Exchanges that 
cover abortion services for which federal funding is prohibited. The 
statute and regulation establish that, unless otherwise prohibited by 
state law, a QHP issuer may elect to cover such abortion services. If 
an issuer elects to cover such services under a QHP sold through an 
individual market Exchange, the issuer must take certain steps to 
ensure that no PTC or CSR funds are used to pay for abortion services 
for which public funding is prohibited.
    As specified in section 1303(b)(2) of the ACA, one such step is 
that individual market Exchange issuers must determine the amount of, 
and collect, from each enrollee, a separate payment for an amount equal 
to the actuarial value of the coverage for abortions for which public 
funding is prohibited, which must be no less than $1 per enrollee, per 
month. QHP issuers must also segregate funds for abortion services for 
which federal funds are prohibited collected through this payment into 
a separate allocation account used to pay for such abortion services.
    Sections 1311(b) and 1321(b) of the ACA provide that each state has 
the opportunity to establish an individual market Exchange that 
facilitates the purchase of insurance coverage by qualified individuals 
through QHPs and meets other standards specified in the ACA. Section 
1321(c)(1) of the ACA directs the Secretary to establish and operate 
such Exchange within states that do not elect to establish an Exchange 
or, as determined by the Secretary on or before January 1, 2013, will 
not have an Exchange operable by January 1, 2014.
    Section 1311(c)(1) of the ACA provides the Secretary the authority 
to issue regulations to establish criteria for the certification of 
QHPs, including network adequacy standards at section 1311(c)(1)(B) of 
the ACA. Section 1311(d) of the ACA describes the minimum functions of 
an Exchange. Section 1311(e)(1) of the ACA grants the Exchange the 
authority to certify a health plan as a QHP if the health plan meets 
the Secretary's requirements for certification issued under section 
1311(c)(1) of the ACA, and the Exchange determines that making the plan 
available through the Exchange is in the interests of qualified 
individuals and qualified employers in the state. Section 1311(c)(6) of 
the ACA establishes authority for the Secretary to require Exchanges to 
provide enrollment periods, including special enrollment periods, 
including the monthly enrollment period for Indians, as defined by 
section 4 of the Indian Healthcare Improvement Act, per section 
1311(c)(6)(D) of the ACA.\13\
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    \13\ The Indian Healthcare Improvement Act (IHCIA), the 
cornerstone legal authority for the provision of health care to 
American Indians and Alaska Natives, was made permanent when 
President Obama signed the bill on March 23, 2010, as part of the 
ACA.
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    Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange 
to establish a Navigator program under which it awards grants to 
entities to carry out certain Navigator duties.
    Section 1312(c) of the ACA generally requires a health insurance 
issuer to consider all enrollees in all health plans (except 
grandfathered health plans) offered by such issuer to be members of a 
single risk pool for each of its individual and small group markets. 
States have the option to merge the individual and small group market 
risk pools under section 1312(c)(3) of the ACA.
    Section 1312(e) of the ACA 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 financial assistance 
for QHPs sold through an Exchange.
    Sections 1313 and 1321 of the ACA provide the Secretary with the 
authority to oversee the financial integrity of State Exchanges, their 
compliance with HHS standards, and the efficient and non-discriminatory 
administration of State Exchange activities. Section 1321 of the ACA 
provides for state flexibility in the operation and enforcement of 
Exchanges and related requirements.
    Section 1321(a)(1) of the ACA directs the Secretary to issue 
regulations that set standards for meeting the requirements of title I 
of the ACA for, among other things, the establishment and operation of 
Exchanges. When operating an FFE under section 1321(c)(1) of the ACA, 
HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of 
the ACA to collect and spend user fees. Office of Management and Budget 
(OMB) Circular A-25 establishes federal policy regarding user fees and 
specifies that a user charge will be assessed against each identifiable 
recipient for special benefits derived from federal activities beyond 
those received by the general public.
    Section 1321(d) of the ACA provides that nothing in title I of the 
ACA must be construed to preempt any state law that does not prevent 
the application of title I of the ACA. Section 1311(k) of the ACA 
specifies that Exchanges may not establish rules that conflict with or 
prevent the application of regulations issued by the Secretary.
    Section 1332 of the ACA provides the Secretary of HHS and the 
Secretary of the Treasury (collectively, the Secretaries) with the 
discretion to approve a state's proposal to waive specific provisions 
of the ACA, provided the state's section 1332 waiver plan meets certain 
requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries 
to issue regulations regarding procedures for section 1332 waivers.
    Section 1402 of the ACA provides for, among other things, 
reductions in cost sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual 
market Exchanges. This section also provides for reductions in cost 
sharing for American Indians enrolled in QHPs at any metal level.
    Section 1411(c) of the ACA requires the Secretary to submit certain 
information provided by applicants under section 1411(b) of the ACA to 
other federal officials for verification, including income and family 
size information to the Secretary of the Treasury.
    Section 1411(d) of the ACA provides that the Secretary must verify 
the accuracy of information provided by applicants under section 
1411(b) of the ACA for which section 1411(c) of the ACA does not 
prescribe a specific verification procedure, in such manner as the 
Secretary determines appropriate.
    Section 1411(f) of the ACA requires the Secretary, in consultation 
with the Secretary of the Treasury, the Secretary of Homeland Security, 
and the Commissioner of Social Security, to establish procedures for 
hearing and making decisions governing appeals of Exchange eligibility 
determinations.
    Section 1411(f)(1)(B) of the ACA requires the Secretary to 
establish procedures to redetermine eligibility on a periodic basis, in 
appropriate circumstances, including eligibility to purchase a QHP 
through the Exchange and for APTC and CSRs.
    Section 1411(g) of the ACA allows the use or disclosure of 
applicant information only for the limited purposes of, and to the 
extent necessary to, ensure the efficient operation of the Exchange, 
including by verifying eligibility to enroll through the Exchange and 
for APTC and CSRs.
    Section 5000A of the Internal Revenue Code (``the Code''), as added 
by section 1501(b) of the ACA, requires individuals to have minimum 
essential coverage (MEC) for each month, qualify

[[Page 35160]]

for an exemption, or make an individual shared responsibility payment. 
Under the Tax Cuts and Jobs Act (Pub. L. 115-97, December 22, 2017) the 
individual shared responsibility payment has been reduced to $0, 
effective for months beginning after December 31, 2018. Notwithstanding 
that reduction, certain exemptions are still relevant to determine 
whether individuals age 30 and above qualify to enroll in catastrophic 
coverage under 45 CFR 155.305(h) or 156.155.
1. Program Integrity
    In the June 19, 2013 Federal Register (78 FR 37031), we published a 
proposed rule that proposed certain program integrity standards related 
to Exchanges and the premium stabilization programs (proposed Program 
Integrity Rule). The provisions of that proposed rule were finalized in 
two rules, the ``first Program Integrity Rule'' published in the August 
30, 2013 Federal Register (78 FR 54069) and the ``second Program 
Integrity Rule'' published in the October 30, 2013 Federal Register (78 
FR 65045). In the December 27, 2019 Federal Register (84 FR 71674), we 
published a final rule that revised standards relating to oversight of 
Exchanges established by states and periodic data matching frequency. 
It also added new requirements for certain issuers related to the 
separate billing and collection of the separate payment for the premium 
portion attributable to coverage for certain abortion services. In the 
May 8, 2020 Federal Register (85 FR 27550), we published the Medicare 
and Medicaid Programs, Basic Health Programs and Exchanges interim 
final rule with public comment (``May 2020 IFC'') and postponed the 
implementation deadline for those separate billing and collection 
requirements by 60 days.
2. Market Rules
    An interim final rule relating to the HIPAA health insurance 
reforms was published in the April 8, 1997 Federal Register (62 FR 
16894). A proposed rule relating to ACA health insurance market reforms 
that became effective in 2014 was published in the November 26, 2012 
Federal Register (77 FR 70584). A final rule implementing those 
provisions was published in the February 27, 2013 Federal Register (78 
FR 13406) (2014 Market Rules).
    A proposed rule relating to Exchanges and Insurance Market 
Standards for 2015 and beyond was published in the March 21, 2014 
Federal Register (79 FR 15808) (2015 Market Standards Proposed Rule). A 
final rule implementing the Exchange and Insurance Market Standards for 
2015 and Beyond was published in the May 27, 2014 Federal Register (79 
FR 30240) (2015 Market Standards Rule). The 2018 Payment Notice final 
rule in the December 22, 2016 Federal Register (81 FR 94058) provided 
additional guidance on guaranteed availability and guaranteed 
renewability. In the Market Stabilization final rule that was published 
in the April 18, 2017 Federal Register (82 FR 18346), we released 
further guidance related to guaranteed availability. In the 2019 
Payment Notice final rule in the April 17, 2018 Federal Register (83 FR 
17058), we clarified that certain exceptions to the special enrollment 
periods only apply with respect to coverage offered outside of the 
Exchange in the individual market.
    In part 2 of the 2022 Payment Notice final rule in the May 5, 2021 
Federal Register (86 FR 24140), we made additional amendments to the 
guaranteed availability regulation regarding special enrollment periods 
and finalized new special enrollment periods related to untimely notice 
of triggering events, cessation of employer contributions or government 
subsidies to COBRA continuation coverage, and loss of APTC eligibility.
3. Exchanges
    We published a request for comment relating to Exchanges in the 
August 3, 2010 Federal Register (75 FR 45584). We issued initial 
guidance to states on Exchanges on November 18, 2010. In the July 15, 
2011 Federal Register (76 FR 41865), we published a proposed rule with 
proposals to implement components of the Exchanges, and a rule in the 
August 17, 2011 Federal Register (76 FR 51201) regarding Exchange 
functions in the individual market and Small Business Health Options 
Program (SHOP), eligibility determinations, and Exchange standards for 
employers. A final rule implementing components of the Exchanges and 
setting forth standards for eligibility for Exchanges, including 
minimum network adequacy requirements, was published in the March 27, 
2012 Federal Register (77 FR 18309) (Exchange Establishment Rule).
    In the 2014 Payment Notice and in the Amendments to the HHS Notice 
of Benefit and Payment Parameters for 2014 interim final rule, 
published in the March 11, 2013 Federal Register (78 FR 15541), we set 
forth standards related to Exchange user fees. We established an 
adjustment to the FFE user fee in the Coverage of Certain Preventive 
Services under the Affordable Care Act final rule, published in the 
July 2, 2013 Federal Register (78 FR 39869) (Preventive Services Rule). 
In the 2016 Payment Notice in the February 27, 2015 Federal Register 
(80 FR 10750), we finalized changes related to network adequacy and 
provider directories.
    In the 2017 Payment Notice in the March 8, 2016 Federal Register 
(81 FR 12204), we finalized six standardized plan options to simplify 
the plan selection process for consumers on the Exchanges. In the 2017 
Payment Notice, we also finalized policies relating to network adequacy 
for QHPs on the FFEs. In the May 11, 2016 Federal Register (81 FR 
29146), we published an interim final rule with amendments to the 
parameters of certain special enrollment periods (2016 Interim Final 
Rule). We finalized these in the 2018 Payment Notice final rule, 
published in the December 22, 2016 Federal Register (81 FR 94058). The 
2018 Payment Notice also modified the standardized options finalized in 
the 2017 Payment Notice and included three new sets of standardized 
options. In the March 8, 2016 Federal Register (81 FR 12203), the final 
2017 Payment Notice codified State-based Exchanges on the Federal 
platform (SBE-FPs) along with relevant requirements.
    In the April 18, 2017 Market Stabilization final rule Federal 
Register (82 FR 18346), we amended standards relating to special 
enrollment periods and QHP certification. In the 2019 Payment Notice 
final rule, published in the April 17, 2018 Federal Register (83 FR 
16930), we modified parameters around certain special enrollment 
periods and discontinued the designation of standardized options. In 
the April 25, 2019 Federal Register (84 FR 17454), the final 2020 
Payment Notice established a new special enrollment period. In the May 
14, 2020 Federal Register (85 FR 29204), the 2021 Payment Notice final 
rule made certain changes to plan category limitations and special 
enrollment period coverage effective date rules, allowed individuals 
provided a non-calendar year qualified small employer health 
reimbursement arrangement (QSEHRA) to qualify for an existing special 
enrollment period, and discussed plans for future rulemaking for 
employer-sponsored coverage verification and non-enforcement discretion 
for Exchanges that do not conduct random sampling until plan year 2021.
    In part 1 of the 2022 Payment Notice final rule, published in the 
January 19, 2021 Federal Register (85 FR 6138), we finalized a new 
Exchange Direct Enrollment (DE) option. In part 2 of the 2022 Payment 
Notice final rule in the May 5, 2021 Federal Register (86 FR 24140) we 
finalized new special

[[Page 35161]]

enrollment periods related to untimely notice of triggering events, 
cessation of employer contributions or government subsidies to COBRA 
continuation coverage, loss of APTC eligibility, and clarified the 
regulation imposing network adequacy standards with regard to QHPs that 
do not use provider networks.
4. Essential Health Benefits
    On December 16, 2011, HHS released a bulletin \14\ that outlined an 
intended regulatory approach for defining EHB, including a benchmark-
based framework. A proposed rule relating to EHBs was published in the 
November 26, 2012 Federal Register (77 FR 70643). We established 
requirements relating to EHBs in the Standards Related to Essential 
Health Benefits, Actuarial Value, and Accreditation Final Rule, which 
was published in the February 25, 2013 Federal Register (78 FR 12833) 
(EHB Rule). In the 2019 Payment Notice, published in the April 17, 2018 
Federal Register (83 FR 16930), we added Sec.  156.111 to provide 
states with additional options from which to select an EHB-benchmark 
plan for plan years 2020 and beyond.
---------------------------------------------------------------------------

    \14\ ``Essential Health Benefits Bulletin,'' December 16, 2011. 
Available at https://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf.
---------------------------------------------------------------------------

5. Section 1332 Waivers
    In the March 14, 2011 Federal Register (76 FR 13553), the 
Departments published the ``Application, Review, and Reporting Process 
for Waivers for State Innovation'' proposed rule \15\ to implement 
section 1332(a)(4)(B) of the ACA. In the February 27, 2012 Federal 
Register (77 FR 11700), the Departments published the ``Application, 
Review, and Reporting Process for Waivers for State Innovation'' final 
rule \16\ (hereinafter referred to as the ``2012 Final Rule''). In the 
October 24, 2018 Federal Register (83 FR 53575), the Departments issued 
the 2018 Guidance, which superseded the previous guidance \17\ 
published in the December 16, 2015 Federal Register (80 FR 78131) 
(hereinafter referred to as the ``2015 Guidance''), and provided 
additional information about the requirements that states must meet for 
waiver proposals, the Secretaries' application review procedures, pass-
through funding determinations, certain analytical requirements, and 
operational considerations. In the November 6, 2020 Federal Register 
(85 FR 71142), the Departments issued an interim final rule \18\ 
(hereinafter referred to as the ``November 2020 IFC''), which revises 
regulations to set forth flexibilities in the public notice 
requirements and post award public participation requirements for 
waivers under section 1332 during the COVID-19 PHE. In the December 4, 
2020 Federal Register (85 FR 78572), the Departments published the 
``Patient Protection and Affordable Care Act; HHS Notice of Benefit and 
Payment Parameters for 2022 and Pharmacy Benefit Manager Standards; 
Updates to State Innovation Waiver (Section 1332 Waiver) Implementing 
Regulations'' proposed rule \19\ (hereinafter referred to as the ``2022 
Payment Notice proposed rule'') to codify certain policies and 
interpretations of the 2018 Guidance. In the January 19, 2021 Federal 
Register (86 FR 6138), the Departments published the ``Patient 
Protection and Affordable Care Act; HHS Notice of Benefit and Payment 
Parameters for 2022; Updates to State Innovation Waiver (Section 1332 
Waiver) Implementing Regulations'' final rule \20\ (hereinafter 
referred to as the ``part 1 of the 2022 Payment Notice final rule'') 
which codified many of the policies and interpretations outlined in the 
2018 Guidance into section 1332 regulations.
---------------------------------------------------------------------------

    \15\ https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf.
    \16\ https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
    \17\ https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
    \18\ https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
    \19\ https://www.federalregister.gov/documents/2020/12/04/2020-26534/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022-and.
    \20\ https://www.federalregister.gov/documents/2021/01/19/2021-01175/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022.
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B. Stakeholder Consultation and Input

    HHS has consulted with stakeholders on policies related to the 
operation of Exchanges. We have held a number of listening sessions 
with consumers, providers, employers, health plans, advocacy groups and 
the actuarial community to gather public input. We have solicited input 
from state representatives on numerous topics, particularly the direct 
enrollment option for FFEs, SBE-FPs and State Exchanges.
    We consulted with stakeholders through monthly meetings with the 
National Association of Insurance Commissioners (NAIC), regular contact 
with states, and health insurance issuers, trade groups, consumer 
advocates, employers, and other interested parties. We considered all 
public input we received as we developed the policies in this proposed 
rule.

C. Structure of Proposed Rule

    The regulations outlined in this proposed rule would be codified in 
45 CFR parts 147, 155, and 156. In addition, the regulations outlined 
in this proposed rule governing waivers under section 1332 of the ACA 
at 45 CFR part 155 subpart N would also be codified in 31 CFR part 33.
    The proposed changes to part 147 would specify that issuers are not 
required to provide a special enrollment period in the individual 
market with respect to coverage offered outside of an Exchange to 
consumers who would be eligible for the proposed special enrollment 
period at Sec.  155.420(d)(16).
    The proposed changes to part 155 would repeal the establishment of 
the Exchange DE option, which permitted State Exchanges, SBE-FPs, and 
FFEs to use direct enrollment technology and non-Exchange websites 
developed by approved web brokers, issuers and other direct enrollment 
partners to enroll qualified individuals in QHPs offered through the 
Exchange. We propose extending FFE open enrollment to end on January 15 
of the applicable year, rather than December 15 of the previous year 
beginning with the 2022 coverage year and beyond. We also propose to 
reinstitute previous requirements that Navigators in FFEs be required 
to provide consumers with information and assistance on certain post-
enrollment topics, such as the Exchange eligibility appeals process, 
the Exchange-related components of the PTC reconciliation process, and 
the basic concepts and rights of health coverage and how to use it. We 
further propose to provide a monthly special enrollment period for 
qualified individuals or enrollees, or the dependents of a qualified 
individual or enrollee, who are eligible for APTC, and whose household 
income does not exceed 150 percent of the FPL. Finally, we propose to 
clarify that, for purposes of the special enrollment periods provided 
at Sec.  155.420(d), a qualified individual or enrollee who qualifies 
for APTC, or a dependent whose tax filer can qualify for APTC on their 
behalf, because they meet the criteria at Sec.  155.305(f), but who 
qualifies for a maximum APTC amount of zero dollars, is not considered 
APTC eligible for purposes of these special enrollment periods.
    The proposed changes to part 156 would update the user fee rates 
for the 2022 benefit year for all issuers participating on the 
Exchanges using the Federal platform. We also propose to

[[Page 35162]]

repeal the separate billing requirement, which requires individual 
market QHP issuers that offer coverage for abortion services for which 
federal funding is prohibited to separately bill policy holders for the 
portion of the premium attributable to coverage of such abortion 
services and instruct the policy holder to pay for this portion of 
their premium in a separate transaction. Finally, we propose to update 
a cross reference to mental health parity standards in the provision of 
EHB regulations.
    The proposed changes in 31 CFR part 33 and 45 CFR part 155 related 
to section 1332 waivers would rescind the previous incorporation of 
certain policies and interpretations announced in the 2018 Guidance 
into regulation. The proposals related to section 1332 waivers include 
proposed processes and procedures for amendments and extensions for 
approved waiver plans. Additionally, the Departments propose to extend 
certain flexibilities in the public notice requirements and post award 
public participation requirements for section 1332 waivers during 
future emergent situations.

III. Provisions of the Updating Payment Parameters and Improving Health 
Insurance Markets for 2022 and Beyond Proposed Rule

A. Part 147--Health Insurance Reform Requirements for the Group and 
Individual Health Insurance Markets

1. Guaranteed Availability of Coverage (Sec.  147.104)
a. Past-Due Premiums
    On January 28, 2021, President Biden issued E.O. 14009, 
``Strengthening Medicaid and the Affordable Care Act,'' \21\ directing 
HHS, and the heads of all other executive departments and agencies with 
authorities and responsibilities related to the ACA, to review all 
existing regulations, orders, guidance documents, policies, and any 
other similar agency actions to determine whether such agency actions 
are inconsistent with this Administration's policy to protect and 
strengthen the ACA and to make high-quality health care accessible and 
affordable for every American.
---------------------------------------------------------------------------

    \21\ 86 FR 7793 (February 2, 2021).
---------------------------------------------------------------------------

    In the preamble to the Market Stabilization final rule,\22\ we 
stated that, to the extent permitted by applicable state law, an issuer 
will not violate the guaranteed availability requirements in Sec.  
147.104 where the issuer attributes a premium payment made for new 
coverage to any past-due premiums owed for coverage from the same 
issuer or another issuer in the same controlled group within the prior 
12-month period before effectuating enrollment in the new coverage. 
This policy addressed concerns regarding the potential for individuals 
to take unfair advantage of the guaranteed availability rules. For 
example, an individual could decline to make premium payments at the 
end of a benefit year, but still receive periods of unpaid coverage 
during a grace period before coverage is terminated. We were concerned 
that despite such failures to pay, such individuals would be able to 
immediately sign up for new coverage for the next benefit year during 
the individual market open enrollment period, without making 
restitution for the periods of unpaid coverage.
---------------------------------------------------------------------------

    \22\ 82 FR 18346, 18349 (April 18, 2017).
---------------------------------------------------------------------------

    HHS currently is reviewing this policy to analyze whether it may 
present unnecessary barriers to accessing health coverage. In 
compliance with E.O. 14009, we intend to address this interpretation of 
guaranteed availability in the 2023 Payment Notice rulemaking.
b. Special Enrollment Periods (Sec.  147.104(b)(2))
    As further discussed in the preamble section regarding the proposed 
monthly special enrollment period for APTC-eligible qualified 
individuals with an expected household income no greater than 150 
percent of the FPL (Sec.  155.420(d)(16)), we propose to add a new 
paragraph at Sec.  147.104(b)(2)(i)(G) to specify that issuers are not 
required to provide this special enrollment period in the individual 
market with respect to coverage offered outside of an Exchange. We 
propose to add this paragraph because eligibility for the special 
enrollment period is based on eligibility for APTC, as discussed in the 
Sec.  155.420(d)(16) preamble section, and APTC cannot be applied to 
coverage offered outside of an Exchange. We request comment on this 
proposal.

B. Part 155--Exchange Establishment Standards and Other Related 
Standards Under the Affordable Care Act

1. Standardized Options (Sec.  155.20)
    On March 4, 2021, the United States District Court for the District 
of Maryland decided City of Columbus v. Cochran, No. 18-2364, 2021 WL 
825973 (D. Md. Mar. 4, 2021). The court reviewed nine separate policies 
we had promulgated in the 2019 Payment Notice final rule. The court 
vacated four of these policies. One of the policies the court vacated 
was the 2019 Payment Notice's cessation of the practice of designating 
some plans in the FFEs as ``standardized options.'' \23\
---------------------------------------------------------------------------

    \23\ See 83 FR 16974-16975.
---------------------------------------------------------------------------

    We intend to implement the court's decision as soon as possible, as 
explained in part 2 of the 2022 Payment Notice final rule.\24\ We will 
not be able to fully implement those aspects of the court's decision 
regarding standardized options in time for issuers to design plans and 
for CMS to be prepared to certify such plans as QHPs for the 2022 plan 
year. With the rule removing standardized options vacated, we will also 
need to design and propose new standardized options that otherwise meet 
current market reform requirements and alter the Federal Exchange 
eligibility and enrollment platform system build (HealthCare.gov) to 
provide differential display of such plans. Web-brokers that are direct 
enrollment partners in FFE and SBE-FP states will also need time to 
adjust their respective systems to provide differential display of such 
plans on their non-Exchange websites.\25\ We will need to design, 
propose, and finalize such plans in time for issuers to design their 
own standardized options in accord with HHS's parameters and to submit 
those plans for approval by applicable regulatory authorities and for 
certification as QHPs. This is not feasible for the upcoming QHP 
certification cycle for the 2022 plan year. The plan certification 
process for that year has already begun as of April 22, 2021. CMS' 
planning for the QHP certification cycle for the 2022 plan year has 
taken into account the existing policies that the court vacated, and it 
is too late now to revisit those factors if the process is to go 
forward in time for plans to be certified by open enrollment later this 
year.
---------------------------------------------------------------------------

    \24\ See 86 FR 24140, 24264-24265.
    \25\ See 45 CFR 155.220(c)(3)(i)(H).
---------------------------------------------------------------------------

    Specifically, in the last iteration of standardized options we 
finalized in the 2018 Payment Notice, we created three sets of 
standardized options based on FFE and SBE-FP enrollment data and state 
cost-sharing laws. The basis on which we created these three sets of 
options as well as a number of other factors in the individual market 
(for example, states with FFEs or SBE-FPs transitioning to SBEs) have 
changed considerably since the last iteration of standardized options 
in 2018. Further, we do not have sufficient time to conduct a full 
analysis of the changes that have occurred in the last several years 
necessary to timely design and propose adequate standardized options 
suitable for the current environment. Additionally, in prior years, we

[[Page 35163]]

proposed and finalized standardized option plan designs prior to the 
start of the QHP certification cycle for the following plan year such 
that issuers had sufficient time to assess these standardized options 
and could thus determine if they wanted to offer them and take the 
steps necessary to do so. Issuers will not have a sufficient amount of 
time to meaningfully assess any standardized options we would propose 
and decide whether or not to offer them if such proposals were made 
effective before the 2023 plan year.
    For these reasons, we intend to resume the designation of 
standardized options and propose specific plan designs in more complete 
detail in the 2023 Payment Notice. As such, we seek the views of 
stakeholders regarding issues related to the proposal of new 
standardized options, including specifically the views of states with 
FFEs or SBE-FPs regarding how unique state cost-sharing laws could 
affect standardized option plan designs to assist in our development of 
such proposals.
2. Navigator Program Standards (Sec.  155.210)
    We propose to amend Sec.  155.210(e)(9) to reinstitute the 
requirement that Navigators in the FFEs provide information and 
assistance with regard to certain post-enrollment topics.
    Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange 
to establish a Navigator program under which it awards grants to 
entities to conduct public education activities to raise awareness of 
the availability of QHPs; distribute fair and impartial information 
concerning enrollment in QHPs, and the availability of PTCs and CSRs; 
facilitate enrollment in QHPs; provide referrals to any applicable 
office of health insurance consumer assistance or health insurance 
ombudsman established under section 2793 of the PHS Act, or any other 
appropriate state agency or agencies for any enrollee with a grievance, 
complaint, or question regarding their health plan, coverage, or a 
determination under such plan or coverage; and provide information in a 
manner that is culturally and linguistically appropriate to the needs 
of the population being served by the Exchange. The statute also 
requires the Secretary, in collaboration with states, to develop 
standards to ensure that information made available by Navigators is 
fair, accurate, and impartial. We have implemented the statutorily 
required Navigator duties through regulations at Sec. Sec.  155.210 
(for all Exchanges) and 155.215 (for Navigators in FFEs).
    Further, section 1311(i)(4) of the ACA requires the Secretary to 
establish standards for Navigators to ensure that Navigators are 
qualified, and licensed, if appropriate, to engage in the Navigator 
activities described in the statute and to avoid conflicts of interest. 
This provision has been implemented at Sec. Sec.  155.210(b) (generally 
for all Exchanges) and 155.215(b) (for Navigators in FFEs).
    We have also established under Sec.  155.205(d) and (e) that each 
Exchange must have a consumer assistance function, including the 
Navigator program, and must conduct outreach and education activities 
to educate consumers about the Exchange and insurance affordability 
programs to encourage participation.
    We propose to amend Sec.  155.210(e)(9) to reinstitute the 
requirement that Navigators in the FFEs provide information and 
assistance with regard to certain post-enrollment topics rather than 
merely being authorized to do so.
    Following a reduction in overall funding available to the FFE 
Navigator program in 2020, we provided more flexibility to FFE 
Navigators by making the provision of certain types of assistance, 
including post-enrollment assistance, permissible, but not required, 
for FFE Navigators under Navigator grants awarded in 2019 or any later 
year.\26\ On June 4, 2021, CMS issued the 2021 Navigator Notice of 
Funding Opportunity (NOFO), which will make $80 million in grant 
funding available to Navigators in states with an FFE for the 2022 plan 
year.\27\ With funding for the FFE Navigator program increasing 
substantially for the 2022 plan year, we believe that there will be 
sufficient Navigator grant funding available to support the post-
enrollment duties we propose to once again require of FFE Navigators. 
We also believe that this proposal aligns with E.O. 14009 on 
Strengthening Medicaid and the ACA because it will improve consumers' 
access to health coverage information, not only when selecting a plan, 
but also throughout the year as they use their coverage.\28\ In 
addition, this proposal is designed to ensure that consumers would have 
access to skilled assistance beyond applying for and enrolling in 
health insurance coverage through the Exchange, including, for example, 
assistance with the process of filing Exchange eligibility appeals, 
understanding basic information about PTC reconciliation, and 
understanding basic concepts and rights related to health coverage and 
how to use it, such as locating providers and accessing care.
---------------------------------------------------------------------------

    \26\ 84 FR 17511-17514 (April 25, 2019). These post-enrollment 
topics included: Understanding the process of filing Exchange 
eligibility appeals; understanding and applying for exemptions from 
the individual shared responsibility payment that are granted 
through the Exchange; understanding the availability of exemptions 
from the requirement to maintain MEC and from the individual shared 
responsibility payment that are claimed through the tax filing 
process and how to claim them; the Exchange-related components of 
the premium tax credit reconciliation process; understanding basic 
concepts and rights related to health coverage and how to use it; 
and referrals to licensed tax advisers, tax preparers, or other 
resources for assistance with tax preparation and tax advice on 
certain Exchange-related topics.
    \27\ https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0.
    \28\ 86 FR 7793 (Feb. 2, 2021).
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    Section 1311(i)(3)(D) of the ACA and 45 CFR 155.210(e)(4) already 
expressly require Navigators to provide post-enrollment assistance by 
referring consumers with complaints, questions, or grievances about 
their coverage to appropriate state agencies. This suggests that 
Congress anticipated that consumers would need assistance beyond the 
application and enrollment process, and that Navigators would maintain 
relationships with consumers and be a source of such post-enrollment 
assistance.
    Consistent with the requirements under section 1311(i)(3)(B) and 
(C) of the ACA that Navigators distribute fair and impartial 
information concerning enrollment in QHPs and facilitate enrollment in 
QHPs, and pursuant to the Secretary's authority under section 
1321(a)(1)(A) of the ACA, we propose to reinstitute as a requirement at 
Sec.  155.210(e)(9)(i) that Navigators in the FFEs must help consumers 
with understanding the process of filing appeals of Exchange 
eligibility determinations. We are once again not proposing to 
establish a duty for Navigators to represent a consumer in an appeal, 
sign an appeal request, or file an appeal on the consumer's behalf. We 
believe that helping consumers understand Exchange appeal rights when 
they have received an adverse eligibility determination when applying 
for health insurance coverage, and assisting them with the process of 
completing and submitting appeal forms, would help to facilitate 
enrollment through the FFEs and would help consumers obtain fair and 
impartial information about enrollment through the FFEs. We would 
interpret this proposal to include helping consumers file appeals of 
eligibility determinations made by an Exchange related to enrollment in 
a QHP, special enrollment periods, and any insurance affordability 
program, including eligibility determinations for Exchange

[[Page 35164]]

financial assistance, Medicaid, the Children's Health Insurance Program 
(CHIP), and the Basic Health Program.
    Currently, pursuant to Sec.  155.210(e)(9)(ii), Navigators in the 
FFEs are permitted to provide information and assistance to consumers 
with regard to understanding and applying for exemptions from the 
individual shared responsibility payment that are granted through the 
Exchange, understanding the availability of exemptions from the 
requirement to maintain minimum essential coverage and from the 
individual shared responsibility payment that are claimed through the 
tax filing process and how to claim them, and understanding the 
availability of the Internal Revenue Service (IRS) resources on this 
topic. We propose to amend Sec.  155.210(e)(9)(ii) slightly to 
reinstitute as a requirement that Navigators in the FFEs must help 
consumers understand and apply for exemptions from the requirement to 
maintain minimum essential coverage granted by the Exchange. Although 
consumers who do not maintain minimum essential coverage no longer need 
to receive an exemption from the individual shared responsibility 
payment to avoid having to make such a payment, Navigators can still 
assist consumers age 30 or above with filing an exemption to qualify to 
enroll in catastrophic coverage under Sec.  155.305(h). We believe that 
this proposal is consistent with Navigators' duty under section 
1311(i)(3)(B) and (C) of the ACA to distribute fair and impartial 
information concerning enrollment in QHPs, since impartial information 
concerning the availability of exemptions for consumers age 30 or above 
to enroll in catastrophic coverage would help consumers make informed 
decisions about whether or not to enroll in such coverage. This 
assistance with Exchange-granted exemptions from the requirement to 
maintain minimum essential coverage would include informing consumers 
about the availability of the exemption; helping consumers fill out and 
submit Exchange-granted exemption applications and obtain any necessary 
forms prior to or after applying for the exemption; explaining what the 
exemption certificate number is and how to use it; and helping 
consumers understand and use the Exchange tool to find catastrophic 
plans in their area.
    In addition, we propose to reinstitute as a requirement at Sec.  
155.210(e)(9)(iii) that Navigators must help consumers with the 
Exchange-related components of the PTC reconciliation process and with 
understanding the availability of IRS resources on this process. This 
would include ensuring consumers have access to their Forms 1095-A and 
receive general, high-level information about the purpose of this form 
that is consistent with published IRS guidance on the topic. This 
proposal stems from the requirement under section 1311(i)(3)(B) of the 
ACA that Navigators distribute fair and impartial information 
concerning the availability of the PTC under section 36B of the Code.
    Consumers who receive premium assistance through APTC may need help 
with a variety of issues related to the requirement to reconcile the 
APTC with the PTC allowed for the year of coverage. FFE Navigators 
would be required to help consumers obtain IRS Forms 1095-A and 8962, 
and the instructions for both, and to provide general information, 
consistent with applicable IRS guidance, about the significance of the 
forms. Navigators would also be required to help consumers understand 
(1) how to report errors on the Form 1095-A; (2) how to find silver 
plan premiums using the Exchange tool; and (3) the difference between 
APTC and PTC and the potential implications for enrollment and 
reenrollment of not filing a tax return and reconciling the APTC paid 
on consumers' behalf with their PTC for the year.
    Navigators would still not be permitted to provide tax assistance 
or advice, or interpret tax rules and forms within their capacity as 
FFE Navigators. However, their expertise related to the consumer-facing 
aspects of the Exchange, including eligibility and enrollment rules and 
procedures, would uniquely qualify them to help consumers understand 
and obtain information from the Exchange that is necessary to 
understand the PTC reconciliation process. Because this proposal 
includes a proposed requirement that Navigators provide consumers with 
information and assistance understanding the availability of IRS 
resources, Navigators would be expected to familiarize themselves with 
the availability of materials on irs.gov, including the Form 8962 
instructions, IRS Publication 974 Premium Tax Credit, and relevant 
FAQs, and to refer consumers with questions about tax law to those 
resources or to other resources, such as free tax return preparation 
assistance from the Volunteer Income Tax Assistance or Tax Counseling 
for the Elderly programs.
    To help ensure consumers have seamless access to Exchange-related 
tax information beyond the basic information that Navigators can 
provide, we propose to reinstitute as a requirement at Sec.  
155.210(e)(9)(v) that FFE Navigators must refer consumers to licensed 
tax advisers, tax preparers, or other resources for assistance with tax 
preparation and tax advice related to consumer questions about the 
Exchange application and enrollment process, and PTC 
reconciliations.\29\
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    \29\ We note that we are not proposing to reinstitute at Sec.  
155.210(e)(9)(v) the requirement that Navigators must provide 
referrals to licensed tax advisers, tax preparers, or other 
resources for assistance with tax preparation and tax advice related 
to consumer questions about exemptions from the requirement to 
maintain minimum essential coverage and from the individual shared 
responsibility payment in light of the fact that the individual 
shared responsibility payment was reduced to zero for months 
beginning after December 31, 2018 under the Tax Cuts and Jobs Act 
(Pub. L. 115-97, December 22, 2017).
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    We interpret the Navigator duties to facilitate enrollment in QHPs 
in section 1311(i)(3)(C) of the ACA, to distribute fair and impartial 
information concerning enrollment in QHPs under section 1311(i)(3)(B) 
of the ACA, and to conduct public education activities to raise 
awareness about the availability of QHPs in section 1311(i)(3)(A) of 
the ACA to include helping consumers understand the kinds of decisions 
they will need to make in selecting coverage, and how to use their 
coverage after they are enrolled. We have previously stated that one of 
the overall purposes of consumer assistance programs is to help 
consumers become fully informed and health literate.\30\
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    \30\ See 79 FR 30276.
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    To improve consumers' health literacy related to coverage 
generally, and to ensure that individual consumers are able to use 
their coverage meaningfully, we propose to reinstitute at Sec.  
155.210(e)(9)(iv) the requirement that Navigators in the FFEs must help 
consumers understand basic concepts and rights related to health 
coverage and how to use it. We also propose to expand our 
interpretation of this requirement and the activities that fall within 
its scope. These activities could be supported through the use of 
existing resources such as the CMS ``From Coverage to Care'' 
initiative, which we encourage Navigators to review, and which are now 
available in multiple languages at https://marketplace.cms.gov/c2c. 
This proposal would improve consumers' access to health coverage 
information, not just when selecting a plan, but also when using their 
coverage.
    We believe expanding our interpretation of the requirement that 
Navigators help consumers understand basic concepts and rights related 
to health coverage and how to use it and

[[Page 35165]]

the activities that fall within the scope of this requirement is vital 
to improving health equity and helping to address social determinants 
of health, particularly among underserved and vulnerable 
populations.\31\ Navigators are already required under Sec.  
155.210(e)(8) to provide targeted assistance to underserved or 
vulnerable populations. Underserved and vulnerable populations often 
experience lower levels of health literacy, which can be a barrier to 
enrolling in and accessing care.\32\ Social determinants of health can 
also create significant disparities in whether and how an individual is 
able to afford and access health coverage and health care services, 
including primary and preventive care. As trusted partners and members 
of local communities, Navigators are uniquely positioned to establish 
and build trust with individuals and families as they transition from 
enrolling in health coverage to using and maintaining their coverage 
throughout the year.
---------------------------------------------------------------------------

    \31\ 86 FR 7009 (Jan. 25, 2021).
    \32\ Access to Health Services: Healthy People 2020. Office of 
Disease Prevention and Health Promotion, Department of Health & 
Human Services. https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/access-to-health.
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    Additionally, Navigators in FFEs are already required under Sec.  
155.215(c)(1) to develop and maintain general knowledge about the 
racial, ethnic, and cultural groups in their service area, including 
each group's health literacy and other needs, and under Sec.  
155.215(c)(2) to collect and maintain updated information to help 
understand the composition of the communities in the service area. 
Because the health literacy needs of consumers will vary depending on 
their circumstances, we are not requiring Navigators to help consumers 
with specific health literacy topics. Instead, we propose to expand our 
interpretation of the Navigator duties proposed to be reinstituted as 
requirements at Sec.  155.210(e)(9)(iv) to include, for example, 
helping consumers understand (1) key terms used in health coverage 
materials, such as ``deductible'' and ``coinsurance,'' and how they 
relate to the consumer's health plan; (2) the cost and care differences 
between a visit to the emergency department and a visit to a primary 
care provider under the coverage options available to the consumer; (3) 
how to evaluate their health care options and make cost-conscious 
decisions, including through the use of information required to be 
disclosed by their health plan as a result of the Transparency in 
Coverage Final Rules; \33\ (4) how to identify in-network providers to 
make and prepare for an appointment with a provider--including 
utilizing tools and resources available through the No Surprises Act 
\34\ to make informed decisions about their care; (5) how the 
consumer's coverage addresses steps that often are taken after an 
appointment with a provider, such as making a follow-up appointment and 
filling a prescription; and (6) the right to coverage of certain 
preventive health services without cost sharing under QHPs--including 
information and resources related to accessing viral testing and 
vaccination options supported by Exchange coverage. If this proposal is 
finalized, CMS intends to make training materials and other educational 
resources available to Navigators regarding the proposed expanded 
interpretation of this requirement.
---------------------------------------------------------------------------

    \33\ 85 FR 72158.
    \34\ Title I of Division BB of the Consolidated Appropriations 
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
---------------------------------------------------------------------------

    FFE Navigators will continue to be permitted to perform the 
Navigator duties specified in Sec.  155.210(e)(9) until this proposal, 
if finalized, becomes effective. If this proposal is finalized, FFE 
Navigators would be required to perform the Navigator duties specified 
in Sec.  155.210(e)(9) beginning with Navigator grants awarded after 
the effective date of this rule, including non-competing continuation 
awards. For example, if this proposal is finalized prior to Navigator 
grant funding being awarded in fiscal year (FY) 2022, FY 2021 Navigator 
grantees will be required to perform these duties beginning with the 
Navigator grant funding awarded in FY 2022 for the second 12-month 
budget period of the 36-month period of performance. To the extent FFE 
Navigators awarded grant funding in FY 2021 are not already performing 
these duties under their year one project plans when this proposal, if 
finalized, becomes effective, they can revise their project plans to 
incorporate performance of the duties specified in Sec.  155.210(e)(9) 
as part of their non-competing continuation application for their FY 
2022 funding. If this proposal is finalized as proposed, we would 
codify in Sec.  155.210(e)(9) the applicability date to make clear when 
the Navigator duties specified in Sec.  155.210(e)(9) would once again 
be required.
    We interpret the requirement to facilitate enrollment in a QHP 
under section 1311(i)(3)(C) of the ACA, and the requirement at Sec.  
155.210(e)(2) to provide information that assists consumers with 
submitting the eligibility application, to include assistance with 
updating an application for coverage through an Exchange, including 
reporting changes in circumstances and assisting with submitting 
information for eligibility redeterminations. Additionally, Navigators 
are already permitted, but not required, to help with a variety of 
other post-enrollment issues. For example, we interpret the 
requirements in Sec.  155.210(e)(1) and (2) that Navigators conduct 
public education activities to raise awareness about the Exchange and 
provide fair and impartial information about the application and plan 
selection process to mean that Navigators may educate consumers about 
their rights with respect to coverage available through an Exchange, 
such as nondiscrimination protections, prohibitions on preexisting 
condition exclusions, and preventive services available without cost-
sharing. We also interpret these requirements, together with the 
requirement in section 1311(i)(3)(B) of the ACA that Navigators 
distribute fair and impartial information concerning enrollment in 
QHPs, and the availability of Exchange financial assistance, to mean 
that Navigators may assist consumers with questions about paying 
premiums for coverage or insurance affordability programs enrolled in 
through an Exchange. Finally, we interpret the requirement in section 
1311(i)(3)(D) of the ACA and Sec.  155.210(e)(4) to provide referrals 
for certain post-enrollment issues to mean that Navigators may help 
consumers obtain assistance with coverage claims denials.
    Certified application counselors (CACs) do not receive grants from 
the FFEs, and thus may have more limited resources than Navigators. As 
a result, while we are not proposing to require CACs to further expand 
their required duties, we encourage CACs to help with activities 
consistent with their existing regulatory duties and recognize that 
many of these CACs may already be participating in these post-
enrollment activities.
    We seek comment on all aspects of this proposal.
3. Exchange Direct Enrollment Option (Sec.  155.221(j))
    In part 1 of the 2022 Payment Notice final rule, we codified Sec.  
155.221(j), which established a process for states to elect a new 
Exchange Direct Enrollment option (Exchange DE option). Under the 
Exchange DE option, State Exchanges, SBE-FPs, and FFE states may work 
directly with private sector entities (including QHP issuers, web-
brokers,

[[Page 35166]]

and agents and brokers) to operate enrollment websites through which 
consumers can apply for coverage, receive an eligibility determination 
from the Exchange, and purchase an individual market QHP offered 
through the Exchange with APTC and CSRs, if otherwise eligible. Subject 
to meeting HHS approval requirements under Sec.  155.221(j)(1) and (2), 
the Exchange DE option may be implemented in states with a State 
Exchange beginning in plan year 2022 and in SBE-FP or FFE states 
beginning in plan year 2023. We also finalized a 2023 user fee rate of 
1.5 percent of the total monthly premiums charged by issuers for each 
policy in FFE and SBE-FP states that elect the Exchange DE option. 
Since the publication of part 1 of the 2022 Payment Notice final rule, 
there have been significant changes to policy and operational 
priorities resulting from recent shifting policy goals, as well as the 
enactment of new federal laws. Given these changes, as well as a 
general lack of interest expressed by states in the option, and 
potential for the Exchange DE option to be misaligned with 
administration priorities, we propose to remove Sec.  155.221(j) and 
repeal the Exchange DE option.
    On January 20, 2021, President Biden issued the Executive Order, 
``On Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government'' (E.O. 13985),\35\ directing that as a 
policy matter the federal government should pursue a comprehensive 
approach to advancing equity for all, including people of color and 
others who have been historically underserved, marginalized, and 
adversely affected by persistent poverty and inequality. On January 28, 
2021, President Biden issued E.O. 14009.\36\ Section 3 of E.O. 14009 
directs HHS, and the heads of all other executive departments and 
agencies with authorities and responsibilities related to Medicaid and 
the ACA, to review all existing regulations, orders, guidance 
documents, policies, and any other similar agency actions to determine 
whether they are inconsistent with policy priorities described in 
Section 1 of E.O. 14009, to include protecting and strengthening the 
ACA by assisting people who are potentially eligible for coverage, and 
eliminating unnecessary difficulties to obtaining health insurance. 
Specifically, this agency review must evaluate whether existing 
policies or regulations, ``. . . undermine the Health Insurance 
Marketplace[supreg] \37\ or the individual, small group, or large group 
markets for health insurance . . .'' or ``. . . present unnecessary 
barriers to individuals and families attempting to access Medicaid or 
ACA coverage . . .'' \38\
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    \35\ 86 FR 7009 (Jan. 25, 2021).
    \36\ 86 FR 7793 (Feb. 2, 2021).
    \37\ Health Insurance Marketplace[supreg] is a registered 
service mark of the U.S. Department of Health & Human Services.
    \38\ 86 FR 7793 (Feb. 2, 2021).
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    Section 2 of E.O. 14009 also requires that the Secretary of HHS 
consider whether to implement an Exchange special enrollment period for 
exceptional circumstances pursuant to Sec.  155.420(d)(9) and other 
existing authorities, for uninsured and underinsured individuals to 
obtain coverage in light of the special circumstances caused by the 
COVID-19 pandemic. After E.O. 14009 was issued, HHS used its discretion 
to make such a special enrollment period available to uninsured and 
underinsured consumers through HealthCare.gov from February 15, 2021, 
through May 15, 2021. To support outreach, education and enrollment 
efforts for this special enrollment period, HHS has provided $2.3 
million in additional funding to current Navigator grantees in the 
FFE.\39\
---------------------------------------------------------------------------

    \39\ https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period.
_____________________________________-

    All State Exchanges followed suit and implemented corresponding 
special enrollment periods on similar timelines. HHS later made a 
decision to extend the ability of consumers to access the special 
enrollment period through HealthCare.gov through August 15, 2021, and 
many State Exchanges extended their special enrollment periods, as 
well. As of May 31, 2021, 1.2 million new consumers had selected plans 
through HealthCare.gov, which represents a substantial increase from 
previous years when special enrollment periods were available primarily 
for normal qualifying life events.\40\
---------------------------------------------------------------------------

    \40\ https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2.
---------------------------------------------------------------------------

    In addition, Congress recently passed the ARP,\41\ which was signed 
into law on March 11, 2021. The ARP establishes new ACA programs, 
including a new grant program for Exchange modernization, which 
appropriates $20,000,000 in federal funding, which is available until 
September 30, 2022, to State Exchanges to implement Exchange system, 
program, or technology updates to ensure compliance with applicable 
federal requirements. It also modifies eligibility criteria for 
existing ACA programs. For example, the provisions in the ARP include a 
temporary change (for taxable years 2021 and 2022) that allows 
consumers with household income above 400 percent of the FPL to be 
applicable taxpayers potentially eligible for PTC, an update to 
applicable percentage tables to increase the amount of PTC for 
qualified individuals in all income brackets, and a modification of 
eligibility for PTC for consumers receiving, or approved to receive, 
unemployment compensation in 2021. Beginning on April 1, HHS 
operationalized these new requirements through HealthCare.gov, and is 
providing technical assistance to State Exchanges that are 
operationalizing these requirements at the state level. Approximately 
1.9 million consumers have returned to HealthCare.gov to reduce their 
monthly premiums after APTC by over 40 percent, from $100 to $57, on 
average, while for new consumers selecting plans during the special 
enrollment period, the average monthly premium after APTC fell by 25 
percent.\42\
---------------------------------------------------------------------------

    \41\ Public Law 117-2.
    \42\ https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-1.
---------------------------------------------------------------------------

    There are also new obligations established via other health care-
related legislation for which HHS is responsible to implement in 
coordination with states and other federal Departments. This includes 
the No Surprises Act,\43\ which was enacted on December 27, 2020, and 
establishes an extensive array of federal and state requirements and 
programs to protect consumers against surprise medical bills.
---------------------------------------------------------------------------

    \43\ Title I of Division BB of the Consolidated Appropriations 
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
---------------------------------------------------------------------------

    Given our obligation to review all existing policies and 
regulations in line with E.O. 14009, E.O. 13985, and recent actions by 
Congress, including the health care-related provisions of the ARP and 
other new federal legislation, for which HHS is now responsible or 
centrally involved in implementing, we have determined that all 
available resources should be directed to ensuring we are able to 
efficiently and effectively meet those obligations. Permitting the 
establishment of the Exchange DE option would detract from those 
efforts. Furthermore, meeting the new requirements of the health care 
provisions of the ARP would add complexity to Exchange operations that 
could reduce the prospects for successful implementation of the 
Exchange DE option, even if temporarily. For instance, states and DE 
entities would need to coordinate and implement new procedures to 
ensure that consumers receive eligibility

[[Page 35167]]

determinations and are enrolled in coverage in line with the modified 
PTC eligibility criteria under the ARP, and then, that this temporary 
modification no longer applies after taxable year 2022. As part of this 
process, HHS would need to ensure the adoption of appropriate 
procedures, proper approvals, and ongoing oversight. To foreclose the 
possibility that federal funding and resources will be diverted from 
efforts to provide direct benefits to consumers made available under 
recent legislation to optional programs, we are proposing to repeal the 
Exchange DE option. This will help ensure that available resources are 
allocated consistent with administration health care priorities and 
dedicated to implementation of newly-enacted federal laws that provide 
greater financial assistance and protections to consumers.
    Repealing the Exchange DE option should generally have a minimal 
impact on states and other interested parties. States with State 
Exchanges already could engage with direct enrollment entities 
preceding the addition of Sec.  155.221(j). In addition, the FFE has 
already implemented the direct enrollment program (including classic 
direct enrollment and enhanced direct enrollment), which provides broad 
availability of non-Exchange websites to assist consumers applying for, 
or enrolling in QHPs through an FFE or SBE-FP with APTC and CSRs, when 
otherwise eligible.\44\ Additionally, nothing in the previous 
regulatory framework prohibited State Exchanges from engaging direct 
enrollment entities similar to the FFE in order to supplement Exchange 
operations in their states should they so choose. In fact, although we 
understand that several State Exchanges have engaged with direct 
enrollment entities to discuss possibilities for collaboration, State 
Exchanges and other stakeholders nearly universally cautioned against 
the Exchange DE option in public comments submitted in response to the 
proposal. In addition, to date, no state has expressed interest in 
implementing the Exchange DE option.
---------------------------------------------------------------------------

    \44\ The FFE direct enrollment pathways are also available in 
SBE-FP states. See 45 CFR 155.220(l) and 155.221(i).
---------------------------------------------------------------------------

    Finally, in reviewing Sec.  155.221(j) in line with E.O. 13985 and 
E.O. 14009, and after further consideration of public comments received 
when the Exchange DE option was proposed, we have determined that the 
Exchange DE option is inconsistent with policies described in E.O. 
13985 and sections 1 and 3 of E.O. 14009. Consistent with many public 
comments received when the Exchange DE option was proposed, we believe 
that shifting away from HealthCare.gov or State Exchange websites as 
the primary pathway to enroll in and receive information about coverage 
would harm consumers by unnecessarily fracturing enrollment processes 
among the Exchange and possibly multiple direct enrollment entities 
operating in a state. Such a shift would be particularly harmful now 
when over one million consumers have successfully navigated 
HealthCare.gov during the COVID special enrollment period to enroll in 
Exchange coverage. We also agree with many commenters who noted that a 
fractured process could foster consumer confusion about how to get 
covered and what coverage options are available, since consumers could 
be directed to direct enrollment entities that only offer assistance 
with a limited selection of products and some of those products may not 
provide, for example, MEC for consumers.\45\ Many commenters raised 
concerns that this consumer confusion or limited product selection 
through direct enrollment entities could also potentially disrupt 
coordination of coverage with other insurance affordability programs, 
including Medicaid and CHIP, which is inconsistent with our ``no wrong 
door'' policy.\46\ In addition, these consequences could act as an 
unnecessary barrier to consumers seeking Medicaid or ACA coverage 
rather than facilitating enrollment, and could have additional 
downstream impacts including an increased uninsured or underinsured 
population, or more consumers enrolled in less comprehensive coverage 
options. Commenters noted that these downstream impacts could lead to 
health inequities by disparately impacting certain vulnerable groups 
that tend to have a greater need for comprehensive coverage or rely 
more heavily on Medicaid and CHIP. These concerns and the accompanying 
risks to the health and well-being of vulnerable groups and consumers 
in general are heightened as the COVID-19 PHE continues.
---------------------------------------------------------------------------

    \45\ Multiple commenters cited the following report as support 
for their comments related to DE entities offering limited plan 
selection and potential disruptions to coordination of coverage with 
other insurance affordability programs: https://www.cbpp.org/research/health/direct-enrollment-in-marketplace-coverage-lacks-protections-for-consumers-exposes.
    \46\ This policy is intended to ensure that consumers can 
complete a single eligibility application to receive determinations 
of eligibility across multiple health insurance affordability 
programs, including for QHPs, APTC, CSRs, as well as Medicaid and 
CHIP. See, for example, sections 1311(d)(4)(F) and 1413 of the ACA.
---------------------------------------------------------------------------

    By finding the Exchange DE option inconsistent with recent 
Executive Orders, to ensure that resources are not diverted from 
fulfilling requirements under the new health care legislation and other 
initiatives like the COVID special enrollment period, and because no 
state has yet expressed interest in implementing the Exchange DE 
option, we propose to remove Sec.  155.221(j) and repeal the Exchange 
DE option. As explained in the preamble section regarding user fee 
rates for the 2022 benefit year (Sec.  156.50), we also propose to 
repeal the accompanying user fee rate for FFE-DE and SBE-FP-DE states 
for 2023. We seek comment on this proposal.
4. Open Enrollment Period Extension (Sec.  155.410(e))
    We propose to amend paragraph (e) of Sec.  155.410, which provides 
the dates for the annual Exchange open enrollment period in which 
qualified individuals and enrollees may apply for or change coverage in 
a QHP. The Exchange open enrollment period is extended by cross-
reference to non-grandfathered plans in the individual market, both 
inside and outside of an Exchange, under guaranteed availability 
regulations at Sec.  147.104(b)(1)(ii). HHS is specifically proposing 
to alter the open enrollment period for the 2022 coverage year and 
beyond so that it begins on November 1 and runs through January 15 of 
the applicable benefit year.
    In previous rulemaking, we established that the open enrollment 
period for benefit years beginning on or after January 1, 2018 would 
begin on November 1, 2021 and extend through December 15, 2021. In 
doing so, we indicated a preference for a shorter month-and-a-half open 
enrollment period, noting our belief that it provides sufficient time 
for consumers to enroll in or change QHPs and that an end date of 
December 15th carries the benefit of ensuring consumers receive a full 
year of coverage and simplifies operational processes for issuers and 
the Exchanges.\47\ Accordingly, the annual open enrollment period dates 
have been set to November 1st through December 15\th\ for the 2018, 
2019, 2020, and 2021 plan years. We have observed several benefits 
using the present open enrollment period dates. Prior enrollment data 
suggests that the majority of new consumers to the Exchange select 
plans prior to December 15th so as to have coverage beginning January 
1st. After 4 years, we believe

[[Page 35168]]

consumers have become accustomed to a December 15th end date for the 
annual open enrollment period. Consistency in open enrollment dates 
promotes consumer confidence, and a December end date generally aligns 
with the open enrollment dates for other health insurance programs such 
as Medicare and employer-based health plans.
---------------------------------------------------------------------------

    \47\ See 82 FR 18346 at 18381.
---------------------------------------------------------------------------

    We also observed that consumer casework volumes related to coverage 
start dates and inadvertent dual enrollment decreased in the years 
after the December 15th end date was adopted, suggesting that the 
consumer experience was improved by having a singular deadline of 
December 15th to enroll in coverage for the upcoming plan year. We note 
that an extension to January 15th may cause some previously observed 
consumer confusion to resurface surrounding the need to enroll by 
December 15th for a full year of coverage versus the final deadline of 
January 15th to enroll for a plan that would begin on February 1st. 
This confusion could cause some consumers to miss out on coverage for 
the month of January altogether. A January 15th end date may also 
require enrollment assisters allocate budget resources over a longer 
period of time.
    However, after observing the effects of a month-and-a-half open 
enrollment period over these years, we have also observed negative 
impacts to consumers that may justify an extension of the open 
enrollment end date to January 15th. In particular, we have observed 
that consumers who receive financial assistance, who do not actively 
update their applications during the open enrollment period, and who 
are automatically re-enrolled into a plan are subject to unexpected 
plan cost increases if they live in areas where the second lowest-cost 
silver plan has dropped in price. These consumers will experience a 
reduction in their allocation of APTC based on the second lowest-cost 
silver plan price, but are often unaware of their increased plan 
liabilities until they receive a bill from the issuer in early January 
after the open enrollment period has concluded. Extending the open 
enrollment end date to January 15th would allow these consumers the 
opportunity to change plans after receiving updated plan cost 
information from their issuer and to select a new plan that is more 
affordable to them. We have also observed concerns from Navigators, 
CACs, and agents and brokers that the current open enrollment period 
does not leave enough time for them to fully assist all interested 
Exchange applicants with their plan choices. Extending the open 
enrollment end date to January 15th would allow more time for consumers 
to seek assistance from one of these entities. Together, the impacts of 
providing consumers with more time to react to updated plan cost 
information and more time to seek enrollment assistance may improve 
access to health coverage. The additional time for enrollment 
assistance provided by this proposal may be particularly beneficial to 
consumers in underserved communities who may face time or language 
barriers in accessing health coverage by extending the period in which 
these consumers can seek in-person assistance to enroll.
    We seek comment on whether a January 15th end date would provide a 
balanced approach to providing consumers with additional time to make 
informed plan choices and increasing access to health coverage, while 
mitigating risks of adverse selection, consumer confusion, and issuer 
and Exchange operational burden. We invite comments from stakeholders 
that would experience specific benefits or adverse effects from a 
January 15th end date, and encourage comments on potential impacts to 
resources, consumer assistance budgets, overall enrollment numbers, 
premiums, and market stability. We seek comments on whether this 
extension would incentivize consumers who need coverage to begin on 
January 1st to still make a choice and enroll by December 15th, while 
also preserving sufficient time in the remainder of the plan year for 
issuers and Exchanges to perform other obligations such as QHP 
certification.
    We further invite comments on alternative approaches to extending 
open enrollment to address coverage gaps or enrollment challenges 
facing consumers and stakeholders. We also invite comments to address 
whether HHS should explore the possibility of a new special enrollment 
period, such as for current enrollees who are automatically re-enrolled 
and experienced a significant cost increase, to address concerns for 
specific consumer challenges as an alternative to extending the annual 
open enrollment period. We are also considering whether approaches such 
as enhanced noticing or special, targeted outreach would address the 
needs of consumers who are automatically re-enrolled in areas where the 
second lowest-cost silver plan drops in value, thereby reducing APTC 
amounts. We seek comment on how we may improve communications and 
consumer engagement around potential cost changes for consumers who do 
not actively re-enroll in coverage. We are also considering if improved 
education and outreach during the coverage year to raise awareness of 
existing special enrollment period opportunities, such as those for 
loss of coverage or becoming newly eligible or ineligible for financial 
assistance, may serve consumers who do not enroll or change plans 
during open enrollment. We seek comment on whether adoption of these or 
other outreach approaches would be a viable alternate approach to 
finalizing our proposal to extend the open enrollment end date to 
January 15th.
    We anticipate that if an open enrollment end date of January 15th 
were finalized, this change would apply to all Exchanges, including 
State Exchanges for the 2022 coverage year and beyond. We note that in 
preceding plan years, a majority of State Exchanges have used special 
enrollment period authority to offer additional enrollment time beyond 
the end date of December 15th in the Exchanges on the Federal platform. 
We invite additional comments on State Exchange flexibility, as well as 
operational challenges relating to State Exchange implementation of the 
proposed change for 2022 and beyond.
5. Monthly Special Enrollment Period for APTC-Eligible Qualified 
Individuals With a Household Income No Greater Than 150 Percent of the 
Federal Poverty Level (Sec.  155.420(d)(16))
    In order to make affordable coverage available to more consumers, 
we propose to codify a monthly special enrollment period for qualified 
individuals or enrollees, or the dependents of a qualified individual 
or enrollee, who are eligible for APTC, and whose household income is 
expected to be no greater than 150 percent of the FPL.\48\ Section 9661 
of the ARP amended section 36B(b)(3)(A) of the Code to decrease the 
applicable

[[Page 35169]]

percentages used to calculate the amount of household income a taxpayer 
is required to contribute to their second lowest cost silver plan for 
tax years 2021 and 2022.\49\ The applicable percentages are used in 
combination with factors including annual household income and the cost 
of the benchmark plan to determine the PTC amount for which a taxpayer 
can qualify to help pay for a QHP on an Exchange for themselves and 
their dependents.\50\ These decreased percentages generally result in 
increased PTC for PTC-eligible taxpayers. For those with household 
incomes no greater than 150 percent of the FPL, the new applicable 
percentage is zero. As a result of these changes, many low-income 
consumers whose QHP coverage can be fully paid for with APTC have one 
or more options to enroll in a silver-level plan without needing to pay 
a premium after the application of APTC. All of these consumers, if 
eligible to enroll through an Exchange and to receive APTC, will 
qualify for CSRs to enroll in a silver plan with an AV of 94 
percent.\51\
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    \48\ Generally, a qualifying individual is not eligible for a 
PTC if their income is below 100 percent of the FPL. However, there 
are a small number of consumers with a household income below 100 
percent of the FPL who may qualify for APTC. Specifically, section 
1401 of the ACA amended section 36B of the Code to provide that a 
taxpayer with a household income which is not greater than 100 
percent of the FPL, and who is a lawfully present immigrant and 
ineligible for Medicaid due to their immigration status, may qualify 
for a PTC. Consumers for whom this is the case would be able to 
qualify for the proposed special enrollment period, as well. 
Additionally, we note that because individuals would qualify for 
this special enrollment period based on their household income 
level, household members who apply for coverage with financial 
assistance together generally will all qualify for the special 
enrollment period. However, it is also possible that one household 
member could trigger the special enrollment period based on a change 
in their eligibility for APTC--for example, a household member who 
loses access to an offer of coverage through an employer that is 
considered affordable based on 26 CFR 1.36B02(c)(3)(v).
    \49\ Public Law 117-2.
    \50\ See 26 CFR 1.36B-3(g) for more information on the 
applicable percentage and its relationship to the PTC.
    \51\ See Sec. Sec.  155.305(g)(2) and 156.420(a).
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    We propose that this special enrollment period be available at the 
option of the Exchange, in order to allow State Exchanges to decide 
whether to implement it based on their specific market dynamics, needs, 
and priorities. Additionally, we propose that Exchanges on the Federal 
platform will implement this special enrollment period by providing 
qualified individuals who are eligible with a pathway to access it 
through the HealthCare.gov application. We propose that implementation 
in Exchanges on the Federal platform be consistent with current special 
enrollment period policy and operations, in particular such that there 
is no limitation on how often individuals who are eligible for this 
special enrollment period can obtain or utilize it.\52\ Consistency in 
this area will mitigate consumer and other stakeholder confusion and 
simplify Exchange operations. To provide Exchanges with flexibility to 
prioritize ensuring that qualifying individuals are able to obtain 
coverage through this special enrollment period quickly following plan 
selection, or to implement this special enrollment period in keeping 
with their current operations, we propose to add a new paragraph at 
Sec.  155.420(b)(2)(vii) to provide that the Exchange must ensure that 
coverage is effective in accordance with paragraph (b)(1) of this 
section or on the first day of the month following plan selection, at 
the option of the Exchange.
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    \52\ For example, those who qualify for the special enrollment 
period per Sec.  155.420(d)(8) for qualifying individuals who gain 
or maintain status as an Indian, as defined by section 4 of the 
Indian Health Care Improvement Act, may change their plan selection 
multiple times each month, noting that only the last plan selection 
before the applicable cutoff date for coverage each month will take 
effect for the month in question.
---------------------------------------------------------------------------

    We also propose to add a new paragraph at Sec.  
155.420(a)(4)(ii)(D) to provide that an Exchange must permit eligible 
enrollees and their dependents to change to a silver level plan, and to 
amend paragraph Sec.  155.420(a)(4)(iii), which provides other plan 
category limitations for other special enrollment periods, to provide 
that these other plan category limitations do not apply to enrollees or 
dependents who qualify for the proposed special enrollment period.\53\ 
While we expect that most consumers who qualify for this special 
enrollment period will select a silver level plan because based on 
their household income, they will be eligible to enroll in a silver 
level plan with an actuarial value of 94 percent, as further discussed 
below, we believe that ensuring that current Exchange enrollees do so 
through plan category limitations will help to mitigate adverse 
selection. Finally, we propose to add a new paragraph at Sec.  
147.104(b)(2)(i)(G) to specify that issuers are not required to provide 
this special enrollment period in the individual market with respect to 
coverage offered outside of an Exchange, because eligibility for the 
special enrollment period is based on eligibility for APTC, and APTC 
cannot be applied to coverage offered outside of an Exchange.
---------------------------------------------------------------------------

    \53\ This provision would not prevent enrollees who qualify for 
the new special enrollment period from changing to a plan of any 
category through a special enrollment period that provides this 
flexibility, including the special enrollment periods at Sec.  
155.420(d)(4), (8), (9), (10), (12), and (14).
---------------------------------------------------------------------------

    The APTC benefit changes under the ARP make affordable coverage 
available to more uninsured people. However, if past trends continue, 
we believe that some consumers who qualify for these benefits under the 
ARP may continue to forgo enrollment in premium-free coverage due to a 
lack of awareness of the opportunity to enroll or a misconception about 
what the coverage would cost. For example, a February 2021 HHS 
Assistant Secretary for Planning and Evaluation (ASPE) issue brief \54\ 
indicates that, as of 2018, 20 percent of the uninsured had a household 
income no higher than $35,000, which, in 2018, was under 150 percent of 
the FPL for households with four or more members.\55\ A recent analysis 
of American Community Survey (ACS) and U.S. Census data also indicates 
that families with low incomes are more likely to be uninsured, and 
that in 2019, more than 70 percent of uninsured adults said that they 
were uninsured because the cost of coverage was too high. It also noted 
that in 2019, almost 70 percent of uninsured, non-elderly adults had 
lacked coverage for more than a year, and that this group may be 
particularly difficult to reach with outreach and education 
efforts.\56\
---------------------------------------------------------------------------

    \54\ Trends in the U.S. Uninsured Population, 2010-2020. Office 
of the Assistant Secretary for Planning and Evaluation (ASPE), 
February 11, 2021: https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.
    \55\ 2017 Federal Poverty Guidelines. ASPE: https://aspe.hhs.gov/2017-poverty-guidelines. We refer to 2017 FPL 
information to determine APTC eligibility for 2018 because, per 26 
CFR 1.36B-1(h), the FPL for computing the PTC for a taxable year is 
the FPL in effect on the first day of the initial or annual open 
enrollment period preceding that taxable year. For example, ASPE 
released 2020 FPL information in January 2020, and so 2020 FPL 
information applies during the 2020 open enrollment period for 2021 
coverage.
    \56\ Key Facts about the Uninsured Population: Kaiser Family 
Foundation; Nov 06, 2020, https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/. https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
---------------------------------------------------------------------------

    Therefore, while HHS will undertake extensive outreach and 
engagement efforts to promote enrollment during the open enrollment 
period for 2022 coverage and to help ensure consumer awareness of 
existing special enrollment periods for which they may qualify, given 
the established challenges with promoting awareness of access to 
coverage among low-income consumers, we believe additional enrollment 
opportunities for low-income consumers are appropriate and in the best 
interest of low-income consumers. The proposed monthly special 
enrollment period policy would align with E.O. 14009, which requires 
federal agencies to identify and appropriately address policies that 
create barriers to accessing ACA coverage, including access through 
mid-year enrollment.
    In addition to providing certain low-income individuals with 
additional opportunities to newly enroll in free or low-cost coverage 
that is available to them, we believe this special enrollment period 
may help consumers who lose Medicaid coverage regain health care 
coverage. These consumers can already qualify for a special enrollment 
period due to their loss of Medicaid coverage, per Sec.  155.420(d)(1). 
Additionally, Exchanges could provide consumers who do not learn of 
their opportunity to enroll in Exchange coverage until after their 60-
day special enrollment period

[[Page 35170]]

has passed with additional time to enroll in health care coverage based 
on the regulation at Sec.  155.420(c)(4) recently finalized in part 2 
of the 2022 Payment Notice final rule to allow a qualified individual, 
enrollee, or dependent who did not receive timely notice of a 
triggering event and was otherwise reasonably unaware that a triggering 
event occurred to select a new plan within 60 days of the date that he 
or she knew, or reasonably should have known, of the occurrence of the 
triggering event.\57\ However, whether consumers in these situations 
are able to benefit from this flexibility may vary, and may require 
Exchanges to assess eligibility on a case-by-case basis; it may also 
require consumers who generally have low household income and who 
therefore may face other barriers to accessing health care coverage, 
such as low health insurance literacy levels and lack of internet 
access, to be aware of the potential for an extended enrollment 
timeframe and to request it from their Exchange. Therefore, while this 
special enrollment period would not be limited to qualified individuals 
who have lost Medicaid coverage, we believe that providing access to a 
monthly enrollment opportunity could help some consumers who lose 
Medicaid coverage to regain health insurance coverage, especially those 
who do not initially realize that loss of Medicaid is a special 
enrollment period triggering event.
---------------------------------------------------------------------------

    \57\ 86 FR 24220.
---------------------------------------------------------------------------

    Further, after the COVID-19 PHE comes to an end, we expect to see a 
higher than usual volume of low-income individuals transitioning from 
Medicaid coverage to the Exchange, for at least several months. This is 
because states will begin to catch up on a backlog of redeterminations 
and terminations for Medicaid beneficiaries with increased income 
following the end of the COVID-19 PHE, after having generally suspended 
Medicaid disenrollments since March 2020 to comply with the continuous 
enrollment provisions in section 6008(b)(3) of the Families First 
Coronavirus Response Act.\58\ Individuals with household income below 
150 percent of the FPL frequently experience income fluctuations that 
cause them to transition between Medicaid, CHIP, and Exchange coverage 
with financial assistance. Further, the consumer eligibility 
determination notices sent by state Medicaid and CHIP agencies can vary 
greatly as far as content, including clarity about the consumer's next 
steps to apply for other coverage, where and how to apply, and the 
timeframes for doing so. Consumers who become ineligible for Medicaid 
are at risk of being uninsured for a period of time and putting off 
accessing health care, which can lead to poorer health outcomes, if 
they are not ultimately able to successfully transition between 
coverage programs.
---------------------------------------------------------------------------

    \58\ Public Law 116-127. These provisions enabled states to 
receive the temporary Federal Medical Assistance Percentage increase 
under that section.
---------------------------------------------------------------------------

    For these consumers, 60 days may not be enough time to successfully 
transition to Exchange coverage, leading to long-term lack of coverage. 
We believe some of these consumers will benefit from additional time to 
enroll in Exchange coverage. In some cases, the loss of Medicaid or 
CHIP coverage comes at a time when consumers are least able to track 
down new health coverage, but are most in need of it. An example of 
this can be seen with consumers who lose pregnancy-related Medicaid or 
CHIP coverage after the postpartum period, posing a health coverage 
hurdle for new mothers at a time when access to health care is 
paramount, but their ability to find and enroll in new coverage is 
limited or impeded by their new childcare responsibilities.
    Exchanges that elect to provide this proposed special enrollment 
period would have the option to require consumers to submit 
documentation to confirm their eligibility in accordance with their 
pre- or post-enrollment verification programs. CMS will determine 
eligibility for this special enrollment period in Exchanges on the 
Federal platform based on consumers' attested household income. Once an 
Exchange on the Federal platform grants this special enrollment period 
to a consumer based on their attested household income, the Exchange 
would then verify applicants' projected annual household income 
consistent with 45 CFR 155.320(c).\59\ Specifically, CMS would continue 
to require consumers whose projected annual household income cannot be 
verified using a trusted electronic data source to submit documentation 
to confirm their annual income (currently approved under OMB control 
number 0938-1207/Expiration date February 29, 2024). However, we would 
not require submission of household income documentation prior to 
enrollment, and would not pend the enrollment as part of a pre-
enrollment verification process, because we believe that the post-
enrollment income verification process already in place is sufficient 
to ensure program integrity because consumers who do not verify their 
attested household income through the post-enrollment verification 
process will have their APTC adjusted accordingly.
---------------------------------------------------------------------------

    \59\ Public Law 111-148.
---------------------------------------------------------------------------

    Further, CMS' experience administering the verification processes 
for Exchanges on the Federal platform in accordance with Sec.  
155.320(c) shows that submitting documentation quickly to verify income 
can be especially onerous for those at the lowest income levels who may 
not have ready access to a computer or smartphone, the internet, a 
copier or scanner, or funds for postage. As noted above, consumers with 
household incomes less than 150 percent of the FPL are most likely to 
experience churn between our health care programs and would be 
disproportionately affected by the delayed access to coverage that will 
result while they complete the post-enrollment verification process. 
For this reason, we are of the view that requiring pre-enrollment 
verification would needlessly delay access to coverage for a 
significant portion of eligible consumers; and that it is reasonable 
and appropriate to allow applicants' enrollments to proceed subject to 
post-enrollment verification of their household income, if additional 
documentation is necessary due to inability to verify their household 
income using a trusted electronic data source.
    In addition to outreach and education efforts, we believe that 
applying plan category limitations to this special enrollment period 
would help to mitigate adverse selection because it would limit the 
ability of enrollees to change to a higher metal level plan based on a 
new health care need and then change back to a silver plan once the 
health issue is resolved. However, enrollees may still choose to enroll 
in a silver level plan that is more expensive than their zero dollar 
option, and, with a monthly special enrollment period, could make this 
change during the plan year based on a difference in provider network 
or prescription drug formulary. We believe that enrollees who are 
interested in changing plans during the year will likely be deterred 
because such a change will generally mean they lose progress they have 
made toward meeting their deductible and other accumulators. We seek 
comment on this proposal and on whether, alternatively, plan category 
limitations should not be applied. For example, we seek comment on 
whether to instead exempt the proposed special enrollment period at 
Sec.  155.420(d)(16) from plan category limitations in order to 
alleviate the implementation burden on Exchanges, or due to a lack of 
concern that eligible enrollees would use the proposed

[[Page 35171]]

special enrollment period to change to a plan category other than 
silver.
    Additionally, we believe that that access to premium-free or very 
low-cost 94 percent AV coverage will help to mitigate risk of adverse 
selection, because qualifying individuals will not have an incentive to 
end coverage when health care services are no longer needed. However, 
we seek comment on the degree to which the risk of adverse selection 
increases due to the fact that not all qualifying individuals who have 
a household income no greater than 150 percent of the FPL will have 
access to a silver plan with a zero-dollar premium and therefore, due 
to their small premium for a silver plan, might be more inclined to 
enroll in coverage due to a health care need and end coverage once this 
need has been met.
    We estimate that this adverse selection risk may result in issuers 
increasing premiums by approximately 0.5 to 2 percent, and a 
corresponding increase in APTC outlays and decrease in income tax 
revenues of approximately $250 million to $1 billion, when the enhanced 
APTC provisions of the ARP are in effect. We describe this impact in 
more detail and seek comment on it in the regulatory impact analysis 
(RIA) section later in this proposed rule. We also discuss some of the 
reasons adverse selection cannot be mitigated in the following 
paragraphs.
    The adverse selection risk presented by the proposal stems, in 
part, from qualifying individuals who live in states where premiums for 
Exchange coverage cannot be fully paid for with APTC,\60\ such that 
these individuals will not have access to a silver plan with a zero-
dollar premium. Such individuals include residents of states that 
require all QHPs in the state to cover services that do not qualify as 
EHB, or that require coverage of certain abortion services for which 
federal funding is prohibited, and we estimate that ten states may fall 
into these categories. The portion of premium attributable to services 
ineligible for APTC is generally small, but increases with age and 
family size. Additionally, in a few locations, QHP issuers' plan 
designs are such that both the lowest-cost silver plan and the second 
lowest-cost silver plan \61\ cover services that do not qualify as 
EHBs, which makes it impossible for most individuals, including those 
whose household income does not exceed 150 percent of the FPL, to 
access a silver plan with a zero dollar monthly premium.
---------------------------------------------------------------------------

    \60\ See section 1303(b)(2)(A) of the ACA and section 
36B(b)(3)(D) of the Code.
    \61\ The second lowest-cost silver plan is the ``benchmark 
plan'' used to determine a household's APTC eligibility. See 26 CFR 
1.36B-3(d)(1) and (f).
---------------------------------------------------------------------------

    Other household-level variation in access to a silver plan with a 
zero-dollar premium includes households where some, but not all, 
applicants are APTC-eligible (for example, a household with one or more 
members with an offer of other MEC through a job), and households with 
applicants living in different locations, because Exchanges must 
determine APTC based on a benchmark plan specific to each location.\62\ 
In this case, the applicable premium amount will be based on the 
subscriber's location, and so available APTC may not fully cover a 
silver plan premium for the policy. Finally, households that include 
one or more members who attest affirmatively to their smoking status 
also may not qualify for an APTC amount sufficient to pay the full 
premium of a silver plan, because consistent with 26 CFR 1.36B-3(e), 
APTC eligibility is not determined using a benchmark plan that rates 
for tobacco.\63\
---------------------------------------------------------------------------

    \62\ 26 CFR 1.36B-3(f)(4).
    \63\ As of May 2021, CMS data indicate that 1-8 percent of 
current enrollees, depending on the state, in Exchanges on the 
Federal platform are rated for tobacco use.
---------------------------------------------------------------------------

    We seek comment from health insurance issuers and other 
stakeholders on our position that adverse selection related to this 
special enrollment period will be mitigated by the availability of free 
or very low-cost coverage with a 94 percent AV and the application of 
plan category limitations to this new special enrollment period, or 
whether the adverse selection risk created by this new special 
enrollment period cannot be sufficiently mitigated such that its 
creation may result in significant rate increases. We also solicit 
comment regarding whether health insurance issuers and other 
stakeholders have concerns that the policy could cause any adverse 
selection among higher income individuals with variable hours and 
income. We also seek comment on whether the requirement that Exchanges 
verify applicants' projected annual household income post-enrollment, 
consistent with 45 CFR 155.320(c), is sufficient, or if there are other 
measures we should put in place to further protect program integrity. 
We also solicit comment on estimated implementation burdens for 
Exchanges who elect to provide this additional enrollment opportunity, 
including whether implementation of this special enrollment period will 
be possible in time for consumers to benefit from it during the 2022 
plan year. We request comment on whether issuers will have sufficient 
time to adjust rate filings to account for any increased risk and 
whether state regulators will have sufficient time to review those 
filings after a final rule is issued.
    We further request comment on whether this proposed special 
enrollment period should be available indefinitely (as proposed), or 
whether it should be time-limited. For example, we seek comment on 
whether we should finalize the proposed special enrollment period to be 
available only for coverage during years when enhanced APTC benefits 
are also available, as provided by the section 9661 of the ARP or any 
subsequent statute. Finally, we request comment on strategies for 
providing outreach and education for consumers who may be eligible for 
this special enrollment period, in particular to help qualifying 
individuals understand and take advantage of the free or very low-cost 
coverage that is available to them. Within this group, we request 
comments on strategies for educating consumers who qualify to enroll in 
a 94 percent AV silver plan about the benefits of enrolling in such a 
plan even if they are required to pay a small premium, as opposed to 
electing a premium-free bronze plan with a lower AV.
6. Clarification of Special Enrollment Period for Enrollees Who Are 
Newly Eligible or Newly Ineligible for Advance Payments of the Premium 
Tax Credit (Sec.  155.420(f))
    We are proposing new language to clarify that, for purposes of the 
special enrollment period rules at Sec.  155.420(d), references to 
ineligibility for APTC refer to being ineligible for such payments or 
being technically eligible for such payments but qualifying for a 
maximum of zero dollars per month of such payments. That is, a 
qualified individual, enrollee, or his or her dependent who is 
technically eligible for APTC because they meet the criteria at Sec.  
155.305(f), but who qualifies for a maximum APTC amount of zero 
dollars, is also considered ineligible for APTC for purposes of these 
special enrollment periods, even if they experience a change in 
circumstance from an APTC ineligible status in accordance with Sec.  
155.305(f), such as having other MEC. Currently, the special enrollment 
periods to which this clarification is applicable are the triggering 
events at Sec.  155.420(d)(6), but we propose that the clarification 
apply to all of Sec.  155.420 to ensure consistency, for example, 
between special enrollment period triggering events at Sec.  155.420(d) 
and related coverage effective date and

[[Page 35172]]

enrollment window rules at Sec.  155.420(b) and (c), respectively.
    We believe that the current special enrollment period rules that 
reference APTC eligibility at Sec.  155.420(d)(6) could permit 
inconsistent interpretations of what it means to be newly eligible or 
ineligible for APTC. Exchange regulations at Sec.  155.305(f)(1) define 
tax filers as APTC eligible if their expected household income for the 
benefit year for which coverage is requested is greater than or equal 
to 100 percent but not more than 400 percent of the FPL and they, or 
their expected tax dependents for the year, (1) meet the requirements 
for eligibility for enrollment in a QHP through the Exchange; and (2) 
are not eligible for MEC, with the exception of coverage in the 
individual market.
    IRS rules at 26 CFR 1.36B-3 govern the APTC amount an individual 
may receive once they are found eligible for APTC underSec.  
155.420(d)(6). Pursuant to these IRS rules, an Exchange enrollee's 
monthly APTC amount is the excess of the adjusted monthly premium for 
the applicable benchmark plan \64\ over 1/12 of the product of the 
taxpayer's household income and the applicable percentage for the 
taxable year. Under this formula, if the applicable percentage of 1/12 
of a taxpayer's estimated annual household income is higher than the 
adjusted monthly premium of the relevant benchmark plan, a taxpayer 
will be eligible generally for APTC under Sec.  155.305(f)(1), but will 
qualify for a maximum APTC amount of zero dollars under 26 CFR 1.36B-3. 
Currently, neither Sec.  155.305(f)(1) or 26 CFR 1.36B-3 recognize or 
explain that an individual generally could be APTC eligible, but not 
qualify to receive any amount in APTC greater than zero. The current 
text of Sec.  155.420 similarly does not address this issue such that 
there could exist some ambiguity about what it means to be APTC 
eligible or ineligible for purposes of the special enrollment periods 
under Sec.  155.420.
---------------------------------------------------------------------------

    \64\ Per IRS rules at 26 CFR 1.36B-3(f), the term ``benchmark 
plan'' is generally used to refer to the second lowest-cost silver 
plan, as described in section 1302(d)(1)(B) of the ACA (42 U.S.C. 
18022(d)(1)(B)), offered to the taxpayer's coverage family through 
the Exchange for the rating area where the taxpayer resides.
---------------------------------------------------------------------------

    We propose to add text to Sec.  155.420 to clarify that an 
individual who qualifies for a maximum APTC amount of zero dollars is 
considered ineligible for APTC for purposes of the Sec.  155.420's 
special enrollment periods. Specifically, any determination that an 
individual cannot receive an APTC amount greater than zero dollars is 
equivalent to being found APTC ineligible for purposes of special 
enrollment period eligibility under Sec.  155.420(d). We believe this 
interpretation comports with the perspective of an applicant for 
Exchange coverage who will take their available financial assistance 
amount into account when selecting a QHP for the upcoming coverage year 
and who may wish to change their QHP partway through a coverage year 
because of a change in their financial assistance. Because we believe 
that the current regulation permits this interpretation, but could 
instead be interpreted to require strict adherence to the listed 
requirements for APTC eligibility at Sec.  155.305(f) (which does not 
address situations where a consumer meets these requirements but 
qualifies for a zero dollar APTC amount), we are proposing regulation 
text to ensure consistent and correct interpretation of what it means 
to be determined ineligible for APTC. This reading of APTC 
ineligibility is also consistent with our discussion of the policy in 
previous rulemaking. For example, in the 2020 Payment Notice final 
rule,\65\ we added a new paragraph at Sec.  155.420(d)(6)(v) allowing 
Exchanges to provide a special enrollment period for qualified 
individuals who experience a decrease in household income and receive a 
new determination of eligibility for APTC by an Exchange, and who had 
MEC for one or more days during the 60 days preceding the financial 
change.
---------------------------------------------------------------------------

    \65\ 84 FR 17526.
---------------------------------------------------------------------------

    We believe that this clarification should also apply to special 
enrollment periods provided in Sec.  155.420(d)(6)(iii) through (v), 
which include special enrollment periods for individuals who become 
newly eligible for APTC. Section 155.420(d)(6)(iii) provides a special 
enrollment period for individuals who are enrolled in an employer-
sponsored plan, and who are determined newly eligible for APTC, in 
part, because they are no longer eligible for qualifying coverage in an 
eligible-employer sponsored plan in accordance with 26 CFR 1.36B-
2(c)(3) (for example, because their employer changed the coverage), and 
who are allowed to terminate their employer-sponsored coverage. We do 
not expect that this special enrollment period would be helpful to 
individuals who qualify for a maximum APTC amount of zero dollars 
because they would not receive assistance to help pay for monthly QHP 
premiums. Further, it likely would not benefit individuals currently 
enrolled in employer-sponsored coverage to change to a QHP without the 
benefit of an APTC dollar amount greater than zero, in part because 
changing plans in the middle of the plan year would cause their 
deductible and other accumulators to be reset. We seek comments on this 
proposal.
    We believe that this clarification will be especially helpful in 
light of the removal of the upper APTC eligibility limit on household 
income at 400 percent of the FPL for taxable years 2021 and 2022 under 
the ARP.\66\ This is because, with this change, any applicants with 
household incomes over 400 percent of the FPL may be eligible for APTC, 
more consumers likely will qualify for APTC technically, but for an 
APTC amount of zero dollars. This clarification ensures that special 
enrollment period regulations clearly reflect that enrollees for whom 
this is the case may qualify for a special enrollment period based on a 
decrease in their household income, or any other change that makes them 
newly eligible for an APTC amount of greater than zero dollars.
---------------------------------------------------------------------------

    \66\ Public Law 117-2.
---------------------------------------------------------------------------

    Additionally, this clarification is important because it helps 
ensure transparency in terms of why enrollees in certain situations 
that appear similar would not both qualify for one of the special 
enrollment periods at Sec.  155.420(d)(6). For example, the new 
affordability provisions in the ARP allow for a situation where an 
enrollee with a household income above 400 percent of the FPL is newly 
determined to qualify for an APTC amount of zero dollars (as opposed to 
APTC-ineligible simply by virtue of exceeding the household income 
limit), while another enrollee with a household income above 400 
percent of the FPL who is residing in a different service area is newly 
determined eligible for an APTC amount of more than zero dollars based 
on the cost of their benchmark plan.\67\ Both enrollees have received 
new determinations of APTC eligibility based just being enrolled in 
Exchange coverage and not having another offer of MEC, but only the 
latter enrollee who is determined eligible for an APTC amount of 
greater than zero dollars is intended to be eligible for the special 
enrollment periods at Sec.  155.420(d)(6). We believe the proposed new 
language provides needed clarity regarding the eligibility parameters 
of this special enrollment period to enrollees, particularly

[[Page 35173]]

enrollees with household incomes above 400 percent of the FPL.
---------------------------------------------------------------------------

    \67\ In Exchanges on the Federal platform, where most ARP 
changes to APTC eligibility were implemented on April 1, 2021, 
enrollees in this situation could change their QHP coverage through 
the 2021 special enrollment period; however, this enrollment window 
was not available through all Exchanges.
---------------------------------------------------------------------------

    Exchange regulations at Sec.  155.420(d)(6) provide several special 
enrollment periods for enrollees and dependents based on a 
determination that they are newly eligible or newly ineligible for 
APTC. These special enrollment periods vary in terms of the details of 
their qualifying events, but all of them are dedicated to ensuring that 
current Exchange enrollees and other qualified individuals who become 
newly eligible or ineligible for APTC have an opportunity to re-assess 
previous decisions about their QHP enrollment, or their decision not to 
enroll in a QHP, based on gaining or losing eligibility for financial 
assistance available to them to help lower premiums. Ensuring that 
Exchanges consistently apply eligibility factors for these special 
enrollment periods is important under a variety of circumstances. For 
example, regulations at Sec.  155.420(d)(6)(i) and (ii) provide current 
Exchange enrollees with an opportunity to change to a different QHP if 
they are determined newly eligible or newly ineligible for APTC for 
themselves or their dependents (or have a change in eligibility for 
CSRs), because such a change may impact the coverage they prefer or the 
type of coverage they can afford.
    Section 155.420(d)(6)(iv) allows individuals to enroll in Exchange 
coverage if they either experience a change in household income or move 
to a different state, and as a result become newly eligible for APTC, 
after they were previously ineligible for APTC solely because of a 
household income below 100 percent of the FPL and, during the same 
timeframe, were ineligible for Medicaid because they lived in a non-
Medicaid expansion state. Like the other qualifying events at Sec.  
155.420(d)(6), this special enrollment period benefits individuals 
because it allows them to take advantage of APTC for which they were 
previously ineligible, and we do not believe that it would benefit 
individuals who newly qualify for APTC but who are not entitled to an 
APTC amount greater than zero dollars. We also believe that, regarding 
the group of potentially eligible individuals, increases from a 
household income of less than 100 percent of the FPL to a household 
income high enough to qualify for an APTC amount of zero dollars are 
relatively uncommon.
    Finally, Sec.  155.420(d)(6)(v) provides a pathway for individuals 
who had MEC for at least one of the past 60 days to enroll in Exchange 
coverage if they experience a decrease in household income and the 
Exchange newly determines them eligible for APTC. This special 
enrollment period was established in the 2020 Payment Notice, 
specifically to permit individuals enrolled in coverage outside of the 
Exchange to enroll in Exchange coverage based on newly being able to 
access APTC.\68\ Because this special enrollment period benefits 
qualified individuals by allowing them to obtain coverage that permits 
them to qualify for APTC, we do not believe that individuals who newly 
qualify for an APTC amount of zero dollars generally benefit from this 
special enrollment period, and they may even be harmed by changing 
plans mid-year because this would generally cause their deductible and 
other accumulators to be re-set.
---------------------------------------------------------------------------

    \68\ 84 FR 17526.
---------------------------------------------------------------------------

    We seek comment on this proposal, including from State Exchanges, 
regarding whether this definition of APTC eligibility reflects their 
current implementation of the special enrollment period qualifying 
events per Sec.  155.420(d)(6), and if not, whether there are policy 
concerns about this clarification, or the burden of making related 
changes to Exchange operations. We also seek comment on whether we 
should provide Exchanges with flexibility in terms of when they are 
required to ensure that their operations reflect this definition, and 
whether Exchanges should be permitted to adopt a more inclusive 
definition, for example, to consider an individual to be newly eligible 
or ineligible for APTC for purposes of the special enrollment periods 
at Sec.  155.420(d)(6) based on a change from a zero-dollar maximum 
APTC amount to APTC ineligibility for another reason per regulations at 
Sec.  155.305(f).
    Additionally, we seek comment on whether the clarification that a 
qualified individual, enrollee, or his or her dependent is considered 
APTC ineligible if they meet the requirements at Sec.  155.305(f), but 
qualify for a maximum APTC amount of zero dollars, should be applied as 
proposed to all of the special enrollment period qualifying events at 
Sec.  155.420(d)(6), or whether it should be limited to only apply to 
some of them. For example, we seek comment on whether we should only 
apply this clarification to the special enrollment periods at Sec.  
155.420(d)(6)(i) and (ii) and (iv) and (v), to permit individuals whose 
employer-sponsored coverage is no longer considered affordable or no 
longer meets the minimum value standard to qualify for a special 
enrollment period to enroll in Exchange coverage through Sec.  
155.420(d)(6)(iii) regardless of whether they qualify for an APTC 
amount of greater than zero dollars.

C. Part 156--Health Insurance Issuer Standards Under the Affordable 
Care Act, Including Standards Related to Exchanges

1. User Fee Rates for the 2022 Benefit Year (Sec.  156.50)
    In the December 4, 2020 Federal Register, we published the proposed 
2022 Payment Notice that proposed to reduce fiscal and regulatory 
burdens across different program areas and to provide stakeholders with 
greater flexibility. In the January 19, 2021 Federal Register (86 FR 
6138), we published part 1 of the 2022 Payment Notice final rule that 
addressed a subset of the policies proposed in the proposed rule. That 
final rule, among other things, finalized the user fee rates for 
issuers offering QHPs through the FFE at 2.25 percent of total monthly 
premiums, and the user fee rate for issuers offering QHPs through SBE-
FPs at 1.75 percent of total monthly premiums.
    On January 28, 2021, President Biden issued E.O. 14009, 
``Strengthening Medicaid and the Affordable Care Act,'' \69\ directing 
HHS, and the heads of all other executive departments and agencies with 
authorities and responsibilities related to the ACA, to review all 
existing regulations, orders, guidance documents, policies, and any 
other similar agency actions to determine whether such agency actions 
are inconsistent with this Administration's policy to protect and 
strengthen the ACA and to make high-quality health care accessible and 
affordable for every American. As part of this review, HHS examined 
policies and requirements under the proposed 2022 Payment Notice and 
part 1 of the 2022 Payment Notice final rule to analyze whether the 
policies under these rulemakings might undermine the Health Benefits 
Exchanges or the health insurance markets, and whether they may present 
unnecessary barriers to individuals and families attempting to access 
health coverage. HHS also considered whether to suspend, revise, or 
rescind any such actions through appropriate administrative action.
---------------------------------------------------------------------------

    \69\ 86 FR 7793 (Feb. 2, 2021).
---------------------------------------------------------------------------

    In compliance with E.O. 14009 and as a result of HHS's review of 
the proposed 2022 Payment Notice and part 1 of the 2022 Payment Notice 
final rule, we have reanalyzed the additional costs of expanded 
services, such as consumer outreach and education in the FFE and SBE-
FPs, and Navigators in the FFE in 2022. As explained in part 2 of the 
2022

[[Page 35174]]

Payment Notice final rule,\70\ we indicated the intention to propose to 
increase the user fee rates for the 2022 benefit year in future 
rulemaking. Therefore, in this rule, HHS proposes new QHP issuer user 
fee rates for the 2022 plan year: A new FFE user fee rate of 2.75 
percent of total monthly premiums, and a new SBE-FP user fee rate of 
2.25 percent of monthly premiums. These proposed rates are based on 
internal projections of federal costs for providing special benefits to 
FFE and SBE-FP issuers during the 2022 benefit year, taking into 
account estimated changes in parameters, specifically the increased 
funding to the FFE Navigator program and consumer outreach and 
education. HHS is of the view that pursuit of this proposal is 
necessary for consistency with E.O. 14009 and this Administration's 
goal of protecting and strengthening the ACA and making high-quality 
health care accessible and affordable for every American. We believe 
that expanded outreach and education will lead to broader risk pools, 
lower premiums, fewer uninsured consumers, and expanded use of Exchange 
services.
---------------------------------------------------------------------------

    \70\ 86 FR 24140, 24288.
---------------------------------------------------------------------------

    Section 1311(d)(5)(A) of the ACA permits an Exchange to charge 
assessments or user fees on participating health insurance issuers as a 
means of generating funding to support its operations. If a state does 
not elect to operate an Exchange or does not have an approved Exchange, 
section 1321(c)(1) of the ACA directs HHS to operate an Exchange within 
the state. Accordingly, in Sec.  156.50(c), we specify that a 
participating issuer offering a plan through an FFE or SBE-FP must 
remit a user fee to HHS each month that is equal to the product of the 
annual user fee rate specified in the annual HHS notice of benefit and 
payment parameters for FFEs and SBE-FPs for the applicable benefit year 
and the monthly premium charged by the issuer for each policy where 
enrollment is through an FFE or SBE-FP. In addition, OMB Circular No. 
A-25 establishes federal policy regarding the assessment of user fee 
charges under other statutes, and applies to the extent permitted by 
law. Furthermore, OMB Circular No. A-25 specifically provides that a 
user fee charge will be assessed against each identifiable recipient of 
special benefits derived from federal activities beyond those received 
by the general public.
    Activities performed by the federal government that do not provide 
issuers participating in an FFE with a special benefit, or that are 
performed by the federal government for all QHPs, including those 
offered through State Exchanges, are not covered by this user fee. As 
in benefit years 2014 through 2021, issuers seeking to participate in 
an FFE in the 2022 benefit year will receive two special benefits not 
available to the general public: (1) The certification of their plans 
as QHPs; and (2) the ability to sell health insurance coverage through 
an FFE to individuals determined eligible for enrollment in a QHP.
a. FFE User Fee Rate
    For the 2022 benefit year, issuers participating in an FFE will 
receive the benefits of the following federal activities:

    Under Consumer Information and Outreach:
    <bullet> Provision of consumer assistance tools;
    <bullet> Consumer outreach and education; and
    <bullet> Management of a Navigator program.

    Under Health Plan Bid Review, Management, and Oversight:
    <bullet> Certification processes for QHPs (including ongoing 
compliance verification, recertification, and decertification); and
    <bullet> Regulation of agents and brokers.

    Under Eligibility and Enrollment:
    <bullet> Eligibility determinations; and
    <bullet> Enrollment processes.
    Activities through which FFE issuers receive a special benefit also 
include use of the Health Insurance and Oversight System (HIOS), which 
is partially funded by FFE and SBE-FP user fees, and the 
Multidimensional Insurance Data Analytics System (MIDAS) platform, 
which is fully funded by FFE and SBE-FP user fees. In light of E.O. 
14009,\71\ published on January 28, 2021, the administration has a 
priority to increase accessibility and affordability of health care for 
every American. Consistent with increasing accessibility for every 
American an expanded budget for consumer support activities and 
Navigators was developed, and HHS conducted additional analytic review 
which revealed that the user fee rates established in part 1 of the 
2022 Payment Notice final rule \72\ need to be increased to sustain 
essential Exchange-related activities. Based on this new analysis of 
the increased contract costs and projected premiums and enrollment 
(including changes in FFE enrollment resulting from anticipated 
establishment of State Exchanges or SBE-FPs in certain states in which 
FFEs currently are operating) for the 2022 plan year, we are proposing 
to establish the FFE user fee for all participating FFE issuers at 2.75 
percent of total monthly premiums.
---------------------------------------------------------------------------

    \71\ 86 FR 7793 (Feb. 2, 2021).
    \72\ 86 FR 6138 at 6152.
---------------------------------------------------------------------------

    We seek comment on this proposed FFE user fee rate for 2022.
b. SBE-FP User Fee Rate
    As previously discussed, OMB Circular No. A-25 establishes federal 
policy regarding user fees, and specifies that a user charge will be 
assessed against each identifiable recipient for special benefits 
derived from federal activities beyond those received by the general 
public.
    SBE-FPs enter into a Federal platform agreement with HHS to 
leverage the systems established for the FFEs to perform certain 
Exchange functions, and to enhance efficiency and coordination between 
state and federal programs. Accordingly, in Sec.  156.50(c)(2), we 
specify that an issuer offering a plan through an SBE-FP must remit a 
user fee to HHS, in the timeframe and manner established by HHS, equal 
to the product of the monthly user fee rate specified in the annual HHS 
notice of benefit and payment parameters for the applicable benefit 
year and the monthly premium charged by the issuer for each policy 
where enrollment is through an SBE-FP, unless the SBE-FP and HHS agree 
on an alternative mechanism to collect the funds from the SBE-FP or 
state.
    The benefits provided to issuers in SBE-FPs by the federal 
government include use of the federal Exchange information technology 
and call center infrastructure used in connection with eligibility 
determinations for enrollment in QHPs and other applicable state health 
subsidy programs, as defined at section 1413(e) of the ACA, and QHP 
enrollment functions under Sec.  155.400. The user fee rate for SBE-FPs 
is calculated based on the proportion of FFE costs that are associated 
with the FFE information technology infrastructure, the consumer call 
center infrastructure, and eligibility and enrollment services, and 
allocating a share of those costs to issuers in the relevant SBE-FPs, 
as issuers in SBE-FPs receive those special benefits and will be able 
to access the increased consumer support and education.
    Similar to the FFE, activities through which SBE-FP issuers receive 
a special benefit also include use of HIOS, which is partially funded 
by FFE and SBE-FP user fees, and the MIDAS platform, which is fully 
funded by FFE and SBE-FP user fees. In light of E.O. 14009,\73\ the

[[Page 35175]]

administration has a priority to increase accessibility and 
affordability of health care for every American. Consistent with 
increasing accessibility for every American an expanded budget for 
consumer support activities and Navigators was developed, and HHS 
conducted additional analytic review which revealed that the user fee 
rates established in part 1 of the 2022 Payment Notice final rule \74\ 
need to be increased to sustain essential Exchange-related activities. 
Based on this new analysis of the increased contract costs and 
projected premiums and enrollment (including changes in FFE enrollment 
resulting from anticipated establishment of State Exchanges or SBE-FPs 
in certain states in which FFEs currently are operating) for the 2022 
plan year, we are proposing to establish the SBE-FP user fee for all 
participating SBE-FP issuers at 2.25 percent of the monthly premium 
charged by the issuer for each policy under plans offered through an 
SBE-FP for benefit year 2022. We seek comment on the SBE-FP user fee 
rate for 2022.
---------------------------------------------------------------------------

    \73\ 86 FR 7793 (Feb. 2, 2021).
    \74\ 86 FR 6138 at 6152.
---------------------------------------------------------------------------

c. 2023 Exchange DE Option User Fee Rate
    In the January 19, 2021 Federal Register (86 FR 6138), we published 
part 1 of the 2022 Payment Notice final rule that codified Sec.  
155.221(j), which established a process for states to elect a new 
Exchange DE option. When finalizing this new Exchange option, we also 
finalized a 2023 user fee rate of 1.5 percent of the total monthly 
premiums charged by issuers for each policy in FFE and SBE-FP states 
that elect the Exchange DE option. As explained above, we propose to 
repeal the Exchange DE option, accordingly we also propose to repeal 
the user fee rate associated with Sec.  155.221(j) for the FFE-DE and 
SBE-FP-DEs for 2023. We seek comment on this proposal.
2. Provision of EHB (Sec.  156.115)
    We propose a technical amendment to Sec.  156.115. Section 
156.115(a)(3) provides that, to satisfy the requirement to provide EHB, 
a health plan must provide mental health and substance use disorder 
services, including behavioral health treatment services required under 
Sec.  156.110(a)(5), in a manner that complies with the parity 
standards set forth in Sec.  146.136, implementing the requirements 
under MHPAEA. Instead of referencing the regulation implementing 
MHPAEA, we propose to reference section 2726 of the PHS Act and its 
implementing regulations. We propose this change to make clear that 
health plans must comply with all the requirements under MHPAEA, 
including any amendments to MHPAEA, such as those made by the 
Consolidated Appropriations Act, 2021,\75\ in order to satisfy the EHB 
requirements.
---------------------------------------------------------------------------

    \75\ See section 203 of Title II of Division BB of the 
Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27, 
2020).
---------------------------------------------------------------------------

3. Network Adequacy (Sec.  156.230)
    As discussed in more detail in the preamble to Sec.  155.20, on 
March 4, 2021, the United States District Court for the District of 
Maryland decided City of Columbus v. Cochran, 2021 WL 825973 (D. Md. 
Mar. 4, 2021). One of the policies the court vacated was the 2019 
rule's elimination of the federal government's reviews of the network 
adequacy of QHPs offered through the FFE in certain circumstances by 
incorporating the results of the states' reviews.\76\
---------------------------------------------------------------------------

    \76\ This policy was first announced in the 2018 Letter to 
Issuers in the Federally-facilitated Marketplaces, December 16, 
2016, available at https://wayback.archive-it.org/2744/20200125161008/ https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf. See also 83 
FR 17024-17026.
---------------------------------------------------------------------------

    As we explained in part 2 of the 2022 Payment Notice final 
rule,\77\ we intend to implement the court's decision through 
rulemaking as soon as possible. However, we also will not be able to 
fully implement the aspects of the court's decision regarding network 
adequacy in time for issuers to design plans and for CMS to be prepared 
to certify such plans as QHPs for the 2022 plan year. We instead intend 
to address these issues in time for plan design and certification for 
plan year 2023. Specifically, with the rule vacated, HHS would need to 
set up a new network adequacy review process, and issuers would need 
sufficient time before the applicable plan year to assess that their 
networks meet the new regulatory standard, submit network information, 
and have the information reviewed by applicable regulatory authorities 
to have their plans certified as QHPs. Issuers might also have to 
contract with other providers in order to meet the standard. This is 
not feasible for the upcoming QHP certification cycle for the 2022 plan 
year, which began April 22, 2021. We plan to propose specific steps to 
address federal network adequacy reviews in future rulemaking. We 
request comments and input regarding how the federal government should 
approach network adequacy reviews.
---------------------------------------------------------------------------

    \77\ 86 FR 24140.
---------------------------------------------------------------------------

4. Segregation of Funds for Abortion Services (Sec.  156.280)
    Section 1303 of the ACA, as implemented in 45 CFR 156.280, 
specifies standards for issuers of QHPs through the Exchanges that 
cover abortion services for which federal funding is prohibited. The 
statute and regulation establish that, unless otherwise prohibited by 
state law, a QHP issuer may elect to cover such abortion services. If 
an issuer elects to cover such services under a QHP sold through an 
individual market Exchange, the issuer must take certain steps to 
ensure that no PTC or CSR funds are used to pay for abortion services 
for which public funding is prohibited, as required by statute.
    Upon consideration of federal district court decisions invalidating 
the policy, we are proposing to repeal the separate billing regulation 
at Sec.  156.280(e)(2)(ii) that requires individual market QHP issuers 
to send a separate bill for that portion of a policy holder's premium 
that is attributable to coverage for abortion services for which 
federal funds are prohibited and to instruct such policy holders to pay 
for the separate bill in a separate transaction. Specifically, we 
propose to revert to and codify in amended regulatory text at Sec.  
156.280(e)(2)(ii) the prior policy announced in the preamble of the 
2016 Payment Notice under which QHP issuers offering coverage of 
abortion services for which federal funds are prohibited have 
flexibility in selecting a method to comply with the separate payment 
requirement in section 1303 of the ACA. Under this proposal, individual 
market QHP issuers covering such abortion services would still be 
expected to comply with all statutory requirements in section 1303 of 
the ACA and all applicable regulatory requirements codified at Sec.  
156.280.
    Since 1976, Congress has included language, commonly known as the 
Hyde Amendment, in the Labor, Health and Human Services, Education and 
Related Agencies appropriations legislation.\78\ The Hyde Amendment, as 
currently in effect, permits federal funds subject to its funding 
limitations to be used for abortion services only in the limited cases 
of rape, incest, or if a woman suffers from a physical disorder, 
physical injury, or physical illness, including a life-endangering 
physical condition caused by or arising from the pregnancy itself, that 
would, as certified by a physician, place the woman in

[[Page 35176]]

danger of death unless an abortion is performed. Abortion coverage 
beyond those limited circumstances is subject to the Hyde Amendment's 
funding limitations which prohibit the use of federal funds for such 
coverage.
---------------------------------------------------------------------------

    \78\ Accordingly, the Hyde Amendment is not permanent federal 
law, but applies only to the extent reenacted by Congress from time 
to time in appropriations legislation.
---------------------------------------------------------------------------

    Section 1303 of the ACA outlines requirements that issuers of 
individual market QHPs covering abortion services for which federal 
funds are prohibited must follow to ensure compliance with these 
funding limitations. Section 1303(b)(2) prohibits QHPs from using any 
amount attributable to PTC (including APTC) or CSRs (including advance 
payments of those funds to an issuer, if any) for coverage of abortion 
services for which federal funds are prohibited. Under sections 
1303(b)(2)(B) and (b)(2)(D) of the ACA, as implemented in Sec.  
156.280(e)(2)(i) and (e)(4), QHP issuers must collect a separate 
payment from each enrollee without regard to the enrollee's age, sex, 
or family status, for an amount equal to the greater of the actuarial 
value of coverage of abortion services for which public funding is 
prohibited, or $1 per enrollee per month. Section 1303(b)(2)(D) of the 
ACA establishes certain requirements with respect to a QHP issuer's 
estimation of the actuarial value of abortion services for which 
federal funds are prohibited including that a QHP issuer may not 
estimate such cost at less than $1 per enrollee, per month. Section 
1303(b)(2)(C) of the ACA, as implemented at Sec.  156.280(e)(3), 
requires that QHP issuers segregate funds for coverage of such abortion 
services collected from enrollees into a separate allocation account 
used to pay for such abortion services. Thus, if a QHP issuer disburses 
funds for an abortion for which federal funds are prohibited on behalf 
of an enrollee, it must draw those funds from the segregated allocation 
account.
    Notably, section 1303 of the ACA does not specify the method a QHP 
issuer must use to comply with the separate payment requirement under 
section 1303(b)(2)(B)(i) of the ACA. In the 2016 Payment Notice, we 
provided guidance with respect to acceptable methods that an issuer of 
individual market QHPs could use to comply with the separate payment 
requirement.\79\ We stated that QHP issuers could satisfy the separate 
payment requirement in one of several ways, including by sending the 
enrollee a single monthly invoice or bill that separately itemized the 
premium amount for coverage of abortion services for which federal 
funds are prohibited; sending the enrollee a separate monthly bill for 
these services; or sending the enrollee a notice at or soon after the 
time of enrollment that the monthly invoice or bill will include a 
separate charge for such services and specify the charge. We also 
stated that an enrollee could make the payment for coverage of such 
abortion services and the separate payment for coverage of all other 
services in a single transaction.\80\ On October 6, 2017, we released a 
bulletin that discussed the statutory requirements for separate 
payment, as well as this previous guidance on the separate payment 
requirement.\81\
---------------------------------------------------------------------------

    \79\ 80 FR 10750 (February 27, 2015).
    \80\ 80 FR 10750 (February 27, 2015).
    \81\ CMS Bulletin Addressing Enforcement of Section 1303 of the 
Patient Protection and Affordable Care Act (October 6, 2017), 
available at https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Section-1303-Bulletin-10-6-2017-FINAL-508.pdf.
---------------------------------------------------------------------------

    The 2019 Program Integrity Rule \82\ prohibited the compliance 
options that the 2016 Payment Notice previously provided to QHP issuers 
with regard to the separate payment requirement. Specifically, the 2019 
Program Integrity Rule finalized a policy requiring issuers of 
individual market QHPs offering coverage of abortion services for which 
federal funds are prohibited to send an entirely separate monthly bill 
to policy holders just for the portion of the premium attributable to 
coverage of such abortion services. QHP issuers were required to either 
send separate paper bills (which could be sent in the same envelope or 
mailing), or send separate bills electronically (which were required to 
be in separate emails or electronic communications). The separate 
billing regulation also required also required QHP issuers to instruct 
the policy holder to pay for the portion of their premium attributable 
to coverage of abortion services for which federal funds are prohibited 
through a separate transaction from any payment made for the portion of 
their premium not attributable to this coverage. It also required QHP 
issuers to make reasonable efforts to collect the payments separately. 
QHP issuers were to begin complying with these billing requirements on 
or before the QHP issuer's first billing cycle following June 27, 2020. 
Although HHS recognized that the previous methods of itemizing or 
providing advance notice about the amounts noted as permissible in the 
preamble of the 2016 Payment Notice arguably identifies two 'separate' 
amounts for two separate purposes, HHS also reasoned that the separate 
billing policy would better align the regulatory requirements for QHP 
issuer billing of enrollee premiums with the intent of the separate 
payment requirement in section 1303 of the ACA.\83\
---------------------------------------------------------------------------

    \82\ 84 FR 71674 (December 27, 2019).
    \83\ 84 FR 71674, 71693 (December 27, 2019).
---------------------------------------------------------------------------

    HHS announced in the 2019 Program Integrity Rule that it would 
exercise enforcement discretion to mitigate risk of inadvertent 
coverage terminations that might result from enrollee confusion in 
connection with receiving two separate bills for one insurance 
contract. HHS explained that it would not take enforcement action 
against a QHP issuer that implemented a policy under which the issuer 
would not place an enrollee into a grace period and would not terminate 
QHP coverage based solely on the policy holder's failure to pay the 
separate bill. The 2019 Program Integrity Rule provided that HHS was 
adopting this enforcement posture effective June 27, 2020.
    In response to the proposal to adopt the separate billing 
requirement finalized in the 2019 Program Integrity Rule, HHS also 
received comments expressing concern that lack of transparency into 
whether QHPs provided coverage of abortion services for which federal 
funds are prohibited presented the risk that consumers could 
unknowingly purchase such coverage. To address this risk, HHS announced 
that as of the effective date of the final rule, February 25, 2020, it 
would not take enforcement action against QHP issuers that allowed 
enrollees to opt out of coverage of such abortion services by not 
paying the separate bill for such services (the opt-out non-enforcement 
policy). The opt-out non-enforcement policy effectively gave issuers 
the flexibility to modify the benefits of a plan during a plan year 
based on an enrollee's desire to opt out of a plan's coverage of such 
abortion services.
    In light of the immediate need for QHP issuers to divert resources 
to respond to the COVID-19 PHE, HHS published an interim final rule 
with comment in May 2020 for Medicare and Medicaid Programs, Basic 
Health Programs and Exchanges (85 FR 27550) (``May 2020 IFC''). The 
rule delayed by 60 days the date when individual market QHP issuers 
would be required to begin separately billing policy holders. As 
finalized at Sec.  156.280(e)(2)(ii), QHP issuers were expected to 
comply with the separate billing regulation beginning on or before the 
QHP issuer's first billing cycle following August 26, 2020. The May 
2020 IFC noted that a 60-day delay was justified in light of the 
ongoing litigation in the federal courts of Maryland, Washington, and 
California challenging the separate billing regulation. The May 2020 
IFC also noted that the extended

[[Page 35177]]

compliance deadline would only apply to the non-enforcement policy 
under which issuers would have flexibility to refrain from triggering 
grace periods or coverage terminations where a policy holder failed to 
pay the separate monthly bill, delaying when this enforcement posture 
would become available by 60 days (to August 26, 2020).
    On April 9, 2020, the United States District Court for the Eastern 
District of Washington issued an opinion declaring the separate billing 
regulation invalid in the State of Washington.\84\ The district court 
specifically found that the separate billing regulation was in conflict 
with Washington's ``Single-Invoice Statute,'' \85\ which requires 
health insurance issuers in the state to bill enrollees using a single 
invoice. The district court held that the separate billing regulation 
did not preempt Washington's Single-Invoice Statute.
---------------------------------------------------------------------------

    \84\ Washington v. Azar, 461 F. Supp. 3d 1016 (E.D. Wash. 2020).
    \85\ Wash. Rev. Code Sec.  48.43.074.
---------------------------------------------------------------------------

    On July 10, 2020, the United States District Court for the District 
of Maryland found the separate billing regulation to be contrary to 
section 1554 of the ACA and arbitrary and capricious under the 
Administrative Procedure Act, thus declaring it invalid and 
unenforceable nationwide.\86\ The district court found the separate 
billing regulation to be in conflict with section 1554 of the ACA, 
which, among other key provisions, prohibits the Secretary from 
promulgating regulations that create any unreasonable barriers to 
obtaining appropriate medical care or impede timely access to health 
care services. The district court concluded that the policy imposed an 
unreasonable barrier because it would make it harder for enrollees to 
pay for insurance because they must keep track of two separate bills, 
which is likely to cause confusion and might lead to some enrollees 
losing health insurance. The district court also held the separate 
billing regulation to be arbitrary and capricious, finding that HHS 
failed to provide a reasoned explanation for abandoning the policy that 
existed prior to the adoption of the current separate billing 
regulation in the 2019 Program Integrity Rule. The district court also 
held that the implementation deadline was arbitrary and capricious 
because HHS failed to consider and adequately address specific, 
contrary evidence from regulated stakeholders that the implementation 
deadline for compliance with the separate billing regulation was 
unreasonable and would not provide QHP issuers with sufficient time to 
comply.
---------------------------------------------------------------------------

    \86\ Planned Parenthood of Maryland, Inc. v. Azar, No. CV CCB-
20-00361 (D. Md. July 10, 2020); 5 U.S.C. 706.
---------------------------------------------------------------------------

    On July 20, 2020, the United States District Court for the Northern 
District of California issued an opinion \87\ holding that the separate 
billing regulation was arbitrary and capricious, setting it aside 
nationwide. The district court held that the required mid-year 
implementation date for issuers to comply with the separate billing 
regulation would cause substantial transactional costs to states, 
issuers, and enrollees without any corresponding benefit. The court 
further found that the 2019 Program Integrity Rule lacked a reasoned 
explanation for deviating from the prior acceptable methods available 
to QHP issuers for compliance with the separate payment requirement and 
for departing from industry billing practice.
---------------------------------------------------------------------------

    \87\ California v. U.S. Dep't of Health & Hum. Servs., 473 F. 
Supp. 3d 992 (N.D. Cal. July 20, 2020).
---------------------------------------------------------------------------

    HHS initially appealed all three decisions, but those appeals have 
been placed on hold following the recent change in administration.
    The district courts in Maryland and California vacated the 2019 
Program Integrity Rule's separate billing regulation in July 2020, in 
advance of the postponed compliance deadline of August 26, 2020. As 
such, the timing of the courts' actions could have dissuaded issuers 
from assuming further costly administrative and operational burdens 
that would have been required to build the separate billing policy into 
their billing and IT systems. Further, as the courts' nationwide 
invalidation of the policy prevented HHS from requiring initial 
implementation of the separate billing regulation, the potential 
consumer confusion over payment obligations, which could have 
inadvertently led to non-payment of enrollee premium and subsequent 
termination of consumer coverage, was also avoided. We believe it is 
prudent to reconsider the separate billing policy and its potential 
effects on consumer coverage.
    In light of these developments, and upon consideration of court 
decisions invalidating the policy, we have reassessed the value of the 
separate billing policy and no longer believe it is justified in light 
of the high burden it would impose on issuers, states, Exchanges, and 
consumers, as well as the high likelihood of consumer confusion and 
unintended losses of coverage. Nor do we believe section 1303 of the 
ACA restricts issuers offering coverage of abortion services for which 
federal funds are prohibited to collect the required separate payment 
through a separate bill and instruct consumers to pay for such bill in 
a separate transaction. Rather, section 1303 of the ACA outlines 
requirements that issuers of individual market QHPs covering such 
abortion services must follow to ensure that no public funding is 
utilized for coverage of such abortion services, including requiring 
issuers to collect separate payments for this portion of the premium, 
to segregate the funds, and deposit such funds into separate allocation 
accounts. As the 2019 Program Integrity Rule acknowledged, section 1303 
of the ACA does not specify the method a QHP issuer must use to comply 
with the separate payment requirement.\88\
---------------------------------------------------------------------------

    \88\ 84 FR 71674, 71683.
---------------------------------------------------------------------------

    To address these concerns, we are proposing amendments to Sec.  
156.280(e)(2)(ii) to revert to and codify the policy previously adopted 
in the 2016 Payment Notice such that QHP issuers offering coverage of 
abortion services for which federal funds are prohibited may have 
flexibility in selecting a reasonable method to comply with the section 
1303 separate payment requirement. If finalized, acceptable methods for 
satisfying the separate payment requirement would be outlined at Sec.  
156.280(e)(2)(ii) and would include sending the policy holder a single 
monthly invoice or bill that separately itemizes the premium amount for 
coverage of such abortion services; sending the policy holder a 
separate monthly bill for these services; or sending the policy holder 
a notice at or soon after the time of enrollment that the monthly 
invoice or bill will include a separate charge for such services and 
specify the charge.
    We are also proposing a technical change to the section heading of 
Sec.  156.280 to more accurately reflect its contents if the revisions 
to rule text under Sec.  156.280 are finalized. We propose that it 
would instead read, ``Segregation of funds for abortion services.'' We 
seek comment on these proposals.
    Under the proposed amendments to the regulatory text at Sec.  
156.280(e)(2)(ii), issuers would no longer be required to send separate 
paper bills or separate electronic communications. Nor would an issuer 
electing to send separate bills, or utilizing any of the proposed 
acceptable methods for collecting the separate payment, be required to 
instruct consumers to pay for the portion of their premium attributable 
to coverage of abortion services for which federal funds are prohibited 
in a

[[Page 35178]]

separate transaction, or to make efforts to collect these payments 
separately.
    If the proposed amendments to Sec.  156.280 are finalized, we 
anticipate most issuers covering abortion services for which federal 
funds are prohibited will decline to send two separate monthly bills, 
and will choose to collect separate payments by one of the other 
proposed acceptable methods, as those alternatives minimize 
administrative complexity for issuers, align with industry billing 
practice, are less costly and administratively burdensome, and promote 
a more seamless consumer billing and payment experience. We would 
encourage any issuer electing to send two separate monthly bills to do 
so in a manner that minimizes consumer confusion and promotes 
continuity of coverage. For example, if an issuer still chooses to send 
two separate monthly bills, we encourage issuers to include both bills 
in the same mailing, explain on both bills that the total premium due 
is inclusive of the amount attributable to coverage of such abortion 
services, and explain that the consumer may pay for both bills in a 
single transaction. We also encourage issuers sending separate bills to 
explain to the consumer that non-payment of any premium due, including 
for the portion of premium attributable to such abortion services, 
would continue to be subject to state and federal rules regarding grace 
periods to mitigate risk of inadvertent loss of coverage from failure 
to pay a portion of the premium due.
    Reverting to the proposed policy would provide issuers greater 
billing flexibility and allow issuers to bill using one of the proposed 
acceptable methods that would eliminate all risk of inadvertent 
coverage terminations that could result from consumer confusion due to 
receiving two monthly bills (one for a miniscule amount) in connection 
with one insurance policy. If the proposed policies in this rule are 
finalized, we would discontinue the non-enforcement policies we adopted 
in the 2019 Program Integrity Rule and the May 2020 IFC, described 
above. These non-enforcement polices, in large part, were intended to 
mitigate potential coverage losses resulting from enrollee confusion 
that leads to enrollees' failures to pay the separate, small monthly 
bill covering abortion services for which federal funds are prohibited.
    In announcing these non-enforcement policies, HHS also noted in the 
2019 Program Integrity Rule that the opt-out non-enforcement policy was 
intended to address commenter concerns regarding insufficient 
transparency into whether QHPs include coverage of abortion services 
for which federal funds are prohibited and the risk that consumers 
could unknowingly purchase QHPs that include such coverage. As part of 
this discussion, HHS noted the steps already taken to improve 
transparency regarding QHP offerings by making it easier for consumers 
to select QHPs that they believe are best suited to their needs and 
preferences. For instance, HHS noted that such information is available 
during plan selection to more readily identify QHPs that offer coverage 
of such abortion services.\89\ This information continues to be 
available on HealthCare.gov, providing consumers with the requisite 
information to make an informed choice about their plan selections 
regarding coverage of such abortion services. Although we acknowledge 
that there are some states where there may be no QHP available on the 
Exchange that omits coverage for such abortion services, such plan 
availability is subject to state law and issuer choice in plan design 
as permitted under section 1303 of the ACA.
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    \89\ Frequently Asked Questions for Agents, Brokers, and 
Assisters Providing Consumers with Details on Plan Coverage of 
Certain Abortion Services (November 21, 2018), available at https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf.
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    Section 1303(b)(1)(A)(ii) specifies that an issuer shall determine 
whether or not the plan provides coverage for abortion services for 
which federal funds are prohibited for the applicable plan year, 
expressly providing that issuers are able to determine whether to offer 
coverage for such abortion services, subject to state law. We are of 
the view that continuing an opt-out non-enforcement policy would 
conflict with this flexibility in issuer plan design provided under 
section 1303. The opt-out non-enforcement policy also conflicts with 
Sec.  147.106(e)(1), which specifies that only at the time of coverage 
renewal may issuers modify the health insurance coverage for a product 
offered to a group health plan or an individual, as applicable. It also 
specifies that any such modification in the individual market must be 
consistent with State law and be effective uniformly for all 
individuals with that product. Further, the United States District 
Court for the Northern District of California cited the opt-out non-
enforcement policy in finding that the 2019 Program Integrity Rule 
lacked a reasoned explanation for deviating from the prior acceptable 
methods available to QHP issuers for compliance with the separate 
payment requirement.\90\ The court explained that inclusion of the opt-
out non-enforcement policy, which was not subject to public comment, 
supported the court's conclusion that HHS changed its prior policy 
without affording any reasoned explanation for the change. For these 
reasons, and given that the separate billing requirements finalized in 
the 2019 Program Integrity Rule have been invalidated, these non-
enforcement policies are no longer necessary or feasible long-term, and 
are therefore discontinued.
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    \90\ California v. U.S. Dep't of Health & Hum. Servs., 473 F. 
Supp. 3d 992, 1003 (N.D. Cal. July 20, 2020) (citing Encino 
Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016)).
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    We note that individual market QHP issuers covering abortion 
services for which federal funds are prohibited would still be expected 
under these proposals to comply with section 1303 of the ACA and all 
applicable requirements codified at Sec.  156.280. This includes 
collecting a separate payment from each policy holder per month for an 
amount equal to the greater of $1 or the actuarial value of coverage of 
abortion services for which federal funds are prohibited, continuing to 
ensure that no federal funding is used to pay for coverage of such 
abortion services, submitting a segregation plan to the relevant state 
insurance regulator, and continuing to segregate funds for coverage of 
such abortion services collected from policy holders into a separate 
allocation account that is to be used to pay for such abortion 
services.
    We believe the proposed changes to Sec.  156.280(e)(2)(ii) offer 
issuers options for meaningful compliance with section 1303 and ensure 
appropriate segregation of funds, without imposing the operational and 
administrative burdens of the separate billing regulation and without 
causing additional consumer confusion and unintended losses of 
coverage. The preamble to the 2019 Program Integrity Rule acknowledged 
that receipt by a QHP issuer of a single premium payment for the 
entirety of the policy holder's coverage including abortion services 
for which federal funds are prohibited did not preclude QHP issuer 
compliance with the section 1303 separate payment requirement. Although 
the separate billing regulation required QHP issuers to bill separately 
and make reasonable efforts to collect the payment separately, it also 
specified that QHP issuers would not be permitted to refuse a combined 
payment or terminate the policy on the basis of combined payment. The 
separate billing policy is ultimately nonessential to QHP issuer 
compliance with the separate

[[Page 35179]]

payment requirement in section 1303 of the ACA. Upon receiving a single 
premium payment inclusive of the portion of premium attributable to 
coverage of such services, the QHP issuer may treat that portion as a 
separate payment and disaggregate the amounts into the separate 
allocation accounts, consistent with Sec.  156.280(e)(2)(iii). 
Therefore, we believe requiring QHP issuers to acquire the separate 
payment through sending separate bills and instructing consumers to pay 
in separate transactions is more restrictive than necessary, especially 
in light of the issuer and stakeholder burden and adverse consumer 
impacts the separate billing regulation could impose.
    The 2019 Program Integrity Rule detailed the anticipated financial 
and operational burdens from the separate billing regulation. Those 
burdens are discussed in further detail in section V, ``Collection of 
Information Requirements,'' and section VII, ``Regulatory Impact 
Analysis,'' of that rule. Those burdens included one-time cost 
estimates for issuers and state Exchanges performing premium billing 
and payment processing for operational changes such as implementation 
of the technical build to implement the necessary system changes to 
support separate billing and receipt of separate payments, which would 
require significant changes to current billing practice and pose 
increased challenges given the mid-plan year implementation timeline. 
The anticipated burden also included ongoing annual costs for sending a 
separate bill to impacted enrollees, associated record keeping, 
customer service, and compliance, as well as annual materials costs 
related to printing of and sending the separate bill. We also 
acknowledged that the separate billing regulation would impose burden 
on State Exchange operations due to one-time technical changes such as 
updating online payment portals to accept separate payments and 
updating enrollment materials, as well as ongoing annual costs 
associated with increased customer service, outreach, and compliance.
    The Program Integrity Rule also projected that FFEs would incur 
additional costs due to one-time technical changes and increased call 
volumes and additional customer services efforts. We also stated that 
QHP issuers were likely to consider these new costs when setting 
actuarially sound rates and that this would likely lead to higher 
premiums for enrollees. We also anticipated increased costs to 
consumers for the time required to read and understand the separate 
bills and to seek help from customer service if necessary, and 
additional time to read and send separate payments in subsequent 
months. In total, the projected burden to all issuers, states, State 
Exchanges performing premium billing and payment processing, the FFEs, 
and consumers totaled $546.1 million in 2020, $232.1 million in 2021, 
$230.7 million in 2022, and $229.3 million annually in 2023 and 
onwards. It was also anticipated that QHP issuers might consider these 
new costs when setting actuarially sound rates and that this could lead 
to higher premiums for enrollees.
    Upon reassessing the burden, we also believe the consumer confusion 
and new logistical obstacles due to the separate billing regulation 
would disproportionately burden communities who already face barriers 
to accessing care, such as individuals with limited English proficiency 
(LEP), individuals with disabilities, rural residents, those with 
inconsistent or no access to the internet, those with low levels of 
health care system literacy, and individuals within other marginalized 
communities. Failure to pay the separate bill entirely due to consumer 
confusion could also lead to a complete loss of coverage, further 
exacerbating existing health disparities and jeopardizing health 
outcomes. The 2019 Program Integrity Rule also acknowledged that the 
high burden associated with the separate billing regulation might 
result in issuers withdrawing coverage of abortion services for which 
federal funds are prohibited altogether to avoid the associated burden, 
requiring some enrollees to pay for these services out-of-pocket. Based 
on a 2014 study, the average costs to patients for first-trimester 
abortion care was $461, and anywhere from $860 to $1,874 for second-
trimester abortion care.\91\ Transferring these costs to enrollees 
could disproportionately impact low-income women who may already face 
barriers to accessing quality health care due to their socioeconomic 
status, gender, sexual orientation, nationality, or race. We believe 
proposing repeal of the separate billing regulation would remove these 
burdensome requirements and obstacles, promoting health equity.
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    \91\ See Roberts, Sarah C.M., Heather Gould, Katrina Kimport, 
Tracy A. Weitz, and Diana Greene Foster. ``Out-of-Pocket Costs and 
Insurance Coverage for Abortion in the United States.'' Women's 
Health Issues, vol. 24, no. 2 (2014): e211-e218.
---------------------------------------------------------------------------

    The 2019 Program Integrity Rule reasoned that separate billing was 
justified to better align with the Congressional intent of section 
1303. Although we still believe sending a separate bill to enrollees 
for these services is one way in which an issuer may satisfy the 
separate payment requirement, we no longer believe it is the only 
method contemplated by the plain reading of section 1303 and believe 
restricting the acceptable methods for collecting these payments was 
unnecessary, especially in light of the substantial anticipated burden 
from the separate billing regulation, the risk of inadvertent coverage 
terminations that could result from consumer confusion due to receiving 
two monthly bills, the stakeholder reliance on the prior acceptable 
methods, and federal district court concerns with barriers to 
appropriate and timely medical care as well as a lack of corresponding 
benefits. Consistent with federal district court orders in Maryland and 
California, we revisited the section 1303 provision in which the 
separate payment requirement is contained, which is titled 
``Establishment of allocation accounts,'' and is in a larger section 
titled ``Prohibition on the use of Federal funds.'' \92\ These sections 
detail issuer requirements for calculating the actuarial value for the 
portion of the premium attributable to coverage of abortion services 
for which federal funds are prohibited, requires issuers to collect 
separate payments for this portion of the premium, to segregate the 
funds, and deposit such funds into separate allocation accounts. 
Notably, these sections do not require that issuers must satisfy these 
requirements by separately billing policy holders or instructing them 
to pay in separate transactions.
---------------------------------------------------------------------------

    \92\ Section 1303(b)(2) and (b)(2)(B) of the ACA.
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    Section 1303 does not specify the method a QHP issuer must use to 
collect the separate payment.\93\ We are therefore proposing a policy 
that allows issuers to satisfy the separate payment requirement through 
methods consistent with section 1303 of the ACA, that imposes no more 
burden on issuers, states, Exchanges, and consumers than is necessary, 
and that removes unreasonable barriers to obtaining appropriate medical 
care.
---------------------------------------------------------------------------

    \93\ 84 FR 71674, 71683.
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    We seek comment on the proposal to repeal the separate billing 
regulation and amend the regulatory text at Sec.  156.280(e)(2)(ii) to 
codify the prior policy in the 2016 Payment Notice for satisfying the 
separate payment requirement in section 1303 of the ACA.

[[Page 35180]]

IV. Provisions of the Proposed Rule for Section 1332 Waivers--
Department of Health and Human Services and Department of the Treasury

A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers

    Section 1332 of the ACA permits states to apply for a section 1332 
waiver to pursue innovative strategies for providing their residents 
with access to higher value, more affordable health coverage.
    Under section 1332, the Secretary of HHS and the Secretary of the 
Treasury (collectively, the Secretaries) may exercise their discretion 
to approve a request for a section 1332 waiver only if the Secretaries 
determine that the proposal for the section 1332 waiver meets the 
following four requirements, referred to as the statutory guardrails: 
(1) The proposal will provide coverage that is at least as 
comprehensive as coverage defined in section 1302(b) of the ACA and 
offered through Exchanges established under title I of the ACA, as 
certified by the Office of the Actuary of CMS, based on sufficient data 
from the state and from comparable states about their experience with 
programs created by the ACA and the provisions of the ACA that would be 
waived; (2) the proposal will provide coverage and cost-sharing 
protections against excessive out-of-pocket spending that are at least 
as affordable for the state's residents as would be provided under 
title I of the ACA; (3) the proposal will provide coverage to at least 
a comparable number of the state's residents as would be provided under 
title I of the ACA; and (4) the proposal will not increase the federal 
deficit. The Secretaries retain their discretionary authority under 
section 1332 to deny waivers when appropriate given consideration of 
the application as a whole, even if an application meets the four 
statutory guardrails.
    The Departments are also responsible under section 1332 for 
monitoring an approved section 1332 waiver's compliance with the 
statutory guardrails and for conducting evaluations to determine the 
impact of the section 1332 waiver. Specifically, section 1332 requires 
that the Secretaries provide for and conduct periodic evaluations of 
approved section 1332 waivers.\94\ The Secretaries must also provide 
for a process under which states with approved section 1332 waivers 
must submit periodic reports concerning the implementation of the 
state's waiver program.\95\
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    \94\ See section 1332(a)(4)(B)(v) of the ACA.
    \95\ See section 1332(a)(4)(B)(iv) of the ACA.
---------------------------------------------------------------------------

    In October 2018, the Departments issued the 2018 Guidance,\96\ 
which provided additional guidance for states that wish to submit 
section 1332 waiver proposals regarding the Secretaries' application 
review procedures, pass-through funding determinations, certain 
analytical requirements, and operational considerations.\97\ The 2018 
Guidance also included information regarding how the Departments will 
apply and interpret the section 1332 statutory guardrails when 
evaluating waiver applications. Furthermore, in part 1 of the 2022 
Payment Notice final rule,\98\ the Departments finalized the 
codification of many of the major policies and interpretations outlined 
in the 2018 Guidance into the text of relevant section 1332 
implementing regulations.
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    \96\ 83 FR 53575 (Oct. 24, 2018).
    \97\ The 2018 Guidance superseded guidance issued by the 
Departments in December 2015, which similarly provided information 
regarding the Secretaries' application review procedures, pass-
through funding determinations, certain analytical requirements, 
operational considerations, and interpretations of the statutory 
guardrails. See 80 FR 78131, available at https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf.
    \98\ See 86 FR 6138.
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    On January 28, 2021, President Biden issued E.O. 14009 directing 
the Secretaries and the heads of all other executive departments and 
agencies with authorities and responsibilities related to Medicaid and 
the ACA to review all existing regulations, orders, guidance documents, 
policies, and any other similar agency actions to determine whether 
such agency actions are inconsistent with the policy set forth in 
section 1 of E.O. 14009.\99\ As part of this review, E.O. 14009 
directed agencies to look at demonstrations and waivers, as well as 
demonstration and waiver policies that may reduce coverage under or 
otherwise undermine Medicaid or the ACA. As such, the Departments have 
reviewed both the 2018 Guidance and the policies implemented in part 1 
of the 2022 Payment Notice final rule on section 1332 waivers to 
determine whether they are inconsistent with the policy intention of 
E.O. 14009 to protect and strengthen Medicaid and the ACA and to make 
high-quality health care accessible and affordable for every American.
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    \99\ 86 FR 7793 (Feb. 2, 2021).
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    In addition, on January 20, 2021, President Biden issued the 
Executive Order, ``On Advancing Racial Equity and Support for 
Underserved Communities Through the Federal Government'' (E.O. 
13985),\100\ directing that as a policy matter the federal government 
should pursue a comprehensive approach to advancing equity for all, 
including people of color and others who have been historically 
underserved, marginalized, and adversely affected by persistent poverty 
and inequality. As such, the Departments have also reviewed the 2018 
Guidance and the policies implemented in part 1 of the 2022 Payment 
Notice final rule on section 1332 waivers to assess whether, and to 
what extent, these policies may perpetuate systemic barriers to 
opportunities and benefits for people of color and other underserved 
groups.
---------------------------------------------------------------------------

    \100\ 86 FR 7009 (Jan. 25, 2021).
---------------------------------------------------------------------------

    Upon review, the Departments have determined that the 2018 Guidance 
and the policies implemented in part 1 of the 2022 Payment Notice final 
rule on section 1332 waivers are generally inconsistent with the policy 
intentions of E.O. 14009 and E.O. 13985. As explained in part 1 of the 
2022 Payment Notice final rule and later in this proposed rule, the 
majority of commenters on both the 2018 Guidance and the 2022 Payment 
Notice Proposed Rule noted that both the 2018 Guidance and the 
incorporation of its guardrail interpretations into regulations could 
result in the Departments approving section 1332 waivers that would 
result in fewer residents in those states enrolling in comprehensive 
and affordable coverage, and that those interpretations do not 
represent the best fulfillment of congressional intent behind the 
statutory guardrails. After further consideration of these comments as 
part of the Departments' reviews under E.O. 14009 and E.O. 13985, the 
Departments propose in this rule to modify 31 CFR 33.108(f)(3)(iv)(A-C) 
and 45 CFR 155.1308(f)(3)(iv)(A-C) to generally remove the language 
incorporating the interpretation of the statutory guardrails first set 
forth in the 2018 Guidance into the text of relevant section 1332 
regulations that were finalized in part 1 of the 2022 Payment Notice 
final rule. In addition, the Departments propose new interpretations 
and proposed amendments to regulations to provide supplementary 
information about the requirements that must be met for the approval of 
a section 1332 waiver, the Secretaries' application review procedures, 
certain analytical requirements, operational considerations, the 
calculation of pass-through funding, and amendments and extensions of 
approved waiver plans. These new proposed policies and interpretations, 
if finalized, would supersede those outlined in the 2018 Guidance and, 
where applicable, those

[[Page 35181]]

captured in the current section 1332 implementing regulations as 
finalized in part 1 of the 2022 Payment Notice final rule.
    The Departments are of the view that rescinding the 2018 Guidance, 
repealing the previous codification of its guardrail interpretations in 
part 1 of the 2022 Payment Notice final rule, and proposing new 
policies and interpretations aligns with the Administration's goals to 
strengthen the ACA and increase enrollment in comprehensive, affordable 
health coverage among the remaining underinsured and uninsured. These 
proposals would further advance this Administration's goal to increase 
access to coverage in that it would empower states to develop 
innovative health coverage options, through section 1332 waivers, that 
best fit the states' individual needs and provide coverage to their 
residents. The proposals are also intended to provide more information 
and clarity regarding the interpretations, processes and procedures the 
Departments would apply when reviewing new waiver applications and 
waiver amendment and extension requests, as well as making pass-through 
funding determinations for approved waivers. All of these proposals are 
designed to align with the Administration's commitment to protect and 
expand Americans' access to high-quality, comprehensive and affordable 
health care coverage and to ensure that systemic barriers to 
opportunities and benefits for people of color and other underserved 
groups are not perpetuated. In addition, these proposals would further 
support the Administration's efforts to build on the ACA to meet the 
health care needs created by the COVID-19 PHE, reduce individuals' 
health care costs, and make our health care system less complex to 
navigate. Through section 1332 waivers, the Departments aim to assist 
states with developing health insurance markets that expand coverage, 
lower costs, and make high-quality health care accessible for every 
American.\101\ In light of E.O. 13985, the Departments also encourage 
states to develop waiver proposals that diminish barriers to 
opportunities and benefits such as health insurance coverage for people 
of color and other underserved groups. For example, states may include 
waiver programs that increase plan options for comprehensive coverage, 
reduce premiums, improve affordability, as well as address social 
determinants of health.
---------------------------------------------------------------------------

    \101\ https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/15/statement-by-president-joe-biden-on-the-2021-special-health-insurance-enrollment-period-through-healthcare-gov/.
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    As under similar waiver authorities,\102\ the Secretaries reserve 
the right to further evaluate an approved waiver and suspend or 
terminate an approved waiver, in whole or in part, any time before the 
date of expiration, if the Secretaries determine that the state 
materially has failed to comply with the terms and conditions of the 
waiver or the section 1332 guardrails,\103\ laws and regulations, 
unless specifically waived.\104\ And they must come into compliance 
with any changes in federal law or regulations affecting section 1332 
waivers, unless the provision being changed is expressly waived.\105\
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    \102\ Section 1115 Waiver Demonstrations have similar authority.
    \103\ See 31 CFR 33.120(d) and 45 CFR 155.1320(d) and STC 16 at 
https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
    \104\ See 31 CFR 33.120(a)(1) and 45 CFR 155.1320(a)(1).
    \105\ Ibid.
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1. Coordinated Waiver Process (31 CFR 33.102 and 45 CFR 155.1302)
    Regulations at 31 CFR 33.102 and 45 CFR 155.1302 permit, but do not 
require, states to submit a single application for a section 1332 
waiver and a waiver under one or more of the existing waiver processes 
applicable under titles XVIII, XIX, and XXI of the Social Security Act 
(the Act), or under any other federal law relating to the provision of 
health care items or services, provided that the application is 
consistent with the procedures outlined in the 2012 Final Rule,\106\ 
the procedures for demonstrations under section 1115 of the Act, if 
applicable, and the procedures under any other applicable federal law 
or regulations under which the state seeks a waiver.
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    \106\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
---------------------------------------------------------------------------

    Similar to the policies outlined in the 2018 Guidance, as well as 
in guidance previously published in December 2015 (2015 Guidance), the 
Departments' determination of whether a section 1332 waiver proposal 
satisfies the statutory guardrails set forth in section 1332 takes into 
consideration the projected impact of waivers of certain ACA provisions 
made pursuant to the section 1332 waiver. The Departments also consider 
related changes to the state's health care system that, under state 
law, are contingent only on the approval of the section 1332 waiver. 
For example, the Departments, in making their determination, would take 
into account the impact of a new, related state-run health benefits 
program that, under legislation enacted by the state, would be 
implemented only if the section 1332 waiver were approved.
    The Departments are not proposing any regulatory changes to 31 CFR 
33.102 and 45 CFR 155.1302, but are reiterating through this preamble 
the proposed policy relating to the coordinated waiver process so 
states understand the process for submission and review of a 
coordinated waiver. The Departments are of the view that the policies 
outlined in this proposed rule, which are in line with both the 2018 
and 2015 Guidance, further advance E.O. 14009 because these policies 
aim to protect and strengthen Medicaid and the ACA and to make high-
quality health care accessible and affordable for every American by 
specifying how a state may submit a coordinated waiver. Specifically, 
under this proposal the Departments would not consider the potential 
impact of policy changes that are contingent on further state action, 
such as state legislation that is proposed but not yet enacted that 
would be in effect during the timeframe for the section 1332 waiver. 
For example, the Departments would not consider the potential impact of 
state legislation to expand Medicaid that is not yet enacted. The 
Departments would also not consider the impact of changes contingent on 
other federal determinations, including approval of federal waivers 
(such as waivers under titles XVIII, XIX, or XXI of the Act) pursuant 
to statutory provisions other than section 1332 of the ACA. Therefore, 
under this proposal, the Departments would not take into account 
proposed changes to Medicaid or CHIP state plans that require separate 
federal approval, such as changes in coverage or federal Medicaid or 
CHIP spending that would result from a proposed section 1115 
demonstration, regardless of whether the section 1115 demonstration 
proposal is submitted as part of a coordinated waiver application with 
a section 1332 waiver. Savings accrued under either proposed or current 
Medicaid or CHIP section 1115 demonstrations would not be factored into 
the assessment of whether a proposed section 1332 waiver meets the 
deficit neutrality requirement. The Departments' determination also 
would not take into account any proposed changes to the Medicaid or 
CHIP state plan that are subject to federal approval.
    Under this proposal, the Departments would, however, take into 
account changes in Medicaid or CHIP coverage or in federal spending on 
Medicaid or CHIP that would result directly from the proposed waiver of 
ACA provisions pursuant to section 1332, holding state

[[Page 35182]]

Medicaid and CHIP policies constant. For example, if a state section 
1332 waiver would result in more or less Medicaid spending, this impact 
would be considered in the Departments assessment of the section 1332 
waiver for the deficit neutrality guardrail.
    Nothing in this proposed rule alters a state's authority to make 
changes to its Medicaid and CHIP policies consistent with applicable 
law. In addition, this proposed rule does not alter the Secretary of 
HHS' authority or CMS' policy regarding review and approval of section 
1115 demonstrations, and states should continue to work with the Center 
for Medicaid and CHIP Services (CMCS) on issues relating to section 
1115 demonstrations or other Medicaid or CHIP authorities. A state may 
submit a coordinated waiver application as provided in 31 CFR 33.102 
and 45 CFR 155.1302. The waiver applications included in a coordinated 
waiver application would each be reviewed by the applicable agency 
component independently according to the federal laws and regulations 
that apply to each waiver application.
    As the Departments receive and review waiver proposals, the 
Departments will continue to examine the types of changes, contingent 
on federal approval that will be considered in reviewing section 1332 
waiver applications.
2. Section 1332 Application Procedures--Application Timing (31 CFR 
33.108(b) and 45 CFR 155.1308(b))
    Consistent with regulations at 31 CFR 33.108(b) and 45 CFR 
155.1308(b), states are required to submit initial section 1332 waiver 
applications sufficiently in advance of the requested waiver effective 
date to allow for an appropriate implementation timeline. In this 
proposed rule, the Departments are not proposing any regulatory changes 
to 31 CFR 33.108(b) and 45 CFR 155.1308(b), but are proposing through 
preamble policies related to the timing of initial section 1332 waiver 
application submissions that are consistent with policies outlined in 
the 2018 Guidance. These proposed policies are intended to help states 
understand the requirements for submitting a section 1332 waiver 
application sufficiently in advance of the requested waiver effective 
date to allow for enough time for federal review and to maintain smooth 
operations of the Exchange in the state. In addition, these proposed 
policies are intended to help states allow for enough time for 
implementation of their section 1332 waiver plan, and for affected 
stakeholders, including issuers of health insurance plans that may be 
affected by the waiver plan, to take necessary actions based on the 
approval of the waiver plan, particularly when the waiver impacts 
premium rates, if approved. As discussed elsewhere in this proposed 
rule, some section 1332 waiver plans may require operational changes or 
accommodations to the federal information technology platform or its 
operations, and these proposed policies would help ensure the state and 
the Departments are able to sufficiently plan in advance of the 
effective waiver date. The proposed policies are as follows:
    The Departments strongly encourage states interested in applying 
for section 1332 waivers, including coordinated waivers with section 
1115 demonstrations, to engage with the Departments promptly for 
assistance in formulating an approach to a section 1332 waiver that 
meets the requirements of section 1332.
    In order to help ensure timely decision-making regarding approval, 
states should plan to submit their initial section 1332 waiver 
applications with enough time to allow for public comment (as required 
by 31 CFR 33.112, 31 CFR 33.116(b), 45 CFR 155.1312, and 45 CFR 
155.1316(b)), review by the Departments, and implementation of the 
section 1332 state plan as outlined in the waiver application. For 
example, for section 1332 waivers that impact the individual market, 
submission before or during the first quarter of the year prior to the 
year health plans affected by the section 1332 waiver would take effect 
would generally permit sufficient time for review and implementation of 
both the waiver application and affected plans, depending on the 
complexity of the proposal. It is important to note that the 
Departments cannot guarantee approval of a section 1332 waiver 
submission or a state's request for expedited review and will continue 
to review applications consistent with the timeline requirements 
outlined in the regulations and statute.\107\ The Departments encourage 
states to work with the Departments on formulating timeframes that take 
into account the states' legislative sessions and timing of health plan 
rate filings if the section 1332 waiver is projected to have any impact 
on premiums. If a state's section 1332 waiver application includes 
potential operational changes or accommodations to the federal 
information technology platform or its operations, additional time for 
review and implementation of the waiver application may be needed. 
States should engage with the Departments early in the process to 
determine whether federal infrastructure can accommodate technical 
changes that support their requested flexibilities, as discussed 
elsewhere in this preamble.
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    \107\ 31 CFR 33.108 and 45 CFR 155.1308; Section 1332(d)(1) of 
the ACA.
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    The Departments seek comment on these proposals.
3. Section 1332 Application Procedures--Statutory Guardrails (31 CFR 
33.108(f)(3)(iv) and 45 CFR 155.1308(f)(3)(iv))
    The Departments are proposing to modify 31 CFR 33.108(f)(3)(iv)(A-
C) and 45 CFR 155.1308(f)(3)(iv)(A-C) to remove the interpretations of 
the comprehensiveness, affordability, and coverage guardrails that were 
codified in part 1 of the 2022 Payment Notice final rule. In addition, 
as detailed later in this section of this preamble, the Departments are 
proposing to adopt new policies and interpretations with regard to the 
statutory guardrails that, if finalized, would supersede and rescind 
those outlined in both the 2018 Guidance and part 1 of the 2022 Payment 
Notice final rule. These proposed guardrail interpretations are largely 
in line with those in the 2015 Guidance. The Departments are also 
proposing to modify 31 CFR 33.108(f)(3)(iv) and 45 CFR 
155.1308(f)(3)(iv) to remove the reference, as codified under part 1 of 
the 2022 Payment Notice final rule, to interpretive guidance published 
by the Departments.
    The 2018 Guidance aimed to allow states to pursue section 1332 
waivers with the goals of increasing consumer choice and promoting 
private market competition. In particular, in the 2018 Guidance, the 
Secretaries explained that their interpretations of the statutory 
guardrails were meant to remove restrictions that could limit consumer 
choice by allowing states to provide access to health insurance 
coverage at different price points and benefits levels, including less 
comprehensive plans that states considered to be better suited to 
consumer needs. Specifically, the 2018 Guidance interpreted the 
comprehensiveness and affordability guardrails to be satisfied if 
comprehensive and affordable coverage were available to consumers, 
without regard to who would actually enroll in such coverage. In 
addition, the 2018 Guidance instructed that these two guardrails must 
be evaluated in conjunction. The 2018 Guidance explained that it is not 
enough to make available some coverage that is comprehensive but not 
affordable, while making available other coverage that is affordable 
but not comprehensive. Thus,

[[Page 35183]]

the Departments stated that a state plan would comply with the 
comprehensiveness and affordability guardrails, consistent with the 
statute, if it makes coverage that is both comprehensive and affordable 
available to a comparable number of otherwise qualified residents as 
would have had such coverage available absent the waiver.
    In the 2018 Guidance, the Departments also stated that section 
1332(b)(1)(C) of the ACA requires that a state's plan under a section 
1332 waiver will provide coverage ``to at least a comparable number of 
its residents'' as would occur without the waiver.\108\ The 2018 
Guidance further noted that the text of the coverage guardrail 
provision of the statute is silent as to the type of coverage that is 
required. Accordingly, to enable state flexibility and to promote 
choice of a wide range of coverage to ensure that consumers can enroll 
in coverage that is right for them, in the 2018 Guidance, the 
Departments would consider section 1332 waivers to satisfy the coverage 
guardrail requirement if at least as many state residents were 
projected to be enrolled in comprehensive and less comprehensive health 
plans combined under the waiver as would be enrolled without the 
waiver. Under that interpretation, the Departments could approve a 
state's section 1332 waiver designed to promote residents' enrollment 
in less comprehensive or less affordable coverage. As long as a 
comparable number of residents were projected to be covered as would 
have been covered absent the waiver, the coverage guardrail would be 
met.
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    \108\ 83 FR at 53577.
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    The policies and interpretations in the 2018 Guidance were in line 
with the Administration's priorities at the time. In particular, the 
2018 Guidance noted that the Secretaries would consider favorably 
section 1332 waiver applications that advance specific principles 
including: Providing increased access to affordable private market 
coverage, encouraging sustainable spending growth, fostering state 
innovation, supporting and empowering those in need, and promoting 
consumer-driven health care. The 2018 Guidance, including the 
interpretations of the guardrails announced therein, aimed to advance 
these principles and noted that the Secretaries intended to provide 
states with maximum flexibility within the law to innovate, empower 
consumers, and expand higher value and more affordable coverage 
options.
    In part 1 of the 2022 Payment Notice final rule, the Departments 
finalized the 2018 Guidance interpretation of the guardrails into the 
text of the section 1332 implementing regulations. Specifically, the 
Departments finalized regulatory language in 31 CFR 33.108(f)(3)(iv)(A) 
and 45 CFR 155.1308(f)(3)(iv)(A), explaining that the Departments would 
consider the comprehensive coverage guardrail to be met by a state 
section 1332 waiver plan if the plan would provide consumers access to 
coverage options that are at least as comprehensive as the coverage 
options provided without the waiver, to at least a comparable number of 
people as would have had access to such coverage absent the waiver. The 
final rule also added language to 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 
155.1308(f)(3)(iv)(B) providing that the Departments would consider the 
affordability requirement to be met by a state section 1332 waiver plan 
that would provide consumers access to coverage options that are at 
least as affordable as the coverage options provided without the 
waiver, to at least a comparable number of people as would have had 
access to such coverage absent the waiver. These modifications also 
provided, consistent with the 2018 Guidance and the Administration's 
priorities at the time, that the Departments would consider the 
comprehensiveness and affordability guardrails met if a section 1332 
waiver plan provides access to coverage that is as comprehensive and 
affordable as coverage forecasted to have been available in the absence 
of the waiver, and is projected to be available to a comparable number 
of people under the waiver, as opposed to the actual number of people 
enrolled in comprehensive and affordable coverage as under the 2015 
Guidance. The final rule also added regulatory language to 31 CFR 
33.108(f)(3)(iv)(C) and 45 CFR 155.1308(f)(3)(iv)(C) providing that, 
for purposes of the coverage guardrail, ``coverage'' refers to minimum 
essential coverage as defined in 26 U.S.C. 5000A(f) and 26 CFR 1.5000A-
2, and health insurance coverage as defined in 45 CFR 144.103.
    A majority of commenters on both the 2018 Guidance and the 2022 
Payment Notice proposed rule were concerned that the 2018 Guidance and 
its proposed codification would undermine the congressional intent 
underlying the section 1332 guardrails and effectively codify policy 
they believe is based on a misapplication of the statutory guardrails. 
The commenters were concerned that the focus on the interpretation of 
the availability of comprehensive and affordable coverage in the 2018 
Guidance would result in fewer residents enrolled in comprehensive and 
affordable coverage. Other commenters asserted that the interpretation 
of the availability of comprehensive and affordable coverage for the 
coverage guardrail allows for a disjointed application of the 
guardrails whereby a state can meet the coverage guardrail, while its 
waiver plan reduces the overall comprehensiveness and affordability of 
coverage in a state. A few commenters recommended rescinding and 
abandoning the 2018 Guidance completely in favor of returning to the 
prior interpretation of the guardrails described in the 2015 Guidance. 
In addition, some commenters also expressed concern that alternative 
coverage options, which would qualify for the purposes of meeting the 
coverage guardrail under the 2018 Guidance, are not subject to the same 
limitations as comprehensive coverage in terms of consumer protections. 
For instance, alternative plan options generally lack financial 
limitations like out-of-pocket maximums and annual/lifetime limits, 
and, if consumers covered by alternative plan options experience 
unexpected, potentially-catastrophic health events, they are likely to 
pay substantially more out-of-pocket to cover incurred costs. Further, 
commenters also raised concerns that alternative plans can terminate or 
deny coverage based on health status, which would tend to affect high-
risk individuals. Coupled with the diminished affordability of 
comprehensive coverage, this possibility puts high-risk individuals at 
great risk of going without effective coverage.
    In this proposed rule, the Departments are proposing changes to 31 
CFR 33.108 and 45 CFR 155.1308 to rescind the interpretations of the 
statutory guardrails announced in the 2018 Guidance and codified in 
part 1 of the 2022 Payment Notice final rule. The decision to rescind 
those interpretations is based on further consideration of commenters' 
concerns that the proposals outlined in this rule are a better 
interpretation of section 1332(b)(1)(A)-(C), and the Departments' 
reviews under E.O. 14009, which was intended to strengthen the ACA and 
expand high-quality health care and E.O. 13985, which was intended to 
pursue a comprehensive approach to advancing equity for all. After 
further consideration, the Departments have concluded that the 
interpretations of section 1332's comprehensiveness, affordability, and 
coverage guardrails

[[Page 35184]]

codified in part 1 of the 2022 Payment Notice final rule could permit 
section 1332 waivers that do not result in a comparable number of 
residents overall being enrolled in coverage that is at least as 
affordable and as comprehensive as they would have enrolled in without 
the waiver. As discussed in more detail later in this section, the 
Departments' proposed changes are intended to align with the 
President's instruction in E.O. 14009 to adopt policies to strengthen 
the implementation of the ACA and remove any barriers that those 
policies may create for expanding coverage, lowering costs, and making 
high-quality health care accessible for every American. Furthermore, in 
line with E.O. 14009, this Administration is focused on ensuring high-
quality health care is accessible and affordable for every American. As 
such, the Departments are of the view that the comprehensiveness and 
affordability guardrails should focus on the types of coverage 
residents actually purchase, rather than the types of coverage 
residents have access to.
    Upon further consideration of these issues, the Departments have 
determined that the guardrail interpretations codified in part 1 of the 
2022 Payment Notice final rule are inconsistent with the Departments' 
goal of ensuring individuals are enrolled in affordable, comprehensive 
coverage and not just that there is generalized access to such 
coverage. The plans that could be offered to individuals under section 
1332 waivers applying the interpretations codified in the part 1 of the 
2022 Payment Notice final rule could allow state section 1332 waivers 
that would result in more individuals enrolling in medically 
underwritten plans \109\ that offer only limited benefits, charge 
higher out-of-pocket costs, or both, which is inconsistent with the 
goal of the E.O. 14009 to reduce barriers for expanding comprehensive 
affordable coverage. Allowing more individuals to be in medically 
underwritten plans could also have a disparate impact on vulnerable 
populations, especially people of color and those who are in poverty, 
those who are underserved, and those with pre-existing conditions, 
which is inconsistent with the goal of E.O. 13985.
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    \109\ Health insurance companies medically underwrite policies 
to try to ascertain prospective enrollees' health statuses when they 
are applying for health insurance coverage in order to determine 
whether to offer these individuals coverage, or at what price, and 
with what exclusions or limits, to offer coverage. (https://www.healthcare.gov/glossary/medical-underwriting/) Since 2014, 
however, medical underwriting is no longer permitted in the 
individual or small group markets with respect to non-grandfathered 
health insurance coverage, due to ACA rules. Instead, all such 
individual and small group plans are guaranteed issue. Guaranteed 
issue is a requirement that health plans must permit any individual 
to enroll regardless of health status, age, gender, or other factors 
that might predict the use of health services. Guaranteed issue does 
not limit how much individuals can be charged if they enroll in 
coverage. https://www.healthcare.gov/glossary/guaranteed-issue/. 
However, the ACA's community rating protections prevent health 
insurers from varying premiums within a geographic area based on 
age, gender, health status or other factors with respect to non-
grandfathered health insurance coverage. https://www.healthcare.gov/glossary/community-rating/.
---------------------------------------------------------------------------

    Additionally, the Departments are of the view that the section 1332 
waiver proposals that could be available under the guardrail 
interpretations in the 2018 Guidance and codified in part 1 of the 2022 
Payment Notice final rule may also not be in line with E.O. 14009. For 
example, the Section 1332 State Relief and Empowerment Waiver Concepts 
Discussion Paper (November 2018 Discussion Paper) \110\ included waiver 
concepts that were intended to foster discussion with states by 
illustrating how states might take advantage of new flexibilities 
provided in the 2018 Guidance. The Departments are of the view that 
some of these waiver concepts which rely upon the 2018 Guidance 
interpretation of the guardrails, are not in line with E.O. 14009 goals 
to protect and strengthen Medicaid and the ACA and to make high-quality 
health care accessible and affordable for every American. For example, 
the Adjusted Plan Options section 1332 waiver concept included in the 
2018 Discussion Paper would permit states to have the flexibility to 
provide state financial assistance for non-QHPs. A section 1332 waiver 
proposal that includes this concept could potentially increase coverage 
in non-QHPs and potentially decrease enrollment in comprehensive 
coverage plans by allowing consumers to use a state subsidy towards 
catastrophic plans, individual market plans that are not QHPs, or plans 
that do not fully meet ACA requirements. In reviewing section 1332 
waiver policies in light of E.O. 14009, this waiver concept is 
inconsistent with the goal of E.O. 14009, as it would likely result in 
consumers enrolling in non-QHPs and plans that do not fully meet ACA 
requirements, thereby increasing barriers for expanding comprehensive 
affordable coverage and potentially decreasing enrollment in 
comprehensive coverage. Further, commenters raised concerns in response 
to the 2018 Guidance that expressed generalized concern that the 2018 
Guidance permitted alternative coverage options that can be 
underwritten and do not meet EHB standards. In addition, commenters 
were concerned that measures taken to facilitate coverage in 
alternative plan options (for example, allowing the use of subsidies 
for such coverage) would result in fewer comprehensive plans on the 
market, and that those comprehensive plans would become less 
affordable. In light of the concerns raised by commenters and the 
E.O.s, the Departments are proposing new policies in this proposed rule 
that would allow states flexibility to develop waiver plans to meet 
their needs and expand coverage, lower costs, and increase access to 
high-quality health care with comprehensive benefits.
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    \110\ https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/Waiver-Concepts-Guidance.PDF.
---------------------------------------------------------------------------

    Given the current policy goals, as well as the Departments' further 
consideration of comments received on the 2022 Payment Notice, the 
Departments are proposing new policies for how the Departments would 
evaluate whether a state's section 1332 waiver plan satisfies each of 
the guardrails, as outlined in more detail later in this section. 
Overall, the Departments are proposing that the ``coverage'' to be 
provided and evaluated in each guardrail should be interpreted the same 
way in each sub-paragraph of Section 1332(b)(1)(A)-(C) for consistency. 
Thus, the Departments are proposing in 31 CFR 33.108(f)(3)(iv)(A) 
through (C) and 45 CFR 155.1308(f)(3)(iv)(A) through (C) to interpret 
``provide'' and ``coverage'' to mean the same thing for the coverage, 
comprehensiveness, and affordability guardrails and that, to be 
approved, a waiver must be projected to provide coverage that is as 
comprehensive and affordable as would have been provided absent the 
waiver and to the same number of residents.
    Similarly, given the current COVID-19 PHE, this Administration is 
focused on the response to the PHE and on helping increase enrollment 
in comprehensive, affordable health insurance coverage. The ARP made 
numerous changes to the ACA to expand access to health insurance 
coverage and lower costs. Specifically, the ARP temporarily expanded 
eligibility for and increased the value of APTC/PTC, enabling 
previously ineligible consumers to qualify for help paying for health 
coverage and increasing assistance to eligible individuals already 
enrolled in Exchange plans. These changes have already increased 
enrollment through

[[Page 35185]]

the Exchanges,\111\ and the Departments are of the view that this law 
will continue to increase enrollment through the Exchanges as the ARP's 
enhanced subsidies lower the costs of coverage for millions of 
Americans and change the incentives to seek and maintain comprehensive 
health insurance coverage. In addition, increased affordability and 
expansion of access to comprehensive health insurance coverage will 
better support enrollment of historically uninsured communities--
especially those who have faced significant health disparities--in such 
coverage, thereby improving access to health care during and beyond the 
COVID-19 PHE. This Administration has also sought to strengthen the ACA 
and increase enrollment by directing the establishment of a special 
enrollment period, which is open from February 15, 2021 through August 
15, 2021, for Exchanges using the HealthCare.gov platform (COVID 
special enrollment period). Over 1.2 million Americans have already 
signed up for coverage on HealthCare.gov during the COVID special 
enrollment period.\112\ To promote the special enrollment period, CMS 
is spending approximately $100 million on outreach and education, 
including broadcast, radio, and digital advertising to reach the 
uninsured, and also launched parallel outreach efforts through 
stakeholders and partners to increase education and awareness across 
communities on the COVID special enrollment period.\113\ Earlier this 
year, CMS made approximately $2.3 million in additional funding 
available to current Navigator grantees in FFEs to support the 
outreach, education, and enrollment efforts around the COVID special 
enrollment period.\114\ Additionally, CMS recently announced that it is 
making $80 million in grant funding available to the FFE Navigator 
program for the 2022 plan year through the 2021 Navigator Notice of 
Funding Opportunity.\115\ This represents an eight-fold increase in 
funding from the previous year. Taken together, these policies, 
including the increased subsidies available under the ARP, the COVID 
special enrollment period, and the increased federal investment in the 
FFE Navigator program, have already led to, and are expected to 
continue to lead to, increased enrollment through the Exchanges.
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    \111\ 2021 Marketplace Special Enrollment Period Report, June 
14, 2021 https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2.
    \112\ Data reflects enrollment as of May 31, 2021: https://www.hhs.gov/about/news/2021/06/14/four-ten-new-consumers-spend-10-or-less-month-healthcaregov-coverage-following-implementation-american-rescue-plan-tax-credits.html.
    \113\ On January 28, 2021, CMS announced $50 million for 
outreach and marketing for the COVID special enrollment period: 
https://www.cms.gov/newsroom/fact-sheets/2021-special-enrollment-period-response-covid-19-emergency. On April 1, 2021 HHS announced 
an additional $50 million to further bolster the COVID special 
enrollment period campaign and promote the lower premiums under the 
ARP: https://www.cms.gov/newsroom/press-releases/hhs-secretary-becerra-announces-reduced-costs-and-expanded-access-available-marketplace-health.
    \114\ https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period.
    \115\ https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0.
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    The Departments are of the view that rescinding the 2018 Guidance, 
repealing the previous codification of its guardrail interpretations in 
part 1 of the 2022 Payment Notice final rule, and proposing new 
policies and interpretations aligns with the Administration's goals to 
strengthen the ACA and increase enrollment in comprehensive, affordable 
health coverage among the remaining underinsured and uninsured. The 
Departments are also of the view that during a pandemic, as Americans 
continue to battle COVID-19 and millions of Americans are facing 
uncertainty and experiencing new health problems, it is even more 
critical that Americans have meaningful access to high-quality, 
comprehensive and affordable health coverage options.
    The Departments are also proposing to modify 31 CFR 
33.108(f)(3)(iv) and 45 CFR 155.1308(f)(3)(iv) to remove the reference, 
as codified under part 1 of the 2022 Payment Notice final rule, to 
interpretive guidance published by the Departments. This proposal is in 
line with the Departments' efforts to provide supplementary information 
about the requirements that must be met for the approval of a section 
1332 waiver and the Secretaries' application review procedures. Because 
the Departments are of the view that the 2018 Guidance and the 
incorporation of its guardrail interpretations into regulations could 
result in the Departments approving section 1332 waivers that would 
result in fewer residents in those states enrolling in comprehensive 
and affordable coverage, that those interpretations do not represent 
the best fulfillment of congressional intent behind the statutory 
guardrails, that they are inconsistent with the policy intentions of 
E.O. 14009 and E.O. 13985, and that it is appropriate to address 
concerns raised by commenters on the 2018 Guidance, the Departments 
propose to remove the reference to the 2018 Guidance.
    Under this proposal the Departments would rely upon the statute and 
regulations, as well as the Departments' interpretive policy statements 
as outlined in the applicable notice and comment rulemaking, in 
reviewing section 1332 waiver applications.
    The Departments seek comment on these proposals. The Departments 
also solicit comment on whether there are policies that meet the 
statutory guardrails of section 1332 waivers that the Departments could 
consider that would encourage states to find innovative ways to use 
section 1332 waivers to focus on equity and expand access to 
comprehensive coverage for their residents. In addition, the 
Departments considered whether any affected parties could be impacted 
by the proposed changes in policy interpretations outlined in this 
rule. The Departments are of the view that both states with approved 
section 1332 waivers and states that are considering section 1332 
waivers would be minimally impacted by these proposed changes in 
policy. The Departments solicit comment on the impact to stakeholders.
a. Comprehensive Coverage (31 CFR 33.108(f)(3)(iv)(A) and 45 CFR 
155.1308(f)(3)(iv)(A))
    The Departments are proposing to modify the regulations at 31 CFR 
33.108(f)(3)(iv)(A) and 45 CFR 155.1308(f)(3)(iv)(A) to remove the 
comprehensiveness guardrail interpretations as adopted in part 1 of the 
2022 Payment Notice final rule. In addition, the Departments are 
proposing, through preamble, policies and interpretations relating to 
the requirements for the comprehensive coverage guardrail that are 
similar to the policies and interpretations outlined in the 2015 
Guidance. Specifically, the Departments are proposing to modify the 
regulations at 31 CFR 33.108(f)(3)(iv)(A) and 45 CFR 
155.1308(f)(3)(iv)(A) such that to satisfy the comprehensive coverage 
requirement, the Departments, as applicable, must determine that the 
section 1332 waiver will provide coverage that is at least as 
comprehensive overall for residents of the state as coverage absent the 
waiver. The Departments' proposed policies and interpretations related 
to the comprehensiveness guardrail are as follows:
    To meet the comprehensiveness guardrail, health care coverage under 
a section 1332 waiver would be required to be forecast to be at least 
as

[[Page 35186]]

comprehensive overall for residents of the state as coverage absent the 
waiver.
    Comprehensiveness refers to the scope of benefits provided by the 
coverage and would be measured by the extent to which coverage meets 
the requirements for EHBs as defined in section 1302(b) of the ACA and 
offered through Exchanges established by Title I of ACA, or, as 
appropriate, Medicaid or CHIP standards. The impact on all state 
residents would be considered, regardless of the type of coverage they 
would have had absent the section 1332 waiver.
    Comprehensiveness would be evaluated by comparing coverage under 
the section 1332 waiver to the state's EHB benchmark (for the 
applicable plan year), selected by the state (or if the state does not 
select a benchmark, the default base-benchmark plan) pursuant to 45 CFR 
156.100, as well as to, in certain cases, the coverage provided under 
the state's Medicaid or CHIP programs.\116\ A section 1332 waiver would 
not satisfy the comprehensiveness requirement if the waiver decreases: 
(1) The number of residents with coverage that is at least as 
comprehensive as the benchmark in all ten EHB categories; (2) for any 
of the ten EHB categories, the number of residents with coverage that 
is at least as comprehensive as the benchmark in that category; or (3) 
the number of residents whose coverage includes the full set of 
services that would be covered under the state's Medicaid or CHIP 
programs, holding the state's Medicaid and CHIP policies constant. That 
is, the section 1332 waiver could not decrease the number of 
individuals with coverage that satisfies EHB requirements, the number 
of individuals with coverage of any particular category of EHB, or the 
number of individuals with coverage that includes the services covered 
under the state's Medicaid or CHIP programs.
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    \116\ In April 2018, HHS provided states with substantially more 
options in the selection of an EHB-benchmark plan. As finalized in 
the 2019 Payment Notice, starting in the 2020 plan year, HHS 
provided states with additional flexibility in how they select their 
EHB-benchmark plan. Instead of being limited to 10 options, states 
are now be able to choose from the 50 EHB-benchmark plans used for 
the 2017 plan year in other states or select specific EHB 
categories, such as drug coverage or hospitalization, from among the 
categories used for the 2017 plan year in other states. 
Additionally, states are able to build their own set of benefits 
that could potentially become their EHB-benchmark plan, subject to 
certain scope of benefits requirements.
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    Assessment of whether a section 1332 waiver proposal meets the 
comprehensiveness requirement would also take into account the effects 
across different groups of state residents, and, in particular, effects 
on those vulnerable and underserved residents, including low-income 
individuals, older adults, those with serious health issues or who have 
a greater risk of developing serious health issues, and people of color 
and others who have been historically underserved, marginalized, and 
adversely affected by persistent poverty and inequality.\117\ A section 
1332 waiver would be highly unlikely to be approved by the Secretaries 
under the proposed interpretation outlined in this rule if the waiver 
would reduce the comprehensiveness of coverage provided to these types 
of vulnerable or underserved groups, even if the waiver maintained 
comprehensiveness in the aggregate. Under the proposed interpretation 
in this rule, this condition generally must be forecast to be met in 
each year that the section 1332 waiver would be in effect.
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    \117\ These groups include individuals who belong to underserved 
communities that have been denied such treatment, such as Black, 
Latino, and Indigenous and Native American persons, Asian Americans 
and Pacific Islanders and other persons of color; members of 
religious minorities; lesbian, gay, bisexual, transgender, and queer 
(LGBTQ+) persons; persons with disabilities; persons who live in 
rural areas; and persons otherwise adversely affected by persistent 
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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    Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the 
section 1332 waiver application must include analysis and supporting 
data that establishes that the section 1332 waiver satisfies this 
requirement. This includes an explanation of how the benefits offered 
under the section 1332 waiver differ from the benefits provided absent 
the waiver (if the benefits differ at all) and how the state determined 
the benefits to be as ``comprehensive.''
    As discussed previously in this section of this preamble, the 
policies and interpretations of the comprehensiveness guardrail 
outlined in the 2018 Guidance and codified in part 1 of the 2022 
Payment Notice final rule, were in line with the Administration's 
priorities at the time to promote private market competition and 
increase consumer choice. Under those policies, analysis of 
comprehensiveness and affordability of coverage under a section 1332 
waiver focused on the nature of coverage that is made available to 
state residents (access to coverage), rather than on the coverage that 
residents actually purchase. The plans that could be offered to 
individuals under section 1332 waivers as codified in part 1 of the 
2022 Payment Notice final rule could therefore allow for more 
individuals to enroll in medically underwritten plans that only offer 
limited benefits, which is inconsistent with the goal of E.O. 14009 to 
reduce barriers for expanding comprehensive affordable coverage.
    In response to the proposal in the 2022 Payment Notice Proposed 
Rule, commenters raised concerns that alternative plan options (which 
could include medically underwritten plans) can terminate or deny 
coverage based on health status, which would tend to affect high-risk 
individuals. Commenters asserted that, this possibility puts 
individuals with greater medical needs at risk of going without 
effective coverage for their health care needs. Some commenters 
expressed concern that the potential market effects would have a 
disparate impact on vulnerable populations, especially low-income 
consumers and those with pre-existing conditions. Additionally, these 
commenters expressed concern that a disparate impact on any particular 
group would not necessarily cause the Departments to deny a section 
1332 waiver application, even though the impact on vulnerable 
population groups would be taken into account.
    The Departments are of the view that the current interpretation of 
the comprehensiveness guardrail is inconsistent with the goal of E.O. 
14009 to reduce barriers for expanding comprehensive affordable 
coverage. The Departments are also of the view that the current 
interpretation of the guardrail is inconsistent with the goal of E.O. 
13985 to pursue a comprehensive approach to advancing equity and could 
create barriers to health coverage for people of color and underserved 
groups.

[[Page 35187]]

    The proposed changes in this rule are intended to align with the 
President's instructions in E.O. 14009 and E.O. 13985 to adopt policies 
to strengthen the implementation of the ACA and ensure high-quality 
health care coverage is accessible and affordable for every American. 
The Departments are of the view that the proposals outlined in this 
proposed rule would further support states providing consumers with 
comprehensive, high-quality health care coverage that will better 
protect consumers with pre-existing conditions and will help protect 
consumers from unexpected and expected medical needs. Further, the 
proposals outlined in this proposed rule would further the goal that 
consumers with pre-existing conditions, particularly racial and ethnic 
minorities who are 1.5 to 2.0 times more likely than whites to have 
major chronic diseases \118\ and as such pre-existing conditions, 
maintain comprehensive coverage.
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    \118\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3794652/
#:~:text=more%20chronic%20diseases.-
,Racial%2Fethnic%20minorities%20are%201.5%20to%202.0%20times%20more%2
0likely,seem%20to%20be%20getting%20worse.
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    The Departments seek comment on these proposed policies and 
interpretations related to the comprehensiveness guardrail. The 
Departments are of the view that this proposal would have minimal 
impact on both states with section 1332 waivers under development and 
states with approved waivers. The Departments solicit comment on the 
impact to stakeholders.
b. Affordability (31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 
155.1308(f)(3)(iv)(B))
    The Departments are proposing to modify the regulations at 31 CFR 
33.108(f)(3)(iv)(B) and 45 CFR 155.1308(f)(3)(iv)(B) to remove the 
affordability guardrail interpretations as codified in part 1 of the 
2022 Payment Notice final rule. In addition, the Departments are 
proposing, through preamble, policies and interpretations relating to 
the requirements for the affordability coverage guardrail that are 
similar to the policies and interpretations outlined in the 2015 
Guidance. Specifically, the Departments are proposing to modify the 
regulations at 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 
155.1308(f)(3)(iv)(B) such that to satisfy the affordability 
requirement, the Departments, as applicable, must determine that the 
section 1332 waiver would provide coverage that is at least as 
affordable overall for residents of the state as coverage absent the 
waiver. The Departments' proposed policies and interpretations related 
to the affordability guardrail are as follows:
    To meet the affordability guardrail, health care coverage under the 
section 1332 waiver would be required to be forecast to be as 
affordable overall for state residents as coverage absent the waiver.
    Affordability refers to state residents' ability to pay for health 
care expenses relative to their incomes and would generally be measured 
by comparing each individual's expected out-of-pocket spending for 
health coverage and services to their incomes. Out-of-pocket spending 
for health care includes premiums (or equivalent costs for enrolling in 
coverage), and spending such as deductibles, co-pays, and co-insurance, 
associated with the coverage or direct payments for health care. 
Spending on health care services that are not covered by a health plan 
or health coverage could also be taken into account if they are 
affected by the section 1332 waiver proposal. The impact on all state 
residents would be required to be considered, regardless of the type of 
coverage they would have had absent the section 1332 waiver. Under the 
proposed policies and interpretation in this rule, this condition 
generally must be forecast to be met in each year that the section 1332 
waiver would be in effect.
    Section 1332 waivers would be evaluated not only based on how they 
affect affordability on average, but also on how they affect the number 
of individuals with large health care spending burdens relative to 
their incomes. Increasing the number of state residents with large 
health care spending burdens would cause a section 1332 waiver proposal 
to fail the affordability requirement, even if the waiver would 
increase affordability for many other state residents. Given that 
eligibility for comprehensive coverage among the uninsured varies 
across racial and ethnic groups, the Departments' assessment of whether 
the proposal meets the affordability requirement would also take into 
account the effects across different groups of state residents, and, in 
particular, effects on vulnerable or underserved residents, including 
low-income individuals, older adults, those with serious health issues 
or who have a greater risk of developing serious health issues, and 
people of color and others who have been historically underserved, 
marginalized, and adversely affected by persistent poverty and 
inequality.\119\ A section 1332 waiver would be highly unlikely to be 
approved by the Secretaries under the proposed policies and 
interpretations set forth in this rule if it reduces affordability for 
these vulnerable or underserved groups, even if the waiver would 
maintain affordability in the aggregate. In addition, a section 1332 
waiver would fail to meet the affordability guardrail if it would 
reduce the number of individuals with coverage that provides a minimal 
level of protection against excessive cost sharing. In particular, 
section 1332 waivers that reduce the number of people with insurance 
coverage that provides both an actuarial value equal to or greater than 
60 percent and an out-of-pocket maximum that complies with section 
1302(c)(1) of the ACA, would fail to meet this guardrail under the 
proposed policies and interpretations set forth in this rule. Section 
1332 waivers that reduce the number of people with coverage that meets 
the affordability requirements set forth in sections 1916 and 1916A of 
the Act, as codified in 42 CFR part 447, subpart A, while holding the 
state's Medicaid policies constant would also fail under the 
affordability guardrail.
---------------------------------------------------------------------------

    \119\ These groups include individuals who belong to underserved 
communities that have been denied such treatment, such as Black, 
Latino, and Indigenous and Native American persons, Asian Americans 
and Pacific Islanders and other persons of color; members of 
religious minorities; lesbian, gay, bisexual, transgender, and queer 
(LGBTQ+) persons; persons with disabilities; persons who live in 
rural areas; and persons otherwise adversely affected by persistent 
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
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    Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the 
section 1332 waiver application must include analysis and supporting 
data that establishes that the waiver satisfies this requirement. This 
includes information on estimated individual out-of-pocket costs 
(premium and out-of-pocket expenses for deductibles, co-payments, co-
insurance, co-payments and plan differences) by income, health 
expenses, health insurance status, and age groups, absent the section 
1332 waiver and with the waiver. The expected changes in premium 
contributions and other out-of-pocket costs and the combined impact of 
changes in these components should be identified separately. The 
application should also describe any changes in employer contributions 
to health coverage or in wages expected under the section 1332 waiver. 
The application should identify any types of individuals for whom 
affordability of coverage would be reduced by the section 1332 waiver.

[[Page 35188]]

    As discussed previously in this section of this preamble, the 
affordability guardrail interpretation outlined in the 2018 Guidance 
and codified in part 1 of the 2022 Payment Notice final rule aimed to 
increase consumer choice to allow states to provide access to health 
insurance coverage at different prices points and benefits levels. The 
Departments are of the view that this interpretation of the 
affordability guardrail is inconsistent with the goal of E.O. 14009 to 
reduce barriers for expanding comprehensive affordable coverage. The 
current interpretation could allow for more individuals, including 
potentially those with pre-existing conditions, to enroll in medically 
underwritten plans that charge higher out-of-pocket costs, which is 
inconsistent with the goal of the E.O. to reduce barriers for expanding 
comprehensive affordable coverage. The proposed changes in this rule 
are intended to align with the President's instruction in E.O. 14009 to 
adopt policies to strengthen the implementation of the ACA and ensure 
high-quality health care is accessible and affordable for every 
American. The Departments are of the view that the proposals outlined 
in this proposed rule would further support states providing consumers 
with comprehensive, high-quality affordable health care coverage that 
will better protect consumers with pre-existing conditions, and will 
help protect consumers from unexpected and expected medical needs.
    The Departments seek comment on these proposed policies and 
interpretations related to the affordability guardrail. The Departments 
are of the view this proposal would have minimal impact on both states 
with section 1332 waivers under development and states with approved 
waivers. The Departments solicit comment on the impact to stakeholders.
c. Coverage (31 CFR 33.108(f)(3)(iv)(C) and 45 CFR 
155.1308(f)(3)(iv)(C))
    The Departments are proposing to modify the regulations at 31 CFR 
33.108(f)(3)(iv)(C) and 45 CFR 155.1308(f)(3)(iv)(C) to remove the 
coverage guardrail interpretations codified in part 1 of the 2022 
Payment Notice final rule. In addition, the Departments are proposing, 
through preamble, policies and interpretations relating to the 
requirements for the coverage guardrail that are similar to the 
policies and interpretations outlined in the 2015 Guidance. 
Specifically, the Departments are proposing to modify the regulations 
at 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 155.1308(f)(3)(iv)(B) such 
that to satisfy the scope of coverage requirement, the Departments, as 
applicable, must determine that the section 1332 waiver would provide 
coverage to a comparable number of state residents under the waiver as 
would have coverage absent the waiver. The Departments' proposed 
policies and interpretations related to the coverage guardrail are as 
follows:
    To meet the coverage guardrail, a comparable number of state 
residents would be required to be forecast to have coverage under the 
section 1332 waiver as would have had coverage absent the waiver.
    Coverage refers to minimum essential coverage as defined in 26 
U.S.C. 5000A(f). For this purpose, ``comparable'' would mean that the 
forecast of the number of covered individuals is no less than the 
forecast of the number of covered individuals absent the section 1332 
waiver. This condition generally would be required to be forecast to be 
met in each year that the section 1332 waiver would be in effect.
    The impact on all state residents would be considered, regardless 
of the type of coverage they would have had absent the section 1332 
waiver. For example, while a section 1332 waiver may not change the 
terms of a state's Medicaid coverage or change existing Medicaid 
demonstration authority, changes in Medicaid enrollment--whether 
increases or decreases--that result from a section 1332 waiver, holding 
the state's Medicaid policies constant, would be considered in 
evaluating the number of residents with coverage under a waiver.
    Assessment of whether the section 1332 waiver application covers a 
comparable number of individuals would also take into account the 
effects across different groups of state residents, and, in particular, 
effects on vulnerable or underserved residents, including low-income 
individuals, older adults, those with serious health issues or who have 
a greater risk of developing serious health issues, and people of color 
and others who have been historically underserved, marginalized, and 
adversely affected by persistent poverty and inequality.\120\ A section 
1332 waiver would be highly unlikely to be approved by the Secretaries 
if it would reduce coverage for these populations, even if the waiver 
would provide coverage to a comparable number of residents overall. 
Finally, analysis under the coverage requirement would need to take 
into account whether the section 1332 waiver sufficiently prevents gaps 
in or discontinuations of coverage.
---------------------------------------------------------------------------

    \120\ These groups include individuals who belong to underserved 
communities that have been denied such treatment, such as Black, 
Latino, and Indigenous and Native American persons, Asian Americans 
and Pacific Islanders and other persons of color; members of 
religious minorities; lesbian, gay, bisexual, transgender, and queer 
(LGBTQ+) persons; persons with disabilities; persons who live in 
rural areas; and persons otherwise adversely affected by persistent 
poverty or inequality. See https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
---------------------------------------------------------------------------

    Consistent with 31 CFR 33.108(f) and 45 CFR 155.1308(f), the 
section 1332 waiver application must include analysis and supporting 
data that establishes that the waiver satisfies this requirement, 
including information on the number of individuals covered by income, 
health expenses, health insurance status, and age groups, under current 
law and under the waiver, including year-by-year estimates. The 
application should identify any types of individuals, including 
vulnerable and underserved individuals, who are more or less likely to 
be covered under the waiver than under current law.
    As discussed previously in this section of this preamble, under the 
coverage guardrail interpretation outlined in the 2018 Guidance and 
codified in part 1 of the 2022 Payment Notice final rule, the guardrail 
is met if at least as many residents are enrolled in health coverage, 
including both comprehensive and less comprehensive health plans, as 
would be enrolled absent the waiver. That interpretation was intended 
to promote choice among a wide range of plans to ensure that consumers 
can enroll in coverage that is right for them. As such, the 
interpretations set forth in the 2018 Guidance and codified in part 1 
of the 2022 Payment Notice final rule permits states to provide access 
to less comprehensive or less affordable coverage as an additional 
option for their residents to choose. Under the current policy, as long 
as a comparable number of residents are projected to be covered as 
would have been covered absent the section 1332 waiver, the coverage 
guardrail would be met. The Departments are of the view that this 
interpretation of the coverage guardrail is inconsistent with the goal 
of E.O. 14009 to reduce barriers for expanding comprehensive affordable 
coverage. The current interpretation could allow for more individuals 
to enroll in medically underwritten plans that offer limited benefits, 
charge higher out-of-pocket costs, or both, which is inconsistent with 
the goal of the E.O. to reduce barriers for expanding comprehensive,

[[Page 35189]]

high-quality, affordable coverage. The proposed changes in this rule 
are intended to align with the President's instruction in E.O. 14009 to 
adopt policies to strengthen the implementation of the ACA and ensure 
high-quality health care is accessible and affordable for every 
American. The Departments are of the view that the proposals outlined 
in this proposed rule would further support states providing consumers 
with comprehensive, high-quality affordable health care that will 
better protect consumers with pre-existing conditions and will help 
protect consumers from unexpected and expected medical costs.
    The Departments seek comment on these proposed policies and 
interpretations related to the coverage guardrail. The Departments are 
of the view that this proposal would have minimal impact on both states 
with section 1332 waivers under development and states with approved 
waivers. The Departments solicit comment on the impact to stakeholders.
d. Deficit Neutrality (31 CFR 33.108(f)(3)(iv)(D) and 45 CFR 
155.1308(f)(3)(iv)(D))
    The Departments are not proposing to modify the regulations at 31 
CFR 33.108(f)(3)(iv)(D) and 45 CFR 155.1308(f)(3)(iv)(D) for the 
deficit neutrality guardrail, but are proposing, through preamble, 
policies and interpretations relating to the requirements for the 
deficit neutrality guardrail consistent with the policies outlined in 
the 2015 and 2018 Guidance. The Departments' proposed policies and 
interpretations related to the deficit neutrality guardrail are as 
follows:
    Under the deficit neutrality guardrail, the projected federal 
spending net of federal revenues under the section 1332 waiver is 
required to be equal to or lower than projected federal spending net of 
federal revenues in the absence of the waiver.
    The estimated effect on federal revenue would be required to 
include all changes in income, payroll, or excise tax revenue, as well 
as any other forms of revenue (including user fees), that would result 
from the proposed section 1332 waiver. Estimated effects would include, 
for example, changes in the amounts the federal government pays in PTC, 
small business tax credits, or other health coverage tax credit; 
changes in the amount of employer shared responsibility payments and-
excise taxes on high-cost employer-sponsored plans collected by the 
federal government; and changes in income and payroll taxes resulting 
from changes in tax exclusions for employer-sponsored insurance and in 
deductions for medical expenses.
    The effect on federal spending would include all changes in federal 
financial assistance (PTC, small business tax credits, or CSRs) and 
other direct spending, such as changes in Medicaid spending (while 
holding the state's Medicaid policies constant) that would result from 
the changes made through the proposed section 1332 waiver. Projected 
federal spending under the section 1332 waiver proposal would also need 
to include all administrative costs to the federal government, 
including any changes in IRS administrative costs, federal Exchange 
administrative costs, or other administrative costs associated with the 
waiver or alleviated by the waiver.
    Under the proposed policies and interpretations outlined in this 
rule, section 1332 waivers must not increase the federal deficit over 
the period of the waiver (which may not exceed 5 years unless renewed) 
or in total over the 10-year budget plan submitted by the state as part 
of the section 1332 waiver application. Consistent with the policies in 
the 2015 Guidance and in the 2018 Guidance, the 10-year budget plan 
would be required to describe for both the period of the waiver and for 
the 10-year budget the projected federal spending and changes in 
federal revenues under the section 1332 waiver and the projected 
federal spending and changes in federal revenues in the absence of the 
waiver for each year of the 10 years.
    The 10-year budget plan should assume the section 1332 waiver would 
continue permanently, but should not include federal spending or 
savings attributable to any period outside of the 10-year budget 
window. A variety of factors, including the likelihood and accuracy of 
projected spending and revenue effects and the timing of these effects, 
would be considered when evaluating the effect of the section 1332 
waiver on the federal deficit. A section 1332 waiver that increases the 
deficit in any given year is less likely to meet the proposed deficit 
neutrality requirement than one that does not.
    Upon consideration, the approach outlined in part 1 of the 2022 
Payment Notice final rule is consistent with E.O. 14009 as it will not 
reduce coverage or otherwise undermine the ACA and Medicaid.
    The Departments seek comment on these proposed policies and 
interpretations related to the deficit neutrality guardrail. The 
Departments believe this proposal would have minimal impact on both 
states with section 1332 waivers under development and states with 
approved waivers. The Departments solicit comment on the impact to 
stakeholders.
4. Section 1332 Application Procedures (31 CFR 33.108(f)(4) and 45 CFR 
155.1308(f)(4))
a. Actuarial and Economic Analysis (31 CFR 33.108(f)(4)(i-iii) and 45 
CFR 155.1308(f)(4)(i-iii))
    As required under 31 CFR 33.108(f)(4)(i-iii) and 45 CFR 
155.1308(f)(4)(i-iii), states must include actuarial analyses and 
actuarial certifications, economic analyses, and the data and 
assumptions used to demonstrate and support the state's estimates that 
the proposed section 1332 waiver will comply with the statutory 
guardrails. The Departments are not proposing any regulatory changes to 
31 CFR 33.108(f)(4)(i-iii) and 45 CFR 155.1308(f)(4)(i-iii), but are 
proposing, through preamble, policies relating to the requirements for 
the actuarial and economic analyses that are similar to the policies 
outlined in the 2015 and 2018 Guidance. We are proposing these policies 
to help ensure that the Departments have the appropriate and necessary 
information to measure the impact of waivers on the guardrails, 
particularly related to coverage. This information is especially 
important in light of the goal of E.O. 14009 to provide more 
comprehensive affordable coverage to consumers. In addition, the 
Departments encourage states to include in their analysis whether the 
proposed section 1332 waiver would increase health equity in line with 
E.O. 13985. The proposed policies are as follows:
    Consistent with the 2015 and 2018 Guidance, the determination of 
whether a proposed section 1332 waiver meets the requirements under 
section 1332 and the calculation of the pass-through funding amount 
would be made using generally accepted actuarial and economic analytic 
methods, such as micro-simulation. The analysis would rely on 
assumptions and methodologies that are similar to those used to produce 
the baseline and policy projections included in the most recent 
President's Budget (or Mid-Session Review), but adapted as appropriate 
to reflect state-specific conditions. As provided in 31 CFR 
33.108(f)(4)(i) and 45 CFR 155.1308(f)(4)(i), the state must include 
actuarial analyses and actuarial certifications to support the state's 
estimates that the proposed section 1332 waiver will comply with the 
comprehensive coverage requirement, the affordability requirement, and 
the scope of coverage requirement. In this

[[Page 35190]]

proposed rule, the Departments propose that, consistent with the 2018 
Guidance, these actuarial analyses and certifications should be 
conducted by a member of the American Academy of Actuaries.
    The Departments' analysis of whether a proposed section 1332 waiver 
meets the requirements under section 1332 would be based on state-
specific estimates of the current level and distribution of population 
by the relevant economic and demographic characteristics, consistent 
with the 2015 and 2018 Guidance, including income and source of health 
coverage. It would generally use federal estimates of population 
growth, and economic growth as published in the Analytical Perspectives 
volume released as part of the President's Budget (https://www.whitehouse.gov/omb/budget/Analytical_Perspectives) and health care 
cost growth (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index.html?redirect=/NationalHealthExpendData/) to project the initial 
state variables through the 10-year budget plan window. However, in 
limited circumstances where it is expected that a state will experience 
substantially different trends than the nation as a whole in the 
absence of a section 1332 waiver, the Secretaries may determine that 
state-specific assumptions will be used.
    Consistent with the 2018 Guidance and largely similar to the 2015 
Guidance, estimates of the effect of the section 1332 waiver would 
assume, in accordance with standard estimating conventions, that 
macroeconomic variables like population, output, and labor supply are 
not affected by the waiver. However, estimates would take into account, 
as appropriate, other changes in the behavior of individuals, 
employers, and other relevant entities induced by the section 1332 
waiver where applicable, including employer decisions regarding what 
coverage (and other compensation) they offer and individual decisions 
regarding whether to take up coverage. The same state-specific and 
federal data, assumptions, and model are used to calculate 
comprehensiveness, affordability, and coverage, and relevant state 
components of federal taxes and spending under the section 1332 waiver 
and under current law.
    The analysis and information submitted by the state as part of the 
section 1332 waiver application would conform to these standards as 
outlined in this proposed rule. Consistent with the 2015 and 2018 
Guidance, the application would describe all modeling assumptions used, 
sources of state-specific data, and the rationale for any deviation 
from federal forecasts. A state may be required under 31 CFR 
33.108(f)(4)(vii) and 45 CFR 155.1308(f)(4)(vii) to provide to the 
Secretaries copies of any data used for their section 1332 waiver 
analyses that are not publicly available so that the Secretaries can 
independently verify the analysis produced by the state.
    In this proposed rule, the Departments propose that, consistent 
with the 2018 Guidance, for each of the guardrails, the state would 
clearly explain its estimates with and without the section 1332 waiver. 
The actuarial and economic analyses would be required to compare 
comprehensiveness, affordability, coverage, and deficit neutrality with 
and without the section 1332 waiver. The deficit neutrality analysis 
would specifically examine net federal spending and revenues under the 
section 1332 waiver to those measures absent the waiver (the baseline) 
for each year of the waiver. If the state is submitting a section 1332 
waiver application for less than a 5-year period, the actuarial 
analysis could be submitted for the period of the waiver. The 
Departments, in accordance with their regulations, could request 
additional information or data in order to conduct their assessments.
    The state should also provide a description of the models used to 
produce these estimates, including data sources and quality of the 
data, key assumptions, and parameters for the section 1332 waiver. 
Consistent with the 2018 Guidance, the Departments are not proposing to 
prescribe any particular method of actuarial analysis to estimate the 
potential impact of a section 1332 waiver. However, the state should 
explain its modeling in sufficient detail to allow the Secretaries to 
evaluate the accuracy of the state's modeling and the comprehensiveness 
and affordability of the coverage available under the state's section 
1332 waiver proposal. As permitted under 31 CFR 33.108(g) and 45 CFR 
155.1308(g), the state may be required to provide, upon request by the 
Secretaries, data or other information that it used to make its 
estimates, including an explanation of the assumptions used in the 
actuarial analysis.
    The Departments seek comment on these proposals.
b. Implementation Timeline and Operational Considerations (31 CFR 
33.108(f)(4)(iv) and 45 CFR 155.1308(f)(4)(iv))
    As required under 31 CFR 33.108(f)(4)(iv) and 45 CFR 
155.1308(f)(4)(iv), states must include in their applications for 
initial approval of a section 1332 waiver a detailed draft timeline for 
the state's implementation of the proposed waiver. In this proposed 
rule, the Departments are not proposing any regulatory changes to 31 
CFR 33.108(f)(4)(iv) and 45 CFR 155.1308(f)(4)(iv). Rather, the 
Departments are proposing the operational considerations in preamble 
that states should take into account when developing their waiver 
application, waiver plan, and implementation timeline. Specifically, 
the Departments are proposing these operational considerations to 
provide additional information regarding how HHS and the IRS may be 
able to support a state in implementing a section 1332 waiver plan so 
states can take this information into consideration as it relates to 
their implementation timeline. These proposals would help to ensure 
that the Departments have the appropriate and necessary information to 
measure the impact of proposed waivers on the statutory guardrails, 
particularly related to coverage. This information is especially 
important in light of the goal of E.O. 14009 to provide more 
comprehensive affordable coverage to consumers. In addition, the 
Departments encourage states to include in their analysis whether the 
proposed section 1332 waiver would increase health equity in line with 
E.O. 13985. Upon consideration, the approach proposed with regard to 
operational considerations is revised from the 2018 Guidance with 
regard to the use of the Exchange information technology platform (the 
federal platform) and IRS operational considerations to maintain smooth 
operations of the Exchange consistent with E.O. 14009 and this 
Administration's goals to protect and strengthen Medicaid and the ACA 
and to make high-quality health care accessible and affordable for 
every American.
    The Departments seek comment on these proposals.
i. Use of Federal Platform Technology
    HHS operates the Federal platform utilized by FFEs and by some 
State Exchanges for eligibility and enrollment functions. For 
technical, operational, and fiscal efficiency, the Federal platform is 
generally designed to support uniform administration across

[[Page 35191]]

the states that utilize it. With that noted, HHS would be open to 
inquiries and further discussion with states that are developing 
section 1332 waiver proposals and are interested in potential technical 
collaboration. For example, over the past few years HHS has offered 
assistance to states implementing state-based reinsurance 
programs.\121\ Currently, states can request that the federal 
government assist with the calculation of issuers' eligible state 
reinsurance payments based on the state reinsurance parameters as part 
of the state's approved section 1332 waiver plan. Under this 
arrangement, states are still responsible for making reinsurance 
payments to issuers and otherwise administering and overseeing their 
programs.
---------------------------------------------------------------------------

    \121\ As of plan year 2021, HHS is providing this support for 
six states: Colorado, Delaware, Maryland, New Hampshire, North 
Dakota, and Pennsylvania.
---------------------------------------------------------------------------

    States that are interested in this assistance should notify HHS 
early in the process about the state's interest and the state's 
parameters (that is, claims cost-based, conditions-based, or other) for 
HHS to assess the feasibility of providing this support. Should a final 
proposal involve any customized or specialized federal technical or 
operational capabilities, states would be responsible for funding the 
development and operation of these capabilities under the 
Intergovernmental Cooperation Act (ICA).\122\ Under the ICA, a federal 
agency generally may provide certain technical and specialized services 
to state governments, so long as the state covers the full costs of 
those services. Accordingly, where a state intends to rely on HHS for 
technical services related to its section 1332 waiver proposal, the 
state would be required to cover HHS's costs. For example, states 
implementing state-based reinsurance programs that request technical or 
specialized services from HHS with respect to calculating state 
reinsurance payments are responsible for the federal costs associated 
with providing this service, including development, implementation, 
maintenance, operations, and customer support. For this reason, under 
this proposal, should HHS and a state agree to such technical or 
specialized services to support an approved section 1332 waiver plan, 
the Departments would not consider costs for HHS services covered under 
the ICA as an increase in federal spending resulting from the state's 
waiver plan for purposes of the deficit neutrality analysis.
---------------------------------------------------------------------------

    \122\ Public Law 90-577 found here: https://www.govinfo.gov/content/pkg/STATUTE-82/pdf/STATUTE-82-Pg1098.pdf.
---------------------------------------------------------------------------

    As noted in the preamble of this proposed rule for the deficit 
neutrality guardrail, costs associated with changes to federal 
administrative processes that are not covered under the ICA would be 
taken into account in determining whether a waiver application 
satisfies the deficit neutrality requirement. Regulations at 31 CFR 
33.108(f)(4) and 45 CFR 155.1308(f)(4), require that such costs be 
included in the 10-year budget plan submitted by the state. As specific 
section 1332 waiver proposals are submitted, HHS would work closely 
with states to determine which federal costs are covered under the ICA 
(and thus are not subject to deficit neutrality guardrail), and which 
are not covered under the ICA (and thus are subject to the deficit 
neutrality guardrail).
ii. IRS Functionality
    Certain changes that affect IRS administrative processes may make a 
section 1332 waiver proposal infeasible for the Departments to 
accommodate. At this time, the IRS generally is not able to administer 
different sets of federal tax rules for different states. As a result, 
while a state may propose to entirely waive the application of one or 
more of the federal tax provisions listed in section 1332 for taxpayers 
in the state, it is generally not feasible to design a section 1332 
waiver that would require the IRS to administer a program that alters 
these provisions for taxpayers in the state.
    In some limited circumstances, the IRS may be able to accommodate 
small adjustments to the existing systems for administering federal tax 
provisions. However, it is generally not feasible to have the IRS 
administer a different set of PTC eligibility or PTC computation rules 
for individuals in a particular state. Thus, states contemplating a 
waiver proposal that includes a modified version of a federal tax 
provision could consider waiving the provision entirely and creating a 
subsidy program administered by the state as part of a section 1332 
waiver proposal.
    In addition, a section 1332 waiver proposal that partly or 
completely waives one or more federal tax provisions in a state may 
create administrative costs for the IRS. As noted in the preamble for 
the deficit neutrality guardrail of this proposed rule, costs 
associated with changes to federal administrative processes would be 
taken into account in determining whether a waiver application 
satisfies the deficit neutrality requirement. Regulations at 31 CFR 
33.108(f)(4) and 45 CFR 155.1308(f)(4), require that such costs be 
included in the 10-year budget plan submitted by the state. States 
contemplating to waive any part of a federal tax provision should 
engage with the Departments early in the section 1332 waiver 
application process to assess whether the waiver proposal is feasible 
for the IRS to implement, and, if applicable, to assess the 
administrative costs to the IRS of implementing the waiver proposal.
5. Public Input on Waiver Proposals (31 CFR 33.112 and 45 CFR 155.1312)
    Section 1332(a)(4)(B)(i) of the ACA, and regulations at 31 CFR 
33.112 and 45 CFR 155.1312, require states to provide a public notice 
and comment period for a section 1332 waiver application sufficient to 
ensure a meaningful level of public input prior to submitting an 
application. In this proposed rule, the Departments are not proposing 
any regulatory changes to 31 CFR 33.112 and 45 CFR 155.1312. Under the 
current requirements, as part of the state's public notice and comment 
period, a state with one or more federally-recognized tribes must 
conduct a separate process for meaningful consultation with such 
tribes.\123\ In addition, a state must make available, at the beginning 
of its public notice and comment period, through its website or other 
effective means of communication, a public notice that includes all of 
the information outlined in 31 CFR 33.112(b) and 45 CFR 155.1312(b). 
The state must also update this information, as appropriate. After 
issuance of this notice and prior to submission of a new section 1332 
waiver application, the state must conduct public hearings and provide 
interested parties an opportunity to learn about and comment on the 
contents of the state's section 1332 waiver application.\124\ Because 
section 1332 waiver applications may vary significantly in their 
complexity and breadth, the regulations provide states with flexibility 
in determining the length of the comment period required to allow for 
meaningful and robust public engagement. Consistent with federal civil 
rights law, including Section 1557 of the ACA, Section 504 of the 
Rehabilitation Act of 1973, and Title II of the Americans with 
Disabilities Act, section 1332 waiver applications must be posted 
online in a manner that is accessible to individuals with disabilities. 
To assist with ensuring website accessibility, states may look to

[[Page 35192]]

national standards issued by the Architectural and Transportation 
Barriers Compliance Board (often referred to as ``section 508'' 
standards''),\125\ or alternatively, the World Wide Web Consortium's 
Web Content Accessibility Guidelines (WCAG) \126\ 2.0 Level AA 
standards.
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    \123\ See 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2).
    \124\ See 31 CFR 33.112(c) and 45 CFR 155.1312(c).
    \125\ For more information on 508 standards see here: https://section508.gov/manage/program-roadmap.
    \126\ For more information, see the WCAG website at http://www.w3.org/TR/WCAG20/.
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    Through this preamble, the Departments are proposing policies and 
interpretations for the state public notice requirements. More 
specifically, the Departments propose to maintain the current standard 
that the state comment period for a section 1332 waiver application 
should generally be no less than 30 days.\127\ The Departments are of 
the view that a general standard requiring a minimum 30 day comment 
period will be sufficient to allow for meaningful and robust public 
engagement on a state's waiver application and reiterate that a longer 
period may be appropriate for complex proposed waiver plans.
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    \127\ Notwithstanding this proposal, we clarify that states with 
approved waivers and states seeking approval for proposed waivers 
would continue to have flexibility to submit requests to the 
Departments to modify certain public participation requirements 
during the COVID-19 PHE. See 31 CFR 33.118 and 45 CFR 155.1318. Also 
see the November 2020 IFC, 85 FR 71142. As detailed below, in this 
rulemaking, the Departments propose to extend similar flexibilities 
during future emergent situations.
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    Section 1332(a)(4)(B)(iii) of the ACA and its implementing 
regulations \128\ also require the federal government to provide a 
public notice and comment period, once the Secretaries receive an 
application. The period must be sufficient to ensure a meaningful level 
of public input and must not impose requirements that are in addition 
to, or duplicative of, requirements imposed under the Administrative 
Procedure Act, or requirements that are unreasonable or unnecessarily 
burdensome with respect to state compliance.\129\ Under existing 
regulations, 31 CFR 33.108(f) and 45 CFR 155.1308(f), a submitted 
section 1332 waiver application will not be deemed received until the 
Secretaries have made the preliminary determination that the 
application is complete. As with the comment period described in this 
preamble, the length of the federal comment period should reflect the 
complexity of the section 1332 waiver proposal and the Departments 
similarly propose that the federal comment period should also generally 
not be less than 30 days.\130\
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    \128\ See 31 CFR 33.116 and 45 CFR 155.1316.
    \129\ See section 1332(a)(4)(B)(iii) of the ACA, 31 CFR 
33.116(b) and 45 CFR 155.1316(b).
    \130\ Notwithstanding this proposal, the Departments clarify 
that states with approved waivers and states seeking approval for 
proposed waivers would continue to have flexibility to submit 
requests to the Departments to modify certain public participation 
requirements during the COVID-19 PHE. See 31 CFR 33.118 and 45 CFR 
155.1318. Also see the November 2020 IFC, 85 FR 71142. As detailed 
below, in this rulemaking, the Departments propose to extend similar 
flexibilities during future emergent situations.
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    The Departments seek comment on these proposals.
6. Modification From the Normal Public Notice Requirements (31 CFR 
33.118, 31 CFR 33.120, 45 CFR 155.1318, and 45 CFR 155.1320)
    In the November 2020 IFC,\131\ the Departments revised regulations 
to set forth flexibilities in the public notice requirements and post 
award public participation requirements for waivers under section 1332 
during the COVID-19 PHE. In this proposed rule, the Departments are 
proposing to extend these changes beyond the COVID-19 PHE to allow 
similar flexibilities in the event of future natural disasters; PHEs; 
or other emergent situations that threaten consumers' access to health 
insurance coverage, consumers' access to health care, or human life. 
The Departments propose to consider a situation to be ``emergent'' if 
it is both unforeseen and urgent. The Departments are not proposing any 
changes or soliciting further comments at this time with respect to the 
flexibility made available in the November 2020 IFC during the COVID-19 
PHE. The Departments further clarify that states with approved section 
1332 waivers and states seeking approval for proposed waivers will 
continue to have flexibility to submit requests to the Departments to 
modify certain public participation requirements during the COVID-19 
PHE.\132\
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    \131\ 85 FR 71142 See https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
    \132\ See 85 FR 71142.
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    In the 2022 Payment Notice proposed rule,\133\ CMS similarly 
proposed an extension of COVID-19 policy flexibilities, specifically 
the calculation of plan average premium and state average premium 
requirements for extending future premium credits (``temporary premium 
credits''), which was originally published in the November 2020 
IFC.\134\ In part 2 of the 2022 Payment Notice final rule, HHS 
finalized these policies to extend beyond the COVID-19 PHE, to be 
available, if permitted by HHS, during a future declared PHE.\135\ In 
developing the policies in this rulemaking, the Departments considered 
extending the section 1332 flexibilities adopted in the November 2020 
IFC only to future declared PHEs, but are of the view that these 
flexibilities, as proposed in this proposed rule to be available on a 
broader basis in different times of emergent situations, will allow 
states to use or modify their waivers to respond to state or local 
emergent situations that may not rise to the level of a national 
declared PHE. The Departments are of the view that this best aligns 
with the overall statutory purpose and goals for section 1332 waivers, 
which are meant to allow states to craft their own unique solutions to 
respond to the specific health care needs in their respective markets. 
If the Departments were to limit these flexibilities only to future 
declared national PHEs, states may not be able to utilize or modify 
their section 1332 waivers as a tool to address state or local emergent 
situations or state designated emergencies which may similarly threaten 
consumers' access to health insurance coverage, consumers' access to 
health care, or human life.
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    \133\ See 85 FR at 78597-78598 and 78608-78609.
    \134\ 85 FR 54820.
    \135\ 86 FR at 24182-24183 and 24202-24203.
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    In addition, the flexibilities outlined in this proposed rule are 
similar to those available under section 1115 demonstrations. Existing 
regulations at 42 CFR 431.416(g), relating to demonstration programs 
under section 1115 of the Act, provide that CMS may waive, in whole or 
in part, the state and federal public notice requirements to expedite a 
decision on a proposed 1115 demonstration or 1115 demonstration 
extension request that addresses a natural disaster, PHE, or other 
sudden emergency threat to human life. The Departments are of the view 
that using a similar standard for section 1332 waivers will provide 
states the necessary flexibility to enable them to quickly respond to 
various emergent situations. For example, some states have used 
flexibilities for section 1115 demonstrations in emergent situations to 
address threats to human life such as mudslides and wildfires which 
were state designated emergencies.
    The Secretaries value the importance of the public input process, 
but also intend to propose to provide reprieve from certain 
requirements, where appropriate, in emergent situations. Allowing the 
Secretaries to modify the public notice and post award requirements, as 
proposed in this rule, would allow states to seek emergency relief in 
support of the development of

[[Page 35193]]

quick and innovative ways to ensure consumers across the country have 
access to health care coverage in the face of unforeseen threats to 
that coverage. As was noted in November 2020 IFC, HHS and the 
Department of the Treasury are concerned that past trends that threaten 
the stability of the individual market risk pool may return, leading 
some issuers to cease offering coverage on the Exchanges in some states 
and counties and leading other issuers to increase their rates, leaving 
some geographic areas with limited or no affordable Exchange coverage 
options. Permitting the Secretary of HHS and the Secretary of the 
Treasury to modify the public notice procedures, in part, will help 
states seeking section 1332 waivers to address such circumstances more 
quickly and develop innovative ways to ensure consumers have access to 
affordable health care coverage. Specifically, in this proposed rule, 
the Departments propose to modify 31 CFR 33.118 and 45 CFR 155.1318 to 
broaden the Secretaries' authority to modify, in part, the otherwise 
applicable public notice procedures to expedite a decision on a 
proposed section 1332 waiver request that is submitted or would 
otherwise become due during emergent situations, when a delay would 
undermine or compromise the purpose of the proposed waiver request and 
be contrary to the interests of consumers. The amendments to these 
regulations further clarify that these proposed flexibilities would be 
available in future natural disasters; PHEs; and other emergent 
situations that threaten consumers' access to health insurance 
coverage, consumers' access to health care, or human life, rather than 
being limited to only the duration of the COVID-19 PHE. These 
amendments could also allow states to better utilize section 1332 
waivers in emergent situations.
    The Departments also propose to modify 31 CFR 33.120(c)(2) and 45 
CFR 155.1320(c)(2) to provide the Secretaries with similar authority to 
modify, in part, otherwise applicable post award public notice 
requirements for an approved waiver outlined in 31 CFR 33.120(c) and 45 
CFR 155.1320(c) when the application of the post award public notice 
procedures would be contrary to the interests of consumers during a 
natural disaster; PHE; or other emergent situations that threaten 
consumers' access to health insurance coverage, consumers' access to 
health care, or human life, rather than limiting this flexibility only 
to the duration of the COVID-19 PHE. These proposals expand on policies 
published in the November 2020 IFC that are limited to the COVID-19 
PHE.
a. Public Notice Procedures and Approval (31 CFR 33.118 and 45 CFR 
155.1318)
    Section 1332(a)(4)(B) of the ACA provides that the Secretaries 
shall issue regulations providing a process for public notice and 
comment at the state level, including public hearings, and a process 
for providing public notice and comment at the federal level after the 
section 1332 waiver application is received by the Secretaries, that 
are both sufficient to ensure a meaningful level of public input. 
Current regulations at 31 CFR 33.112 and 45 CFR 155.1312 specify state 
public notice and participation requirements for proposed section 1332 
waiver requests, and 31 CFR 33.116(b) and 45 CFR 155.1316(b) specify 
the public notice and comment period requirements under the 
accompanying federal process.
    As explained in the November 2020 IFC, the Departments recognize 
that the current section 1332 waiver regulations regarding state and 
federal public notice procedures and comment period requirements may 
impose barriers for states pursuing a proposed waiver request during an 
emergent situation, such as the COVID-19 PHE or a future natural 
disaster; PHE; or other emergent situation that threatens consumers' 
access to health insurance coverage, consumers' access to health care, 
or human life. It is the mission of the Departments to enhance and 
protect the health and well-being of all Americans. As such, the 
Departments are proposing to extend the existing flexibilities codified 
in regulations to protect public health and access to health insurance 
coverage and care during the COVID-19 PHE to also apply in the event of 
a future emergent situation, such as a natural disaster; a PHE; or 
other emergent situations that threaten consumers' access to health 
insurance coverage, consumers' access to health care, or human life. 
These flexibilities have been important during the COVID-19 PHE and 
support efforts to prevent the spread of COVID-19 by limiting the need 
for in-person gatherings related to section 1332 waivers during the 
PHE. Extending these flexibilities beyond the COVID-19 PHE to future 
emergent situations is important to similarly help states as they may 
face uncertainty as to whether their waiver request will be approved in 
time, given the otherwise applicable state and federal public notice 
procedures or public participation requirements, to expeditiously 
reform their health insurance markets and to protect consumers during a 
future emergent situation. Some states may not consider more robust 
changes because they are concerned that the current section 1332 waiver 
application requirements are too time-consuming or burdensome to pursue 
during a future emergency or other emergent situation. Therefore, the 
Departments are of the view that providing similar flexibility to 
modify certain public notice procedures and participation requirements 
during a future emergent situation will protect public health and 
health insurance markets, and will increase flexibility and reduce 
burdens for states seeking to use section 1332 waivers as a means of 
innovation for providing coverage, lowering premiums, and improving 
their health care markets.
    Permitting the Secretaries to modify the public notice procedures, 
in part, when a delay would undermine or compromise the purpose of the 
proposed section 1332 waiver request and be contrary to the interests 
of consumers will help states seeking section 1332 waivers to address 
such circumstances more quickly to ensure consumers have access to 
affordable health care coverage throughout the emergent situation. As 
such, the Departments are of the view that, if certain safeguards are 
met, it is in the best interest of the public to provide states 
applying for section 1332 waivers with the option to request to modify 
public notice procedures during an emergent situation. Based on the 
Departments' experience with the current COVID-19 PHE, the Departments 
are of the view that it is appropriate and reasonable to propose to 
make similar flexibilities available in future emergent situations.
    The Departments are therefore proposing to modify 31 CFR 33.118(a) 
and 45 CFR 155.1318(a) to provide that the Secretaries may modify, in 
part, the state public notice requirements specified in 31 CFR 
33.112(a)(1), (b), (c), and (d) and 45 CFR 155.1312(a)(1), (b), (c), 
and (d) and the federal public notice requirements specified at 31 CFR 
33.116(b) and 45 CFR 155.1316(b) to expedite a decision on a proposed 
section 1332 waiver request during an emergent situation, when a delay 
would undermine or compromise the purpose of the proposed waiver 
request and would be contrary to the interests of consumers. The 
proposed amendments to 33 CFR 33.118(a) and 45 CFR 155.1318(a) further 
specify that these flexibilities would be limited to emergent 
situations, including natural disasters; PHEs; or other emergent 
situations that threaten consumers'

[[Page 35194]]

access to health insurance coverage, consumers' access to health care, 
or human life.
    As noted earlier in this section of the preamble, the existing 
flexibility made available in the November 2020 IFC \136\ for the 
COVID-19 PHE will continue to apply. The Departments also clarify that, 
similar to the November 2020 IFC, this rule does not propose to allow 
states to waive 31 CFR 33.112(a)(2) and 45 CFR 155.1312(a)(2), which 
requires states to conduct a separate process for meaningful 
consultation with federally-recognized tribes. The Departments note 
that tribal consultation is subject to separate requirements in 
accordance with Executive Order 13175,\137\ which mandates the 
establishment of regular and meaningful consultation and collaboration 
with tribal officials in the development of federal policies that have 
tribal implications.
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    \136\ See 85 FR 71142, https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency.
    \137\ See 85 FR 71142, 71178.
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    In addition, the Departments clarify that a state cannot use this 
flexibility to request to eliminate public notice and participation 
procedures. Instead, this is a targeted proposal intended to extend the 
existing COVID-19 PHE flexibilities to future emergent situations to 
remove potential barriers and allow both the federal government and 
states flexibility to respond to emergent situations as they unfold. It 
is limited to permitting states to request to modify, in part, certain 
otherwise applicable public notice and participation requirements.
    Examples of the public notice and participation procedures that 
currently apply that, under this proposal, a state may seek to have 
waived or modified during a future emergent situation include the 
requirement that states notify the public and hold hearings prior to 
submitting an application, that the state hold more than one public 
hearing in more than one location, and that the Departments provide for 
public notice and comment after an application is determined to be 
complete. States may also seek to modify the state and/or federal 
comment periods to be less than 30 days and to host public hearings 
virtually rather than in-person.
    In addition, the Departments are of the view that these 
flexibilities are necessary to allow states flexibility to respond to 
rapid changes in the event of a future emergent situation and note that 
these proposals align with existing flexibilities available for public 
health programs that do not apply to section 1332 waivers. For example, 
when the President declares a disaster or emergency under the Stafford 
Act or the National Emergencies Act and the Secretary of HHS declares a 
PHE under section 319 of the Public Health Service Act, section 1135 of 
the Act allows the Secretary of HHS to temporarily waive or modify 
certain Medicare, Medicaid, and CHIP requirements to ensure: (1) 
Sufficient health care items and services are available to meet the 
needs of individuals enrolled in these programs in the emergency 
area(s) and time periods; and (2) providers who give such services in 
good faith can be reimbursed and exempted from sanctions (absent any 
determination of fraud and abuse). However, section 1135 of the Act 
does not apply to or otherwise provide the Departments with authority 
to waive or modify requirements regarding section 1332 waivers when 
similar events cause similar impacts in the private health insurance 
markets. The proposed modifications to the Departments' section 1332 
waiver regulations outlined in this rule are designed to generally 
align with the section 1135 flexibilities, but would be available in 
broader circumstances than emergencies or disasters declared under the 
Stafford Act or the National Emergencies Act and public health 
emergencies declared under section 319 of the Public Health Service 
Act. The Departments are proposing to apply this flexibility to include 
other emergencies at the state or local level to allow states to better 
address all of the various emergent situations that may impact their 
state health insurance markets and residents access to coverage and 
care.
    Consistent with the existing framework for state modification 
requests related to the COVID-19 PHE, for a state request to modify the 
state or federal public notice requirements to expedite a decision on a 
proposed section 1332 waiver request during an emergent situation to be 
approved, the state must meet the requirements outlined in 31 CFR 
33.118(b) and 45 CFR 155.1318(b). Under this proposal, the Secretaries 
could approve a state's request to modify the federal and/or state 
public notice procedures, in part, in future emergent situations if the 
state meets all of the following requirements:
    <bullet> The state requests a modification in the form and manner 
specified by the Secretaries.
    <bullet> The state acted in good faith, and in a diligent, timely, 
and prudent manner in the preparation of the request for the 
modification for the section 1332 waiver, and the waiver application 
request, as applicable.
    <bullet> The state details in its request for a modification, as 
applicable, the justification for the requested modification from the 
state public notice procedures, and the alternative public notice 
procedures it proposes to implement at the state level, including 
public hearings, that are designed to provide the greatest opportunity 
and level of meaningful public input from impacted stakeholders that is 
practicable given the emergency circumstances underlying the state's 
request for a modification.
    <bullet> The state details in its request for a modification, as 
applicable, the justification for the request and the alternative 
public notice procedures it requests to be implemented at the federal 
level.
    The Departments also propose that the state, as applicable, 
implements the alternative public notice procedures at the state level 
if the state's modification request is approved and, if required, 
amends the section 1332 waiver application to specify that it is the 
state's intent to comply with those alternative public notice 
procedures in the state's modification request. These are the same 
requirements that apply under the existing framework for state 
modification requests related to the COVID-19 PHE and are currently 
captured in 31 CFR 33.118(b)(1) through (4) and (f) and 45 CFR 
155.1318(b)(1) through (4) and (f).\138\
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    \138\ To effectuate the extension of these flexibilities to 
future emergent situations, the Departments propose to amend 31 CFR 
33.118(b)(3) and 45 CFR 155.1318(b)(3) to replace the current 
reference to ``public health emergency'' with ``the emergent 
situation.'' This criterion otherwise remains the same.
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    Any state submitting a proposed section 1332 waiver application 
during a future emergent situation could submit a separate request to 
the Secretaries to modify, in part, certain otherwise applicable state 
and/or federal public notice and public participation requirements or 
could include such a request in its section 1332 waiver application 
request.
    Consistent with the framework for COVID-19 PHE state modification 
requests, the Secretaries' review and consideration of a modification 
request for future emergent situations would vary based on the state's 
circumstances, its modification request, and the complexity and breadth 
of the state's proposed section 1332 waiver request. For example, 
during the COVID-19 PHE, many states prohibited in-person public 
gatherings or established stay-at-home orders due to the public health

[[Page 35195]]

threat.\139\ States seeking new section 1332 waiver(s) that had such 
prohibitions in effect at the time they would have otherwise had to 
conduct public notice were unable to hold two in-person public hearings 
prior to submission of their section 1332 waiver applications. In 
similar future emergent situations, this approach would allow the 
Secretaries to grant the state's request to hold the two public 
hearings virtually, rather than in-person, or to hold one public 
hearing at the state level, rather than two public hearings at the 
state level, if the state's request meets other applicable 
requirements. As another example, the Secretaries may agree with a 
state's determination that, due to emergent circumstances that have 
arisen related to a natural disaster, there is insufficient time for 
the state to provide public notice and hold any public hearings at the 
state level prior to submitting its section 1332 waiver application as 
would otherwise be required by 31 CFR 33.112(a) and 45 CFR 155.1312(a), 
and grant the state's request to provide public notice and hold public 
hearings at the state level after the state's submission of its 
application if the state's request meets other applicable requirements.
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    \139\ https://khn.org/morning-breakout/states-declare-emergencies-ban-large-gatherings-as-coronavirus-sweeps-the-nation/. 
https://www.axios.com/states-shelter-in-place-coronavirus-66e9987a-a674-42bc-8d3f-070a1c0ee1a9.html.
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    In situations where the Departments approve a state's modification 
request to provide public notice and host the state-level hearings on a 
different timeframe or setting, such as after the submission of a 
state's waiver application request, the state would be required to 
amend the application request as necessary to reflect public comments 
or other relevant feedback received during the alternative state-level 
public notice procedures. The Departments would evaluate a state's 
request for a modification of the public participation requirements and 
issue their modification determination within approximately 15 calendar 
days after the request is received. In assessing whether a state acted 
in good faith, and in a diligent, timely, and prudent manner in the 
preparation of the modification request for the waiver, and for the 
section 1332 waiver application, the Departments would evaluate whether 
the relevant circumstances are sufficiently emergent. The Departments 
propose in new proposed 31 CFR 33.118(g) and 45 CFR 155.1318(g) that 
the Departments will consider circumstances to be emergent when they 
could not have been reasonably foreseen. In addition, the Departments 
propose to assess ``reasonable foreseeability'' based on the specific 
issues that a section 1332 waiver proposes to address and other 
relevant factors, and would not make this assessment based solely on 
the number of days a state may have been aware of such issues. Other 
relevant factors that the Departments would consider include the 
specific circumstances involved, the nature and extent of the future 
emergent situation, and whether the state could have predicted the 
situation. To assist the Departments with making this assessment the 
Departments also propose to capture a new requirement at 31 CFR 
33.118(b)(5) and 45 CFR 155.1318(b)(5) to require a state submitting a 
modification request must also explain in its request how the 
circumstances underlying its request result from a natural disaster; 
PHE; or other emergent situations that threaten consumers' access to 
health insurance coverage, consumers' access to health care, or human 
life could not be reasonably have been foreseen and how a delay would 
undermine or compromise the purpose of the waiver and be contrary to 
the interests of consumers.
    The Departments remind states that any public participation 
processes must continue to comply with applicable federal civil rights 
laws,\140\ including taking reasonable steps to provide meaningful 
access for individuals with limited English proficiency and taking 
appropriate steps to ensure effective communication with individuals 
with disabilities, including accessibility of information and 
communication technology. It is also important for states to remember 
that virtual meetings may present additional accessibility challenges 
for people with communications and mobility disabilities, as well as to 
those who lack broadband access. The Departments expect states to take 
these considerations into account when seeking flexibility to modify 
the public participation requirements as the overall statutory and 
regulatory obligation to ensure a meaningful level of public input 
during the public notice and comment period would continue to apply. By 
way of example, ensuring effective communication during a future 
emergent situation when the otherwise applicable public notice and 
participation requirements are modified may include providing American 
Sign Language interpretation and real-time captioning as part of a 
virtual hearing, and ensuring that the platform used to host the 
hearing is interoperable with assistive technology for those with 
mobility difficulties. The Departments especially encourage states to 
strive to obtain meaningful input from potentially affected 
populations, including low-income residents, residents with high 
expected health care costs, persons less likely to have access to care, 
and members of federally-recognized tribes, if applicable, as part of 
any alternative public participation process.
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    \140\ The HHS Office for Civil Rights enforces applicable 
federal civil rights laws that prohibit discrimination on the basis 
of race, color, national origin, sex, age, or disability, as well as 
laws protecting the exercise of conscience and religious freedom, 
including the Religious Freedom Restoration Act (42 U.S.C. 2000bb 
through 2000bb-4). HHS's requirements are subject to these laws, and 
states may have obligations under these laws to protect conscience, 
prohibit coercion, and to ensure the free exercise of religion. U.S. 
Department of Health & Human Services, Office for Civil Rights, 
Conscience and Religious Freedom, https://www.hhs.gov/conscience/index.html (last visited Aug. 20, 2020).
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    Consistent with the framework for COVID-19 PHE state modification 
requests, the Secretary of HHS would publish on the CMS website any 
modification determinations within 15 calendar days of the Secretaries 
making such a determination, as well as the approved revised timeline 
for public comment at the state and federal level, as applicable.\141\ 
In addition, the state would be required to publish on its website any 
modification requests and determinations within 15 calendar days of 
receipt of the determination, as well as the approved revised timeline 
for public comment at the state and Federal level, as applicable.\142\
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    \141\ See 31 CFR 33.118(d) and 45 CFR 155.1318(d).
    \142\ See 31 CFR 33.118(e) and 45 CFR 155.1318(e).
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    The Departments seek comment on these proposals.
b. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
    As section 1332 waivers are likely to a have a significant impact 
on individuals, states, and the federal government, the 2012 Final Rule 
established processes and methodologies to ensure that the Secretaries 
receive adequate and appropriate information regarding section 1332 
waivers (consistent with section 1332(a)(4)(B)(iv) of the ACA). As part 
of the Departments' monitoring and oversight of approved section 1332 
waivers, the Secretaries monitor the state's compliance with the 
specific terms and conditions of the waiver, including, but not limited 
to, compliance with the guardrails, reporting requirements, and the 
post

[[Page 35196]]

award forum requirements.\143\ Under 31 CFR 33.120(c) and 45 CFR 
155.1320(c), to ensure continued public input within at least six 
months after the implementation date, and annually thereafter, states 
are required to hold a public forum at which members of the public have 
an opportunity to provide comments on the progress of the program 
authorized by the section 1332 waiver and to provide a summary of this 
forum to the Secretary of HHS for the Departments' review as part of 
the quarterly and annual reports required under 31 CFR 33.124 and 45 
CFR 155.1324. Under 31 CFR 33.120(c)(1) and 45 CFR 155.1320(c)(1), 
states are required to publish the date, time, and location of the 
public forum in a prominent location on the state's public website at 
least 30 days prior to the date of the planned public forum. In the 
November 2020 IFC, the Departments added 31 CFR 33.120(c)(2) and 45 CFR 
155.1320(c)(2) to provide that the Secretaries may waive, in part, post 
award public notice requirements during the COVID-19 PHE when certain 
criteria were met.
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    \143\ See section 1332(a)(4)(iv) and (v). Also see 31 CFR 33.120 
and 45 CFR 155.1320.
---------------------------------------------------------------------------

    In this rulemaking, the Departments propose to modify 31 CFR 
33.120(c)(2) and 45 CFR 155.1320(c)(2), to extend the flexibilities 
currently provided during the COVID-19 PHE to permit the Secretaries to 
modify in part, certain post award public notice requirements in 31 CFR 
33.120(c) and 45 CFR 155.1320(c) for approved waivers during a future 
emergent situation when the application of the post award public notice 
procedures would be contrary to the interests of consumers. Extending 
these flexibilities beyond the COVID-19 PHE to future emergent 
situations is important to help states as they may face similar 
uncertainty as to whether they are able to comply with the otherwise 
applicable post award requirements in such situations. For example, the 
state post award procedures generally require an in-person gathering. 
Based on the Departments' experience with the current COVID-19 PHE, the 
Departments are of the view that it is appropriate and reasonable to 
propose to make similar flexibilities available in future emergent 
situations as those circumstances may also limit the ability for the 
state to host in-person gatherings. The Departments are not proposing 
any changes or soliciting further comments at this time with respect to 
the flexibility made available in the November 2020 IFC in response to 
the COVID-19 PHE. States with approved section 1332 waivers will 
continue to have flexibility to submit requests to the Departments to 
modify certain post award public notice requirements during the COVID-
19 PHE.\144\
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    \144\ See 85 FR 71142.
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    Consistent with the framework for state modification requests 
related to the COVID-19 PHE, under this proposal, the Secretaries could 
similarly approve a state request to modify the post award public 
notice procedures, in part, when the application of the post award 
public notice requirements would be contrary to the interest of 
consumers during the future emergent situation. The Departments propose 
to amend the title in 31 CFR 33.120(c)(2) and 45 CFR 155.1320(c)(2) and 
to amend the text at 31 CFR 33.120(c)(2)(i) and 45 CFR 
155.1320(c)(2)(i) to replace the references to ``the public health 
emergency'' with ``an emergent situation.'' Amendments are also 
proposed to the last sentence of 31 CFR 33.120(c)(2)(i) and 45 CFR 
155.1320(c)(2)(i) to replace the language that limits these 
flexibilities to the COVID-19 PHE to reflect the broader proposed 
applicability to emergent situations, including natural disasters; 
PHEs; or other emergent situations that threaten consumers' access to 
health insurance coverage, consumers' access to health care, or human 
life. In addition, the Departments propose that the Secretaries could 
approve a state's post award modification request if the state meets 
all of the following requirements:
    <bullet> The state requests a modification in the form and manner 
specified by the Secretaries.
    <bullet> The state acts in good faith, and in a diligent, timely, 
and prudent manner to comply with the monitoring and compliance 
requirements under the regulations and specific terms and conditions of 
the section 1332 waiver and to submit and prepare the request for a 
modification.
    <bullet> The state details in its request for a modification the 
reason(s) for the alternative post award public notice procedures it 
proposes to implement at the state level, including public hearings, 
that are designed to provide the greatest opportunity and level of 
meaningful public input from impacted stakeholders that is practicable 
given the emergent circumstances underlying the state's request for a 
modification.
    These are the same requirements that apply under the existing 
framework for state post award modification requests related to the 
COVID-19 PHE currently captured in 31 CFR 33.120(c)(2)(ii)(A) through 
(C) and 45 CFR 155.1320(c)(2)(ii)(A) through (C).
    Under this proposal, a state may request to modify the otherwise 
applicable public participation requirements to host the public forum 
for an approved section 1332 waiver that would take place or become due 
during an emergent situation virtually rather than as an in person 
gathering. When reviewing state modification requests, the Departments 
would remain focused on ensuring the public is informed about the 
implementation of programs authorized by section 1332 waivers and has a 
meaningful opportunity to comment on its implementation.
    Consistent with the framework for COVID-19 state modification 
requests, the Secretaries would evaluate a state's request for a 
modification of certain post award public participation requirements 
during a future emergent situation and issue their modification 
determination within approximately 15 calendar days after the request 
is received.\145\ The state would be required to publish on its website 
any modification requests and determinations by the Departments within 
15 calendar days of receipt of the determination, as well as 
information on the approved revised timeline for the state's post award 
public notice procedures, as applicable.\146\ Since the state is 
already required to post materials as part of post award annual 
reporting requirements, such as the notice for the public forum and 
annual report, states would be responsible for ensuring that the public 
is aware of the determination to modify the public notice procedures 
and would be required to include this information along with the other 
information required under 31 CFR 33.120(c)(1) and 45 CFR155.1320(c)(1) 
for the alternative procedures in a prominent location on the state's 
public website.
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    \145\ See 31 CFR 33.120(c)(2)(ii)(D) and 45 CFR 
155.1320(c)(2)(ii)(D).
    \146\ See 31 CFR 33.120(c)(2)(ii)(E) and 45 CFR 
155.1320(c)(2)(ii)(E).
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    The Departments are of the view that post award public forums are 
critical to ensure that the public has a regular opportunity to learn 
about and comment on the progress of section 1332 waivers. Based on the 
Departments' experience during COVID-19 PHE, the Departments believe it 
is appropriate and reasonable to propose to provide similar 
flexibilities and permit states to request to modify certain post award 
public participation requirements in future emergent situations. States 
that receive approval to modify, in part, these post award public 
notice procedures would

[[Page 35197]]

still need to meet all other applicable requirements specified in 31 
CFR 33.120(c) and 45 CFR 155.1320(c). For example, if the state 
receives a modification approval that permits it to hold the post award 
public forum virtually instead of in person, the state must still 
publish the notice of its post award public notice on the state's 
public website and use other effective means to communicate the 
required information to the public. The public notice must include the 
website, date, and time of the public forum that will be convened by 
the state, information related to the timeframe for comments, and how 
comments from the public on the section 1332 waiver must be submitted. 
The Departments remind states that they still must also comply with 
applicable federal civil rights requirements, including laws pertaining 
to accessibility, if the Secretaries approve a modification from post 
award public notice procedures. For example, a state that receives 
approval to host the required public hearing(s) virtually would need to 
ensure the hearings are accessible to individuals with disabilities and 
individuals with limited English proficiency (LEP) so members of the 
public can participate and submit comments. The state should also track 
how many people are attending these forums, if possible.
    In assessing whether a state acted in good faith, and in a 
diligent, timely, and prudent manner when reviewing a state's post 
award modification request, the Departments would evaluate whether the 
relevant circumstances are sufficiently emergent. The Departments 
propose in 31 CFR 33.120(c)(2)(iii) and 45 CFR 155.1320(c)(2)(iii) that 
the Departments will consider circumstances to be emergent when they 
could not have been reasonably foreseen. In addition, the Departments 
propose that to assess ``reasonable foreseeability'' based on the 
specific issues that a section 1332 waiver proposes to address and 
other relevant factors, and would not make this assessment based solely 
on the number of days a state may have been aware of such issues. Other 
relevant factors that the Departments would consider include the 
specific circumstances involved, the nature and extent of the emergent 
situation, and whether the state could have predicted the situation. To 
assist the Departments with making this assessment the Departments also 
propose to capture a new requirement at 31 CFR 33.120(c)(2)(ii)(F) and 
45 CFR 155.1320(c)(2)(ii)(F) to require a state submitting a post award 
modification request must also explain in its request how the 
circumstances underlying its request result from a natural disaster; 
PHE; or other emergent situations that threaten consumers' access to 
health insurance coverage, consumers' access to health care, or human 
life and could not be reasonably have been foreseen and how application 
of the post award public notice requirements would be contrary to the 
interests of consumers.
    The Departments seek comment on this proposal.
7. Monitoring and Compliance (31 CFR 33.120 and 45 CFR 155.1320)
    The Departments are proposing to modify 31 CFR 33.120(a)(1) and (2) 
and 45 CFR 155.1320(a)(1) and (2) to remove the reference, as codified 
under part 1 of the 2022 Payment Notice final rule, to interpretive 
guidance published by the Departments. This proposal is in line with 
the Departments efforts to provide supplementary information about the 
requirements that must be met for the continued oversight and 
monitoring of an approved section 1332 waiver. Because the Departments 
are of the view that the 2018 Guidance and the incorporation of its 
guardrail interpretations into regulations could result in the 
Departments approving section 1332 waivers that would result in fewer 
residents in those states enrolling in comprehensive and affordable 
coverage, that those interpretations do not represent the best 
fulfillment of congressional intent behind the statutory guardrails, 
that they are inconsistent with the policy intentions of E.O. 14009 and 
E.O. 13985, and that it is appropriate to address concerns raised by 
commenters on the 2018 Guidance, the Departments propose to remove the 
reference to the 2018 Guidance. Under this proposal the Departments 
would rely upon the statute and regulations, as well as the 
Departments' interpretive policy statements as outlined in the 
applicable notice and comment rulemaking, in monitoring approved 
section 1332 waivers.
8. Pass-Through Funding (31 CFR 33.122 and 45 CFR 155.1322)
    Section 1332(a)(3) of the ACA directs the Secretaries to pay pass-
through funding to the state for the purpose of implementing the state 
section 1332 waiver plan and outlines accompanying requirements for 
making the pass-through funding determination. In this proposed rule, 
the Departments propose new regulation text at 31 CFR 33.122 and 45 CFR 
155.1322 to codify in regulation details regarding the Departments' 
determination of pass-through funding for approved section 1332 
waivers. More specifically, the Departments are proposing to codify in 
regulation that, with respect to a State's approved section 1332 
waiver, the amount of federal pass-through funding would equal the 
amount, determined annually by the Secretaries, of the PTC under 
section 36B of the Code, the small business tax credit (SBTC) under 
section 45R of the Code, or cost-sharing reductions under ACA part I of 
subtitle E (collectively referred to as federal financial assistance), 
that individuals and small employers in the state would otherwise be 
eligible for had the State not received approval for its section 1332 
waiver. This would include any amount not paid due to an individual not 
qualifying for federal financial assistance or qualifying for a reduced 
level of such financial assistance. The pass-through amount would not 
be increased to account for any savings other than the reduction in 
federal financial assistance. The pass-through amount would be reduced 
by any net increase in federal spending or net decrease in federal 
revenue if necessary to ensure deficit neutrality. The pass-through 
estimates take into account experience in the relevant state and the 
experience of other states with respect to participation in an Exchange 
and credits and reductions provided under such provisions to residents 
of the other states. This amount would be calculated annually by the 
Departments and could be updated by the Departments as necessary to 
reflect applicable changes in Federal or State law. The proposed 
regulations further state, consistent with the statute,\147\ that any 
pass-through funding can only be used for purposes of implementing the 
state's approved section 1332 waiver plan.
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    \147\ See section 1332(a)(3) of the ACA.
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    Consistent with the Departments' existing regulations at 31 CFR 
33.108(f)(4) and 45 CFR 155.1308(f)(4), state section 1332 waiver 
applications are required to provide analysis and supporting data to 
inform the Department's estimate of the pass-through funding amount and 
the waivers' predicted impact on the deficit neutrality guardrail. For 
states that do not utilize a FFE, this includes information about 
enrollment, premiums, and federal financial assistance in the state's 
Exchange by age, income, and type of policy, and other information as 
may be required by the Secretaries. Consistent with the Departments' 
existing regulations at 31 CFR 33.124 and 45 CFR 155.1324, states with 
approved section 1332 waivers must comply with state reporting 
requirements in accordance with the

[[Page 35198]]

terms and conditions of the state's section 1332 waiver. If pass-
through funding is being sought as part of the state's section 1332 
waiver plan, states may also be required to submit data as outlined in 
the states terms and conditions for the Departments to calculate pass-
through funding. The Departments are not proposing any changes to these 
waiver requirements.
    In addition, these proposals do not change the existing 
requirements codified in 31 CFR 33.108(f)(3)(iii) and 45 CFR 
155.1308(f)(3)(iii) for the state's section 1332 waiver application to 
include a description of the provisions for which the state seeks a 
section 1332 waiver and how the waiver is necessary to facilitate the 
state's waiver plan. Further, under this proposed rule, the Departments 
propose that, as part of the state's waiver plan if the state is 
seeking pass-through funding, the state waiver application should 
include an explanation of how, due to the structure of the section 1332 
state plan and the statutory provisions waived, the state anticipates 
that individuals would no longer qualify for federal financial 
assistance or would qualify for reduced federal financial assistance, 
as a result of the section 1332 waiver.\148\ In addition, the 
Departments propose the state would also need to explain in its 
application how the state intends to use that funding for the purposes 
of implementing its section 1332 state plan.
---------------------------------------------------------------------------

    \148\ While this rule generally proposes to supersede and 
rescind the 2018 Guidance, the Departments are proposing these 
standards which align with the approach outlined in the 2018 
Guidance.
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    The Departments seek comment on these proposals including the 
proposed adoption of the new regulatory text on pass-through funding 
for approved section 1332 waivers.
9. Periodic Evaluation Requirements (31 CFR 33.128 and 45 CFR 155.1328)
    The Departments are proposing to modify 31 CFR 33.128(a) and 45 CFR 
155.1328(a) to remove the reference, as codified under part 1 of the 
2022 Payment Notice final rule, to interpretive guidance published by 
the Departments. This proposal is in line with the Departments efforts 
to provide supplementary information about the requirements that must 
be met for the periodic evaluation requirements of an approved section 
1332 waiver. Because the Departments are of the view that the 2018 
Guidance and the incorporation of its guardrail interpretations into 
regulations could result in the Departments approving section 1332 
waivers that would result in fewer residents in those states enrolling 
in comprehensive and affordable coverage, that those interpretations do 
not represent the best fulfillment of congressional intent behind the 
statutory guardrails, that they are inconsistent with the policy 
intentions of E.O. 14009 and E.O. 13985, and that it is appropriate to 
address concerns raised by commenters on the 2018 Guidance, the 
Departments propose to remove the reference to the 2018 Guidance. Under 
this proposal the Departments would rely upon the statute and 
regulations, as well as the Departments' interpretive policy statements 
as outlined in the applicable notice and comment rulemaking, in 
conducting periodic evaluations of approved section 1332 waivers.
10. Waiver Amendment (31 CFR 33.130 and 45 CFR 155.1330)
    The Departments are proposing new regulations at 31 CFR 33.130 and 
45 CFR 155.1330 to delineate the process by which a state is permitted 
to submit an amendment to an approved section 1332 waiver. The proposed 
new regulations also capture a proposed definition of section 1332 
waiver amendment. While the statute does not specifically mention 
amendment requests, some states with approved section 1332 waivers have 
indicated interest in amending their current approved waiver plans. 
Further, in response to previously received comments on the 2012 final 
rule, the Departments acknowledged that information regarding section 
1332 waiver amendments and renewals would be needed in the future \149\ 
and the Departments have received several inquiries from states on 
these topics. In addition, there may be situations where states 
pursuing proposed section 1332 waiver plans are interested in amending 
an application that has been submitted to the Departments for review. 
The Departments propose that the framework outlined in this rule would 
only apply to amendments to approved section 1332 waiver plans and 
would not apply to changes to an initial section 1332 waiver 
application submitted to the Departments but unapproved.\150\ A state 
is not authorized to implement any aspect of the proposed amendment 
without prior approval by the Departments.
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    \149\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
    \150\ In circumstances where a state wants to amend its waiver 
application before the Departments have approved the waiver plan, 
the Departments intend to work with the state to ensure there is an 
adequate, meaningful opportunity for public notice and comment 
taking into account the particular circumstances of the situation 
and the state's waiver application (such as the changes to the 
proposed waiver, timing, etc.).
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    In this rule, the Departments set forth a proposed procedural 
framework for submission and review of amendment requests for an 
approved section 1332 waiver. The Departments are of the view that this 
additional information will help states with approved section 1332 
waiver plans better plan for and prepare for potential amendments to 
their state waiver plans. The Departments also intend to continue 
providing information and details regarding the section 1332 waiver 
amendment process in the specific terms and conditions for an approved 
waiver plan. The proposals outlined later in this section are intended 
to align with the current amendment request process outlined in recent 
specific terms and conditions (STCs) for states with approved 
waivers.\151\
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    \151\ For example, see STC 9 in New Hampshire's Approval Letter 
and STCs: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
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a. Definition of Waiver Amendment
    For purposes of these requirements, the Departments propose to 
define the term ``section 1332 waiver amendment'' as a change to a 
section 1332 waiver plan that is not otherwise allowable under the STCs 
of an approved waiver, a change that could impact any of the section 
1332 statutory guardrails or a change to the program design for an 
approved waiver. Such potential changes include, but are not limited 
to, changes to eligibility, coverage, benefits, premiums, out-of-pocket 
spending, and cost sharing. The Departments propose to codify this 
definition in new proposed 31 CFR 33.130(a) and 45 CFR 155.1330(a).
b. Waiver Amendment Process
    To request a waiver amendment, the Departments propose that the 
state must submit a letter in electronic format to the Departments to 
notify them in writing of its intent to request an amendment to its 
approved section 1332 waiver plan(s). The state would be required to 
include a detailed description of all of the intended change(s), 
including the proposed implementation date(s), in its letter of intent. 
The state is encouraged to submit the letter of intent at least 15 
months prior to the section 1332 waiver amendment's proposed 
implementation date and to engage with the Departments early on in 
their development of a potential waiver amendment. The state may want 
to submit this letter of intent more than 15 months prior to the 
section 1332 waiver

[[Page 35199]]

amendment's proposed implementation date, depending on the complexity 
of the amendment request, the timeline for implementation, among other 
factors.
    The Departments would review the state's letter of intent request. 
The Departments propose that, within approximately 30 days of the 
Departments' receipt of the letter of intent, the Departments would 
respond to the state and confirm whether the change requested is a 
section 1332 waiver amendment, as well as identify the information the 
state needs to submit in its waiver amendment request. This written 
response would also include whether or not the proposed section 1332 
waiver amendment(s) would be subject to any additional or different 
requirements. For example, depending on the complexity of the section 
1332 amendment request, scope of changes from the approved waiver plan, 
operational/technical changes, or implementation considerations, the 
Departments may impose requirements similar to those specified in 31 
CFR 33.108(f) and 45 CFR 155.1308(f) for initial section 1332 waiver 
applications. The preamble regarding section 1332 waiver amendment 
content that follows further describes the proposed content 
requirements for section 1332 waiver amendment requests.
    Under the proposed section 1332 waiver amendment framework, the 
state should generally plan to submit its waiver amendment request no 
later than nine months prior to when the proposed amendment would take 
effect in order to allow for sufficient time for review of the waiver 
amendment request. Similar to the regulations at 31 CFR 33.108(a) and 
45 CFR 155.1308(a) for new section 1332 waiver applications, the 
Departments propose that applications for waiver amendments of a 
section 1332 waiver must be submitted in electronic format to the 
Departments. Similar to the regulations at 31 CFR 33.108(b) and 45 CFR 
155.1308(b) for new section 1332 waiver applications, the Departments 
propose that the state is required to submit the section 1332 waiver 
amendment request sufficiently in advance of the requested waiver 
implementation date, particularly when the waiver plan impacts premium 
rates, to allow for an appropriate review and implementation timeframe. 
Depending on the complexity of the section 1332 amendment request, the 
state may want to submit the amendment application earlier than nine 
months prior to implementation. In developing the implementation 
timeframe for its section 1332 waiver amendment request, the 
Departments propose that the state must maintain uninterrupted 
operations of the Exchange in the state and provide adequate notice to 
affected stakeholders and issuers of health insurance plans that would 
be (or may be) affected by the amendment to take necessary action based 
on approval of the section 1332 waiver amendment request. As detailed 
later in this section of this preamble, these are operational details 
that the state would be required to address as part of its waiver 
amendment request. In addition, as reflected in the new proposed 
regulations at 31 CFR 33.130(a) and 45 CFR 155.1330(a), a state would 
not be authorized to implement any aspect of the proposed amendment 
without prior approval from the Secretaries.
    In this rule, the Departments are proposing a similar process for 
section 1332 waiver amendment requests as is outlined for new section 
1332 waiver applications in 31 CFR 33.108 and 45 CFR 155.1308. In line 
with these requirements, the Departments are proposing to define the 
type of information and what information a state is required to provide 
to the public prior to the submission of a section 1332 waiver 
amendment request to the Departments. Similar to new section 1332 
waiver applications, the Departments propose to evaluate the state's 
section 1332 waiver amendment request and may approve the request if 
the waiver, as amended, meets the statutory guardrails as defined in 
Section 1332(b)(1)(A)-(D) and other applicable requirements. In 
general, states are permitted to have a waiver plan that consists of 
different components or parts. Under this proposal, states would be 
permitted to propose an amendment, which could build on an approved 
section 1332 waiver plan. The Departments are proposing that a state's 
approved section 1332 waiver plan and the proposed waiver amendment 
request should be analyzed together, and the state would receive pass-
through funding for implementation of the amended waiver plan 
(including the amendment, if approved) if the amended waiver plan 
yields federal financial assistance savings, net of any reductions 
necessary to ensure deficit neutrality. For example, if a state has an 
approved reinsurance program for plan year 2021 through 2025, and is 
seeking approval for a waiver amendment request to begin in 2023, the 
analysis in the section 1332 waiver amendment request should 
demonstrate that the reinsurance program combined with any proposed 
amendments meets the guardrails. In comparing scenarios with and 
without the section 1332 waiver, the Departments propose to consider 
the without-waiver scenario to include neither the reinsurance program 
nor the section 1332 waiver amendment request and the with-waiver 
scenario to include the combined impact of the reinsurance program and 
the section 1332 waiver amendment request. In terms of pass-through 
funding, the Departments propose that, if the section 1332 waiver 
amendment request described in the example above is approved and 
determined to yield additional reductions in federal financial 
assistance (in the form of PTC, CSR, or SBTC), the state would continue 
to receive pass-through funding annually for combined reductions in 
federal financial assistance for the entire section 1332 waiver plan, 
rather than receiving a separate pass through funding amount for the 
reinsurance component of the waiver and a separate pass-through funding 
amount for the waiver amendment component. As noted in the above 
preamble on pass-through funding, such amounts could be updated by the 
Departments, as necessary, to reflect applicable changes in state or 
federal law.
    Similar to the requirements in 31 CFR 33.108 and 45 CFR 155.1308, 
the Departments also propose that the public must have a meaningful 
opportunity to provide input at the state and federal level on waiver 
amendment requests. Section 1332(a)(4)(B) of the ACA requires the 
Secretaries to issue regulations that provide a process for public 
notice and comment at the State level, including public hearings, that 
is sufficient to ensure a meaningful level of public input. The 
Departments propose that a state pursuing a section 1332 waiver 
amendment must conduct the state public notice process that is 
specified for new applications at 31 CFR 33.112 and 45 CFR 155.1312. As 
such, to ensure a meaningful level of public input the comment period 
would generally need to be no less than 30 days. The Departments also 
propose that it would be permissible for a state to use its annual 
public forum required under 31 CFR 33.120(c) and 45 CFR 155.1320(c) for 
the dual purpose of soliciting public input on a proposed section 1332 
waiver amendment request and on the progress of its approved waiver 
plan. This policy proposal is in line with the flexibility the 
Departments permitted in the 2012 Final Rule section 1332 regulations 
\152\ to allow for states to use Medicaid tribal consultation to also 
satisfy the requirements as set forth in 31 CFR 33.112(a)(2) and 45 CFR

[[Page 35200]]

155.1312(a)(2), that require a State with one or more Federally-
recognized tribes within its borders to conduct a separate process for 
meaningful consultation with the tribes as part of the State section 
1332 waiver public notice and comment process. The Departments are of 
the view that allowing states to use the annual public forum for the 
dual purpose of soliciting public input on the state's proposed section 
1332 waiver amendment request and on the progress of its approved 
waiver plan would create a more efficient process for both the state 
and the public to provide a meaningful level of input. Furthermore, 
this proposal would allow a state to explain to the public how the 
state's proposed section 1332 waiver amendment would interact with the 
state's approved waiver plan, and thus would be beneficial to the 
public in understanding the impact of the state's proposed waiver 
amendment.
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    \152\ See 77 FR at 11706.
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    In this rule, the Departments are proposing a similar federal 
public notice and approval process for section 1332 waiver amendment 
requests as is outlined for new section 1332 waiver applications in 31 
CFR 33.116 and 45 CFR 155.1316. In line with these requirements, the 
Departments propose that following a determination that a state's 
section 1332 waiver application request for a section 1332 waiver is 
complete, the Secretaries will provide for a public notice and comment 
period that is sufficient to ensure a meaningful level of public input 
and the comment period would generally be no less than 30 days. The 
Departments would make available through an HHS website the complete 
section 1332 waiver amendment request, information relating to how and 
where written comments may be submitted, and the timeframe during which 
comments will be accepted. Additionally, the Departments will make 
available public comments received on the section 1332 waiver amendment 
request during the Federal public notice and comment period. The 
Departments are of the view that these proposals would increase 
transparency of the federal review process and create a clear path for 
states and the Departments to determine if the information submitted is 
sufficient to continue review and when to start a federal public 
comment period on the state's proposed waiver amendment. In addition, 
the Departments are of the view that these proposals provide the public 
with a meaningful opportunity to provide input on a section 1332 waiver 
request in line with the intent of the statute.
c. Waiver Amendment Content
    The Departments propose that a state that wants to pursue a section 
1332 waiver amendment request must furnish information and analysis 
regarding the state's proposed waiver amendment that is necessary to 
permit the Departments to evaluate the request. The proposed 
information and analysis is similar to the existing requirements for 
new section 1332 waiver applications.\153\ As such, the Departments 
propose that a section 1332 waiver amendment request must include the 
following:
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    \153\ See 31 CFR 33.108 and 45 CFR 155.1308.
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    (1) A detailed description of the requested amendment, including 
the impact on the guardrails, and related changes to the section 1332 
waiver program elements as applicable, including sufficient supporting 
documentation;
    (2) An explanation and evidence of the process used by the state to 
ensure meaningful public input;
    (3) Evidence of sufficient authority under state law(s) in order to 
meet the ACA section 1332(b)(2)(A) requirement for purposes of pursuing 
the section 1332 waiver amendment;
    (4) An updated actuarial and/or economic analysis demonstrating how 
the section 1332 waiver, as amended, will meet the section 1332 
statutory guardrails;
    (5) An explanation of the estimated impact, if any, of the section 
1332 waiver amendment on pass-through funding; and
    (6) Any further requested information and/or analysis that is 
determined necessary by the Departments to evaluate the section 1332 
waiver amendment.
    For the required updated actuarial and/or economic analysis, the 
Departments propose that such analysis must identify the ``with 
waiver'' impact of the requested amendment on the statutory guardrails. 
Such analysis would also be required to include a ``with waiver'' and 
``without waiver'' status on both a summary and detailed level through 
the current approval period using data from recent experience, as well 
as a summary of and detailed projections of the change in the ``with 
waiver'' scenario. In addition, as described above, the Departments 
propose that the analysis submitted by the state with its section 1332 
waiver amendment request must demonstrate how the state's approved 
section 1332 waiver plan, combined with any proposed amendments, 
impacts the guardrails.
    The Departments solicit comments on these proposals, including 
whether the proposed framework for section 1332 waiver amendment 
requests should be codified in regulation.
11. Waiver Extension (31 CFR 33.132 and 45 CFR 155.1332)
    Section 1332(e) of the ACA provides that no section 1332 waiver may 
extend over a period of longer than 5 years unless the state requests 
continuation of its waiver, and such request shall be deemed granted 
unless the Departments, within 90 days after the date of its 
submission, either deny such request in writing or inform the state in 
writing with respect to any additional information which is needed in 
order to make a final determination with respect to the request. 
Recognizing that several of the existing section 1332 waivers were 
approved in 2016 and 2017 to begin in plan years 2017 and 2018, 
respectively, the Departments are proposing new regulations at 31 CFR 
33.132 and 45 CFR 155.1332 to codify section 1332(e) of the ACA and are 
also proposing, in preamble, the proposed framework for section 1332 
waiver extensions. Further, in response to previously received 
comments, the Departments acknowledged that information regarding 
section 1332 waiver amendments and renewals would be needed in the 
future \154\ and the Departments have received several inquiries from 
states on these topics. As such, in this proposed rule the Departments 
are proposing new regulations at 31 CFR 33.132 and 45 CFR 155.1332 to 
permit, but not require, states to submit a section 1332 waiver 
extension request to continue an approved waiver plan. These proposed 
new regulations also provide that an extension request shall be deemed 
granted unless the Secretaries, within 90 days after the date of the 
state's submission of a complete section 1332 waiver extension request, 
either deny such request in writing or inform the State in writing with 
respect to any additional information needed to make a final 
determination with respect to the request. This proposed rule also sets 
forth, in preamble, a proposed procedural framework for submission and 
review of extension requests for approved section 1332 waiver plans. 
The Departments are of the view that this additional information will 
help states with approved section 1332 waiver plans better plan for and 
prepare for potential extensions to their waiver plans. The Departments 
also intend to provide information and details regarding the section 
1332 waiver

[[Page 35201]]

extension process in the STCs for an approved waiver plan. These 
proposals are intended to align with the extension request process 
outlined in recent STCs for states with approved section 1332 
waivers.\155\
---------------------------------------------------------------------------

    \154\ See 77 FR 11700, https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf.
    \155\ For example, see STC 10 in New Hampshire's Approval Letter 
and STCs: https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-Waivers/Downloads/1332-NH-Approval-STCs.pdf.
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    The Departments propose to define a section 1332 waiver extension 
as an extension of an approved waiver under the existing waiver terms. 
As detailed further later in this section of this preamble, if a state 
wants to make changes to the existing terms of an approved section 1332 
waiver, the proposed waiver amendment request framework outlined in 
this rulemaking would apply. The Departments propose that states with 
approved section 1332 waivers that want to pursue a waiver extension 
would be required to inform the Departments if the state will apply for 
extension of its waiver at least one year prior to the waiver's end 
date. To request a section 1332 waiver extension, the Departments 
propose that the state must submit a letter of intent in an electronic 
format to the Departments to notify them in writing of its intent to 
request a waiver extension of its approved waiver plan(s). The 
Departments would then review the state's letter of intent request. The 
Departments propose that, within approximately 30 days of the 
Departments' receipt of the letter of intent, the Departments will 
respond to the state and confirm whether the extension request will be 
considered as an extension request or whether any changes requested 
result in the need for a waiver amendment request instead. The 
Departments will also identify the information the state needs to 
submit in its section 1332 waiver extension request. The Departments 
also propose that section 1332 waiver extension requests must also be 
submitted in electronic format to the Departments, consistent with the 
format and manner requirements applicable to initial waiver 
applications under 31 CFR 33.108(a) and 45 CFR 155.1308(a).
    Furthermore, the Departments propose that the Departments may 
request an updated economic or actuarial analysis for the requested 
extension period in a section 1332 waiver extension request. Given that 
the Departments receive periodic reports from states with approved 
section 1332 waivers under 31 CFR 33.124 and 45 CFR 155.1324, in some 
circumstances the Departments may not need and therefore would not 
require full new analysis (as required under 31 CFR 33.108(f)(4) and 45 
CFR 155.1308(f)(4) for initial section 1332 waiver applications) and 
instead may rely on the updated analyses provided as part of these 
periodic reports. In other instances, depending on the complexity of 
the section 1332 waiver and the extension request, the Departments may 
require additional data and information to be submitted to review the 
extension request.
    The Departments propose to evaluate the state's section 1332 waiver 
extension request and may approve the request if it meets the statutory 
guardrails as defined in section 1332 (b)(1)(A)-(D) and meets other 
applicable requirements. The Departments propose that a state waiver 
extension request may be required to include the following information:
    (1) Updated economic or actuarial analyses for the requested 
extension period in a format and manner specified by the Departments;
    (2) Preliminary evaluation data and analysis from the existing 
section 1332 waiver program;
    (3) Evidence of sufficient authority under state law(s) in order to 
meet the ACA section 1332(b)(2)(A) requirement for purposes of pursuing 
the requested extension;
    (4) An explanation of the process followed by the state to ensure 
meaningful public input on the extension request at the state-level; 
and,
    (5) Other information as requested by the Departments that is 
necessary to reach a decision on the requested extension.
    As noted above, the Departments would identify the specific 
information a state needs to include as part of its section 1332 waiver 
extension request in the response to the state's letter of intent. 
Further, the Departments have proposed a requirement that the updated 
economic or actuarial analyses for the requested extension period would 
be in a format and manner specified by the Departments. The Departments 
will also rely on available data, such as the analyses provided as part 
of the periodic reports required under 31 CFR 33.124 and 45 CFR 
155.1324, when evaluating a state's waiver extension request if 
appropriate.
    The Departments also propose that it would be permissible for a 
state to use its annual public forum required under 31 CFR 33.120(c) 
and 45 CFR 155.1320(c) for the dual purpose of soliciting public input 
on a proposed section 1332 waiver extension request and on the progress 
of its approved waiver plan. This policy proposal is in line with the 
flexibility the Departments permitted in the 2012 section 1332 
regulations \156\ to allow states to use Medicaid tribal consultation 
to also satisfy the requirements as set forth in 31 CFR 33.112(a)(2) 
and 45 CFR 155.1312(a)(2), that require a state with one or more 
federally-recognized tribes within its borders to conduct a separate 
process for meaningful consultation with such tribes as part of the 
state section 1332 waiver public notice and comment process. The 
Departments are of the view that allowing states to use the annual 
public forum for the dual purpose of soliciting public input on an 
extension request and on the progress of its approved section 1332 
waiver would create a more efficient process for both the state and for 
the public to provide a meaningful level of input.
---------------------------------------------------------------------------

    \156\ See 77 FR at 11706.
---------------------------------------------------------------------------

    In this rule, the Departments are proposing a similar federal 
public notice and review process for a section 1332 waiver extension 
request as is outlined for new section 1332 waiver applications in 31 
CFR 33.116 and 45 CFR 155.1316. The Departments propose that the 
Departments will review a state's section 1332 waiver extension request 
and make a preliminary determination as to whether it is complete 
within approximately 30 days after it is submitted. In line with these 
requirements, the Departments propose that after determining that the 
section 1332 waiver extension request is complete, the waiver extension 
request would be made public through the CMS website, and a 30-day 
federal public comment period would commence while the extension 
request is under review. The Departments will make available through 
the CMS website the information relating to how and where written 
comments may be submitted and the timeframe during which comments will 
be accepted. Additionally, the Departments will make available public 
comments received on the section 1332 waiver amendment request during 
the Federal public notice and comment period. The determination that 
the section 1332 waiver extension request is complete would also mark 
the beginning of the 90-day clock outlined in section 1332(e) of the 
ACA for the Secretaries to deny or request more information regarding 
the continuation, or extension, of the state's approved waiver plan. 
If, after the extension request has been determined complete, the 
Departments find that content is missing, additional information is 
required, or the state needs to respond to public comments received 
during the federal comment period, the Departments would notify

[[Page 35202]]

the state and an additional review period would begin once the 
Departments have received the requested information from the state. The 
Departments propose that this additional review period would be no 
longer than 90 days. The Departments are of the view that these 
proposals increase transparency of the federal review process and 
creates a clear path for states and the Departments to determine if the 
information submitted is sufficient to continue review and when to 
start a federal public comment period. In addition, the Departments are 
of the view that this proposal provides the public with a meaningful 
opportunity to provide input on a section 1332 waiver extension request 
in line with the intent of the statute.
    The proposed section 1332 waiver extension request process would be 
separate from the waiver amendment framework described earlier in this 
rulemaking. A section 1332 waiver extension request under proposed 31 
CFR 33.132 and 45 CFR 155.1332 would only be available for an extension 
of the existing terms of an approved waiver plans and would not be 
applicable if the state was seeking to make substantive changes to its 
approved waiver plan beyond a continuation of the term of the waiver. 
If a state also seeks to make substantive changes to its approved 
section 1332 waiver plan along with seeking an extension, the 
Departments would treat those changes as amendments and the framework 
outlined in this preamble for waiver amendment requests would apply.
    The Departments solicit comments on these proposals including 
whether the proposed framework for section 1332 waiver extension 
requests should be codified in regulation.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
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 requires that we solicit comment 
on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs).

A. ICRs Regarding Navigator Program Standards (Sec.  155.210)

    The data collection requirements for FFE Navigator grantees are 
currently approved under OMB control 0938-1215/Expiration date: October 
31, 2023 (Cooperative Agreement to Support Navigators in Federally-
facilitated Exchanges). The proposal to once again require FFE 
Navigators to provide consumers with information and assistance with 
regard to certain post-enrollment topics does not increase the number 
of reports that Navigator grantees are required to submit. 
Additionally, we do not anticipate changes to the data elements related 
to the proposed expansion of required Navigator duties to be 
significant. We note that since the 2020 Payment Notice made assistance 
with the topics at Sec.  155.210(e)(9) permissible, but no longer 
required, many Navigator grantees have continued to report on these 
activities as part of their weekly, monthly, and quarterly metric 
reports to HHS. Therefore, we do not project the information collection 
burden to increase.

B. ICRs Regarding Segregation of Funds for Abortion Services (Sec.  
156.280)

    We are proposing an amendment to Sec.  156.280(e)(2)(ii) to repeal 
the separate billing requirement governing payments for QHPs that offer 
coverage of abortion services for which federal funds are prohibited. 
Specifically, we are proposing to revert to and codify in amended 
regulatory text at Sec.  156.280(e)(2)(ii) the prior policy in the 2016 
Payment Notice such that QHP issuers offering coverage of abortion 
services for which federal funds are prohibited again have flexibility 
in selecting a method to comply with the separate payment requirement 
in section 1303 of the ACA. If finalized, acceptable methods for 
satisfying the separate payment requirement would include sending the 
policy holder a single monthly invoice or bill that separately itemizes 
the premium amount for coverage of abortion services for which federal 
funds are prohibited; sending the policy holder a separate monthly bill 
for these services; or sending the policy holder a notice at or soon 
after the time of enrollment that the monthly invoice or bill will 
include a separate charge for such services and specify the charge. We 
believe these proposals will remove the burden associated with the 
separate billing regulation, as detailed below.
    The 2019 Program Integrity Rule \157\ estimated that the total one-
time burden to implement the separate billing regulation for the 94 
issuers that were offering coverage for abortion services for which 
federal funds are prohibited at the time of finalization would be 
2,961,000 hours for a total cost of approximately $385 million. We 
anticipated the one-time burden for the 3 State Exchanges that 
performed premium billing and payment processing and had QHP issuers 
that offered coverage for abortion services for which federal funds are 
prohibited to be 94,500 hours for a total cost of approximately $12.3 
million. In the May 2020 IFC,\158\ we reaffirmed these one-time 
estimates and anticipated that this one-time burden would still be 
incurred primarily in 2020, despite the 60-day delay to the 
implementation deadline.
---------------------------------------------------------------------------

    \157\ 84 FR 71674 (December 27, 2019).
    \158\ 85 FR 27550 (May 8, 2020).
---------------------------------------------------------------------------

    The 2019 Program Integrity Rule also estimated ongoing annual costs 
for implementing the separate billing regulation. We estimated the 
total annual burden in 2020 for all 94 issuers would be 1,133,640 hours 
with an equivalent cost of approximately $50.1 million. From 2021 
onwards, we estimated the total annual burden for all 94 issuers to be 
approximately 2,267,280 hours with an associated cost of approximately 
$100.2 million. We estimated that for the 3 State Exchanges performing 
premium billing and payment processing, the total annual burden would 
be approximately 36,180 hours with an equivalent cost of approximately 
$1.6 million in 2020 and 72,360 hours with an associated cost of 
approximately $3.2 million starting in 2021. We predicted in the May 
2020 IFC that delaying the implementation of the deadline for the 
separate billing regulation by 60 days would result in a reduction to 
this annual burden in 2020 of 389,940 hours with an equivalent cost 
reduction of approximately $17.4 million for all 97 issuers and State 
Exchanges performing premium billing and payment processing.
    In addition, the Program Integrity Rule estimated that issuers and 
State Exchanges performing premium billing and payment processing would 
need to print and send approximately 1.82 million separate paper bills 
per month in 2020, incurring monthly costs of approximately $91,200. 
The Program

[[Page 35203]]

Integrity Rule estimated the total cost for all issuers and State 
Exchanges to be approximately $547,225 in 2020. In 2021, we estimated 
that the annual cost for all issuers and State Exchanges to send 
separate paper bills would be approximately $1,070,129 and that, in 
2022, the annual cost would be approximately $1,045,808. In the May 
2020 IFC, we anticipated that delaying the implementation of the 
deadline for the separate billing regulation by 60 days would reduce 
the cost of printing separate bills in 2020 by approximately $182,400.
    We are not aware of any issuers or State Exchanges performing 
premium billing and payment processing that have incurred costs to 
implement these requirements. Therefore, if finalized, repealing the 
separate billing regulation would also remove the associated ICRs and 
the anticipated burden on QHP issuers and State Exchanges that perform 
premium billing and payment processing. Thus, if finalized as proposed, 
we will request discontinuation of the ICRs associated with the 
repealed separate billing regulation (OMB control number: 0938-1358 
(Billing and Collection of the Separate Payment for Certain Abortion 
Services (CMS-10681).

C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45 CFR Part 
155)

    In this proposed rule, the Departments propose modifications to the 
section 1332 waiver implementing regulations, including changes related 
to the interpretation of the statutory guardrails, section 1332 waiver 
amendment and extension requests, and new language related to pass-
through funding for approved section 1332 waiver plans. As outlined in 
this proposed rule, the policies and interpretations proposed in this 
rule, if finalized, would supersede and replace prior finalized 
policies and interpretations. The Departments also propose to modify 
regulations to set forth flexibilities in the public notice 
requirements and post award public participation requirements for 
section 1332 waivers during emergent situations, building off of the 
flexibilities provided during the COVID-19 PHE. However, this rule does 
not propose to alter any of the requirements related to section 1332 
waiver applications, compliance and monitoring, or evaluation in a way 
that would impose any additional costs or burdens for states seeking 
waiver approval or those states with approved waiver plans that have 
not already been captured in prior burden estimates. The Departments 
anticipate that implementing these provisions would not significantly 
change the associated burden currently approved under OMB control 
number: 0938-1389/Expiration date: February 29, 2024.

D. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. These requirements are not effective until they have been 
approved by the OMB.
    We invite public comments on these potential ICRs. If you comment 
on these information collections, that is, reporting, recordkeeping or 
third-party disclosure requirements, please submit your comments 
electronically as specified in the ADDRESSES section of this proposed 
rule.
    Comments must be received on/by July 28, 2021.

VI. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VII. Regulatory Impact Analysis

A. Statement of Need

    This rule proposes revised FFE and SBE-FP user fees for the 2022 
benefit year. It also proposes to repeal the Exchange DE option; and 
includes proposed changes related to open enrollment; Navigator program 
standards; and separate billing and segregation of funds for abortion 
services. In addition, it clarifies a provision related to special 
enrollment periods for enrollees that are newly eligible or ineligible 
for APTC. Finally, relating to section 1332 waivers, it proposes 
several changes, including the repeal of the incorporation of many 
policies and interpretations from the 2018 Guidance into the section 
1332 waiver implementing regulations. These policies are consistent 
with providing more accessible and affordable health care through the 
individual and small group markets.
    HHS is proposing to extend the annual individual market open 
enrollment period in order to provide individuals with a longer 
opportunity to enroll in coverage, which will expand access to health 
insurance coverage. Similarly, HHS is proposing to reinstitute prior 
requirements that FFE Navigators provide information and assistance 
with regard to certain post-enrollment topics and help consumers 
understand basic concepts and rights related to health coverage and how 
to use it in order to make coverage more accessible to consumers. In 
addition, HHS is proposing to repeal the separate billing regulation at 
Sec.  156.280(e)(2)(ii) that required individual market QHP issuers to 
send a separate bill for that portion of a policy holder's premium that 
is attributable to coverage for abortion services for which federal 
funds are prohibited and to instruct such policy holders to pay for the 
separate bill in a separate transaction. This proposal, if finalized, 
would reduce administrative burden on issuers, states, Exchanges, and 
consumers, as well as consumer confusion and unintended losses of 
coverage.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980; Pub. L. 96354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct 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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 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

[[Page 35204]]

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 economically significant effects ($100 million or more in any 1 
year). We estimate that this rulemaking is ``economically significant'' 
as measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we have prepared a 
Regulatory Impact Analysis that to the best of our ability presents the 
costs and benefits of the rulemaking.
    The provisions in this proposed rule aim to expand consumer access 
to affordable health care. They would extend the annual open enrollment 
period, expand Navigator duties, repeal the Exchange DE option, provide 
more funding for FFE Navigators and consumer outreach and education, 
and reduce administrative burden and confusion for consumers. These 
provisions would also reduce regulatory burden for states and 
administrative costs for Exchanges and issuers. Through the 
improvements in enrollment accessibility and increased affordability 
for consumers, these proposed provisions are expected to increase 
access to affordable health coverage.
    The proposed user fee rates in this proposed rule are higher than 
those previously finalized for 2022 in part 1 of the 2022 Payment 
Notice final rule,\159\ which could increase premiums for consumers. In 
accordance with Executive Order 12866, HHS believes that the benefits 
of this regulatory action justify the costs.
---------------------------------------------------------------------------

    \159\ 85 FR 6138.
---------------------------------------------------------------------------

C. Impact Estimates of the Proposed Rule Provisions and Accounting 
Table

    In accordance with OMB Circular A-4, Table 1 depicts an accounting 
statement summarizing HHS's assessment of the benefits, costs, and 
transfers associated with this regulatory action.
    This proposed rule implements standards for programs that will have 
numerous effects, including allowing consumers to have continued access 
to coverage and health care and stabilizing premiums in the individual 
and small group health insurance markets and in the Exchanges. We are 
unable to quantify all benefits and costs of this proposed rule. The 
effects in Table 1 reflect qualitative impacts and estimated direct 
monetary costs and transfers resulting from the provisions of this 
proposed rule for health insurance issuers and consumers.

[[Page 35205]]

[GRAPHIC] [TIFF OMITTED] TP01JY21.004

    This RIA expands upon the impact analyses of previous rules and 
utilizes the CBO analysis of the ACA's impact on federal spending, 
revenue collection, and insurance enrollment. In addition to utilizing 
CBO projections, HHS conducted an internal analysis of the effects of 
its regulations on enrollment and premiums. Based on these internal 
analyses, we anticipate that the quantitative effects of the provisions 
proposed in this rule are consistent with our previous estimates in the 
2021 Payment Notice for the impacts associated with APTC and FFE user 
fee requirements.
1. Navigator Program Standards (Sec.  155.210)
    We propose to amend Sec.  155.210(e)(9) to reinstitute the 
requirement that FFE Navigators provide consumers with information and 
assistance with regard to certain post-enrollment topics. In FFEs, 
Navigators will continue to be permitted to undertake the Navigator 
duties specified in Sec.  155.210(e)(9) until this proposal, if 
finalized, becomes effective. If this proposal is finalized, FFE 
Navigators would be required to perform the Navigator duties specified 
in Sec.  155.210(e)(9) beginning with Navigator grants awarded after 
the effective date of this rule, including non-competing continuation 
awards. If this proposal is finalized prior to Navigator grant funding 
being awarded in FY 2022, FY 2021 Navigator grantees will be required 
to perform these duties beginning with the Navigator grant funding 
awarded in FY 2022 for the second 12-month budget period of the 36-
month period of performance. To the extent Navigators awarded grant

[[Page 35206]]

funding in FY 2021 are not already performing these duties under their 
year one project plans when this proposal, if finalized, becomes 
effective, they can revise their project plans to incorporate 
performance of the duties specified in Sec.  155.210(e)(9) as part of 
their non-competing continuation application for their FY 2022 funding.
    These duties were previously required of Navigators in all 
Exchanges before the 2020 Payment Notice amended Sec.  155.210(e)(9) 
and made assistance with these post-enrollment topics permissible for 
FFE Navigators, but not required, beginning with FFE Navigator grants 
awarded in 2019. Despite no longer being required, the majority of FFE 
Navigators continue to provide information and assistance to consumers 
and report metrics on the post-enrollment topics outlined in Sec.  
155.210(e)(9) and we anticipate positive feedback from Navigators and 
other stakeholders in response to this proposal. Additionally, by 
reinstituting the requirements at Sec.  155.210(e)(9), we would be able 
to both require applicants to include plans for performing these post-
enrollment activities as part of their annual applications for new or 
continued Navigator grant funding, as well as include Navigator 
assistance with these post-enrollment activities as part of their 
performance evaluations. All costs associated with reaching these 
consumers in FFEs would be considered allowable costs that would be 
covered by the Navigator grants for the FFEs and that may be drawn down 
as the grantee incurs such costs.
2. Exchange Direct Enrollment Option (Sec.  155.221(j))
    We propose to remove Sec.  155.221(j) and repeal the Exchange DE 
option, which allows states to use direct enrollment technology to 
transition to private-sector-focused enrollment pathways operated by 
QHP issuers, web-brokers, and agents and brokers, instead of or in 
addition to a centralized eligibility and enrollment website operated 
by an Exchange. We anticipate that repealing the Exchange DE option 
would have minimal impact on stakeholders since no resources have been 
expended by states or HHS on implementing it. Any potential costs and 
burdens associated with the Exchange DE option would be eliminated. 
These include costs to develop consumer-facing enrollment functionality 
and meet eligibility application technical requirements, as well as to 
maintain back-end eligibility determination functionality and other 
back-end eligibility services; start-up and implementation costs to 
develop the appropriate privacy and security infrastructure and 
business controls; as well as costs related to ongoing oversight and 
monitoring of DE entities and maintaining the individual interfaces and 
transactions with each DE entity. We also anticipate that repealing the 
Exchange DE option could mitigate potential negative downstream impacts 
raised by commenters when it was proposed, including an increased 
uninsured and underinsured population.
3. Open Enrollment Period Extension (Sec.  155.410(e))
    We are proposing to extend the individual market annual open 
enrollment period for all Exchanges from November 1 through January 
15th for the 2022 coverage year and beyond. We do not anticipate a 
significant impact on the Exchange risk pool to result from this 
change. Consumers would benefit from a longer open enrollment period 
without additional demand placed on them. A lengthened open enrollment 
period may lead to increased enrollments which could impose additional 
costs on Exchanges and enrollment assisters to conduct outreach and 
assist new consumers. However, this change could also reduce outreach 
costs on Exchanges and enrollment assisters by spreading out 
enrollments over a greater length of time, resulting in opportunities 
for efficiency and increased health coverage.
4. Monthly Special Enrollment Period for APTC-Eligible Qualified 
Individuals With a Household Income No Greater Than 150 Percent of the 
Federal Poverty Level (Sec.  155.420(d)(16))
    We propose to codify a monthly special enrollment period for 
qualified individuals or enrollees, or the dependents of a qualified 
individual or enrollee, who are eligible for APTC, and whose household 
income is expected to be no greater than 150 percent of the FPL. We 
propose that this special enrollment period be available at the option 
of the Exchange in order to allow State Exchanges to decide whether to 
implement it based on their specific market dynamics, needs, and 
priorities. We also propose that Exchanges on the Federal platform will 
implement this special enrollment period by providing qualified 
individuals who are eligible with a pathway to access it through the 
HealthCare.gov application.
    To provide Exchanges with flexibility to prioritize ensuring that 
qualifying individuals are able to obtain coverage through this special 
enrollment period quickly following plan selection, or to implement 
this special enrollment period in keeping with their current 
operations, we propose to add a new paragraph at Sec.  
155.420(b)(2)(vii) to provide that the Exchange must ensure that 
coverage is effective in accordance with paragraph (b)(1) of this 
section or on the first day of the month following plan selection, at 
the option of the Exchange. We also propose to include plan category 
limitations by adding a new paragraph at Sec.  155.420(a)(4)(ii)(D) to 
provide that an Exchange must permit eligible enrollees and their 
dependents to use the special enrollment period to change to a silver 
level plan; and to amend Sec.  155.420(a)(4)(iii), which provides other 
plan category limitations for other special enrollment periods, to 
provide that these other plan category limitations do not apply to 
enrollees and dependents who qualify for the proposed special 
enrollment period.\160\ Finally, we propose to add a new paragraph at 
Sec.  147.104(b)(2)(i)(G) to specify that issuers are not required to 
provide this special enrollment period in the individual market with 
respect to coverage offered outside of an Exchange, because eligibility 
for the special enrollment period is based on eligibility for APTC, and 
APTC cannot be applied to coverage offered outside of an Exchange.
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    \160\ This provision would not prevent enrollees who qualify for 
the new special enrollment period from changing to a plan of any 
category through a special enrollment period that provides this 
flexibility, including the special enrollment periods at Sec.  
155.420(d)(4), (8), (9), (10), (12), and (14).
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    A monthly special enrollment period available through Exchanges for 
APTC-eligible qualifying individuals whose household income does not 
exceed 150 percent of the FPL would provide more opportunities for 
certain low-income APTC and CSR-eligible consumers to take advantage of 
the financial assistance available to them. As discussed in the 
preamble for this rulemaking, we believe that the benefit to providing 
these opportunities outweighs adverse selection concerns. Further, we 
believe the risk of adverse selection is mitigated to some degree by 
most qualifying individuals having access to a premium-free silver plan 
after application of APTC with a 94 percent actuarial value, because 
consumers eligible for a premium-free plan covering such a significant 
portion of health care services would likely already be enrolled if 
they were aware of their eligibility for such coverage. Additionally, 
we believe that those for whom this is the case are not likely to move 
in and out of coverage once they have enrolled, for example to end

[[Page 35207]]

coverage once an immediate health care need is met, which may also 
limit some adverse selection risk. We also believe that applying plan 
category limitations to this special enrollment period would help to 
mitigate adverse selection because it would limit the ability of 
enrollees to change to a higher metal level plan based on a new health 
care need and then change back to a silver plan once the health issue 
is resolved. We also believe that enrollees who are interested in 
changing plans during the year through this special enrollment period 
would likely be deterred because such a change would generally mean 
they lose progress they have made toward meeting their deductibles and 
other accumulators. However, enrollees may still choose to enroll in a 
silver level plan that is more expensive than their zero dollar option, 
and, with a monthly special enrollment period, could make this change 
during the plan year based on a difference in provider network or 
prescription drug formulary.
    Therefore, we request comment on practices, including education and 
outreach, that could help ensure that consumers who are eligible for 
this special enrollment period enroll in the zero-dollar premium silver 
plan that is available to them. We also seek comment on the remaining 
risk for issuers; for example, on the extent to which there is risk 
related to consumers who become aware of the availability of the 
proposed special enrollment period after they become sick and seek to 
enroll because they need medical care. Based on the possibility that 
consumers could enroll through the special enrollment period only after 
they need to use health care services, we seek comment on whether 
issuers may account for this risk through premium increases. We 
estimate a 0.5 to 2 percent increase in premiums when the enhanced APTC 
provisions of the ARP are in effect in states where this special 
enrollment period is implemented, due to increased adverse selection 
risk, resulting in an estimated $250 million to $1 billion increase in 
APTC/PTC outlays and decrease in income tax revenues nationwide, and we 
seek comment on this estimate.
    We also seek comment on potential risk that individuals, including 
those who enroll in coverage due to a health event, later experience a 
household income change or change their primary place of residence such 
that they are no longer eligible for a silver plan with a zero dollar 
premium, and that these individuals will end coverage at that point. 
Because this special enrollment period has the potential to introduce 
new adverse selection risk into the individual market, CMS also seeks 
comment generally on the impact on premiums of this policy in Exchanges 
where it is implemented, and potential regulatory tools that could 
mitigate these risks.
    For example, Exchanges that implement this special enrollment 
period could try to mitigate some risks with a robust outreach and 
education campaign to promote awareness of the special enrollment 
period. However, because the proposed special enrollment period would 
be based on projected annual household income level, and Exchanges rely 
on applicants to report their most up to date household income 
information, it may be difficult for Exchanges to assess which 
individuals might be eligible for outreach and education purposes and 
could make targeted marketing and outreach difficult. We therefore seek 
comment on practices that could help mitigate this challenge, and ways 
to improve outreach to low-income consumers more generally. Relatedly, 
we seek comment on how Exchanges could help to mitigate potential 
confusion on the part of stakeholders that provide enrollment 
assistance, such as HHS Navigator grantees, and agents and brokers. We 
seek comment on how Exchanges and stakeholders that provide enrollment 
assistance could develop effective outreach and education campaigns to 
target this population.
    Finally, we request comment on level of effort for Exchanges to 
implement this special enrollment period, especially within the amount 
of time required to make it available to consumers during the 2022 plan 
year.
5. Clarification of Special Enrollment Period for Enrollees Who Are 
Newly Eligible or Newly Ineligible for Advance Payments of the Premium 
Tax Credit (Sec.  155.420(f))
    We are proposing new language to clarify, for purposes of the 
special enrollment period rules at 45 CFR 155.420, that a qualified 
individual, enrollee, or his or her dependent, who qualifies for APTC 
because they meet the criteria at Sec.  155.305(f), but who qualifies 
for a maximum APTC amount of zero dollars, is not considered APTC 
eligible, even when they have previously been APTC ineligible for 
another reason, such as having other MEC. We believe that the current 
special enrollment period rules that reference APTC eligibility at 
Sec.  155.420(d)(6) could permit inconsistent interpretations of what 
it means to be newly eligible or ineligible for APTC when an individual 
is found to be eligible generally to receive APTC, but for a specific 
APTC amount of zero dollars. We believe that this clarification will 
help ensure that the special enrollment periods at Sec.  155.420(d)(6) 
are available to individuals as intended: those determined to be newly 
eligible for an APTC amount greater than zero dollars.
    We believe that this change will not be relevant to a significant 
number of individuals in Exchanges on the Federal platform, but that 
for the reasons described in preamble, it will be important in light of 
the removal of the upper APTC eligibility limit on household income at 
400 percent of the FPL for taxable years 2021 and 2022 under the 
ARP.\161\ More specifically, this definition makes clear that an 
individual who becomes newly eligible for a maximum APTC amount of zero 
dollars, and who enrolls in Exchange coverage, for example, through the 
2021 special enrollment period available to consumers in states on the 
Federal platform, would qualify for a special enrollment period per 
Sec.  155.420(d)(6)(i) or (ii) if, later in the plan year, they become 
newly eligible for an APTC amount greater than zero dollars based on a 
decrease in their household income. This clarification may be helpful 
for any individual who experiences a decrease in household income that 
makes them newly eligible for an APTC amount of greater than zero 
dollars to understand.
---------------------------------------------------------------------------

    \161\ Public Law 117-2.
---------------------------------------------------------------------------

    As of March 1, 2021 (prior to the passage of the ARP), 
approximately 7.25 million enrollees through Exchanges on the Federal 
platform were APTC eligible, but only 36,000 (or 0.5 percent) were APTC 
eligible with a maximum APTC amount of zero dollars. However, just 
under 119,000 enrollees through Exchanges on the Federal platform 
reported a household income that was greater than 400 percent of the 
FPL. HHS analysis indicated that roughly 35,000 of this greater than 
400 percent FPL population would automatically be considered APTC 
eligible with a maximum APTC amount of zero dollars once the 400 
percent FPL limit on household income had been removed and these 
enrollees were no longer considered APTC ineligible simply by virtue of 
exceeding that limit, doubling the number of potentially impacted 
enrollees through Exchanges on the Federal platform even before to the 
passage of the ARP. Additionally, as of March 1, 2021, HHS identified 
roughly 501,000 enrollees that did not report any household income on 
their application; some of these enrollees may

[[Page 35208]]

also be newly eligible for APTC under the new rules. Currently, after 
passage of the ARP and CMS' removal of the 400 percent FPL limit on 
household income regarding qualifying individuals applying for coverage 
through an Exchange on the Federal platform, the number of enrollees 
who did not provide household income has decreased slightly, to just 
under 472,000, and the number of enrollees reporting a household income 
greater than 400 percent of the FPL has increased to over 191,000. The 
number of enrollees eligible for a maximum APTC amount of zero dollars 
has also increased slightly, to just under 42,000 individuals.\162\ We 
expect these trends continue during 2022 in Exchanges on the Federal 
platform and likely in other State Exchanges, as well, making this 
clarification especially relevant at that time.
---------------------------------------------------------------------------

    \162\ These figures are drawn from internal CMS analysis as of 
late May, 2021, almost two months after CMS updated HealthCare.gov 
to reflect the removal of the 400 percent FPL limit on household 
income on applicants applying for coverage with APTC.
---------------------------------------------------------------------------

    We seek comment on this proposal, including from State Exchanges 
regarding whether this definition of APTC eligibility reflects their 
current implementation of the special enrollment period qualifying 
events per Sec.  155.420(d)(6), and if not, whether there are policy 
concerns about this clarification, or concerns about the burden of 
making related changes to State Exchanges' operations. We also seek 
comment on whether any group of individuals who may qualify for one or 
more of the special enrollment periods at Sec.  155.420(d)(6) could be 
harmed by this clarification, and if so, how such harm could be 
mitigated.
6. FFE and SBE-FP User Fees (Sec.  156.50)
    We are proposing an increased FFE user fee rate of 2.75 percent for 
the 2022 benefit year, which is higher than the 2.25 percent FFE user 
fee rate finalized in part one of the 2022 Payment Notice. We also 
propose to increase the SBE-FP user fee rate to 2.25 percent for the 
2022 benefit year from the 1.75 percent SBE-FP user fee rate finalized 
in part 1 of the 2022 Payment Notice final rule.\163\ Based on our 
estimated costs, enrollment (including anticipated transitions of 
states from the FFE and SBE-FP models to either the SBE-FP or State 
Exchange models), premiums for the 2021 and 2022 benefit years, and 
proposed user fee rates, we expect transfers from the issuers to 
federal government to be increased by approximately $200 million in 
plan year 2022.
---------------------------------------------------------------------------

    \163\ 85 FR 6138.
---------------------------------------------------------------------------

    We are proposing to repeal the 2023 benefit year user fee rate for 
the Exchange DE option in FFE and SBE-FP states, which was finalized in 
part 1 of the 2022 Payment Notice final rule. No state entity has 
approached HHS to consider this option. Since this option has not been 
implemented in any state, we do not expect any changes to user fee 
transfers from issuers to the federal government due to this 
rescission.
7. Segregation of Funds for Abortion Services (Sec.  156.280)
    We propose to amend the separate billing regulation at Sec.  
156.280(e)(2)(ii) that governs payments for QHPs that provide coverage 
of abortion services for which federal funds are prohibited. Under this 
proposal, we would revert to prior policy that allowed QHP issuers 
offering coverage of such abortion services flexibility in selecting a 
method to comply with the separate payment requirement in section 1303. 
If finalized, acceptable methods for satisfying the separate payment 
requirement would include sending the policy holder a single monthly 
invoice or bill that separately itemizes the premium amount for 
coverage of such abortion services; sending the policy holder a 
separate monthly bill for these services; or sending the policy holder 
a notice at or soon after the time of enrollment that the monthly 
invoice or bill will include a separate charge for such services and 
specify the charge.
    The 2019 Program Integrity Rule extensively detailed the 
anticipated financial and operational burdens from the separate billing 
regulation. We believe these proposals will remove the significant 
burden associated with the separate billing regulation. Those burdens 
included costly estimates for issuer implementation of the technical 
build to implement the necessary system changes to support separate 
billing and receipt of separate payments, which would require 
significant changes to current billing practice and pose increased 
challenges for some states and issuers given the mid-plan year 
implementation timeline. These activities included planning, 
assessment, budgeting, contracting, building and testing their systems; 
as well as one-time changes such as billing-related outreach and call 
center training. The burdens also included ongoing costs related to 
sending a separate bill, such as those related to identifying impacted 
enrollees, ensuring billing accuracy, reconciliation, quality 
assurance, record keeping, document retention, support for enrollees 
who enter grace periods for non-payments, customer service, outreach, 
and compliance. Issuers would also expected to assume annual materials 
costs related to printing of and sending the separate bill. We 
anticipated that State Exchanges would experience increased burden 
associated with one-time technical changes such as updating online 
payment portals to accept separate payments and updating enrollment 
materials and notices that reference binder payments, and ongoing costs 
related to increased customer service, outreach, and compliance.
    We also stated in the 2019 Program Integrity Rule that QHP issuers 
were likely to consider these new costs when setting actuarially sound 
rates and that this would likely lead to higher premiums for enrollees. 
Specifically, we estimated there would be an approximate premium impact 
of up to 1.0 percent in plan year 2021 and each year thereafter states 
with QHP issuers offering coverage of abortion services for which 
federal funds are prohibited. We also estimated that enrollment would 
be slightly reduced in the impacted states as a result of the increase 
to premiums. In plan year 2021 and each year after, we estimated that 
APTC amounts would increase up to $146 million when premium rates 
reflect the projected additional administrative and operational expense 
burdens.
    We also projected in the 2019 Program Integrity Rule that the FFE 
would incur additional costs due to one-time technical changes and 
increased call volumes and additional customer services efforts. We 
estimated that the FFE would incur a one-time cost of $750,000 in 2020 
and ongoing annual costs of approximately $400,000 in 2020, $800,000 in 
2021, $600,000 in 2022, and $400,000 in 2023 onwards to implement the 
separate billing policy.
    We also anticipated that all impacted State Exchanges would incur 
one-time costs of $9 million in 2020 for necessary technical changes 
such as updating online payment portals to accept separate payments and 
updating enrollment materials. In addition, we estimated that State 
Exchanges would incur ongoing annual costs associated with increased 
customer service, outreach, and compliance totaling $2.4 million in 
2020, $4.8 million in 2021, $3.6 million in 2022, and $2.4 million 2023 
onwards for all impacted State Exchanges.
    We also anticipated increased costs to consumers for the time 
required to read and understand the separate bills and seek help from 
customer service, and additional time to read and send separate 
payments in subsequent

[[Page 35209]]

months. For the estimated 2 million policy holders in plans offering 
coverage of abortion services for which federal funds are prohibited, 
the Program Integrity Rule estimated a total annual cost for of 2.9 
million hours in 2020 with an associated annual cost of $35.5 million. 
We decreased this estimated burden slightly in the May 2020 IFC to 
account for a burden reduction of approximately 337,793 hours with an 
equivalent cost savings of approximately $4.2 million. For subsequent 
years, we estimated in the 2019 Program Integrity Rule that the annual 
enrollee burden would be approximately 2 million hours with an 
associated annual cost of approximately $25.1 million.
    In total, the projected burden to all issuers, states, State 
Exchanges performing premium billing and payment processing, the FFE, 
and consumers due to the separate billing policy regulation totaled 
$546.1 million in 2020, $232.1 million in 2021, $230.7 million in 2022, 
and $229.3 million annually in 2023 and onwards.
    We also believe the consumer confusion and new logistical obstacles 
due to the separate billing regulation would disproportionately harm 
and burden communities who already face barriers to accessing care and 
that any potential coverage losses caused by the separate billing 
regulation could further exacerbate existing health disparities and 
jeopardize health outcomes. Further, issuers dropping coverage of 
abortion services for which federal funds are prohibited as a result of 
the burden associated with the separate billing regulation could 
transfer out-of-pocket costs for this coverage to enrollees, which may 
disproportionately impact low-income women who already face barriers to 
accessing quality health care.
    Upon reassessing the separate billing policy and in light of the 
legal developments, we no longer see a discernable benefit to requiring 
separate billing that would be sufficient to outweigh its burdens. If 
finalized, we anticipate repeal of the separate billing regulation 
would remove the associated burdens to issuers, states, Exchanges, and 
consumers by allowing issuers to continue the billing practices and 
collection methods previously adopted and relied upon since publication 
of the 2016 Payment Notice.
8. Section 1332 Waivers
    In this proposed rule, the Departments propose modifications to the 
section 1332 waiver implementing regulations, including new proposed 
policies and interpretations of the guardrails. We also propose new 
process and procedures for amendment and extension requests for 
approved section 1332 waiver plans. As outlined in this proposed rule, 
the policies and interpretations proposed in this rule, if finalized, 
would supersede and replace prior finalized policies and 
interpretations. The Departments also propose to modify these 
regulations to set forth flexibilities in the public notice 
requirements and post award public participation requirements for 
section 1332 waivers during future emergent situations. However, this 
rule does not propose to alter any of the requirements related to state 
innovation waiver applications, compliance and monitoring, or 
evaluation in a way that would create any additional costs or burdens 
for states submitting proposed waiver applications or those states with 
approved waiver plans that has not already been captured in prior 
burden estimates. The Departments are of the view that both states with 
approved section 1332 waivers and states that are considering section 
1332 waivers would be minimally impacted by these proposed changes in 
policy. The Departments anticipate that implementing these provisions 
would not significantly change the associated burden currently approved 
under OMB control number: 0938-1389/Expiration date: February 29, 2024. 
The Departments are of the view that section 1332 waivers could help 
increase state innovation, which in turn could lead to more affordable 
health coverage for individuals and families in states that consider 
implementing a section 1332 waiver program.
9. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed or final 
rule, we should estimate the cost associated with regulatory review. 
Due to the uncertainty involved with accurately quantifying the number 
of entities that will review the rule, we assume that the total number 
of unique commenters on the 2022 Payment Notice proposed rule will be 
the number of reviewers of this proposed rule. We acknowledge that this 
assumption may understate or overstate the costs of reviewing this 
rule. It is possible that not all commenters reviewed the 2022 Payment 
Notice proposed rule in detail, and it is also possible that some 
reviewers chose not to comment on that proposed rule. For these 
reasons, we thought that the number of past commenters on the 2022 
Payment Notice proposed would be a fair estimate of the number of 
reviewers of this rule. We welcome any comments on the approach in 
estimating the number of entities which will review this proposed rule.
    We also recognize that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rule. We seek comments 
on this assumption.
    Using the wage information from the Bureau of Labor Statistics 
(BLS) for medical and health service managers (Code 11-9111), we 
estimate that the cost of reviewing this rule is $114.24 per hour, 
including overhead and fringe benefits.\164\ Assuming an average 
reading speed, we estimate that it would take approximately 1 hour for 
the staff to review half of this proposed rule. We assume 245 entities 
will review this proposed rule. For each entity that reviews the rule, 
the estimated cost is approximately $114.24 (1 hour x $114.24). 
Therefore, we estimate that the total cost of reviewing this regulation 
is approximately $27,989 ($114.24 x 245 reviewers).
---------------------------------------------------------------------------

    \164\ https://www.bls.gov/oes/current/oes_nat.htm.
---------------------------------------------------------------------------

D. Regulatory Alternatives Considered

    In developing the policies contained in this proposed rule, we 
considered numerous alternatives to the presented proposals. Below we 
discuss the key regulatory alternatives that we considered.
    We considered taking no action related to our proposal to add a new 
paragraph at Sec.  155.420(d)(16), to provide a monthly special 
enrollment period for qualified individuals or enrollees, or the 
dependent of a qualified individual or enrollee, who are eligible for 
APTC, and whose household income is expected to be no greater than 150 
percent of the FPL. However, we believe that many consumers will 
benefit from having additional opportunities to enroll in low-cost 
Exchange coverage, and that those who do not enroll during the open 
enrollment period are likely to have been unaware of their option to 
enroll in a plan with no monthly premium through the Exchange.
    We also considered other strategies to help individuals who may 
benefit from the proposed special enrollment period, some of whom 
qualify for another, existing special enrollment period. For example, 
consumers who do not receive timely notice of an event that triggers 
eligibility for a special enrollment period, and otherwise were 
reasonably unaware that a triggering event occurred under Sec.  
155.420(d)(1) may be able to

[[Page 35210]]

benefit from a policy finalized at Sec.  155.420(c)(5) in the 2022 
Payment Notice that requires the Exchange to provide 60 days from the 
date that the consumer knew or reasonably should have known of the 
occurrence of the triggering event.\165\ Exchanges could leverage this 
provision to help enable consumers to maintain coverage after losing 
Medicaid. We solicit comment regarding additional strategies to help 
consumers maintain coverage.
---------------------------------------------------------------------------

    \165\ 86 FR 24140.
---------------------------------------------------------------------------

    We considered taking no action related to our proposal to clarify, 
for purposes of the special enrollment period rules at Sec.  155.420, 
that a qualified individual, enrollee, or his or her dependent who 
qualifies for APTC because they meet the criteria at Sec.  155.305(f), 
but who qualifies for a maximum APTC amount of zero dollars, is not 
considered APTC eligible. However, we believe that consumers and other 
stakeholders will benefit from clarity on this issue because it 
improves transparency of Exchanges' implementation of the special 
enrollment period qualifying events provided at Sec.  155.420(d)(6). 
Increased transparency will allow consumers to better understand the 
eligibility criteria for special enrollment periods provided by Sec.  
155.420(d)(6) and may help Exchanges and other stakeholders to more 
effectively message rules that determine eligibility. We also 
considered applying this clarification only to some of the special 
enrollment period qualifying events at Sec.  155.420(d)(6), such as 
only to those at paragraphs (d)(6)(ii)-(ii), to permit some individuals 
to access a special enrollment period based on newly becoming eligible 
for a maximum APTC amount of zero dollars after previously having been 
APTC ineligible for another reason. We believe that applying this 
definition to all of the qualifying events in Sec.  155.420(d) is 
simpler and makes sense based on the nature of the qualifying events. 
However, we have solicited comment on whether Exchanges and other 
stakeholders agree with this approach, or believe that another 
definition of APTC eligibility should apply to certain qualifying 
events at Sec.  155.420(d)(6).
    We considered restoring user fee rates to their 2021 levels at 3 
percent and 2.5 percent of total monthly premium for issuers in the FFE 
and SBE-FPs, respectively. However, based on our analysis of estimated 
2022 enrollment, premiums, and contract costs, we determined that this 
increase would be unnecessary to finance the Exchange essential 
functions.
    Regarding the section 1332 waiver proposals in this rule, the 
Departments considered rescinding the 2018 Guidance and the regulatory 
updates and policies finalized in part 1 of the 2022 Payment Notice 
final rule such that the Departments would rely on the statute for 
review and approval of section 1332 waiver applications. The 
Departments did not choose this option because not proposing policies, 
interpretations and standards to help explain the program requirements 
would lead to uncertainty for states considering section 1332 waiver 
applications. The Departments also considered codifying the policies 
and interpretations in the 2015 Guidance in regulation, but determined 
proposing new policies and interpretations (some of which align with 
previous guidance and rulemaking) was the clearest way to explain the 
proposed requirements for submission and approval of section 1332 
waivers.

E. Regulatory Flexibility Act (RFA)

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.), requires 
agencies to prepare an initial regulatory flexibility analysis to 
describe the impact of the proposed rule on small entities, unless the 
head of the agency can certify that the rule will not have a 
significant economic 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 not-for-profit 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 considers a rule to have a significant economic 
impact on a substantial number of small entities if at least 5 percent 
of small entities experience a change in revenues of more than 3 to 5 
percent.
    In this proposed rule, we propose revised 2022 user fee rates, 
which will impact issuer rate setting. We believe that health insurance 
issuers and group health plans would be classified under the North 
American Industry Classification System code 524114 (Direct Health and 
Medical Insurance Carriers). According to SBA size standards, entities 
with average annual receipts of $41.5 million or less would be 
considered small entities for these North American Industry 
Classification System codes. Issuers could possibly be classified in 
621491 (HMO Medical Centers) and, if this is the case, the SBA size 
standard would be $35 million or less.\166\ We believe that few, if 
any, insurance companies underwriting comprehensive health insurance 
policies (in contrast, for example, to travel insurance policies or 
dental discount policies) fall below these size thresholds. Based on 
data from MLR annual report \167\ submissions for the 2019 MLR 
reporting year, approximately 77 out of 479 issuers of health insurance 
coverage nationwide had total premium revenue of $41.5 million or less. 
This estimate may overstate the actual number of small health insurance 
companies that may be affected, since over 67 percent of these small 
companies belong to larger holding groups, and many, if not all, of 
these small companies are likely to have non-health lines of business 
that will result in their revenues exceeding $41.5 million. The user 
fee rates proposed in this rule are lower than the 2021 benefit year 
user fee rates by 0.25 percent, and these new proposed rates are higher 
than the previously finalized 2022 benefit year user fee rates by 0.5 
percent. Therefore, these user fee rates would only impact premium 
revenue for these issuers by approximately 0.25 percent, since no 
issuer has effectuated payments under the previously finalized user fee 
rates, and this impact is below HHS's 3 to 5 percent significance 
threshold stated above.
---------------------------------------------------------------------------

    \166\ https://www.sba.gov/document/support-table-size-standards.
    \166\ Available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html.
---------------------------------------------------------------------------

    In this proposed rule, we also propose to codify a new monthly 
special enrollment period for certain APTC-eligible individuals. 
Because this special enrollment period has the potential to introduce 
new adverse selection risk into the individual market, we seek comment 
in the RIA on the impact on premiums of this policy in Exchanges where 
it is implemented. We estimate that this policy could result in an 
increase in premiums of 0.5 to 2 percent when the enhanced APTC 
provisions of the ARP are in effect, and this impact is below HHS's 3 
to 5 percent significance threshold stated earlier in this preamble.
    In addition, the other proposals in this rule would either reduce 
costs or have no cost impact. Therefore, we do not expect the proposed 
provisions of this rule to affect a substantial number of small 
entities. We do not believe that this threshold will be reached by the 
requirements in this proposed rule or final rule. Therefore, the 
Secretary has determined that this proposed rule will not have a 
significant economic impact

[[Page 35211]]

on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. While this rule is not 
subject to section 1102 of the Act, we have determined that this 
proposed rule would not affect small rural hospitals. Therefore, the 
Secretary has determined that this rule would not have a significant 
impact on the operations of a substantial number of small rural 
hospitals.

F. Unfunded Mandates Reform Act (UMRA)

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2021, that 
threshold is approximately $158 million. Although we have not been able 
to quantify all costs, we expect the combined impact on state, local, 
or Tribal governments and the private sector to be below the threshold.

G. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has federalism 
implications. In our view, while this proposed rule would not impose 
substantial direct requirement costs on state and local governments, 
this regulation has federalism implications due to potential direct 
effects on the distribution of power and responsibilities among the 
state and federal governments relating to determining standards 
relating to health insurance that is offered in the individual and 
small group markets.
    In compliance with the requirement of Executive Order 13132 that 
agencies examine closely any policies that may have federalism 
implications or limit the policy making discretion of the states, we 
have engaged in efforts to consult with and work cooperatively with 
affected states, including participating in conference calls with and 
attending conferences of the NAIC, and consulting with state insurance 
officials on an individual basis.
    While developing this rule, we attempted to balance the states' 
interests in regulating health insurance issuers with the need to 
ensure market stability. By doing so, we complied with the requirements 
of Executive Order 13132.
    Because states have flexibility in designing their Exchange and 
Exchange-related programs, state decisions will ultimately influence 
both administrative expenses and overall premiums. States are not 
required to establish an Exchange. For states that elected previously 
to operate an Exchange, those states had the opportunity to use funds 
under Exchange Planning and Establishment Grants to fund the 
development of data. Accordingly, some of the initial cost of creating 
programs was funded by Exchange Planning and Establishment Grants. 
After establishment, Exchanges must be financially self-sustaining, 
with revenue sources at the discretion of the state. A user fee is 
assessed on issuers under all existing Exchange models, including State 
Exchanges where the user fee is assessed by the state, SBE-FPs, and the 
FFEs. We have solicited comment on the proposed user fee rate of 2.75 
percent of monthly premiums for issuers in FFEs and 2.25 percent of 
monthly premiums for issuers in SBE-FPs.

H. Congressional Review Act

    This proposed rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801, et seq.), which specifies that before a rule can 
take effect, the federal agency promulgating the rule shall submit to 
each House of the Congress and to the Comptroller General a report 
containing a copy of the rule along with other specified information, 
and has been transmitted to the Congress and the Comptroller for 
review. This proposed rule, if finalized as proposed, is expected to be 
a ``major rule'' as that term is defined in 5 U.S.C. 804(2), because it 
is likely to result in an annual effect on the economy of $100 million 
or more.

List of Subjects

31 CFR Part 33

    Health care, Health insurance, Reporting and recordkeeping 
requirements.

45 CFR Part 147

    Age discrimination, Citizenship and naturalization, Civil rights, 
Health care, Health insurance, Individuals with disabilities, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
Sex discrimination.

45 CFR Part 155

    Administrative practice and procedure, Advertising, Age 
discrimination, Brokers, Civil rights, Citizenship and naturalization, 
Conflict of interests, Consumer protection, Grant programs-health, 
Grants administration, Health care, Health insurance, Health 
maintenance organizations (HMO), Health records, Hospitals, Indians, 
Individuals with disabilities, Intergovernmental relations, Loan 
programs-health, Medicaid, Organization and functions (Government 
agencies), Public assistance programs, Reporting and recordkeeping 
requirements, Sex discrimination, State and local governments, 
Technical assistance, Taxes, Women, Youth.

45 CFR Part 156

    Administrative practice and procedure, Advertising, Advisory 
committees, Age discrimination, Alaska, Brokers, Citizenship and 
naturalization, Civil rights, Conflict of interests, Consumer 
protection, Grant programs-health, Grants administration, Health care, 
Health insurance, Health maintenance organization (HMO), Health 
records, Hospitals, Indians, Individuals with disabilities, 
Intergovernmental relations, Loan programs-health, Medicaid, 
Organization and functions (Government agencies), Prescription drugs, 
Public assistance programs, Reporting and recordkeeping requirements, 
Sex discrimination, State and local governments, Sunshine Act, 
Technical assistance, Women, Youth.

    For the reasons set forth in the preamble, the Department of the 
Treasury proposes to amend 31 CFR subtitle A as set forth below:

PART 33--WAIVERS FOR STATE INNOVATION

0
1. The authority citation for part 33 continues to read as follows:

    Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119.

0
2. Amend Sec.  33.108 by revising paragraphs (f)(3)(iv) introductory 
text and (f)(3)(iv)(A) through (C) to read as follows:


Sec.  33.108  Application procedures.

* * * * *
    (f) * * *
    (3) * * *

[[Page 35212]]

    (iv) The analyses, actuarial certifications, data, assumptions, 
targets, and other information set forth in paragraph (f)(4) of this 
section sufficient to provide the Secretary and the Secretary of Health 
and Human Services, as applicable, with the necessary data to determine 
that the State's proposed waiver satisfies the general requirements for 
approval under section 1332(b)(1) of the Affordable Care Act consistent 
with the provisions of this paragraph (f)(3)(iv):
    (A) As required under section 1332(b)(1)(A) of the Affordable Care 
Act (the comprehensive coverage requirement), will provide coverage 
that is at least as comprehensive as the coverage defined in section 
1302(b) of the Affordable Care Act and offered through Exchanges 
established under the Affordable Care Act as certified by the Office of 
the Actuary of the Centers for Medicare & Medicaid Services based on 
sufficient data from the State and from comparable States about their 
experience with programs created by the Affordable Care Act and the 
provisions of the Affordable Care Act that the State seeks to waive. To 
satisfy the comprehensive coverage requirement, the Secretary and the 
Secretary of Health and Human Services, as applicable, must determine 
that the coverage under the State plan is forecasted to be at least as 
comprehensive overall for residents of the state as coverage absent the 
waiver;
    (B) As required under section 1332(b)(1)(B) of the Affordable Care 
Act (the affordability requirement), will provide coverage and cost 
sharing protections against excessive out-of-pocket spending that are 
at least as affordable as the provisions of Title I of the Affordable 
Care Act would provide. To satisfy the affordability requirement, the 
Secretary and the Secretary of Health and Human Services, as 
applicable, must determine that the coverage under the State plan is 
forecasted to be as affordable overall for state residents as coverage 
absent the waiver;
    (C) As required under section 1332(b)(1)(C) of the Affordable Care 
Act (the scope of coverage requirement), will provide coverage to at 
least a comparable number of its residents as the provisions of Title I 
of the Affordable Care Act would provide. To satisfy the scope of 
coverage requirement, the Secretary and the Secretary of the Health and 
Human Services, as applicable, must determine that the State plan will 
provide coverage to a comparable number of state residents under the 
waiver as would have coverage absent the waiver; and
* * * * *
0
3. Amend Sec.  33.118 by--
0
a. Revising the section heading;
0
b. Revising paragraph (a);
0
c. Revising paragraph (b)(3);
0
d. Adding paragraph (b)(5);
0
e. Adding paragraph (g).
    The revisions and additions read as follows:


Sec.  33.118  Modification from the normal public notice requirements 
during an emergent situation.

    (a) The Secretary and the Secretary of Health and Human Services 
may modify, in part, the State public notice requirements under Sec.  
33.112(a)(1), (b), (c), and (d) and the Federal public notice 
procedures under Sec.  33.116(b) to expedite a decision on a proposed 
section 1332 waiver request during an emergent situation, when a delay 
would undermine or compromise the purpose of the proposed waiver 
request and be contrary to the interests of consumers. These 
flexibilities are limited to emergent situations, including natural 
disasters; public health emergencies; or other emergent situations that 
threaten consumers' access to health insurance coverage, consumers' 
access to health care, or human life.
    (b) * * *
    (3) The State must, as applicable, detail in its request for a 
modification from State-level notice procedures under paragraph (a) of 
this section the justification for the request as it relates to the 
emergent situation and the alternative public notice procedures it 
proposes to implement at the State level, including public hearings, 
that are designed to provide the greatest opportunity and level of 
meaningful public input from impacted stakeholders that is practicable 
given the emergency circumstances underlying the State's request for a 
modification.
* * * * *
    (5) The State must explain in its request for a modification from 
State-level notice procedures under paragraph (a) of this section how 
the emergent circumstances underlying its request results from a 
natural disaster; public health emergency; or other emergent situations 
that threaten consumers' access to health insurance coverage, 
consumers' access to health care, or human life could not reasonably 
have been foreseen and how a delay would undermine or compromise the 
purpose of the waiver and be contrary to the interests of consumers.
* * * * *
    (g) The Departments will consider circumstances to be emergent when 
they could not have been reasonably foreseen. The Departments will 
assess ``reasonable foreseeability'' based on the specific issues that 
a section 1332 waiver proposes to address and other relevant factors, 
and will not make this assessment based solely on the number of days a 
State may have been aware of such issues.
0
4. Amend Sec.  33.120 by--
0
a. Revising paragraph (a);
0
b. Revising paragraph (c)(2)(i); and
0
c. Adding paragraphs (c)(2)(ii)(F) and (c)(2)(iii).
    The revisions and additions read as follows:


Sec.  33.120  Monitoring and compliance.

    (a) General. (1) Following the issuance of a final decision to 
approve a section 1332 waiver by the Secretary and the Secretary of 
Health and Human Services, as applicable, a State must comply with all 
applicable Federal laws and regulations, unless expressly waived. A 
State must, within the timeframes specified in law and regulation come 
into compliance with any changes in Federal law and regulation 
affecting section 1332 waivers, unless the provision being changed is 
expressly waived.
    (2) The Secretary and the Secretary of Health and Human Services 
will examine compliance with Federal and regulatory requirements 
consistent with Sec.  155.1308(f)(3)(iv) when conducting implementation 
reviews under paragraph (b) of this section.
* * * * *
    (c) * * *
    (2) * * * (i) The Secretary and the Secretary of Health and Human 
Services may modify, in part, State post award requirements under this 
paragraph (c)(2) for an approved section 1332 waiver request during an 
emergent situation, when the application of the post award public 
notice requirements would be contrary to the interests of consumers. 
These flexibilities are limited to emergent situations, including 
natural disasters; public health emergencies; or other emergent 
situations that threaten consumers' access to health insurance 
coverage, consumers' access to health care, or human life.
    (ii) * * *
    (F) The State must explain in its request for modification under 
this paragraph (c)(2) how the emergent circumstances underlying its 
request results from a natural disaster; public health emergency; or 
other emergent situations that threaten consumers' access to health 
insurance coverage, consumers' access to health care, or

[[Page 35213]]

human life and could not reasonably have been foreseen and how the 
application of the post-award public notice requirements would be 
contrary to the interests of consumers.
    (iii) The Secretary and the Secretary of Health and Human Services 
will consider circumstances to be emergent when they could not have 
been reasonably foreseen. The Secretary and the Secretary of Health and 
Human Services will assess ``reasonable foreseeability'' based on the 
specific issues that a section 1332 waiver proposes to address and 
other relevant factors, and will not make this assessment based solely 
on the number of days a State may have been aware of such issues.
* * * * *
0
5. Section 33.122 is added to read as follows:


Sec.  33.122  Pass-through Funding for Approved Waivers.

    (a) Pass-through Funding. With respect to a State's approved 
section 1332 waiver, under which, due to the structure of the approved 
State waiver plan, individuals and small employers in the State would 
not qualify for or would qualify for a reduced amount of premium tax 
credit under section 36B of the Internal Revenue Code, small business 
tax credit under section 45R of the Internal Revenue Code, or cost-
sharing reductions under ACA part I of subtitle E for which they would 
otherwise be eligible, the Secretary and the Secretary of the Health 
and Human Services shall provide for an alternative means by which the 
aggregate amount of such credits or reductions that would have been 
paid on behalf of participants in the Exchanges had the State not 
received such waiver shall be paid to the State for purposes of 
implementing the approved State waiver plan. Such amount shall be 
determined annually by the Secretary and the Secretary of Health and 
Human Services, taking into consideration the experience of other 
States with respect to participation in an Exchange and credits and 
reductions provided under such provisions to residents of the other 
States. This amount can be updated to reflect applicable changes in 
Federal or State law.
    (b) [Reserved]
0
6. Amend Sec.  33.128 by revising paragraph (a) to read as follows:


Sec.  33.128  Periodic evaluation requirements.

    (a) The Secretary and the Secretary of Health and Human Services, 
as applicable, shall periodically evaluate the implementation of a 
program under a section 1332 waiver consistent with Sec.  
33.108(f)(3)(iv) and any terms and conditions governing the section 
1332 waiver.
* * * * *
0
7. Section 33.130 is added to read as follows:


Sec.  33.130  Waiver Amendment.

    (a) Amendment to an approved section 1332 waiver. A State may 
request an amendment to an approved section 1332 waiver from the 
Secretary and the Secretary of Health and Human Services. A section 
1332 waiver amendment is considered a change to an approved section 
1332 waiver plan that is not otherwise allowable under the terms and 
conditions of an approved waiver, a change that could impact any of the 
section 1332 statutory guardrails or a change to the program design for 
an approved waiver. A state is not authorized to implement any aspect 
of the proposed amendment without prior approval by the Secretary and 
the Secretary of Health and Human Services.
    (b) [Reserved]
0
8. Section 33.132 is added to read as follows:


Sec.  33.132  Waiver Extension.

    (a) Extension. A State may request continuation of an approved 
section 1332 waiver, and such request shall be deemed granted unless 
the Secretary and the Secretary of Health and Human Services, within 90 
days after the date of submission of a complete waiver extension 
request to the Secretary and the Secretary of Health and Human 
Services, either denies such request in writing or informs the State in 
writing with respect to any additional information that is needed in 
order to make a final determination with respect to the request.
    (b) [Reserved]
    For the reasons set forth in the preamble, under the authority at 5 
U.S.C. 301, the Department of Health and Human Services proposes to 
amend 45 CFR subtitle A, subchapter B, as set forth below.

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL INSURANCE MARKETS

0
9. The authority citation for part 147 continues to read as follows:

    Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92, as amended, and section 3203, Pub. L. 116-136, 134 Stat. 
281.
0
10. Amend Sec.  147.104 by--
0
a. Revising paragraphs (b)(2)(i)(E) and (F); and
0
b. Adding paragraph (b)(2)(i)(G).
    The revisions and addition read as follows:


Sec.  147.104  Guaranteed availability of coverage.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (E) Section 155.420(d)(12) of this subchapter (concerning plan and 
benefit display errors);
    (F) Section 155.420(d)(13) of this subchapter (concerning 
eligibility for insurance affordability programs or enrollment in the 
Exchange); and
    (G) Section 155.420(d)(16) of this subchapter (concerning 
eligibility for advance payments of the premium tax credit and 
household income, as defined in 26 CFR 1.36B-1(e), that is expected to 
be no greater than 150 percent of the federal poverty level).
* * * * *

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

0
11. The authority citation for part 155 continues to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 
18051, 18054, 18071, and 18081-18083.

0
12. Amend Sec.  155.210 by revising paragraph (e)(9) to read as 
follows:


Sec.  155.210  Navigator program standards.

* * * * *
    (e) * * *
    (9) The Exchange may require or authorize Navigators to provide 
information and assistance with any of the following topics. In 
Federally-facilitated Exchanges, Navigators are required to provide 
information and assistance with all of the following topics:
    (i) Understanding the process of filing Exchange eligibility 
appeals;
    (ii) Understanding and applying for exemptions from the requirement 
to maintain minimum essential coverage granted through the Exchange;
    (iii) The Exchange-related components of the premium tax credit 
reconciliation process, and understanding the availability of IRS 
resources on this process;
    (iv) Understanding basic concepts and rights related to health 
coverage and how to use it; and
    (v) Referrals to licensed tax advisers, tax preparers, or other 
resources for assistance with tax preparation and tax advice related to 
consumer questions about the Exchange application and

[[Page 35214]]

enrollment process, and premium tax credit reconciliations.
* * * * *


Sec.  155.221  [Amended]

0
13. Amend Sec.  155.221 by removing paragraph (j).
0
14. Amend Sec.  155.410 by revising paragraph (e)(3) and adding 
paragraph (e)(4).
    The revision and addition read as follows:


Sec.  155.410  Initial and annual open enrollment periods.

* * * * *
    (e) * * *
    (3) For the benefit years beginning on January 1, 2018 to January 
1, 2021, the annual open enrollment period begins on November 1 and 
extends through December 15 of the calendar year preceding the benefit 
year.
    (4) For the benefit years beginning on or after January 1, 2022, 
the annual open enrollment period begins on November 1 of the calendar 
year preceding the benefit year and extends through January 15 of the 
benefit year.
* * * * *
0
15. Amend Sec.  155.420 by--
0
a. Revising paragraph (a)(4)(ii)(C);
0
b. Adding paragraph (a)(4)(ii)(D);
0
c. Revising paragraph (a)(4)(iii) introductory text; and
0
d. Adding paragraphs (b)(2)(vii), (d)(16), and (f).
    The revision and additions read as follows:


Sec.  155.420  Special enrollment periods.

* * * * *
    (a) * * *
    (4) * * *
    (ii) * * *
    (C) No later than January 1, 2024, if an enrollee or his or her 
dependents become newly ineligible for advance payments of the premium 
tax credit in accordance with paragraph (d)(6)(i) or (ii) of this 
section, the Exchange must allow the enrollee or his or her dependents 
to change to a QHP of any metal level, if they elect to change their 
QHP enrollment; or
    (D) If an enrollee or his or her dependents qualify for a special 
enrollment period in accordance with paragraph (d)(16) of this section 
and are not enrolled in a silver-level QHP, the Exchange must allow the 
enrollee and his or her dependents to change to a silver-level QHP if 
they elect to change their QHP enrollment;
    (iii) For the other triggering events specified in paragraph (d) of 
this section, except for paragraphs (d)(2)(i), (d)(4), and (d)(6)(i) 
and (ii) of this section for becoming newly eligible or ineligible for 
CSRs and paragraphs (d)(8), (9), (10), (12), (14), and (16) of this 
section:
* * * * *
    (b) * * *
    (2) * * *
    (vii) If a qualified individual or enrollee, or the dependent of a 
qualified individual or enrollee, who is eligible for advance payments 
of the premium tax credit, and whose household income, as defined in 26 
CFR 1.36B-1(e), is expected to be no greater than 150 percent of the 
federal poverty level, enrolls in a QHP or changes from one QHP to 
another one time per month in accordance with paragraph (d)(16) of this 
section, the Exchange must ensure that coverage is effective in 
accordance with paragraph (b)(1) of this section or on the first day of 
the month following plan selection, at the option of the Exchange.
* * * * *
    (d) * * *
    (16) At the option of the Exchange, a qualified individual or 
enrollee, or the dependent of a qualified individual or enrollee, who 
is eligible for advance payments of the premium tax credit, and whose 
household income, as defined in 26 CFR 1.36B-1(e), is expected to be no 
greater than 150 percent of the federal poverty level, may enroll in a 
QHP or change from one QHP to another one time per month.
* * * * *
    (f) For purposes of this section, references to eligibility for 
advance payments of the premium tax credit refer to being eligible for 
such advance payments in an amount greater than zero dollars per month. 
References to ineligibility for advance payments of the premium tax 
credit refer to being ineligible for such payments or being eligible 
for such payments but being eligible for a maximum of zero dollars per 
month of such payments.
* * * * *
0
16. Amend Sec.  155.1308 by revising paragraphs (f)(3)(iv) introductory 
text and (f)(3)(iv)(A) through (C) to read as follows:


Sec.  155.1308  Application procedures.

* * * * *
    (f) * * *
    (3) * * *
    (iv) The analyses, actuarial certifications, data, assumptions, 
targets, and other information set forth in paragraph (f)(4) of this 
section sufficient to provide the Secretary and the Secretary of the 
Treasury, as applicable, with the necessary data to determine that the 
State's proposed waiver satisfies the general requirements for approval 
under section 1332(b)(1) of the Affordable Care Act consistent with the 
provisions of this paragraph (f)(3)(iv);
    (A) As required under section 1332(b)(1)(A) of the Affordable Care 
Act (the comprehensive coverage requirement), will provide coverage 
that is at least as comprehensive as the coverage defined in section 
1302(b) of the Affordable Care Act and offered through Exchanges 
established under the Affordable Care Act as certified by the Office of 
the Actuary of the Centers for Medicare & Medicaid Services based on 
sufficient data from the State and from comparable States about their 
experience with programs created by the Affordable Care Act and the 
provisions of the Affordable Care Act that the State seeks to waive. To 
satisfy the comprehensive coverage requirement, the Secretary and the 
Secretary of the Treasury, as applicable, must determine that the 
coverage under the State plan is forecasted to be at least as 
comprehensive overall for residents of the state as coverage absent the 
waiver;
    (B) As required under section 1332(b)(1)(B) of the Affordable Care 
Act (the affordability requirement), will provide coverage and cost 
sharing protections against excessive out-of-pocket spending that are 
at least as affordable as the provisions of Title I of the Affordable 
Care Act would provide. To satisfy the affordability requirement, the 
Secretary and the Secretary of the Treasury, as applicable, must 
determine that the coverage under the State plan is forecasted to be at 
least as affordable overall for state residents as coverage absent the 
waiver;
    (C) As required under section 1332(b)(1)(C) of the Affordable Care 
Act (the scope of coverage requirement), will provide coverage to at 
least a comparable number of its residents as the provisions of Title I 
of the Affordable Care Act would provide. To satisfy the scope of 
coverage requirement, the Secretary and the Secretary of the Treasury, 
as applicable, must determine that the State plan will provide coverage 
to a comparable number of state residents under the waiver as would 
have coverage absent the waiver; and
* * * * *
0
17. Amend Sec.  155.1318 by--
0
a. Revising the section heading;
0
b. Revising paragraphs (a) and (b)(3); and
0
c. Adding paragraphs (b)(5) and (g).
    The revisions and addition read as follows:

[[Page 35215]]

Sec.  155.1318  Modification from the normal public notice requirements 
during an emergent situation.

    (a) The Secretary and the Secretary of the Treasury may modify, in 
part, the State public notice requirements under Sec.  155.1312(a)(1), 
(b), (c), and (d) and the Federal public notice procedures under Sec.  
155.1316(b) to expedite a decision on a proposed section 1332 waiver 
request during an emergent situation, when a delay would undermine or 
compromise the purpose of the proposed waiver request and be contrary 
to the interests of consumers. These flexibilities are limited to 
emergent situations, including natural disasters; public health 
emergencies; or other emergent situations that threaten consumers' 
access to health insurance coverage, consumers' access to health care, 
or human life.
    (b) * * *
    (3) The State must, as applicable, detail in its request for a 
modification from State-level notice procedures under paragraph (a) of 
this section the justification for the request as it relates to the 
emergent situation and the alternative public notice procedures it 
proposes to implement at the State level, including public hearings, 
that are designed to provide the greatest opportunity and level of 
meaningful public input from impacted stakeholders that is practicable 
given the emergency circumstances underlying the State's request for a 
modification.
* * * * *
    (5) The State must explain in its request for a modification from 
State-level notice procedures under paragraph (a) of this section how 
the emergent circumstances underlying its request result from a natural 
disaster; public health emergency; or other emergent situations that 
threaten consumers' access to health insurance coverage, consumers' 
access to health care, or human life could not reasonably have been 
foreseen and how a delay would undermine or compromise the purpose of 
the waiver and be contrary to the interests of consumers.
* * * * *
    (g) The Secretary and the Secretary of the Treasury will consider 
circumstances to be emergent when they could not have been reasonably 
foreseen. The Secretary and the Secretary of the Treasury will assess 
``reasonable foreseeability'' based on the specific issues that a 
section 1332 waiver proposes to address and other relevant factors, and 
will not make this assessment based solely on the number of days a 
State may have been aware of such issues.
0
18. Amend Sec.  155.1320 by--
0
a. Revising paragraph (a);
0
b. Revising the paragraph heading for paragraph (c)(2);
0
c. Revising paragraph (c)(2)(i); and
0
d. Adding paragraphs (c)(2)(ii)(F) and (c)(2)(iii).
    The revisions and additions read as follows:


Sec.  155.1320  Monitoring and compliance.

    (a) General. (1) Following the issuance of a final decision to 
approve a section 1332 waiver by the Secretary and the Secretary of the 
Treasury, as applicable, a State must comply with all applicable 
Federal laws and regulations, unless expressly waived. A State must, 
within the timeframes specified in law and regulation come into 
compliance with any changes in Federal law and regulation affecting 
section 1332 waivers, unless the provision being changed is expressly 
waived.
    (2) The Secretary and the Secretary of the Treasury will examine 
compliance with Federal and regulatory requirements consistent with 
Sec.  155.1308(f)(3)(iv) when conducting implementation reviews under 
paragraph (b) of this section.
* * * * *
    (c) * * *
    (2) Modification from the normal post award requirements during an 
emergent situation. (i) The Secretary and the Secretary of the Treasury 
may modify, in part, State post award requirements under this paragraph 
(c)(2) for an approved section 1332 waiver request during an emergent 
situation when the application of the post award public notice 
requirements would be contrary to the interests of consumers. These 
flexibilities are limited to emergent situations, including natural 
disasters; public health emergencies; or other emergent situations that 
threaten consumers' access to health insurance coverage, consumers' 
access to health care, or human life.
    (ii) * * *
    (F) The State must explain in its request for a modification under 
paragraph (c)(2) of this section how the emergent circumstances 
underlying its request results from a natural disaster; public health 
emergency; or other emergent situations that threaten consumers' access 
to health insurance coverage, consumers' access to health care, or 
human life and could not reasonably have been foreseen and how the 
application of the post award public notice requirements would be 
contrary to the interests of consumers.
    (iii) The Secretary and the Secretary of the Treasury will consider 
circumstances to be emergent when they could not have been reasonably 
foreseen. The Secretary and the Secretary of the Treasury will assess 
``reasonable foreseeability'' based on the specific issues that a 
section 1332 waiver proposes to address and other relevant factors, and 
will not make this assessment based solely on the number of days a 
State may have been aware of such issues.
* * * * *
0
19. Section 155.1322 is added to subpart N to read as follows:


Sec.  155.1322  Pass-Through Funding for Approved Waivers.

    (a) Pass-through Funding. With respect to a State's approved 
section 1332 waiver, under which, due to the structure of the approved 
State waiver plan, individuals and small employers in the State would 
not qualify for or would qualify for a reduced amount of premium tax 
credit under section 36B of the Internal Revenue Code, small business 
tax credit under section 45R of the Internal Revenue Code, or cost-
sharing reductions under ACA part I of subtitle E for which they would 
otherwise be eligible, the Secretary and the Secretary of the Treasury 
shall provide for an alternative means by which the aggregate amount of 
such credits or reductions that would have been paid on behalf of 
participants in the Exchanges had the State not received such waiver 
shall be paid to the State for purposes of implementing the approved 
State waiver plan. Such amount shall be determined annually by the 
Secretary and the Secretary of the Treasury, taking into consideration 
the experience of other States with respect to participation in an 
Exchange and credits and reductions provided under such provisions to 
residents of the other States. This amount can be updated to reflect 
applicable changes in Federal or State law.
    (b) [Reserved]
0
20. Amend Sec.  155.1328 by revising paragraph (a) to read as follows:


Sec.  155.1328  Periodic evaluation requirements.

    (a) The Secretary and the Secretary of the Treasury, as applicable, 
shall periodically evaluate the implementation of a program under a 
section 1332 waiver consistent with Sec.  155.1308(f)(3)(iv) and any 
terms and conditions governing the section 1332 waiver.
* * * * *
0
21. Section 155.1330 is added to subpart N to read as follows:

[[Page 35216]]

Sec.  155.1330  Waiver Amendment.

    (a) Amendment to an approved section 1332 waiver. A State may 
request an amendment to an approved section 1332 waiver from the 
Secretary and the Secretary of the Treasury. A section 1332 waiver 
amendment is considered a change to a section 1332 waiver plan that is 
not otherwise allowable under the terms and conditions of an approved 
waiver, a change that could impact any of the section 1332 statutory 
guardrails or a change to the program design for an approved waiver. A 
state is not authorized to implement any aspect of the proposed 
amendment without prior approval by the Secretary and the Secretary of 
the Treasury.
    (b) [Reserved]
0
22. Section 155.1332 is added to subpart N to read as follows:


Sec.  155.1332  Waiver Extension.

    (a) Extension. A State may request continuation of an approved 
section 1332 waiver, and such request shall be deemed granted unless 
the Secretary and the Secretary of the Treasury, within 90 days after 
the date of submission of a complete waiver extension request to the 
Secretary and the Secretary of the Treasury, either denies such request 
in writing or informs the State in writing with respect to any 
additional information that is needed in order to make a final 
determination with respect to the request.
    (b) [Reserved]

PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE 
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES

0
23. The authority citation for part 156 is revised to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18032, 18041-18042, 
18044, 18054, 18061, 18063, 18071, 18082, and 26 U.S.C. 36B.

0
24. Amend Sec.  156.115 by revising paragraph (a)(3) to read as 
follows:


Sec.  156.115  Provision of EHB.

    (a) * * *
    (3) With respect to the mental health and substance use disorder 
services, including behavioral health treatment services, required 
under Sec.  156.110(a)(5) of this subpart, comply with the requirements 
under section 2726 of the Public Health Service Act and its 
implementing regulations.
* * * * *
0
25. Amend Sec.  156.280 by revising the heading and paragraph 
(e)(2)(ii) to read as follows:


Sec.  156.280  Segregation of funds for abortion services.

* * * * *
    (e) * * *
    (2) * * *
    (ii) An issuer will be considered to satisfy the obligation in 
paragraph (e)(2)(i) of this section if it sends the policy holder a 
single monthly invoice or bill that separately itemizes the premium 
amount for coverage of abortion services described in paragraph (d)(1) 
of this section; sends the policy holder a separate monthly bill for 
these services; or sends the policy holder a notice at or soon after 
the time of enrollment that the monthly invoice or bill will include a 
separate charge for such services, and specifies the charge.
* * * * *

Xavier Becerra,
Secretary, Department of Health and Human Services.
Mark Mazur,
Deputy Assistant Secretary (Tax Policy), Department of the Treasury.
[FR Doc. 2021-13993 Filed 6-28-21; 4:15 pm]
BILLING CODE 4120-01-P