35156 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

1The 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 

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. 

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 Federallyfacilitated 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 (§ 155.210) 

B. ICRs Regarding Segregation of Funds for 

Abortion Services (§ 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 


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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 35157 

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.’’ 

2 86 FR 7793 (Feb. 2, 2021). 

3 86 FR 7009 (Jan. 25, 2021). 

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. 

5See ‘‘Social Risk Factors and Medicare’s ValueBased Purchasing Programs,’’ HHS Office of the 

Secretary of Planning and Evaluation, available at 

https://aspe.hhs.gov/social-risk-factors-andmedicares-value-based-purchasing-programs. 

6See 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/raceethnicity.html#print. 

7Although 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. 

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. 

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 highquality 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. 

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. 

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 innetwork 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

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

We propose to amend § 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 

§ 155.420(d)(16) described below. 

We also propose to amend 

§ 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 

§ 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 Federallyfacilitated 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 

§ 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 § 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 


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35158 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

8These 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. 

10 83 FR 53575. 

11The 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. 

12Before 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. 

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 § 155.420(d), that a qualified 

individual who meets the criteria at 

§ 155.305(f), but who qualifies for a 

maximum APTC amount of zero dollars, 

is not considered APTC eligible. This 

approach would ensure that § 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 

§ 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 § 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 

§ 156.280. 

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. 

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. 

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

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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13The 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. 

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

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 nondiscriminatory 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 


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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 noncalendar 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 


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14 ‘‘Essential Health Benefits Bulletin,’’ December 

16, 2011. Available at https://www.cms.gov/CCIIO/ 

Resources/Files/Downloads/essential_health_

benefits_bulletin.pdf. 

15https://www.govinfo.gov/content/pkg/FR-2011- 

03-14/pdf/2011-5583.pdf. 

16https://www.govinfo.gov/content/pkg/FR-2012- 

02-27/pdf/2012-4395.pdf. 

17https://www.govinfo.gov/content/pkg/FR-2015- 

12-16/pdf/2015-31563.pdf. 

18https://www.federalregister.gov/documents/ 

2020/11/06/2020-24332/additional-policy-andregulatory-revisions-in-response-to-the-covid-19- 

public-health-emergency. 

19https://www.federalregister.gov/documents/ 

2020/12/04/2020-26534/patient-protection-andaffordable-care-act-hhs-notice-of-benefit-andpayment-parameters-for-2022-and. 

20https://www.federalregister.gov/documents/ 

2021/01/19/2021-01175/patient-protection-andaffordable-care-act-hhs-notice-of-benefit-andpayment-parameters-for-2022. 

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 § 156.111 to provide 

states with additional options from 

which to select an EHB-benchmark plan 

for plan years 2020 and beyond. 

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. 

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 § 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 postenrollment 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 § 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 

§ 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 


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21 86 FR 7793 (February 2, 2021). 22 82 FR 18346, 18349 (April 18, 2017). 

23See 83 FR 16974–16975. 

24See 86 FR 24140, 24264–24265. 

25See 45 CFR 155.220(c)(3)(i)(H). 

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 

(§ 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 highquality health care accessible and 

affordable for every American. 

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 

§ 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. 

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 

(§ 147.104(b)(2)) 

As further discussed in the preamble 

section regarding the proposed monthly 

special enrollment period for APTCeligible qualified individuals with an 

expected household income no greater 

than 150 percent of the FPL 

(§ 155.420(d)(16)), we propose to add a 

new paragraph at § 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 

§ 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 (§ 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

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. 

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 


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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 Exchangerelated topics. 

27https://www.cms.gov/newsroom/press-releases/ 

cms-announces-80-million-funding-opportunityavailable-navigators-states-federally-facilitated-0. 28 86 FR 7793 (Feb. 2, 2021). 

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 

(§ 155.210) 

We propose to amend § 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 §§ 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 

§§ 155.210(b) (generally for all 

Exchanges) and 155.215(b) (for 

Navigators in FFEs). 

We have also established under 

§ 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 § 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. 

Section 1311(i)(3)(D) of the ACA and 

45 CFR 155.210(e)(4) already expressly 

require Navigators to provide postenrollment 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 

§ 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 


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29We note that we are not proposing to reinstitute 

at § 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). 

30See 79 FR 30276. 

financial assistance, Medicaid, the 

Children’s Health Insurance Program 

(CHIP), and the Basic Health Program. 

Currently, pursuant to 

§ 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 § 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 

§ 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 § 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 § 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

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

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 § 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 


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31 86 FR 7009 (Jan. 25, 2021). 

32Access 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. 

33 85 FR 72158. 

34Title I of Division BB of the Consolidated 

Appropriations Act, 2021, Public Law 116–260 

(Dec. 27, 2020). 

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 § 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. 

Additionally, Navigators in FFEs are 

already required under § 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 

§ 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 § 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. 

FFE Navigators will continue to be 

permitted to perform the Navigator 

duties specified in § 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 § 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 

§ 155.210(e)(9) as part of their noncompeting continuation application for 

their FY 2022 funding. If this proposal 

is finalized as proposed, we would 

codify in § 155.210(e)(9) the 

applicability date to make clear when 

the Navigator duties specified in 

§ 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 § 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 § 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 

§ 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 

(§ 155.221(j)) 

In part 1 of the 2022 Payment Notice 

final rule, we codified § 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, 


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35 86 FR 7009 (Jan. 25, 2021). 

36 86 FR 7793 (Feb. 2, 2021). 

37Health Insurance Marketplace® is a registered 

service mark of the U.S. Department of Health & 

Human Services. 

38 86 FR 7793 (Feb. 2, 2021). 

39https://www.cms.gov/newsroom/press-releases/ 

cms-announces-additional-navigator-fundingsupport-marketplace-special-enrollment-period. 

40https://www.cms.gov/newsroom/fact-sheets/ 

2021-marketplace-special-enrollment-period-report2. 

41Public Law 117–2. 

42https://www.cms.gov/newsroom/fact-sheets/ 

2021-marketplace-special-enrollment-period-report1. 43Title I of Division BB of the Consolidated 

Appropriations Act, 2021, Public Law 116–260 

(Dec. 27, 2020). 

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 

§ 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 

§ 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® 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

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 

§ 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

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

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

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. 

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 


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44The FFE direct enrollment pathways are also 

available in SBE–FP states. See 45 CFR 155.220(l) 

and 155.221(i). 

45Multiple 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-enrollmentin-marketplace-coverage-lacks-protections-forconsumers-exposes. 

46This 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. 47See 82 FR 18346 at 18381. 

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 

§ 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. 

Finally, in reviewing § 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. 

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 § 155.221(j) and 

repeal the Exchange DE option. As 

explained in the preamble section 

regarding user fee rates for the 2022 

benefit year (§ 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 

(§ 155.410(e)) 

We propose to amend paragraph (e) of 

§ 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 crossreference to non-grandfathered plans in 

the individual market, both inside and 

outside of an Exchange, under 

guaranteed availability regulations at 

§ 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 

15th 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 


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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). 

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. 

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 inperson 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 (§ 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 


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49Public Law 117–2. 

50See 26 CFR 1.36B–3(g) for more information on 

the applicable percentage and its relationship to the 

PTC. 

51See §§ 155.305(g)(2) and 156.420(a). 

52For example, those who qualify for the special 

enrollment period per § 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. 

53This 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 § 155.420(d)(4), (8), (9), (10), (12), and (14). 

54Trends 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-aboutthe-uninsured-population/. https://www.kff.org/ 

uninsured/issue-brief/key-facts-about-theuninsured-population/. 

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 lowincome consumers whose QHP coverage 

can be fully paid for with APTC have 

one or more options to enroll in a silverlevel 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

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 § 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 add a new 

paragraph at § 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 § 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 § 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. 

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, nonelderly 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

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 lowincome 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 § 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 


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57 86 FR 24220. 

58Public Law 116–127. These provisions enabled 

states to receive the temporary Federal Medical 

Assistance Percentage increase under that section. 59Public Law 111–148. 

has passed with additional time to 

enroll in health care coverage based on 

the regulation at § 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. 

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. 

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. 

Further, CMS’ experience 

administering the verification processes 

for Exchanges on the Federal platform 

in accordance with § 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 postenrollment 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 postenrollment 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 

§ 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 


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60See section 1303(b)(2)(A) of the ACA and 

section 36B(b)(3)(D) of the Code. 

61The 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). 

62 26 CFR 1.36B–3(f)(4). 

63As 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. 

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 zerodollar 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. 

Other household-level variation in 

access to a silver plan with a zero-dollar 

premium includes households where 

some, but not all, applicants are APTCeligible (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

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 lowcost 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 

(§ 155.420(f)) 

We are proposing new language to 

clarify that, for purposes of the special 

enrollment period rules at § 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 § 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 

§ 155.305(f), such as having other MEC. 

Currently, the special enrollment 

periods to which this clarification is 

applicable are the triggering events at 

§ 155.420(d)(6), but we propose that the 

clarification apply to all of § 155.420 to 

ensure consistency, for example, 

between special enrollment period 

triggering events at § 155.420(d) and 

related coverage effective date and 


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64Per 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. 65 84 FR 17526. 

66Public Law 117–2. 

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. 

enrollment window rules at § 155.420(b) 

and (c), respectively. 

We believe that the current special 

enrollment period rules that reference 

APTC eligibility at § 155.420(d)(6) could 

permit inconsistent interpretations of 

what it means to be newly eligible or 

ineligible for APTC. Exchange 

regulations at § 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 under§ 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 

§ 155.305(f)(1), but will qualify for a 

maximum APTC amount of zero dollars 

under 26 CFR 1.36B–3. Currently, 

neither § 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 § 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 § 155.420. 

We propose to add text to § 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 § 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 § 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 

§ 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 

§ 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. 

We believe that this clarification 

should also apply to special enrollment 

periods provided in § 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 eligibleemployer 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. 

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 

§ 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 § 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 


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68 84 FR 17526. 69 86 FR 7793 (Feb. 2, 2021). 

enrollees with household incomes 

above 400 percent of the FPL. 

Exchange regulations at 

§ 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 § 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 nonMedicaid expansion state. Like the other 

qualifying events at § 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, § 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. 

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 

§ 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 § 155.420(d)(6) based on a 

change from a zero-dollar maximum 

APTC amount to APTC ineligibility for 

another reason per regulations at 

§ 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 § 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 § 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 § 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 § 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 (§ 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 highquality 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. 

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 


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70 86 FR 24140, 24288. 

71 86 FR 7793 (Feb. 2, 2021). 

72 86 FR 6138 at 6152. 73 86 FR 7793 (Feb. 2, 2021). 

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. 

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 § 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: 

• Provision of consumer assistance 

tools; 

• Consumer outreach and education; 

and 

• Management of a Navigator 

program. 

Under Health Plan Bid Review, 

Management, and Oversight: 

• Certification processes for QHPs 

(including ongoing compliance 

verification, recertification, and 

decertification); and 

• Regulation of agents and brokers. 

Under Eligibility and Enrollment: 

• Eligibility determinations; and 

• 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 Exchangerelated 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. 

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 § 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 § 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 


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74 86 FR 6138 at 6152. 

75See section 203 of Title II of Division BB of the 

Consolidated Appropriations Act, 2021, Public Law 

116–260 (Dec. 27, 2020). 

76This 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-Federallyfacilitated-Marketplaces-and-February-17- 

Addendum.pdf. See also 83 FR 17024–17026. 

77 86 FR 24140. 

78Accordingly, the Hyde Amendment is not 

permanent federal law, but applies only to the 

extent reenacted by Congress from time to time in 

appropriations legislation. 

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 Exchangerelated 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. 

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 § 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 § 155.221(j) for the 

FFE–DE and SBE–FP–DEs for 2023. We 

seek comment on this proposal. 

2. Provision of EHB (§ 156.115) 

We propose a technical amendment to 

§ 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 § 156.110(a)(5), in a 

manner that complies with the parity 

standards set forth in § 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. 

3. Network Adequacy (§ 156.230) 

As discussed in more detail in the 

preamble to § 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

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. 

4. Segregation of Funds for Abortion 

Services (§ 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 § 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 

§ 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 § 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 


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79 80 FR 10750 (February 27, 2015). 

80 80 FR 10750 (February 27, 2015). 

81CMS 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/Regulationsand-Guidance/Downloads/Section-1303-Bulletin10-6-2017-FINAL-508.pdf. 

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

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. 

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 § 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 § 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

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

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 

§ 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 


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84Washington v. Azar, 461 F. Supp. 3d 1016 (E.D. 

Wash. 2020). 85Wash. Rev. Code § 48.43.074. 86Planned Parenthood of Maryland, Inc. v. Azar, 

No. CV CCB–20–00361 (D. Md. July 10, 2020); 5 

U.S.C. 706. 

87California v. U.S. Dep’t of Health & Hum. 

Servs., 473 F. Supp. 3d 992 (N.D. Cal. July 20, 

2020). 88 84 FR 71674, 71683. 

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 ‘‘SingleInvoice 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. 

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. 

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. 

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

To address these concerns, we are 

proposing amendments to 

§ 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 § 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 

§ 156.280 to more accurately reflect its 

contents if the revisions to rule text 

under § 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 § 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 


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89Frequently 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-andFAQs/Downloads/FAQ-on-Providing-Consumerswith-Details-on-Plan-Coverage-of-Certain-AbortionServices.pdf. 

90California 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)). 

separate transaction, or to make efforts 

to collect these payments separately. 

If the proposed amendments to 

§ 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. 

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 optout non-enforcement policy also 

conflicts with § 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 nonenforcement 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 nonenforcement policies are no longer 

necessary or feasible long-term, and are 

therefore discontinued. 

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 § 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 

§ 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 


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91See 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. 

92Section 1303(b)(2) and (b)(2)(B) of the ACA. 

93 84 FR 71674, 71683. 

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 

§ 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 outof-pocket. Based on a 2014 study, the 

average costs to patients for firsttrimester 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 lowincome 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. 

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. 

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. 

We seek comment on the proposal to 

repeal the separate billing regulation 

and amend the regulatory text at 

§ 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. 


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94See section 1332(a)(4)(B)(v) of the ACA. 

95See section 1332(a)(4)(B)(iv) of the ACA. 

96 83 FR 53575 (Oct. 24, 2018). 

97The 2018 Guidance superseded guidance 

issued by the Departments in December 2015, 

which similarly provided information regarding the 

Secretaries’ application review procedures, passthrough 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. 

98See 86 FR 6138. 

99 86 FR 7793 (Feb. 2, 2021). 

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

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 costsharing 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

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, passthrough 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. 

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. 

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. 

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 passthrough 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 


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101https://www.whitehouse.gov/briefing-room/ 

statements-releases/2021/02/15/statement-bypresident-joe-biden-on-the-2021-special-healthinsurance-enrollment-period-through-healthcaregov/. 

102Section 1115 Waiver Demonstrations have 

similar authority. 

103See 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. 

104See 31 CFR 33.120(a)(1) and 45 CFR 

155.1320(a)(1). 

105 Ibid. 

106See 77 FR 11700, https://www.govinfo.gov/ 

content/pkg/FR-2012-02-27/pdf/2012-4395.pdf. 

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 highquality, 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. 

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

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. 

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 


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107 31 CFR 33.108 and 45 CFR 155.1308; Section 

1332(d)(1) of the ACA. 

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. 

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, 


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108 83 FR at 53577. 

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. 

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 


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35184 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

109Health 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/. 

110https://www.cms.gov/CCIIO/Programs-andInitiatives/State-Innovation-Waivers/Downloads/ 

Waiver-Concepts-Guidance.PDF. 

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. 

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. 

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 subparagraph 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 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 35185 

111 2021 Marketplace Special Enrollment Period 

Report, June 14, 2021 https://www.cms.gov/ 

newsroom/fact-sheets/2021-marketplace-specialenrollment-period-report-2. 

112 Data reflects enrollment as of May 31, 2021: 

https://www.hhs.gov/about/news/2021/06/14/fourten-new-consumers-spend-10-or-less-monthhealthcaregov-coverage-following-implementationamerican-rescue-plan-tax-credits.html. 

113On 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-enrollmentperiod-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/pressreleases/hhs-secretary-becerra-announces-reducedcosts-and-expanded-access-available-marketplacehealth. 

114https://www.cms.gov/newsroom/pressreleases/cms-announces-additional-navigatorfunding-support-marketplace-special-enrollmentperiod. 

115https://www.cms.gov/newsroom/pressreleases/cms-announces-80-million-fundingopportunity-available-navigators-states-federallyfacilitated-0. 

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. 

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 


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35186 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

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. 

117These 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-orderadvancing-racial-equity-and-support-forunderserved-communities-through-the-federalgovernment/. 

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. 

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. 

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 lowincome consumers and those with preexisting 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. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 35187 

118https://www.ncbi.nlm.nih.gov/pmc/articles/ 

PMC3794652/#:∼:text=more%20chronic

%20diseases.-,Racial%2Fethnic%20minorities%20

are%201.5%20to%202.0%20times%20more%20

likely,seem%20to%20be%20getting%20worse. 

119These 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-orderadvancing-racial-equity-and-support-forunderserved-communities-through-the-federalgovernment/. 

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. 

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-ofpocket 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 coinsurance, 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 lowincome 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 outof-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. 

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-ofpocket 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. 


khammond on DSKJM1Z7X2PROD with PROPOSALS2
35188 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

120These 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-orderadvancing-racial-equity-and-support-forunderserved-communities-through-the-federalgovernment/. 

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, highquality 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. 

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, 


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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, highquality affordable health care that will 

better protect consumers with preexisting 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 statespecific 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 


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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 statespecific 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 statespecific 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 


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121As of plan year 2021, HHS is providing this 

support for six states: Colorado, Delaware, 

Maryland, New Hampshire, North Dakota, and 

Pennsylvania. 

122Public Law 90–577 found here: https://

www.govinfo.gov/content/pkg/STATUTE-82/pdf/ 

STATUTE-82-Pg1098.pdf. 

123See 31 CFR 33.112(a)(2) and 45 CFR 

155.1312(a)(2). 

124See 31 CFR 33.112(c) and 45 CFR 155.1312(c). 

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 statebased 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. 

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. 

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 federallyrecognized 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 


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125For more information on 508 standards see 

here: https://section508.gov/manage/programroadmap. 

126For more information, see the WCAG website 

at http://www.w3.org/TR/WCAG20/. 

127Notwithstanding 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. 

128See 31 CFR 33.116 and 45 CFR 155.1316. 

129See section 1332(a)(4)(B)(iii) of the ACA, 31 

CFR 33.116(b) and 45 CFR 155.1316(b). 

130Notwithstanding 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. 

131 85 FR 71142 See https://

www.federalregister.gov/documents/2020/11/06/ 

2020-24332/additional-policy-and-regulatoryrevisions-in-response-to-the-covid-19-public-healthemergency. 

132See 85 FR 71142. 

133See 85 FR at 78597–78598 and 78608–78609. 

134 85 FR 54820. 135 86 FR at 24182–24183 and 24202–24203. 

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. 

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. 

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

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

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. 

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 


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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’ 


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35194 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

136See 85 FR 71142, https://

www.federalregister.gov/documents/2020/11/06/ 

2020-24332/additional-policy-and-regulatoryrevisions-in-response-to-the-covid-19-public-healthemergency. 

137See 85 FR 71142, 71178. 

138To 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. 

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 IFC136

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 federallyrecognized 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. 

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: 

• The state requests a modification in 

the form and manner specified by the 

Secretaries. 

• 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. 

• 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. 

• 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

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-athome orders due to the public health 


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139https://khn.org/morning-breakout/statesdeclare-emergencies-ban-large-gatherings-ascoronavirus-sweeps-the-nation/. https://

www.axios.com/states-shelter-in-place-coronavirus66e9987a-a674-42bc-8d3f-070a1c0ee1a9.html. 

140The 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). 

141See 31 CFR 33.118(d) and 45 CFR 155.1318(d). 

142See 31 CFR 33.118(e) and 45 CFR 155.1318(e). 

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. 

In situations where the Departments 

approve a state’s modification request to 

provide public notice and host the statelevel 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 federallyrecognized tribes, if applicable, as part 

of any alternative public participation 

process. 

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

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 


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143See section 1332(a)(4)(iv) and (v). Also see 31 

CFR 33.120 and 45 CFR 155.1320. 144See 85 FR 71142. 

145See 31 CFR 33.120(c)(2)(ii)(D) and 45 CFR 

155.1320(c)(2)(ii)(D). 

146See 31 CFR 33.120(c)(2)(ii)(E) and 45 CFR 

155.1320(c)(2)(ii)(E). 

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. 

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 inperson 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

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: 

• The state requests a modification in 

the form and manner specified by the 

Secretaries. 

• 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. 

• 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. 

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 


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147See section 1332(a)(3) of the ACA. 

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 passthrough 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 passthrough 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 passthrough 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. 

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 passthrough 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 


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148While 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. 

149See 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.). 

151For example, see STC 9 in New Hampshire’s 

Approval Letter and STCs: https://www.cms.gov/ 

CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Downloads/1332-NH-Approval-STCs.pdf. 

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. 

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. 

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

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 


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152See 77 FR at 11706. 

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 passthrough 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 passthrough 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 


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153See 31 CFR 33.108 and 45 CFR 155.1308. 

154See 77 FR 11700, https://www.govinfo.gov/ 

content/pkg/FR-2012-02-27/pdf/2012-4395.pdf. 

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. 

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: 

(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 


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155For example, see STC 10 in New Hampshire’s 

Approval Letter and STCs: https://www.cms.gov/ 

CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Downloads/1332-NH-Approval-STCs.pdf. 156See 77 FR at 11706. 

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

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. 

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 


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157 84 FR 71674 (December 27, 2019). 

158 85 FR 27550 (May 8, 2020). 

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: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

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 (§ 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 postenrollment 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 

§ 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 (§ 156.280) 

We are proposing an amendment to 

§ 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 

§ 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 onetime estimates and anticipated that this 

one-time burden would still be incurred 

primarily in 2020, despite the 60-day 

delay to the implementation deadline. 

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 


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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 postenrollment 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 § 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 


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159 85 FR 6138. 

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. 

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. 


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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 

(§ 155.210) 

We propose to amend § 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 § 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 § 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 


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TABLE 1: Accounting Statement 

Benefits: 

Qualitative: 

• Consumers will benefit from a longer open enrollment period, as they will have a greater opportunity to enroll in 

coverage. 

• The special enrollment period clarification will benefit any individual who experiences a decrease in household 

income that makes them newly eligible for an APTC amount of greater than zero dollars. 

• Consumers will benefit from repeal of the separate billing regulation, as they will no longer be subject to confusing 

billing processes. 

• APTC-eligible qualified individuals whose household income does not exceed 150 percent of the FPL will benefit 

from the new special enrollment period, as they will have more opportunities to enroll in coverage throughout the 

year. 

Costs: Estimate Year Discount Period Covered 

Dollar Rate 

Annualized Monetized ($/year) -$270.1 million 2020 7 oercent 2021-2025 

-$267.3 million 2020 3 oercent 2021-2025 

Quantitative: 

• Reduction in costs to all issuers, states, State Exchanges performing premium billing and payment processing, the 

FFE, and consumers due to the separate billing regulation of approximately $407.05 million in 2021, $230.7 million 

in 2022, and $229.3 million annually in 2023 and onwards. In addition to annual costs, the reduction in costs in 2021 

includes a reduction in cost to reflect the one-time implementation changes that issuers, states, States Exchanges 

performing premium billing and payment processing, and the FFEs would have incurred if the separate billing policy 

had been implemented in 2020. Because the separate billing policy was not implemented in 2020 due to courts 

invalidating the policy, these one-time costs could have been incurred in 2021, had the separate billing policy 

remained aoolicable. 

Qualitative: 

• Increased costs due to increases in providing medical services (if health insurance enrollment increases) . 

• 

Transfers: Estimate Year Discount Period Covered 

Dollar Rate 

$480.9 million to $1.2309 2021 7 percent 

2022-2026 

billion Annualized Monetized ($/year) $481.5 million to $1.2315 2022-2026 

billion 2021 3 percent 

Quantitative: 

• Increase in transfers from the issuers to federal government by approximately $200 million in 2022 and approximately 

$240 million in 2023 onwards due to changes in user fee rates and state transitions from FFEs to SBE-FPs or from 

SBE-FPs to SBEs. 

• A potential 0.5 to 2 percent increase in premiums in 2022 and onwards as a result of the monthly special enrollment 

period for APTC-eligible qualified individuals whose household income does not exceed 150 percent of the FPL, with 

a corresponding potential increase in APTC/PTC annual outlays and decrease in income tax revenues of 

annroximatelv $250 million to $1 billion. 
35206 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

160This 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 § 155.420(d)(4), (8), (9), (10), (12), and (14). 

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 

§ 155.210(e)(9) as part of their noncompeting continuation application for 

their FY 2022 funding. 

These duties were previously required 

of Navigators in all Exchanges before the 

2020 Payment Notice amended 

§ 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 

§ 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 § 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 

(§ 155.221(j)) 

We propose to remove § 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 

(§ 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 (§ 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 § 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 § 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 

§ 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 § 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. 

A monthly special enrollment period 

available through Exchanges for APTCeligible 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 


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161Public Law 117–2. 

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 

(§ 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 § 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 

§ 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 § 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 § 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. 

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 


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162These 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. 

163 85 FR 6138. 

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. 

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 

§ 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 § 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 (§ 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. 

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 (§ 156.280) 

We propose to amend the separate 

billing regulation at § 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 onetime 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 onetime 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 


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

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-ofpocket 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 × 

$114.24). Therefore, we estimate that 

the total cost of reviewing this 

regulation is approximately $27,989 

($114.24 × 245 reviewers). 

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 § 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 § 155.420(d)(1) may be able to 


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165 86 FR 24140. 

166https://www.sba.gov/document/support-tablesize-standards. 

166 Available at https://www.cms.gov/CCIIO/ 

Resources/Data-Resources/mlr.html. 

benefit from a policy finalized at 

§ 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. 

We considered taking no action 

related to our proposal to clarify, for 

purposes of the special enrollment 

period rules at § 155.420, that a 

qualified individual, enrollee, or his or 

her dependent who qualifies for APTC 

because they meet the criteria at 

§ 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 § 155.420(d)(6). Increased 

transparency will allow consumers to 

better understand the eligibility criteria 

for special enrollment periods provided 

by § 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 

§ 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 § 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 § 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-forprofit 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 nonhealth 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. 

In this proposed rule, we also propose 

to codify a new monthly special 

enrollment period for certain APTCeligible 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 


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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 Exchangerelated 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 programshealth, 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 

■ 1. The authority citation for part 33 

continues to read as follows: 

Authority: Sec. 1332, Pub. L. 111–148, 124 

Stat. 119. 

■ 2. Amend § 33.108 by revising 

paragraphs (f)(3)(iv) introductory text 

and (f)(3)(iv)(A) through (C) to read as 

follows: 

§ 33.108 Application procedures. 

* * * * * 

(f) * * * 

(3) * * * 


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(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-ofpocket 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 

* * * * * 

■ 3. Amend § 33.118 by— 

■ a. Revising the section heading; 

■ b. Revising paragraph (a); 

■ c. Revising paragraph (b)(3); 

■ d. Adding paragraph (b)(5); 

■ e. Adding paragraph (g). 

The revisions and additions read as 

follows: 

§ 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 § 33.112(a)(1), (b), 

(c), and (d) and the Federal public 

notice procedures under § 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 Statelevel 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. 

■ 4. Amend § 33.120 by— 

■ a. Revising paragraph (a); 

■ b. Revising paragraph (c)(2)(i); and 

■ c. Adding paragraphs (c)(2)(ii)(F) and 

(c)(2)(iii). 

The revisions and additions read as 

follows: 

§ 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 

§ 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 


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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. 

* * * * * 

■ 5. Section 33.122 is added to read as 

follows: 

§ 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 costsharing 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] 

■ 6. Amend § 33.128 by revising 

paragraph (a) to read as follows: 

§ 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 

§ 33.108(f)(3)(iv) and any terms and 

conditions governing the section 1332 

waiver. 

* * * * * 

■ 7. Section 33.130 is added to read as 

follows: 

§ 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] 

■ 8. Section 33.132 is added to read as 

follows: 

§ 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 

■ 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. 

■ 10. Amend § 147.104 by— 

■ a. Revising paragraphs (b)(2)(i)(E) and 

(F); and 

■ b. Adding paragraph (b)(2)(i)(G). 

The revisions and addition read as 

follows: 

§ 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 

■ 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. 

■ 12. Amend § 155.210 by revising 

paragraph (e)(9) to read as follows: 

§ 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 Federallyfacilitated 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 


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enrollment process, and premium tax 

credit reconciliations. 

* * * * * 

§ 155.221 [Amended] 

■ 13. Amend § 155.221 by removing 

paragraph (j). 

■ 14. Amend § 155.410 by revising 

paragraph (e)(3) and adding paragraph 

(e)(4). 

The revision and addition read as 

follows: 

§ 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. 

* * * * * 

■ 15. Amend § 155.420 by— 

■ a. Revising paragraph (a)(4)(ii)(C); 

■ b. Adding paragraph (a)(4)(ii)(D); 

■ c. Revising paragraph (a)(4)(iii) 

introductory text; and 

■ d. Adding paragraphs (b)(2)(vii), 

(d)(16), and (f). 

The revision and additions read as 

follows: 

§ 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. 

* * * * * 

■ 16. Amend § 155.1308 by revising 

paragraphs (f)(3)(iv) introductory text 

and (f)(3)(iv)(A) through (C) to read as 

follows: 

§ 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-ofpocket 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 

* * * * * 

■ 17. Amend § 155.1318 by— 

■ a. Revising the section heading; 

■ b. Revising paragraphs (a) and (b)(3); 

and 

■ c. Adding paragraphs (b)(5) and (g). 

The revisions and addition read as 

follows: 


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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 35215 

§ 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 

§ 155.1312(a)(1), (b), (c), and (d) and the 

Federal public notice procedures under 

§ 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 Statelevel 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. 

■ 18. Amend § 155.1320 by— 

■ a. Revising paragraph (a); 

■ b. Revising the paragraph heading for 

paragraph (c)(2); 

■ c. Revising paragraph (c)(2)(i); and 

■ d. Adding paragraphs (c)(2)(ii)(F) and 

(c)(2)(iii). 

The revisions and additions read as 

follows: 

§ 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 

§ 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. 

* * * * * 

■ 19. Section 155.1322 is added to 

subpart N to read as follows: 

§ 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 costsharing 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] 

■ 20. Amend § 155.1328 by revising 

paragraph (a) to read as follows: 

§ 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 

§ 155.1308(f)(3)(iv) and any terms and 

conditions governing the section 1332 

waiver. 

* * * * * 

■ 21. Section 155.1330 is added to 

subpart N to read as follows: 


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35216 Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules 

§ 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] 

■ 22. Section 155.1332 is added to 

subpart N to read as follows: 

§ 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 

■ 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. 

■ 24. Amend § 156.115 by revising 

paragraph (a)(3) to read as follows: 

§ 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 § 156.110(a)(5) 

of this subpart, comply with the 

requirements under section 2726 of the 

Public Health Service Act and its 

implementing regulations. 

* * * * * 

■ 25. Amend § 156.280 by revising the 

heading and paragraph (e)(2)(ii) to read 

as follows: 

§ 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 


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