53412 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

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 

and Affordable Care Act, was enacted on March 30, 

2010. In this proposed rule, HHS refers 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). 

DEPARTMENT OF THE TREASURY 

31 CFR Part 33 

RIN 1505–AC78 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

45 CFR Parts 147, 155, and 156 

[CMS–9906–F] 

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 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS; 

Monetary Offices, Department of the 

Treasury. 

ACTION: Final rule. 

SUMMARY: This final rule sets forth 

revised 2022 user fee rates for issuers 

offering qualified health plans (QHPs) 

through federally-facilitated Exchanges 

and State-based Exchanges on the 

Federal platform; repeals separate 

billing requirements related to the 

collection of separate payments for the 

portion of QHP premiums attributable to 

coverage for certain abortion services; 

expands the annual open enrollment 

period and Navigator duties; 

implements 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, available during 

periods of time during which APTC 

benefits are available such that certain 

applicable taxpayers’ applicable 

percentage is set at zero, such as during 

tax years 2021 and 2022 under the 

section 9661 of the American Rescue 

Plan Act of 2021; repeals the recent 

establishment of a Direct Enrollment 

option for Exchanges; and modifies 

regulations and policies related to 

section 1332 waivers. 

DATES: This final rule is effective on 

November 26, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Adrianne Patterson, (410) 786–0686, 

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 the annual open enrollment 

period. 

Carolyn Kraemer, (301) 492–4197, for 

matters related to special enrollment 

periods for Exchange enrollment under 

parts 147 and 155. 

Nikolas Berkobien, (301) 492–4400, 

for matters related to standardized 

options. 

Aaron Franz, (410) 786–8027, 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: 

Table of Contents 

I. Executive Summary 

II. Background 

A. Legislative and Regulatory Overview 

B. Stakeholder Consultation and Input 

C. Structure of the Final Rule 

III. Provisions of the Updating Payment 

Parameters and Improving Health 

Insurance Markets for 2022 and Beyond 

Final Rule and Responses to Public 

Comments 

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 Final Rule for Section 

1332 Waivers and Responses to Public 

Comments 

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) 

VI. 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 

which qualified individuals and 

qualified employers can purchase 

comprehensive health insurance 

coverage through 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 

rule finalizes 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, President Biden 

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’’ or the ‘‘Secretary of HHS’’), 

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 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53413 

4See ‘‘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. 

5 ‘‘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. 

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/race-ethnicity.

html#print, https://www.cdc.gov/coronavirus/2019- 

ncov/community/health-equity/race-ethnicity.

html#print. 

7Although many of the policies in this rule 

support the goals outlined in recent Executive 

Orders, as described later in the preamble 

discussions related to individual provisions, each of 

the provisions is supported by statutory authority 

independent of the Executive Orders. 8 86 FR 6138. 

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. 

Those who have insurance frequently 

face barriers to using it 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),4

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. Today, of the 30 

million uninsured, half are people of 

color.5 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 analyzed whether certain policies 

and requirements addressed in this final 

rule 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 HHS’s analyses led to the 

policies and rules finalized in this rule. 

In previous rulemakings, HHS 

established provisions and parameters 

to implement many ACA requirements 

and programs. In this final rule, HHS 

amends and repeals some of these 

provisions and parameters, with a focus 

on making high-quality health care 

accessible and affordable for consumers. 

These changes provide consumers 

greater access to coverage through, for 

example, greater education and 

outreach, improved affordability for 

consumers, reduced administrative 

burden for issuers and consumers, and 

improved program integrity. As 

discussed more fully later in the 

preamble, each of these measures 

strengthen the ACA or otherwise 

promote the policy goals outlined in the 

Executive Orders described earlier in 

this preamble.7

HHS amends § 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. 

HHS also amends § 155.210(e)(9) to 

reinstitute previous requirements that 

Navigators in federally-facilitated 

Exchanges (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. 

HHS also finalizes the removal of 

§ 155.221(j) and repeal of the Exchange 

Direct Enrollment option which 

established a process for State 

Exchanges, State-based Exchanges on 

the Federal platform (SBE–FPs), and 

FFEs 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, HHS amends § 155.410(e) to 

lengthen the annual open enrollment 

period for coverage through all 

individual market Exchanges to 

November 1 through January 15, as 

compared to the current annual open 

enrollment period of November 1 

through December 15, and HHS codifies 

flexibility for State Exchanges that 

operate their own eligibility and 

enrollment platform to set annual open 

enrollment period end dates no earlier 

than December 15. 

HHS adds 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 Federal 

poverty line (FPL), in order to provide 

low-income individuals who generally 

will have access to a premium-free 

silver plan with a 94 percent actuarial 

value (AV) with more opportunities to 

enroll in coverage. This monthly special 

enrollment period will be available 

during periods of time when APTC 

benefits are available such that the 

applicable taxpayers’ applicable 

percentage is set at zero, such as during 

tax years 2021 and 2022, as provided by 

section 9661 of the American Rescue 

Plan Act of 2021 (Pub. L. 117–2) (ARP). 

HHS also clarifies, 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 will ensure that § 155.420 

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, HHS is finalizing 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 the HHS 

Notice of Benefit and Payment 

Parameters for 2022 (hereinafter referred 

to as ‘‘part 1 of the 2022 Payment Notice 

final rule’’).8 These finalized 2022 user 


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53414 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

9These 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. 

10 80 FR 10750 (Feb. 27, 2015). 

11 83 FR 53575. 

12 86 FR 6138. 

13The 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 the ACA. The term ‘‘health plan’’ does not 

include self-insured group health plans. 

14Before 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. 

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. 

HHS is also finalizing 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. 

HHS is repealing the separate billing 

regulation at § 156.280(e)(2), which 

requires individual market QHP issuers 

that offer coverage of abortion services 

for which Federal funds are prohibited 9

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, HHS will revert to, finalize, 

and codify the policy finalized in the 

2016 Payment Notice 10 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. As finalized, 

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 rulemaking also finalizes 

modifications to the section 1332 

Waivers for State Innovation (referred to 

throughout this rule as section 1332 

waivers) implementing regulations, 

including changes to many of the 

policies and interpretations of the 

statutory guardrails recently codified in 

regulation. The policies and 

interpretations finalized in this rule 

supersede and rescind those outlined in 

the October 2018 ‘‘State Relief and 

Empowerment Waivers’’ guidance 11

(hereinafter referred to as the ‘‘2018 

Guidance’’) and repeal the previous 

codification of the interpretations of the 

statutory guardrails in part 1 of the 2022 

Payment Notice final rule.12 HHS and 

the Department of the Treasury 

(collectively, the Departments) are also 

finalizing flexibilities in the public 

notice requirements and post award 

public participation requirements for 

section 1332 waivers under certain 

future emergent situations. The 

Departments are also finalizing the 

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 13 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.14

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 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. 

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 AV 

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 collected through this payment 

for abortion services for which Federal 

funds are prohibited 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 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53415 

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 

Health Care Improvement Act, per 

section 1311(c)(6)(D) of the ACA. 

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 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 

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), HHS 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), HHS 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), 

HHS published the Medicare and 

Medicaid Programs, Basic Health 

Programs and Exchanges interim final 

rule with public comment (‘‘May 2020 

IFC’’) and postponed the 


lotter on DSK11XQN23PROD with RULES2
53416 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

15Washington v. Azar, 461 F. Supp. 3d 1016 (E.D. 

Wash. 2020); Planned Parenthood of Maryland, Inc. 

v. Azar, No. CV CCB–20–00361 (D. Md. July 10, 

2020); California v. U.S. Dep’t of Health & Hum. 

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

2020). 

16 ‘‘Essential Health Benefits Bulletin,’’ December 

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

Resources/Files/Downloads/essential_health_

benefits_bulletin.pdf. 

implementation deadline for those 

separate billing and collection 

requirements by 60 days. In light of 

court rulings in the ongoing litigation in 

Federal courts in Maryland, 

Washington, and California challenging 

the separate billing regulation,15 the 

separate billing policy is not currently 

in effect. 

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), HHS released 

further guidance related to guaranteed 

availability. In the 2019 Payment Notice 

final rule in the April 17, 2018 Federal 

Register (83 FR 17058), HHS 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 the 2022 Payment Notice final rule 

in the May 5, 2021 Federal Register (86 

FR 24140) (hereinafter referred to as the 

‘‘part 2 of the 2022 Payment Notice final 

rule’’), HHS 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 

HHS published a request for comment 

relating to Exchanges in the August 3, 

2010 Federal Register (75 FR 45584). 

HHS issued initial guidance to states on 

Exchanges on November 18, 2010. In the 

July 15, 2011 Federal Register (76 FR 

41865), HHS 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), HHS set forth standards related 

to Exchange user fees. HHS 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), HHS finalized 

changes related to network adequacy 

and provider directories. 

In the 2017 Payment Notice in the 

March 8, 2016 Federal Register (81 FR 

12203), HHS finalized six standardized 

plan options to simplify the plan 

selection process for consumers on the 

Exchanges and codified SBE–FPs along 

with relevant requirements, including 

the associated user fee. In the 2017 

Payment Notice, HHS also finalized 

policies relating to network adequacy 

for QHPs on the FFEs. In the May 11, 

2016 Federal Register (81 FR 29146), 

HHS published an interim final rule 

with amendments to the parameters of 

certain special enrollment periods (2016 

Interim Final Rule). HHS finalized these 

amendments 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 April 18, 2017 Market 

Stabilization final rule Federal Register 

(82 FR 18346), HHS 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), HHS 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 (ESC) 

verification and non-enforcement 

discretion for Exchanges that do not 

conduct random sampling to verify 

whether an employer offers ESC until 

plan year 2021. 

In part 1 of the 2022 Payment Notice 

final rule, published in the January 19, 

2021 Federal Register (86 FR 6138), 

HHS 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) HHS finalized new special 

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 16 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). HHS 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 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53417 

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

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

FR 12833) (EHB Rule). In the 2019 

Payment Notice, published in the April 

17, 2018 Federal Register (83 FR 

16930), HHS 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 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 (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, passthrough 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 

(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 (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 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 consulted with stakeholders on 

policies related to the operation of 

Exchanges relevant to the policies in 

this final rule. HHS held a number of 

listening sessions with consumers, 

providers, employers, health plans, 

advocacy groups and the actuarial 

community to gather public input. HHS 

has solicited input from state 

representatives on numerous topics, 

particularly the direct enrollment option 

for FFEs, SBE–FPs and State Exchanges. 

HHS 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. HHS considered all 

public input it received as HHS 

developed the policies in this rule. 

C. Structure of Final Rule 

The regulations outlined in this final 

rule were proposed in the ‘‘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’’ published in the July 1, 2021 

Federal Register (86 FR 35156 through 

35216) and will be codified in 45 CFR 

parts 147, 155, and 156. In addition, the 

regulations outlined in this final rule 

governing waivers under section 1332 of 

the ACA at 45 CFR part 155 subpart N 

will also be codified in 31 CFR part 33. 

The changes to part 147 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 special enrollment period at 

§ 155.420(d)(16). 

The changes to part 155 repeal the 

establishment of the Exchange DE 

option, which established a process for 

State Exchanges, SBE–FPs, and FFEs to 

elect to transition to use direct 

enrollment technology and nonExchange websites developed by 

approved web brokers, issuers and other 

direct enrollment partners to enroll 

qualified individuals in QHPs offered 

through the Exchange. HHS is finalizing 

an extension of the annual individual 

market open enrollment period to end 

on January 15 of the applicable year, 

rather than December 15 of the previous 

year beginning with the open 

enrollment period for the 2022 coverage 

year, and HHS is codifying flexibility for 

State Exchanges that operate their own 

eligibility and enrollment platform to 

set individual market annual open 

enrollment period end dates no earlier 

than December 15 and to adopt 

accelerated effective dates. HHS is also 

finalizing the reinstitution of previous 

requirements that Navigators in FFEs 

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. HHS is 

further finalizing the provision of 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 for 

periods of time during which enhanced 

APTC benefits are also available, such 

that certain applicable taxpayers’ 

applicable percentage is set at zero, as 

provided by the section 9661 of the ARP 

or any subsequent statute or rule. HHS 

is finalizing a clarification that, for 

purposes of the special enrollment 

periods provided at § 155.420(d), a 

qualified individual, enrollee, or his or 

her dependent who is eligible 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 for 

purposes of these special enrollment 

periods. 

The changes to part 156 update the 

user fee rates for the 2022 benefit year 

for all issuers participating on the 

Exchanges using the Federal platform. 

HHS is also finalizing the repeal of the 

separate billing requirement, which 

required 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, HHS is finalizing 

an update to cross reference to mental 

health parity standards in the provision 

of EHB regulations. 

The changes in 31 CFR part 33 and 45 

CFR part 155 related to section 1332 

waivers rescind the previous 

incorporation into regulation of certain 

policies and interpretations announced 

in the 2018 Guidance and are adopting 

new policies and interpretations for the 

statutory guardrails. The Departments 

are finalizing modifications to the 

section 1332 implementing regulations, 

and the proposals related to section 

1332 waivers, which include adoption 

of processes and procedures for 


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18 86 FR 35156. 

19 86 FR 24140. 

20See 86 FR 7009 (Jan. 25, 2021) and 86 FR 7793 

(Feb. 2, 2021). 21See IRC 36B(b)(2)(A), (c)(2)(A)(i). 

amendments and extensions for 

approved waiver plans. Additionally, 

the Departments are finalizing the 

extension of 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 the Final Rule and Analysis 

and Responses to Public Comments 

In the July 1, 2021 Federal Register 

(86 FR 35156) HHS published the 

‘‘Updating Payment Parameters, Section 

1332 Waiver Implementing Regulations, 

and Improving Health Insurance 

Markets for 2022 and Beyond’’ proposed 

rule.18 HHS received a total of 390 

comments, including 168 comments 

that were substantially similar to one 

form letter. Comments were received 

from state entities, such as departments 

of insurance and State Exchanges, 

health insurance issuers, providers and 

provider groups, consumer groups, 

industry groups, national interest 

groups, and other stakeholders. The 

comments ranged from general support 

for the proposed rule, to specific 

support of or opposition to the proposed 

provisions, to specific questions 

regarding proposed changes. HHS also 

received a number of comments and 

suggestions that were outside the scope 

of the proposed rule. These out-of-scope 

comments are not addressed in this final 

rule. 

In this final rule, HHS provides a 

summary of proposed provisions, a 

summary of the public comments 

received that directly related to those 

proposals, its responses to these 

comments and a description of the 

provisions HHS is finalizing. 

HHS first addresses comments 

regarding the publication of the 

proposed rule and the comment period. 

Comment: Some commenters were 

concerned about the length of the 

comment period, stating that a longer 

comment period is necessary to allow 

stakeholders to review the proposed 

rule and provide thoughtful comments. 

Some commenters expressed concern 

that HHS should not calculate the 

comment period from the posting of the 

public inspection version, and that HHS 

would not have time to adequately 

review and consider all the comments 

before issuing a final rule. 

Response: HHS disagrees that the 

comment period was not long enough to 

allow stakeholders to provide 

meaningful comments. HHS found 

commenters’ submissions to be 

thoughtful and reflective of a detailed 

review and analysis of the proposed 

rule. HHS notes that in the interest of 

providing valuable information for 

issuers to set their rates for the 2022 

plan year as soon as possible, HHS 

started the 30-day comment period with 

the posting of the rule for public 

inspection. 

HHS further recognizes the 

importance of Federal agencies 

reviewing and considering all the 

relevant comments before issuing a final 

rule. The comment period for the 

proposed rule closed on July 28, 2021. 

HHS has had ample time to review and 

fully consider comments relevant to the 

rules and policies addressed in this final 

rule. 

Comment: HHS received several 

comments of general support for the 

rule and for the proposed provisions 

which expand access to affordable 

health coverage. Some commenters 

expressed support for EOs 13985 and 

14009. Other commenters expressed 

concern regarding the timing of the rule 

and the repeal of policies finalized in 

part 1 of the 2022 Payment Notice final 

rule.19 A few commenters stated that 

this rule is being published too late in 

the 2021 plan year for policy 

implementation and rate-setting for the 

2022 plan year. 

Response: HHS recognizes that this 

rulemaking has occurred later than 

usual in the plan year. However, HHS 

believes that the policies finalized in 

this rule align with the goals included 

in EOs 13985 and 14009.20

While several of the policies in this 

final rule do not directly impact ratesetting, this final rule is being released 

prior to the September 21, 2021 

deadline for signing final QHP 

agreements to participate in FFEs and 

SBE–FPs during the 2022 plan year. The 

purpose of the policies in this final rule 

is to strengthen the health insurance 

markets comprising plans that are 

subject to the ACA market reforms, and 

HHS encourages issuers to continue 

their participation in the Exchanges for 

2022. HHS also believes that there is 

sufficient time to implement the 

applicable policies in advance of the 

start of the 2022 plan year. 

Comment: One commenter requested 

that HHS assess and address systemic 

barriers to access for American Indian 

and Alaskan Native populations and 

establish guidance to address the social 

determinants of health that affect these 

communities and other communities of 

color. 

Response: While this comment is 

outside of the scope of this rule, HHS 

appreciates this feedback. HHS notes 

that it is actively seeking ways to engage 

with stakeholders in an effort to 

advance health equity and address the 

social determinants of health that 

disparately impact communities of color 

in line with E.O. 13985 as described 

previously. 

A. Part 147—Health Insurance Reform 

Requirements for the Group and 

Individual Health Insurance Markets 

1. Guaranteed Availability of Coverage 

(§ 147.104) 

a. Special Enrollment Periods 

(§ 147.104(b)(2)) 

As further discussed in the preamble 

section regarding the monthly special 

enrollment period for APTC-eligible 

qualified individuals with an expected 

household income no greater than 150 

percent of the FPL (§ 155.420(d)(16)), 

HHS is finalizing the proposed special 

enrollment period with amendments, so 

that it is available only during periods 

of time during which APTC benefits are 

available such that the applicable 

taxpayers’ applicable tax percentage is 

set at zero, such as during tax years 

2021 and 2022, as provided by section 

9661 of the ARP. HHS is otherwise 

finalizing this new special enrollment 

period as proposed, including adding 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. 

HHS proposed 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 

that is not a QHP offered through an 

Exchange.21 HHS requested comment 

on this proposal. HHS did not receive 

many comments on this aspect of the 

proposed special enrollment period. 

However, comments that HHS did 

receive supported the proposal to not 

require issuers to provide the proposed 

special enrollment period for consumers 

to enroll in coverage off-Exchange. HHS 

appreciates this support and is 

finalizing the proposed special 

enrollment period to specify that issuers 

are not required to provide it in the 

individual market with respect to 

coverage offered outside of an Exchange. 


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22See 83 FR 16974–16975. 

23See 86 FR 36987 (Jul. 9, 2021). 

24See 86 FR 24140, 24264–24265. 

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

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 HHS 

had promulgated in the 2019 Payment 

Notice final rule. The court vacated four 

of these policies. One of the policies 

vacated was the 2019 Payment Notice’s 

cessation of the practice of designating 

some plans in the FFEs as ‘‘standardized 

options.’’ 22 Additionally, in July 2021, 

President Biden’s Executive Order 

14036 on Promoting Competition in the 

American Economy directed HHS to 

standardize plan options in order to 

facilitate the plan selection process for 

consumers on the Exchanges.23

HHS intends to implement the court’s 

decision as soon as possible, as 

explained in part 2 of the 2022 Payment 

Notice final rule.24 HHS 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, HHS will 

also need to design and propose new 

standardized options that otherwise 

meet current market reform 

requirements.25 HHS 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’s 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 in time for the 

annual open enrollment period later this 

year. 

Specifically, in the last iteration of 

standardized options HHS finalized in 

the 2018 Payment Notice, HHS created 

three sets of standardized options based 

on FFE and SBE–FP enrollment data 

and state cost-sharing laws. The basis on 

which HHS 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 State Exchanges), have 

changed considerably since the last 

iteration of standardized options in 

2018. Further, HHS does 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 standardized 

options suitable for the current 

environment. Additionally, in prior 

years, HHS 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 HHS would 

propose and decide whether or not to 

offer them if such proposals were made 

effective before the 2023 plan year. 

For these reasons, HHS intends to 

resume the designation of standardized 

options and to propose specific plan 

designs in more complete detail in the 

2023 Payment Notice. HHS sought the 

views of stakeholders regarding issues 

related to the proposal of new 

standardized options, including the 

views of states with FFEs or SBE–FPs 

regarding how unique state cost-sharing 

laws could affect standardized option 

plan designs. 

The following is a summary of the 

comments received and HHS’s 

responses related to standardized 

options. 

Comment: Some commenters 

recommended not requiring issuers to 

offer standardized options. Some 

commenters also recommended 

permitting issuers to voluntarily offer 

standardized options in states with State 

Exchanges, including SBE–FPs, even if 

issuers in the FFEs were required to 

offer them. Some commenters also 

noted opposition to limiting the number 

of non-standardized plans issuers could 

offer. Some commenters also 

recommended not preferentially or 

differentially displaying standardized 

options on HealthCare.gov. 

These commenters explained that 

issuers are already required to cover the 

EHB at specified metal tiers of coverage, 

which provides consumers a sufficient 

degree of standardization. These 

commenters also explained that 

requiring issuers to offer standardized 

options could result in an influx of 

options that fail to provide additional 

value to consumers and make it more 

difficult to compare plan options. These 

commenters also explained that limiting 

the number of non-standardized plans 

issuers could offer would inhibit 

innovative plan designs that meet 

diverse coverage needs. These 

commenters also explained that the 

preferential or differential display of 

standardized options would appear to 

favor some plans over others, 

inadvertently steer consumers towards 

standardized plans, and discourage 

consumers from exploring all available 

options. These commenters 

recommended that CMS identify issuers 

with a disproportionately high volume 

of plan options in a given geographic 

region and work with these issuers to 

ensure there are actual meaningful 

differences among the plans. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: Some commenters 

recommended that CMS should employ 

a minimally disruptive approach in 

designing standardized options and not 

design plans to be radically different 

from those currently offered. These 

commenters explained that such plans 

would be more complicated for issuers 

to develop and could be challenging for 

consumers to interpret. These 

commenters recommended that CMS 

offer standardized options that are based 

on the most popular plans currently 

offered on the Exchanges, a similar 

approach to that taken in past iterations. 

Several of these commenters also 

recommended that CMS not be overly 

prescriptive in standardizing every 

aspect of cost sharing, but instead focus 

on setting annual deductible and out-ofpocket limits. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: Some commenters 

explained that plan standardization 

could stifle competition. These 

commenters explained that if cost 

sharing is standardized, the only 

difference between plans will be 

networks. These commenters also 

explained that if standardization 

strengthens the importance of networks 

while deemphasizing other aspects of 

coverage, issuers may not stay in 

markets where network costs exceed 

their competitors’. These commenters 

further explained that with every 

additional aspect of coverage that is 

standardized, issuers will have to 

consider their ability to compete as 


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potential areas to innovate and 

differentiate are limited. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: Commenters also 

expressed support for requiring issuers 

to offer standardized options, limiting 

the number of non-standardized plans 

that issuers could offer, and 

preferentially or differentially 

displaying standardized options. 

Commenters explained the 

importance of simplifying the complex 

process of purchasing insurance and the 

important role that standardized options 

could play in that simplification. 

Commenters explained that there is 

significant variation in the cost sharing 

structures of non-standardized plans, 

much of which cannot be identified 

without a detailed analysis of benefit 

designs. Commenters explained that 

many individuals do not have the time, 

resources, or health literacy necessary 

for this level of analysis. Commenters 

explained that enrollees typically 

choose plans based on more readily 

available comparison points, like 

premiums, rather than factors that 

would be illuminated by a more 

detailed examination of plan designs, 

like expected out-of-pocket costs. 

Commenters explained that selecting a 

plan solely based on its premium 

without taking into consideration other 

attributes of its design, such as its cost 

sharing structure, deductible, or 

expected out-of-pocket costs, can result 

in unexpected costs and financial harm 

for consumers. 

Commenters explained that barriers to 

conducting a detailed analysis of plan 

designs are particularly pronounced for 

those whose resources are already 

severely constrained, including those 

with limited English proficiency, those 

with inadequate internet access, and 

those with complex health needs. 

Commenters explained that facilitating 

consumer understanding and 

streamlining decision-making would 

benefit these populations as well as 

populations with disproportionately 

high rates of chronic diseases. 

Commenters also explained that 

standardized plans could help 

individuals more easily identify plans 

that have potentially discriminatory 

benefit designs, such as plans that have 

coinsurance subject to the deductible as 

the cost sharing type for specialty tier 

prescription drugs. These commenters 

explained that discriminatory benefit 

designs target individuals with 

particular disabilities or health 

conditions by leaving them with 

substantial out-of-pocket costs. 

Commenters explained that conditions 

that are typically targeted, including 

HIV, diabetes, cancer, and mental health 

conditions, disproportionately affect 

individuals of color. Commenters 

explained that discriminatory benefit 

designs continue to violate the ACA’s 

protections for people with preexisting 

conditions and its prohibition on 

discrimination based on race, sex, and 

disability. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: Commenters also 

recommended taking a more 

prescriptive approach beyond requiring 

issuers to offer standardized plans, 

limiting the number of nonstandardized plans, and preferentially 

or differentially displaying standardized 

plans. These commenters recommended 

requiring issuers to offer standardized 

options exclusively, pointing to Covered 

California’s approach, which has 

required issuers to offer standardized 

plans exclusively since 2014. These 

commenters explained that in Covered 

California’s approach, to the extent 

issuers want to offer non-standardized 

products, they need to demonstrate that 

such designs are also patient-centered. 

These commenters explained that 

issuers in California have not seen the 

value in offering non-standardized 

options to date, suggesting that 

California’s approach to standardized 

options has satisfied the needs of issuers 

and enrollees alike. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: Commenters also made 

recommendations regarding specific 

aspects of standardized plan designs. 

Some commenters expressed concern 

about the cost-sharing structure in the 

first set of standardized plans in the 

2018 Payment Notice in particular, 

which had coinsurance subject to the 

deductible as the form of cost sharing 

for occupational, physical, and speech 

therapies. Many commenters also noted 

a strong preference for copayments over 

coinsurance as the form of cost sharing 

for as many benefit categories as 

possible. These commenters explained 

that consumers prefer copayments to 

coinsurance because copayments are 

more transparent and make it easier to 

predict out-of-pocket costs. Commenters 

also explained that in the context of 

prescription drugs, the use of 

coinsurance results in patients paying 

cost sharing amounts based on a 

medicine’s list price, rather than a 

medicine’s net price, which accounts for 

manufacturer discounts and rebates 

paid to pharmacy benefit managers 

(PBMs) and issuers. Some commenters 

recommended that standardized plans 

include a nominal cost-sharing cap in 

the form of copayments for all tiers of 

prescription drug coverage to limit the 

amount that consumers spend on 

prescriptions every month, as several 

states have already done. 

Commenters also recommended 

having low deductibles, explaining that 

deductibles act as a barrier to access. 

One commenter pointed to 

Washington’s standardized plans, which 

have a deductible that is on average 

$1,000 less than non-standard offerings 

and provide more pre-deductible 

services. Commenters also 

recommended exempting a range of 

benefits from the deductible, including 

primary care visits, specialist visits, 

outpatient visits, mental health services, 

habilitative and rehabilitative services, 

pediatric preventative services, 

preventative care, chronic condition 

management, and prescription drug 

coverage. One commenter explained 

that any standardized plan that is also 

a high deductible health plan (HDHP) 

should provide pre-deductible coverage 

for preventive care the Internal Revenue 

Service (IRS) has determined is 

permitted to be provided without a 

deductible pursuant to section 

223(c)(2)(C) of the Code. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

Comment: One commenter 

recommended delaying the 

implementation of standardized options 

requirements until plan year 2024 to 

allow issuers sufficient time to prepare 

for this change. 

Response: HHS will take these 

considerations into account when 

designing the standardized options that 

will be proposed in the 2023 Payment 

Notice. 

2. Navigator Program Standards 

(§ 155.210) 

HHS proposed 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 


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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 PTC 

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/ 

biden-harris-administration-quadruples-numberhealth-care-navigators-ahead-healthcaregov-open. 

28 86 FR 7793 (Feb. 2, 2021). 

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. HHS has 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). 

HHS has 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. 

HHS proposed 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, HHS 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 August 27, 2021, HHS 

awarded $80 million in grant funding to 

60 Navigator grantees in 30 states with 

an FFE for the 2022 plan year.27 With 

this substantially increased funding for 

the FFE Navigator program for the 2022 

plan year, HHS noted that HHS believes 

there will be sufficient Navigator grant 

funding available to support the postenrollment duties HHS proposed to 

once again require of FFE Navigators. 

HHS also noted that HHS believes 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, the proposal 

was 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, HHS 

proposed 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. HHS noted that HHS 

was 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. HHS noted that 

HHS believes 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. HHS discussed that 

HHS would interpret the 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 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 

Federal income tax filing process and 

how to claim them, and understanding 

the availability of the IRS resources on 

this topic. HHS proposed 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). HHS noted that HHS 

believes that the proposal was 

consistent with Navigators’ duty under 


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29HHS notes that HHS did not propose 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 MEC 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. 

31See https://marketplace.cms.gov/c2c. 

32 86 FR 7009 (Jan. 25, 2021). 

33Access 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. 

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, HHS proposed to 

reinstitute as a requirement at 

§ 155.210(e)(9)(iii) that Navigators must 

help consumers with the Exchangerelated components of the PTC 

reconciliation process and with 

understanding the availability of IRS 

resources on this process. As explained 

in the proposed rule, 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. The proposal stemmed 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. As explained in the proposed 

rule, FFE Navigators would be required 

to help consumers obtain IRS Form 

1095–A, Health Insurance Marketplace 

Statement, and Form 8962, Premium 

Tax Credit (PTC), and the instructions 

for Form 8962, and to provide general 

information, consistent with applicable 

IRS guidance, about the significance of 

the forms. HHS noted that, as proposed, 

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. 

HHS noted that, as proposed, 

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 the 

proposal included a requirement that 

Navigators provide consumers with 

information and assistance 

understanding the availability of IRS 

resources, HHS noted that 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, 

HHS proposed 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

In the proposed rule, HHS discussed 

that it interprets 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. HHS has 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, HHS proposed 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. HHS also 

proposed to expand its interpretation of 

this requirement and the activities that 

fall within the requirement’s scope. As 

explained in the proposed rule, these 

activities could be supported through 

the use of existing resources such as the 

CMS ‘‘From Coverage to Care’’ 

initiative, which HHS encourages 

Navigators to review, and which are 

now available in multiple languages.31

HHS noted that, as proposed, the 

provision would improve consumers’ 

access to health coverage information, 

not just when selecting a plan, but also 

when using their coverage. 

HHS noted that HHS believes 

expanding its interpretation of the 

requirement that Navigators help 

consumers understand basic concepts 

and rights related to health coverage and 

how to use it and 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.32 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.33 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, 

HHS noted that Navigators are uniquely 

positioned to establish and build trust 


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34 85 FR 72158. 

35Title I of Division BB of the Consolidated 

Appropriations Act, 2021, Pub. L. 116–260 (Dec. 27, 

2020). 

with individuals and families as they 

transition from enrolling in health 

coverage to using and maintaining their 

coverage throughout the year. 

Additionally, HHS noted that 

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, HHS noted that HHS is 

not requiring Navigators to help 

consumers with specific health literacy 

topics. Instead, HHS proposed to 

expand its interpretation of the 

Navigator duties 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; 34 (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 35 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. HHS noted that, if this 

proposal were finalized, CMS intends to 

make training materials and other 

educational resources available to 

Navigators regarding the proposed 

expanded interpretation of this 

requirement. 

HHS noted that, as proposed, FFE 

Navigators would continue to be 

permitted to perform the Navigator 

duties specified in § 155.210(e)(9) until 

this provision, if finalized, became 

effective. HHS explained that if the 

proposal was 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 the 

proposal was finalized prior to 

Navigator grant funding being awarded 

in fiscal year (FY) 2022, FY 2021 

Navigator grantees would 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 the provision, if finalized, 

becomes effective, HHS noted that they 

can revise their project plans to 

incorporate performance of the duties 

specified in § 155.210(e)(9) as part of 

their non-competing continuation 

application for their FY 2022 funding. 

HHS also noted that if the provision was 

finalized as proposed, HHS 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. 

HHS discussed in the proposed rule 

that HHS interprets 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, HHS 

noted that Navigators are already 

permitted, but not required, to help with 

a variety of other post-enrollment 

issues. For example, HHS noted that 

HHS interpreted 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. HHS also 

noted that HHS interpreted 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, HHS 

noted that HHS interpreted 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 HHS did not propose to require 

CACs to further expand their required 

duties, HHS noted that HHS encouraged 

CACs to help with activities consistent 

with their existing regulatory duties and 

recognized that many of these CACs 

may already be participating in these 

post-enrollment activities. 

The following is a summary of the 

comments received and HHS’s 

responses related to Navigator program 

standards at § 155.210. 

Comment: The vast majority of 

comments HHS received in relation to 

this proposal expressed enthusiastic 

support. Many commenters stated that 

they believe it is important that highquality consumer assistance to help 

people find, keep, and use health 

coverage be free and widely available. 

Several commenters emphasized that 

this was particularly important for 

individuals with limited English 

proficiency (LEP) or those who lack 

basic health insurance literacy to reduce 

health disparities in rural and 

underserved communities, including 

the Black, Indigenous, and other People 

of Color (BIPOC) community. 

Additionally, several commenters 

supported and noted the importance of 

increased funding for the Navigator 

program. 

Response: HHS appreciates the 

comments in support of this proposal 

and is finalizing the proposal 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 

as proposed. HHS also appreciates 

commenters’ support of increased 


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funding for the Navigator program, 

which has funded 60 Navigator grantees 

in 30 FFE states for plan year 2022. 

Comment: A few commenters said 

they believe the proposed Navigator 

duties duplicate services provided by 

issuers or agents and brokers. A few 

commenters suggested that Navigators 

be required to be licensed, carry errors 

and omissions insurance, and be under 

the oversight of state regulators. 

Response: HHS believes it is 

important for consumers to have access 

to a variety of assistance options. HHS 

especially believes it is important that 

consumers have access to Navigators 

who, unlike agents and brokers, are 

required under § 155.210(e)(2) to 

provide information and services in a 

fair, accurate, and impartial manner, 

and to abide by the conflict of interest 

provision at § 155.210(d)(4) prohibiting 

Navigators from receiving any 

consideration directly or indirectly from 

any health insurance issuer or issuer of 

stop loss insurance in connection with 

the enrollment of any individuals or 

employees in a QHP or a non-QHP. 

Although they are not required by CMS 

to carry errors and omissions insurance, 

Navigators are required to complete 

HHS-approved training, achieve a 

passing score on all approved 

certification examinations, and be 

certified or recertified on at least an 

annual basis before carrying out any 

consumer assistance functions under 

§ 155.210. Additionally, Navigators in 

all states are required under 

§ 155.210(c)(1)(iii) to meet any 

licensing, certification, or other 

standards prescribed by the state or 

Exchange, if applicable, so long as the 

standards do not prevent the application 

of the provisions of title I of the ACA. 

Comment: A few commenters 

expressed concern that CMS did not 

propose to restore the requirements to 

have at least two in-person Navigator 

organizations in each state and to ensure 

that at least one of those organizations 

was a community and consumerfocused nonprofit group. 

Response: HHS recognizes that 

trusted community non-profits and inperson presence are desirable qualities 

for Navigator organizations, and that 

these can be particularly valuable in 

serving vulnerable populations such as 

minorities, individuals with LEP, and 

individuals with disabilities. However, 

the existing Navigator grant process 

already gives considerable weight to the 

capacity of the Navigator organization to 

serve vulnerable populations, including 

those who may need communications 

assistance, lack broadband access, or 

have specialized needs. Therefore, HHS 

believes that reinstating these 

requirements would not be beneficial to 

Exchanges, as they currently have the 

flexibility to award funding to the 

number and type of entities that will be 

most effective for the specific Exchange, 

thus optimizing use of the funding 

amounts available to direct investments 

to effective and efficient Navigators, 

which may include selecting a single, 

high performing grantee in an Exchange. 

Additionally, reinstating the 

requirement that one Navigator grantee 

in each Exchange must be a community 

and consumer-focused nonprofit group 

may unnecessarily limit an Exchange’s 

ability to award grants to the strongest 

applicants, particularly in an Exchange 

that opts to have only one Navigator 

grantee, and where the strongest 

applicant is not a community and 

consumer-focused nonprofit group. 

Reinstating this requirement would 

effectively exclude any other type of 

statutorily eligible entities from 

becoming Navigators in an Exchange 

that opts to have only one Navigator 

grantee and would limit an Exchange’s 

ability to target to the highest scoring 

and performing entities, regardless of 

organization type. 

Comment: A few commenters 

suggested HHS reinstate the 

requirement that Navigators receiving 

grants maintain a physical presence in 

the Exchange service area. 

Response: HHS agrees with 

commenters who emphasized the 

importance of providing more flexibility 

to each Exchange to structure its 

Navigator program to best serve the 

Exchange’s service area. HHS believes 

that entities with a physical presence 

and strong relationships in their FFE 

service areas tend to deliver the most 

effective outreach and enrollment 

results. Navigator grant applicants that 

demonstrate the ability to maintain 

these relationships and establish new 

relationships through a physical 

presence in their proposed service 

area(s) may receive a higher score on 

their application than those who do not. 

The majority of HHS’s 2021 Navigator 

grantees will be maintaining a physical 

presence in the state they are serving, 

and there will be at least one physically 

present Navigator organization in every 

FFE state. Additionally, nothing in this 

final rule prevents an Exchange from 

selecting grantees that are physically 

present and available to provide a 

spectrum of in-person, local outreach, 

education, and assistance, including 

directing these services towards 

vulnerable and underserved 

populations, if the Exchange elects to 

weight its selection process in that way 

and its selection process is consistent 

with section 1311(i)(2)(A) of the ACA 

and § 155.210(c)(1)(ii). 

After consideration of the comments 

received, HHS is finalizing the 

proposals as proposed. FFE Navigators 

will continue to be permitted to perform 

the Navigator duties specified in 

§ 155.210(e)(9) until Navigator grants are 

awarded in 2022. FFE Navigators will be 

required to perform the Navigator duties 

specified in § 155.210(e)(9) beginning 

with Navigator grants awarded in 2022, 

including non-competing continuation 

awards. Thus, 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. 

3. Exchange Direct Enrollment Option 

(§ 155.221(j)) 

In part 1 of the 2022 Payment Notice 

final rule, HHS 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, 

and agents and brokers) to transition to 

private-sector enrollment pathways 

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. 

These private-sector pathways could be 

offered in addition to or instead of a 

centralized eligibility and enrollment 

website operated by an Exchange. 

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. HHS 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, 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, HHS proposed to remove 

§ 155.221(j) and repeal the Exchange DE 

option. 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53425 

36 86 FR 7009 (Jan. 25, 2021). 

37 86 FR 7793 (Feb. 2, 2021). 

38Health Insurance Marketplace® is a registered 

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

Human Services. 

39 86 FR 7793 (Feb. 2, 2021). 

40https://www.cms.gov/newsroom/press-releases/ 

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

41https://www.cms.gov/newsroom/press-releases/ 

more-25-million-americans-gain-health-coverageduring-special-enrollment-period. 

42Public Law 117–2. 

43https://www.cms.gov/newsroom/press-releases/ 

more-25-million-americans-gain-health-coverageduring-special-enrollment-period. 

44Title I of Division BB of the Consolidated 

Appropriations Act, 2021, Public Law 116–260 

(Dec. 27, 2020). 

On January 20, 2021, President Biden 

issued the E.O. 13985,36 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. 14009.37

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® 38 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 . . .’’ 39

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 

FFEs.40

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 August 10, 2021, 

2.5 million consumers have enrolled in 

coverage through HealthCare.gov and 

the State Exchanges, which represents a 

substantial increase from previous years 

when special enrollment periods were 

available primarily for normal 

qualifying life events.41

In addition, Congress recently passed 

the ARP,42 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. 

The approximately 2.5 million 

consumers that have enrolled in 

coverage through HealthCare.gov and 

the State Exchanges during the COVID– 

19 special enrollment period have 

reduced their monthly premiums by $40 

per person per month due to the ARP’s 

premium credits, with more than onethird of consumers finding coverage for 

$10 or less per month. In addition, outof-pockets costs have fallen for new 

consumers that have enrolled since 

April, with the median plan deductible 

falling by nearly 90 percent from $450 

to $50.43

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,44

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 its 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, 

HHS determined that all available 

resources should be directed to ensuring 

HHS is 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 

determinations and are enrolled in 

coverage in line with the modified PTC 

eligibility criteria under the ARP, and 

then take steps and expend resources to 

end these new procedures since 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, HHS proposed to 

repeal the Exchange DE option. As 

explained in the proposed rule, this 

would help ensure that available 

resources are allocated consistent with 

administration health care priorities and 

dedicated to implementation of newlyenacted Federal laws that provide 

greater financial assistance and 

protections to consumers. 

HHS further explained that repealing 

the Exchange DE option should 

generally have a minimal impact on 

states and other interested parties. 


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53426 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

45The FFE DE pathways are also available in 

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

155.221(i). 

46Multiple 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. 47This 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. 

States with State Exchanges already 

could engage with DE entities preceding 

the addition of § 155.221(j). In addition, 

the FFEs have already implemented the 

DE program (including classic direct 

enrollment and enhanced direct 

enrollment, or EDE), 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.45 Additionally, 

HHS noted that nothing in the previous 

regulatory framework prohibited State 

Exchanges from engaging DE entities 

similar to the FFEs in order to 

supplement Exchange operations in 

their states should they so choose. HHS 

also noted that although HHS 

understands that several State 

Exchanges have engaged with DE 

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 initial proposal to 

establish the Exchange DE option. HHS 

further noted that, to date, no state had 

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, HHS 

explained in the proposed rule that HHS 

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, HHS 

noted that HHS believed 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 DE 

entities operating in a state. HHS noted 

that such a shift would be particularly 

harmful now when over 2.5 million 

consumers have relied upon and 

successfully navigated HealthCare.gov 

and State Exchange websites during the 

COVID–19 special enrollment period to 

enroll in Exchange coverage. HHS also 

agreed 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 DE entities that only offer 

assistance with a limited selection of 

products and some of those products 

may not provide, for example, MEC for 

consumers.46 Many commenters raised 

concerns that this consumer confusion 

or limited product selection through DE 

entities could also potentially disrupt 

coordination of coverage with other 

insurance affordability programs, 

including Medicaid and CHIP, which is 

inconsistent with HHS’s ‘‘no wrong 

door’’ policy.47 In addition, these 

consequences could act as an 

unnecessary barrier to consumers 

seeking Medicaid or ACA coverage 

rather than facilitating enrollment in 

comprehensive coverage, and could 

have additional downstream impacts 

including an increased uninsured or 

underinsured population, or more 

consumers enrolling in less 

comprehensive coverage options. 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 

underserved groups and consumers in 

general are heightened as the COVID–19 

PHE continues. 

After 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–19 

special enrollment period, and because 

no state had yet expressed interest in 

implementing the Exchange DE option, 

HHS proposed 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), HHS also 

proposed to repeal the accompanying 

user fee rate for FFE–DE and SBE–FP– 

DE states for 2023. 

The following is a summary of the 

comments received and HHS’s 

responses to the proposed repeal of the 

Exchange DE option (§ 155.221(j)). 

Comment: The overwhelming 

majority of commenters supported the 

proposal to repeal the Exchange DE 

option. These commenters both 

endorsed the rationale behind this 

proposal, and reiterated concerns about 

the potential negative ramifications of 

the Exchange DE option that were 

expressed in comments when the 

Exchange DE option was originally 

proposed in the 2022 Payment Notice. 

These include a lack of empirical 

research to quantify potential impacts or 

demonstrate the value that would be 

added by implementation of this option; 

the potential for consumer confusion 

due to fragmentation among multiple 

DE entities; the potential for DE entities 

with misaligned incentives to steer 

consumers toward less comprehensive 

coverage options or fail to inform 

consumers that they are eligible for 

Medicaid or CHIP; an increase in 

funding and resources that would be 

needed to provide effective oversight; 

and other downstream impacts, 

including the potential for an increase 

in uninsured and underinsured 

populations, particularly within the 

QHP, Medicaid, and CHIP populations. 

Several commenters also raised health 

equity concerns, asserting that the 

Exchange DE option could have a 

disproportionate impact on certain 

underserved or historicallymarginalized groups, and others that 

face barriers navigating the health care 

system to get coverage. Supporting 

commenters commented on behalf of 

those with pre-existing conditions, the 

LGBTQ+ population, women and 

children, those with substance use 

disorders, young adults, and others. One 

commenter noted that the Exchange DE 

option would disproportionately impact 

historically-marginalized populations 

by making Medicaid less accessible, 

asserting that DE entities do not 

necessarily provide Medicaid eligibility 

information to consumers. Another 

commenter noted that making Medicaid 

less accessible would be particularly 

harmful to women of color and those in 

the LGBTQ+ community who, due to 

discrimination and depressed wages, are 

disproportionately eligible for Medicaid 

and CHIP. Several commenters 

expressed concern that the Exchange DE 

option would disproportionately impact 

people with substance use disorders and 

mental health conditions given the 

increased prevalence of those 

conditions during the PHE. Commenters 

expressed concern that those with 

limited health literacy also could be 

particularly harmed by the Exchange DE 

option, citing consumers in underserved 

communities, young people, people 

who do not speak English as a first 

language, and others. These commenters 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53427 

48https://www.cms.gov/newsroom/press-releases/ 

more-25-million-americans-gain-health-coverageduring-special-enrollment-period. 

49The FFE DE pathways are also available in 

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

155.221(i). 

stated that such consumers are 

particularly susceptible to being harmed 

by insufficient information, coverage, 

and hidden costs. One commenter also 

noted that women generally have more 

health care needs and are more 

vulnerable to high health costs, which 

means enrolling in substandard 

coverage could result in care being 

delayed or denied, medical debt, and 

overall worse health outcomes. 

Commenters also noted that the 

potential increase in the number of 

consumers enrolled in substandard 

coverage as a result of the Exchange DE 

option would be particularly harmful 

for consumers with pre-existing 

conditions, since through such 

substandard coverage they could 

experience a denial of coverage due to 

their pre-existing conditions. Most of 

these commenters underscored that 

health equity concerns are heightened 

by the ongoing PHE. 

Supporting commenters strongly 

encouraged the repeal to be finalized as 

proposed to remedy these concerns and 

protect consumers, particularly 

underserved and historicallymarginalized consumers. 

Response: HHS appreciates the 

support of this proposal and generally 

agrees with commenters’ concerns, 

particularly those regarding the 

potential negative impacts to 

underserved and historicallymarginalized consumers during the 

PHE. The new enrollment and coverage 

opportunities available to consumers, 

including the special enrollment period 

to enroll in Exchange coverage through 

HealthCare.gov or their State Exchange 

website during the COVID–19 PHE, and 

the increased financial assistance under 

the ARP, have proven to be successful 

at increasing enrollment in 

comprehensive coverage options, such 

as ACA coverage offered through 

Exchanges.48 HHS believes it is critical 

to build on this success by maximizing 

opportunities for consumers to get 

comprehensive ACA coverage through 

the Exchanges and to enroll in 

insurance affordability programs (for 

example, Medicaid and CHIP), when 

eligible. Moreover, HHS believes that 

this will best serve underserved and 

historically-marginalized groups, as 

well as support health equity. For 

example, as raised in comments that are 

summarized earlier in this preamble, 

consumers in these groups tend to have 

a greater need for more comprehensive 

coverage (for example, those with preexisting conditions) or to require robust 

consumer support and ample 

opportunity to successfully navigate the 

health care system (for example, those 

with limited health literacy). HHS 

believes that focusing resources on the 

Exchanges and the new health care 

programs they are leading is the best 

approach to support these, and other 

consumer needs, for underserved and 

historically-marginalized groups, and 

for consumers in general. 

HHS also notes that repealing the 

Exchange DE option will not foreclose 

states’ option to leverage the existing 

FFE DE pathways,49 nor the ability of 

State Exchanges to implement DE 

pathways similar to the FFEs, should 

they find that it is appropriate given 

their specific market dynamics, 

priorities, and needs. However, on 

balance, HHS believes there is much 

greater risk that the Exchange DE option 

could serve as a barrier to consumers 

getting comprehensive coverage rather 

than facilitate such enrollment. The 

repeal of the Exchange DE option also 

permits HHS to direct available 

resources to implementation of the new 

Federal requirements (for example, the 

No Surprises Act consumers protections 

and the ARP increased subsidies), rather 

than diverting resources to implement 

an optional program. Finally, as detailed 

earlier in this preamble, it aligns with 

the policy goals and directives in the 

recent Executive Orders to advance 

health equity for all, protect and 

strengthen the ACA, and eliminate 

unnecessary difficulties to obtaining 

health insurance. After consideration of 

comments, HHS is finalizing the repeal 

of the Exchange DE option and 

accompanying user fees, as proposed. 

Comment: Commenters requested 

clarification regarding the scope of the 

proposed repeal and whether HHS’s 

intent is to eliminate the existing FFE 

DE pathways or just to eliminate the 

Exchange DE option. 

Response: HHS clarifies that the 

existing FFE DE pathways, including 

both classic DE and EDE, will not be 

impacted by the repeal of the Exchange 

DE option. Those pathways will 

continue to be available to consumers 

shopping for Exchange coverage in FFE 

and SBE–FP states. In addition, states 

with State Exchanges also still have the 

option to leverage DE should they 

choose to do so based on their specific 

market dynamics, priorities, and needs. 

The proposed repeal, which HHS is 

finalizing in this rule, is specific to 

removing the Exchange DE option 

codified at § 155.221(j) and the 

accompanying FFE–DE and SBE–FP–DE 

user fees. The other Federal 

requirements applicable to the FFE DE 

pathways, as outlined in §§ 155.220, 

155.221, and 156.1230, remain intact. 

Comment: Several opposing 

commenters asserted it is premature to 

repeal the Exchange DE option on the 

grounds of lacking state interest, given 

the limited time since the proposal was 

finalized. They stated that reliance on 

this ground was questionable in light of 

the many other health care priorities 

that have occupied states such as 

implementing and operationalizing the 

health care provisions of recent 

legislation, including the ARP. Some 

opposing commenters recommended 

that the rollout of the Exchange DE 

option merely be delayed, rather than 

repealed, to give states additional time 

to explore its feasibility. Several 

commenters also expressed general 

support for the Exchange DE option, 

noting that it meets all applicable ACA 

statutory and regulatory requirements. 

One commenter suggested that the 

lowered user fee for the Exchange DE 

option for FFE and SBE–FP states could 

be attractive to states and weigh 

favorably in the balance for those states 

who may be interested in pursuing the 

Exchange DE option, if given more time 

to consider it. This commenter noted 

that another attractive feature to states is 

the potential cost savings on consumer 

support functions resulting from 

potentially having more enrollment 

channels available to consumers. Other 

commenters in opposition of the 

proposed repeal stated that there would 

be no cost to the Federal Government 

beyond oversight costs in states that 

elected to implement the Exchange DE 

option. 

Response: HHS acknowledges that the 

Exchange DE option was only recently 

finalized and it is plausible that but for 

competing health care priorities perhaps 

some states would express interest in 

the Exchange DE option. However, HHS 

clarifies that the lack of interest from 

states was just one factor that lead to the 

proposed repeal of the Exchange DE 

option. As detailed earlier in this 

preamble and in the proposed rule, HHS 

was also concerned that permitting the 

establishment of the Exchange DE 

option would detract from efforts to 

implement new Federal requirements, 

including consumer protections against 

surprise medical billing, for which HHS 

is now responsible and centrally 

involved in implementing. HHS was 

also concerned about the additional 

complexity to Exchange operations 

resulting from newly passed legislation 

that could impact the successful 

implementation of the Exchange DE 


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53428 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

50See 86 FR 6169–6170. 

51https://www.cms.gov/newsroom/press-releases/ 

more-25-million-americans-gain-health-coverageduring-special-enrollment-period. 

52Several commenters cited in particular that 

CMS data show that the FFE DE pathways more 

than doubled enrollments during the plan year 2021 

open enrollment period, increasing from 521,000 to 

1,130,000. They also noted that the FFE DE 

pathways have attracted a higher proportion of new 

consumers and increased the number of consumers 

who made active plan selections. 

option, which could negatively impact 

consumers ability to enroll in 

comprehensive coverage. Finally, the 

proposal was made following HHS’s 

evaluation of the Exchange DE option as 

directed by EOs 13985 and 14009, 

which determined the option was 

inconsistent with the policies outlined 

in those Executive Orders to advance 

health equity for all, protect and 

strengthen the ACA, and eliminate 

unnecessary difficulties to obtaining 

health insurance. 

HHS appreciates that there are 

potentially attractive features of the 

Exchange DE option both for states and 

the Federal Government, particularly 

from a financial perspective. This was 

one of the considerations that led to the 

proposed establishment of the Exchange 

DE option. However, HHS does not 

believe that a reduced user fee or 

potential savings on consumer support 

costs outweighs the potential harm to 

consumers, or other considerations, 

outlined earlier in this preamble and in 

the proposed rule, that HHS considered 

as part of its recent evaluation of the 

Exchange DE option. Delaying the 

rollout of the Exchange DE option and 

giving states more time to evaluate its 

feasibility would not assuage the 

multitude of concerns expressed by the 

public or those outlined earlier in this 

preamble and in the proposed rule, 

including the need to focus health care 

resources on the emergent needs of 

struggling vulnerable and historicallymarginalized consumers and the need to 

focus available Department resources on 

implementing new Federal 

requirements, including the new 

consumer protections against surprise 

medical billing. In part 1 of the 2022 

Payment Notice final rule, HHS outlined 

many potential direct and indirect costs 

of startup, approval, and oversight.50

HHS therefore disagrees that the Federal 

Government would incur only oversight 

costs in states that elect to implement 

the Exchange DE option. 

Comment: All opposing commenters 

argued that state flexibility, particularly 

the flexibility to tailor enrollment 

portals, should not be curtailed, 

especially during a PHE. Relatedly, 

these commenters asserted that 

consumers universally benefit from an 

increase in choice. One of these 

commenters stated that DE entities 

would serve to supplement and extend 

the reach of Exchanges rather than 

replacing them. 

Response: HHS agrees that proposals 

that encourage and promote state 

flexibility are important, as states are 

best suited to tailor programs to address 

local health care priorities and the 

needs of their residents. HHS also 

reiterates that the existing FFE DE 

pathways are not impacted by the repeal 

of the Exchange DE option. States using 

the HealthCare.gov platform and State 

Exchanges will still have the option to 

leverage DE as a supplement to the 

Exchange should they find that it would 

provide value for their consumers given 

their specific market dynamics, 

priorities, and needs. States that 

currently use HealthCare.gov also have 

flexibility to transition to a State 

Exchange model and adapt Exchange 

functions to their local markets and 

unique needs of their residents. HHS 

also believes that in this situation, on 

balance, the potential for expanded 

choice does not outweigh the potential 

consumer harms when there is a danger 

of fragmenting consumers’ path to 

getting comprehensive coverage and 

directing consumers to less 

comprehensive coverage options that, in 

many cases, will not cover their health 

care costs. This places an outsized 

burden on consumers that, after further 

evaluation, HHS determined is 

unnecessary given their existing choice 

of multiple enrollment pathways offered 

by Exchanges, QHP issuers, webbrokers, agents and brokers, generally 

harmful for consumers, and 

unacceptable during a PHE. 

HHS also highlights the recent 

enrollment increases driven by 

HealthCare.gov and State Exchange 

websites, which are outlined earlier in 

this preamble. In particular, HHS 

reiterates that as of August 10, 2021, 

approximately 2.5 million consumers 

have enrolled in coverage through 

HealthCare.gov and State Exchange 

websites during the COVID–19 special 

enrollment period, and have reduced 

their monthly premiums by $40 per 

person per month due to the ARP’s 

premium credits, with more than onethird of consumers finding coverage for 

$10 or less per month.51 In addition, 

out-of-pockets costs have fallen for new 

consumers that have enrolled since 

April, with the median plan deductible 

falling by nearly 90 percent from $450 

to $50. This increased enrollment and 

cost savings to consumers, which has 

been driven by the current Exchange 

programs, further demonstrates their 

importance and effectiveness. 

Comment: All opposing commenters 

asserted that DE entities and their 

platforms are better suited than 

Navigators and centralized, governmentrun Exchanges to innovate to meet 

consumer needs. Relatedly, they argue 

that the FFE DE pathways have in many 

ways surpassed the consumer support 

functionality of HealthCare.gov, and 

that this is largely driven by 

competition among DE entities to attract 

consumers. They also claim that the 

success of the FFE DE pathways is 

evidenced by the enrollment statistics 

from the successful plan year 2021 open 

enrollment period.52 One commenter 

argued that EOs 13985 and 14009 would 

actually be better served by maintaining 

the Exchange DE option since it would 

provide more consumer-centric access 

to coverage, including for vulnerable 

populations. 

Response: While HHS does not agree 

with many of these characterizations, 

HHS reiterates again that the FFE DE 

pathways will not be impacted by the 

repeal of § 155.221(j). Those pathways 

and their success may continue 

unimpeded since HHS is only repealing 

the Exchange DE option. DE may indeed 

be the right choice for some states and 

certain consumers, and HHS does not 

intend to diminish its success or inhibit 

innovation in this area. However, HHS 

maintains that the policy goals outlined 

in EOs 13985 and 14009 are best served 

by repealing the Exchange DE option. 

More specifically, the dangers that this 

optional program that would remove the 

centralized Exchange website could 

fragment consumers’ path to getting 

comprehensive coverage, direct 

consumers to less comprehensive 

coverage options that, in many cases, 

will not cover their health care costs, 

and disproportionately impact certain 

underserved and historically 

marginalized groups are inconsistent 

with advancing health equity, protecting 

and strengthening the ACA, and 

eliminating unnecessary barriers to 

obtaining health insurance. These 

dangers are heightened during a PHE. 

HHS believes that access to 

comprehensive coverage options, 

including Exchange plans, and 

advancing health equity among 

consumers will be best served by 

enhancing access to coverage through 

proven enrollment channels like the 

Exchanges or the FFEs’ DE pathways, 

and eliminating optional programs that 

have the potential to cause significant 

consumer confusion and harm at a time 

when consumer protection and 

enrollment in comprehensive coverage 


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53These include the efforts to administer the 

health care provisions of the ARP and the related 

COVID–19 special enrollment period. 

54One of the critical consumer-centric 

innovations of the Federal EDE pathway is to enable 

consumers to access eligibility and enrollment 

information directly through a DE entity’s website 

by means of various application program interfaces 

rather than having to re-direct to HealthCare.gov. 

55For instance, DE entities may offer plan 

comparison tools with functionality targeted 

specifically to serve the needs of their consumer 

base. 

56See, for example, 45 CFR 155.220(c)(3)(i)(A)— 

(L), 155.220(j), 155.221(b)(1)-(3) and 156.1230(a) 

and (b). 

57See, e.g., https://www.cbpp.org/research/ 

health/direct-enrollment-in-marketplace-coveragelacks-protections-for-consumers-exposes. 58See 82 FR 18346 at 18381. 

is of paramount importance. 

Notwithstanding the claim that 

centralized, government-run Exchanges 

are not as well equipped to innovate to 

meet consumer needs as DE entities and 

platforms, HHS highlights that 

Exchanges do innovate, and are central 

participants in innovative programs. For 

instance, the State Exchanges and 

HealthCare.gov have administered 

innovative new health care programs in 

2021 detailed previously 53 that have 

resulted in 2.5 million consumers 

successfully enrolling through the 

Exchanges with significant premium 

assistance. In addition, the FFEs have 

been central participants in innovating 

through the Federal DE pathways.54

These pathways are designed to foster 

innovation of new consumer-based tools 

and functionality by approved DE 

partners.55 HHS believes that these and 

other examples of Exchange innovation 

and collaboration with the private sector 

help dispel concerns about the ability of 

centralized, government-run Exchanges 

to meet consumer needs. 

Comment: Opposing commenters 

argued that concerns about consumers 

being steered toward noncomprehensive coverage options like 

short-term limited duration insurance or 

association health plans are exaggerated 

since there are existing FFE DE 

requirements and limitations that would 

mitigate such concerns. They also 

highlighted that § 155.221(j) requires 

that a State Exchange electing to 

implement the Exchange DE option 

must have at least one DE entity that 

meets all requirements of the FFE DE 

program, including displaying all 

available QHPs. These commenters also 

suggested that concerns about potential 

disruptions to coordination of coverage 

with insurance affordability programs 

like Medicaid and CHIP are exaggerated 

because the DE entities participating in 

the FFE DE pathways use the same 

single, streamlined application and 

eligibility notices as HealthCare.gov to 

assist the Exchange with rendering an 

eligibility determination for all 

insurance affordability programs in 

compliance with the ‘‘no wrong door’’ 

policy. 

Response: HHS appreciates that there 

are Federal DE requirements and 

operational practices in place designed 

to protect consumers, including certain 

requirements to protect against steering 

QHP consumers to less comprehensive 

coverage options.56 The Exchange DE 

option also included certain safeguards, 

including the requirement that at least 

one DE entity must meet all of the 

requirements to participate in the FFE 

DE program. However, HHS maintains 

that the previously identified dangers 

that this optional program could harm 

consumers by fragmenting the path to 

comprehensive coverage, directing 

consumers to less comprehensive 

coverage options, and 

disproportionately impacting certain 

underserved and historically 

marginalized groups are inconsistent 

with advancing health equity, protecting 

and strengthening the ACA, and 

eliminating unnecessary barriers to 

obtaining health insurance. These 

dangers are real,57 they are heightened 

during a PHE, and after further 

evaluation, HHS determined they place 

an unnecessary and unacceptable 

outsized burden on consumers. HHS 

believes that access to comprehensive 

coverage options, including Exchange 

plans, and advancing health equity 

among consumers will be best served by 

enhancing access to coverage through 

proven enrollment channels, which 

includes maintaining a centralized 

Exchange website for consumers to 

apply for an enroll in QHPs and 

insurance affordability programs. The 

increased enrollment through Exchange 

websites during the COVID–19 special 

enrollment period underscores the 

importance of maintaining these known 

enrollment pathways for consumers. 

Finalizing the repeal of the Exchange DE 

option also ensures HHS can focus 

resources and efforts on implementing 

new Federal requirements, including 

consumer protections against surprise 

medical billing, for which HHS is now 

responsible and centrally involved in 

implementing, rather than on 

implementing and overseeing an 

optional program, which has the 

potential to cause significant confusion 

and harm at a time when consumer 

protection is paramount. Finally, HHS 

reiterates that the repeal of the Exchange 

DE option does not impact or change the 

other Federal requirements applicable to 

the FFE DE pathways, which will 

continue to be available in FFE and 

SBE–FP states. States with State 

Exchanges can also still leverage DE as 

a supplement to the Exchange website 

should they find it would provide value 

for their consumers given their specific 

market dynamics, priorities, and needs. 

After consideration of these 

comments, HHS is finalizing the repeal 

of the Exchange DE option and the FFE– 

DE and SBE–FP–DE user fees, as 

proposed. 

4. Annual Open Enrollment Period 

Extension (§ 155.410(e)) 

HHS proposed to amend paragraph (e) 

of § 155.410, which provides the dates 

for the annual individual market 

Exchange open enrollment period in 

which qualified individuals and 

enrollees may apply for or change 

coverage in a QHP. The annual 

individual market 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 specifically 

proposed to alter the annual 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, HHS 

established that the annual open 

enrollment period for benefit years 

beginning on or after January 1, 2018 

would begin on November 1 and extend 

through December 15. In doing so, HHS 

indicated a preference for a shorter 6- 

week annual open enrollment period, 

noting HHS’s belief that it provides 

sufficient time for consumers to enroll 

in or change QHPs and that an end date 

of December 15 carries the benefit of 

ensuring consumers receive a full year 

of coverage and simplifies operational 

processes for issuers and the 

Exchanges.58 Accordingly, the annual 

open enrollment period dates have been 

set to November 1 through December 15 

for the 2018, 2019, 2020, and 2021 plan 

years. As discussed in the proposed 

rule, HHS has observed several benefits 

using the present annual open 

enrollment period dates. Prior 

enrollment data suggests that the 

majority of new consumers to the 

Exchange select plans prior to December 

15 so as to have coverage beginning 

January 1. 

HHS also observed that consumer 

casework volumes related to coverage 

start dates and inadvertent dual 

enrollment decreased in the years after 

the December 15 end date was adopted, 


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suggesting that the consumer experience 

was improved by having a singular 

deadline of December 15 to enroll in 

coverage for the upcoming plan year. 

HHS noted that an extension to January 

15 may cause some previously observed 

consumer confusion to resurface 

surrounding the need to enroll by 

December 15 for a full year of coverage 

versus the final deadline of January 15 

to enroll for a plan that would begin on 

February 1. This confusion could cause 

some consumers to miss out on coverage 

for the month of January altogether. A 

January 15 end date may also require 

enrollment assisters allocate budget 

resources over a longer period of time. 

However, after observing the effects of 

a 6-week annual open enrollment period 

over these years, HHS has also observed 

negative impacts to consumers that may 

justify an extension of the annual open 

enrollment period end date to January 

15. In particular, HHS has observed that 

consumers who receive financial 

assistance, who do not actively update 

their applications during the annual 

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 

annual open enrollment period has 

concluded. Extending the annual open 

enrollment period end date to January 

15 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. 

HHS also noted in the proposed rule 

that HHS has also observed concerns 

from Navigators, CACs, and agents and 

brokers that the current annual open 

enrollment period does not leave 

enough time for them to fully assist all 

interested Exchange applicants with 

their plan choices. Extending the annual 

open enrollment period end date to 

January 15 would allow more time for 

consumers to seek assistance from one 

of these entities. Together, the impacts 

of providing consumers with more time 

to react to updated plan cost 

information and more time to seek 

enrollment assistance may improve 

access to health coverage. The 

additional time for enrollment 

assistance provided by this proposal 

may be particularly beneficial to 

consumers in underserved communities 

who may face time or language barriers 

in accessing health coverage by 

extending the period in which these 

consumers can seek in-person assistance 

to enroll. 

HHS sought comment on whether a 

January 15 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. HHS 

invited comments from stakeholders 

that would experience specific benefits 

or adverse effects from a January 15 end 

date, and encourage comments on 

potential impacts to resources, 

consumer assistance budgets, overall 

enrollment numbers, premiums, and 

market stability. HHS sought comment 

on whether this extension would 

incentivize consumers who need 

coverage to begin on January 1 to still 

make a choice and enroll by December 

15, while also preserving sufficient time 

in the remainder of the plan year for 

issuers and Exchanges to perform other 

obligations such as QHP certification. 

HHS further invited comments on 

alternative approaches to extending the 

annual open enrollment period to 

address coverage gaps or enrollment 

challenges facing consumers and 

stakeholders. HHS also invited 

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. 

HHS also noted that HHS is 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. HHS sought 

comment on how HHS may improve 

communications and consumer 

engagement around potential cost 

changes for consumers who do not 

actively re-enroll in coverage. HHS also 

noted that HHS is 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 the 

annual open enrollment period. HHS 

sought comment on whether adoption of 

these or other outreach approaches 

would be a viable alternate approach to 

finalizing its proposal to extend the 

annual open enrollment period end date 

to January 15. 

HHS noted that HHS anticipated that 

if an annual open enrollment period end 

date of January 15 were finalized, this 

change would apply to all Exchanges, 

including State Exchanges for the 2022 

coverage year and beyond. HHS noted 

that in preceding plan years, a majority 

of State Exchanges operating their own 

eligibility and enrollment platform have 

used special enrollment period 

authority to offer additional enrollment 

time beyond the end date of December 

15 in the Exchanges on the Federal 

platform. HHS invited additional 

comments on State Exchange flexibility, 

as well as operational challenges 

relating to State Exchange 

implementation of the proposed change 

for 2022 and beyond. 

HHS is finalizing this policy for the 

FFEs and SBE–FPs, and HHS codifies 

flexibility for State Exchanges that 

operate their own eligibility and 

enrollment platform to set individual 

market annual open enrollment period 

end dates no earlier than December 15 

and to offer accelerated effective date 

rules. HHS is clarifying that the annual 

open enrollment period end dates 

chosen by State Exchanges operating 

their own eligibility and enrollment 

platform will apply to all nongrandfathered plans in the individual 

market, both inside and outside of an 

Exchange, under guaranteed availability 

regulations at § 147.104(b)(1)(ii). The 

following is a summary of the comments 

received and HHS’s responses to its 

proposals related to the annual open 

enrollment period extension 

(§ 155.410(e)). 

Comment: The majority of 

commenters supported HHS’s proposal. 

Commenters agreed that lengthening the 

annual open enrollment period would 

provide valuable time to consumers to 

seek in-person assistance and make 

informed plan choices. Many 

commenters agreed that this time would 

be particularly helpful to those who are 

auto-reenrolled into coverage, but 

receive a lower subsidy than the prior 

year because the cost of their benchmark 

plan has dropped. Commenters also 

noted additional groups that would 

benefit from this extension: Consumers 

whose coverage is terminated towards 

the end of the calendar year and who do 

not become aware of its termination 

until after January 1, consumers whose 

Medicaid eligibility is ending as the 

result of the potential expiration of the 

continuous enrollment provisions in 

section 6008(b)(3) of the Families First 


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Coronavirus Response Act (Pub. L. 116– 

127), and consumers whose share of 

premiums may increase in plan year 

2022 due to the expiration of extra 

subsidies provided for under the ARP. 

A January 15 end date would provide 

these consumers extra time and a 

streamlined process to understand their 

eligibility and plan cost changes and 

enroll in new coverage. 

Several commenters highlighted the 

complex medical needs of consumers 

with chronic and serious medical 

conditions, noting that a longer annual 

open enrollment period would give 

these consumers more time to review 

and compare plan options, provider 

networks, and prescription drug 

offerings. Organizations and individuals 

providing application and enrollment 

assistance commented that there is often 

not enough time to provide individual 

or in-person help to all consumers who 

request it at the end of the current 6- 

week annual open enrollment period. 

Other commenters agreed with HHS’s 

proposal that a longer annual open 

enrollment period would allow 

underserved populations more time to 

seek in person assistance and reduce 

barriers to enrollment, and that the 

proposal would allow agents and 

brokers, Navigators, and other consumer 

assisters more time to help and serve 

consumers shopping for plans. Finally, 

many commenters noted that the 

months of November and December are 

some of the busiest for consumers, and 

that holidays and end of the year 

activities cause significant time and 

financial constraints that are barriers to 

enrollment. Commenters argued that 

many consumers would benefit from 

additional time in January to complete 

plan shopping and enrollment activities. 

Response: HHS agrees with these 

comments and is finalizing the policy to 

extend the annual open enrollment 

period to January 15 of the applicable 

benefit year, as proposed, and HHS 

codifies flexibility for State Exchanges 

that operate their own eligibility and 

enrollment platform to set individual 

market annual open enrollment period 

end dates no earlier than December 15 

and to use accelerated effective date 

rules. 

Comment: Many commenters noted 

that the majority of State Exchanges 

have already extended their annual 

open enrollment periods beyond the 

current December 15 deadline used by 

Exchanges on the Federal platform, and 

that State Exchanges have achieved 

enrollment gains in the month of 

January without introducing adverse 

selection into the market. Some State 

Exchange commenters noted that a 

longer annual open enrollment period 

allowed new consumers to enroll and 

resulted in a healthier risk pool mix. 

Another commenter noted that while 

most consumers continued to choose 

plans in December in order to have 

coverage effectuate January 1, the 

additional time in January offered 

flexibility for consumers who needed 

more time to weigh coverage options 

and enroll. 

Many state commenters noted that 

State Exchanges that offered extended 

periods for the annual open enrollment 

period beyond the end date used by the 

Exchanges on the Federal platform in 

some cases offered more accelerated 

effective date rules during the annual 

open enrollment period such that plan 

selections made by the last day of the 

month are effective the first day of the 

following month. These commenters 

asked that this flexibility be maintained 

and that January 15 be the minimum 

end date for the annual open enrollment 

period in the State Exchanges. Other 

commenters noted that not all State 

Exchanges have chosen to extend their 

annual open enrollment periods into 

January and requested that State 

Exchanges maintain an ability to end 

the annual open enrollment period 

earlier than January 15. These 

commenters noted that State Exchanges 

may face operational burdens in 

adjusting their systems to accommodate 

the January 15 end date and that State 

Exchanges should maintain autonomy 

to set annual open enrollment period 

dates that best serve their populations. 

Response: HHS appreciates the 

comments highlighting evidence from 

State Exchange experiences with longer 

effective annual open enrollment 

periods, and are finalizing the policy to 

extend the annual open enrollment 

period to January 15. HHS agrees with 

commenters that State Exchanges are 

best suited to address the needs of their 

markets and are therefore codifying 

flexibilities for State Exchanges that 

operate their own eligibility and 

enrollment platform to set annual open 

enrollment period end dates no earlier 

than December 15. HHS also is 

codifying that these State Exchanges 

may extend their annual open 

enrollment periods beyond the end date 

of January 15 that will be used by the 

Exchanges on the Federal platform and 

may adopt more flexible accelerated 

effective date rules. 

Comment: Many commenters 

encouraged HHS to extend the annual 

open enrollment period even further, 

specifically to January 31. Commenters 

also asked that HHS use accelerated 

effective dates to make coverage 

available February 1 for plan selections 

received by January 31. Other 

commenters asked us to consider 

beginning the annual open enrollment 

period earlier in the year, for example 

on October 15, while still maintaining 

an end date of December 15 or 

December 31, as an alternative way to 

extend the total length of the annual 

open enrollment period. Still other 

commenters asked HHS to explore an 

October 15 start date in addition to the 

proposed extension, noting that the date 

would align with the beginning of 

Medicare’s annual open enrollment 

period and that this alignment would 

facilitate additional consumer outreach 

and enrollments. Another commenter 

suggested providing an annual open 

enrollment period of January 1 through 

March 31 to avoid the holiday season 

and end of the calendar year altogether. 

Response: HHS recognizes that a 

January 31 end date would provide 

additional time for consumers to enroll, 

and that some State Exchanges have 

adopted this date. However, HHS 

believes the proposed date of January 15 

sufficiently balances its priorities of 

allowing consumers additional time to 

enroll after the end of the calendar year, 

while still promoting full coverage year 

enrollment and minimizing 

administrative burdens on Exchanges 

and issuers associated with longer 

annual open enrollment periods. Given 

the high volume of transactions 

processed by the Federal platform, 

HHS’s operational experience suggests 

that adopting accelerated effective dates 

for the annual open enrollment period 

could cause delays in enrollments and 

claims processing and would require 

further study. Accordingly, HHS is not 

considering requiring changes to 

effective date rules at this time, but as 

noted earlier, is codifying flexibility for 

State Exchanges operating their own 

eligibility and enrollment platforms to 

adopt accelerated effective dates. 

While beginning the annual open 

enrollment period in October instead of 

November 1 would effectively lengthen 

the total annual open enrollment period 

timeframe, it would not address the 

needs of consumers who receive 

updated plan cost information or who 

experience program eligibility changes 

after January 1 and would also create 

administrative burdens on Exchanges 

and issuers to complete QHP plan 

certification and other pre-enrollment 

readiness activities. Similarly, HHS 

believes a change to begin the annual 

open enrollment period on January 1 

and end in March would require a shift 

of the plan year calendar and create 

significant administrative burden on 

Exchanges, issuers, and state regulators, 

and HHS is not considering such a 

change at this time. 


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59As noted in the proposed rule, a qualifying 

individual is generally not eligible for a PTC if their 

household income is below 100 percent of the FPL, 

but there are a small number of consumers with a 

household income below 100 percent of the FPL 

who may qualify for APTC. Specifically, section 

36B(c)(1)(B) of the Code provides 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, HHS notes 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 1.36B–2(c)(3)(v). 

Comment: Other commenters opposed 

the proposal to extend the annual open 

enrollment period to January 15. 

Commenters stated that this change 

would introduce adverse selection into 

the market, as more consumers would 

delay enrollment and may enroll in 

January only after needing care. Others 

noted that the change would increase 

administrative burdens and marketing 

and operational costs on issuers. 

Commenters noted that consumers have 

become accustomed to a 6-week annual 

open enrollment period and some 

commenters assisting consumers with 

enrollment activities noted that in their 

experience consumers did not need 

more time. Other commenters argued 

that the change would actually decrease 

total enrollment figures, as measured by 

total coverage months, as more 

consumers delay enrollment and neglect 

coverage for the month of January. 

Response: HHS acknowledges 

commenters’ concerns regarding 

consumer confusion and coverage gaps, 

and recognizes that HHS will need to 

engage in consumer outreach activities 

to ensure consumers are aware of the 

new deadlines and the implications of 

signing up by December 15 for a January 

1 effective date. However, HHS notes 

that the experience from State 

Exchanges operating their own 

eligibility and enrollment platforms 

suggests that extending the annual open 

enrollment period into January does 

result in increased consumer 

enrollments and does not introduce 

adverse selection into market. State 

Exchange commenters noted that the 

majority of consumers still enrolled in 

time to effectuate coverage for January 1, 

but that the Exchanges were able to 

achieve additional enrollments in 

January from consumers who simply 

missed the deadline or needed more 

time and help enrolling. The experience 

from these State Exchange commenters 

is also consistent with other comments 

received in support of this proposal 

which noted that underserved 

consumers, consumers with complex 

health needs, and consumers with 

unexpected plan cost or eligibility 

changes at the end of the year do not 

have enough time to shop and get inperson assistance under the current 

annual open enrollment period 

timeframe. 

Comment: HHS received comments in 

support of its suggestion to offer a 

special enrollment period for current 

enrollees who are automatically reenrolled and experienced a significant 

cost increase as an alternative to 

extending the annual open enrollment 

period, and a request that HHS delay 

offering this special enrollment period 

until 2023. Other commenters opposed 

the idea of a targeted special enrollment 

period and noted that special 

enrollment periods create complexity 

and costs for issuers and are difficult 

and burdensome for consumers to 

navigate. Commenters stated that an 

extended annual open enrollment 

period offers a much more streamlined 

approach to achieving the policy goal of 

allowing consumers to change plans in 

response to updated cost information as 

compared to a special enrollment 

period. Commenters also supported 

HHS’s suggestions to improve consumer 

outreach and education activities to 

address enrollment barriers, but did not 

agree this outreach is an adequate 

substitute for extending the annual open 

enrollment period. 

Response: While HHS is not aware of 

increased issuer costs or consumer 

burden in the State Exchanges that have 

used special enrollment periods to 

effectively lengthen the annual open 

enrollment period, HHS acknowledges 

that the targeted special enrollment 

period as discussed in this rule would 

be limited to certain consumers meeting 

specified criteria and, as such, could 

require additional administrative steps 

for issuers, consumers, and Exchanges. 

HHS agrees that an extended annual 

open enrollment period offers a more 

streamlined approach for consumers, 

and also serves the added benefit of 

allowing other consumers, such as those 

with complex health needs, those in 

underserved communities, and those 

who receive a lower subsidy than the 

prior year that they are not aware of 

until receiving their January bill more 

time to determine their best coverage 

option. 

Comment: Other commenters 

suggested HHS could do more to 

improve renewal notices to address the 

challenges faced by consumers who 

were automatically re-enrolled but then 

experienced a significant cost increase 

as an alternative to extending the annual 

open enrollment period. Commenters 

suggested HHS consider aligning 

operational timelines and allowing 

issuers to provide more timely and 

accurate premium tax credit and plan 

cost information to consumers. 

Commenters suggested HHS could 

improve its communications around the 

automatic re-enrollment process to 

better avoid consumers receiving 

surprising plan cost information after 

the benefit year has begun. Another 

commenter asked HHS to consider a 

policy for providing retroactive 

terminations to consumers who were 

automatically re-enrolled into coverage 

that they no longer want, and that such 

a policy could reduce spending on 

APTC paid for these months of 

inadvertent coverage. 

Response: HHS agrees that more 

improvements can be made in this area, 

and welcomes the suggestions by 

commenters to improve renewal notice 

processes to provide more accurate plan 

cost information to consumers earlier in 

the annual open enrollment period. 

However, after review of the range of 

public comments received, HHS does 

not believe improvements to the 

renewal noticing and automatic reenrollment process alone is a sufficient 

alternative to providing additional 

enrollment time. HHS notes that current 

HHS policy does allow for consumers to 

request retroactive terminations under 

certain circumstance after their coverage 

has been automatically renewed, and 

that an extended annual open 

enrollment period deadline of January 

15 will also allow consumers more time 

to become aware of their enrollment 

options after automatic reenrollment has 

occurred. 

5. Monthly Special Enrollment Period 

for APTC-Eligible Qualified Individuals 

With a Household Income No Greater 

Than 150 Percent of the Federal Poverty 

Level Whose Applicable Taxpayer Has 

an Applicable Percentage of Zero 

(§ 155.420(d)(16)) 

In order to make affordable coverage 

available to more consumers, HHS 

proposed 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.59 As discussed in the proposed 

rule, HHS proposed making this special 

enrollment period available to 

individuals based on household income 

level because enhanced financial 


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60 86 FR 35169. 

61Public Law 117–2. 

62See 26 CFR 1.36B–3(g) for more information on 

the applicable percentage and its relationship to the 

PTC. 

63See §§ 155.305(g)(2) and 156.420(a). 

64For 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. 

65This 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). 

66See IRC 36B(b)(2)(A), (c)(2)(A)(i). 

assistance provided by the ARP for tax 

years 2021 and 2022 is such that many 

individuals with a household income no 

greater than 150 percent of the FPL have 

access to a silver plan with a zero dollar 

monthly premium after the application 

of APTC.60 Specifically, section 9661 of 

the ARP amended section 36B(b)(3)(A) 

of the Code to decrease the applicable 

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 2022.61 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.62 These decreased 

percentages generally result in increased 

PTC for PTC-eligible taxpayers, and 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 with a household 

income no greater than 150 percent of 

the FPL whose QHP coverage can be 

fully paid for with APTC have one or 

more options to enroll in a silver-level 

plan without needing to pay a premium 

after the application of APTC. All of 

these consumers, if eligible to enroll 

through an Exchange and to receive 

APTC, will qualify for CSRs to enroll in 

a silver plan with an AV of 94 percent.63

HHS proposed 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, HHS proposed 

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. HHS 

proposed 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.64 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, HHS proposed 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. 

HHS also proposed 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.65 Finally, HHS proposed 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 that is not a QHP 

offered through an Exchange.66

In consideration of public comments 

that HHS received, HHS is finalizing 

this monthly special enrollment period 

for APTC eligible consumers with a 

projected annual household income no 

greater than 150 percent of the FPL with 

coverage effective dates and other 

eligibility parameters as proposed, but is 

finalizing it so that the special 

enrollment period is only available 

during periods of time during which 

PTC benefits are available such that the 

applicable taxpayers’ applicable 

percentage is set at zero. HHS is also 

finalizing a revision to the language of 

proposed paragraph 

§ 155.420(a)(4)(ii)(D) to reflect that an 

enrollee who is adding a qualified 

individual or dependent through this 

special enrollment period may add the 

newly-enrolling household member to 

their current QHP; or, change to a silverlevel QHP and add the newly-enrolling 

household member to this silver-level 

QHP; or, change to a silver-level QHP 

and enroll the newly-enrolling qualified 

individual or dependent in a separate 

QHP. In consideration of concerns 

raised by commenters as further 

discussed below, HHS believes that this 

modification is appropriate to provide 

clarity on options and limitations for 

enrollees whose household members 

newly enroll through this special 

enrollment period. In particular, this 

change makes clear that while newlyenrolling qualified individuals and 

dependents are not subject to plan 

category limitations, enrollees with a 

newly-enrolling dependent or other 

household member may not use the new 

monthly special enrollment period to 

change to a plan of a different metal 

level other than a silver-level QHP to 

enroll together with their newlyenrolling household member, but can 

stay in the same plan or change to a 

silver plan to enroll together with the 

newly-enrolling household member. 

This limitation will help to mitigate 

adverse selection. Also, the revision 

HHS is finalizing makes clear that the 

limitation that applies to this new 

special enrollment period functions 

similarly to other plan category 

limitations, such as those at 

§ 155.420(a)(4)(iii)(B) and (C) for 

enrollees who are adding one or more 

newly-enrolling dependents or 

household members to their Exchange 

coverage. 

In addition to finalizing the 

previously stated modifications, HHS is 

also finalizing conforming updates to 

regulatory text at § 155.420(a)(4)(ii)(C). 

HHS proposed to add new paragraph 

(a)(4)(ii)(D) which provided that where 

an enrollee ‘‘or’’ his or her dependents 

qualify for a special enrollment period 

under§ 155.420(d)(16) and is not 

enrolled in a silver-level QHP, the 

Exchange must allow the enrollee and 

their dependents to change to a silverlevel QHP if they elect to change their 

QHP enrollment. HHS also proposed to 

align existing regulatory text at 

§ 155.420(a)(4)(ii)(C) with this new 

paragraph, and with the related special 

enrollment period triggering event at 

§ 155.420(d)(6)(i) and (ii), by updating a 

sentence reading ‘‘if an enrollee and his 

or her dependents’’ to ‘‘if an enrollee or 

his or her dependents.’’ These edits 

align with corresponding special 


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67See 78 FR 42262. Also, the 2017 Market 

Stabilization Rule used the phrase ‘‘if an enrollee 

or his or her dependent’’ when describing the rule 

that would be finalized at what is now paragraph 

§ 155.420(a)(4)(ii)(A), See 82 FR 18359. 

68 Key Facts about the Uninsured Population: 

Kaiser Family Foundation; Nov. 6, 2020, https://

www.kff.org/uninsured/issue-brief/key-facts-aboutthe-uninsured-population/. 

69Public Law 116–127. These provisions enabled 

states to receive the temporary Federal Medical 

Assistance Percentage increase under that section. 

70See 86 FR 35170 for discussion of this issue in 

the proposed rule. 

71Section 1411(c)(3) of the ACA. 

enrollment period triggering events at 

§ 155.420(d) to which plan category 

limitations at (a)(4) refer. 

As discussed in previous rulemaking, 

certain provisions under § 155.420(d) 

defining special enrollment period 

triggering events refer both to a qualified 

individual and the qualified 

individual’s dependents, and use ‘‘or’’ 

(rather than ‘‘and’’) to be clear that 

when a qualified individual or enrollee, 

or his or her dependent, experiences the 

special enrollment period triggering 

event, all members of a household 

generally may enroll in or change plans 

together in response to the event 

experienced by one member of the 

household, subject to the limitations in 

§ 155.420(a)(4).67 Therefore, HHS is 

finalizing as proposed this change to 

§ 155.420(a)(4)(ii)(C). 

Although HHS proposed revisions to 

§ 155.420(a)(4)(ii)(C) to align with the 

text of triggering event provisions 

under§ 155.420(d), HHS neglected to 

propose similar but necessary changes 

to the text of § 155.420(a)(4)(ii)(A) and 

(B). HHS intends to propose these 

changes in future rulemaking. Because 

this is a technical change, HHS does not 

anticipate that it will impact Exchanges’ 

operations or messaging. However, if the 

change does affect an Exchange’s 

operations, CMS will not consider the 

Exchange to be out of compliance with 

the rule due to interpreting the plan 

category limitations rules as aligning 

with the related special enrollment 

period qualifying events at § 155.420(d). 

This new monthly special enrollment 

period will be available at the option of 

the Exchange, as proposed, in order to 

allow State Exchanges to decide 

whether to implement it based on their 

specific market dynamics, needs, and 

priorities. HHS is also finalizing 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. 

The APTC benefit changes under the 

ARP make affordable coverage available 

to more uninsured people. However, as 

discussed in the proposed rule, if past 

trends continue, HHS believes 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, and that low-income 

consumers who have lacked coverage 

for more than a year may be especially 

difficult to reach.68 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, HHS believes additional 

enrollment opportunities for lowincome consumers are appropriate and 

in the best interest of low-income 

consumers. Additionally, as noted in 

the proposed rule, the 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, HHS believes this special 

enrollment period may help consumers 

who lose Medicaid coverage to regain 

health care coverage. While, as 

discussed in the proposed rule, these 

consumers can already qualify for a 

special enrollment period due to their 

loss of Medicaid coverage per 

§ 155.420(d)(1), and may also have 

access to other flexibilities, whether 

members of this group of consumers are 

able to benefit from existing enrollment 

periods and flexibilities may vary, and 

may require Exchanges to assess 

eligibility on a case-by-case basis. This 

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. As 

also discussed in the proposed rule, 

after the COVID–19 PHE comes to an 

end, HHS expects to see a higher than 

usual volume of low-income individuals 

transitioning from Medicaid coverage to 

the Exchanges for at least several 

months as states begin to catch up on a 

backlog of redeterminations and 

terminations for Medicaid beneficiaries 

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.69 Therefore, 

while this special enrollment period 

would not be limited to qualified 

individuals who have lost Medicaid 

coverage, HHS noted 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. This special 

enrollment period could help mitigate 

the risk of long-term coverage 

disruptions due to the potentially high 

volume of Medicaid terminations 

following the end of the COVID–19 

PHE, by giving qualifying individuals 

who lose Medicaid and who may miss 

or misunderstand notifications about 

their coverage loss more time to enroll 

in Exchange coverage.70

As proposed, Exchanges that elect to 

provide this 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. However as 

discussed in the proposed rule, 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 will 

then verify applicants’ projected annual 

household income consistent with 45 

CFR 155.320(c).71 Specifically, CMS 

will 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). CMS will not 

require submission of household 

income documentation prior to 

enrollment, and will not pend the 

enrollment as part of a pre-enrollment 

verification process, in part because 

CMS’s 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 


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72See the proposed rule at 86 FR 35206 through 

35207 for more detail on this discussion. 

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. 

In addition to outreach and education 

efforts, HHS noted that HHS believed 

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, HHS acknowledged that 

enrollees may still choose to enroll in a 

silver-level plan that is more expensive 

than their zero dollar option, and, while 

HHS believes that enrollees will likely 

be deterred from changing plans midyear because such a change will 

generally mean they lose progress they 

have made toward meeting their 

deductible and other accumulators, 

HHS acknowledged that through a 

monthly special enrollment period, 

enrollees could change plans mid-year 

based on differences in provider 

networks or prescription drug 

formularies. HHS sought comment on 

this proposal and on whether, 

alternatively, plan category limitations 

should not be applied. For example, 

HHS sought 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 special enrollment 

period to change to a plan category 

other than silver. 

HHS also sought 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 and whose 

applicable percentage is therefore set at 

zero will have access to a silver plan 

with a zero-dollar premium, and 

therefore might be more inclined to 

enroll in coverage due to a health care 

need and end coverage once this need 

has been met rather than pay even a 

relatively small premium. 

HHS estimated 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 

(currently, plan year 2022). HHS 

described this impact in more detail in 

the regulatory impact analysis (RIA) 

section in the proposed rule.72 HHS also 

discussed some of the reasons adverse 

selection can be mitigated, but not 

altogether eliminated. 

HHS sought comment from health 

insurance issuers and other stakeholders 

on its 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. HHS also solicited comment 

regarding whether health insurance 

issuers and other stakeholders have 

concerns that the policy could cause 

any adverse selection among higherincome individuals with variable hours 

and income. HHS sought 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 

HHS should put in place to further 

protect program integrity. HHS also 

solicited comment on estimated 

implementation burdens for Exchanges 

that 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. HHS 

requested 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. 

HHS further requested comment on 

whether this proposed special 

enrollment period should be available 

indefinitely (as proposed), or whether it 

should be time-limited. For example, 

HHS sought comment on whether HHS 

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, HHS requested 

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, HHS requested 

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. 

The following is a summary of the 

comments received and HHS’s 

responses regarding the proposals 

related to the monthly special 

enrollment period for APTC-eligible 

qualified individuals with a household 

income no greater than 150 percent of 

the FPL and whose applicable 

percentage therefore is zero 

(§ 155.420(d)(16)). 

Comment: Many commenters 

supported the proposal to provide a 

monthly special enrollment period to 

APTC-eligible individuals with 

projected annual household income no 

higher than 150 percent of the FPL, and 

a number of them agreed with and 

expanded upon HHS’s position that it 

would positively impact health equity. 

For example, several commenters agreed 

that lower-income individuals often face 

greater barriers to enrollment, such as a 

lack of an internet connection or other 

computer equipment, limited available 

time due to working multiple jobs, and 

LEP. Commenters also noted that this 

group of consumers is 

disproportionately made up of people of 

color. Several commenters noted that 

they expected this special enrollment 

period to be especially helpful to 

individuals in their area whose income 

is under 100 percent of the FPL, but 

who do not qualify for Medicaid 

because of their immigration status, and 

who therefore may qualify for APTC. 

They noted that this group can be 

difficult to reach through outreach and 

education, and therefore may benefit 

significantly from additional 

opportunities to enroll throughout the 

year. Several commenters voiced 

support for outreach and education to 

promote awareness of this special 

enrollment period as well as other 

special enrollment period qualifying 

events. Some added that currentlyavailable enrollment opportunities are 

underutilized due to their complexity 

and due to the challenges associated 

with learning about and enrolling in 

coverage. Some commenters encouraged 

CMS to focus outreach and education 

efforts on vulnerable communities, 

individuals with LEP, immigrants, and 

the LGBTQ+ community. A few 

commenters specified potential 

outreach strategies, such as engaging 

schools and community health workers. 

Response: As discussed in the 

proposed rule, HHS agrees that 


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73 Kaiser Family Foundation. A closer look at the 

uninsured marketplace eligible population 

following the American Rescue Plan Act. May 2021. 

https://www.kff.org/private-insurance/issue-brief/acloser-look-at-the-uninsured-marketplace-eligiblepopulation-following-the-american-rescueplan-act/. 

74Specifically, the commenter stated that 0.23 

percent of Health Connector members changed 

plans from June to July 2021. 

75See Improving the Affordability of Coverage 

through the Basic Health Program in Minnesota and 

New York, Kaiser Family Foundation, Dec. 8, 2016, 

available at https://www.kff.org/report-section/ 

improving-the-affordability-of-coverage-throughthe-basic-health-program-in-minnesota-and-newyork-issue-brief/ . 

76See Many States with COVID–19 Special 

Enrollment Periods See Increase in Younger 

Enrollees, The Commonwealth Fund, Jan. 28, 2021, 

available at https://www.commonwealthfund.org/ 

blog/2021/many-states-covid-19-special-enrollmentperiods-see-increase-younger-enrollees. 

providing a monthly enrollment 

opportunity for certain low-income 

consumers will increase the likelihood 

that more of these consumers are able to 

access coverage in spite of barriers that 

this group, which disproportionately 

includes people of color, often face. A 

May 2021 report by the Kaiser Family 

Foundation estimates that there are 

approximately 10.9 million uninsured 

people who are both eligible for 

coverage through the Exchange and 

eligible for subsidies under the ACA 

and ARP.73 The report found that 

compared to the general non-elderly 

population in the U.S., this population 

is more likely to be Hispanic, people 

with a high school diploma or less, and 

young adults ages 19 to 34. 

Additionally, it found that uninsured 

people eligible for subsidies are more 

likely to live in rural areas and lack 

internet access than the general nonelderly population in the U.S. The 

report also noted that the estimated 6 

million uninsured people who may be 

eligible for a zero-dollar premium plan 

through the Exchange after application 

of APTC are more likely to be nonEnglish speakers at home. Providing a 

monthly enrollment opportunity will 

give this population of uninsured 

people more opportunities to access 

coverage and provide more time for 

targeted outreach to consumers who 

may be harder to reach and enroll, such 

as those who are non-English speakers 

at home. HHS agrees with commenters’ 

support for robust outreach and 

education efforts targeted in particular 

to ensuring awareness and 

understanding of this special enrollment 

period and other enrollment 

opportunities, and will continue to 

work with stakeholders to develop and 

optimize targeted messaging. 

Comment: Some commenters who 

supported the proposed special 

enrollment period were skeptical that it 

would pose a significant adverse 

selection risk, citing as mitigating 

factors the high rate of subsidization for 

qualifying individuals and the 

likelihood that younger, healthier 

individuals would enroll. Many of these 

commenters also cited comparable state 

experiences as evidence of the low 

likelihood of adverse selection and high 

likelihood of a positive impact on 

reducing uninsured rates should CMS 

finalize the proposed special enrollment 

period. Some commenters said that 

State Exchange data on risk factors 

associated with enrollees who accessed 

coverage through a special enrollment 

period, including the special enrollment 

period that State Exchanges provided 

during the 2020 or 2021 plan years due 

to the COVID–19 pandemic, indicated 

that these enrollees did not pose 

significant additional risk. One of these 

commenters asked that CMS analyze 

data on special enrollment period 

enrollees in states that use the 

HealthCare.gov platform, and suggested 

that such analysis would yield a similar 

result. 

For example, multiple commenters 

cited the Massachusetts State 

Exchange’s enrollment opportunity for 

individuals with a household income no 

higher than 300 percent of the FPL, and 

the ability of consumers up to 200 

percent of the FPL to enroll in the Basic 

Health Program year-round in 

Minnesota and New York. Specifically, 

one commenter noted that in 

Massachusetts, consumers with 

household incomes up to 300 percent of 

the FPL may qualify for coverage with 

low or no monthly premiums, low 

copays, and no deductibles through the 

state’s Health Connector’s 

ConnectorCare program, and that these 

individuals, once determined eligible 

for ConnectorCare, qualify for a 60-day 

special enrollment period to enroll in 

coverage at any point during the plan 

year. The commenter added that in spite 

of this flexible enrollment opportunity, 

the state has not experienced individual 

market adverse selection within the 

program, and enrollment in the program 

has remained stable over time. In fact, 

the commenter noted that the average 

risk score for insurers participating in 

ConnectorCare is lower than the risk 

score for insurers in their individual 

market outside of ConnectorCare. 

Finally, the commenter noted a low rate 

of changes in plans among current 

enrollees during the mid-2021 

enrollment period that the state 

established due to the COVID–19 

pandemic, adding that this experience 

suggests less risk of adverse selection 

due to current enrollees changing plans 

in response to an emerging medical 

need.74

Another commenter cited reports that 

indicated issuers had not found 

evidence of adverse selection due to the 

ability of individuals with a household 

income up to 200 percent of the FPL to 

enroll year-round in a Basic Health 

Program in New York or Minnesota.75

This commenter also cited a report that 

suggested, based on data from states that 

offered a mid-year special enrollment 

period in 2020 due to the COVID–19 

pandemic, that these enrollment periods 

resulted in individuals enrolling who 

were younger and healthier than those 

who enrolled during the annual open 

enrollment period.76 Another 

commenter provided data from DC 

Health Link, the Washington, DC State 

Exchange, that indicated that a higher 

percentage of younger enrollees 

accessed coverage through the mid-2020 

special enrollment period than through 

the annual open enrollment period. 

However, some commenters did not 

support finalizing this special 

enrollment period, primarily due to 

concerns that it posed significant 

adverse selection risks. Several of these 

commenters said that in the proposed 

rule, CMS significantly underestimated 

the increase in rates due to adverse 

selection that would result from the 

proposed special enrollment period. 

Commenters also raised the concern that 

qualifying individuals would learn 

about their enrollment opportunity due 

to experiencing a health event, and a 

few also worried that consumers would 

decline to renew coverage once a 

medical need had ended, or lose 

coverage because of the need to pay 

even a relatively small premium. 

Commenters also voiced concerns 

specifically about adverse selection the 

proposed special enrollment period 

could create for plans with broad 

provider networks due to the potential 

for qualifying enrollees to change plans 

mid-year to access a specific provider or 

prescription drug. Some of these 

commenters were concerned that health 

care providers would encourage current 

enrollees to change plans based on an 

emerging health care need, in order to 

access coverage for items or services 

furnished by a provider that does not 

participate in the consumer’s current 

plan’s network. Several commenters 

added that due to these adverse 

selection risks, the proposed special 

enrollment period would result in 

narrower networks and fewer choices 

for consumers. 


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77See 81 FR at 94071–94074. Since the 2017 

benefit year, HHS has operated the risk adjustment 

program in all 50 states and the District of 

Columbia. Massachusetts ran its own risk 

adjustment program for benefit years 2014–2016. 

See, e.g., page 5 of the March 2016 Risk Adjustment 

Methodology White Paper (March 24,2016), 

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

Forms-Reports-and-Other-Resources/Downloads/ 

RA-March-31-White-Paper-032416.pdf. 

78For more information on the enrollment 

duration factors, see 85 FR at 7103, 7104. 

79See, e.g., Enrollment Duration Factors in Table 

2: Final Adult Risk Adjustment Factors for 2017 

Benefit Year, 81 FR at 94088; and Enrollment 

Duration Factors in Table 1: Final Adult Risk 

Adjustment Factors for 2022 Benefit Year, available 

at https://www.cms.gov/files/document/updated2022-benefit-year-final-hhs-risk-adjustment-modelcoefficients-clean-version-508.pdf. 

80HHS proposed but did not finalize updates to 

the enrollment duration factors in the 2022 

Payment Notice. See 86 FR at 24151–24162. Also 

see 85 FR at 78581–78586. 

Other concerns included the 

likelihood that adverse selection would 

drive up rates and that these rate 

increases would disproportionately 

impact unsubsidized consumers. 

Additionally, several commenters 

agreed that, as noted in the proposed 

rule, adverse selection and related 

increases in individual health insurance 

premiums would vary significantly by 

state based on specific market 

conditions such as Medicaid expansion 

status. Several commenters, including 

some that supported the proposal, asked 

that CMS monitor the individual market 

for impacts of adverse selection, and 

one commenter asked us to engage in 

additional rulemaking if evidence of 

significant adverse selection is found. A 

few commenters were also concerned 

that the applicable risk adjustment 

methodology would not adequately 

compensate issuers for individuals who 

enroll through the special enrollment 

period and, as a result, have partial-year 

or short enrollment terms. 

Response: HHS agrees that, in many 

cases, special enrollment periods may 

encourage consumers who are younger 

and healthier than average to enroll. 

Additionally, HHS acknowledges that 

some Exchanges that have expanded 

enrollment opportunities for consumers 

with a projected annual household 

income below a certain threshold have 

not experienced significant negative 

impacts from adverse selection. 

However, HHS appreciates concerns 

that the risk of adverse selection may 

vary significantly based on market 

conditions specific to different 

Exchanges, and HHS’s goal is also to 

achieve a balanced approach that takes 

into account these varying conditions as 

much as possible. Therefore, HHS is 

finalizing this special enrollment period 

as proposed but limiting it to be 

available only during periods of time 

during which APTC benefits are 

available such that the applicable 

taxpayers’ applicable percentage is set at 

zero. 

HHS believes that the time-limited 

nature of this special enrollment period, 

and providing Exchanges with 

flexibility in terms of whether to 

implement it, will help to mitigate 

concerns about adverse selection, 

especially when combined with robust 

outreach and education efforts to 

maximize the number of qualifying 

individuals who gain coverage through 

the special enrollment period based on 

an understanding of its availability as 

opposed to due to an emerging health 

care need. 

HHS also appreciates concerns about 

the impact of rate increases on 

unsubsidized enrollees and will work 

with stakeholders to monitor the 

markets to track potential adverse 

selection impacts of the special 

enrollment period. Currently, however, 

HHS is of the view that the enhanced 

benefits available under the ARP 

mitigate adverse selection risk such that 

premiums for subsidized and 

unsubsidized consumers will rise no 

more than 0.5 to 2 percent as a result of 

this special enrollment period. In 

assessing the impact on unsubsidized 

consumers, HHS also considered that 

under section 9661 of the ARP, 

consumers may qualify for premium tax 

credits at any point at which they would 

be required to contribute more than 8.5 

percent of their annual household 

income to their benchmark health 

insurance plan. However, HHS will 

work with stakeholders to monitor and 

evaluate the impacts of this policy on 

individuals who do not qualify for PTC 

(or who qualify for a maximum amount 

of zero dollars of PTC), including 

consideration of possible approaches to 

address them as may be necessary. 

Finally, HHS notes that the HHSoperated risk adjustment methodology 

added enrollment duration factors to the 

adult risk adjustment models starting 

with the 2017 benefit year.77 These 

enrollment duration factors are used in 

the calculation of adult enrollee risk 

scores under the state payment transfer 

formula to account for additional risk 

associated with enrollees with partialyear enrollment.78 They do so through 

a set of 11 enrollment duration binary 

indicatory variables that signify that an 

enrollee had exactly one to 11 months 

of enrollment in a given plan.79 The 

value of these indicators decreases 

monotonically from one to 11 months, 

reflecting the increased annualized costs 

associated with fewer months of 

enrollment. Adult enrollees who 

enrolled during this special enrollment 

period will receive the applicable risk 

adjustment enrollment duration factor 

in the risk score calculation. While HHS 

continues to evaluate the current 

enrollment duration factors, HHS 

generally disagrees with comments 

asserting the risk adjustment 

methodology does not adequately 

address partial year enrollees.80

Comment: Some commenters voiced 

the concern that providing this openended enrollment opportunity would 

undermine the goal of continuous 

coverage, decreasing issuers’ ability to 

connect with beneficiaries and making 

it less likely that certain qualifying 

consumers would take advantage of 

preventive care. A few added the 

concern that consumers changing plans 

mid-year might not realize their 

deductibles and other accumulators 

would reset, and unexpectedly would 

end up paying more out-of-pocket than 

if they had remained enrolled in the 

same plan. Some commenters were 

concerned about individuals attesting to 

a lower-than-accurate annual household 

income in order to gain coverage, and 

one commenter added the concern that 

these consumers would unexpectedly 

have to pay back APTC at tax time for 

which they were not eligible based on 

actual annual household income. Some 

commenters suggested that qualifying 

enrollees might decide to change plans 

in spite of the knowledge that their 

accumulators would reset, with one 

commenter noting that the relatively 

low deductible and other cost-sharing 

requirements for a plan with a 94 

percent AV were not a sufficient 

incentive for enrollees to preserve 

progress they had made towards 

meeting maximum cost-sharing 

requirements. Finally, a few 

commenters said that HHS does not 

have statutory authority to establish the 

proposed special enrollment period, 

because section 1311(c)(6) of the ACA 

refers to specific qualifying events and 

HHS has limited authority to establish 

special enrollment periods that are not 

included in this list. 

Response: HHS disagrees that this 

special enrollment period opportunity 

will discourage eligible consumers from 

maintaining continuous coverage once 

they have learned about and been able 

to access the free or low-cost coverage 

available to them. In HHS’s view and 

based on State Exchanges’ experiences, 

it is more likely that consumers who 

newly gain access to free or low-cost 

coverage through this special 

enrollment period will maintain such 

coverage because of its affordability and 

comprehensiveness. HHS appreciates 


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81For example, before signing and submitting 

their application, all consumers see the statement, 

‘‘I’m signing this application under penalty of 

perjury, which means I’ve provided true answers to 

all of the questions to the best of my knowledge. 

I know I may be subject to penalties under Federal 

law if I intentionally provide false information.’’ 

82See, for example, 77 FR 18310, 18312 (Mar. 27, 

2012), and 78 FR 42160, 42162 (July 15, 2013). 

concerns that consumers who are 

enrolled in Exchange coverage may not 

be aware that changing plans mid-year 

will cause their deductible and other 

accumulators to reset, and HHS will 

continue working to develop and 

enhance messaging to make consumers 

and other stakeholders, such as 

enrollment assisters, understand that 

this is the case. HHS disagrees that 

qualifying enrollees with a 94 percent 

AV silver plan will not have an 

incentive to preserve progress they 

make during the year toward meeting 

their deductible and other cost-sharing 

requirements, because for enrollees who 

qualify for income-based CSRs, the 

deductible and cost-sharing 

requirements under the plan variation is 

based on household income, and such 

amounts therefore likely do not 

represent insignificant amounts relative 

to that household income. 

HHS notes that consumers who apply 

for Exchange coverage on 

HealthCare.gov are required to attest 

multiple times, at the beginning and end 

of the application process, that the 

information they have provided is 

correct.81 As part of the implementation 

of this special enrollment period, HHS 

will also continue to emphasize to 

applicants and current enrollees the 

importance of attesting to an accurate 

and up-to-date estimate of their annual 

household income. Additionally, when 

applicants attest to a household income 

amount that CMS cannot verify using a 

trusted data source, HHS generates an 

income ‘‘inconsistency’’ explaining that 

this is the case and requiring the 

consumer to submit additional 

information. This process involves 

extensive outreach and education, 

which helps ensure that consumers 

understand the importance of attesting 

to an accurate household income 

amount, including how their attested 

household income informs the APTC 

that they receive. Further, once the 

special enrollment period has been 

implemented, HHS will monitor uptake 

and the occurrence of income 

inconsistencies among qualifying 

individuals, and work with stakeholders 

as appropriate to address instances of 

potential abuse. Finally, as discussed in 

prior rulemaking, section 1311(c) of the 

ACA requires the Secretary to establish 

the minimum uniform enrollment 

periods across all Exchanges; and 

section 1321(a) of the ACA provides 

broad authority for the Secretary to 

issue regulations setting standards to 

implement the statutory requirements 

related to Exchanges, QHPs, and other 

standards under title I of the ACA.82

Comment: Several commenters raised 

the concern that HHS underestimated 

rate increases due to the proposed 

special enrollment period, and that 

issuers had not incorporated this risk 

into their rates for the 2022 plan year. 

However, no commenters recommended 

giving issuers an additional opportunity 

to adjust rates—one did not believe such 

an opportunity was needed, and the 

others did not believe that there was 

enough time for issuers to submit and 

regulators to review updated rates 

before the 2022 plan year. One 

commenter requested that HHS delay 

making the proposed special enrollment 

period available until the 2023 plan year 

in order to provide issuers with 

adequate time to incorporate related risk 

into their rates. Some commenters who 

did not support the special enrollment 

period suggested that, if it were to be 

finalized, it should be limited to the first 

few months of the year. These 

commenters noted that the tax season 

could be leveraged to promote the 

special enrollment period, and that this 

limitation was reasonable because 

consumers should be able to accurately 

predict their annual income once they 

have completed the Federal income tax 

filing process. 

Response: Because of the benefit to 

consumers who are eligible for free or 

very low-cost coverage provided by 

enhanced APTC through the ARP from 

having additional opportunities to 

enroll in Exchange coverage while this 

enhanced assistance is in place, HHS is 

finalizing the special enrollment period 

to be available for the 2022 plan year. 

However, HHS is limiting it to be 

available only during periods of time 

during which APTC benefits are 

available such that the applicable 

taxpayers’ applicable percentage is set at 

zero. Further, HHS appreciates concerns 

that issuers and other stakeholders 

benefit from having as much time as 

possible to adjust rates and other 

planning processes based on upcoming 

developments. However, in some 

instances, particularly in the context of 

a PHE such as the COVID–19 pandemic, 

HHS believes that rapid responses are 

warranted and necessary to help ensure 

as many individuals as possible can 

access basic necessities such as health 

insurance coverage and care. Further, 

HHS believes it is appropriate to 

provide this special enrollment period 

for the full duration of time that 

enhanced APTC benefits are available in 

order to maximize opportunities for 

qualifying individuals to enroll. Finally, 

while the Federal income tax filing 

process may be helpful for some 

consumers as a way to estimate their 

annual household income, HHS notes 

that this is not necessarily the case, 

because the Federal income tax filing 

process is based on prior year 

household income, and applicants for 

future or current year Exchange 

coverage with financial assistance must 

estimate their household income for the 

upcoming or current coverage year, and 

annual household income can fluctuate 

significantly from one year to another. 

Comment: Several commenters that 

opposed the special enrollment period 

due to concerns about adverse selection 

and resulting rate increases said that, if 

finalized, they strongly supported 

applying plan category limitations as 

proposed. Some of these commenters 

also recommended that qualifying 

individuals be limited even further; for 

example, to a specific plan or plans 

such as the second lowest-cost or 

lowest-cost silver plan available to 

them, or to a plan with an AV of 94 

percent. Some commenters expressed 

stronger concerns about adverse 

selection due to enrollees changing 

plans based on provider network rather 

than based on metal level. Some 

commenters asked that only currently 

uninsured consumers be permitted to 

use the special enrollment period, or 

that consumers only be permitted to 

access the special enrollment period 

once per year, or if they had not yet 

received any APTC for the year, in order 

to help mitigate adverse selection. 

Response: As discussed in the 

proposed rule, HHS believes that 

applying plan category limitations to 

this special enrollment period will help 

to mitigate adverse selection, because it 

will 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. Further, 

HHS notes that all consumers who 

qualify for this special enrollment 

period and choose to enroll in a silverlevel plan will gain coverage with a 94 

percent AV based on their projected 

annual household income level. HHS 

does not believe that it is necessary to 

limit enrollees to one or several specific 

silver-level plan(s), because HHS 

believes that enrollees who are 

interested in changing plans during the 

year will generally be deterred as such 

a change will often mean they lose 

progress they have made toward 

meeting their deductible and other 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53439 

accumulators. Additionally, requiring 

this type of restriction, limiting use of 

the special enrollment period to once 

per year per consumer, or limiting the 

special enrollment period to consumers 

who had not yet received APTC during 

the applicable plan year, would impose 

additional complexity on Exchanges to 

the point that implementation would 

not be possible in time for the 2022 plan 

year. However, in consideration of these 

concerns, HHS is clarifying at 

§ 155.420(a)(4)(ii)(D) that an enrollee 

who is adding a qualified individual or 

dependent may add the newly-enrolling 

household member to their current 

QHP; or, change to a silver-level QHP 

and add their newly-enrolling 

household member to this silver-level 

QHP; or, change to a silver-level QHP 

and enroll the newly-enrolling qualified 

individual or dependent in a separate 

QHP. HHS believes that this language is 

appropriate to provide clarity on 

options and limitations for enrollees 

whose household members newly enroll 

through this special enrollment period. 

In particular, this language clarifies that, 

while newly-enrolling qualified 

individuals and dependents are not 

subject to plan category limitations, 

current enrollees with a newly-enrolling 

dependent or other household member 

may not use this new special enrollment 

period to change to a plan of any metal 

level along with their newly-enrolling 

household member. 

Comment: One commenter 

misunderstood the proposal to newly 

permit enrollees to change from one 

metal level to another, and raised 

concerns about how such changes could 

affect enrollment in standalone dental 

plans. Another commenter asked for 

clarification that individuals will still 

qualify for the other special enrollment 

periods only when they experience a 

special enrollment period qualifying 

event that makes them eligible. 

Response: HHS clarifies that this 

proposal, and the resulting final rule, do 

not newly permit Exchange enrollees to 

change to a plan of a different metal 

level or make policy changes to plan 

category limitations for existing special 

enrollment periods. Rather, the new rule 

establishes a plan category limitation to 

address a newly-created special 

enrollment period triggering event and 

makes a small technical clarification to 

the preceding paragraph, as further 

discussed earlier in this preamble. 

Further, HHS has discussed and 

extensively investigated concerns about 

accidental standalone dental plan 

disenrollment due to a change in 

medical QHP and has not found this to 

be a problem in practice for 

HealthCare.gov enrollees, who are 

always offered the opportunity to select 

or re-select their standalone dental plan 

after completing medical QHP selection. 

Finally, HHS clarifies that the new 

monthly special enrollment period does 

not change or expand eligibility 

requirements for other special 

enrollment period qualifying events at 

§ 155.420(d). 

Comment: A few commenters asked 

that HHS require pre-enrollment 

verification of income for consumers to 

qualify for this special enrollment 

period. However, several commenters 

supported the proposal not to require 

such verification, and one commenter 

encouraged HHS to monitor even postenrollment income verification to 

ensure that it did not present a 

significant barrier to low-income 

consumers seeking to enroll in coverage. 

Response: As discussed in the 

proposed rule, HHS believes that the 

post-enrollment income verification 

process already in place consistent with 

§ 155.320(c) is sufficient to ensure 

program integrity, because consumers 

who do not verify their attested 

household income through the postenrollment verification process will 

have their APTC adjusted accordingly. 

Further, HHS agrees with commenters’ 

concerns that imposing a pre-enrollment 

income verification process would 

prevent eligible consumers from 

accessing coverage through the special 

enrollment period, especially those who 

represent marginalized communities 

that face barriers to accessing 

documentation quickly and those who 

are younger and healthier, and 

therefore, have less incentive to devote 

time to a complex enrollment process. 

Comment: Some commenters that did 

not have adverse selection concerns 

asked HHS not to finalize the proposed 

special enrollment period to be limited 

to the period of time during which 

enhanced APTC is available per ARP or 

other statutory authority. These 

commenters’ position was that even 

without the ARP’s enhanced APTC, 

consumers with household income 

below a certain FPL are heavily 

subsidized enough to mitigate adverse 

selection. However, commenters with 

concerns about adverse selection, 

including some who otherwise 

supported offering the special 

enrollment period as proposed, 

requested that, if finalized, CMS limit 

its availability to periods when APTC is 

available at the level provided for under 

the ARP. 

Response: To an extent, HHS agrees 

with certain commenters that some 

markets could see limited effects of 

adverse selection if the proposed special 

enrollment period were available 

permanently, depending on individual 

market conditions. However, as 

discussed in the proposed rule, HHS 

believes that that access to 94 percent 

AV coverage premium-free or at very 

low-cost after application of APTC will 

help to mitigate risk of adverse 

selection, because qualifying 

individuals will not have an incentive 

not to enroll or to end coverage when 

health care services are no longer 

needed. HHS also agrees with 

commenters’ concerns that even a 

relatively small premium could 

introduce additional risk of adverse 

selection. Therefore, HHS is finalizing 

this special enrollment period to be 

available only during periods of time 

during which APTC benefits are 

available such that the applicable 

taxpayers’ applicable percentage is set at 

zero, such as during tax years 2021 and 

2022, as provided by section 9661 of the 

ARP. 

Comment: Several issuers provided 

recommendations for alternatives to the 

proposed special enrollment period that 

would assist consumers with 

transitioning between Medicaid and 

Exchange coverage—for example, a few 

commenters suggested providing an 

extended loss of coverage special 

enrollment period window to those who 

lose Medicaid coverage due to the end 

of the COVID–19 PHE. Other 

suggestions included establishing policy 

similar to a Medicaid waiver in New 

York under section 1115 of the Social 

Security Act that allows issuers who are 

Medicaid Managed Care Organizations 

(MCOs) to assist consumers with reenrollment, and suggested that HHS 

permit MCOs to auto-enroll consumers 

eligible to transition into a 

corresponding QHP, or generally 

facilitate enhanced communication 

between issuers and enrollees to allow 

issuers to provide more support for 

transitions. One commenter suggested 

that instead of providing this special 

enrollment period, HHS automatically 

enroll all qualifying individuals into 

coverage with the option to opt out. One 

commenter supported the proposed 

special enrollment period but also 

offered suggestions for improving 

consumers’ transition from Medicaid to 

Exchange coverage. Another commenter 

who supported the proposed special 

enrollment period requested that, in 

addition, HHS also provide guidance in 

rulemaking on an ‘‘Automatic 

Retention’’ program that would 

automatically enroll individuals who 

miss premium payments into a plan 

available without premiums after 

application of the APTC until they lose 

eligibility or cancel their plan. 


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83See 86 FR 35170. 

84See FFEs and FF–SHOP Enrollment Manual: 

Section 6, Exhibit 14, https://www.regtap.info/ 

uploads/library/ENR_FFEFFSHOPEnrollment

Manual2020_5CR_090220.pdf. 

85For example, in 2018, HHS issued guidance to 

provide that an individual or their dependents who 

are affected by an emergency or major disaster that 

is recognized with a formal declaration from FEMA 

and that emergency or major disaster prevents the 

qualified individual or their dependents from 

enrolling during the annual open enrollment period 

or during the enrollment window for a special 

enrollment period for which they qualified will be 

eligible for an exceptional circumstances special 

enrollment period under § 155.420(d)(9). See 

https://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/Downloads/8-9-natural-disasterSEP.pdf. 

Response: As discussed in the 

proposed rule, HHS believes that 

providing a special enrollment period 

for all APTC-eligible individuals with a 

household income up to 150 percent of 

the FPL, and whose applicable 

percentage is therefore set at zero, will 

be an important tool to help these 

consumers access coverage. However, 

HHS also appreciates the interest in 

developing additional strategies for 

improving the transition from Medicaid 

to Exchange coverage and encouraging 

newly enrolling individuals and current 

enrollees to maintain continuous 

coverage, and HHS will continue to 

work with stakeholders in the future to 

do so. 

Further, HHS notes that there are 

other existing special enrollment 

periods that may support Medicaid 

beneficiaries’ transition to Exchange 

coverage at the end of the COVID–19 

PHE. For example, if state Medicaid 

programs or Medicaid MCOs experience 

delays in delivering notices informing 

beneficiaries that their Medicaid 

eligibility is terminating, Exchanges 

currently have flexibility and authority 

to provide additional relief for 

consumers who lose Medicaid coverage. 

As discussed in the proposed rule,83

Exchanges could provide consumers 

who do not timely learn of their 

opportunity to enroll in Exchange 

coverage with additional time to enroll 

in health coverage based on the 

regulation at § 155.420(c)(5), recently 

finalized in part 2 of the 2022 Payment 

Notice final rule. Additionally, 

§ 155.420(d)(9) provides a special 

enrollment period to consumers who 

demonstrate to the Exchange, in 

accordance with guidelines issued by 

HHS, the individual meets exceptional 

circumstances as the Exchange may 

provide. In the FFE and FF–SHOP 

Enrollment Manual, which provides 

operational policy and guidance on key 

topics related to eligibility and 

enrollment for FFEs and SBE–FPs, HHS 

explains that an individual may qualify 

for a special enrollment period through 

authority at § 155.420(d)(9) if their 

enrollment or non-enrollment in a QHP 

(or that of their dependent) is the result 

of an exceptional circumstance, as 

determined by the Secretary.84 In 2018, 

HHS issued guidance to provide that an 

individual or their dependents who are 

affected by an emergency or major 

disaster that is recognized with a formal 

declaration from the Federal Emergency 

Management Agency (FEMA) and that 

prevents the qualified individual or 

their dependents from enrolling during 

the annual open enrollment period or 

during the enrollment window for a 

special enrollment period for which 

they qualified will be eligible for an 

Exceptional Circumstances special 

enrollment period under 

§ 155.420(d)(9). If needed, HHS will 

similarly provide a special enrollment 

period to former Medicaid beneficiaries 

who are prevented from enrolling in 

Exchange coverage by challenges they 

experience as a result of the end of the 

PHE, and HHS notes that State 

Exchanges can also take similar action. 

Further, HHS will continue to engage 

with all Exchanges and other 

stakeholders to provide additional 

support for consumer transitions 

between Medicaid and Exchange 

coverage following the end of the PHE.85

HHS believes the special enrollment 

period finalized in this rule, along with 

existing special enrollment authorities 

granted to Exchanges discussed here, 

are sufficient to ensure that consumers 

who lose Medicaid coverage due to the 

end of the PHE are able to transition to 

Exchange coverage. 

Comment: Multiple commenters that 

supported the proposal were optimistic 

about Exchanges’ ability to implement it 

in time for the 2022 plan year based on 

availability of comparable special 

enrollment periods in some Exchanges, 

such as Massachusetts’. Other 

commenters were generally supportive 

of the special enrollment period, but 

strongly supported that it be finalized, 

as proposed, at the option of the 

Exchange, and varied in their 

assessments of level of effort to 

implement it. One estimated that the 

special enrollment period could be 

implemented for the 2022 plan year, but 

that state regulators would first need to 

be consulted about potential impact on 

individual market rates to determine 

whether they should. One commenter 

did not think that Exchanges could 

implement the special enrollment 

period in time for the 2022 plan year, 

and another was unsure about whether 

they could do so. 

Finally, several commenters said that 

the special enrollment period could be 

implemented in time for the 2022 plan 

year, but without plan category 

limitations, and suggested that these 

limitations be optional for Exchanges 

due to significant additional level of 

effort for implementation, and because 

of the likely very small affected 

population. One state regulator 

requested that plan category limitations 

not be applied because some qualifying 

individuals would be better served by 

enrolling in a very low-cost bronze plan, 

and that they should be permitted to 

determine with an agent or broker 

which metal level was best for them. 

Response: HHS agrees with 

commenters that State Exchanges 

should have the option of whether to 

implement this special enrollment 

period, and therefore have finalized, as 

proposed, that it be at the option of the 

Exchange. While HHS understands 

concerns about complexity of 

implementation, in consideration of 

strong support from other commenters 

for guardrails to help mitigate adverse 

selection, HHS agrees that the proposed 

plan category limitations, as clarified in 

this final rule, will be helpful in 

mitigating potential adverse selection, 

even in Exchanges in which the 

population of consumers potentially 

eligible for this special enrollment 

period is small. 

Comment: Based on a belief that 

adverse selection would be limited and 

that the uninsured rates would decrease 

due to the proposed special enrollment 

period, several commenters asked that 

HHS increase the household income 

threshold for qualifying individuals to 

200 or 250 percent of the FPL. These 

commenters’ rationale was that 

individuals with household income 

below this threshold are also highly 

subsidized to an extent that would 

mitigate adverse selection risk. Several 

commenters also noted that this income 

range would include more consumers 

who make minimum wage, and who 

regularly transition between Medicaid 

and Exchange coverage. 

Response: HHS shares the goal of 

reducing barriers to coverage for as 

many individuals as possible. However, 

as discussed in the proposed rule, HHS 

believes that access to premium-free or 

very low-cost coverage with a 94 

percent AV after application of APTC 

and CSRs will be an important factor to 

help mitigate risk of adverse selection, 

because qualifying individuals will not 

have an incentive not to enroll or to end 

coverage when health care services are 

no longer needed. While many 

individuals with projected annual 

household income greater than 150 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53441 

86Per 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. 

87 84 FR 17526. 

88Public Law 117–2. 

percent of the FPL also benefit from 

APTC that covers a significant portion 

of their monthly premium, given a 

number of commenters’ concerns about 

adverse selection risk, HHS believes it is 

appropriate to make the special 

enrollment period available only to 

individuals whose applicable taxpayer 

has an applicable premium percentage 

set at zero. Limiting the special 

enrollment period in this way also 

ensures that eligible individuals will 

have access to a silver plan with a 94 

percent AV, which may reinforce 

qualifying individuals’ interest in 

maintaining coverage when health care 

services are no longer needed, even for 

those who must pay a small premium, 

because of the ability to access care 

without significant cost sharing. 

Further, as also addressed in the 

proposed rule, 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, such that these individuals will 

not have access to a silver plan with a 

zero-dollar premium, because these 

individuals may have more incentive to 

end their coverage when they no longer 

believe that they need it, or to 

inadvertently allow their coverage to 

lapse due to missing multiple premium 

payments. Therefore, HHS is finalizing 

the special enrollment period for APTCeligible individuals with a household 

income up to 150 percent of the FPL, 

but limiting it to be available only 

during periods of time during which 

APTC benefits are available, such that 

the applicable taxpayers’ applicable 

percentage is set at zero. 

6. Clarification of Special Enrollment 

Periods for Enrollees Who Are Newly 

Eligible or Newly Ineligible for Advance 

Payments of the Premium Tax Credit 

(§ 155.420(f)) 

HHS proposed 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. 

As discussed in the proposed rule, 

currently, the special enrollment 

periods to which this clarification is 

applicable are the triggering events at 

§ 155.420(d)(6), but HHS proposed 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 

enrollment window rules at § 155.420(b) 

and (c), respectively. After 

consideration of public comments, as 

further discussed below, HHS is 

finalizing § 155.420(f) as proposed. 

As discussed in the proposed rule, 

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 86 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 APTCeligible, 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. 

HHS proposed 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 

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). HHS noted that 

HHS believed 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 HHS 

believes 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), HHS proposed 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 HHS’s discussion of the 

policy in previous rulemaking. For 

example, in the 2020 Payment Notice 

final rule,87 HHS 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. 

HHS stated that HHS believes 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.88 This is because, with 

this change, any applicants with 

household incomes over 400 percent of 

the FPL may be eligible for APTC, so 

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. 

HHS explained that HHS believes that 

this clarification should also apply to 

the 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. However, HHS sought 

comment on whether the clarification 

that a qualified individual, enrollee, or 

his or her dependent is considered 


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53442 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

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, 

HHS sought comment on whether HHS 

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 ESC 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. 

HHS also sought comment on the 

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. HHS also sought comment 

on whether HHS 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). 

The following is a summary of the 

comments received and HHS’s 

responses regarding these proposals 

related to the clarification of the special 

enrollment period for enrollees who are 

newly eligible or newly ineligible for 

advance payments of the premium tax 

credit (§ 155.420(f)). 

Comment: Multiple commenters 

supported this clarification, and one 

commenter confirmed that it reflected 

their State Exchange’s implementation 

of the applicable special enrollment 

periods. Several commenters, including 

another State Exchange, agreed that this 

clarification is helpful for mitigating 

issuer and consumer confusion. 

However, one commenter raised the 

concern that the clarification would 

result in fewer consumers qualifying for 

a special enrollment period due to 

confusion about how to report life 

changes related to special enrollment 

period access and eligibility. The 

commenter added that some consumers 

who are not receiving PTCs may wish to 

change plans based on having reported 

a change to their household income. 

This commenter also raised the concern 

that it would require their State 

Exchange to make significant system 

and messaging adjustments to change 

how they implement applicable special 

enrollment periods. 

Response: HHS appreciates comments 

that this clarification is helpful, and 

HHS is finalizing it as proposed. In 

response to the concern that it will 

cause fewer consumers to qualify for 

special enrollment periods, HHS notes 

that in addition to providing general 

clarity, HHS’s primary purpose for this 

update is be clear that enrollees may 

qualify for a special enrollment period 

at § 155.420(d)(6)(i) or (ii) based on a 

change from being eligible for a 

maximum APTC of zero dollars per 

month to an amount greater than zero 

dollars per month, or who become 

newly eligible for a maximum of zero 

dollars per month after previously 

having qualified for an amount of more 

than zero dollars. While this may 

require some Exchanges to make system 

changes, HHS is finalizing the 

clarification as proposed to ensure that 

enrollees in this situation may qualify 

for a special enrollment period based on 

a meaningful change in eligibility for 

APTC as opposed to a change that is not 

meaningful. 

Additionally, HHS appreciates the 

comment that some consumers who 

experience a change in household 

income mid-year may wish to change to 

a different QHP based on this 

clarification. However, current rules do 

not include special enrollment periods 

based only on a change in household 

income, and qualifying events at 

§ 155.420(d)(6) are not based on changes 

in household income, but rather on 

changes in eligibility for APTC, to 

account for whether, based on their 

household income, a qualifying 

individual can receive assistance with 

their monthly QHP premium payments. 

HHS disagrees that this clarification will 

result in fewer special enrollment 

periods for consumers who qualify 

based on experiencing an established 

special enrollment period triggering 

event, because special enrollment 

period rules at § 155.420(d) do not 

currently include an enrollment 

opportunity based solely on a change in 

household income. However, HHS 

commits to continue working with State 

Exchanges on an ongoing basis to 

mitigate confusion related to eligibility 

rules to promote greater access to 

coverage. HHS also commits to 

collaborating to promote continuity of 

coverage for all Exchange enrollees, 

including by helping enrollees to 

understand the importance of reporting 

changes to their household income so 

that they receive an up-to-date APTC 

amount even if their change does not 

make them eligible for a special 

enrollment period. 

Comment: One commenter generally 

supported the proposal, but requested 

that HHS finalize it to exempt the 

special enrollment period at 

§ 155.20(d)(6)(iii) so that employees or 

dependents who are enrolled in an 

employer-sponsored plan and 

determined newly APTC-eligible based 

in part on a finding that they are no 

longer eligible for qualifying coverage in 

an eligible employer-sponsored plan in 

accordance with 26 CFR 1.36B–2(c)(3) 

may qualify for a special enrollment 

period even if they qualify for a 

maximum payment of zero dollars per 

month. This commenter explained that 

individuals in this situation could 

benefit from an opportunity to change to 

coverage that meets the minimum value 

standards that apply to Exchange 

coverage, even if they are required to 

pay full price for Exchange coverage. 

Response: HHS appreciates this 

comment and agrees that an individual 

whose ESC is no longer considered 

affordable or no longer provides 

minimum value may wish to access 

individual market coverage through an 

Exchange, even if they will not qualify 

for APTC to help reduce their 

premiums. 

HHS does not agree that additional 

special enrollment period authority is 

necessary at this time, because there are 

existing pathways to enrollment in 

individual market coverage through an 

Exchange for many individuals who 

meet the conditions of the triggering 

event at § 155.420(d)(6)(iii), except that 

they do not qualify for APTC. Further, 

based on HHS’s experience, changes to 

ESC that would have these effects are 

rarely made mid-plan year. Therefore, 

employees and dependents who 

experience this type of change and 

whose ESC renews on a calendar year 

basis can enroll in individual market 

coverage through an Exchange during 

the annual open enrollment period, and 

those whose ESC renews on a noncalendar year basis can qualify for a 

special enrollment period per 

§ 155.420(d)(1)(ii), based on the last day 

of the plan year of their ESC. In what 

HHS expects will be rare instances that 

an individual’s ESC ceases to meet the 

minimum value or affordability 

standards in the middle of a plan year 

under circumstances that would not 

qualify the individual for a special 


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89 86 FR 7793 (Feb. 2, 2021). 90 86 FR 24140, 24288. 91 86 FR 7793 (Feb. 2, 2021). 

enrollment period under 

§ 155.420(d)(1)(ii), an Exchange could 

exercise its authority to find that this 

change is an exceptional circumstance 

that qualifies the individual for a special 

enrollment period under 

§ 155.420(d)(9). 

Due to the existing special enrollment 

period authorities available to 

Exchanges, HHS is of the view that 

additional special enrollment period 

authority is not necessary at this time. 

HHS will monitor these circumstances 

and, if necessary, consider proposing 

such authority in future rulemaking. 

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 (85 FR 78572), HHS 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 that included a proposed 

2022 user fee rate. In the January 19, 

2021 Federal Register (86 FR 6138), 

HHS 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 2022 user fee rates for issuers 

offering QHPs through the FFEs 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. 14009,89 directing HHS, and 

the heads of all other executive 

departments and agencies with 

authorities and responsibilities related 

to the ACA, to review all existing 

regulations, orders, guidance 

documents, policies, and any other 

similar agency actions to determine 

whether such agency actions are 

inconsistent with this Administration’s 

policy to protect and strengthen the 

ACA and to make high-quality health 

care accessible and affordable for every 

American. As part of this review, HHS 

examined policies and requirements 

under the proposed 2022 Payment 

Notice and part 1 of the 2022 Payment 

Notice final rule to analyze whether the 

policies under these rulemakings might 

undermine the Health Benefits 

Exchanges or the health insurance 

markets, and whether they may present 

unnecessary barriers to individuals and 

families attempting to access health 

coverage. HHS also considered whether 

to suspend, revise, or rescind any such 

actions through appropriate 

administrative action. 

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, HHS 

discussed in the proposed rule that HHS 

has reanalyzed the additional costs of 

expanded services, such as consumer 

outreach and education in the FFEs and 

SBE–FPs, and Navigators in the FFEs in 

2022. As explained in part 2 of the 2022 

Payment Notice final rule,90 HHS 

indicated the intention to propose to 

increase the user fee rates for the 2022 

benefit year in future rulemaking. 

Therefore, in the proposed rule, HHS 

proposed 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. The 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. As discussed in 

the proposed rule, HHS is of the view 

that pursuit of the proposal was 

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. HHS noted that HHS 

believed 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), HHS specifies 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. 14009,91 published on 

January 28, 2021, the administration has 

a priority to increase accessibility and 

affordability of health care for every 

American. Consistent with increasing 


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53444 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

92 86 FR 6138 at 6152. 

93 86 FR 7793 (Feb. 2, 2021). 

94 86 FR 6138 at 6152. 

95https://www.cms.gov/newsroom/press-releases/ 

biden-harris-administration-quadruples-numberhealth-care-navigators-ahead-healthcaregov-open. 

96 86 FR 24141. 

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 92 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, 

HHS proposed to establish the FFE user 

fee for all participating FFE issuers at 

2.75 percent of total monthly premiums. 

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), HHS 

specifies 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 FFEs, 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. 14009,93 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 94 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, 

HHS proposed 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. 

HHS sought comment on the FFE and 

SBE–FP user fee rates for 2022. The 

following is a summary of the comments 

received and the responses to HHS’ 

proposals related to the FFE and SBE– 

FP user fee rates for 2022. 

Comment: Most commenters 

supported the proposal to increase the 

2022 user fee rates for the FFEs and 

SBE–FPs. These commenters supported 

funding increases for consumer 

outreach and education and Navigators, 

and for building up the Exchange 

infrastructure. Other commenters were 

concerned about changes to user fees 

happening this late into the 2022 rate 

-setting process. One commenter 

suggested that the increased user fee 

collections be aimed at only consumer 

outreach and education and not toward 

funding Navigators. 

Response: HHS is finalizing the 

higher 2022 user fee rates for the FFEs 

and SBE–FPs as proposed. These higher 

user fee rates will allow for an expanded 

budget for consumer support activities 

and Navigators and will ensure that 

HHS can sustain essential Exchangerelated activities. 

HHS is finalizing the proposal to 

increase the user fee rates to fund both 

consumer outreach and education and 

Navigators. Pursuant to E.O. 14009, 

HHS is aiming to increase accessibility 

and affordability of health care for every 

American. On August 27, 2021, CMS 

awarded $80 million in grant funding to 

60 Navigator grantees in 30 states with 

an FFE for the 2022 plan year.95

Extending funding for Navigators 

through 2022 is consistent with 

increasing accessibility for every 

American. 

HHS also appreciates commenters’ 

concerns about rate-setting. To help 

stakeholders anticipate a possible 

increase to the FFE and SBE–FP user fee 

rates for 2022, HHS announced in part 

two of the 2022 Payment Notice final 

rule 96 that HHS intended to propose 

increased new user fee rates for 2022 

and provided the projected user fee 

rates that HHS was considering. 

Therefore, HHS believes that 

stakeholders may have been anticipating 

the proposed changes to the 2022 user 

fee rates and reasonably could have 

taken steps to accommodate the possible 

change. 

Comment: Some commenters 

recommended that HHS further increase 

the user fee rates to 3.5 percent or 3.0 

percent of total monthly premiums. 

Other commenters were concerned 

about the proposed higher user fee rates. 

Some of these commenters were 

concerned that increasing user fee rates 

is unnecessary as increased enrollment 

should provide adequate revenue to 

fund Exchange activities. Other 

commenters expressed concern that the 

costs of increased user fee rates would 

be passed on to consumers in the form 

of higher premiums. One commenter 

was concerned that increasing user fee 

rates could result in reduced 

commission paid to agents and brokers 

and limit enrollment growth through 

those channels. Another commenter 

suggested that, rather than increasing 

user fee rates, HHS should use excess 

collections from prior years to cover the 

costs of the expanded Navigator and 

consumer information and outreach 

activities. One commenter observed that 

the higher user fee rates will be covered 

by higher APTC payments, which 

results in transferring funds from one 

program to another program. 

Response: HHS believes that these 

newly finalized 2022 user fee rates will 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53445 

97The FY 2022 CMS Budget Request is available 

at https://www.cms.gov/files/document/fy2022-cmscongressional-justification-estimatesappropriations-committees.pdf and the FY 2022 

HHS Budget Request is available at https://

www.hhs.gov/sites/default/files/fy-2022-budget-inbrief.pdf. 

98https://www.cms.gov/newsroom/press-releases/ 

cms-announces-80-million-funding-opportunityavailable-navigators-states-federally-facilitated-0 

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

biden-harris-administration-quadruples-numberhealth-care-navigators-ahead-healthcaregov-open. 

provide adequate funding for the full 

functioning of the Federal platform, and 

HHS does not need to further increase 

these rates at this time. HHS 

acknowledges that the user fee rates in 

this final rule are higher than those 

previously finalized for 2022 in part 1 

of the 2022 Payment Notice final rule, 

which could increase premiums for 

consumers, but in accordance with E.O. 

12866, HHS believes that the benefits of 

this regulatory action justify the costs. 

The FFE and SBE–FP user fee rates for 

the 2022 benefit year are based on 

expected total costs to offer the special 

benefits to issuers offering plans on 

FFEs or SBE–FPs and were developed 

based on an evaluation of expected 

enrollment and premiums for the 2022 

benefit year. HHS also notes that the 

2022 user fee rates are still lower than 

the 2021 user fee rates. 

Regardless, HHS will continue to 

examine cost estimates for the special 

benefits provided to issuers offering 

QHPs on the FFEs and SBE–FPs for 

future benefit years. This will include 

annually evaluating outreach and 

education efforts to consider what the 

appropriate level of funding should be. 

HHS also notes that it is consistent 

with the ACA and implementing 

regulations for user fees to be included 

in premiums (as determined by the 

issuer) and for these premiums to be 

partially covered by APTC payments for 

eligible enrollees. 

Comment: Some commenters 

requested that HHS provide greater 

budget transparency and more data 

reporting on how and where user fees 

are spent. 

Response: HHS believes that the 

information provided in the proposed 

rule in support of the proposed user fee 

rate was sufficient to allow commenters 

to meaningfully assess and comment on 

the appropriateness of the user fee rate 

proposals. The FFE and SBE–FP user fee 

rates for the 2022 benefit year are based 

on expected total costs to offer the 

special benefits to issuers offering plans 

on FFEs or SBE–FPs, and are based on 

an evaluation of expected enrollment 

and premiums for the 2022 benefit year. 

Annually, HHS and CMS also publish 

detailed information on Federal 

Exchange Activities and budget request 

estimates, including expected Exchange 

user fee-eligible costs.97 To calculate 

these expected costs, HHS makes 

reasonable assumptions about the 

expected market for the upcoming 

benefit year, and reconsiders these 

assumptions and re-estimate these costs 

on an annual basis with the most recent 

data available. For example, for the 2022 

benefit year, HHS considered whether 

they needed to make changes to the 

cost, premium, and enrollment 

assumptions based on data from the 

2020 benefit year and made updates to 

their projections as appropriate. User 

fee-eligible costs are generally estimated 

in advance of the benefit year and are 

based upon cost targets for specific 

contracting activities that are not yet 

finalized, and therefore contain 

proprietary information related to 

contracting activities that should not be 

disclosed. HHS will continue to outline 

user fee-eligible functional areas in the 

annual HHS notice of benefit and 

payment parameters, and will evaluate 

contract activities related to operation of 

Federal platform user fee-eligible 

functions. 

Comment: HHS received comments 

that HHS should switch to a per 

member per month (PMPM) capitated 

user fee, rather than a premium based 

user fee, and a comment requesting that 

HHS conduct and publish a study on a 

PMPM user fee. 

Response: HHS did not propose to 

switch to a PMPM capitated user fee 

and therefore is not finalizing a PMPM 

capitated user fee. The FFE and SBE–FP 

user fee rates will continue to be 

assessed as a percent of the monthly 

premium charged by participating 

issuers. Setting the user fee as a percent 

of premium avoids disproportionately 

increasing premiums in lower-cost areas 

and for lower-premium plans, since, 

holding all other factors constant, 

issuers of plans with lower premiums 

will experience lower user fees, and 

issuers of plans with higher premiums 

will experience a proportional increase 

in user fees. Although a PMPM user fee 

rate would yield lower user fees for 

higher-premium plans, it would likely 

cause issuers of lower-premium plans to 

increase premiums, thus decreasing the 

affordability of the most affordable 

plans. 

Comment: One commenter suggested 

that more user fee money be aimed at 

enrolling immigrants by, for example, 

offering the option to receive 

educational material in different 

languages. 

Response: A portion of user fee funds 

is used for the management of the FFE 

Navigator program, as well as consumer 

outreach and education for the FFEs and 

SBE–FPs. In previous Payment Notices, 

commenters have acknowledged the 

important role that Navigators play in 

assisting individuals with LEP. On 

August 27, 2021, CMS awarded $80 

million in grant funding to 60 Navigator 

grantees in 30 states with an FFE for the 

2022 plan year.98 This is the largest 

funding allocation HHS has made 

available for Navigator grants to date. As 

part of this grant funding, HHS has 

encouraged current and past Navigators 

to apply, especially those that focus on 

education, outreach, and enrollment 

efforts to underserved and diverse 

communities, including those with LEP. 

HHS also notes that under 

§ 155.205(c)(2)(i)(A), HHS currently 

provides accessibility services in at least 

150 languages at no cost to applicants 

and enrollees. These translation services 

are provided telephonically and for 

written communications at no cost to 

the consumer. 

After considering the public 

comments, HHS is are finalizing the 

proposed rates of 2.75 percent for the 

FFE user fee rate and 2.25 percent for 

the SBE–FP user fee rate for the 2022 

benefit year. 

c. 2023 Exchange DE Option User Fee 

Rate 

In the January 19, 2021 Federal 

Register (86 FR 6138), HHS 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, 

HHS 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 earlier in this preamble, HHS 

proposed to repeal the Exchange DE 

option; accordingly, HHS also proposed 

to repeal the user fee rate associated 

with § 155.221(j) for the FFE–DE and 

SBE–FP–DEs for 2023. HHS sought 

comment on this proposal. 

HHS did not receive public comments 

specific to the proposal to repeal the 

user fee rates for FFE–DEs and SBE–FP– 

DEs for 2023. HHS summarizes the 

comments received on the 

accompanying proposal to repeal the 

Exchange DE option under part 155 

earlier in this preamble. After 

consideration of those comments, HHS 

is finalizing the proposal to repeal the 

Exchange DE option and the 

accompanying 2023 user fee rates for 

FFE–DEs and SBE–FP–DEs, as 

proposed. 


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99See section 203 of Title II of Division BB of the 

Consolidated Appropriations Act, 2021, Public Law 

116–260 (Dec. 27, 2020). 

100This 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/2744/2020012

5161008/https://www.cms.gov/CCIIO/Resources/ 

Regulations-and-Guidance/Downloads/Final-2018- 

Letter-to-Issuers-in-the-federally-facilitatedMarketplaces-and-February-17-Addendum.pdf. See 

also 83 FR 17024–17026. 101 86 FR 24140. 

102https://oig.hhs.gov/oei/reports/oei-02-13- 

00670.pdf. 

2. Provision of EHB (§ 156.115) 

HHS proposed 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, 

HHS proposed to reference section 2726 

of the PHS Act and its implementing 

regulations. HHS proposed 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, 

2021,99 in order to satisfy the EHB 

requirements. 

The following is a summary of the 

comments received and responses to the 

HHS proposals related to EHB provision 

(§ 156.115). 

Comment: HHS received several 

comments in support of the proposed 

amendment. The commenters expressed 

that the amendment would affirm HHS’ 

commitment to the goal of ensuring 

access to mental health and substance 

use disorder coverage for individuals, 

and also will strengthen national and 

local efforts to enforce MHPAEA 

requirements. 

Response: HHS appreciates the 

support of the commenters and are 

finalizing this policy as proposed. 

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 

Payment Notice’s elimination of the 

Federal Government’s reviews of the 

network adequacy of QHPs offered 

through the FFEs in certain 

circumstances by incorporating the 

results of the states’ reviews.100

As explained in part 2 of the 2022 

Payment Notice final rule,101 HHS 

intends to implement the court’s 

decision through rulemaking as soon as 

possible. However, HHS 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. HHS noted in the proposed 

rule that HHS instead intends 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 was not feasible for the QHP 

certification cycle for the 2022 plan 

year, which began on April 22, 2021. 

HHS plans to propose specific steps to 

address Federal network adequacy 

reviews in future rulemaking. HHS 

requested comments and input 

regarding how the Federal Government 

should approach network adequacy 

reviews. 

The following is a summary of the 

comments received and the responses to 

HHS’ solicitation for comments related 

to network adequacy (§ 156.230). 

Comment: Many commenters 

highlighted the importance of ensuring 

adequate network access for all 

consumers seeking coverage through 

QHPs offered through the FFEs. 

Commenters encouraged HHS to 

specifically review networks for: full 

accessibility to consumers with 

disabilities, language access, cultural 

competency, capacity to deliver antibias care, specialist and sub-specialist 

access, end-of-life care services, diverse 

providers reflecting backgrounds of 

enrollees, and extended hours of 

operation. Commenters also suggested 

networks’ capacity to deliver LGBTQ+- 

affirming care should be assessed as part 

of network adequacy review processes. 

Other commenters specified that broad 

and equitable access to sexual and 

reproductive health services, 

contraceptive services, and HIV care 

should be evaluated. 

Response: HHS agrees that adequacy 

metrics supporting equitable access for 

all consumers should be a high priority. 

For future rulemaking, HHS is carefully 

considering standards that promote 

health equity (for example, provider 

directory requirements to include 

information about the race/ethnicity, 

language(s) spoken, accessibility, and 

office hours of in-network providers). 

Comment: Many commenters offered 

network adequacy enforcement 

strategies for HHS to consider, stating 

HHS should implement direct testing of 

provider availability as an enforcement 

method, per the 2014 HHS Office of 

Inspector General Report.102 Others 

encouraged HHS to examine out-ofnetwork claims submission rates and 

claims denials rates (adjusted for 

enrollment numbers) to monitor and 

enforce network adequacy. Additional 

enforcement and monitoring strategies 

cited by commenters included: 

submission and review of access plans 

for new networks, submission and 

review of parity compliance reports on 

network standards, use of consumer 

surveys and complaint data, and use of 

geographic mapping tools and secret 

shopper surveys to identify adequacy 

gaps. 

Response: HHS will take these 

comments under advisement when 

detailing the specific criteria and 

processes for meeting network adequacy 

standards. 

Comment: Some comments cautioned 

against creating a quantitative Federal 

standard that is overly prescriptive for 

issuers, citing differences across states. 

A Federal standard may not allow for 

the needed tailored flexibilities and 

innovations in adequacy assessment 

that respond to the unique workforces, 

geographies, populations, and markets 

of each state. Additionally, several 

comments called for maximum 

consistency of approach across states. 

One commenter encouraged HHS to 

utilize the network adequacy standards 

developed by the National Committee 

for Quality Assurance (NCQA) for 

medical and behavioral health services. 

Conversely, one commenter noted 

accreditation organizations are not the 

appropriate arbiter of network 

adequacy. 

Response: HHS aims to establish 

Federal oversight standards that 

complement state standards while 

meeting Federal obligations, including 

for QHPs on FFEs. HHS will continue to 

coordinate closely with state authorities 

to address compliance issues, eliminate 

duplicative requirements or reviews, 

and reduce stakeholder burden. 

Comment: Several comments 

supported the application of telehealth 

for fulfilling network adequacy 


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103The Hyde Amendment is not permanent 

Federal law, but applies only to the extent 

reenacted by Congress from time to time in 

appropriations legislation. 

standards. Some commenters cautioned 

against the use of telehealth or virtualonly providers to fulfill quantitative 

standards for adequacy in lieu of inperson care. 

Response: Telehealth is of special 

interest to HHS given its recent 

expansion during the COVID–19 

pandemic. HHS intends to detail the 

specific criteria and processes for 

meeting network adequacy standards. 

Standards that account for the 

availability of telehealth services are 

under consideration. 

Comment: Some commenters asserted 

that Federal network adequacy reviews 

should prevent discrimination against 

and examine the availability of a diverse 

set of provider types, including nurse 

practitioners, certified registered nurse 

anesthetists, and other mid-level 

practitioners. Commenters called for 

including all applicable provider types 

such as skilled nursing facilities, 

durable medical equipment suppliers, 

and prosthetists and orthotists. 

Specifically, some commenters noted 

the importance of ensuring access, via 

quantitative standards, to behavioral 

health and substance use disorder 

providers and services at all care levels, 

including intermediate care. 

Response: HHS intends to evaluate 

QHP issuer networks for access to 

providers enrollees most generally use 

and/or that have historically been the 

subject of network adequacy concerns 

raised by patients and other 

stakeholders (for example, behavioral 

health providers). 

Comment: Commenters suggested use 

of a range of general and specific 

network adequacy metrics and 

standards, including time and distance, 

provider-to-enrollee ratio minimums, 

availability of providers accepting new 

patients, timely notification of provider 

terminations, provision of out-ofnetwork services, provider directory 

data elements, and appointment wait 

times. Commenters also suggested that 

when assessing network adequacy, HHS 

should consider enrollees’ health care 

needs (for example, by using the 

Community Need Index) and 

transportation and topographical 

complexities that influence geographic 

accessibility. 

Response: HHS intends to ensure that 

network adequacy standards ensure 

enrollee access to care, are applicable 

and meaningful across diverse state 

settings, are achievable, and do not 

place an undue burden on issuers to 

collect and validate the necessary data. 

HHS will take the comments into 

consideration while formulating 

forthcoming rulemaking. HHS will also 

consider these comments in specifying 

QHP certification requirements related 

to network adequacy. Pursuant to 45 

CFR 156.230(a)(2), an issuer of a QHP 

that has a provider network must 

maintain a network that is sufficient in 

number and types of providers, 

including providers that specialize in 

mental health and substance use 

disorder services, to assure that all 

services will be accessible to enrollees 

without unreasonable delay. 

For the certification cycle for plan 

years beginning in 2023, HHS is 

considering the adoption of time and 

distance standards to assess whether 

QHP issuer networks fulfill this 

regulatory requirement. HHS is 

considering evaluating QHP issuer 

networks for compliance with this 

standard based on the numbers and 

types of providers that enrollees most 

generally use and/or that have 

historically been the subject of network 

adequacy concerns raised by patients 

and other stakeholders (for example, 

behavioral health providers); providers’ 

geographic location; and other factors to 

be determined by HHS. HHS would 

calculate time and distance standards at 

the county level. Issuers that are unable 

to meet the specified standards would 

be able to submit a justification to 

account for variances, and the FFEs 

would review the justification to 

determine whether the variance(s) is/are 

reasonable based on a specific set of 

circumstances, such as the local 

availability of providers and variables 

reflected in local patterns of care. HHS 

would also include a requirement for 

issuers to make the information 

necessary to evaluate their QHP issuer 

networks under these standards 

available in a machine-readable file and 

format specified by HHS. 

HHS anticipates: 

• Using standards that are informed 

by those used in Medicare Advantage; 

• Implementing methodologies that 

account for local geographical and 

topographical features that influence 

real-world access to providers such as 

the physical environment (for example, 

bodies of water, unpassable 

mountainous areas) and varied travel 

modes (for example, car, public 

transportation); and 

• Expanding the use of the Java Script 

Object Notation (JSON) files QHP 

issuers currently make available as part 

of meeting provider directory 

requirements. 

In light of the expanded use of, and 

reimbursement for, telehealth services 

during the COVID–19 PHE, time and 

distance standard methodologies that 

account for the availability of telehealth 

services are also under consideration. 

For future rulemaking, HHS is 

carefully considering other network 

adequacy standards, including 

appointment wait times and standards 

that promote health equity (for example, 

provider directory requirements to 

include information about the race/ 

ethnicity, language(s) spoken, 

accessibility, and office hours of innetwork providers). 

4. Segregation of Funds for Abortion 

Services (§ 156.280) 

HHS proposed 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. 

Specifically, HHS proposed 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. As proposed, HHS noted that 

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. HHS 

is finalizing removal of the separate 

billing regulation and codification of the 

prior policy at § 156.280(e)(2)(ii) as 

proposed. 

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, which are 

based on the law in effect as of the date 

that is 6 months before the beginning of 

the plan year involved. 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 that 

sets out funding restrictions for 

abortions.103 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 


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53448 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

104 80 FR 10750 (February 27, 2015). 

105 80 FR 10750, 10840 (February 27, 2015). 

106CMS 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. 

107 84 FR 71674 (December 27, 2019). 

108 84 FR 71674, 71693. 

109 85 FR 27550. 

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 

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(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 AV 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 AV 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, HHS provided 

guidance with respect to acceptable 

methods that an issuer of individual 

market QHPs could use to comply with 

the separate payment requirement.104

HHS 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. HHS 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.105 On 

October 6, 2017, HHS released a bulletin 

that discussed the statutory 

requirements for separate payment, as 

well as this previous guidance on the 

separate payment requirement.106

The 2019 Program Integrity Rule 107

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 

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 identified 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.108

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 (‘‘May 2020 

IFC’’).109 Finalized at § 156.280(e)(2)(ii), 

the rule delayed by 60 days the date 

when individual market QHP issuers 

would be required to begin separately 

billing policy holders such that 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 Federal courts in 

Maryland, Washington, and California 

challenging the separate billing 


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110Washington v. Azar, 461 F. Supp. 3d 1016 

(E.D. Wash. 2020). 

111Planned Parenthood of Maryland, Inc. v. Azar, 

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

U.S.C. 706. 

112California v. U.S. Dep’t of Health & Hum. 

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

2020). 

113Washington v. Azar, 461 F. Supp. 3d 1016 

(E.D. Wash. 2020). 

114Wash. Rev. Code § 48.43.074. 

115Planned Parenthood of Maryland, Inc. v. Azar, 

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

U.S.C. 706. 

116California v. U.S. Dep’t of Health & Hum. 

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

2020). 117 84 FR 71674, 71683. 

regulation. The May 2020 IFC also noted 

that the extended compliance deadline 

would only apply to the nonenforcement 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). 

A district court in Washington 110

invalidated the 2019 Program Integrity 

Rule’s separate billing regulation in the 

state of Washington in April 2020, and 

district courts in Maryland 111 and 

California 112 vacated the 2019 Program 

Integrity Rule’s separate billing 

regulation in July 2020, in advance of 

the postponed compliance deadline of 

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.113 The district court 

specifically found that the separate 

billing regulation was in conflict with 

Washington’s ‘‘Single-Invoice 

Statute,’’ 114 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.115 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 116

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. As explained 

in the proposed rule, in light of these 

developments, and upon further 

consideration of the court decisions 

invalidating the policy, HHS reassessed 

the value of the separate billing 

regulation 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 does HHS 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 a bill in a 

separate transaction. Rather, 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 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 to 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.117

After considering comments received 

on this proposal, HHS is finalizing 

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 have 

flexibility in selecting a reasonable 

method to comply with the section 1303 

separate payment requirement. As 

finalized, acceptable methods for 

satisfying the separate payment 

requirement are outlined at 

§ 156.280(e)(2)(ii) and 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. 

Since HHS is finalizing these policies, 

the non-enforcement policies adopted in 

the 2019 Program Integrity rule and the 

May 2020 IFC are discontinued. 

HHS is also finalizing as proposed the 

technical change to the section heading 

of § 156.280 to more accurately reflect 

its contents. As finalized, it will instead 

read, ‘‘Segregation of funds for abortion 

services.’’ 

Comment: The majority of 

commenters supported the proposed 

changes to repeal the separate billing 

regulation and codify the prior policy at 

§ 156.280(e)(2)(ii). A minority of 

commenters objected to the proposal. 

Commenters supporting repeal of the 

separate billing regulation asserted that 

eliminating the separate billing 

requirements would streamline issuer 

billing practices, alleviate consumer and 

issuer burden, lessen the confusion for 

consumers pertaining to billing for their 

health needs, and prevent termination 

of coverage that would have otherwise 

resulted from substantial consumer 

confusion over a second bill for such a 

miniscule amount. These commenters 


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53450 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

highlighted how the separate billing 

regulation would have caused 

considerable and unnecessary confusion 

and frustration for consumers that may 

have jeopardized their health insurance 

coverage if not for court intervention 

invalidating the policy prior to 

implementation. Commenters 

supporting repeal also noted that the 

separate billing framework contradicted 

well established industry practices for 

sending one bill for the entire premium 

for a set period. These commenters 

highlighted that HHS never offered 

examples of where the new approach of 

separate billing is used for other types 

of insurance billing successfully and 

without harm to consumers, and that 

HHS broadly failed to support the 

change to separate billing with evidence 

that the approach was reasonable. 

Commenters stated that such an 

unreasonable requirement is arbitrary 

and capricious and therefore unlawful, 

and noted that the separate billing 

regulation was so egregious of an 

interpretation of section 1303 of the 

ACA that multiple Federal courts 

invalidated the policy in 2020. 

Commenters supported repeal from 

both a policy and legal perspective, 

noting that repeal of the separate 

regulation aligns with the vacatur of the 

policy by multiple Federal district 

courts in 2020. Commenters specifically 

raised that the Maryland District Court 

vacated the separate billing regulation 

in part because it would have created 

unreasonable barriers to obtaining 

appropriate medical care and impeded 

timely access to health care services, as 

it would have made it harder for 

enrollees to pay for insurance by making 

consumers keep track of two separate 

bills—in conflict with section 1554 of 

the ACA. Commenters also noted that 

court decisions invalidating the separate 

billing regulation focused on the harm 

that the requirements would have 

caused to enrollees if it went into effect. 

For example, commenters emphasized 

that the United States District Court for 

the Northern District of California 

issued an opinion holding that the 

separate billing regulation was arbitrary 

and capricious and focused on the 

substantial costs of the policy to states, 

issuers, and enrollees without any 

corresponding benefit. 

Commenters also raised that the 

separate billing regulation was 

incompatible with some state laws, 

including Washington law. Commenters 

asserted that the United States District 

Court for the Eastern District of 

Washington found that the separate 

billing regulation was invalid in 

Washington State because of 

Washington’s ‘‘single invoice statute,’’ 

which the court found was not 

preempted by the separate billing 

regulation. 

Commenters also expressed support 

for codifying the policy put in place 

under the 2016 Payment Notice for 

issuer compliance with section 1303’s 

separate payment requirement, asserting 

that separately billing was unnecessary 

to achieve the congressional objective to 

section 1303 of segregating funds into 

separate allocation accounts and 

ensuring no Federal funds are used for 

coverage of abortion services for which 

Federal funding is prohibited. 

Specifically, commenters noted that for 

the five years preceding the separate 

billing regulation, individual market 

QHP issuers covering abortion services 

for which Federal funding is prohibited 

had executed HHS-approved methods 

for complying with section 1303 as 

permitted under the 2016 Payment 

Notice and, in doing so, achieved the 

congressional intent of segregating 

funds as the statute requires, without 

the variety of negative consequences 

from the separate billing regulation. 

Supporting commenters explained that 

reverting to the pre-2019 policy 

properly prioritizes a more efficient 

policy that will alleviate any burden the 

separate billing regulation would have 

imposed on consumers and issuers. 

Commenters commended HHS for 

proposing to allow issuers and states to 

choose the best compliance option for 

the separate payment requirement in 

section 1303 that will minimize carrier 

and consumer burden in the context of 

the local, state-specific landscape. 

Some commenters expressing strong 

support for repeal of the separate billing 

policy and codification of the prior 

policy also asserted that, because the 

separate billing regulation has been 

vacated and because issuers never 

implemented the requirements, HHS 

does not technically need to finalize the 

proposed rule in order to grant issuers, 

consumers, and other stakeholders the 

requisite relief. These commenters 

emphasized that, by virtue of the 

Federal district courts’ vacaturs, the 

policy finalized in the preamble of the 

2016 payment notice is already 

currently in effect, which was itself a 

policy adopted after notice-andcomment rulemaking. 

Other commenters supported the 

repeal of the separate billing regulation 

and codification of the pre-2019 policy, 

but requested that HHS prohibit issuers 

from sending separate bills entirely. 

These commenters asserted that 

compliance with section 1303 falls on 

the issuers, not the consumers, and that 

the negative consequences of the issuer 

billing and the consumer paying for 

coverage through separate 

transactions—increasing consumer 

confusion without any real benefit and 

the risk of coverage termination—are 

significant. Commenters noted that 

section 1303 requires that any notice 

regarding payments ‘‘shall provide 

information only with respect to the 

total amount of the combined payments 

for services’’ covered by the plan and 

that this restriction suggests that bills 

regarding abortion should only bill ‘‘the 

total amount of the combined 

payments.’’ These commenters therefore 

urged HHS to eliminate the option for 

QHP issuers to send a separate monthly 

bill for abortion services for which 

Federal funding is prohibited because it 

is prohibited by the statute, consistent 

with the purpose of section 1303, and 

supported by the record and common 

industry practice. Other commenters 

urged HHS to emphasize the third 

option for compliance, sending the 

consumer a notice at or shortly after 

time of enrollment, over the others as it 

is the least burdensome to consumers 

and would reduce potential confusion. 

If the option to send separate bills is 

maintained, some commenters 

encouraged HHS to consider adopting 

consumer protections to guard against 

the potential for policy holders to lose 

their health insurance coverage because 

they fail to pay the de minimis amount 

of the separate premium bill for abortion 

services for which Federal funds are 

prohibited, if issuers still choose to send 

separate bills. 

Commenters opposing the proposal 

objected to abortion coverage altogether 

and asked that HHS retain the separate 

billing regulation and continue to 

require separate checks, separate 

envelopes, and separate transactions for 

all QHPs that provide coverage for 

abortion services for which Federal 

funding is prohibited. Many 

commenters objecting to the proposal 

also asked that HHS allow issuers to 

permit consumers to opt out of such 

coverage by refusing to pay the portion 

of their premium attributable to 

coverage for abortions for which Federal 

funding is prohibited. Objecting 

commenters also challenged the 

assertion that the separate billing 

regulation would cause undue 

consumer confusion, pointing to how 

some policy holders receive multiple 

bills anyway from their insurance 

issuers or providers, such as consumers 

who have Medicare as well as a 

supplemental Medigap policy. 

Objecting commenters generally 

argued that section 1303 of the ACA 

expressly requires separate billing as the 

only appropriate method for collection 

of the separate payment required under 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53451 

118Planned Parenthood of Maryland, Inc. v. Azar, 

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

U.S.C. 706; California v. U.S. Dep’t of Health & 

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

20, 2020); Washington v. Azar, 461 F. Supp. 3d 

1016 (E.D. Wash. 2020). 

section 1303, that the burden estimated 

for implementation of the separate 

billing regulation is necessary to achieve 

compliance with the statute, and that 

repeal of the separate billing regulation 

will deprive consumers of needed 

transparency into coverage for which 

they may object on conscience or other 

grounds. Commenters asserted that all 

of the revised options for compliance 

with section 1303 proposed at 

§ 156.280(e)(2)(ii) other than separate 

billing are inadequate to satisfy the 

section 1303 requirement as they would 

conceal the portion of the premium 

attributable to certain abortion services 

and would permit issuers to collect 

monthly premiums in a single, rather 

than separate, payment. Commenters 

also questioned HHS’s reasoning for 

continuing to allow issuers to bill 

separately as one of the available 

compliance options when such a billing 

method leads to so many unjustified 

burdens, consumer confusion, barriers 

to care, and inequities. 

Most commenters supported the 

proposal to change the section heading 

of § 156.280 to ‘‘Segregation of funds for 

abortion services.’’ Commenters asserted 

that this technical change would better 

align with the intention of section 1303 

of the ACA which expressly requires 

issuers to segregate funds and accounts 

for certain abortion coverage but does 

not pass on that burden to consumers. 

Commenters that objected to the 

proposal to repeal the separate billing 

regulation also objected to renaming the 

section heading, arguing that the 

technical change is inappropriate and a 

further attempt to establish regulations 

that deviate from the law, for the same 

reasons that such commenters object to 

the proposal overall. 

Response: HHS agrees with 

commenters that repealing the separate 

billing regulation is consistent with the 

Federal district court decisions 

invalidating the separate billing 

regulation and the requirements of 

section 1303 of the ACA. HHS also 

agrees that codifying the pre-2019 

policy reinstates a policy that supports 

meaningful issuer compliance with 

section 1303 by ensuring appropriate 

segregation of funds as required by 

statute, without imposing the 

operational and administrative burdens 

of the separate billing regulation and 

without causing additional consumer 

confusion and unintended losses of 

coverage. 

Although HHS acknowledges that 

some commenters continue to support 

the separate billing regulation, HHS 

emphasizes that multiple Federal 

district courts have already invalidated 

the separate billing regulation, 

preventing HHS from requiring its 

implementation. 

HHS agrees with commenters’ 

assertions that the invalidation of the 

separate billing regulation by the 

Federal district courts is binding on 

HHS and currently prohibits 

implementation of the separate billing 

policy.118 HHS also believes the 

potential harms to consumers, costs to 

issuers and states, consumer confusion, 

and potential loss of consumer coverage 

that would have occurred under the 

separate billing regulation warrant a 

formal repeal of the policy through 

notice and comment rulemaking not 

only to reflect these legal developments 

but also to rectify the interpretation and 

implementation of section 1303 of the 

ACA as a matter of Federal policy. HHS 

also believes it is important to codify 

the pre-2019 options for issuer 

compliance with section 1303 of the 

ACA, as such compliance options were 

noted only in the preamble to the 2016 

Payment Notice. Taken together, HHS 

believes the Federal district court cases 

invalidating the separate billing 

regulation in combination with 

finalizing repeal of the regulation and 

codifying the pre-2019 options in this 

rule will provide additional clarity 

regarding compliance with section 1303 

for stakeholders and remove 

contradictory policy interpretations at 

the Federal level. 

Therefore, HHS is repealing the 

separate billing regulation and codifying 

the policy previously adopted 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 reasonable method to comply 

with the section 1303 separate payment 

requirement. As finalized at 

§ 156.280(e)(2)(ii), acceptable methods 

for satisfying the separate payment 

requirement 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. As finalized, issuers 

will no longer be required to send 

separate paper bills or separate 

electronic communications for the 

portion of the policy holder’s premium 

attributable to coverage of abortions 

services for which Federal funding is 

prohibited. Nor will an issuer electing to 

send separate bills, or utilizing any of 

the 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 

separate transaction, or to make efforts 

to collect these payments separately. 

HHS again emphasizes that under this 

finalized revision to § 156.280(e)(2)(ii), 

individual market QHP issuers covering 

abortion services for which Federal 

funds are prohibited are still required to 

comply with section 1303 of the ACA 

and all applicable requirements codified 

at § 156.280. As discussed in the 

proposed rule, this includes collecting a 

separate payment from each policy 

holder per month for an amount equal 

to the greater of $1 or the AV 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 plan to 

the relevant state insurance regulator 

outlining how it will comply with the 

segregation of funds requirements, 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. 

HHS understands commenter 

concerns regarding issuers that might 

choose to continue sending separate 

bills for the portion of the policy 

holder’s premium attributable to 

abortion services for which Federal 

funding is prohibited. However, HHS 

continues to anticipate most issuers will 

decline to send two separate monthly 

bills and will instead 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. 

Although sending two bills would 

continue to be an option under the 

revisions HHS is finalizing, HHS 

emphasizes that any issuer electing to 

send two separate monthly bills should 

do so in a manner that minimizes 

consumer confusion, promotes 

continuity of coverage, and complies 

with section 1303 of the ACA. For 

example, if an issuer still chooses to 

send two separate monthly bills, issuers 

should include both bills in the same 

mailing, include the total premium due 

on both bills, explain on both bills that 


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53452 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

119Frequently 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. 

the total premium due is inclusive of 

the amount attributable to coverage of 

such abortion services for which Federal 

funding is prohibited, and explain that 

the consumer may pay for both bills in 

a single transaction. Issuers that do 

choose to send separate bills should also 

explain to the consumer that nonpayment 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. Although HHS 

encourages issuers to utilize the other 

available options for compliance, HHS 

also believes separately billing in the 

manner described (without direction to 

pay in two separate transactions and 

with adequate consumer protections in 

place) would comply with section 1303, 

which does not specify a single method 

for compliance with the separate 

payment requirement, and would 

continue to alleviate the burden from 

the rigid requirements of the separate 

billing regulation. 

Comment: Commenters who objected 

to repealing the separate billing 

regulation argued that the revised 

options for compliance with section 

1303’s separate payment requirement 

would not adequately address the 

concerns of consumers who object to 

coverage of abortions for which Federal 

funding is prohibited based on their 

conscience or religion. Such 

commenters maintain that abortion is 

immoral, has no place in health care, 

and that the separate billing regulation 

is the best way to affirm consumer 

conscience rights. These commenters 

asserted that the proposed revisions to 

§ 156.280(e)(2)(ii) weaken statutory 

prohibitions on Federal funding for 

certain abortions that protect the 

conscience rights of taxpayers 

consistent with the Hyde Amendment. 

Such commenters asked that HHS allow 

consumers to opt out of coverage for 

abortions for which Federal funding is 

prohibited by not paying the portion of 

their premium attributable to such 

coverage, thereby avoiding the separate 

charge entirely. 

Objecting commenters also stated that 

repealing the separate billing regulation 

removes transparency for consumers 

into which QHPs cover abortion 

services for which Federal funding 

prohibited and that the proposal to 

codify prior policy options for 

compliance with section 1303 would 

leave it up to QHP issuer discretion to 

determine how to comply with the 

statutory requirements of the ACA, 

when in fact the only method that 

complies with the statute existed under 

the separate billing regulation. Such 

commenters also asserted that the prior 

methods for compliance with section 

1303 under the 2016 Payment Notice 

deprive consumers of needed 

transparency and allow many 

unwittingly to purchase plans that 

include abortion coverage that might be 

contrary to their religious and moral 

convictions. These commenters urged 

HHS to pursue greater transparency by 

being open to consumers about their 

coverage options and what they are 

paying for in their insurance. 

Commenters supporting the proposal 

to repeal the separate billing regulation 

and codify the prior options for 

compliance noted that transparency on 

HealthCare.gov could be further 

improved for consumers who value 

coverage of abortion services by 

including language during plan 

selection that indicates when a plan 

does not cover abortion services for 

which Federal funding is prohibited so 

that consumers are aware of this lack of 

coverage and can seek out a different 

plan with such coverage. 

Commenters supporting repeal also 

supported discontinuing the opt-out 

non-enforcement policy. These 

commenters noted that HHS never 

sought public comment on that policy, 

which was especially harmful to 

consumers as the opt-out would have 

applied not only to the policy holder 

but also to anyone else on the policy, 

such as a spouse or an adult child, 

potentially causing consumers to lose 

coverage of abortion services. 

Commenters supporting discontinuation 

of the opt-out non-enforcement policy 

also asserted that allowing opt-outs in 

this manner runs afoul of the plain 

language of section 1303, which 

distinguishes between plans that offer 

abortion coverage for which Federal 

funding is prohibited to all enrollees on 

one hand, and plans that do not offer 

such coverage, on the other. 

Commenters asserted that section 1303 

therefore leaves no room for the issuer 

of a single plan to offer such abortion 

coverage to some enrollees but not 

others, or to permit enrollees to opt-out 

of such coverage and effectively turn a 

single plan otherwise approved by the 

Exchange and offered to consumers into 

two separate plans. Commenters also 

noted that, in announcing the opt-out 

non-enforcement policy, HHS did not 

quantify the financial impact that was 

certain to result from it, as the issuers 

and plan participants who maintained 

abortion coverage would be left to 

shoulder the cost of that coverage 

without those who had opted out. 

Response: Repealing the separate 

billing regulation and codifying the 

prior policy will allow issuers to bill 

using one of the prior 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, not less than 

$1) in connection with one insurance 

policy. 

As such, HHS affirms that repealing 

the separate billing regulation will also 

discontinue the non-enforcement 

policies adopted in the 2019 Program 

Integrity Rule and the May 2020 IFC, 

including the opt-out non-enforcement 

policy, which were in large part 

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. 

HHS acknowledges that the 2019 

Program Integrity Rule noted that the 

opt-out non-enforcement policy was 

also 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, and potentially 

conflict with their conscience. In 

response to comments again raising 

these concerns, HHS reiterates that it 

has already taken steps to improve 

transparency regarding QHP offerings of 

abortion coverage by making it easier for 

consumers to select QHPs that they 

believe are best suited to their needs 

and preferences. For instance, 

information is available during plan 

selection on HealthCare.gov that can 

assist consumers in more readily 

identifying QHPs that offer coverage of 

such abortion services and provide 

consumers with the requisite 

information to make an informed choice 

about their plan selections regarding 

coverage of such services.119 Further, 

although section 1303 requires 

collection of a separate payment and 

segregation of funds for coverage of 

certain abortion services, it does not 

require issuers to alert consumers to this 

coverage for purposes of transparency of 

benefits. Like with coverage of other 

benefits, consumers seeking a QHP that 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53453 

120California 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)). 

covers abortion services should review 

plan details and plan documents for 

information during plan selection that 

affirms the plan’s coverage of such 

services. Consumers are able to make 

plan selections based on their unique 

health needs and benefit coverage 

preferences prior to enrollment, and 

updates made to plan selection on 

HealthCare.gov to list coverage of 

abortion services for which Federal 

funding is prohibited facilitates this 

selection process for individuals with 

conscience objections or other 

preferences regarding their coverage. 

Although HHS acknowledges that 

there are some states where there may 

be no QHP available on the Exchange 

that omits coverage for such abortion 

services, HHS again emphasizes that 

such plan availability is subject to state 

law and issuer choice in plan design as 

permitted under section 1303 of the 

ACA. Specifically, 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. Therefore, it is state law that 

dictates to what extent issuers may 

cover abortion services for which 

Federal funding is prohibited, the 

issuer’s option whether to offer such 

services pursuant to state law, and the 

enrollee’s option whether to enroll in 

such a plan. 

HHS therefore continues to believe 

that allowing an opt-out policy would 

conflict with the flexibility in issuer 

plan design expressly provided under 

section 1303. HHS also believes the optout non-enforcement policy conflicts 

with § 147.106(e)(1), which generally 

provides 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. Finally, 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.120 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. Section 1303 of 

the ACA requires certain billing, 

accounting, and notice requirements of 

issuers in the individual market to 

ensure that issuers that do offer abortion 

services for which Federal funding is 

prohibited do so in a manner that 

ensures separation of funds consistent 

with statute. HHS believes the 

permissible methods finalized at 

§ 156.280(e)(2)(ii) for issuer compliance 

with section 1303 of the ACA offer 

issuers several ways to comply with 

section 1303 of the ACA in a manner 

that works best for them and minimizes 

burden on consumers. 

Comment: Commenters supporting 

the proposal to repeal the separate 

billing regulation and codify the prior 

policy explained that the separate 

billing regulation would have imposed 

new overly burdensome costs on 

issuers, states, State Exchanges, and 

FFEs, which would have been passed on 

to consumers in the form of higher 

premiums. 

Supporting commenters stated that 

issuers subject to the separate billing 

requirements would have had to 

redesign their billing systems and 

imposed expensive IT changes on 

issuers and states, requiring creation of 

an operating billing system only for 

individual Exchanges and not for 

products sold in any other market. 

Commenters also agreed that the 

separate billing regulation would have 

required costly changes to other issuer 

operations such as invoice processing, 

collections, customer service support, 

and electronic data interchange (EDI) 

transactions with Exchanges. 

Commenters also agreed there would be 

added administrative costs of mailing 

separate bills in separate envelopes and 

collecting separate payments. 

Commenters also expressed concern 

that the highest costs from the separate 

billing regulation would have been 

concentrated in states that require 

abortion coverage. Some commenters 

noted that issuers have already incurred 

ongoing costs for printing and mailing, 

additional staffing, and reprograming 

billing systems and that the separate 

billing regulation already resulted in 

increased burden for issuers and 

consumers, widespread confusion by 

consumers and other stakeholders, and 

an increase in frustration and confusion 

around grace periods and terminations. 

Supporting commenters also stated 

that the separate billing regulation 

would have been so burdensome on 

issuers and consumers that it would 

have impeded access to abortion 

coverage, which is a common and safe 

medical intervention, and a legally and 

constitutionally protected form of 

medical care in the United States. These 

commenters noted that some issuers 

would find the separate billing 

regulation so burdensome that they 

would either leave the Exchange or drop 

coverage for abortion care entirely. 

These commenters asserted that 

coverage for abortion care often means 

the difference between getting the 

health care that a consumer needs and 

being denied that care, and that 

individuals denied abortions are more 

likely to experience eclampsia, other 

serious medical complications, and 

death, remain in relationships where 

interpersonal violence is present, and 

suffer anxiety after being denied an 

abortion. 

Commenters agreed that it would 

have had a disproportionate effect on 

consumer groups who already face 

barriers in navigating health insurance, 

particularly people of color, immigrants, 

individuals with LEP or low literacy 

and educational levels, and those living 

with visual disabilities and/or 

impairments. Commenters explained 

that restrictions to abortion coverage 

such as the separate billing regulation 

particularly harm BIPOC as well as 

LGBTQ+ individuals who 

disproportionately struggle with poverty 

and who are over-represented in the 

population of individuals receiving 

abortions. Commenters noted that 28 

percent of individuals who receive 

abortions are Black and 25 percent are 

Latinx, while they represent only 13 

percent and 18 percent of the U.S. 

population, respectively. These 

commenters also noted that the separate 

billing regulation would have exposed 

many of these individuals and families 

to untenable economic circumstances 

because, if issuers were to drop such 

abortion coverage, the costs would be 

transferred to consumers and such costs 

would likely disproportionately impact 

low-income women who already face 

barriers to accessing health care 

services. Commenters also asserted that 

termination of coverage due to 

confusion over payment of the second 


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121 86 FR 7009 (Jan. 25, 2021). 

bill would be especially problematic for 

consumers with critical medical needs 

such as cancer patients and survivors, as 

gaps in coverage may interrupt 

treatment schedules which could 

jeopardize outcomes in care. 

Commenters also noted that repealing 

the separate billing regulation and 

interpreting section 1303 of the ACA in 

the least burdensome manner is 

consistent with both the Department’s 

mission to ‘‘enhance the health and 

well-being of all Americans’’ and E.O. 

14009, which directed HHS to review 

all existing regulations to determine 

whether they are inconsistent with the 

Administration’s policy priority of 

‘‘eliminating unnecessary difficulties to 

obtaining health insurance.’’ 

Commenters also expressed support that 

the proposal is consistent with E.O. 

13985, which directed 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.’’ 121

Commenters objecting to repeal of the 

separate billing regulation and 

codification of the pre-2019 policy 

asserted that justifying repeal of the 

policy based partially on a reassessment 

of burden ignores the issuers, states, 

Exchanges, and consumers for which 

separate billing regulation had no 

impact. For example, such commenters 

explained that the separate billing 

regulation had no effect on issuers, 

states, Exchanges, and consumers in 

states that prohibit insurance coverage 

of abortion services for which Federal 

funding is prohibited or on issuers that 

do not include such coverage in their 

plans for other reasons. 

Objecting commenters broadly 

criticized HHS’s cost estimates for the 

burden associated with the separate 

billing regulation, arguing that HHS 

failed to consider important factors, 

explore sufficient data, and make 

necessary estimates. These commenters 

asserted that HHS based its cost 

estimates on the projections from the 

2019 Program Integrity Rule which 

commenters claim lack sufficient 

justification. For example, commenters 

asserted that HHS did not provide 

sufficient evidence that certain groups 

of people are more likely to be impacted 

by the separate billing regulation than 

others or that the burden will fall more 

heavily on marginalized communities. 

Such commenters added that, in any 

event, such arguments cannot justify 

violating the separate billing 

requirement that commenters argue is 

expressly required under section 1303. 

Commenters also argued that HHS has 

not shown how repeal of the separate 

billing regulation and codification of the 

prior policy will add a financial benefit 

for either consumers or issuers that 

outweighs the harm caused to consumer 

transparency, conscience protections, 

and statutory compliance with section 

1303. Such commenters asserted that 

the separate billing regulation would 

have rightly shifted the burden of 

complying with section 1303 away from 

individual consumers and onto issuers. 

Commenters also asserted that, without 

exploring further information, HHS 

cannot claim a full and complete 

savings of the estimated costs had the 

separate billing regulation been 

implemented. 

Objecting commenters also alleged 

that, regardless of the extent of burden 

associated with the separate billing 

regulations on issuers, states, 

Exchanges, and consumers, any such 

burden is not unreasonable, but rather is 

necessary to ensure compliance with 

section 1303. Commenters objecting to 

repeal of the separate billing regulation 

also posited that HHS provided 

insufficient evidence to support the 

assertion that marginalized 

communities would be 

disproportionality burdened by the 

separate billing regulation had it been 

implemented. 

Commenters also asserted that the 

cost estimates fail to address or take into 

account recent changes in the law made 

by the ARP. Commenters stated that 

millions of Americans are newly eligible 

for zero-dollar coverage under ARP but 

that, in states where all or most 

individual market plans cover abortion 

for which Federal funding is prohibited, 

consumers will not be able to purchase 

a zero-dollar premium plan because of 

section 1303’s funding restrictions. 

Commenters therefore argued that 

individuals in such situations are 

already paying, in effect, a ‘‘separate 

bill’’ for that coverage and would not 

face additional burdens established by 

the separate billing regulation. 

Commenters raising this objection asked 

HHS to explain how the Department 

will enforce section 1303’s funding 

restrictions for otherwise zero-premium 

Exchange plans and to provide a stateby-state analysis of the effects of the 

proposed rule. 

Response: HHS agrees with 

commenters that the burden on 

stakeholders and consumers to comply 

with the separate billing regulation 

would have been overly burdensome if 

the policy had ultimately been 

implemented. HHS also agrees that the 

increased burden associated with 

issuers complying with the separate 

billing regulation could have influenced 

whether a QHP issuer continues to offer 

coverage of abortion services for which 

Federal funding is prohibited in states 

that do not require it, an outcome which 

was also acknowledged in the 2019 

Program Integrity Rule. HHS also agrees 

with commenters that, had the separate 

billing regulation been implemented, 

consumer confusion over receiving a 

separate bill for a relatively small 

amount of premium could have caused 

inadvertent loss of coverage and would 

have imposed significant burden on 

states and issuers to implement the new 

billing framework. 

HHS generally disagrees with 

commenters contesting the estimated 

cost savings of repealing the separate 

billing regulation, particularly those 

claiming that the estimated cost savings 

are too high because they believe that 

the estimated burden in the 2019 

Program Integrity rule was inflated. 

Some commenters noted that issuers 

have already incurred ongoing costs for 

printing and mailing, additional 

staffing, and reprograming billing 

systems and that the separate billing 

regulation already resulted in increased 

burden for issuers and consumers, 

widespread confusion by consumers 

and other stakeholders, and an increase 

in frustration and confusion around 

grace periods and terminations. HHS 

acknowledges that some costs may have 

already been incurred by issuers and 

that the actual cost savings, especially 

for one-time IT related costs, may be 

lower than HHS estimates. 

Unfortunately, HHS does not have an 

estimate of costs already incurred by 

issuers and can only estimate savings 

going forward. HHS nonetheless 

continues to believe the timing of the 

courts’ actions likely dissuaded issuers 

from assuming further costly 

administrative and operational burdens 

required to build the separate billing 

policy into their billing and IT systems. 

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. Furthermore, HHS 

continues to believe that requiring 

separate billing is unnecessary and 

overly burdensome to achieve 

compliance with section 1303 of the 

ACA. Section 1303 does not specify a 

method for compliance with the 

separate payment requirement, and HHS 

believes the new issuer compliance 


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122 86 FR 35156. 

123See Rural Health, Centers for Disease Control 

and Prevention, available at https://www.cdc.gov/ 

chronicdisease/resources/publications/factsheets/ 

rural-health.htm; Accenture, The Hidden Cost of 

Healthcare System Complexity (2018), available at 

https://www.accenture.com/_acnmedia/pdf-104/ 

accenture-health-hidden-cost-of-healthcare-systemcomplexity.pdf; The Current State of Health Care for 

People with Disabilities, The National Council on 

Disability, available at https://www.ncd.gov/ 

publications/2009/Sept302009#Overview. See 

Victor G. Villagra et al., Health Insurance Literacy: 

Disparities by Race, Ethnicity, and Language 

Preference, American Journal of Managed Care 

(Mar. 2019), available at https://www.ajmc.com/ 

view/health-insurance-literacy-disparities-by-raceethnicity-and-language-preference. 

124See The Current State of Health Care for 

People with Disabilities, The National Council on 

Disability, available at https://www.ncd.gov/ 

publications/2009/Sept302009#Overview. 

125See Health Coverage by Race and Ethnicity, 

2010–2019, Kaiser Family Foundation, available at 

https://www.kff.org/racial-equity-and-health-policy/ 

issue-brief/health-coverage-by-race-and-ethnicity/. 

126See 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. 

options codified at § 156.280(e)(2)(ii) 

minimize stakeholder burden and 

protect against consumer confusion and 

potential loss of coverage. 

HHS acknowledges that consumers 

who live in states where premiums for 

Exchange coverage cannot be fully paid 

for with APTC, such as states that 

require coverage of abortion services for 

which Federal funding is prohibited, 

will not have access to a silver plan 

with a zero-dollar premium, as further 

explained in the preamble to 

§ 155.420(d)(16) of the proposed rule.122

However, HHS also notes that 

individual market QHP issuers covering 

abortion services for which Federal 

funds are prohibited offering coverage to 

consumers who qualify for zero-dollar 

premium plans are still required to 

comply with section 1303 of the ACA 

and all applicable requirements codified 

at § 156.280. HHS also notes that the 

ARP was enacted in 2021 and, therefore, 

the consumer cost and burden estimates 

in each respective rule regarding the 

separate billing regulation were based 

on the estimated number of all 

consumers enrolled in QHPs offering 

coverage for abortion and are reflective 

of the anticipated burden at that time. 

HHS similarly disagrees with 

commenters questioning the validity of 

the cost estimates and cost-benefit 

analysis for repealing the separate 

billing regulation and codifying the 

prior acceptable methods for 

compliance with section 1303. In 

response to comments that objected to 

the omission of issuers that do not cover 

abortion services for which Federal 

funding is prohibited and states that ban 

such coverage, HHS notes that such an 

omission is appropriate as such issuers 

and states would not be impacted by the 

requirements or the high costs and 

burden from the separate billing 

regulation. The 2019 Program Integrity 

Rule included a detailed account of the 

anticipated financial and operational 

burdens from the separate billing 

regulation, estimates which were based 

upon plan and premium data, actuarial 

estimates, public comments from issuers 

and states directly regulated by the 

separate billing policy, and consumer 

enrollment figures. Those burdens are 

discussed in further detail in sections 

III., ‘‘Collection of Information 

Requirements,’’ and IV., ‘‘Regulatory 

Impact Analysis,’’ of that rule and 

explain from where such estimates are 

derived. Those burdens included onetime 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. 

HHS also acknowledged that the 

separate billing regulation would 

impose burdens 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. HHS 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. 

HHS 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. 

As stated in the proposed rule, HHS 

has since reassessed these burdens and 

agree with commenters that the 

consumer confusion and new logistical 

obstacles from the separate billing 

regulation would disproportionately 

burden communities that already face 

barriers to accessing care, such as 

individuals with 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. The 

impact of these barriers to access for the 

aforementioned segments of consumers 

are routinely borne out in multiple 

studies and supported by readily 

available data and evidence.123 For 

example, the National Council on 

Disability concludes that, ‘‘[p]eople 

with disabilities experience more 

problems accessing health care than 

other groups, and these difficulties 

increase for those with the most 

significant disabilities and who are in 

the poorest health.’’ 124 Existing 

inequalities in access to health care 

resulting from those barriers would be 

exacerbated by the addition of further 

and unnecessary requirements that 

result in consumers receiving a second 

separate bill for a relatively miniscule 

amount with an arbitrary requirement to 

pay both bills in separate transactions. 

As many commenters noted, 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.125

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.126

Transferring these costs to enrollees 

could disproportionately impact lowincome women for whom these out-ofpocket costs could represent a 

significant financial burden. In addition, 


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127See Disparities, Healthy People 2020, available 

at https://www.healthypeople.gov/2020/about/ 

foundation-health-measures/Disparities. 

128U.S. Government Accountability Office, 

‘‘Health Insurance Exchanges: Coverage of 

Nonexcepted Abortion Services by Qualified Health 

Plans,’’ (Sept. 15, 2014), available at http://

www.gao.gov/products/GAO-14-742R. 

129Letter from Chris Smith, Member of Congress, 

to Alex Azar, Secretary, U.S. Department of Health 

and Human Services (Aug. 6, 2018), available at 

https://chrissmith.house.gov/uploadedfiles/2018- 

08-06_-_smith_letter_on_section_1303_-_abortion_

funding_transparency.pdf. 

130Planned Parenthood of Maryland, Inc. v. Azar, 

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

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

473 F. Supp. 3d 992 (N.D. Cal. July 20, 2020); 

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

Wash. 2020). 

low-income women may already face 

barriers to accessing quality health care 

due to their socioeconomic status, 

gender, sexual orientation, nationality, 

or race.127 HHS believes proposing 

repeal of the separate billing regulation 

would remove these burdensome 

requirements and obstacles, promoting 

health equity. 

Comment: Commenters supporting 

the proposal to repeal the separate 

billing regulation and codify the prior 

policy from the 2016 Payment Notice 

expressed support for reverting to an 

interpretation of section 1303 that is 

consistent with Congressional intent. 

Such commenters emphasized that, 

although Congress decided to treat 

abortion differently when passing 

section 1303, it did so specifically to 

ensure that private insurance plans 

could continue to decide whether or not 

to cover abortion in a state that did not 

ban such coverage. These commenters 

also noted that during the ACA debates 

and negotiations, Congress rejected 

amendments aimed at more stringent 

restrictions or prohibitions of abortion 

coverage. Commenters also supported 

repeal of the separate billing regulation, 

noting it would have interfered with 

flexibility provided to states under 

section 1303 of the ACA by interfering 

with states’ requirements to offer or 

allow abortion coverage in their plans, 

which section 1303 expressly permits. 

Commenters also noted that section 

1303(b)(2)(E)(i) of the ACA designates 

state insurance commissioners as the 

entities responsible for monitoring, 

overseeing, and enforcing the provisions 

in section 1303 related to the 

segregation of funds for QHPs that cover 

abortion services for which Federal 

funding is prohibited. 

Commenters supporting repeal of the 

separate billing regulation agreed that 

section 1303 does not expressly require 

a specific method for collecting the 

separate payment for abortion services 

for which Federal funding is prohibited. 

Commenters also highlighted that 

section 1303(b)(3)(B) of the ACA 

specifies that issuer notifications shall 

provide information only with respect 

to the total amount of the combined 

payments for abortion services for 

which Federal funding is prohibited and 

other services covered by the plan. 

Commenters therefore stated that 

requiring separate billing for these 

services directly contradicts section 

1303(b)(3)(B) as it would have required 

issuers to separately notify the 

consumer on a monthly basis of the 

portion of their premium attributable to 

coverage of abortion services for which 

Federal funds are prohibited. 

Commenters also stated that codifying 

the pre-2019 options for compliance 

with the separate payment requirement 

comply with the section 1303(b)(2)(E) of 

the ACA, which states that health plans 

shall ‘‘comply with the segregation 

requirements in this subsection through 

the segregation of plan funds in 

accordance with applicable provisions 

of generally accepted accounting 

requirements, circulars on funds 

management of the Office of 

Management and Budget, and guidance 

on accounting of the Government 

Accountability Office.’’ Specifically, 

commenters noted that generally 

accepted accounting requirements 

would permit one single bill outlining 

the separate charges for any covered 

abortion services for which Federal 

funding is prohibited. Commenters 

noted that requiring separate bills for 

each charge, as established in the 2019 

Program Integrity Rule, goes too far, is 

against industry practice, and is not 

what section 1303 requires. 

Commenters objecting to the proposal 

to repeal the separate billing regulation 

asserted that section 1303 is 

unambiguous in requiring a separate bill 

for coverage of abortion for which 

Federal funding is prohibited, and that 

any ambiguity is clarified by the 

legislative history of section 1303 of the 

ACA. Objecting commenters also stated 

that, prior to the separate billing 

regulation, HHS failed to enforce section 

1303’s separate payment requirements 

sufficiently, citing a 2014 Government 

Accountability Office (GAO) report that 

found issuer inconsistencies in 

compliance with section 1303 

requirements 128 and a 2018 letter from 

Congress which cited the same GAO 

report.129 Such commenters objected to 

repeal of the separate billing regulation, 

stating that requiring two separate bills 

would have addressed what 

commenters believed was insufficient 

enforcement of section 1303. 

Commenters argued that money that 

originates as a single payment and is 

later separated into separate allocation 

accounts is not separate within the 

meaning of section 1303 and that only 

with separation from intake to 

expenditure can health care providers 

meaningfully ensure that abortion 

services are not being funded from the 

same pool of resources as other health 

care services. These commenters 

asserted that the separate billing 

regulations align best with the text of 

the ACA and the intent of Congress in 

including section 1303 by providing the 

most common-sense route to encourage 

consumers to make separate payments 

as required by statute and to maintain 

the segregation of funds from intake to 

expenditure. Commenters also stated 

that, according to Merriam-Webster 

Dictionary, the word ‘‘separate’’ means 

‘‘to set or keep apart’’ and that this 

warrants an interpretation of section 

1303 as requiring only separate bills. 

Objecting commenters also argued that 

section 1303(b)(2)(B)(i) of the ACA 

demonstrates that section 1303 requires 

separate billing by elaborating that in 

the case of a payroll deposit, a separate 

deposit is required. Commenters 

therefore assert that the fact that section 

1303 expressly requires separate 

deposits for certain abortion coverage in 

the case of premiums paid through 

employee payroll deposits further 

supports the interpretation that issuers 

must collect all separate payments from 

individuals through separate 

transactions. 

Response: HHS again emphasizes that 

multiple Federal district courts have 

already invalidated the separate billing 

regulation, preventing HHS from 

requiring its implementation.130 HHS 

also continues to believe the changes to 

§ 156.280(e)(2)(ii) offer issuers options 

for meaningful compliance with section 

1303 and ensure appropriate segregation 

of funds required by statute, without 

imposing the operational and 

administrative burdens of the separate 

billing regulation and without causing 

additional consumer confusion and 

unintended losses of coverage, a 

position that is supported by the Federal 

district courts invalidating the separate 

billing regulation. HHS therefore 

disagrees with commenters’ assertions 

that the other methods for complying 

with the separate payment requirement 

HHS is finalizing at § 156.280(e)(2)(ii) 

are in conflict with the requirements in 

section 1303. 

Indeed, 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 


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131Section 1303(b)(2) and (b)(2)(B) of the ACA. 132 84 FR 71674, 71683. 

133See section 1332(a)(4)(B)(v) of the ACA. 

134See section 1332(a)(4)(B)(iv) of the ACA. 

135 83 FR 53575 (Oct. 24, 2018). 

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 

regulation is therefore ultimately 

nonessential to QHP issuer compliance 

with the separate payment requirement 

in section 1303 of the ACA, which does 

not expressly require that a separate bill 

be sent for coverage of abortions for 

which Federal funding is prohibited. 

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). HHS believes 

this provides the requisite segregation of 

funds required by statute. HHS therefore 

believes that 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. 

Although sending a separate bill to 

enrollees for these services is one way 

in which an issuer may satisfy the 

separate payment requirement as 

finalized at § 156.280(e)(2)(ii), it is not 

the only method contemplated by the 

plain reading of section 1303. HHS 

therefore agrees with commenters that it 

is unnecessary to restrict the acceptable 

methods for collecting these payments, 

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. 

The section 1303 provision that is 

colloquially referred to as the separate 

payment requirement is titled 

‘‘Establishment of allocation accounts,’’ 

and is a subsection of a section titled 

‘‘Prohibition on the use of Federal 

funds.’’ 131 These sections detail issuer 

requirements for calculating the AV for 

the portion of the premium attributable 

to coverage of abortion services for 

which Federal funds are prohibited, and 

require issuers to collect separate 

payments for this portion of the 

premium, segregate the funds, and 

deposit such funds into separate 

allocation accounts. Notably, these 

sections do not require that issuers 

satisfy these requirements by separately 

billing policy holders or instructing 

them to pay in separate transactions. 

Lastly, HHS notes that not only is the 

2014 U.S. GAO report that objecting 

commenters state is evidence of HHS 

non-enforcement of section 1303 of the 

ACA outdated, but also there is no 

evidence of ongoing issuer compliance 

issues with section 1303 of the ACA. In 

fact, the 2014 U.S. GAO report predates 

the 2016 Payment Notice, which is 

where HHS first clarified for issuers the 

acceptable methods for complying with 

the separate payment requirement 

which HHS is reinstating and codifying 

today. Further, the research to inform 

that report was conducted between 

February 2014 and September 2014, 

prior to the 2016 Payment Notice and 

during the first full year that the 

Exchanges began operating. As such, 

issuers were less likely to have fully 

implemented the compliance standards 

required under the ACA and were not 

yet aware of how HHS would further 

clarify and implement the separate 

payment requirement in the 2016 

Payment Notice. 

Section 1303 does not specify the 

method a QHP issuer must use to collect 

the separate payment.132 Consistent 

with the Federal district court decisions 

invalidating the separate billing 

regulation, HHS is therefore finalizing a 

revised policy at § 156.280(e)(2)(ii) that 

repeals the separate billing regulation 

and instead allows issuers to satisfy the 

separate payment requirement through 

methods consistent with section 1303 of 

the ACA. As finalized, § 156.280(e)(2)(ii) 

imposes no more burden on issuers, 

states, Exchanges, and consumers than 

is necessary, and removes unreasonable 

barriers to obtaining appropriate 

medical care. 

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 of the ACA, 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 

of the ACA requires that the Secretaries 

provide for and conduct periodic 

evaluations of approved section 1332 

waivers.133 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.134

In October 2018, the Departments 

issued the 2018 Guidance,135 which 

provided additional guidance for states 

wishing to submit section 1332 waiver 

proposals regarding the Secretaries’ 

application review procedures, passthrough funding determinations, certain 

analytical requirements, and operational 


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136The 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. 

137See 86 FR 6138. 

138 86 FR 7793 (Feb. 2, 2021). 

139 86 FR 7009 (Jan. 25, 2021). 

considerations.136 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,137

the Departments codified 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. 14009,138 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. 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 reviewed the 2012 Final 

Rule, the 2015 Guidance, 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 E.O. 13985,139

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 also reviewed the 2012 

Final Rule, the 2015 Guidance, 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 

determined that the 2012 Final Rule was 

generally consistent with the policy 

intentions of E.O. 14009 and E.O. 13985. 

However, the Departments determined 

that the 2018 Guidance and the policies 

implemented in part 1 of the 2022 

Payment Notice final rule on section 

1332 waivers were 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 the 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 proposed 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 from 

the text of the section 1332 regulations, 

including those that were finalized in 

part 1 of the 2022 Payment Notice final 

rule. In addition, the Departments 

proposed 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. 

The Departments discussed that the new 

proposed policies and interpretations, if 

adopted, would supersede those 

outlined in the 2018 Guidance and, 

where applicable, the preamble to part 

1 of the 2022 Payment Notice final rule. 

The Departments also proposed 

amendments to the regulations that 

align with the revised interpretations of 

the guardrails. 

In this final rule, the Departments are 

finalizing policies, interpretations, and 

regulatory amendments to provide 

clarity to states regarding the 

requirements and expectations of the 

section 1332 waiver program for the 

approval, as well as for ongoing 

oversight, of approved waivers. The 

Departments received 262 comments on 

the section 1332 waiver proposals from 

a mix of stakeholders, including general 

advocacy organizations, disease 

advocacy organizations, states, issuers, 

providers, individuals, and other 

entities. The overwhelming majority of 

stakeholders supported the section 1332 

waiver proposals and encouraged the 

Departments to finalize the policies as 

proposed. The Departments are 

generally finalizing the policies, 

interpretations, and regulatory 

amendments as proposed in order to 

encourage states to develop innovative 

waivers. Specifically, the Departments 

are finalizing modifications to 31 CFR 

33.109(f)(3)(iv)(A)–(C) and 45 CFR 

155.1308(f)(3)(iv)(A)–(C) to codify in 

regulation the manner in which the 

Departments will apply the 

comprehensiveness, affordability, and 

coverage guardrails. Relatedly, the 

Departments are adopting the proposed 

policy clarifications relating to the 

deficit neutrality guardrail. In addition, 

the Departments are adopting policy 

clarifications as outlined in the 

preamble to the proposed rule relating 

to coordinated waivers, application 

timing, requirements for the actuarial 

and economic analyses, implementation 

timeline and operational concerns, and 

public input on waiver proposals. The 

Departments are also finalizing 

modifications to 31 CFR 33.118, 31 CFR 

33.120, 45 CFR 155.1318, and 45 CFR 

155.1320 to extend flexibilities in the 

public notice requirements and postaward public participation requirements 

for waivers under section 1332 beyond 

the COVID–19 PHE to allow similar 

flexibilities in the event of future 

emergent situations. The Departments 

also are finalizing the modifications to 

31 CFR 33.120(a)(1) and (2) and 45 CFR 

155.1320(a)(1) and (2) relating to waiver 

monitoring and compliance, to remove 

the reference, as codified under part 1 

of the 2022 Payment Notice final rule, 

to interpretive guidance published by 

the Departments. Similarly, the 

Departments are finalizing the 

modifications to 31 CFR 33.128(a) and 

45 CFR 155.1328(a) relating to periodic 

evaluation requirements, to remove the 

reference, as codified under part 1 of the 

2022 Payment Notice final rule, to 

interpretive guidance published by the 

Departments. This rule also finalizes 

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 


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140https://www.whitehouse.gov/briefing-room/ 

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

141Section 1115 Waiver Demonstrations have 

similar authority. 

142See 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. 

143See 31 CFR 33.120(a)(1) and 45 CFR 

155.1320(a)(1). 

144 Ibid. 

145See 77 FR 11700. 

1332 waivers. Through this rule, the 

Departments also finalize the addition 

of new regulation text at 31 CFR 33.130 

and 45 CFR 155.1330 governing waiver 

amendment requests for approved 

section 1332 waivers and at 31 CFR 

33.132 and 45 CFR 155.1332 governing 

waiver extension requests for approved 

section 1332 waivers. 

As discussed in the proposed 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 

finalizing new policies and 

interpretations will align with the 

Administration’s goals to strengthen the 

ACA and increase enrollment in 

comprehensive, affordable health 

coverage among the remaining 

underinsured and uninsured. These 

policies will further advance this 

Administration’s goal of increasing 

access to coverage by empowering states 

to develop innovative health coverage 

options for their residents through 

section 1332 waivers that best fit the 

states’ individual needs. The policies 

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. 

The Departments noted that all of the 

policies were 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, the policies will further 

support the Administration’s efforts to 

build on the ACA by meeting the health 

care needs created by the COVID–19 

PHE, reducing individuals’ health care 

costs, and making our health care 

system less complex to navigate. The 

Departments noted that, through section 

1332 waivers, they aim to assist states 

with developing health insurance 

markets that expand coverage, lower 

costs, and make high-quality health care 

accessible for every American.140 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 propose waiver 

programs that increase plan options for 

comprehensive coverage, reduce 

premiums, improve affordability, and 

address social determinants of health. 

As under similar waiver 

authorities,141 the Departments note that 

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, the 

section 1332 guardrails,142 or applicable 

laws and regulations, unless specifically 

waived.143 In addition, states with 

approved waivers must come into 

compliance with any changes in Federal 

law, regulation, or policy affecting 

section 1332 waivers, unless the 

provision being changed is expressly 

waived.144

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,145 the 

procedures for demonstrations under 

section 1115 of the Act (section 1115 

demonstrations), 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 did not propose any 

regulatory changes to 31 CFR 33.102 

and 45 CFR 155.1302, but reiterated in 

the proposed rule the policy relating to 

the coordinated waiver process so states 

understand the process for submission 

and review of a coordinated waiver. As 

explained in the preamble to the 

proposed rule, the Departments are of 

the view that the policies outlined, 

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, the Departments will 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 will not 

consider the potential impact of state 

legislation to expand Medicaid that is 

not yet enacted. The Departments also 

will not consider the impact of changes 

contingent on other Federal 

determinations, including approval of 

Federal waivers (such as waivers under 

section 1115 or titles XVIII, XIX, or XXI 

of the Act) pursuant to statutory 

provisions other than section 1332 of 

the ACA. Therefore, as proposed, the 

Departments will not take into account 

proposed changes to Medicaid or CHIP 

state plans, waivers, or demonstration 

projects 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 will not be factored into 

the assessment of whether a proposed 

section 1332 waiver meets the deficit 

neutrality requirement. The 

Departments’ determination also will 


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not take into account any proposed 

changes to the Medicaid or CHIP state 

plan that are subject to Federal 

approval. 

As proposed, the Departments will 

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 Medicaid and CHIP 

policies constant. For example, if a state 

section 1332 waiver would result in 

more or less Medicaid spending, this 

impact will be considered in the 

Departments’ assessment of the section 

1332 waiver for the deficit neutrality 

guardrail. 

Nothing in the proposed rule 

proposed to alter a state’s authority to 

make changes to its Medicaid and CHIP 

policies consistent with applicable law. 

In addition, the proposed rule did not 

propose to alter the Secretary of HHS’s 

authority or CMS’s 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. 

The following is a summary of the 

comments received and the 

Departments’ responses related to the 

coordinated waiver process (31 CFR 

33.102 and 45 CFR 155.1302). 

Comment: The Departments received 

a few comments on coordinated waivers 

expressing general support of the policy 

clarifications regarding coordinated 

waivers. Some of the commenters also 

encouraged the Departments to consider 

additional flexibilities to further support 

coordinated waivers and reduce the 

burden on states. Commenters 

recommended allowing states to 

coordinate section 1115 demonstration 

projects and section 1332 waivers so 

that deficit neutrality is considered in 

light of both programs to result in 

greater savings. Commenters also 

recommended that the Departments 

provide additional flexibility to states to 

demonstrate overall savings across both 

programs and for consumers/enrollees. 

The commenters contended that the 

proposal would otherwise have a 

negative impact on any new state-led 

innovation efforts through the section 

1332 waiver process. Furthermore, 

another commenter encouraged the 

Departments to explore options for 

combined section 1115 demonstrations/ 

1332 waivers to address affordability 

concerns for states, and to coordinate 

between Medicaid and Exchange 

programs to avoid gaps in coverage and 

ensure a seamless enrollment process. 

Response: The Departments 

appreciate the comments and welcome 

the opportunity to work with states 

interested in pursuing coordinated 

waivers. States with specific proposals 

for coordinated waivers are encouraged 

to discuss proposals with the 

Departments early in the coordinated 

waiver development process. In regard 

to the commenter’s suggestion that the 

Departments consider additional 

flexibilities concerning deficit neutrality 

(for the purposes of section 1332 

waivers) and budget neutrality (for the 

purposes of section 1115 

demonstrations) to further support 

coordinated waivers, the Departments 

note that there are differences between 

the section 1115 demonstration budget 

neutrality requirement and the section 

1332 waiver deficit neutrality 

requirement. Section 1115 

demonstrations are required to be 

budget neutral, meaning that Federal 

spending under the section 1115 

demonstration cannot exceed the 

aggregate budget neutrality limit of what 

Federal spending would have been in 

absence of the section 1115 

demonstration, and states are liable for 

additional demonstration spending over 

the budget neutrality limit. Section 1332 

waivers are required by statute to not 

increase the Federal deficit. With regard 

to commenters’ concerns that state 

innovation would be hindered without 

flexibility for states to demonstrate 

overall savings across Medicaid and 

Exchange programs, the Departments 

remind states that the Departments are 

committed to providing technical 

assistance to states and encourage 

innovative waiver proposals. Proposals 

may range from addressing affordability 

concerns, to closing gaps in coverage 

and ensuring a seamless enrollment 

process, and the particular approach 

taken will depend on each state’s 

unique needs and circumstances. 

As previously noted, the Departments 

did not propose any regulatory changes 

to 31 CFR 33.102 and 45 CFR 155.1302 

in the proposed rule. After 

consideration of the comments received, 

the Departments are adopting the 

proposed policies and interpretations 

related to the coordinated waiver 

process. 

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. As explained 

in the proposed rule, the Departments 

did not propose any regulatory changes 

to 31 CFR 33.108(b) and 45 CFR 

155.1308(b), but did propose through 

preamble policies related to the timing 

of initial section 1332 waiver 

application submissions that are 

consistent with policies outlined in the 

2018 Guidance. As the Departments 

noted in the proposed rule, the 

proposed policies were 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, the proposed policies were 

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 in the proposed 

rule, some section 1332 waiver plans 

may require operational changes or 

accommodations to the Federal 

information technology platform or its 

operations, and the proposed policies 

would help ensure the state and the 

Departments are able to sufficiently plan 

in advance of the effective waiver date. 

The Departments proposed the 

following policies: 

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, the 

Departments advise that states should 

plan to submit their initial section 1332 

waiver applications with enough time to 


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146 31 CFR 33.108 and 45 CFR 155.1308; Section 

1332(d)(1) of the ACA. 

147 83 FR at 53577. 

148The Departments note that 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 advanced specific 

principles and noted that the Secretaries aimed to 

provide states maximum flexibility. See 83 FR at 

53576. 

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. The Departments note that 

they 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.146 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, the 

Departments note that additional time 

for review and implementation of the 

waiver application may be needed. The 

Departments also encourage states to 

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 following is a summary of the 

comments received regarding the 

Departments’ proposed policies and the 

Departments’ responses. 

Comment: The Departments received 

one comment, which was in support of 

the proposal. The commenter applauded 

the Departments for encouraging states 

to engage with the Departments early in 

the waiver process and consider the 

implementation timeline as part of the 

waiver development and application 

process. 

Response: The Departments 

appreciate the commenter’s support. 

After consideration of the comments 

received, the Departments are adopting 

the proposed policies relating to section 

1332 application procedures and timing. 

3. Section 1332 Application 

Procedures—Statutory Guardrails (31 

CFR 33.108(f)(3)(iv) and 45 CFR 

155.1308(f)(3)(iv)) 

The Departments proposed to modify 

31 CFR 33.108(f)(3)(iv)(A)–(C) and 45 

CFR 155.1308(f)(3)(iv)(A)–(C) to set 

forth revised interpretations of the 

comprehensiveness, affordability, and 

coverage guardrails. In addition, the 

Departments proposed to adopt new 

policies and interpretations with regard 

to the statutory guardrails that, if 

finalized, would supersede and rescind 

those outlined in the 2018 Guidance. 

The proposed guardrail interpretations 

were largely in line with those in the 

2015 Guidance. The Departments also 

proposed 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. 

As discussed in the proposed rule, 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 together. 

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, 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.147 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, 

in the 2018 Guidance, the Departments 

explained they 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 to promote 

choice. 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.148

In part 1 of the 2022 Payment Notice 

final rule, the Departments codified the 

2018 Guidance interpretation of the 

guardrails into the text of the section 

1332 implementing regulations. 

Specifically, the Departments added 

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 


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53462 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

149Health insurance issuers 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 insurance issuers must 

permit any individual to enroll regardless of health 

status, age, gender, or other factors that might 

predict the use of health services, subject to certain 

specified exceptions. 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 

insurance issuers from varying premiums within a 

geographic area based on gender, health status or 

other factors not specified in the statute with 

respect to non-grandfathered individual and small 

group plans. https://www.healthcare.gov/glossary/ 

community-rating/. 

150https://www.cms.gov/CCIIO/Programs-andInitiatives/State-Innovation-Waivers/Downloads/ 

Waiver-Concepts-Guidance.PDF. 

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. 

As noted in the proposed rule, 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 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 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 the proposed rule, the Departments 

proposed changes to 31 CFR 33.108 and 

45 CFR 155.1308 to incorporate revised 

interpretations of the statutory 

guardrails. The decision to rescind those 

interpretations was based on further 

consideration of commenters’ concerns 

that the proposals 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 access 

to high-quality health care, and E.O. 

13985, which was intended to pursue a 

comprehensive approach to advancing 

equity for all. The Departments 

concluded that the interpretations of 

section 1332’s comprehensiveness, 

affordability, and coverage guardrails 

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 

preamble, the Departments’ 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. 

The Departments determined that the 

guardrail interpretations codified in part 

1 of the 2022 Payment Notice final rule 

were inconsistent with the Departments’ 

goal of ensuring that the guardrails 

should be focused on the types of 

coverage residents actually purchase 

such that individuals are enrolled in 

affordable, comprehensive coverage and 

not just that there is generalized access 

to such coverage. The Departments note 

that 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 149 that offer only 

limited benefits, charge higher out-ofpocket 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 preexisting 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 

conflict with E.O. 14009. For example, 

the Section 1332 State Relief and 

Empowerment Waiver Concepts 

Discussion Paper (November 2018 

Discussion Paper) 150 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 also 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. 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53463 

151 2021 Marketplace Special Enrollment Period 

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

newsroom/fact-sheets/2021-marketplace-specialenrollment-period-report-2. 152See https://www.cms.gov/newsroom/factsheets/2021-marketplace-special-enrollmentperiod-report-3 and https://www.cms.gov/ 

newsroom/fact-sheets/2021-marketplace-specialenrollment-period-report-4. 

153On January 28, 2021, CMS announced $50 

million for outreach and marketing for the COVID– 

19 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–19 special enrollment 

period campaign and promote the lower premiums 

under the ARP: https://www.cms.gov/newsroom/ 

press-releases/hhs-secretary-becerra-announcesreduced-costs-and-expanded-access-availablemarketplace-health. 

154https://www.cms.gov/newsroom/pressreleases/cms-announces-additional-navigatorfunding-support-marketplace-special-enrollmentperiod. 

155https://www.cms.gov/newsroom/pressreleases/cms-announces-80-million-fundingopportunity-available-navigators-states-federallyfacilitated-0. 

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

biden-harris-administration-quadruples-numberhealth-care-navigators-ahead-healthcaregov-open. 

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. This waiver concept 

is inconsistent with 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 to the 2018 

Guidance 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 E.O.s 

13985 and 14009 and concerns raised by 

commenters, the Departments proposed 

new policies that would allow states 

flexibility to develop waiver plans to 

meet their needs and expand coverage, 

lower costs, and increase access to highquality health care with comprehensive 

benefits. 

Given current policy goals, as well as 

the Departments’ further consideration 

of comments received on the 2022 

Payment Notice, the Departments 

proposed to revise 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 proposed 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) of the ACA for consistency. Thus, 

the Departments proposed in 31 CFR 

33.108(f)(3)(iv)(A) through (C) and 45 

CFR 155.1308(f)(3)(iv)(A) through (C) 

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 comprehensive 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 Exchange 

coverage and increasing assistance to 

eligible individuals already enrolled in 

Exchange plans. As discussed in the 

proposed rule, these changes have 

already increased enrollment through 

the Exchanges,151 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 was open from February 

15, 2021 through August 15, 2021, for 

Exchanges using the HealthCare.gov 

platform (COVID–19 special enrollment 

period). Over 1.5 million Americans had 

already signed up for coverage on 

HealthCare.gov during the COVID–19 

special enrollment period at the time of 

the proposed rule and that number has 

increased to 2.5 million.152 To promote 

the special enrollment period, CMS 

spent 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–19 

special enrollment period.153 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–19 

special enrollment period.154

Additionally, on August 27, 2021, CMS 

awarded $80 million in grant funding to 

60 Navigator grantees in 30 states with 

an FFE for the 2022 plan year.155 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–19 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. 

As noted in the proposed 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 restoring 

prior 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 also noted that they are 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 also proposed 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 Departments noted 

that they are of the view that the 

proposal aligns with the Departments’ 

efforts to provide supplementary 

information about the requirements that 

must be met for the approval of a 


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53464 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

156Center of the American Experiment comment 

letter on proposed rule. 

section 1332 waiver and the Secretaries’ 

application review procedures. Because 

the Departments are of the view that the 

2018 Guidance and its incorporation 

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 proposed to 

remove references to the 2018 Guidance. 

As proposed, 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 sought comment on 

the proposals. The Departments also 

solicited 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. 

This rule does not 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. As such, the Departments are 

of the view that both states with 

approved section 1332 waivers and 

states that are considering section 1332 

waivers would continue to comply with 

the requirements noted earlier without 

creating any additional costs or burdens 

that have not already been accounted for 

in prior impact estimates of benefits and 

costs. 

The following is a summary of the 

general comments received and the 

Departments’ responses related to the 

section 1332 application procedures— 

statutory guardrails (31 CFR 

33.108(f)(3)(iv) and 45 CFR 

155.1308(f)(3)(iv)). 

Comment: The overwhelming 

majority of commenters were supportive 

of the proposed changes to the policies 

and interpretations related to the 

statutory guardrails. Commenters 

encouraged the Departments to finalize 

the statutory guardrail proposals in 

order to establish strong protections for 

consumers so that states are not able to 

use section 1332 waivers to take away 

coverage or force people into high-cost 

health plans. Furthermore, commenters 

supported the policies and 

interpretations relating to the 

Departments’ commitment to ensuring 

that waivers must not adversely affect 

vulnerable and underserved 

populations. A few commenters noted 

that the change in policies and 

interpretations would not affect 

approved waivers and supported the 

Departments finalizing the statutory 

guardrail policies and interpretations as 

proposed. 

Response: The Departments 

appreciate commenters’ support and 

agree that it is important to adopt 

policies that strengthen the ACA and 

increase enrollment in comprehensive, 

affordable health coverage. After 

consideration of the comments received, 

the Departments are finalizing as 

proposed regulation text at 31 CFR 

33.108(f)(3)(iv)(A)–(C) and 45 CFR 

155.1308(f)(3)(iv)(A)–(C), as well as 

adopting the new underlying statutory 

guardrail policies and interpretations 

described in this preamble. 

Comment: A few commenters were 

concerned that the proposed changes to 

the policies and interpretations related 

to the statutory guardrails would be 

overly restrictive. These commenters 

were concerned that these proposed 

changes would limit state innovation 

and would be too restrictive for states to 

meet. Instead, these commenters 

expressed support for the 2018 

Guidance guardrail interpretations, in 

particular the access standard. One 

commenter recommended that the 2018 

Guidance guardrail interpretation for 

the access standard be expanded to the 

coverage guardrail as well. 

Some of these commenters also took 

the position that the proposed changes 

to the policies and interpretations 

related to the statutory guardrails would 

undermine Congress’ intent to give 

states a meaningful level of flexibility to 

develop and implement new health 

programs. They contended that the 

proposals only allow a waiver from the 

requirements of the ACA if the waiver 

meets the requirements of the ACA, 

thereby significantly diminishing state 

flexibility. Additionally, one commenter 

expressed concern that, by limiting 

consumer choice, the proposal would 

have a detrimental impact on vulnerable 

populations and ‘‘ignores how waiver 

flexibility may allow states to better 

tailor plans for people with greater 

health needs.’’ 156

Response: The Departments 

appreciate these comments, but disagree 

that the proposed guardrail policies and 

interpretations are overly restrictive and 

will limit state flexibility to provide 

access to comprehensive, affordable 

coverage. These policies and 

interpretations only limit states’ 

flexibility to adopt section 1332 waiver 

plans that promote coverage that is not 

comprehensive (such as medically 

underwritten plans) at the expense of 

comprehensive coverage options. The 

Departments are of the view that the 

policies and interpretations finalized in 

this rule will allow states to develop 

proposals to promote comprehensive 

affordable coverage and restrict waiver 

proposals that would result in 

enrollment in less comprehensive 

coverage that may leave consumers 

exposed to high out-of-pocket costs. The 

Departments are committed to working 

with states to develop innovative waiver 

plans to address health care needs in a 

particular state. As discussed in the 

preambles to the proposed rule and this 

final rule, 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 decision to 

rescind these interpretations is based on 

the Departments’ goal to ensure 

enrollment in comprehensive coverage 

and further consideration of previous 

comments and whether the replacement 

proposals are a better interpretation of 

section 1332(b)(1)(A)–(C), as well as the 

Departments’ reviews under E.O. 14009, 

which is intended to strengthen the 

ACA and expand high-quality health 

care, and E.O. 13985, which is intended 

to pursue a comprehensive approach to 

advancing equity for all. The 

Departments’ proposed statutory 

guardrail policies and interpretations, 

which are being finalized as proposed, 

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 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53465 

157 In the 2019 Payment Notice, HHS provided 

states with substantially more options in the 

selection of an 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 in the 

EHB-benchmark plan 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. 

158These 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. https:// 

www.whitehouse.gov/briefing-room/presidentialactions/2021/01/20/executive-order-advancingracial-equity-and-support-for-underservedcommunities-through-the-Federal-government/. 

accessible and affordable for every 

American. Therefore, as explained in 

the preambles to the proposed rule and 

this final rule, 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 to which residents have 

access. 

The Departments are also of the view 

that the policies and interpretations 

adopted in this preamble do not limit 

consumer choice and instead further the 

goal of ensuring individuals are enrolled 

in affordable, comprehensive coverage 

and not just that there is generalized 

access to such coverage. As discussed in 

the preambles to the proposed rule and 

this final rule, the plans that could be 

offered to individuals under section 

1332 waivers when 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 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 

enroll 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. Further, waivers that result 

in more individuals enrolling in 

medically underwritten plans could also 

be detrimental to those who have 

chronic conditions or greater health 

needs. The policies and interpretations 

adopted in this preamble and 

regulations finalized in this rule will 

help decrease barriers for expanding 

comprehensive affordable coverage and 

potentially increase access to and 

enrollment in high-quality health care 

with comprehensive benefits. However, 

at the same time, the Departments note 

that the changes in policies and 

interpretations adopted in this preamble 

do not limit or otherwise establish new 

requirements or restrictions on other 

currently available coverage options. 

Therefore, the Departments generally 

disagree with commenters’ assertions 

that the new statutory guardrail policies 

and interpretations will limit consumer 

choice, as consumers will continue to 

have access to the same coverage 

options, both on and off Exchange, as 

they do today. 

After consideration of the comments 

received, the Departments are adopting 

the new policies and interpretations 

described in this preamble with regard 

to the statutory guardrails and are 

finalizing the regulatory changes 

relating to the statutory guardrails (31 

CFR 33.108(f)(3)(iv) and 45 CFR 

155.1308(f)(3)(iv)) as proposed. Each of 

the statutory guardrails is addressed 

further later in this section of this 

preamble, along with summaries of and 

responses to comments on each of the 

individual guardrails. 

a. Comprehensive Coverage (31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A)) 

The Departments proposed to modify 

the regulations at 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A) to set forth a 

revised interpretation of the 

comprehensiveness guardrail. In 

addition, the Departments proposed, 

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 proposed 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 to modify 

the regulations at 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A) for the 

comprehensiveness guardrail as follows: 

To meet the comprehensiveness 

guardrail, health care coverage under a 

section 1332 waiver is required to be 

forecast to be at least as comprehensive 

overall for residents of the state as 

coverage absent the waiver. 

As proposed, the Departments’ 

policies and interpretations related to 

the comprehensiveness guardrail are as 

follows: 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 the 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 will be evaluated 

by comparing coverage under the 

section 1332 waiver to the state’s EHBbenchmark plan applicable for the plan 

year pursuant to 45 CFR 156.111, as 

well as to, in certain cases, the coverage 

provided under the state’s Medicaid or 

CHIP programs.157 A section 1332 

waiver will not satisfy the 

comprehensiveness requirement if the 

waiver decreases: (1) The number of 

residents with coverage that is at least 

as comprehensive as the EHBbenchmark plan 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 cannot 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 will 

also take into account the effects across 

different groups of state residents, and, 

in particular, effects on vulnerable and 

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.158 A section 1332 

waiver will be highly unlikely to be 

approved by the Secretaries under the 


lotter on DSK11XQN23PROD with RULES2
53466 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

159https://www.ncbi.nlm.nih.gov/pmc/articles/ 

PMC3794652/#:∼:text=more%20chronic%20

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

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

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

interpretation outlined in the preambles 

to the proposed rule and this final 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. 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 the 

preamble to the proposed rule, 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 noted that they 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 also noted 

that they are of the view that the current 

interpretation of the comprehensiveness 

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. 

As noted in the proposed rule, the 

proposed changes 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 note that they are of the 

view that the provisions outlined in the 

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 Departments note 

that the provisions outlined in the 

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 159 and as such 

pre-existing conditions, maintain 

comprehensive coverage. 

The Departments sought comment on 

the proposed policies and 

interpretations related to the 

comprehensiveness guardrail. The 

Departments noted that they are of the 

view that the proposed provisions 

would have minimal impact on both 

states with section 1332 waivers under 

development and states with approved 

waivers. The Departments solicited 

comment on the impact to stakeholders. 

The following is a summary of the 

comments received and the 

Departments’ responses related to 31 

CFR 33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A), the 

comprehensiveness guardrail. 

Comment: The Departments received 

a few comments specifically focused on 

the comprehensiveness guardrail. 

Several commenters supported the 

proposal to use EHB and Medicaid 

coverage as a standard of comparison for 

the comprehensiveness guardrail. 

Furthermore, these commenters 

supported the modifications to the rule 

text to evaluate this guardrail based on 

coverage that is provided under the 

waiver, not just coverage that is 

available. One commenter 

recommended adding rule text to 

capture that the waiver cannot decrease 

the number of people with coverage that 

satisfies EHB requirements, the number 

of people 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. 

Furthermore, this commenter 

recommended that the rule text should 

reaffirm that these criteria must be met 

in each year of the waiver. 

Response: After consideration of the 

comments received, the Departments are 

adopting the proposed policies and 

interpretations related to the 

comprehensiveness guardrail, as well as 

the proposed amendments to 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A). As finalized, to 

meet the comprehensiveness guardrail, 

coverage under a section 1332 waiver 

must be forecast to be at least as 

comprehensive overall for residents of 

the state as coverage absent the waiver. 

For this purpose, comprehensiveness 

refers to the scope of benefits provided 

and will be measured by the extent to 

which coverage meets EHB or, as 

appropriate, Medicaid or CHIP 

standards. The impact on all state 

residents will be considered as part of 

this analysis, regardless of the type of 

coverage they would have had absent 

the section 1332 waiver. As explained 

in this preamble, the Departments will 

evaluate this guardrail in each year that 

the section 1332 waiver would be in 

effect to ensure that a waiver will not 

decrease the number of people 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. The Departments 

remain committed to approving waivers 

that promote health insurance coverage 

and health equity. 

Regarding the comprehensiveness 

guardrail regulatory provisions, the 

Departments are not finalizing 

additional changes to the rule text at 

this time. The Departments are of the 


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160Oregon Department of Consumer and Business 

Services, the State of Oregon’s insurance regulator, 

and the Oregon Health Authority comment letter on 

proposed rule. 

161 45 CFR 156.111. 

162These 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/. 

view that codifying more specific 

requirements and guidelines in 

regulation is unnecessary, given the 

policies and interpretations already 

discussed in this preamble and the 

amendments to the comprehensiveness 

guardrail regulations finalized in this 

rule, which provide states and the 

Federal Government the information to 

reasonably evaluate whether a section 

1332 waiver meets the coverage 

guardrail and relevant policy goals. 

Comment: One commenter opposed 

the proposal due to concerns it would 

stifle a state’s ability to innovate 

through plan design. This commenter 

raised concerns that as proposed, the 

proposal ‘‘leaves no room for plan and 

benefit design’’ and encouraged the 

Departments to use an ‘‘overall’’ 

standard for comprehensiveness as they 

do for the affordability guardrail.160

Response: The proposed policies and 

interpretations related to the statutory 

guardrails require that coverage be 

available for a comparable number of 

people that is as affordable and 

comprehensive as coverage would have 

been available in the absence of the 

waiver. The Departments disagree that 

the proposed policies and 

interpretations of the 

comprehensiveness guardrail will stifle 

a state’s ability to innovate through plan 

design. Under the 2019 Payment Notice 

final rule, states have increased 

flexibility to change their EHBbenchmark plan.161 States interested in 

changing their EHB-benchmark plan can 

do so without pursuing a section 1332 

waiver, following the approach finalized 

in the 2019 Payment Notice final rule, 

or they can elect to make those changes 

while also pursuing a section 1332 

waiver to make other changes. For 

example, a state could select another 

state’s EHB-benchmark plan that was 

applicable for the 2017 plan year, 

replace one or more of categories in its 

EHB-benchmark plan with the same 

categories from another state’s EHB 

-benchmark plan that was applicable for 

the 2017 plan year, or select a set of 

benefits that would become the state’s 

new EHB -benchmark plan. 

States could also consider increasing 

the generosity of an EHB-benchmark 

plan’s benefits to address health equity. 

Further, the Departments are of the view 

that the ‘‘overall’’ standard incorporated 

in the comprehensiveness guardrail 

analysis, which looks at the number of 

residents with coverage that is at least 

as comprehensive as the benchmark in 

all ten EHB categories, any of the ten 

EHB categories, and full set of services 

under the state’s Medicaid or CHIP 

programs, is critical to ensure that 

consumers continue to have 

comprehensive affordable coverage 

under a waiver. As such, the 

Departments are of the view that states 

could consider current policy 

flexibilities and utilizing section 1332 

waivers to innovate through plan design 

and benefit design. 

After consideration of the comments 

received, the Departments are adopting 

the proposed policies and 

interpretations relating to the 

comprehensiveness guardrail and 

finalizing the proposed modifications to 

31 CFR 33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A). 

b. Affordability (31 CFR 

33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B)) 

The Departments proposed to modify 

the regulations at 31 CFR 

33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B) to set forth a 

revised interpretation of the 

affordability guardrail. In addition, the 

Departments proposed, 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 

proposed 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 to modify 

the regulations at 31 CFR 

33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B) for the affordability 

guardrail as follows: To meet the 

affordability guardrail, health care 

coverage under the section 1332 waiver 

will be required to be forecast to be as 

affordable overall for state residents as 

coverage absent the waiver. 

As proposed, the Departments’ 

policies and interpretations related to 

the affordability guardrail are as follows: 

Affordability refers to state residents’ 

ability to pay for health care expenses 

relative to their incomes and will 

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 will be 

required to be considered, regardless of 

the type of coverage they would have 

had absent the section 1332 waiver. 

Under the proposed provisions and 

interpretation, this condition generally 

must be forecast to be met in each year 

that the section 1332 waiver would be 

in effect. 

Section 1332 waivers will 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 will 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 will 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.162 A section 

1332 waiver will be highly unlikely to 

be approved by the Secretaries under 

the policies and interpretations set forth 

in the preambles to the proposed rule 

and this final rule if it reduces 

affordability for these vulnerable or 

underserved groups, even if the waiver 

would maintain affordability in the 


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53468 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

163See 31 CFR 33.108(f)(4)(i)–(iii) and 45 CFR 

155.1308(f)(4)(i)–(iii). 

aggregate. In addition, a section 1332 

waiver will 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 AV equal to or greater than 60 

percent and an out-of-pocket maximum 

that complies with section 1302(c)(1) of 

the ACA, will fail to meet this guardrail 

under the 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 will 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. 

As discussed previously in the 

preamble of the proposed rule, 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 noted 

that they 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 preexisting 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. As 

proposed, the changes were 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 noted 

that they are of the view that the 

provisions outlined in the 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 sought comment on 

these proposed policies and 

interpretations related to the 

affordability guardrail. The Departments 

noted that they are of the view the 

proposal would have minimal impact 

on both states with section 1332 waivers 

under development and states with 

approved waivers. The Departments 

solicited comment on the impact to 

stakeholders. 

The following is a summary of the 

comments received and the 

Departments’ responses related to 31 

CFR 33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B), the affordability 

guardrail. 

Comment: Commenters were 

generally supportive of the proposals 

related to the affordability guardrail. 

These commenters supported the 

modifications to require coverage and 

cost sharing protections against 

excessive out-of-pocket spending that 

are at least as affordable as the 

provisions of title I of the ACA. 

Commenters were supportive of the 

policies outlined in the preamble to the 

proposed rule, including the 

Departments’ policy under which they 

would evaluate whether consumers 

would have large health care spending 

burdens relative to their incomes and 

will examine the effects on various 

vulnerable groups. Additionally, one 

commenter recommended that the rule 

text should similarly require 

examination of the effect of a proposed 

waiver on vulnerable groups and the 

groups now eligible for the largest 

premium credits and cost sharing 

reductions. 

Response: The Departments 

appreciate commenters’ support and are 

finalizing the amendments to 31 CFR 

33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B) and the 

affordability guardrail policies and 

interpretations as proposed. As 

finalized, to meet the affordability 

guardrail, a section 1332 waiver must be 

forecast to be as affordable overall for 

state residents as coverage absent the 

waiver. The impact on all state residents 

will be considered as part of this 

analysis, regardless of the type of 

coverage they would have had absent 

the section 1332 waiver. Section 1332 

waivers will 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. As previously explained, 

in applying this guardrail, the 

Departments will examine the impact 

the waiver has on state residents’ ability 

to pay for health care expenses relative 

to their incomes and will generally 

measure compliance by comparing each 

individual’s expected out-of-pocket 

spending for health coverage and 

services to their incomes. This approach 

allows the Departments to evaluate the 

affordability guardrail across various 

FPL levels, including for those newly 

eligible or eligible for expanded PTC as 

a result of the ARP, which impacts 

various FPLs differently, an issue that 

was raised by a commenter. Regarding 

the waiver’s impact on the affordability 

of coverage for vulnerable populations, 

the Departments’ analysis of compliance 

with the affordability guardrail will also 

take into account the effects on 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. The Departments also 

note that, under the proposals finalized 

in this rule related to the Actuarial and 

Economic Analysis section of the 

regulation,163 states should compare 

comprehensiveness, affordability, 

coverage, and deficit neutrality with and 

without the section 1332 waiver. States 

should also include in their analysis of 

the aforementioned guardrails whether 

the proposed section 1332 waiver would 

increase health equity in keeping with 

goals of with E.O. 13985, which will 

provide the Departments with 

information to evaluate the impact on 

vulnerable populations. 

The Departments decline to finalize 

additional changes to the rule text at 

this time. The Departments are of the 

view that codifying more specific 

requirements and guidelines in 

regulation is unnecessary, given the 

policies and interpretations already 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53469 

164These 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/. 

discussed in this preamble and the 

amendments to the affordability 

guardrail regulations finalized in this 

rule, which provide states and the 

Federal Government the information 

needed to reasonably evaluate the 

ability of a section 1332 waiver to meet 

the affordability guardrail and relevant 

policy goals. 

The Departments remain committed 

to approving waivers that promote 

health insurance coverage and health 

equity and are adopting the proposed 

policies and interpretations relating to 

the affordability guardrail, as well as 

finalizing as proposed the modifications 

to 31 CFR 33.108(f)(3)(iv)(B) and 45 CFR 

155.1308(f)(3)(iv)(B). 

c. Coverage (31 CFR 33.108(f)(3)(iv)(C) 

and 45 CFR 155.1308(f)(3)(iv)(C)) 

The Departments proposed 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 proposed, 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 proposed to modify the 

regulations at 31 CFR 33.108(f)(3)(iv)(C) 

and 45 CFR 155.1308(f)(3)(iv)(C) 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 to modify 

the regulations at 31 CFR 

33.108(f)(3)(iv)(C) and 45 CFR 

155.1308(f)(3)(iv)(C) for the coverage 

guardrail as follows: To meet the 

coverage guardrail, a comparable 

number of state residents must be 

forecast to have coverage under the 

section 1332 waiver as would have had 

coverage absent the waiver. 

As proposed, the Departments’ 

policies and interpretations related to 

the coverage guardrail are as follows: 

Coverage refers to MEC as defined in 

26 U.S.C. 5000A(f). For this purpose, 

‘‘comparable’’ means 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 

will 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 will 

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, will 

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 will 

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.164 A section 1332 

waiver will 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 in the aggregate. Finally, 

analysis under the coverage requirement 

will 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 the 

preamble to the proposed rule, under 

the interpretation outlined in the 2018 

Guidance and codified in part 1 of the 

2022 Payment Notice final rule, the 

coverage guardrail would be 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 Departments 

noted that the interpretations set forth 

in the 2018 Guidance and codified in 

part 1 of the 2022 Payment Notice final 

rule permit 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 noted 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 

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 E.O. 14009 to reduce 

barriers for expanding comprehensive, 

high-quality, affordable coverage. As 

discussed in the preamble to the 

proposed rule, the proposed provisions 

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 the proposed rule 

will 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 sought comment on 

the proposed policies and 

interpretations related to the coverage 

guardrail. The Departments are of the 

view that the proposed provisions 

would have minimal impact on both 

states with section 1332 waivers under 

development and states with approved 

waivers. The Departments solicited 

comment on the impact to stakeholders. 

The following is a summary of the 

comments received and the 


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Departments’ responses related to 31 

CFR 33.108(f)(3)(iv)(C) and 45 CFR 

155.1308(f)(3)(iv)(C), the coverage 

guardrail. 

Comment: Commenters were 

generally supportive of the proposals 

related to the coverage guardrail. One 

commenter recommended that the 

regulatory language be clarified to 

indicate that the coverage it references 

is comprehensive coverage, meeting the 

standards set forth in 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A). 

Response: The Departments 

appreciate commenters’ support and are 

adopting the policies and 

interpretations related to the coverage 

guardrail policy and finalizing the 

amendments to 31 CFR 

33.108(f)(3)(iv)(C) and 45 CFR 

155.1308(f)(3)(iv)(C) as proposed. The 

Departments confirm that for purposes 

of the coverage guardrail, the term 

‘‘coverage’’ refers to minimum essential 

coverage as defined in 26 U.S.C. 

5000A(f), which aligns with the policies 

and interpretations described in this 

preamble for the comprehensiveness 

guardrail analysis under 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A). As explained in 

this preamble, the Departments will 

evaluate waiver proposals against this 

guardrail to ensure that, under the 

waiver, a comparable number of state 

residents are forecast to have coverage 

under the section 1332 waiver as would 

have had coverage absent the waiver. 

The impact on all state residents will be 

considered, regardless of the type of 

coverage they would have had absent 

the section 1332 waiver. The 

Departments remain committed to 

approving waivers that promote health 

insurance coverage and health equity. 

Regarding the coverage guardrail 

regulations, the Departments are not 

finalizing additional changes to the rule 

text at this time. The Departments are of 

the view that codifying more specific 

requirements and guidelines in 

regulation is unnecessary, given the 

polices and interpretations already 

discussed in this preamble and the 

amendments to the coverage guardrail 

regulations finalized in this rule, which 

provide states and the Federal 

Government the information necessary 

to reasonably evaluate the ability of a 

section 1332 waiver to meet the 

coverage guardrail and relevant policy 

goals. 

After consideration of the comments 

received, the Departments are adopting 

the policies and interpretations related 

to the coverage guardrail and finalizing 

the modifications to 31 CFR 

33.108(f)(3)(iv)(C) and 45 CFR 

155.1308(f)(3)(iv)(C) as proposed. 

d. Deficit Neutrality (31 CFR 

33.108(f)(3)(iv)(D) and 45 CFR 

155.1308(f)(3)(iv)(D)) 

The Departments did not propose 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 proposed, 

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. As proposed, the 

Departments’ 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 is 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 include, 

for example, changes in the amounts the 

Federal Government pays in PTC, small 

business tax credits, or other health 

coverage tax credits; 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 employersponsored insurance and in deductions 

for medical expenses. 

The effect on Federal spending 

includes all changes in Federal financial 

assistance (PTC, small business tax 

credits, and 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 also 

includes all administrative costs to the 

Federal Government, including any 

changes in IRS administrative costs, 

Federal Exchange administrative costs, 

and other administrative costs 

associated with the waiver or alleviated 

by the waiver. 

Under the policies and interpretations 

outlined in the proposed 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 window, 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, will 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 

deficit neutrality requirement than one 

that does not. 

The Departments note that the 

approach outlined in part 1 of the 2022 

Payment Notice final rule for the deficit 

neutrality guardrail is consistent with 

E.O. 14009 as it would not reduce 

coverage or otherwise undermine the 

ACA and Medicaid. 

The Departments sought comment on 

the proposed policies and 

interpretations related to the deficit 

neutrality guardrail. The Departments 

noted that the proposal would have 

minimal impact on both states with 

section 1332 waivers under 

development and states with approved 

waivers. The Departments solicited 

comment on the impact to stakeholders. 

The following is a summary of the 

comments received and the 

Departments’ responses related to 31 

CFR 33.108(f)(3)(iv)(D) and 45 CFR 

155.1308(f)(3)(iv)(D), the deficit 

neutrality guardrail. The summary of 

comments and the Departments’ 

responses that follow also address 

comments regarding pass-through 

funding that were made in connection 

with the Departments’ proposals related 

to the deficit neutrality guardrail. 

Comment: The Departments received 

two specific comments that were 

generally supportive of the proposals 

related to the deficit neutrality 

guardrail. One commenter noted that 

the ‘‘Departments’ longstanding 

approach . . . appropriately carries out 

this statutory requirement by specifying 


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165Center on Budget and Policy Priorities 

comment letter on proposed rule. 

166See section 1332(a)(3) of the ACA, which 

refers to premium tax credits, cost-sharing 

reductions, and small business credits under 

section 36B of the Code or under Part I of subtitle 

E of the ACA. 

167SMD # 18–009 RE: Budget Neutrality Policies 

for Section 1115(a) Medicaid Demonstration 

Projects available online at https://

www.medicaid.gov/Federal-policy-guidance/ 

downloads/smd18009.pdf. 

168See section 1332(b)(1)(D) of the ACA. 

that the Federal Government’s projected 

spending net of revenues under a 

section 1332 waiver would need to be 

equal to or lower than would occur in 

the absence of a waiver.’’ 165 Another 

commenter noted that while it supports 

the policies and interpretation of the 

deficit neutrality guardrail, ‘‘the 

Departments should calculate passthrough funding differently and in a 

way that would allow states to share 

more of the Federal savings that a 

section 1332 waiver could generate.’’ 

Response: The Departments 

appreciate commenters’ support and are 

finalizing the policies and 

interpretations related to the deficit 

neutrality guardrail policy as proposed. 

Regarding pass-through funding, states 

with approved section 1332 waivers 

may only receive pass-through funding 

associated with resulting reductions in 

Federal spending on certain types of 

Federal financial assistance specified in 

the statute and reduced, as necessary, to 

ensure deficit neutrality, as required by 

the statute.166

Comment: The Departments received 

several comments requesting that the 

Departments revisit their proposed 

policies and interpretations of the 

deficit neutrality guardrail. These 

commenters expressed concern that as 

proposed, the policies and 

interpretations are overly strict and 

narrow, which may prevent states from 

pursuing innovative new models that 

would expand coverage, and are 

inconsistent with the original intent of 

the waiver program and the 

Administration’s goal of increasing 

enrollment in comprehensive coverage. 

Furthermore, these commenters 

contended that the Departments’ overall 

proposed interpretation of deficit 

neutrality is inconsistent with the other 

statutory guardrails and the ACA more 

broadly. Other commenters were of the 

view that these policies and 

interpretations were also contrary to 

E.O. 14009 and E.O. 13985 and should 

be updated to explicitly allow state 

efforts to experiment with improving on 

the ACA while reducing racial 

disparities due to a lack of coverage or 

barriers to affordability. 

These commenters expressed concern 

that the proposed policies and 

interpretations of the deficit neutrality 

guardrail could result in a scenario 

where a state that pursues a section 

1332 waiver that successfully results in 

an increase in ACA-eligible enrollment 

would fail to meet the deficit neutrality 

requirement because the increase in 

enrollment would increase Federal 

spending on PTC, thereby increasing the 

Federal deficit. The commenters stated 

that this creates a disincentive for states 

to pursue innovative health care reform 

under a section 1332 waiver, since, if a 

state were to pursue an innovative 

health care proposal outside the section 

1332 process which resulted in 

increased enrollment, the Federal 

Government would bear the cost of any 

increased enrollment. Further, 

commenters noted that the Departments’ 

overall interpretation of the deficit 

neutrality guardrail is contrary to the 

goals of the ACA and E.O.s 14009 and 

13985 as people who are eligible but not 

enrolled are disproportionately from 

communities of color. As such, 

commenters contended that the policies 

and interpretations as proposed would 

penalize states seeking to innovate 

through a section 1332 waiver and 

contradict the Departments’ stated goal 

to expand coverage. 

The commenters recommended that 

the Departments instead consider three 

alternative ways to evaluate the deficit 

neutrality guardrail. One 

recommendation is that the 

Departments take into account those 

who are currently eligible for coverage, 

but unenrolled, in the baseline coverage 

for evaluating the deficit neutrality 

guardrail and costs used to compute 

pass-through funding. Commenters 

noted that this alternate interpretation 

of ‘‘deficit neutrality’’ aligns with the 

aims of the ACA to expand coverage and 

would grant states the flexibility to 

create new waiver designs, including a 

state-level public option, to meet those 

goals. Commenters noted utilizing this 

approach for section 1332 waivers 

would align with the statutory 

interpretation for section 1115 

demonstrations and Medicaid waivers 

that a law should be interpreted to 

promote rather than undermine the 

accomplishment of its core objectives. 

Further, the commenters noted that 

CMS has permitted states to juxtapose 

waiver spending against baselines 

reflecting state implementation of 

alternative policies permitted without 

any waiver in the context of section 

1115 demonstrations to promote 

statutory objectives and increased 

enrollment of eligible people. 

Another commenter recommended 

that instead of looking at deficit 

neutrality on an annual basis for each 

and every year of the waiver, the 

Departments should instead consider 

the deficit neutrality guardrail over a 10- 

year period to allow states greater 

opportunity for innovation, such as 

creating a public option. The 

commenter noted that this approach 

would be consistent with existing 

requirements for section 1332 waivers to 

include a 10-year budget projection in 

1332 waiver applications. In other 

rulemaking, commenters have also 

noted that this approach would be 

consistent with how the Congressional 

Budget Office (CBO) scores are generally 

analyzed for deficit neutrality over a 10- 

year period. 

Another recommendation from 

commenters was that the Departments 

evaluate deficit neutrality and compute 

pass-through funding on a per capita 

basis. These commenters explained that 

a per capita basis would provide a 

sustainable funding source in the event 

future enrollment exceeds current 

levels. These commenters further noted 

that under section 1115 demonstration 

projects, the calculation of the without 

waiver budget neutrality expenditure 

limit(s) is based on spending per eligible 

individual, per month (PMPM). Using 

this PMPM approach, the commenters 

explained that the state is not at risk for 

increased costs associated with 

increases in enrollment, and does not 

accrue savings from decreases in 

enrollment. Unexpected increases in 

enrollment could be a consequence of 

factors outside the demonstration and 

beyond the state’s complete control— 

such as changing economic conditions 

and natural disasters. The state is at risk 

only for increases to the PMPM cost 

growth—not for the increases in 

enrollment.167

Response: The Departments 

appreciate these commenters’ 

recommendations and acknowledge 

stakeholders’ interest in pursuing 

innovative strategies to increase 

enrollment. After consideration of the 

comments received, the Departments are 

finalizing as proposed their 

interpretation of the requirement that 

waivers must not increase the Federal 

deficit.168 Thus, 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 to meet the deficit 

neutrality guardrail requirement. The 

Departments also clarify that the 

evaluation of whether a section 1332 

waiver increases the Federal deficit will 

include consideration of the projected 

impact of the waiver over the period of 


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169https://www.whitehouse.gov/omb/budget/ 

Analytical_Perspectives. 

170https://www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-and-Reports/ 

NationalHealthExpendData/index.html?redirect=/ 

NationalHealthExpendData/. 171See 31 CFR 33.108(g) and 45 CFR 155.1308(g). 

the waiver (which may not exceed 5 

years unless renewed) and over the 10- 

year budget plan. However, the 

Departments reiterate that under the 

policies and interpretations finalized in 

this rule, a section 1332 waiver that 

increases the Federal deficit in any 

given year is less likely to meet this 

guardrail than one that does not. 

The Departments appreciate 

commenters’ suggestions on the deficit 

neutrality guardrail, as well as 

suggestions related to the affordability, 

comprehensiveness, and coverage 

guardrails and pass-through funding. 

The Departments reaffirm their aim to 

promote health equity and increase 

health insurance coverage through 

section 1332 waivers and are of the view 

that the proposed policies and 

interpretations related to the deficit 

neutrality guardrail are consistent with 

the goals of the ACA, and align with 

E.O. 14009 and E.O. 13985, as states are 

still encouraged to consider ways to 

experiment with improving coverage 

and affordability for vulnerable 

populations. Thus, after consideration 

of the comments received, the 

Departments are adopting the proposed 

policies and interpretations related to 

the deficit neutrality guardrail. The 

Departments are also finalizing the 

accompanying pass-through funding 

policies and interpretations, as well as 

the codification of 31 CFR 33.122 and 

45 CFR 155.1322, as proposed. 

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 did not 

propose any regulatory changes to 31 

CFR 33.108(f)(4)(i)–(iii) and 45 CFR 

155.1308(f)(4)(i)–(iii), but did propose, 

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. The Departments 

proposed 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 encouraged 

states to include in their analysis 

whether the proposed section 1332 

waiver would increase health equity in 

line with E.O. 13985. As proposed, the 

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 will be made using 

generally accepted actuarial and 

economic analytic methods, such as 

micro-simulation. The analysis will 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. 

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 

will 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 will 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 169 and health care cost 

growth 170 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 will assume, in 

accordance with standard estimating 

conventions, that macroeconomic 

variables like population, output, and 

labor supply are not affected by the 

waiver. However, estimates will 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 must 

conform to these standards. 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. 

Consistent with the 2018 Guidance, 

for each of the guardrails, the state must 

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 will 

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,171 could request 


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172For plan year 2021, HHS is providing this 

support for six states: Colorado, Delaware, 

Maryland, New Hampshire, North Dakota, and 

Pennsylvania. 173Public Law 90–577. 

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 will 

not 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 sought comment on 

the proposals, and did not receive any 

comments in response to these 

proposals regarding 31 CFR 

33.108(f)(4)(i)–(iii) and 45 CFR 

155.1308(f)(4)(i)–(iii). The Departments 

are finalizing these policies as proposed. 

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. The 

Departments did not propose any 

regulatory changes to 31 CFR 

33.108(f)(4)(iv) and 45 CFR 

155.1308(f)(4)(iv). Rather, the 

Departments proposed the operational 

considerations in preamble that states 

should take into account when 

developing a waiver application, waiver 

plan, and implementation timeline. 

Specifically, the Departments proposed 

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 

timelines. The Departments noted that 

the 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 encouraged 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 was 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 Exchanges 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. A discussion of operational 

considerations for waivers that use the 

Federal platform for FFE states and IRS 

functionality follows, as well as 

comments on the 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 

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.172

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. 

The Departments noted that 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, the 

Departments noted that states would be 

responsible for funding the 

development and operation of these 

capabilities under the 

Intergovernmental Cooperation Act 

(ICA).173 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, the Departments noted that 

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 outlined in the preamble of the 

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, the Departments noted that 

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. 

The IRS generally is not able to 

administer different sets of Federal tax 

rules for different states. As a result, the 


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174See 31 CFR 33.112(a)(2) and 45 CFR 

155.1312(a)(2). 

175See 31 CFR 33.112(c) and 45 CFR 155.1312(c). 

176For more information on section 508 

standards, see: https://section508.gov/manage/ 

program-roadmap. See also: https://www.hhs.gov/ 

sites/default/files/ocr-guidance-electronicinformation-technology.pdf. 

177For more information, see the WCAG website 

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

178Notwithstanding this policy, the Departments 

clarified that states with approved waivers and 

states seeking approval for proposed waivers 

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 are 

finalizing the proposal to extend similar flexibilities 

during future emergent situations. As such, states 

with approved waivers and state seeking approval 

for proposed waivers will have similar flexibilities 

to submit requests to the Departments to modify 

certain public participation requirements during 

future emergent situations. 

179See 31 CFR 33.116 and 45 CFR 155.1316. 

180See section 1332(a)(4)(B)(iii) of the ACA, 31 

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

181Notwithstanding this policy, the Departments 

clarified that states with approved waivers and 

states seeking approval for proposed waivers 

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 are 

Departments noted that 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 would 

generally not be 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. 

The Departments noted that in some 

limited circumstances, the IRS may be 

able to accommodate small adjustments 

to the existing systems for administering 

Federal tax provisions. However, the 

Departments noted that 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 the 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. 

The Departments did not receive any 

public comments in response to these 

proposals regarding 31 CFR 

33.108(f)(4)(iv) and 45 CFR 

155.1308(f)(4)(iv), Implementation 

Timeline and Operational 

Considerations, and are finalizing these 

policy clarifications and operational 

considerations as proposed. 

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. 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.174 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.175 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 

national standards issued by the 

Architectural and Transportation 

Barriers Compliance Board (often 

referred to as ‘‘section 508 

standards’’),176 or alternatively, the 

World Wide Web Consortium’s Web 

Content Accessibility Guidelines 

(WCAG) 177 2.0 Level AA standards. 

While the Departments did not 

propose any regulatory changes to 31 

CFR 33.112 and 45 CFR 155.1312, 

through the preamble, the Departments 

proposed policies and interpretations 

for the state public notice requirements. 

More specifically, the Departments 

proposed to maintain the current 

standard that the state comment period 

for a section 1332 waiver application 

should generally be no less than 30 

days.178 The Departments explained 

that a general standard requiring a 

minimum 30-day comment period 

would be sufficient to allow for 

meaningful and robust public 

engagement on a state’s waiver 

application and reiterated 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 179

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.180 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 state comment 

period described earlier, the 

Departments did not propose regulatory 

amendments and instead proposed 

adoption of policies and interpretations 

related to the Federal comment period. 

More specifically, the Departments 

explained that the length of the Federal 

comment period should also reflect the 

complexity of the section 1332 waiver 

proposal and similarly proposed that 

the Federal comment period should also 

generally not be less than 30 days.181


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finalizing the proposal to extend similar flexibilities 

during future emergent situations. As such, states 

with approved waivers and state seeking approval 

for proposed waivers will have similar flexibilities 

to submit requests to the Departments to modify 

certain public participation requirements during 

future emergent situations. 

182 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. 

183See 85 FR 71142. 

184See 85 FR at 78597–78598 and 78608–78609. 

185 85 FR 54820. 186 86 FR at 24182–24183 and 24202–24203. 

The Departments did not receive any 

public comments on the proposals 

related to 31 CFR 33.112 and 45 CFR 

155.1312, Public Input on Waiver 

Proposals, and are finalizing these 

policy clarifications and interpretations 

as proposed. 

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,182 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. The Departments proposed 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 

proposed to consider a situation to be 

‘‘emergent’’ if it is both unforeseen and 

urgent. The Departments did not 

propose any changes with respect to the 

flexibility made available in the 

November 2020 IFC during the COVID– 

19 PHE. The Departments further 

clarified 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.183

The Departments also explained in 

the 2022 Payment Notice proposed 

rule 184 that 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.185 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.186 In developing 

the policies in the proposed rule, 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 to be 

available on a broader basis in different 

times of emergent situations, would 

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 further explained they 

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 the proposed rule are similar to those 

available under section 1115 

demonstrations. Existing regulations at 

42 CFR 431.416(g), relating to 

demonstration projects 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 

section 1115 demonstration application 

or section 1115 demonstration extension 

request that addresses a natural disaster, 

PHE, or other sudden emergency threat 

to human life, under certain 

circumstances described in the 

regulation. The Departments explained 

they are of the view that using a similar 

standard for section 1332 waivers would 

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 that were statedesignated 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 would allow states to seek 

emergency relief in support of the 

development of 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 

the November 2020 IFC and the 

proposed rule, 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 Secretaries 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, the 

Departments proposed 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 proposed 

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. 

The Departments also proposed 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 

would expand on policies published in 


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53476 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

187See 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. 

188See 85 FR 71142, 71178. 

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 proposed 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 explained they 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 explained they 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 otherwise applicable public 

notice procedures during an emergent 

situation. Based on the experience with 

the current COVID–19 PHE, the 

Departments noted they are of the view 

that it is appropriate and reasonable to 

propose to make similar flexibilities 

available in future emergent situations. 

The Departments proposed 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. As proposed, the 

amendments to 31 CFR 33.118(a) and 45 

CFR 155.1318(a) further specified that 

these flexibilities would be limited 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. 

As noted earlier in this section of the 

preamble, under the proposal, the 

existing flexibility made available in the 

November 2020 IFC187 for the COVID– 

19 PHE would continue to apply. The 

Departments also clarified that, similar 

to the November 2020 IFC, they were 

not proposing to allow states to waive 

31 CFR 33.112(a)(2) and 45 

CFR 155.1312(a)(2), which require states 

to conduct a separate process for 

meaningful consultation with federallyrecognized tribes. The Departments 

noted that tribal consultation is subject 

to separate requirements in accordance 

with E.O. 13175,188 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 clarified 

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, 

not to eliminate the requirements all 

together. 

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 the state 

notifies the public and holds 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 

explained they 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 noted that these proposals 

align with existing flexibilities available 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53477 

189To effectuate the extension of these 

flexibilities to future emergent situations, the 

Departments proposed 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. 

190https://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. 

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 PHS 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. As proposed, the 

modifications to the Departments’ 

section 1332 waiver regulations 

outlined in the proposed rule were 

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 PHEs declared 

under section 319 of the PHS Act. The 

Departments proposed 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). As proposed, 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 proposed that 

the state, as applicable, must implement 

the alternative public notice procedures 

at the state level if the state’s 

modification request is approved and, if 

required, amend 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).189

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 

threat.190 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 

proposed 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 


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191See Title VI of the Civil Rights Act of 1964 (42 

U.S.C. 2000d, 45 CFR part 80), Section 1557 of the 

ACA (42 U.S.C. 18116), Section 504 of the 

Rehabilitation Act of 1973 (29 U.S.C 794, 45 CFR 

part 84), and Title II of the Americans with 

Disabilities Act (42 U.S.C. 1213 et seq., 28 CFR part 

35). The HHS Office for Civil Rights enforces 

applicable Federal civil rights laws that prohibit 

discrimination on the basis of race, color, national 

origin, sex, age, or disability, as well as laws 

protecting the exercise of conscience and religious 

freedom, including the Religious Freedom 

Restoration Act (42 U.S.C. 2000bb through 

2000bb–4). 

192See 31 CFR 33.118(d) and 45 CFR 155.1318(d). 

193See 31 CFR 33.118(e) and 45 CFR 155.1318(e). 

194As finalized, the new regulatory text provides 

these flexibilities are limited to emergent situations, 

including natural disasters; public health 

emergencies; or other emergent situations that 

threaten consumers’ access to comprehensive 

coverage, consumers’ access to health care, or 

human life. Similarly, state requests to modify 

otherwise applicable public notice and 

participation requirements must explain how the 

emergent circumstances underlying the request 

result from a natural disaster; public health 

emergency; or other emergent situation that 

threatens consumers’ access to comprehensive 

coverage, consumers’ access to health care, or 

human life and could not reasonably have been 

foreseen. 

195See section 1332(a)(4)(iv) and (v). Also see 31 

CFR 33.120 and 45 CFR 155.1320. 

foreseen. In addition, the Departments 

proposed 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 proposed 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 situation that threatens 

consumers’ access to health insurance 

coverage, consumers’ access to health 

care, or human life that 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 reminded states that 

any public participation processes must 

continue to comply with applicable 

Federal civil rights laws,191 including 

taking reasonable steps to provide 

meaningful access for individuals with 

LEP 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 

communication and mobility 

disabilities, as well as those who lack 

broadband access. The Departments 

noted that they 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 encouraged 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.192 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.193

The Departments sought comment on 

these proposals. The Departments 

summarize and respond to comments on 

the proposals related to Public Notice 

Procedures and Approval requirements 

captured in 31 CFR 33.118 and 45 CFR 

155.1318 below alongside comments on 

the accompanying proposals to the 

Monitoring and Compliance 

requirements captured in 31 CFR 33.120 

and 45 CFR 155.1320. As detailed 

further later in this section of the 

preamble, the Departments are 

finalizing the amendments to 31 CFR 

33.118(a), (b)(3), (b)(5) and (g) and 45 

CFR 155.1318(a), (b)(3), (b)(5) and (g) 

with one modification. In response to 

comments and to align the regulations 

with the intended policy, we are 

replacing the reference to ‘‘health 

insurance coverage’’ with 

‘‘comprehensive coverage’’ in the 

description of emergent situations in 31 

CFR 33.118(a) and (b)(5) and 45 CFR 

155.1318(a) and (b)(5).194

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 

award forum requirements.195 Under 31 

CFR 33.120(c) and 45 CFR 155.1320(c), 

to ensure continued public input within 

at least 6 months after the 

implementation date, and annually 

thereafter, states are required to hold a 

public forum at which members of the 

public have an opportunity to provide 

comments on the progress of the 

program authorized by the section 1332 

waiver and to provide a summary of this 

forum to the Secretary of HHS for the 

Departments’ review as part of the 

quarterly and annual reports required 

under 31 CFR 33.124 and 45 CFR 

155.1324. Under 31 CFR 33.120(c)(1) 

and 45 CFR 155.1320(c)(1), states are 

required to publish the date, time, and 

location of the public forum in a 

prominent location on the state’s public 

website at least 30 days prior to the date 

of the planned public forum. In the 

November 2020 IFC, the Departments 

added 31 CFR 33.120(c)(2) and 45 CFR 

155.1320(c)(2) to provide that the 

Secretaries may waive, in part, post 

award public notice requirements 

during the COVID–19 PHE when certain 

criteria were met. 


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196See 85 FR 71142. 

197See 31 CFR 33.120(c)(2)(ii)(D) and 45 CFR 

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

198See 31 CFR 33.120(c)(2)(ii)(E) and 45 CFR 

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

The Departments proposed 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 

experience with the current COVID–19 

PHE, the Departments explained they 

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 

did not propose any changes with 

respect to the flexibility made available 

in the November 2020 IFC in response 

to the COVID–19 PHE and clarified that 

states with approved section 1332 

waivers continue to have flexibility to 

submit requests to the Departments to 

modify certain post award public notice 

requirements during the COVID–19 

PHE.196

Consistent with the framework for 

state modification requests related to the 

COVID–19 PHE, as proposed, 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 proposed 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.’’ The Departments also 

proposed amendments 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 proposed 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). 

As proposed, 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 inperson 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.197 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.198 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 CFR 155.1320(c)(1) for the alternative 

procedures in a prominent location on 

the state’s public website. 

The Departments explained they 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 

experience during COVID–19 PHE, the 

Departments explained they are of the 

view that 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 

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 forum 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 reminded 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 LEP so 

members of the public can participate 

and submit comments. The state should 


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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 

proposed 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 

proposed 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 

proposed 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 to also explain in its request 

how the circumstances underlying its 

request result from a natural disaster; 

PHE; or other emergent situation that 

threatens 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 sought comment on 

this proposal. 

The following is a summary of the 

comments received and the 

Departments’ responses to our proposals 

to amend 31 CFR 33.118, 31 CFR 

33.120, 45 CFR 155.1318, and 45 CFR 

155.1320 to permit the Secretaries to 

modify, in part, the normal public 

notice requirements for section 1332 

waivers in future emergent situations. 

Comment: The Departments received 

comments in support of the proposals to 

modify 31 CFR 33.118, 31 CFR 33.120, 

45 CFR 155.1318, and 45 CFR 155.1320. 

In addition, one commenter 

recommended that the Departments 

codify as part of the regulatory text the 

‘‘reasonably foreseeable’’ definition for 

emergent situations. Another 

commenter recommended that the 

section 1332 waiver process should 

more closely mirror the section 1115 

demonstration program emergency 

process. This commenter had concerns 

about the vagueness of both the 

definition of ‘‘emergency’’ and the 

definition of ‘‘health insurance 

coverage’’—specifically, the latter not 

being defined as comprehensive—and 

that the proposed flexibilities could be 

‘‘subject to misuse’’ as a result. Another 

commenter requested that the 

Departments provide further guidance 

or examples of situations the 

Departments will consider 

unforeseeable and urgent threats to 

consumers’ access to health insurance 

coverage, consumers’ access to health 

care, or human life so states can better 

understand when these flexibilities may 

be available. One commenter 

recommended that the Departments 

extend the flexibilities demonstrated 

during the COVID–19 PHE, not just for 

other emergent situations, but regardless 

of whether the circumstances are 

emergent or not. This commenter 

explained that extending these policies 

beyond emergencies would foster the 

goals of the statute by providing the 

public an opportunity for meaningful 

access and participation in the public 

notice process. This commenter noted 

that extending this policy more 

generally would help individuals with 

LEP and individuals with disabilities 

since online tools make participation 

possible and may exceed what is 

available at a time- and space-restricted 

in-person forum. 

Response: The Departments 

appreciate commenters’ support for the 

proposals to extend the COVID–19 

flexibilities to modify, in part, the 

otherwise applicable public 

participation requirements and are 

finalizing these policies and 

clarifications as proposed. The 

Departments are not finalizing 

additional changes to the rule text at 

this time. 

The Departments considered but did 

not propose extending these flexibilities 

regardless of whether the circumstances 

are emergent or not. The Departments 

proposed and are finalizing the 

extension of these flexibilities to 

address when current requirements are 

barriers for states during emergent 

situations. This policy is targeted at 

providing a reprieve from certain 

requirements to allow the Federal 

Government and states to respond to 

emergent situations as they unfold. 

States will be required to meet the 

otherwise applicable public 

participation requirements in all other 

circumstances. Furthermore, there is 

also no requirement that precludes 

states from utilizing online tools for 

their public participation requirements 

forums in addition to in-person forums 

to better meet the needs of populations 

such as those with disabilities or LEP. 

The Departments decline to adopt a 

specific definition for ‘‘reasonable 

foreseeability’’ or further define the 

exact number of days that the state must 

not have been aware of such issues. The 

Departments are of the view that such 

a determination would depend heavily 

on the specific facts and circumstances 

involved, including the nature and 

extent of the emergent situation. The 

Departments are finalizing the proposal 

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 

will consider include the specific 

circumstances involved, the nature and 

extent of the future emergent situation, 

and whether the state could have 

predicted the situation. The justification 

and other information submitted by the 

state as part of its modification request 

will also be considered. The 

Departments are of the view that this 

general framework allows the 

Departments to strike a balance in 

accounting for states experiencing 

different kind of emergencies, while 

also providing states with information 

on the factors the Departments will use 

when making this determination. For 

example, a state that experiences a 

hurricane, which often happens quickly 

and may impact the state’s ability to 

hold an in-person hearing, would likely 

have little lead time to request and plan 

for a change. Furthermore, a state could 

experience a new emergent situation 

that could lead to limited or no 

Exchange plan options in a geographic 

area—perhaps from a very recent and 

sudden economic downturn, issuer 

insolvency, or other reasons—that could 

threaten consumers’ access to health 

insurance coverage or care. In this 

scenario, the state would likely have 

more lead time compared to a natural 

disaster, such as a hurricane or flooding, 

but the issue could become emergent at 

various points during the rate 

submission or QHP certification 

process. For example, the Departments 

would not consider an ongoing 

recession, by itself, to be an emergent 

situation. The Departments further note 

that existing threats to consumers’ 

access to health coverage or care—such 

as in geographic areas in which issuer 

participation has been historically 

low—would not be considered emergent 

situations for purposes of applying the 

flexibilities finalized in this rule. After 


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199As finalized, the new regulatory text provides 

these flexibilities are limited to emergent situations, 

including natural disasters; public health 

emergencies; or other emergent situations that 

threaten consumers’ access to comprehensive 

coverage, consumers’ access to health care or 

human life. Similarly, state requests to modify 

otherwise applicable public notice and 

participation requirements must explain how the 

emergent circumstances underlying the request 

result from a natural disaster; public health 

emergency; or other emergent situation that 

threatens consumers’ access to comprehensive 

coverage, consumers’ access to health care or 

human life and could not reasonably have been 

foreseen. 

200The state’s request must detail the justification 

for and the alternative public notice procedures it 

seeks to implement that are designed to provide the 

greatest opportunity and level of public input from 

impacted stakeholders practicable given the 

emergent circumstances underlying the state’s 

request. See 31 CFR 33.118(b)(3) and 45 CFR 

155.1318(b)(3). 

receipt of a state’s modification request, 

the Departments will also examine what 

is in the best interest of the public and 

whether allowing the state to modify the 

full public participation requirements 

would do undue harm to the public. 

This evaluation will also take into 

account other relevant factors and 

information, including information 

provided by the state regarding how the 

emergent situation could not reasonably 

have been foreseen and how a delay 

would undermine or compromise the 

purpose of the waiver and be contrary 

to the interest of consumers. 

The Departments are not providing 

additional examples of situations they 

may consider ‘‘reasonably unforeseen’’ 

at this time but will consider doing so 

in the future. States that may be 

interested in using these flexibilities 

during an emergent situation should 

reach out to the Departments as soon as 

practicable to help determine if the 

situation would meet the requirements 

outlined in this rule. 

While section 1115 demonstration 

projects do not have emergency 

processes for situations that threaten 

access to health insurance coverage, it is 

the Departments’ view that these 

flexibilities for an emergent situation are 

important for section 1332 waivers for 

the private health insurance market. In 

addition, the Departments clarify that 

for the purposes of this flexibility to 

address emergent situations that 

threaten consumers’ access to health 

insurance coverage, the reference to 

‘‘health insurance coverage’’ was 

intended to capture comprehensive 

coverage as defined under 31 CFR 

33.108(f)(3)(iv)(A) and 45 CFR 

155.1308(f)(3)(iv)(A) such that situations 

that threaten consumers’ access to 

comprehensive coverage that meets the 

requirements for EHBs as defined in 

section 1302(b) of the ACA and offered 

through Exchanges established by title I 

of the ACA, or, as appropriate, Medicaid 

or CHIP, may be considered emergent 

under this rule. Similarly, the reference 

was intended to align with the policies 

and interpretations finalized in this rule 

regarding the coverage guardrail and to 

capture the different forms of MEC as 

defined in 26 U.S.C. 5000A(f). In 

response to comments and to align the 

regulations with the intended policies 

and interpretations, we are updating 31 

CFR 33.118(a) and (b)(5), 31 CFR 

33.120(c)(2)(i) and (c)(2)(ii)(F), 45 CFR 

155.1318(a) and (b)(5), and 45 CFR 

155.1320(c)(2)(i) and (c)(2)(ii)(F) to 

replace the references to ‘‘health 

insurance coverage’’ with 

‘‘comprehensive coverage’’ in the 

description of emergent situations.199

Comment: The Departments received 

several comments encouraging the 

Departments to withdraw the proposals 

to modify 31 CFR 33.118, 31 CFR 

33.120, 45 CFR 155.1318, and 45 CFR 

155.1320 related to extending the 

COVID–19 PHE flexibilities to future 

emergent situations. These commenters 

voiced concerns that the proposals 

would allow states to avoid providing 

the public a meaningful opportunity to 

provide input on waiver plans, as 

required by the statute. Some of these 

commenters were concerned that the 

revised public notice requirements risk 

unintended negative consequences for 

consumers. They noted that various 

stakeholders, including state advocates, 

rely on these public comment periods to 

provide feedback on how waiver 

proposals will impact consumers and 

other key stakeholders. The commenters 

expressed the view that the proposed 

flexibilities would allow states to cut 

short the notice and comment periods, 

thereby not allowing for a meaningful 

level of public input. Furthermore, these 

commenters were of the view that the 

proposed flexibilities would delay the 

public notice procedures until after the 

Departments make a decision on a 

waiver application request. These 

commenters also noted that section 

1332 waivers are designed to implement 

health system innovations, not to 

respond to disasters and other 

emergencies. They also cited that 

Congress has provided other authorities 

to respond to natural disasters and other 

emergencies. 

Response: The Departments 

appreciate and understand the concerns 

raised by these commenters; however, 

as explained earlier and in the proposed 

rule, the flexibilities provided under 

this rule do not allow states to avoid 

providing notice and an opportunity to 

comment on proposed waiver 

applications. Consistent with section 

1332(a)(4)(B)(i) of the ACA and 

regulations at 31 CFR 33.112 and 45 

CFR 155.1312, states will continue to be 

required to provide a public notice and 

comment period for section 1332 waiver 

applications sufficient to ensure a 

meaningful level of public input prior to 

approval or denial of an application. 

States with approved section 1332 

waivers will similarly be required to 

provide a meaningful opportunity to 

comment during post award public 

forums. Stakeholders and the general 

public will continue to be able to 

provide feedback on the impact of 

waiver proposals. As explained in this 

preamble, the Departments value the 

importance of the public input process, 

but are finalizing the flexibility to 

permit the adjustment of certain 

requirements, where appropriate, in 

emergent situations. 

In finalizing these policies, the 

Departments intend to permit states to 

request to modify the public notice 

procedures for proposed waiver 

applications, 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. States will also 

be permitted to request to modify the 

post award requirements, in part, when 

the application of those requirements 

would be contrary to the interests of 

consumers. The Departments again 

reiterate that a state cannot use this 

flexibility to eliminate public notice and 

participation procedures.200 In addition, 

states cannot waive the requirement to 

conduct a separate process for 

meaningful consultation with federallyrecognized tribes. States must also 

continue to comply with applicable 

civil rights laws, including requirements 

related to providing meaningful access 

for individuals with LEP and effective 

communication with individuals with 

disabilities. This rule is a targeted 

policy 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. 

States can seek to use these flexibilities 

to modify the requirement to hold more 

than one public hearing in more than 

one location, to hold public hearings 

before submission of the waiver 

application to the Departments, or to 

hold the hearings virtually rather than 

in-person. The Departments expect 

states will take into account relevant 

considerations when seeking flexibility 


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201States with approved waivers that have held 

public notice requirements virtually during the 

COVID–19 PHE include Alaska, Colorado, 

Delaware, Hawaii, Maine, Maryland, Minnesota, 

Montana, New Hampshire, North Dakota, Oregon, 

Pennsylvania, Rhode Island, and Wisconsin. 

to modify the public participation 

requirements and that states will 

address these considerations in 

modification requests. For example, 

when evaluating a state’s request to 

conduct a virtual hearing during a 

future emergent situation, the 

Departments may evaluate, among other 

relevant factors, what steps the state 

outlines in its modification request in 

response to the additional accessibility 

challenges that such hearings entail. 

The Departments also reiterate that 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 in a different 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 statelevel public notice procedures. The state 

would also be required to publish on its 

website any modification requests and 

determinations, as well as publish 

information on the approved revised 

timeline to inform the public about the 

alternative timeline or procedures. The 

Departments further clarify and affirm 

that they do not intend to approve or 

deny a waiver application request until 

after completion of the modified public 

notice procedures at the state or Federal 

level, as applicable, and consideration 

of timely submitted public comments. 

Finally, these flexibilities have been 

important during the COVID–19 PHE 

and have furthered efforts to prevent the 

spread of COVID–19 by limiting the 

need for in-person gatherings related to 

section 1332 waivers. During the 

COVID–19 PHE, 14 states with approved 

section 1332 waivers have utilized the 

flexibilities outlined in the November 

2020 IFC to meet the section 1332 

public notice requirements while 

ensuring the safety of state residents by 

holding virtual forums.201 Furthermore, 

states have found virtual forums more 

beneficial in terms of reaching more 

rural or hard-to-reach populations, 

when compared to in-person gatherings. 

Finally, the Departments acknowledge 

there are similar flexibilities available 

under section 1115 demonstrations for 

Medicaid and CHIP, as well as under 

section 1135 waivers for Medicare, 

Medicaid, and CHIP. These 

amendments to 31 CFR 33.118, 31 CFR 

33.120, 45 CFR 155.1318, and 45 CFR 

155.1320 provide for similar treatment 

of section 1332 waivers. 

The Departments appreciate 

commenters’ concern that section 1332 

waivers are not intended to respond to 

disasters and other emergencies, but are 

of the view that these situations could 

lead to an acute need for health 

insurance coverage and that section 

1332 waivers can be used to help 

address these challenges and promote 

market stability. 

After consideration of these 

comments, the Departments are 

finalizing the modifications to 31 CFR 

33.118(a), (b)(3), (b)(5) and (g); 31 CFR 

33.120(c)(2); 45 CFR 155.1318(a), (b)(3), 

(b)(5) and (g); and 45 CFR 155.1320(c)(2) 

and the adoption of the accompanying 

policies, interpretations, and 

clarifications as explained in this 

section of this preamble. 

7. Monitoring and Compliance (31 CFR 

33.120 and 45 CFR 155.1320) 

The Departments proposed 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. The proposal aligns 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 

proposed to remove the reference to the 

2018 Guidance. As proposed, 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. 

The following is a summary of the 

comments received and the 

Departments’ responses to our proposals 

to amend 31 CFR 33.120(a)(1) and (2) 

and 45 CFR 155.1320(a)(1) and (2). 

Comment: The Departments received 

some comments expressing general 

support for removing the reference to 

guidance from the rule text. In addition, 

one commenter specifically supported 

the proposal to monitor approved 

section 1332 waivers according to the 

statute, regulations, and interpretative 

policy described in notice and comment 

rulemaking, and removing the reference 

to the 2018 guidance. 

Response: The Departments 

appreciate commenters’ support. After 

consideration of these comments, the 

Departments are finalizing these 

proposed modifications to 31 CFR 

33.120(a)(1) and (2) and 45 CFR 

155.1320(a)(1) and (2). 

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. The 

Departments proposed new regulation 

text at 31 CFR 33.122 and 45 CFR 

155.1322 to codify in regulation details 

regarding the Departments’ 

determination of pass-through funding 

for approved section 1332 waivers. 

More specifically, the Departments 

proposed 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 CSRs 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 calculation 

would include any amount not paid due 

to an individual not qualifying for 

Federal financial assistance or 

qualifying for a reduced level of such 

financial assistance. The pass-through 

amount would not be increased to 

account for any savings other than the 

reduction in Federal financial 

assistance. The pass-through amount 

would be reduced by any net increase 

in Federal spending or net decrease in 

Federal revenue if necessary to ensure 

deficit neutrality. The pass-through 

estimates take into account experience 

in the relevant state and the experience 

of other states with respect to 

participation in an Exchange and credits 

and reductions provided under such 

provisions to residents of the other 


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202See section 1332(a)(3) of the ACA. 203While this rule generally finalizes the proposal 

to supersede and rescind the 2018 Guidance, the 

Departments are finalizing these standards which 

align with the approach outlined in the 2018 

Guidance. 

204See 77 FR 11700. 

205 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.). 

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,202 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), 

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 an 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 

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 specific terms and 

conditions for the state’s approved 

waiver in order for the Departments to 

calculate pass-through funding. The 

Departments did not propose any 

changes to these waiver requirements. 

In addition, the 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. The 

Departments proposed that, 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.203 In 

addition, the Departments proposed 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 sought comment on 

the proposals, including the proposed 

adoption of the new regulatory text on 

pass-through funding for approved 

section 1332 waivers. The Departments 

received some comments regarding 

pass-through funding in connection 

with the Departments’ proposals related 

to the deficit neutrality guardrail and 

those comments are summarized and 

responded to in this preamble at section 

IV(3)(d) of this final rule. 

Comment: The Departments received 

a comment expressing general support 

for codifying the proposed 

interpretation related to pass-through 

funding. 

Response: The Departments 

appreciate this commenter’s support. 

After consideration of the comments on 

pass-through funding, the Departments 

are finalizing the adoption of these 

proposed policies and the codification 

of these new regulations. 

9. Periodic Evaluation Requirements (31 

CFR 33.128 and 45 CFR 155.1328) 

The Departments proposed 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. The proposal aligns 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 proposed to 

remove the reference to the 2018 

Guidance. As proposed, 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. 

The following is a summary of the 

comments received and the 

Departments’ responses to the proposals 

to amend 31 CFR 33.128(a) and 45 CFR 

155.1328(a). 

Comment: The Departments received 

some comments expressing general 

support for removing the reference to 

guidance from the rule text. 

Response: The Departments 

appreciate commenters’ support. After 

consideration of these comments, the 

Departments are finalizing the proposed 

modifications to 31 CFR 33.128(a) and 

45 CFR 155.1328(a). 

10. Waiver Amendment (31 CFR 33.130 

and 45 CFR 155.1330) 

The Departments proposed 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 a 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,204 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 proposed that the 

framework 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.205 Under 

this proposal, a state would not be 

authorized to implement any aspect of 

the proposed amendment without prior 

approval by the Departments. 

In the proposed rule, the Departments 

set forth a proposed procedural 


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206For 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. 

framework for submission and review of 

amendment requests for an approved 

section 1332 waiver. The Departments 

explained they 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 

noted they 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 

were intended to align with the current 

amendment request process outlined in 

recent specific terms and conditions 

(STCs) for states with approved 

waivers.206

a. Definition of Waiver Amendment 

For purposes of these requirements, 

the Departments proposed 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 proposed 

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 proposed 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 Departments explained they 

would encourage the state 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 in its 

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 

amendment’s proposed implementation 

date, depending on the complexity of 

the amendment request and the timeline 

for implementation, among other 

factors. 

The Departments would review the 

state’s letter of intent request. The 

Departments proposed 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 

9 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 proposed 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 proposed that the state 

would be 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 request earlier 

than 9 months prior to implementation. 

In developing the implementation 

timeframe for its section 1332 waiver 

amendment request, the Departments 

proposed 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. 

The Departments proposed 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 proposed 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 proposed 

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) 

of the ACA and other applicable 

requirements. In general, states are 

permitted to have a waiver plan that 

consists of different components or 

parts. As proposed, states would be 

permitted to propose an amendment, 

which could build on an approved 

section 1332 waiver plan. The 

Departments proposed that a state’s 

approved section 1332 waiver plan and 

the proposed waiver amendment 

request should be analyzed together, 

and the state would receive passthrough 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 proposed to consider 


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207See 77 FR at 11706. 208See 31 CFR 33.108 and 45 CFR 155.1308. 

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 

proposed that, if the section 1332 

waiver amendment request described in 

the example 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 earlier in 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 proposed 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 proposed 

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 207 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 

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 

explained they 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, the 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. 

The Departments proposed 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 proposed 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 explained they 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 noted 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 proposed 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 are similar to 

the existing requirements for new 

section 1332 waiver applications.208 As 

such, the Departments proposed 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 proposed 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 earlier, the Departments 

proposed 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 solicited comments 

on the proposals, including whether the 

proposed framework for section 1332 

waiver amendment requests should be 

codified in regulation. 


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The following is a summary of the 

comments received and the 

Departments’ responses to the waiver 

amendment request proposals and the 

proposed adoption of 31 CFR 33.130 

and 45 CFR 155.1330. 

Comment: The Departments received 

some comments on the proposals 

regarding waiver amendments. 

Commenters were supportive of the 

proposals overall and appreciated the 

clarification on what is required for a 

state with an approved waiver to request 

to make changes to the approved 

waiver. Several commenters sought 

further clarification on the definition of 

a waiver amendment under various 

scenarios. One commenter requested 

clarification regarding whether a state 

may have two separate section 1332 

waivers or if any additional waiver 

request, while a state has an approved 

waiver, would be considered a waiver 

amendment. Another commenter 

relatedly asked if, for example, a state 

with an approved waiver plan were to 

seek both an extension and an 

amendment to its waiver plan, whether 

the state would be able to accomplish 

the two requests through one 

submission, rather than by making 

separate requests under 31 CFR 33.130 

and 45 CFR 155.1330 for the 

amendment request and 31 CFR 33.132 

and 45 CFR 155.1332 for the extension 

request. As another example, the 

commenter questioned whether a 

second waiver request submitted by a 

state with an approved waiver plan 

would automatically be considered an 

amendment request; or alternatively, 

whether the second waiver request 

would only be considered an 

amendment request if it was closely 

enough related to the state’s approved 

waiver plan. Two commenters requested 

that the Departments minimize the 

burden on states seeking a section 1332 

waiver amendment and only request 

from states the minimum 

documentation necessary to review the 

state’s proposal. One commenter did not 

support the amendment provision 

because the commenter did not support 

the requirement for states to submit an 

amendment proposal at least 15 months 

prior to the waiver’s implementation 

date, which in the commenter’s view is 

too long and inflexible. 

Response: The Departments 

appreciate these comments and look 

forward to working with states on 

potential amendments to approved 

waivers, extensions of approved 

waivers, and new waiver application 

requests. The Departments note that 

state waiver proposals may present 

novel approaches for providing coverage 

to a state’s residents, such that by 

nature, the outcomes may be difficult to 

predict and must be analyzed based on 

a state’s specific proposal and 

circumstances. For example, as seen in 

each state’s section 1332 waiver 

application, the required actuarial and 

economic analyses take into account 

various state-specific characteristics and 

data, such as historical and current 

information on premiums, target 

enrollee populations, market conditions, 

and other economic factors, in order to 

project the potential outcomes of 

implementing a section 1332 waiver 

under different scenarios. It would be 

difficult to ascertain whether a proposal 

is a waiver amendment, technical 

change to the existing waiver, or a new 

waiver application request without 

sufficient information and analysis. 

Accordingly, the Departments 

encourage states seeking to amend or 

otherwise modify a section 1332 waiver 

to contact the Departments early in their 

processes to discuss their plans and 

receive guidance on whether the request 

would be considered an amendment, a 

technical change, or a new waiver, 

taking into account their approved 

waiver plans and their proposals. This 

rulemaking provides a general 

framework for amendment requests, 

including the establishment of a 

definition for this key term, to provide 

states and other stakeholders with 

sufficient information to reasonably 

evaluate whether the state’s proposal is 

an amendment. More specifically, as 

finalized, the term ‘section 1332 waiver 

amendment’ is defined 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. 

Regarding the specific questions related 

to whether a state could seek an 

amendment and an extension (defined 

later in this preamble) through a single 

submission, the Departments encourage 

states with approved waiver plans to 

discuss specific waiver proposals with 

the Departments, as that determination 

will depend on the details of the waiver 

proposal(s) and the state’s approved 

waiver plan. 

As discussed earlier in this preamble 

and in the proposed rule, the 

Departments will 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 if the 

state’s proposal is determined to be a 

waiver amendment. Depending on the 

complexity of the proposed waiver 

amendment request, the scope of 

changes from the approved waiver plan, 

operational/technical changes, and 

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. 

In general, a waiver amendment request 

must include a detailed description of 

the requested amendment, including the 

impact on the guardrails; an explanation 

and evidence of the process used by the 

state to ensure meaningful public input; 

evidence of sufficient authority under 

state law to pursue the section 1332 

waiver amendment; an updated 

actuarial and/or economic analysis; and 

an explanation of the estimated impact 

of the amendment on pass-through 

funding. This information is necessary 

to permit the Departments to evaluate 

the waiver amendment request. 

However, the Departments agree with 

certain commenters’ concerns about 

minimizing the burden on states and 

will aim to request the minimum 

documentation and analysis necessary 

from states to review waiver amendment 

requests. For example, the Departments 

intend to use available data and 

resources, including the data and 

analysis in the periodic reports 

submitted by states with approved 

waivers under 31 CFR 33.124 and 45 

CFR 155.1324, if appropriate, to 

minimize the burden on states. The 

Departments also clarify that the 

Departments are not requiring that states 

submit the letter of intent at least 15 

months prior to the section 1332 waiver 

amendment’s proposed implementation 

date, but that the Departments are 

encouraging states to follow that 

timeline and submit the letter of intent 

at least 15 months prior to the section 

1332 waiver amendment’s proposed 

implementation date to allow enough 

time for submission and review of the 

amendment request and to allow for an 

appropriate timeline for implementation 

of the already approved waiver and 

amendment, if approved. 

After consideration of these 

comments, the Departments are 

finalizing the adoption of the waiver 

amendment framework along with 

clarifications outlined in this section of 

this preamble and the addition of 31 

CFR 33.130 and 45 CFR 155.1330. 

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, 


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209See 77 FR 11700. 

210For 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. 211See 77 FR at 11706. 

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 proposed 

new regulations at 31 CFR 33.132 and 

45 CFR 155.1332 to codify section 

1332(e) of the ACA and also proposed, 

in preamble, the proposed framework 

for section 1332 waiver extensions. In 

response to previously received 

comments, the Departments 

acknowledged that information 

regarding section 1332 waiver 

amendments and renewals would be 

needed in the future 209 and noted they 

received several inquiries from states on 

these topics. As such, the Departments 

proposed 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. The 

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. The proposed rule also set 

forth, in preamble, a proposed 

procedural framework for submission 

and review of extension requests for 

approved section 1332 waiver plans. 

The Departments explained they are of 

the view that this additional 

information would help states with 

approved section 1332 waiver plans 

better plan for and prepare for potential 

extensions to their waiver plans. The 

Departments also noted they intend to 

provide information and details 

regarding the section 1332 waiver 

extension process in the STCs for an 

approved waiver plan. The proposals 

were intended to align with the 

extension request process outlined in 

recent STCs for states with approved 

section 1332 waivers.210

The Departments proposed 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 would apply. The 

Departments proposed 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 proposed 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 proposed 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 

extension request would be considered 

as an extension request or whether any 

changes requested result in the need for 

a waiver amendment request instead. 

The Departments would also identify 

the information the state needs to 

submit in its section 1332 waiver 

extension request. The Departments also 

proposed 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). 

The Departments also proposed that 

they 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 proposed 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 

proposed 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) 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 earlier in this preamble, 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 

proposed 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 would 

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 proposed 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 Final Rule 211 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 explained 

they are of the view that allowing states 

to use the annual public forum for the 


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212Technical changes are changes that do not 

impact the guardrails or any obligations of the state 

or the Departments, such as changes to the stateapproved program funding level or program 

parameters like altering the attachment point, cap, 

coinsurance rate, or eligible conditions. 

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. 

The Departments proposed 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 proposed that the 

Departments would 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 

proposed 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 would 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 would 

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 

the state and an additional review 

period would begin once the 

Departments received the requested 

information or responses from the state. 

The Departments proposed that this 

additional review period would be no 

longer than 90 days. The Departments 

explained they are of the view that these 

proposals 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. In 

addition, the Departments noted they 

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 solicited comments 

on these proposals, including whether 

the proposed framework for section 

1332 waiver extension requests should 

be codified in regulation. 

The following is a summary of the 

comments received and the 

Departments’ responses to the waiver 

extension request proposals and the 

proposed adoption of 31 CFR 33.132 

and 45 CFR 155.1332. 

Comment: The Departments received 

some comments on the proposals 

regarding waiver extensions. 

Commenters were supportive of the 

proposals overall and appreciated the 

clarification on what is required for a 

state with an approved waiver to request 

an extension of the approved waiver. 

Several commenters requested 

clarification regarding whether a waiver 

could be extended with one or more 

amendments through one submission, 

rather than by making separate waiver 

extension and amendment requests. 

Response: The Departments 

appreciate commenters’ support. As 

finalized, a section 1332 waiver 

extension is defined as an extension of 

an approved waiver under the existing 

waiver terms. For example, if a state 

with an approved section 1332 

reinsurance waiver wanted to extend a 

reinsurance program for an additional 

three years, but was not seeking to make 

any other changes beyond a technical 

change as allowable under the STCs, the 

request would be treated as a waiver 

extension request. Examples of 

allowable technical changes are 

revisions to a state’s reinsurance 

program parameters or a state’s 

authorized funding source.212 Any 

changes to an approved waiver not 

otherwise allowable under the STCs 

would be considered an amendment. As 

explained earlier in this preamble 

regarding waiver amendments (31 CFR 

33.130 and 45 CFR 155.1330), the 

Departments will analyze state waiver 

proposals, including amendment and 

extension requests, based on a state’s 

specific proposals and circumstances. 

Accordingly, the Departments 

encourage states seeking to amend or 

extend a section 1332 waiver to contact 

the Departments early in their processes 

to discuss their plans and receive 

guidance on whether the request would 

be considered an amendment or an 

extension, as well as confirm the 

applicable requirements. In general, the 

Departments aim to work with states in 

a manner that provides clarity and 

transparency on the waiver extension 

and amendment process. 

After consideration of these 

comments, the Departments are 

finalizing the adoption of the waiver 

extension framework along with 

clarifications outlined in this section of 

this preamble and the addition of 31 

CFR 33.132 and 45 CFR 155.1332. 

V. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, the Departments are required to 

provide 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 the 

Departments 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. 

HHS solicited public comment on 

each of these issues for the following 

sections of this preamble that contain 

ICRs. 


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213 84 FR 71674 (December 27, 2019). 214 85 FR 27550 (May 8, 2020). 

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, HHS does not anticipate 

changes to the data elements related to 

the expansion of required Navigator 

duties to be significant. HHS notes 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, HHS does not project 

the information collection burden to 

increase. 

B. ICRs Regarding Segregation of Funds 

for Abortion Services (§ 156.280) 

HHS is finalizing amendments to 

§ 156.280(e)(2)(ii) to repeal the separate 

billing regulation governing payments 

for QHPs that offer coverage of abortion 

services for which Federal funds are 

prohibited. As finalized, HHS is 

reverting to and codifying 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. 

Acceptable methods for satisfying the 

separate payment requirement 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. Repealing the separate billing 

regulation will remove the burden 

associated with the policy, as detailed 

below. 

The 2019 Program Integrity Rule 213

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. HHS 

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,214 HHS 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. HHS 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, HHS 

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. HHS 

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. HHS 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 

Integrity Rule estimated the total cost 

for all issuers and State Exchanges to be 

approximately $547,225 in 2020. In 

2021, HHS 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, HHS 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. 

As described in further detail in the 

preamble to § 156.280, the majority of 

commenters agreed with these burden 

estimates, citing significant concerns 

that the separate billing regulation was 

unduly burdensome to issuers, states, 

Exchanges, and consumers and could 

create consumer confusion, resulting in 

significant harm to consumers who 

inadvertently lose their coverage. 

HHS disagrees with comments 

contesting the validity of its burden 

estimates and suggesting that they are 

inflated. HHS again emphasizes that the 

2019 Program Integrity Rule included a 

detailed account of the anticipated 

financial and operational burdens from 

the separate billing regulation, estimates 

which were based upon plan and 

premium data, actuarial estimates, 

public comments from issuers and states 

directly regulated by the separate billing 

policy, and consumer enrollment 

figures. Those burdens are discussed in 

further detail in sections III., ‘‘Collection 

of Information Requirements,’’ and IV., 

‘‘Regulatory Impact Analysis,’’ of that 

rule, which explain from where such 

estimates are derived. 

Some commenters noted that issuers 

have already incurred ongoing costs for 

printing and mailing, additional 

staffing, and reprograming billing 

systems and that the separate billing 

regulation already resulted in increased 

burden for issuers and consumers, 

widespread confusion by consumers 

and other stakeholders, and an increase 

in frustration and confusion around 

grace periods and terminations. HHS 

acknowledges that some costs may have 

already been incurred by issuers and 

that the actual cost savings, especially 

for one-time IT related costs, may be 

lower than HHS estimates. 

Unfortunately, HHS does not have an 

estimate of costs already incurred by 

issuers and can only estimate savings 

going forward. HHS continues to believe 

the timing of the courts’ actions likely 

dissuaded most issuers from assuming 

further costly administrative and 

operational burdens 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 


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termination of consumer coverage, was 

also avoided. 

Therefore, HHS believes repeal of the 

separate billing regulation removes the 

associated ICRs and the anticipated 

burden on QHP issuers and State 

Exchanges that perform premium billing 

and payment processing, which have 

not been approved by OMB. HHS will 

not pursue OMB approval 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)). As repeal of the 

separate billing regulation removes the 

associated ICRs with that regulation, the 

currently approved ICRs associated with 

issuer compliance with other 

longstanding requirements of § 156.280 

in existence prior to finalization of the 

separate billing regulation apply and 

capture the associated burden with 

issuer compliance of § 156.280 (OMB 

control number: 0938–1156, 

Establishment of Exchanges and 

Qualified Health Plans (CMS–10400)). 

Those ICRs capture the estimated 

associated burden with issuer 

compliance under § 156.280(e)(5)(ii), 

which requires each QHP issuer offering 

coverage of abortion services for which 

Federal funding is prohibited to submit 

to the relevant state insurance 

commissioner a plan describing how the 

issuer will establish and maintain a 

separate payment account for any QHP 

that covers abortion services for which 

Federal funding is prohibited, and 

§ 156.280(e)(5)(iii) which requires each 

QHP issuer to annually attest to 

compliance with section 1303 of the 

ACA and applicable regulations. 

C. ICRs Regarding Section 1332 Waivers 

(31 CFR Part 33 and 45 CFR Part 155) 

The Departments are finalizing 

modifications to the section 1332 waiver 

implementing regulations, including 

changes related to the interpretation of 

the statutory guardrails, the 

establishment of processes for section 

1332 waiver amendment and extension 

requests, and the codification of new 

regulatory text related to pass-through 

funding for approved section 1332 

waiver plans. In the proposed rule, the 

Departments discussed that the 

proposed policies and interpretations, if 

finalized, would supersede and replace 

prior finalized policies and 

interpretations. The Departments are 

also finalizing modifications to the 

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. These altered 

requirements related to section 1332 

waiver applications, compliance and 

monitoring, or evaluation do not 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. Therefore, the 

Departments do not expect that 

implementing these provisions will 

significantly change the associated 

burden currently approved under OMB 

control number: 0938–1389/Expiration 

date: February 29, 2024. 

VI. Regulatory Impact Analysis 

A. Statement of Need 

This rule implements revised FFE and 

SBE–FP user fees for the 2022 benefit 

year. It also repeals the Exchange DE 

option. The rule also includes changes 

related to the annual open enrollment 

period; 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, 

and establishes a monthly special 

enrollment period for qualified 

individuals who are eligible for APTC, 

and whose household income is 

expected to be no greater than 150 

percent of the FPL during periods of 

time when APTC benefits are available 

such that the applicable taxpayers’ 

applicable percentage is set at zero, such 

as during tax years 2021 and 2022, as 

provided by section 9661 of the ARP. 

Finally, relating to section 1332 waivers, 

it implements several changes, 

including the repeal of the 

incorporation of many policies and 

interpretations from the 2018 Guidance 

into the section 1332 waiver 

implementing regulations. This rule also 

finalizes proposed policies and 

interpretations governing section 1332 

waivers that are consistent with 

providing more accessible and 

affordable health care through the 

individual and small group markets. 

HHS is extending the annual open 

enrollment period to provide 

individuals with a longer opportunity to 

enroll in coverage, which will expand 

access to health insurance coverage, and 

HHS is codifying flexibility for State 

Exchanges that operate their own 

eligibility and enrollment platform to 

set annual open enrollment period end 

dates no earlier than December 15. 

Similarly, HHS is reinstituting prior 

requirements that FFE Navigators 

provide information and assistance with 

regard to certain post-enrollment topics, 

including helping consumers 

understand basic concepts and rights 

related to health coverage and how to 

use it. In addition, HHS repeals 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 rule also 

reduces administrative burden on 

issuers, states, Exchanges, and 

consumers, as well as consumer 

confusion and unintended losses of 

coverage. 

B. Overall Impact 

HHS has 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 

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. 


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215 86 FR 6138. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year). Based on 

HHS’s estimates, OMB’s Office of 

Information and Regulatory Affairs has 

determined this rulemaking is 

‘‘economically significant’’ as measured 

by the $100 million threshold, and 

hence also a major rule under Subtitle 

E of the Small Business Regulatory 

Enforcement Fairness Act of 1996 (also 

known as the Congressional Review 

Act). Accordingly, HHS has prepared a 

Regulatory Impact Analysis that to the 

best of its ability presents the costs and 

benefits of the rulemaking. 

The provisions in this final rule will 

expand consumer access to affordable 

health care. The provisions in this final 

rule will extend the annual open 

enrollment period and codify flexibility 

for State Exchanges that operate their 

own eligibility and enrollment platform 

to set annual open enrollment period 

end dates no earlier than December 15, 

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 will 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 

provisions will increase access to 

affordable health coverage. 

The user fee rates in this final rule are 

higher than those previously finalized 

for 2022 in part 1 of the 2022 Payment 

Notice final rule,215 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 final 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, including in the 

Exchanges. HHS is unable to quantify 

all benefits and costs of this final rule. 

The effects in Table 1 reflect qualitative 

impacts and estimated direct monetary 

costs and transfers resulting from the 

provisions of this final rule for health 

insurance issuers and consumers. 

TABLE 1—ACCOUNTING STATEMENT

Benefits: 

Qualitative: 

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

• State Exchanges that operate their own eligibility and enrollment platform will benefit from flexibility to set annual open enrollment period 

end dates no earlier than December 15, as they will retain flexibility to determine the optimal annual open enrollment period length for 

their state. 

• The special enrollment period clarification will benefit individuals who experience 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 the risk of 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 during periods of time when APTC benefits are available such that the applicable taxpayers’ applicable percentage is 

set at zero, such as during tax years 2021 and 2022, as provided by section 9661 of the ARP, as they will have more opportunities to 

enroll in coverage throughout the year. 

Costs: Estimate Year dollar Discount rate 

(%) 

Period 

covered 

Annualized Monetized ($/year) ¥$261.8 million ............................................. 2020 7 2021–2025 

¥$259.0 million ............................................. 2020 3 2021–2025 

Quantitative: 

• Reduction in costs to all issuers, states, State Exchanges performing premium billing and payment processing, Exchanges on the Federal platform, 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 the one-time implementation changes that issuers, states, States Exchanges performing premium billing and payment processing, and the Exchanges on the 

Federal platform 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 applicable. 

• Increase in costs to Exchanges on the Federal platform of $8.3 million annually to extend the annual open enrollment period to January 

15. 

Qualitative: 

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

Transfers: Estimate Year dollar Discount rate 

(%) 

Period 

covered 

Annualized Monetized ($/year) $480.9 million to $1.2309 billion .................... 2021 7 2022–2026 

$481.5 million to $1.2315 billion .................... 2021 3 2022–2026 

Quantitative: 


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TABLE 1—ACCOUNTING STATEMENT—Continued 

• Increase in transfers from 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 State Exchanges. 

• 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, during periods of time when APTC benefits 

are available such that the applicable taxpayers’ applicable percentage is set at zero, such as during tax years 2021 and 2022, as provided by section 9661 of the ARP, with a corresponding potential increase in APTC/PTC annual outlays and decrease in income tax revenues of approximately $250 million to $1 billion. 

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, HHS anticipates 

that the quantitative effects of the 

provisions in this rule are consistent 

with its previous estimates in the 2021 

Payment Notice for the impacts 

associated with APTC, expanded 

consumer outreach and education and 

Navigators, and FFE user fee 

requirements. 

1. Navigator Program Standards 

(§ 155.210) 

HHS is amending § 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 provision becomes effective. FFE 

Navigators will be required to perform 

the Navigator duties specified in 

§ 155.210(e)(9) beginning with Navigator 

grants awarded in 2022, including noncompeting continuation awards. As 

finalized in this rule, 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 

funding in FY 2021 are not already 

performing these duties under their year 

one project plans when this provision 

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). Additionally, by 

reinstituting the requirements at 

§ 155.210(e)(9), HHS will 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)) 

HHS is removing § 155.221(j) and 

repealing the Exchange DE option, 

which established a process for 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. HHS 

believes that repealing the Exchange DE 

option will have minimal impact on 

stakeholders at this time 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. HHS also believes that repealing 

the Exchange DE option would mitigate 

potential negative downstream impacts, 

including consumer confusion and an 

increased uninsured and underinsured 

population. A more detailed discussion 

of potential impacts appears earlier in 

this preamble in the discussion of 

public comments on this provision. 

3. Annual Open Enrollment Period 

Extension (§ 155.410(e)) 

HHS is extending the individual 

market annual open enrollment period 

from November 1 through January 15 for 

the 2022 coverage year and beyond, 

with a modification to codify 

flexibilities for State Exchanges not 

utilizing the Federal platform to choose 

an annual open enrollment period end 

date no earlier than December 15 and to 

adopt accelerated effective dates. HHS 

does not believe a significant impact on 

the Exchange risk pool will result from 

this change. Consumers will benefit 

from a longer annual open enrollment 

period without additional demand 

placed on them. A lengthened annual 

open enrollment period may result in an 

increase of $8.3 million in technical 

infrastructure costs to the FFEs annually 

to support extended Cloud and 

application services associated with the 

extension. A lengthened annual open 

enrollment period may also 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 Whose Applicable Taxpayer Has 

an Applicable Percentage of Zero 

(§ 155.420(d)(16)) 

HHS is finalizing the monthly special 

enrollment period for APTC eligible 

consumers with a projected annual 


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216As noted in the proposed rule, this provision 

does 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). 217See IRC 36B(b)(2)(A), (c)(2)(A)(i). 

household income no greater than 150 

percent of the FPL with coverage 

effective dates and other eligibility 

parameters as proposed, but is finalizing 

it so that the special enrollment period 

is only available during periods of time 

during which APTC benefits are 

available such that the applicable 

taxpayers’ applicable percentage is set at 

zero, such as during tax years 2021 and 

2022, as provided by section 9661 of the 

ARP. HHS is also finalizing that plan 

category limitations apply to this special 

enrollment period, and in consideration 

of concerns from certain commenters as 

further discussed in preamble, HHS is 

also finalizing § 155.420(a)(4)(ii)(D) with 

revisions to reflect that an enrollee who 

is adding a qualified individual or 

dependent through this special 

enrollment period may add the newly 

enrolling household member to their 

current QHP; or, change to a silver-level 

QHP and add their newly enrolling 

household member to this silver-level 

QHP; or, change to a silver-level QHP 

and enroll the newly enrolling qualified 

individual or dependent in a separate 

QHP. HHS believes that this 

modification is appropriate to provide 

clarity on options and limitations for 

enrollees whose household members 

newly enroll through this special 

enrollment period. In particular, HHS is 

finalizing that, while newly enrolling 

qualified individuals and dependents 

are not subject to plan category 

limitations, enrollees with a newlyenrolling dependent or other household 

member may not use the new monthly 

special enrollment period to change to 

a plan of any metal level to enroll 

together with their newly-enrolling 

household member, but can stay in the 

same plan or change to a silver plan to 

enroll together with the newly-enrolling 

household member.216 Additionally, 

this special enrollment period will be 

available at the option of the Exchange, 

as proposed, in order to allow State 

Exchanges to decide whether to 

implement it based on their specific 

market dynamics, needs, and priorities. 

HHS is also finalizing 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, HHS is adding 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. Finally, HHS is adding 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 that is not a QHP offered 

through an Exchange.217

This special enrollment period 

availability will 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, HHS believes that the 

benefit to providing these opportunities 

outweighs adverse selection concerns. 

Further, HHS believes the risk of 

adverse selection is mitigated to some 

degree by most qualifying individuals 

having access to a premium-free silver 

plan with a 94 percent AV after 

application of APTC, because 

consumers eligible for a premium-free 

plan after application of APTC which, 

due to its 94 percent AV, covers such a 

significant portion of health care 

services, would likely already be 

enrolled if they were aware of their 

eligibility for such coverage. 

Additionally, HHS believes 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 

coverage once an immediate health care 

need is met, which may also limit some 

adverse selection risk. HHS also 

believes that applying plan category 

limitations to this special enrollment 

period will help to mitigate adverse 

selection because it will 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 

or bronze plan once the health issue is 

resolved. HHS also believes that 

enrollees who are interested in changing 

plans during the year through this 

special enrollment period will likely be 

deterred because such a change would 

generally mean they lose progress they 

have made toward meeting their 

deductibles and other accumulators. 

However, HHS acknowledges that 

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. 

HHS requested comment on practices, 

including education and outreach, that 

could help ensure that consumers who 

are eligible for this special enrollment 

period enroll in the silver plan with a 

zero-dollar premium after application of 

APTC that is available to them. HHS 

also sought 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 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, 

HHS sought comment on whether 

issuers may account for this risk 

through premium increases. HHS 

estimated 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 HHS sought comment 

on this estimate. 

HHS also sought 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, HHS also sought 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 special enrollment period 

will be based on projected annual 

household income level, and Exchanges 

rely on applicants to report their most 


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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. HHS also sought comment on 

practices that could help mitigate this 

challenge, and ways to improve 

outreach to low-income consumers 

more generally. Relatedly, HHS sought 

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. HHS sought comment on how 

Exchanges and stakeholders that 

provide enrollment assistance could 

develop effective outreach and 

education campaigns to target this 

population. 

Finally, HHS requested 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. 

The following is a summary of the 

comments received and HHS’s 

responses to the comment solicitations 

related to the estimated impact of the 

monthly special enrollment period for 

APTC-eligible qualified individuals 

with a household income no greater 

than 150 percent of the FPL 

(§ 155.420(d)(16)). 

Comment: As further discussed in 

preamble, some commenters supported 

the monthly special enrollment period 

and stated that the risk of adverse 

selection as a result of the policy would 

be limited due to the enhanced subsidy 

provisions of the ARP. Some of these 

commenters also stated that risk would 

be limited because younger and 

healthier individuals would be more 

likely to enroll when given additional 

opportunities to do so. As further 

discussed in preamble, many 

commenters also cited comparable state 

experiences as evidence of the low 

likelihood of adverse selection, such as 

the Massachusetts State Exchange’s 

enrollment opportunity for individuals 

with a household income no higher than 

300 percent of the FPL, and the ability 

of consumers up to 200 percent of the 

FPL to enroll in the Basic Health 

Program year-round in Minnesota and 

New York. 

Some commenters added that State 

Exchange data on risk factors associated 

with enrollees who accessed coverage 

through a special enrollment period, 

including the special enrollment period 

that State Exchanges provided during 

the 2020 or 2021 plan years due to the 

COVID–19 pandemic, indicated that 

these enrollees did not pose significant 

additional risk and in some cases were 

younger than the average age of 

enrollees who did not access coverage 

through the special enrollment period. 

One of these commenters asked that 

CMS analyze data on special enrollment 

period enrollees in states that use the 

HealthCare.gov platform, and suggested 

that such analysis would yield a similar 

result. Other commenters suggested that 

HHS could extend the special 

enrollment period to APTC-eligible 

individuals with household incomes up 

to 200 or 250 percent of the FPL with 

only a relatively small increase in 

adverse selection. 

Response: HHS appreciates 

commenters’ support of the monthly 

special enrollment period and agree that 

adverse selection will be mitigated 

during the period of enhanced subsidies 

due to the ARP. The goal of this policy 

is to increase access to affordable health 

care, consistent with E.O. 14009, and 

HHS appreciates comments stating that 

the monthly special enrollment period 

would increase the number of 

subsidized enrollees in the individual 

market. As further discussed in 

preamble, HHS also agrees that, in many 

cases, special enrollment periods may 

encourage consumers who are younger 

and healthier than average to enroll. 

Additionally, HHS acknowledges that 

some Exchanges that have expanded 

enrollment opportunities for consumers 

with a projected annual household 

income below a certain threshold have 

not experienced significant negative 

impacts from adverse selection. 

However, because HHS appreciates 

concerns that the risk of adverse 

selection may vary significantly based 

on market conditions specific to 

different Exchanges, and HHS’s goal is 

also to achieve a balanced approach that 

takes into account these varying 

conditions as much as possible, HHS is 

finalizing this special enrollment period 

to limit it to be available only during 

periods of time when APTC benefits are 

available such that the applicable 

taxpayers’ applicable percentage is set at 

zero, such as during tax year 2022, as 

provided by section 9661 of the ARP. 

Comment: As noted in preamble, 

some commenters were concerned that 

the monthly special enrollment period 

would result in increased premiums, 

narrowed networks, fewer plan choices, 

and market instability due to adverse 

selection created by newly enrolling 

consumers but also, perhaps more 

significantly, by current enrollees using 

the special enrollment period to change 

plans mid-year based on provider 

network or other plan characteristics. 

Several of these commenters stated that 

HHS’s estimated increase in premiums 

of 0.5 to 2 percent was an underestimate 

of the true impact of this policy and 

argued that adverse selection would 

increase if the special enrollment period 

extends beyond the current expiration 

date of the ARP. 

Several commenters agreed that 

adverse selection and related increases 

in individual health insurance 

premiums would vary significantly by 

state based on specific market 

conditions such as Medicaid expansion 

status. A few commenters voiced 

concerns that the HHS-operated risk 

adjustment methodology does not 

adequately compensate for individuals 

with partial-year or short-term 

enrollment. Several commenters, 

including some that supported the 

proposal, asked that CMS monitor the 

individual market for impacts of adverse 

selection, and one commenter asked us 

to engage in additional rulemaking if 

evidence of significant adverse selection 

is found. One commenter stated that 

this special enrollment period would 

increase enrollment and the increased 

costs would be overwhelmingly borne 

by the Federal Government in the form 

of increased APTC, but that these costs 

would be an appropriate use of Federal 

resources. However, other commenters 

voiced the concern that adverse 

selection would drive up rates and that 

these increases would 

disproportionately impact unsubsidized 

consumers. 

Response: As further discussed in 

preamble, HHS acknowledges the 

potential impacts to premiums and 

adverse selection as a result of this 

special enrollment period and 

appreciates comments on its estimates 

of potential premium increases related 

to adverse selection. HHS also clarifies 

that HHS calculated this estimate based 

on currently available data and internal 

analyses, and based on the assumption 

that the proposed special enrollment 

period would only be available for 

coverage for periods of time during 

which APTC benefits are available such 

that the applicable taxpayers’ applicable 

percentage is set at zero; in particular, 

during tax year 2022, as provided by 

section 9661 of the ARP. Based on this 

internal analysis and the balance of 

public comments, including those that 

cite other Exchanges’ experiences with 

open-ended special enrollment periods, 

HHS continues to believe the risk of 

adverse selection with respect to this 

new special enrollment period is 

limited and is outweighed by the gains 

in coverage that would result from this 

special enrollment period. 

Further, as discussed in preamble and 

the proposed rule, HHS believes that 


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218Public Law 117–2. 

applying plan category limitations to 

this special enrollment period will help 

to mitigate adverse selection, and HHS 

has updated the proposed regulatory 

text at § 155.420(a)(4)(ii)(D) to clarify 

that an enrollee who is adding a 

qualified individual or dependent may 

add the newly enrolling household 

member to their current QHP; or, change 

to a silver-level QHP and add their 

newly enrolling household member to 

this silver-level QHP; or, change to a 

silver-level QHP and enroll the newly 

enrolling qualified individual or 

dependent in a separate QHP. HHS 

notes that per the time limitation HHS 

is finalizing, the special enrollment 

period will be available only for 

coverage for periods of time during 

which APTC benefits are available such 

that the applicable taxpayers’ applicable 

percentage is set at zero, which is 

currently limited to tax year 2022, as 

provided by section 9661 of the ARP. 

HHS believes that the time-limited 

nature of this special enrollment period 

and the applicable plan category 

limitations will help to mitigate 

concerns about adverse selection, 

especially when combined with robust 

outreach and education efforts to 

maximize the number of qualifying 

individuals who gain coverage through 

the special enrollment period based on 

an understanding of its availability as 

opposed to enrolling due to an emerging 

health care need. 

However, as also noted in preamble, 

HHS appreciates that adverse selection 

will likely vary across different 

Exchanges based on a variety of factors, 

such as whether a state has expanded its 

Medicaid program, and HHS will work 

with stakeholders to monitor individual 

health insurance markets while the 

special enrollment period is in place to 

track potential adverse selection 

impacts of the special enrollment 

period, as well as access to coverage for 

higher-income individuals, in particular 

those who do not qualify for a monthly 

APTC payment of more than zero 

dollars, and to consider possible 

approaches to address any issues that 

arise. 

Last, as discussed in this preamble, 

the HHS-operated risk adjustment 

methodology added enrollment duration 

factors to the adult risk adjustment 

models starting with the 2017 benefit 

year. These enrollment duration factors 

are used in the calculation of adult 

enrollee risk scores under the state 

payment transfer formula to account for 

additional risk associated with enrollees 

with partial-year enrollment. They do so 

through a set of 11 enrollment duration 

binary indicatory variables that signify 

that an enrollee had exactly one to 11 

months of enrollment in a given plan. 

The value of these indicators decreases 

monotonically from one to 11 months, 

reflecting the increased annualized costs 

associated with fewer months of 

enrollment. Adult enrollees who 

enrolled during this special enrollment 

period will receive the applicable 

enrollment duration factor in the risk 

score calculation. While HHS continues 

to evaluate the current enrollment 

duration factors, HHS generally 

disagrees with comments asserting the 

risk adjustment methodology does not 

adequately address partial year 

enrollees. 

Comment: As also discussed in 

preamble, some commenters stated the 

concern that issuers had not had time to 

incorporate adverse selection risk 

related to the proposed special 

enrollment period into their rates for the 

2022 plan year. However, no 

commenters recommended giving 

issuers an additional opportunity to 

adjust rates before the 2022 plan year. 

Several commenters requested that HHS 

delay making the proposed special 

enrollment period available until the 

2023 plan year if HHS finalized the 

proposal, in order to provide issuers 

with adequate time to incorporate 

related risk into their rates. 

Response: Based on HHS’s 

determination that consumers who are 

eligible for free or very low-cost 

coverage provided by enhanced APTC 

through the ARP will benefit from 

additional opportunities to enroll in 

Exchange coverage while this enhanced 

assistance is in place, HHS is finalizing 

the special enrollment period to be 

available for the 2022 plan year, and to 

be limited to provide coverage for 

periods of time during which APTC 

benefits are available such that the 

applicable taxpayers’ applicable 

percentage is set at zero, including tax 

year 2022, as provided by section 9661 

of the ARP. 

5. Clarification of Special Enrollment 

Periods for Enrollees Who Are Newly 

Eligible or Newly Ineligible for Advance 

Payments of the Premium Tax Credit 

(§ 155.420(f)) 

HHS is finalizing new language 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, even 

when they have previously been APTC 

ineligible for another reason, such as 

having other MEC. HHS believes that 

the special enrollment period rules that 

reference APTC eligibility at 

§ 155.420(d)(6) could have permitted 

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. HHS believes 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. 

HHS believes 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.218 More specifically, 

this definition makes clear that an 

individual who qualifies for a maximum 

APTC amount of zero dollars would 

qualify for a special enrollment period 

per § 155.420(d)(6)(i) or (ii) if, later in 

the plan year, they became 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. 

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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219Figures repeated here that were also included 

in the proposed rule were drawn from internal CMS 

analysis as of late May 2021, almost 2 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. 

New figures are from internal CMS analysis as of 

late August 2021. 220 86 FR 6138. 

also be newly eligible for APTC under 

the new rules. After passage of the ARP 

and CMS’s 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 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. More 

recently, the number of enrollees who 

did not provide household income 

decreased further, to just under 458,000, 

and the number of enrollees reporting a 

household income greater than 400 

percent of the FPL has increased to over 

280,000. The number of enrollees 

eligible for a maximum APTC amount of 

zero dollars has also increased, to just 

over 51,000 individuals.219 As noted in 

the proposed rule, HHS expects 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. 

HHS sought comment on the 

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. HHS also 

sought 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. 

The summary of the comments 

received and HHS’s responses to the 

comment solicitations related to the 

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)) appears in that preamble 

section earlier in this rule. 

6. FFE and SBE–FP User Fees (§ 156.50) 

HHS is finalizing 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 1 of the 2022 Payment Notice. 

HHS is also increasing 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.220

Based on HHS’s 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 

user fee rates, HHS expects transfers 

from issuers to Federal Government to 

be increased by approximately $200 

million in plan year 2022. 

HHS is repealing 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, HHS does 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) 

HHS is amending 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. As 

finalized, HHS reverts to codifies 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 of the ACA. 

As finalized, the acceptable methods for 

satisfying the separate payment 

requirement 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. HHS 

continues to believe removal of the 

separate billing regulation 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, and 

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 be 

expected to assume annual materials 

costs related to printing of and sending 

the separate bill. HHS 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. 

HHS 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, 

HHS estimated there would be an 

approximate premium impact of up to 

1.0 percent in plan year 2021 and each 

year thereafter in states with QHP 

issuers offering coverage of abortion 

services for which Federal funds are 

prohibited. HHS 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, HHS estimated that 

APTC amounts would increase up to 

$146 million when premium rates 

reflect the projected additional 

administrative and operational expense 

burdens. 

HHS also projected in the 2019 

Program Integrity Rule that the FFEs 

would incur additional costs due to onetime technical changes and increased 

call volumes and additional customer 

service efforts. HHS estimated that the 

FFEs would incur a one-time cost of 

$750,000 in 2020 and ongoing annual 

costs of approximately $400,000 in 


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2020, $800,000 in 2021, $600,000 in 

2022, and $400,000 in 2023 onwards to 

implement the separate billing policy. 

HHS 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, HHS 

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. 

HHS 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 

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. HHS 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, HHS 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 FFEs, 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. 

HHS also believes the consumer 

confusion and new logistical obstacles 

due to the separate billing regulation 

would disproportionately harm and 

burden communities that 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. 

Comment: Commenters supporting 

repeal of the separate billing regulation 

and codification of the prior policy 

confirmed these estimates and 

expressed support for removal of an 

onerous billing requirement on issuers, 

states, Exchanges, and consumers. 

Commenters stated that issuers would 

have had to redesign their billing 

systems for only a small portion of their 

business in the individual market 

Exchanges. Commenters agreed that the 

separate billing regulation would have 

imposed expensive IT changes on 

issuers and states, requiring creation of 

a billing system only for individual 

Exchanges and not for products sold in 

any other market. Commenters also 

agreed that the separate billing 

regulation would have required costly 

changes to other issuer operations such 

as invoice processing, collections, 

customer service support, and other 

transactions with Exchanges. 

Commenters also agreed there would be 

added administrative costs of mailing 

separate bills in separate envelopes and 

collecting separate payments. Some 

commenters noted that issuers have 

already incurred ongoing costs for 

printing and mailing, additional 

staffing, and reprograming billing 

systems and that the separate billing 

regulation already resulted in increased 

burden for issuers and consumers, 

widespread confusion by consumers 

and other stakeholders, and an increase 

in frustration and confusion around 

grace periods and terminations. 

Commenters also expressed concern 

that the highest costs from the separate 

billing regulation would have been 

concentrated in states that require 

abortion coverage. 

For example, one commenter noted 

that many of its QHPs that offer abortion 

coverage for which Federal funding is 

prohibited are in states where the State 

Exchange operationalizes the premium 

billing and collections process on behalf 

of issuers, while others directly bill 

consumers. This commenter noted that 

for issuers operating in states that 

operationalize the billing and 

collections themselves, issuers expected 

that there would be an additional 

assessment to cover the costs to the 

state, which will ultimately be factored 

into premiums, as the 2019 Program 

Integrity Rule acknowledged. In other 

states, including those where abortion 

coverage for which Federal funding is 

prohibited is mandatory, the commenter 

explained that issuers would have been 

tasked with the complete operational 

and financial burden. This commenter 

asserted that the separate billing 

regulation therefore conflicted with the 

common goal among QHPs to keep costs 

and premiums low in order to provide 

affordable care for low-income and 

vulnerable populations. 

Commenters also asserted that the 

separate billing regulation seemed to 

serve no discernible purpose beyond the 

introduction of easily-avoidable 

administrative complexity for health 

plans and red tape for consumers. As 

such, commenters believe that the 

separate billing regulation would have 

caused issuers to stop covering abortion 

services for which Federal funding is 

prohibited in states where such 

coverage is not mandated. Commenters 

agreed that, if issuers were to drop such 

abortion coverage, the costs would be 

transferred to consumers and would 

likely disproportionately impact lowincome women that already face barriers 

to accessing health care services. 

Commenters also noted that the burden 

would have been particularly significant 

in states that require individual market 

QHP coverage of abortion because, in 

such states, every QHP policy holder 

would have received two separate bills 

and been instructed to pay those bills in 

two separate transactions. Commenters 

assert that this would have caused 

significant harm to individual market 

enrollees and that implementation costs 

for issuers would have further harmed 

consumers by causing their premiums to 

increase. Commenters again agreed that 

these negative impacts, including the 

widespread consumer confusion that 

could result in an increased number of 

consumers losing their health coverage, 

would have had a disproportionate 

impact on the state’s most vulnerable 

residents. 

Commenters objecting to repeal of the 

separate billing regulation argued that 

HHS has not shown how repeal of the 

separate billing regulation and 

codification of the prior policy will add 

a financial benefit to either consumers 

or insurers that outweighs the harm 

caused to consumer transparency, 

conscience protections, and statutory 

compliance with section 1303. 

Objecting commenters also broadly 

criticized HHS’s cost estimates for the 

burden associated with the separate 

billing regulation, arguing that HHS 

failed to consider important factors, 

explore sufficient data, and make 

necessary estimates. Objecting 

commenters also alleged that, regardless 

of the extent of burden associated with 

the separate billing regulations on 

issuers, states, Exchanges, and 

consumers, that any such burden is not 

unreasonable, but necessary to ensure 

compliance with section 1303 of the 


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221 86 FR 35156. 

222 84 FR 71674, 71683. 

223Planned Parenthood of Maryland, Inc. v. Azar, 

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

U.S.C. 706; California v. U.S. Dep’t of Health & 

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

20, 2020); Washington v. Azar, 461 F. Supp. 3d 

1016 (E.D. Wash. 2020). 

ACA. Commenters also asserted that 

HHS did not provide sufficient evidence 

that certain groups of people are more 

likely to be impacted by the separate 

billing regulation than others and that, 

in any event, such arguments cannot 

justify violating the separate billing 

requirement that commenters argue is 

expressly required under section 1303 

of the ACA. 

Commenters objecting to repeal of the 

separate billing regulation asserted that 

the cost estimates fail to address or take 

into account recent changes in the law 

made by the ARP. Commenters stated 

that millions of Americans are newly 

eligible for zero-dollar coverage under 

ARP but that, in states where all or most 

ACA individual market plans cover 

abortion for which Federal funding is 

prohibited, consumers will not be able 

to purchase a zero-dollar premium plan 

because of section 1303’s funding 

restrictions. Commenters therefore 

argued that individuals in such 

situations are already paying, in effect, 

a ‘‘separate bill’’ for that coverage and 

would not face additional burdens 

established by the separate billing 

regulation. Commenters raising this 

objection asked HHS to explain how the 

Department will enforce section 1303’s 

funding restrictions for otherwise zeropremium Exchange plans and to provide 

a state-by-state analysis of the effects of 

the proposed rule. 

Response: HHS agrees with 

commenters concerns regarding the 

costs and burdens the separate billing 

policy would have imposed on 

stakeholders. As raised by some 

commenters, HHS also acknowledges 

that some costs may have already been 

incurred by issuers and that the actual 

cost savings, especially for one-time IT 

related costs, may be lower than HHS 

estimates. Unfortunately, HHS does not 

have an estimate of costs already 

incurred by issuers and can only 

estimate savings going forward. HHS 

disagrees with comments contesting the 

validity of these burden estimates. 

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. 

HHS acknowledges that consumers 

who live in states where premiums for 

Exchange coverage cannot be fully paid 

for with APTC, such as states that 

require coverage of abortion services for 

which Federal funding is prohibited, 

will not have access to a silver plan 

with a zero-dollar premium, as further 

explained in the preamble to 

§ 155.420(d)(16) of the proposed rule.221

However, HHS also notes that 

individual market QHP issuers covering 

abortion services for which Federal 

funds are prohibited offering coverage to 

consumers who qualify for zero-dollar 

premium plans are still required to 

comply with section 1303 of the ACA 

and all applicable requirements codified 

at § 156.280. HHS also notes that the 

ARP was enacted in 2021, and therefore, 

the consumer cost and burden estimates 

in each respective rule regarding the 

separate billing regulation were based 

on the estimated number of all 

consumers enrolled in QHPs offering 

coverage for abortion and are reflective 

of the anticipated burden at that time. 

The 2019 Program Integrity Rule 

included a detailed account of the 

anticipated financial and operational 

burdens from the separate billing 

regulation, estimates which were based 

upon plan and premium data, actuarial 

estimates, public comments from issuers 

and states directly regulated by the 

separate billing regulation, and 

consumer enrollment figures. Those 

burdens are discussed in further detail 

in sections III., ‘‘Collection of 

Information Requirements,’’ and IV., 

‘‘Regulatory Impact Analysis,’’ of that 

rule, which explain from where such 

estimates are derived. As explained in 

more detail in the preamble to 

§ 156.280, HHS also agrees with 

commenters that the consumer 

confusion and new logistical obstacles 

from the separate billing regulation 

would disproportionately burden 

communities who already face barriers 

to accessing care. 

Upon reassessing the separate billing 

regulation, and in light of the legal 

developments, HHS no longer sees a 

discernible benefit to requiring separate 

billing that would be sufficient to 

outweigh its burdens. Section 1303 does 

not specify the method a QHP issuer 

must use to collect the separate 

payment 222 and multiple Federal 

district courts have already invalidated 

the separate billing regulation, 

preventing HHS from requiring its 

implementation.223 HHS is therefore 

finalizing 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. HHS 

anticipates repeal of the separate billing 

regulation will 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 rule, the Departments are 

finalizing modifications to the section 

1332 waiver implementing regulations, 

including the adoption of new policies 

and interpretations of the statutory 

guardrails. The Departments also 

finalize new processes and procedures 

for amendment and extension requests 

for approved section 1332 waiver plans. 

As outlined in this final rule, the 

policies and interpretations in this rule 

will supersede and replace prior 

finalized policies and interpretations. 

The Departments are also modifying 

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 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. As such, the Departments are 

of the view that both states with 

approved section 1332 waivers and 

states that are considering section 1332 

waivers would continue to comply with 

the requirements noted earlier without 

creating any additional costs or burdens 

that have not already been accounted for 

in prior impact estimates of benefits and 

costs. 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. 


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224https://www.bls.gov/oes/current/oes_nat.htm. 

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, HHS 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, HHS assumes that 

the total number of unique commenters 

on part three of the 2022 Payment 

Notice proposed rule will be the number 

of reviewers of this final rule. HHS 

acknowledges that this assumption may 

understate or overstate the costs of 

reviewing this rule. It is possible that 

not all commenters reviewed the 

proposed rule in detail, and it is also 

possible that some reviewers chose not 

to comment on the proposed rule. For 

these reasons, HHS believed that the 

number of commenters on part three of 

the 2022 Payment Notice proposed rule, 

in addition to the number of states and 

issuers in the individual, small and 

large group markets nationwide, would 

be a fair estimate of the number of 

reviewers of the final rule. HHS 

welcomed any comments on the 

approach in estimating the number of 

entities which will review the proposed 

rule. 

HHS also recognized that different 

types of entities are in many cases 

affected by mutually exclusive sections 

of this final rule, and therefore, for the 

purposes of this estimate, HHS assumes 

that each reviewer reads approximately 

50 percent of the rule. HHS sought 

comments on this assumption. 

Using the wage information from the 

Bureau of Labor Statistics (BLS) for 

medical and health service managers 

(Code 11–9111), HHS estimates that the 

cost of reviewing this rule is $114.24 per 

hour, including overhead and fringe 

benefits.224 Assuming an average 

reading speed, HHS estimates that it 

would take approximately 1 hour for the 

staff to review half of this final rule. 

HHS assumes 652 entities will review 

this final rule. For each entity that 

reviews the rule, the estimated cost is 

approximately $114.24 (1 hour × 

$114.24). Therefore, HHS estimates that 

the total cost of reviewing this 

regulation is approximately $74,588.80 

($114.24 × 652 reviewers). 

D. Regulatory Alternatives Considered 

In developing the policies contained 

in this final rule, HHS considered 

numerous alternatives to the provisions. 

Below HHS discusses the key regulatory 

alternatives that HHS considered. 

HHS considered taking no action 

related to adding 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, HHS believes that many 

consumers will benefit from having 

additional opportunities to enroll in 

low-cost Exchange coverage, and that 

those who will be eligible for this 

special enrollment period and who do 

not enroll during the annual open 

enrollment period are likely to have 

been unaware of their option to enroll 

in a plan with no monthly premium 

through the Exchange, after application 

of APTC. HHS also considered whether, 

if HHS were to provide this special 

enrollment period, whether it should be 

limited to periods of time when 

enhanced APTC benefits were also 

available, such as those provided by the 

section 9661 of the ARP. Based on 

public comments and in order to help 

mitigate adverse selection concerns, 

HHS is limiting availability of this 

special enrollment period to periods of 

time when APTC benefits are available 

such that the applicable taxpayers’ 

applicable percentage is set at zero, such 

as during tax years 2021 and 2022, as 

provided by section 9661 of the ARP. 

Finally, HHS also considered and 

received comment on other strategies to 

help individuals who may benefit from 

the proposed special enrollment period, 

some of whom may qualify for another 

existing special enrollment period or 

could benefit from assistance with 

transitioning between Medicaid and 

Exchange coverage. HHS will continue 

to consider innovative and thoughtful 

steps that HHS and Exchanges may take 

to assist consumers with transitions 

between different coverage types and 

help them to maintain continuous 

coverage. However, HHS is also 

finalizing the proposed special 

enrollment period to maximize 

opportunities for consumers to enroll in 

free or low-cost coverage of which they 

may not be aware. 

HHS considered taking no action 

related to its clarification, 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, HHS is finalizing as 

proposed because, in consideration of 

generally supportive public comments, 

HHS continues to believe that 

consumers and other stakeholders will 

benefit from this clarification because it 

improves transparency of Exchanges’ 

implementation of the special 

enrollment period qualifying events 

provided at § 155.420(d)(6). 

HHS considered restoring user fee 

rates to their 2021 levels at 3 percent 

and 2.5 percent of total monthly 

premium for issuers in the FFEs and 

SBE–FPs, respectively. However, based 

on HHS’s analysis of estimated 2022 

enrollment, premiums, and contract 

costs, HHS determined that this increase 

would be unnecessary to finance the 

Exchange essential functions. 

Regarding the section 1332 waiver 

provisions 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 outlining policies, 

interpretations, and standards to help 

explain the section 1332 program 

requirements and the Departments’ 

interpretations thereof 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 finalizing new policies and 

interpretations (some of which align 

with previous guidance and rulemaking) 

was the clearest way to explain the 

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 a final regulatory flexibility 

analysis to describe the impact of the 

final 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. 


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53500 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

225https://www.sba.gov/document/support-tablesize-standards. 

226Available at https://www.cms.gov/CCIIO/ 

Resources/Data-Resources/mlr.html. 

In this rule, HHS finalizes revised 

2022 user fee rates, which will impact 

issuer rate setting. HHS believes 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.225 HHS believes that few, if any, 

insurance issuers 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 226 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 

issuers that may be affected, since over 

67 percent of these small companies 

belong to larger holding groups, and 

many, if not all, of these small 

companies are likely to have non-health 

lines of business that will result in their 

revenues exceeding $41.5 million. The 

user fee rates finalized in this rule are 

lower than the 2021 benefit year user fee 

rates by 0.25 percent, and these new 

rates are higher than the previously 

finalized 2022 benefit year user fee rates 

by 0.5 percent. Therefore, these user fee 

rates will 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 earlier. 

In this final rule, HHS also codifies a 

new monthly special enrollment period 

for certain APTC-eligible individuals. 

Because this special enrollment period 

has the potential to introduce new 

adverse selection risk into the 

individual market, HHS sought 

comment in the RIA on the impact on 

premiums of this policy in Exchanges 

where it is implemented. HHS estimates 

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 provisions in 

this rule will either reduce costs or have 

no cost impact. Therefore, HHS does not 

expect the provisions of this rule to 

affect a substantial number of small 

entities. HHS does not believe that this 

threshold will be reached by the 

requirements in this final rule. 

Therefore, the Secretary of HHS has 

determined that this final rule will not 

have a significant economic impact on 

a substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires HHS to prepare a regulatory 

impact analysis in certain cases 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 604 

of the RFA. For purposes of section 

1102(b) of the Act, HHS defines 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, HHS has 

determined that this final rule would 

not affect small rural hospitals, as the 

policies finalized in this rule impact 

consumer assisters, Exchanges, states, 

issuers, and consumers, but do not 

directly pertain to providers or facilities. 

Therefore, the Secretary of HHS has 

determined that this rule will 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) 

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 HHS has not 

been able to quantify all costs, HHS 

expects 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 HHS’s view, while this final rule does 

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, HHS has 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, HHS 

attempted to balance the states’ interests 

in regulating health insurance issuers 

with the need to ensure market stability. 

By doing so, HHS complied with the 

requirements of E.O. 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. HHS 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 final rule is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801, et seq.), which specifies that 

before a rule can take effect, the Federal 

agency promulgating the rule shall 

submit to each House of the Congress 

and to the Comptroller General a report 

containing a copy of the rule along with 

other specified information, and has 

been transmitted to the Congress and 

the Comptroller for review. This final 

rule is a ‘‘major rule’’ as that term is 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53501 

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. 

Chiquita Brooks-LaSure, Administrator of 

the Centers for Medicare & Medicaid 

Services, approved this document on 

September 13, 2021. 

List of Subjects 

31 CFR Part 33 

Health care, Health insurance, 

Reporting and recordkeeping 

requirements. 

45 CFR Part 147 

Age discrimination, Citizenship and 

naturalization, Civil rights, Health care, 

Health insurance, Individuals with 

disabilities, Intergovernmental relations, 

Reporting and recordkeeping 

requirements, Sex discrimination. 

45 CFR Part 155 

Administrative practice and 

procedure, Advertising, Age 

discrimination, Brokers, Civil rights, 

Citizenship and naturalization, Conflict 

of interests, Consumer protection, Grant 

programs—health, Grants 

administration, Health care, Health 

insurance, Health maintenance 

organizations (HMO), Health records, 

Hospitals, Indians, Individuals with 

disabilities, Intergovernmental relations, 

Loan programs—health, Medicaid, 

Organization and functions 

(Government agencies), Public 

assistance programs, Reporting and 

recordkeeping requirements, Sex 

discrimination, State and local 

governments, Technical assistance, 

Taxes, Women, Youth. 

45 CFR Part 156 

Administrative practice and 

procedure, Advertising, Advisory 

committees, Age discrimination, Alaska, 

Brokers, Citizenship and naturalization, 

Civil rights, Conflict of interests, 

Consumer protection, Grant programs— 

health, Grants administration, Health 

care, Health insurance, Health 

maintenance organization (HMO), 

Health records, Hospitals, Indians, 

Individuals with disabilities, 

Intergovernmental relations, Loan 

programs—health, Medicaid, 

Organization and functions 

(Government agencies), Prescription 

drugs, Public assistance programs, 

Reporting and recordkeeping 

requirements, Sex discrimination, State 

and local governments, Sunshine Act, 

Technical assistance, Women, Youth. 

For the reasons set forth in the 

preamble, the Department of the 

Treasury amends 31 CFR part 33 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) * * * 

(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 revising the 

section heading and paragraphs (a) and 

(b)(3) and adding paragraphs (b)(5) and 

(g) to 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 comprehensive 

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 


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53502 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

results from a natural disaster; public 

health emergency; or other emergent 

situations that threaten consumers’ 

access to comprehensive 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 revising 

paragraphs (a) and (c)(2)(i) and adding 

paragraphs (c)(2)(ii)(F) and (c)(2)(iii) to 

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 comprehensive 

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 comprehensive 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 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 amends 45 CFR 

subtitle A, subchapter B, as set forth 

below. 


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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 53503 

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 revising 

paragraphs (b)(2)(i)(E) and (F) and 

adding paragraph (b)(2)(i)(G) to 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, 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. Beginning with Navigator 

grants awarded in 2022, including noncompeting continuation awards, 

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 

enrollment process, and premium tax 

credit reconciliations. 

* * * * * 

§ 155.221 [Amended] 

■ 13. Amend § 155.221 by removing 

paragraph (j). 

■ 14. Amend § 155.410 by— 

■ a. Revising paragraph (e)(3); 

■ b. Adding paragraph (e)(4); 

■ c. Revising paragraph (f)(2) 

introductory text; and 

■ d. Adding paragraph (f)(3). 

The revisions and additions read as 

follows: 

§ 155.410 Initial and annual open 

enrollment periods. 

* * * * * 

(e) * * * 

(3) For the benefit years beginning on 

January 1, 2018 through 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— 

(i) Subject to paragraph (e)(4)(ii) of 

this section, 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. 

(ii) For State Exchanges not utilizing 

the Federal platform, for the benefit 

years beginning on or after January 1, 

2022, an alternative annual open 

enrollment period end date may be 

adopted, provided the end date is no 

earlier than December 15 of the calendar 

year preceding the benefit year. 

(f) * * * 

(2) For the benefit years beginning on 

January 1, 2016 through January 1, 2021, 

the Exchange must ensure coverage is 

effective— 

* * * * * 

(3) For benefit years beginning on or 

after January 1, 2022, the Exchange must 

ensure that coverage is effective— 

(i) Subject to paragraph (f)(3)(ii) of 

this section— 

(A) January 1, for QHP selections 

received by the Exchange on or before 

December 15 of the calendar year 

preceding the benefit year. 

(B) February 1, for QHP selections 

received by the Exchange from 

December 16 of the calendar year 

preceding the benefit year through 

January 15 of the benefit year. 

(C) The first of the following month, 

for QHP selections received by the 15 of 

a month after January, if applicable 

under paragraph (e)(4)(ii) of this section. 

(D) The first of the second following 

month, for plan selections received 

between the 16th and the end of a 

month, beginning January 16 of the 

benefit year, if applicable under 

paragraph (e)(4)(ii) of this section. 

(ii) For State Exchanges not utilizing 

the Federal platform, for a QHP 

selection received by the Exchange 

during the open enrollment period for 

which effective dates specified in 

paragraph (f)(3)(i) of this section would 

apply, the Exchange may provide a 

coverage effective date that is earlier 

than specified in such paragraph. 

* * * * * 

■ 15. Amend § 155.420— 

■ a. In paragraph (a)(4)(ii)(B), by 

removing the phrase ‘‘enrollment; or’’ 

and adding in its place ‘‘enrollment;’’; 

■ b. By revising paragraph (a)(4)(ii)(C); 

■ c. By adding paragraph (a)(4)(ii)(D); 

■ d. By revising paragraph (a)(4)(iii) 

introductory text; and 

■ e. By 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 and 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 

enrolled dependents qualify for a 

special enrollment period in accordance 

with paragraph (d)(16) of this section, 

the Exchange must allow the enrollee 

and his or her enrolled dependents to 

change to any available silver-level QHP 


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53504 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

if they elect to change their QHP 

enrollment. If a qualified individual or 

a dependent who is not an enrollee 

qualifies for a special enrollment period 

in accordance with paragraph (d)(16) of 

this section and has one or more 

household members who are enrollees, 

the Exchange must allow the enrollee to 

add the newly enrolling household 

member to his or her current QHP; or, 

to change to a silver-level QHP and add 

the newly enrolling household member 

to this silver-level QHP; or, to change to 

a silver level QHP and enroll the newly 

enrolling qualified individual or 

dependent in a separate QHP; 

(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 

during periods of time when the 

applicable taxpayer’s applicable 

percentage for purposes of calculating 

the premium assistance amount, as 

defined in section 36B(b)(3)(A) of the 

Internal Revenue Code, is set at zero. 

* * * * * 

(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; 

(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 revising the 

section heading and paragraphs (a) and 

(b)(3) and adding paragraphs (b)(5) and 

(g) to read as follows: 

§ 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 comprehensive 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 


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situations that threaten consumers’ 

access to comprehensive 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 subject 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 comprehensive 

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 comprehensive 

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: 

§ 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] 


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53506 Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Rules and Regulations 

PART 156—HEALTH INSURANCE 

ISSUER STANDARDS UNDER THE 

AFFORDABLE CARE ACT, INCLUDING 

STANDARDS RELATED TO 

EXCHANGES 

■ 23. The authority citation for part 156 

continues 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), 

comply with the requirements under 

section 2726 of the Public Health 

Service Act and its implementing 

regulations. 

* * * * * 

■ 25. Amend § 156.280 by revising the 

section 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 J. Mazur, 

Deputy Assistant Secretary (Tax Policy), 

Department of the Treasury. 

[FR Doc. 2021–20509 Filed 9–20–21; 4:15 pm] 

BILLING CODE 4120–28–P 


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