69802 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

1Multi-State Plan option or MSP option means a 

discrete pairing of a package of benefits with 

particular cost sharing (which does not include 

premium rates or premium rate quotes) that is 

offered under a contract with OPM. 

2Note that the U.S. Department of Health & 

Human Services (HHS) determined that Statespecific requirements in the ACA do not apply to 

U.S. territories, and thus territories are not required 

to establish Exchanges. See Letter to Commissioner 

Gregory R. Francis, Division of Banking & 

Insurance, St. Croix, Virgin Islands, from Marilyn 

Tavenner, Administrator, Centers for Medicare and 

Medicaid Services, July 16, 2014. 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

application of those requirements would 

be inconsistent with the Clean Air Act; 

and 

• does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed rule does 

not have tribal implications as specified 

by Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP is 

not approved to apply in Indian country 

located in the state, and EPA notes that 

it will not impose substantial direct 

costs on tribal governments or preempt 

tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Intergovernmental relations, 

Ozone, Lead, Reporting and 

recordkeeping requirements. 

Dated: September 30, 2014. 

Jared Blumenfeld, 

Regional Administrator, Region IX. 

[FR Doc. 2014–27752 Filed 11–21–14; 8:45 am] 

BILLING CODE 6560–50–P 

OFFICE OF PERSONNEL 

MANAGEMENT 

45 CFR Part 800 

RIN 3206–AN12 

Patient Protection and Affordable Care 

Act; Establishment of the Multi-State 

Plan Program for the Affordable 

Insurance Exchanges 

AGENCY: Office of Personnel 

Management. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Office of Personnel 

Management (OPM) is issuing a 

proposed rule to implement 

modifications to the Multi-State Plan 

(MSP) Program based on the experience 

of the Program to date. OPM established 

the MSP Program pursuant to section 

1334 of the Patient Protection and 

Affordable Care Act, as amended by the 

Health Care and Education 

Reconciliation Act of 2010, referred to 

collectively as the Affordable Care Act. 

This proposed rule clarifies the 

approach used to enforce the applicable 

requirements of the Affordable Care Act 

with respect to health insurance issuers 

that contract with OPM to offer MSP 

options. This proposed rule amends 

MSP standards related to coverage area, 

benefits, and certain contracting 

provisions under section 1334 of the 

Affordable Care Act. This document 

also makes non-substantive technical 

changes. 

DATES: Comments are due on or before 

December 24, 2014. 

ADDRESSES: You may submit comments, 

identified by Regulation Identifier 

Number (RIN) 3206–AN12 using any of 

the following methods: 

Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

Mail, Hand Delivery or Courier: 

National Healthcare Operations, 

Healthcare and Insurance, U.S. Office of 

Personnel Management, 1900 E Street 

NW., Room 3468, Washington, DC 

20415. 

FOR FURTHER INFORMATION CONTACT: 

Cameron Stokes by telephone at (202) 

606–2128, by FAX at (202) 606–4430, or 

by email at mspp@opm.gov. 

SUPPLEMENTARY INFORMATION: The 

Patient Protection and Affordable Care 

Act (Pub. L. 111–148), as amended by 

the Health Care and Education 

Reconciliation Act of 2010 (Pub. L. 111– 

152), together known as the Affordable 

Care Act, provides for the establishment 

of Affordable Insurance Exchanges, or 

‘‘Exchanges’’ (also called Health 

Insurance Marketplaces, or 

‘‘Marketplaces’’), where individuals and 

small businesses can purchase qualified 

coverage. The Exchanges provide 

competitive marketplaces for 

individuals and small employers to 

compare available private health 

insurance options based on price, 

quality, and other factors. The 

Exchanges enhance competition in the 

health insurance market, improve 

choice of affordable health insurance, 

and give individuals and small 

businesses purchasing power 

comparable to that of large businesses. 

The Multi-State Plan (MSP) Program 

was created pursuant to section 1334 of 

the Affordable Care Act to increase 

competition by offering high-quality 

health insurance coverage sold in 

multiple States on the Exchanges. The 

U.S. Office of Personnel Management 

(OPM) is proposing this regulation to 

modify the standards set forth for the 

MSP Program under 45 CFR part 800 

that was published as final rule on 

March 11, 2013 (78 FR 15560). This 

proposed rule will clarify OPM’s intent 

in administering the Program as well as 

make regulatory changes in order to 

expand issuer participation and 

offerings in the Program to meet the goal 

of increasing competition. 

Abbreviations 

EHB Essential Health Benefits 

FEHBA Federal Employees Health Benefits 

Act 

FEHB Program Federal Employees Health 

Benefits Program 

HHS U.S. Department of Health and Human 

Services 

MSP Multi-State Plan 

NAIC National Association of Insurance 

Commissioners 

OPM U.S. Office of Personnel Management 

PHS Act Public Health Service Act 

QHP Qualified Health Plan 

SHOP Small Business Health Options 

Program 

Table of Contents 

I. Background 

A. Affordable Insurance Exchanges 

B. Objectives of the Multi-State Plan 

Program 

C. Review of U.S. Office of Personnel 

Management’s Role in Contracting Under 

the Federal Employees Health Benefits 

Program 

D. Overview of the Multi-State Plan 

Program’s Statutory Requirements 

E. Stakeholder Interaction 

II. Proposed Regulatory Approach 

A. Overview of Regulatory Approach 

B. Governing Law 

III. Provisions of the Proposed Regulation 

A. General Provisions and Definitions 

B. Multi-State Plan Issuer Requirements 

C. Application and Contracting Procedures 

D. Compliance 

E. Miscellaneous 

IV. Regulatory Impact Analysis 

V. Paperwork Reduction Act 

VI. Regulatory Flexibility Act 

VII. Unfunded Mandates 

VIII. Federalism 

I. Background 

Section 1334 of the Affordable Care 

Act created the Multi-State Plan (MSP) 

Program to foster competition in the 

individual and small group health 

insurance markets on the Exchanges 

(also called Health Insurance Exchanges 

or Marketplaces) based on price, quality, 

and benefit delivery. The Affordable 

Care Act directs the U.S. Office of 

Personnel Management (OPM) to 

contract with private health insurance 

issuers to offer at least two MSP options 

on each of the Exchanges in the States 

and the District of Columbia.1 2 The law 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69803 

3Multi-State Plan issuer or MSP issuer means a 

health insurance issuer or group of issuers that has 

a contract with OPM to offer MSP options pursuant 

to section 1334 of the Affordable Care Act. 

4Patient Protection and Affordable Care Act; 

Establishment of the Multi-State Plan Program for 

the Affordable Insurance Exchanges, 78 FR 15560 

(Mar. 11, 2013). 

5Affordable Care Act section 1334(a)(1). 

6Affordable Care Act section 1334(a)(4). 

7Affordable Care Act section 1334(a)(1). 

8Affordable Care Act section 1334(a)(2). 

9Affordable Care Act section 1334(d). 

10 Id. 

11Affordable Care Act section 1334(a)(7). 

12Affordable Care Act section 1334(a)(4). 

13Affordable Care Act section 1334(b)(2). 

allows MSP issuers to phase in 

coverage.3

In the 2014 plan year, OPM 

contracted with one group of issuers to 

offer more than 150 MSP options in 31 

States, including the District of 

Columbia. Approximately 371,000 

individuals have enrolled in an MSP 

option to date. OPM added a second 

group of issuers for plan year 2015 and 

the MSP Program will expand into five 

additional States for a total of 36 States. 

The Program will offer more than 200 

MSP options on the Exchanges during 

the 2015 plan year to further 

competition and expand choices 

available to individuals, families, and 

small businesses. 

A. Affordable Insurance Exchanges 

The Affordable Care Act established 

the Exchanges where individuals and 

small businesses can purchase qualified 

coverage. The Exchanges provide 

competitive marketplaces for 

individuals and small businesses to 

compare health insurance coverage 

based on price, quality, and other 

factors. The goals of the Exchanges are 

to enhance competition in the health 

insurance market, improve choice of 

affordable health insurance, and provide 

individuals and small businesses 

purchasing power comparable to that of 

large businesses. 

The purpose of this proposed rule is 

to modify the MSP Program final rule 

published March 11, 2013.4 Proposed 

changes to the regulation include 

clarifications to the process by which 

OPM administers the MSP Program, 

pursuant to section 1334 of the 

Affordable Care Act, and revisions to 

select sections of the regulation that 

establish standards and requirements 

applicable to MSP options and MSP 

issuers. 

B. Objectives of the Multi-State Plan 

Program 

MSP options were among several 

private health insurance coverage 

options offered on the Exchanges 

beginning in 2014. MSP options differ 

from QHPs in that MSP options are 

certified by OPM to be offered on an 

Exchange through the MSP Program 

application process and signing of a 

contract with OPM. In administering the 

MSP Program, OPM focuses on several 

important objectives: 

• To ensure a choice of at least two 

options for high-quality health 

insurance coverage on each Exchange; 

• To promote competition on the 

Exchanges to the benefit of all 

consumers; 

• To provide strong, effective 

contractual oversight of the issuers that 

offer MSP options; and 

• To work cooperatively with States 

and HHS to ensure a level playing field 

between QHP issuers and MSP issuers. 

Pursuant to section 1334 of the 

Affordable Care Act, the Director of 

OPM sets standards for the MSP 

Program. Under section 1334(b)(2), MSP 

issuers generally are also required to 

comply with requirements of State law 

not inconsistent with requirements in 

section 1334. OPM accordingly aligns 

standards for the MSP Program with the 

standards set for QHPs and QHP issuers 

by States, HHS, and the Exchanges. In 

certain unique and specific 

circumstances, MSP Program standards 

differ from QHP requirements. OPM 

will continue to ensure that to the 

extent that any of the rules governing 

MSP options and MSP issuers differ 

from those governing QHPs and QHP 

issuers, the standards afford the MSP 

options and MSP issuers neither a 

competitive advantage nor disadvantage 

with respect to other plans offered on 

the Exchange. OPM will continue to 

administer the MSP Program in a 

manner that is sensitive to the 

significant State and Federal interests 

affected by the MSP Program and 

informed by input from a broad array of 

stakeholders. Accordingly, OPM 

appreciates the ongoing coordination 

and cooperation with States and HHS in 

the administration of the MSP Program. 

C. Review of OPM’s Role in Contracting 

Under the Federal Employees Health 

Benefits Program 

Enacted in 1959, the Federal 

Employees Health Benefits Act (FEHBA) 

established health benefits for Federal 

employees, annuitants, and their 

dependents. More than eight million 

employees, annuitants, and their family 

members have coverage under the 

Federal Employees Health Benefits 

(FEHB) Program. Enrollees can choose 

fee-for-service plans with preferred 

providers, local Health Maintenance 

Organizations, consumer-driven health 

plans, or high-deductible health plans 

in the FEHB Program. Among these 

options are six nationwide plans, each 

of which offers coverage in all 50 States 

and the District of Columbia. 

For the 2014 and 2015 plan years, 

OPM negotiated with issuers to 

participate in the MSP Program. The 

process was guided by our experience in 

the FEHB Program, although it differed 

in certain respects from the FEHB 

Program process to account for the 

differences between the large group 

market, where OPM solely operated 

prior to the MSP Program, and the 

individual and small group markets 

served by the Exchanges. 

D. Overview of the MSP Program’s 

Statutory Requirements 

Section 1334(a)(1) of the Affordable 

Care Act requires OPM to ‘‘enter into 

contracts with health insurance issuers, 

(which may include a group of health 

insurance issuers affiliated either by 

common ownership and control or by 

the common use of a nationally licensed 

service mark) . . . to offer at least 2 

multi-State qualified health plans 

through each Exchange in each State.’’ 5

The Director has the authority to 

implement and administer the MSP 

Program ‘‘in a manner similar to the 

manner in which the Director 

implements the contracting provisions 

with respect to carriers under the 

Federal Employees Health Benefit 

Program.’’ 6 Further, OPM may enter 

into these contracts without regard to 

competitive bidding laws.7 Each MSP 

Program contract must be for a term of 

at least one year, but can be 

automatically renewable in the absence 

of a notice of termination from either 

the MSP issuer or OPM.8

The statute grants to OPM the 

authority to certify MSP options.9 Any 

MSP options offered under a contract 

negotiated with OPM are ‘‘deemed to be 

certified by an Exchange for purposes of 

section 1311(d)(4)(A)’’ of the Affordable 

Care Act and would not need to apply 

separately for certification on each 

Exchange,10 as outlined at 45 CFR 

155.1010(b)(1). The Director is 

authorized to withdraw approval of an 

MSP Program contract after notice and 

opportunity for a hearing.11 The 

Director also has the authority to 

negotiate with each MSP issuer ‘‘(A) a 

medical loss ratio; (B) a profit margin; 

(C) the premiums to be charged; and (D) 

such other terms and conditions of 

coverage as are in the interests of 

enrollees in such plans.’’ 12

MSP issuers are required to be 

licensed in each State in which they 

offer an MSP option 13 and be ‘‘subject 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69804 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

14Affordable Care Act section 1334(b)(2). 

15Affordable Care Act section 1334(b)(3). 

16Affordable Care Act section 1334(b)(4). 

17The Request for Information is available at 

https://www.fbo.gov/index?s=opportunity&mode=

form&id=677e422dd3f2bc983cb985eb73995b63&

tab=core&_cview=1. 

18Affordable Care Act section 1334(h). 19 Id. 

20 78 FR 15588. 

21U.S. Reg. No. 4599136. 

to all requirements of State law not 

inconsistent with this section [1334], 

including the standards and 

requirements that a State imposes that 

do not prevent the application of a 

requirement of part A of title XXVII of 

the Public Health Service Act (PHS Act) 

or a requirement of this title [I of the 

Affordable Care Act].’’ 14 The Affordable 

Care Act directs that MSP issuers must 

comply with the minimum standards for 

FEHB Program carriers under section 

8902(e) of title 5 of the United States 

Code to the extent that the standards do 

not conflict with provisions of title I of 

the Affordable Care Act.15 Congress also 

authorized OPM to establish additional 

standards for MSP options that OPM, in 

consultation with HHS, deems 

‘‘appropriate.’’ 16

E. Stakeholder Interaction 

To assess the level of interest in the 

MSP Program, and to ascertain feedback 

from stakeholders about the program, 

OPM issued a Request for Information 

June 16, 2011.17 OPM received 19 

responses representing the views of 39 

groups and organizations. Responses 

came from health insurance issuers 

(including issuers of dental and vision 

insurance), employer organizations, 

labor organizations, consumer groups, 

patient organizations, and provider 

associations. On December 5, 2012, 

OPM published a notice of proposed 

rulemaking (77 FR 72582) establishing 

the MSP Program at part 800 of title 45, 

Code of Federal Regulations. OPM 

received about 350 comments from a 

wide variety of entities and individuals. 

Since publishing the final rule, OPM 

conducted presentations and met with 

numerous stakeholders to seek feedback 

on the implementation of the MSP 

Program. Stakeholder groups included 

representatives from the National 

Association of Insurance Commissioners 

(NAIC), States, tribal entities, consumer 

advocacy groups, health insurance 

issuers, provider associations, and trade 

groups. OPM also convened groups of 

individuals—representing the general 

public as well as consumer advocates— 

to solicit input on branding and 

marketing of the MSP Program. 

OPM is also in the process of 

establishing an MSP Program Advisory 

Board, the purpose of which will be to 

‘‘provide recommendations on the 

activities’’ of the MSP Program.18 A 

‘‘significant percentage of the members’’ 

of the MSP Program Advisory Board 

will be enrollees in an MSP option or 

representatives of such enrollees.19

Members of the MSP Program Advisory 

Board will exchange information, ideas, 

and recommendations regarding OPM’s 

administration of the MSP Program. 

OPM values the participation of diverse 

stakeholders and encourages them to 

submit comments on this proposed rule. 

II. Proposed Regulatory Approach 

A. Overview of Regulatory Approach 

OPM’s approach to the development 

of this proposed regulation seeks to: 

• Support a program that will attract 

additional issuers and thus, offer a 

greater selection of MSP options on each 

Exchange in every State and the District 

of Columbia. 

• Balance State and Federal 

regulatory interests in a manner that 

will enable MSP issuers to offer viable 

plans on the Exchanges. 

• Ensure a level playing field such 

that neither MSP options nor plans 

offered by non-MSP issuers are 

advantaged or disadvantaged on the 

Exchanges. 

OPM seeks comment on whether 

these proposed changes to this 

regulation satisfy our goals. We are 

republishing the unchanged sections of 

the regulation to provide context for the 

proposed changes as well as to include 

non-substantive technical corrections. 

B. Governing Law 

The Affordable Care Act generally 

requires that the MSP Program be 

governed by all State and Federal laws 

that apply to QHPs. The Act, however, 

grants discretion to the Director to 

administer the MSP Program in a 

manner that fulfills OPM’s statutory 

responsibility to ensure that there are at 

least two issuers offering MSP options 

on each Exchange in every State and the 

District of Columbia. OPM recognizes 

that potential MSP issuers seek 

administrative simplicity and some 

uniformity of standards in the MSP 

Program. Accordingly, in unusual 

circumstances, it may be necessary for 

the Director to adopt standards or 

requirements for the MSP Program that 

differ from standards and requirements 

applicable to QHPs under either State or 

Federal law. This proposed regulation, 

however, reflects the Director’s 

continued intention for the MSP options 

and MSP issuers to generally adhere to 

all State and Federal laws applicable to 

QHPs and QHP issuers, except to the 

extent any such laws are inconsistent 

with section 1334. We propose to 

continue to implement these regulations 

in OPM guidance and OPM’s contracts 

with MSP issuers. 

III. Provisions of the Proposed 

Regulation 

A. Subpart A—General Provisions and 

Definitions 

Definitions (§ 800.20) 

We seek comments on a definition for 

‘‘group of issuers’’ that was defined in 

the final rule. We are specifically 

interested in whether this definition 

allows for alternative structures, such as 

decentralized health insurance issuers 

or organizations, to join together as 

potential applicants to offer MSP 

options. Under the definition in the 

MSP Program final rule, a ‘‘group of 

issuers,’’ for purposes of the MSP 

Program, may include: (1) A group of 

health insurance issuers who are 

affiliated either by common ownership 

and control or by common use of a 

nationally licensed service mark (as 

defined in § 800.20); or (2) an affiliation 

of health insurance issuers and an entity 

that is not an issuer but owns a 

nationally licensed service mark.20 We 

are making an editorial correction to 

this definition under (1) to state that 

‘‘health insurance issuers that are 

affiliated.’’ 

We propose to add the definition for 

‘‘Multi-State Plan option,’’ which may 

also be referred to as ‘‘MSP option.’’ We 

propose the definition of ‘‘MSP option’’ 

as a discrete pairing of a package of 

benefits with particular cost sharing 

(which does not include premium rates 

or premium rate quotes) that is offered 

pursuant to a contract with OPM 

pursuant to section 1334 of the 

Affordable Care Act and meets the 

requirements of 45 CFR part 800. We 

also propose to remove the definition of 

‘‘Multi-State Plan.’’ The term ‘‘MultiState Plan option’’ is more precise and 

avoids the confusion of the varying 

definitions of the word ‘‘plan’’ in the 

context of health insurance. In the past 

two years, OPM refined how to use the 

term ‘‘Multi-State Plan.’’ It is our 

intention to not apply the term ‘‘MultiState Plan’’ as a general concept, but 

instead as a specific descriptor used 

under this Program. OPM registered the 

term ‘‘Multi-State Plan’’ as a mark with 

the U.S. Patent and Trademark Office,21

and we intend to enforce its exclusive 

use under this Program. 

We also propose to add a definition 

for State-level issuer. This definition is 

consistent with the statutory concept of 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69805 

22 45 CFR 800.20. (2013). 23 78 FR 15565. 

contracting with a group of issuers, and 

our experience reviewing MSP 

applications and negotiating contracts 

with MSP issuers. We propose to define 

a State-level issuer as a health insurance 

issuer designated by the MSP issuer to 

offer an MSP option or MSP options. 

The State-level issuer may offer health 

insurance coverage through one or more 

MSP options in all or part of one or 

more States. 

OPM invites comments on the 

proposed changes to the definitions 

under 45 CFR 800.20. 

B. Subpart B—Multi-State Plan Issuer 

Requirements 

Phased Expansion: Coverage in All 

States; Coverage State-Wide; and SHOP 

(§ 800.104) 

Section 1334(e) of the Affordable Care 

Act provides for OPM to phase 

expansion of an issuer’s participation in 

the MSP Program. In the final rule, OPM 

largely codified the statutory language 

for the phase-in standards and set 

standards for coverage within a State, 

participation in the Small Business 

Health Insurance Options Program 

(SHOP), and licensure. Since the 

publication of the final rule, OPM 

gained valuable insight and feedback 

from MSP issuers and potential MSP 

issuer applicants. 

Coverage in All States 

Under § 800.104(a) of the final rule, 

OPM established a standard that it may 

enter into a contract with a health 

insurance issuer to offer MSP options if 

the health insurance issuer agrees to a 

phased expansion of coverage in States. 

We request comment on how we may 

expand participation in the Program to 

meet the goal of increasing competition 

while balancing consumers’ needs for 

coverage across an entire State. OPM 

conducted outreach to potential MSP 

issuers and is engaged in ongoing 

discussions with current MSP issuers to 

address expansion of access to MSP 

options for consumers throughout the 

country. These issuers have expressed 

significant concern about the challenges 

of rapidly expanding access to MSP 

coverage both within and across State 

lines. 

The text of section 1334 is clear in its 

intent that the primary purpose of the 

MSP Program is to promote competition 

on Exchanges by contracting with 

issuers to offer coverage in each State. 

Section 1334 contemplates interest from 

private health insurance issuers in 

participating in the Program; however, 

there is no requirement for health 

insurance issuers to participate in the 

Program. The statute sets forth 

standards to guide the exercise of this 

contracting authority, noting that 

section 1334(b)(1) contemplates offering 

coverage in every State and the District 

of Columbia, and outlining a framework 

within which participation in the MSP 

Program is a feasible and attractive 

business activity. Such standards 

include the provisions under 

subsections (b) and (e) on offering 

coverage in every State. OPM intends to 

ensure that MSP coverage is available as 

expansively and as soon as practicable, 

but recognizes the operational 

challenges issuers may face. 

OPM has discretion over how we may 

implement and expand the MSP 

Program. We request comment on 

timeframes and other appropriate 

parameters within which an MSP issuer 

could reasonably expand participation 

in the Program. For example, a MSP 

issuer may be expected to expand to a 

certain number of states within a 

specified timeframe. In addition, we 

request comment on how OPM may 

encourage MSP issuers to expedite their 

participation on the Exchanges in which 

there is limited competition. At this 

time, we do not propose any changes to 

the regulatory text. 

State-Wide Coverage 

The final rule established a standard 

for MSP coverage in a State under 

§ 800.104(b) that permits OPM to enter 

into a contract with an issuer that offers 

coverage in part of a State, but not 

necessarily the entire State. Most, but 

not all, of the MSP options available to 

consumers in plan years 2014 and 2015 

provide coverage statewide. 

In some circumstances, issuers in 

particular States have not consistently 

been able to offer statewide MSP 

coverage. Based on discussions with 

potential MSP issuers, we believe some 

of the challenges to providing statewide 

coverage in all States will continue to 

impede expansion or participation in 

the Program. One of these challenges is 

the licensing agreements for use of a 

nationally licensed service mark among 

the group of issuers participating in the 

MSP Program.22 Section 1334 requires 

that a group of issuers offering MSP 

coverage must be affiliated in one of a 

few specific ways, including common 

use of a nationally licensed service 

mark. Antitrust and other laws that limit 

the permissible scope of interaction 

among issuers may make it difficult for 

a group of issuers under the MSP 

Program to coordinate nationally. OPM 

is sensitive to these constraints and 

recognizes that they may hinder 

development and implementation of 

issuers’ plans to offer statewide MSP 

coverage. 

OPM is committed to a goal of 

statewide coverage in the MSP Program, 

and intends to continue working with 

MSP issuers and potential MSP issuers 

to develop productive and ambitious 

approaches to achieving statewide 

coverage. In clarifying the status of the 

Program and how we are implementing 

the standards set under § 800.104, we 

propose to delete the standard for an 

MSP issuer to submit a plan to become 

statewide. In lieu of requiring a plan, 

OPM intends to negotiate with MSP 

issuers to determine their MSP coverage 

area. In the MSP Program contract 

negotiation process, we will consider 

the MSP issuers’ capacity to provide 

statewide coverage. OPM will take into 

account many factors when assessing an 

MSP issuer’s capacity for offering 

statewide coverage (e.g., other business 

commitments, financials, Exchange 

QHP standards, and OPM’s dialogue 

with State regulators). In addition, OPM 

will assess consumers’ needs for 

coverage, including ensuring that MSP 

issuers’ proposed service areas have 

been established without regard to 

racial, ethnic, language, or health statusrelated factors listed in section 2705(a) 

of the PHS Act, or other factors that 

exclude specific high-utilizing, highcost, or medically underserved 

populations. 

SHOP Coverage 

The final rule established flexibility 

in SHOP participation for MSP issuers 

in § 800.104(c) by establishing a policy 

for participation consistent with 

standards set for QHP issuers. 

Specifically, we adopted standards that 

require MSP issuers to generally comply 

with standards in 45 CFR 156.200(g) 

and with State standards for SHOP 

participation if the State has set a 

standard that requires QHP issuers to 

participate. This policy provided OPM 

discretion to provide MSP issuers 

flexibility during the initial years of the 

Program to phase into the SHOP in a 

State-based Exchange. OPM provided 

that an MSP issuer may meet the 

requirements of 45 CFR 156.200(g)(3) if 

a State-level issuer or any other issuer 

in the same issuer group affiliated with 

an MSP issuer provides coverage on the 

Federally-facilitated SHOP. We 

discussed this policy in-depth in the 

final rule.23

Section 1334 requires OPM to 

contract for coverage to be offered on 

each Exchange in each State, offering 

individual or small group coverage. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69806 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

24Centers for Medicare and Medicaid Services, 

Essential Health Benefits: List of the Largest Three 

Small Group Products by State, available at http:// 

cciio.cms.gov/resources/files/largest-smgroupproducts-7-2-2012.pdf.PDF (July 3, 2012). 

25 Id. 

Based on our current experience 

implementing the Program, a number of 

challenges prevent issuer participation 

in the MSP Program, including timing 

and resources. Very few MSP issuers 

have offered MSP SHOP options in 

these initial years of the Program. We 

solicit comment on when MSP issuers 

should be required to participate on the 

SHOPs. 

Benefits (§ 800.105) 

The final rule adopted requirements 

in § 800.105(a) that an MSP issuer must 

offer a uniform package of benefits for 

each MSP option within a State and that 

the package of benefits must comply 

with section 1302 of the Affordable Care 

Act, as well as standards set by OPM 

and any applicable standards set by 

HHS. 

In § 800.105(b), OPM finalized a rule 

that allowed MSP issuers to offer a 

package of benefits in all States that is 

substantially equal to either (1) each 

State’s Essential Health Benefits (EHB)- 

benchmark plan in each State in which 

it operates; or (2) any EHB-benchmark 

plan selected by OPM. In response to 

comments received on the proposed 

rule, OPM clarified that the option 

chosen must be applied uniformly in 

each State in which the MSP issuer 

proposes to offer MSP options. 

OPM continues to conduct outreach 

to potential MSP issuers and encourages 

ongoing discussions with current MSP 

issuers in hopes of expanding the 

Program. OPM interprets the discretion 

afforded to the Director under section 

1334(a) of the Affordable Care Act, such 

that he or she may administer the 

Program in a way to attract issuers to the 

Program and grow the Program to meet 

the goal of increasing competition. By 

applying the Director’s discretion to 

offer flexibility in the selection of the 

package of benefits, OPM hopes to 

reduce the number of obstacles and 

increase competition and consumer 

choice while maintaining benefit 

standards and protections 

After completing two application 

cycles for the MSP Program and 

administering the Program since January 

2014, OPM is proposing to adjust the 

approach to the selection of the package 

of benefits to allow for more flexibility 

to attract issuers to the MSP Program 

with the expectation of expanding 

competition on the Exchanges. OPM is 

requesting public comment on this 

approach. This flexibility would allow 

an MSP issuer to make benchmark 

selections on a State-by-State basis. The 

issuer would also be able to offer two or 

more MSP options in each State, for 

example, one using the State-selected 

benchmark and one using the OPMselected benchmark. OPM believes that 

allowing this flexibility will enable 

coalition building across issuers in 

different States, so that they can work 

together toward MSP options that meets 

the MSP Program standards. For 

example, an MSP issuer or potential 

issuer that chooses to offer an OPMselected benchmark plan in one State 

may want to partner with another MSP 

issuer or potential issuer that would 

choose to offer a State EHB-benchmark 

plan in another State. We seek 

comments on whether this would have 

the desired effect of encouraging 

participation without causing consumer 

confusion or segmenting of risk. 

In § 800.105(c)(1), OPM finalized the 

selection of EHB-benchmark plans. 

OPM selected the three largest FEHB 

Program plan options by enrollment that 

are open to Federal employees and 

annuitants. These FEHB Program 

benchmark plans were identified by 

HHS pursuant to section 1302(b) of the 

Affordable Care Act. On July 3, 2012, 

HHS identified the three largest FEHB 

Program plan options, as of March 31, 

2012, as Blue Cross Blue Shield (BCBS) 

Standard Option; BCBS Basic Option; 

and Government Employees Health 

Association (GEHA) Standard Option.24

OPM will continue to offer flexibility to 

MSP issuers to select among these 

benchmark options based on their 

business strategies and perceived needs 

of MSP enrollees. 

In § 800.105(c)(2), OPM finalized the 

requirement that any OPM-selected 

EHB-benchmark plan lacking coverage 

of pediatric oral services or pediatric 

vision services must be supplemented 

by the addition of the entire category of 

benefits from the largest Federal 

Employee Dental and Vision Insurance 

Program (FEDVIP) dental or vision plan 

option, respectively, pursuant to 45 CFR 

156.110(b) and section 1302(b) of the 

Affordable Care Act. On July 3, 2012, 

HHS identified the largest FEDVIP 

dental and vision plan options, as of 

March 31, 2012, to be, respectively, 

MetLife Federal Dental Plan High 

Option and FEP BlueVision High 

Option.25

OPM is proposing to add a 

clarification in the new § 800.105(c)(3). 

Based on outreach with potential MSP 

issuers and ongoing discussions with 

current MSP issuers, there is confusion 

about the prescription drug formulary 

standards of OPM-selected benchmarks. 

As is done in the FEHB Program, OPM 

will work with MSP issuers to negotiate 

a formulary that best manages the needs 

of MSP enrollees while focusing on 

managing costs and ensuring access. In 

addition, OPM will ensure that MSP 

issuers comply with any HHS standards 

related to drug formularies for QHPs 

and are not discriminatory in the 

formulary’s design. OPM sees large 

variations in the formulary structures in 

the FEHB Program, and there are 

ongoing changes in the use of managed 

formularies. OPM also seeks comment 

on the feasibility of substituting an 

OPM-selected benchmark plan 

formulary with the formulary from the 

respective State’s EHB-benchmark plan. 

This approach would promote 

consistency in benefits to enhance 

portability while maintaining a level 

playing field. By working with MSP 

issuers to build flexibility in the 

management of formularies, OPM 

believes the formulary will be seen as an 

opportunity to build a plan around the 

needs of enrollees while clarifying 

formulary requirements with the OPMselected benchmarks. 

In the final rule at § 800.105(c)(3), 

proposed to be republished as 

§ 800.105(c)(4), OPM finalized the use of 

State definitions for habilitative services 

where the State chooses to specifically 

define this category pursuant to 45 CFR 

156.110(f). In this section of the final 

rule, OPM also reserved the authority to 

determine what to include in this 

category for the OPM-selected 

benchmarks where the State has not 

defined it and no definition exists in the 

OPM-selected benchmark. OPM is 

proposing to change this section to 

apply a Federal definition of habilitative 

services, should HHS choose to define 

the term. 

We propose to renumber 

§ 800.105(c)(4) to § 800.105(c)(5). We are 

not proposing changes to this standard. 

In § 800.105(d), OPM finalized the 

rule that an MSP issuer’s package of 

benefits, including its formulary, must 

be submitted to and approved by OPM, 

which will determine whether a 

package of benefits proposed by an MSP 

issuer is substantially equal to an EHBbenchmark plan. OPM also plans to 

review an MSP issuer’s package of 

benefits for discriminatory benefit 

design, consistently with section 

1302(b)(4) of the Affordable Care Act 

and 45 CFR 156.110(d), 156.110(e), and 

156.125, and will work closely with 

States and HHS to identify and 

investigate any potentially 

discriminatory or otherwise 

noncompliant benefit design in MSP 

options. 

In § 800.105(e), OPM finalized the 

rule that the cost of benefits required by 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69807 

the State in addition to those in the 

benchmark package would be assumed 

by the State. This policy was consistent 

with section 1334(c)(2) of the Affordable 

Care Act. OPM now proposes to change 

‘‘assume’’ to ‘‘defray’’ to make the 

language align with the language in the 

statute. 

Assessments and User Fees (§ 800.108) 

OPM has authority to collect MSP 

Program user fees, and continues to 

preserve its discretion to collect an MSP 

Program user fee. We wish to clarify that 

OPM may begin collecting the fee as 

early as plan year 2015. The user fee 

may be used to fund OPM activities 

directly related to MSP Program 

certification, administration, and 

operational costs. We currently estimate 

that any assessment or fee would be no 

more than 0.2 percent of premiums. In 

the Federally-facilitated Exchange, OPM 

is coordinating with HHS regarding the 

collection of user fees, so that issuers 

would not be affected operationally. We 

are revising the regulatory text to allow 

for flexibility in the process for 

collecting MSP Program assessments or 

user fees. We solicit comments on the 

process for collecting user fees in the 

State-based Exchanges. We also seek 

comments on the use of these fees. 

Network Adequacy (§ 800.109) 

We are proposing to add that an MSP 

issuer must also comply with any 

additional standards related to provider 

directories set by HHS for QHP issuers. 

Accreditation (§ 800.111) 

We revised the reference to the 

specific section in the Code of Federal 

Regulations to 45 CFR 156.275(a)(1) to 

be more precise. 

Level Playing Field (§ 800.115) 

We revised the regulatory text to 

clarify that all the areas listed under 

section 1324 of the Affordable Care Act 

are subject to § 800.114. In addition, we 

are making a technical correction to 

§ 800.114(l) to change a reference to 45 

CFR part 162 to 45 CFR part 164. 

C. Subpart D—Application and 

Contracting Procedures 

Application Process (§ 800.301) 

In § 800.301, OPM provided that 

health insurance issuers may submit 

applications to OPM for participation in 

the MSP Program. If OPM decided not 

to consider new applications for the 

upcoming year, it would issue a notice 

indicating so. This section also specified 

that applications would meet the form, 

manner, and timeframes prescribed by 

OPM. 

The edit to § 800.301(a) is a technical 

correction that more accurately 

describes that OPM determines annually 

whether new issuer applications should 

be considered to participate in the MSP 

Program. This correction is meant to 

distinguish new applications from 

renewal applications. OPM’s discretion 

over whether to consider issuer 

applications pertains to new issuers that 

want to apply to participate in the MSP 

Program for the first time. Issuers that 

already participate in the MSP Program, 

and would like to continue 

participating, may submit a renewal 

application to OPM on an annual basis. 

OPM will determine annually whether a 

renewal application is required. 

MSP Contracting (§ 800.303) 

In § 800.303, OPM provided that an 

applicant must execute a contract with 

OPM to become an MSP issuer; that 

OPM would establish a standard 

contract for the MSP Program; that OPM 

and an applicant would negotiate 

premiums for each plan year; that OPM 

would review for approval an 

applicant’s benefit packages; that OPM 

may negotiate additional contractual 

terms and conditions; and that MSP 

issuers would be certified to offer MSP 

coverage on Exchanges. 

The edit to § 800.303(f) is a technical 

correction to clarify that the MSP 

Program contract specifies that OPM 

certifies the MSP options that are 

authorized to provide coverage. We also 

propose a technical correction to 

§ 800.303(f)(2) consistent with the edit 

to (f)(1) to provide that MSP options 

must be certified in order to be offered 

on an Exchange. These edits more 

accurately describe the information that 

is reflected in the MSP Program contract 

with respect to OPM’s certification 

process. 

Nonrenewal (§ 800.306) 

The proposed language for 

§ 800.306(a) serves to clarify two 

different nonrenewal concepts. The 

term ‘‘nonrenewal’’ as described in the 

current rule more accurately describes 

nonrenewal of an MSP Program contract 

because it pertains to the MSP issuer. 

Therefore, we propose the term 

‘‘nonrenewal of contract’’ to clarify this 

concept. Additionally, there are 

instances where a State-level issuer may 

choose not to renew its participation in 

the MSP Program contract, even though 

the MSP issuer (of which the State-level 

issuer is a part) will continue to contract 

with OPM. The current regulatory 

language does not contemplate this 

latter concept. Therefore, we propose 

the term ‘‘nonrenewal of participation’’ 

to describe such concept. By 

distinguishing the two types of 

nonrenewal, the rule will better align 

with the terms described in the MSP 

Program contract, which already 

distinguishes these concepts. Despite 

this distinction, the notice requirements 

and MSP issuer responsibilities as 

provided in subsections (b) and (c) 

respectively, are still applicable. In 

subsection § 300.306(c), with respect to 

providing notice of termination to 

enrollees, we propose to reference 

§ 800.404(d) instead of duplicating the 

explanation of the requirements in this 

section. This will ensure consistency 

across the MSP Program. 

D. Subpart E—Compliance 

Contract Performance (§ 800.401) 

In addition to other MSP contract 

performance requirements, § 800.401 

paragraphs (b)(5)–(6), (c), and (d) require 

an MSP issuer to perform its obligations 

under an MSP Program contract using 

prudent business practices that 

emphasize ethical standards and 

compliance with OPM directives and 

other applicable laws, regulations, and 

MSP contract provisions. The section 

prohibits fraud, waste, abuse, and 

deceptive business practices. It also 

requires an MSP issuer to adjudicate 

claims promptly and maintain a system 

that accurately accounts for costs 

occurring under the MSP Program. 

Although this section lists numerous 

prudent and poor business practices, we 

did not intend them to be exhaustive. In 

addition, because industry standards 

and State markets are evolving 

constantly, we address business practice 

standards in each MSP Program 

contract. Therefore, we are clarifying 

that OPM will consider an MSP issuer’s 

specific circumstances and facts in 

using its discretion to determine if an 

MSP issuer has fulfilled its obligations 

pursuant to this section. We seek 

comment on these issues. 

Contract Quality Assurance (§ 800.402) 

OPM proposes corrections to 

§ 800.402 paragraphs (b) and (c). In 

paragraph (b), OPM proposes to clarify 

that it ‘‘may,’’ instead of ‘‘will,’’ 

periodically evaluate a contractor’s 

system of internal controls. OPM also 

clarifies in paragraph (b) that it will 

only acknowledge in writing when the 

contractor’s system of internal controls 

is inconsistent with the MSP Program 

contract requirements. In paragraph (c), 

OPM will correct a drafting error and 

clarify that MSP issuers must comply 

with the performance standards issued 

‘‘pursuant’’ to this section. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69808 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

26These are services for which Federal funding is 

prohibited. 

27PHS Act section 2715(a) (2012). 

28 45 CFR 156.280(f). 

Compliance Actions (§ 800.404) 

OPM proposes to make technical edits 

to § 800.404 paragraphs (a), (b), (c) and 

(d). In paragraph (a)(4), we clarify that 

OPM may initiate a compliance action 

for violations of law or regulation as 

OPM may determine, ‘‘including 

pursuant to its authority under 

§§ 800.102 and 800.114.’’ This revision 

more accurately reflects OPM’s 

approach to enforcement and 

compliance. 

In paragraph (b), we clarify that OPM 

may withdraw certification of the MSP 

option or options for noncompliance 

with applicable law or the MSP 

contract. Consistent with new paragraph 

800.306(a)(2), we add ‘‘nonrenewal of 

participation’’ as a compliance action. 

Accordingly, we renumber the two 

subsequent compliance actions. We also 

revised ‘‘Nonrenewal of the MSPP 

contract’’ to ‘‘Nonrenewal of contract’’ 

to be consistent with the term as defined 

in new paragraph 800.306(a)(1). We 

revise paragraph (c)(2) to include 

nonrenewal of participation as a 

compliance action for which OPM must 

notify the MSP issuer of its right to 

reconsideration. 

Paragraph (d) requires an MSP issuer 

to comply with State and Exchange 

requirements regarding termination of a 

plan when an MSP Program contract is 

terminated or when OPM withdraws 

certification. Absent State or Exchange 

requirements, the MSP issuer must 

provide enrollees 90 days’ notice. If a 

State or Exchange has a requirement to 

provide enrollees notice of more than 90 

days, then the MSP issuer must comply 

with that standard. We clarify that these 

requirements are triggered in the event 

that one of the following occurs: The 

MSP Program contract is terminated, 

OPM withdraws certification of an MSP 

option, or if a State-level issuer’s 

participation is not renewed. 

Reconsideration of Compliance Actions 

(§ 800.405) 

OPM proposes technical edits and 

corrections to section 800.405. Section 

800.405 describes the compliance 

actions for which the MSP issuer may 

request reconsideration. We correct 

paragraph (a)(1) to reflect that an MSP 

issuer may request reconsideration upon 

withdrawal of certification of the MSP 

option or options offered on an 

Exchange. Consistent with the approach 

800.404(b), we revise (a)(2) to allow an 

MSP issuer to request reconsideration of 

the nonrenewal of participation of a 

State-level issuer. We renumber the 

subsequent paragraphs accordingly. 

E. Subpart G—Miscellaneous 

Consumer Choice With Respect to 

Certain Services (§ 800.602) 

Section 1334(a)(6) of the Affordable 

Care Act requires OPM to contract with 

at least one MSP issuer that excludes 

coverage of abortion services, except in 

the case of rape or incest, or when the 

life of the woman would be endangered. 

In the MSP Program final rule, we 

codified the statutory language and 

provided sub-regulatory guidance to 

MSP issuer applicants on how to meet 

this requirement in their benefit 

proposals. 

For the 2014 and 2015 plan years, 

OPM operationalized this policy by 

requiring each MSP issuer to offer at 

least one silver MSP option and one 

gold MSP option that excludes these 

services in each State in which it was 

under contract. MSP issuers also had 

discretion to cover these services if the 

issuer offered additional MSP options 

on the Exchange. 

Consumers, State regulators, and 

other stakeholders expressed to OPM 

the desire to have greater transparency 

with regard to MSP options that exclude 

non-excepted abortion services.26

Section 2715 of the PHS Act requires 

group health plans and health insurance 

issuers of group or individual health 

insurance coverage to provide ‘‘a 

summary of benefits and coverage 

explanation that accurately describes 

the benefits and coverage under the 

applicable plan or coverage to 

applicants, enrollees, and policyholders 

or certificate holders.’’ 27 MSP issuers 

are required to notify consumers who 

purchase an MSP option that covers 

non-excepted abortion services of such 

coverage as part of the SBC at time of 

enrollment.28

We are proposing to add a new 

paragraph (c) to § 800.602 that would 

require an MSP issuer to provide 

disclosure of coverage or exclusion of 

this benefit before a consumer enrolls in 

an MSP option. In addition, OPM will 

reserve the authority to review and 

approve these MSP notices and 

materials. OPM requests comments on 

the form and manner for the disclosure. 

Note that the question of how this 

coverage should be disclosed is not 

unique to MSP options; the Departments 

of Health and Human Services, Labor, 

and Treasury intend to issue guidance 

on the Summary of Benefits and 

Coverage in the future. 

Disclosure of Information (§ 800.603) 

In order to effectively implement and 

operationalize the MSP Program, there 

may be circumstances in which OPM 

would share information with State 

entities, including State Departments of 

Insurance and Exchanges. The sharing 

of information is intended to keep such 

entities informed and to reflect OPM’s 

approach to compliance. The addition 

of this new section clarifies that OPM 

may use its discretion and authority to 

disclose information to such State 

entities. In all cases, OPM will adhere 

to any applicable privacy and security 

standards for the disclosure of such 

information. 

Technical Changes to 45 CFR Part 800 

In addition to the changes proposed 

for the specific sections of the 

regulation, we also propose technical 

corrections to streamline the use of 

‘‘MSP’’ throughout the rules. The 

changes are not substantive to our 

policy. These changes apply to all 

sections and include the following: 

• ‘‘MSPP’’ will be replaced with 

‘‘MSP Program;’’ 

• ‘‘MSPP issuer’’ will be replaced 

with ‘‘MSP issuer;’’ 

• ‘‘MSP’’ will be replaced with ‘‘MSP 

option’’ when referring to the plan that 

makes up the specific package of 

benefits and associated cost-sharing; 

and 

• ‘‘MSPP contract’’ will be replaced 

with ‘‘MSP Program contract.’’ 

IV. Regulatory Impact Analysis 

OPM has examined the impact of this 

proposed rule as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993) and 

Executive Order 13563 on Improving 

Regulation and Regulatory Review 

(January 18, 2011). 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). A regulatory impact analysis 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year adjusted 

for inflation). Section 3(f) of Executive 

Order 12866 defines a ‘‘significant 

regulatory action’’ as an action that is 

likely to result in a rule that may: 

(1) Have an annual effect on the 

economy of $100 million or more in any 

one year or adversely affect in a material 

way a sector of the economy, 

productivity, competition, jobs, the 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69809 

29 5 U.S.C. 601 et seq. 

30According to the SBA size standards, entities 

with average annual receipts of $7 million or less 

would be considered small entities for North 

American Industry Classification System (NAICS) 

Code 524114 (Direct Health and Medical Insurance 

Carriers) (for more information, see ‘‘Table of Size 

Standards Matched To North American Industry 

Classification System Codes,’’ effective March 26, 

2012, U.S. Small Business Administration, available 

at http://www.sba.gov). 31Public Law 104–4. 

environment, public health or safety, or 

State, local, or tribal government or 

communities; 

(2) Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlement grants, user fees, 

or loan programs, or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in Executive Order 12866. 

OPM will continue to generally 

operate the MSP Program as it 

previously had in plan year 2014. The 

regulatory changes in this proposed rule 

are for purposes of policy clarification 

and any proposed changes will have 

minimal impact on the administration 

of the Program. Administrative costs of 

the rule are generated both within OPM 

and by issuers offering MSP options. 

The costs that MSP issuers may incur 

are the same as those of QHPs and, as 

stated in 45 CFR part 156, will include: 

Accreditation, network adequacy 

standards, and quality improvement 

strategy reporting. The costs associated 

with MSP certification offset the costs 

that issuers would face were they to be 

certified by the State, or HHS on behalf 

of the State, to offer QHPs through the 

Exchange. For the 2014 plan year, there 

are approximately 371,000 enrolled in 

MSP options and with an estimated 

average monthly premium of $350, 

premiums collected by MSP issuers for 

consumers enrolled in MSP options is 

are approximately $1.4 billion this year. 

While the overall regulation and 

Program have a significant economic 

impact, this proposed rule provides for 

no substantial changes to the Program 

and will not be economically 

significant. The economic impact of this 

rule is not expected exceed the $100 

million threshold; we therefore do not 

assess costs and benefits as required by 

the Executive Order. 

V. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. chapter 35; see 5 CFR part 

1320) requires that the U.S. Office of 

Management and Budget (OMB) 

approve all collections of information 

by a Federal agency from the public 

before they can be implemented. 

Respondents are not required to respond 

to any collection of information unless 

it displays a current valid OMB control 

number. OPM is not proposing any 

additional collections from MSP issuers 

or applicants seeking to become MSP 

issuers in this proposed rule. OPM 

continues to expect fewer than ten 

responsible entities to respond to all of 

the collections noted above. For that 

reason alone, the existing collections are 

exempt from the Paperwork Reduction 

Act under 44 U.S.C. 3502(3)(A)(i). 

VI. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(RFA) 29 requires agencies to prepare an 

initial regulatory flexibility analysis to 

describe the impact of the proposed rule 

on small entities, unless the head of the 

agency can certify that the rule would 

not have a significant economic impact 

on a substantial number of small 

entities. The RFA generally defines a 

‘‘small entity’’ as—(1) a proprietary firm 

meeting the size standards of the Small 

Business Administration (SBA); (2) a 

not-for-profit organization that is not 

dominant in its field; or (3) a small 

government jurisdiction with a 

population of less than 50,000. States 

and individuals are not included in the 

definition of ‘‘small entity.’’ 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses, if a proposed rule has a 

significant impact on a substantial 

number of small entities. For purposes 

of the RFA, small entities include small 

businesses, small non-profit 

organizations, and small government 

jurisdictions. Small businesses are those 

with sizes below thresholds established 

by the SBA. With respect to health 

insurers, the SBA size standard is $7.0 

million in annual receipts.30

OPM does not think that small 

businesses with annual receipts less 

than $7.0 million would likely have 

sufficient economies of scale to become 

MSP issuers or be part of a group of 

MSP issuers. Similarly, while the 

Director must enter into an MSP 

Program contract with at least one nonprofit entity, OPM does not think that 

small non-profit organizations would 

likely have sufficient economies of scale 

to become MSP issuers or be part of a 

group of MSP issuers. 

OPM does not think that this 

proposed rule would have a significant 

economic impact on a substantial 

number of small businesses with annual 

receipts less than $7.0 million, because 

there are only a few health insurance 

issuers that could be considered small 

businesses. Moreover, while the 

Director must enter into an MSP 

contract with at least one non-profit 

entity, OPM does not think that this 

proposed rule would have a significant 

economic impact on a substantial 

number of small non-profit 

organizations, because few health 

insurance issuers are small non-profit 

organizations. 

OPM incorporates by reference 

previous analysis by HHS, which 

provides some insight into the number 

of health insurance issuers that could be 

small entities. Particularly, as discussed 

by HHS in the Medical Loss Ratio 

interim final rule (75 FR 74918), few, if 

any, issuers are small enough to fall 

below the size thresholds for small 

business established by the SBA. In that 

rule, HHS used a data set created from 

2009 NAIC Health and Life Blank 

annual financial statement data to 

develop an updated estimate of the 

number of small entities that offer 

comprehensive major medical coverage 

in the individual and group markets. 

For purposes of that analysis, HHS used 

total Accident and Health earned 

premiums as a proxy for annual 

receipts. HHS estimated that there are 

28 small entities with less than $7 

million in accident and health earned 

premiums offering individual or group 

comprehensive major medical coverage. 

OPM concurs with this HHS analysis, 

and, thus, does not think that this 

proposed rule would have a significant 

economic impact on a substantial 

number of small entities. 

Based on the foregoing, OPM is not 

preparing an analysis for the RFA 

because OPM has determined, and the 

Director certifies, that this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities. 

VII. Unfunded Mandates 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 

(UMRA) 31 requires that agencies assess 

anticipated costs and benefits and take 

certain other actions before issuing a 

proposed rule (and subsequent final 

rule) that includes any Federal mandate 

that may result in expenditures in any 

one year by a State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $100 million in 1995 

dollars, updated annually for inflation. 

In 2014, that threshold is approximately 

$141 million. UMRA does not address 

the total cost of a rule. Rather, it focuses 

on certain categories of costs, mainly 

those ‘‘Federal mandate’’ costs resulting 

from: (1) Imposing enforceable duties on 

State, local, or tribal governments, or on 

the private sector; or (2) increasing the 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69810 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

stringency of conditions in, or 

decreasing the funding of, State, local, 

or tribal governments under entitlement 

programs. 

This proposed rule does not place any 

Federal mandates on State, local, or 

Tribal governments, or on the private 

sector. This proposed rule would 

modify the MSP Program, a voluntary 

federal program that provides health 

insurance issuers the opportunity to 

contact with OPM to offer MSP options 

on the Exchanges. Section 3 of UMRA 

excludes from the definition of ‘‘Federal 

mandate’’ duties that arise from 

participation in a voluntary Federal 

program. Accordingly, no analysis 

under UMRA is required. 

VIII. Federalism 

Executive Order 13132 outlines 

fundamental principles of federalism, 

and requires the adherence to specific 

criteria by Federal agencies in the 

process of their formulation and 

implementation of policies that have 

‘‘substantial direct effects’’ on the 

States, the relationship between the 

national government and States, or on 

the distribution of power and 

responsibilities among the various 

levels of government. Federal agencies 

promulgating regulations that have 

these federalism implications must 

consult with State and local officials, 

and describe the extent of their 

consultation and the nature of the 

concerns of State and local officials in 

the preamble to the regulation. 

This proposed regulation has 

federalism implications, because it has 

direct effects on the States, the 

relationship between the national 

government and States, or on the 

distribution of power and 

responsibilities among various levels of 

government. In particular, under 

§ 800.114, OPM may deem a State law 

to be inconsistent with section 1334 of 

the Affordable Care Act, and, thus, 

inapplicable to an MSP option or MSP 

issuer. However, in OPM’s view, the 

federalism implications of this proposed 

regulation are substantially mitigated 

because, OPM expects that the vast 

majority of States have laws that are 

consistent with section 1334 of the 

Affordable Care Act. Furthermore, 

§ 800.116 sets forth a process for dispute 

resolution if a State seeks to challenge 

OPM’s determination that a State law is 

inapplicable to an MSP option or MSP 

issuer. 

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, OPM has engaged in efforts to 

consult with and work cooperatively 

with affected State and local officials, 

including attending meetings of the 

NAIC and consulting with State 

insurance officials on an individual 

basis. It is expected OPM will continue 

act in a similar fashion in enforcing the 

Affordable Care Act requirements. 

Throughout the process of 

administering the MSP Program and 

developing this proposed regulation, 

OPM has attempted to balance the 

States’ interests in regulating health 

insurance issuers, and the statutory 

requirement to provide two MSP 

options in all Exchanges in the every 

States and the District of Columbia. By 

doing so, it is OPM’s view that it has 

complied with the requirements of 

Executive Order 13132. 

Pursuant to the requirements set forth 

in section 8(a) of Executive Order 

13132, and by the signature affixed to 

this proposed regulation, OPM certifies 

that it has complied with the 

requirements of Executive Order 13132 

for the attached regulation in a 

meaningful and timely manner. 

List of Subjects in 45 CFR Part 800 

Administrative practice and 

procedure, Health facilities, Health 

insurance, Health professions, Reporting 

and recordkeeping requirements. 

Office of Personnel Management. 

Katherine Archuleta, 

Director. 

Accordingly, the U.S. Office of 

Personnel Management is proposing to 

revise part 800 to title 45, Code of 

Federal Regulations, as follows: 

PART 800—MULTI-STATE PLAN 

PROGRAM 

Subpart A—General Provisions and 

Definitions 

Sec. 

800.10 Basis and scope. 

800.20 Definitions. 

Subpart B—Multi-State Plan Program Issuer 

Requirements 

800.101 General requirements. 

800.102 Compliance with Federal law. 

800.103 Authority to contract with issuers. 

800.104 Phased expansion, etc. 

800.105 Benefits. 

800.106 Cost-sharing limits, advance 

payments of premium tax credits, and 

cost-sharing reductions. 

800.107 Levels of coverage. 

800.108 Assessments and user fees. 

800.109 Network adequacy. 

800.110 Service area. 

800.111 Accreditation requirement. 

800.112 Reporting requirements. 

800.113 Benefit plan material or 

information. 

800.114 Compliance with applicable State 

law. 

800.115 Level playing field. 

800.116 Process for dispute resolution. 

Subpart C—Premiums, Rating Factors, 

Medical Loss Ratios, and Risk Adjustment 

800.201 General requirements. 

800.202 Rating factors. 

800.203 Medical loss ratio. 

800.204 Reinsurance, risk corridors, and 

risk adjustment. 

Subpart D—Application and Contracting 

Procedures 

800.301 Application process. 

800.302 Review of applications. 

800.303 MSP Program contracting. 

800.304 Term of the contract. 

800.305 Contract renewal process. 

800.306 Nonrenewal. 

Subpart E—Compliance 

800.401 Contract performance. 

800.402 Contract quality assurance. 

800.403 Fraud and abuse. 

800.404 Compliance actions. 

800.405 Reconsideration of compliance 

actions. 

Subpart F—Appeals by Enrollees of Denials 

of Claims for Payment or Service 

800.501 General requirements. 

800.502 MSP issuer internal claims and 

appeals. 

800.503 External review. 

800.504 Judicial review. 

Subpart G—Miscellaneous 

800.601 Reservation of authority. 

800.602 Consumer choice with respect to 

certain services. 

800.603 Disclosure of information. 

Authority: Sec. 1334 of Pub. L. 111–148, 

124 Stat. 119; Pub. L. 111–152, 124 Stat. 1029 

(42 U.S.C. 18054). 

Subpart A—General Provisions and 

Definitions 

§ 800.10 Basis and scope. 

(a) Basis. This part is based on the 

following sections of title I of the 

Affordable Care Act: 

1001. Amendments to the Public 

Health Service Act. 

1302. Essential Health Benefits 

Requirements. 

1311. Affordable Choices of Health 

Benefit Plans. 

1324. Level Playing Field. 

1334. Multi-State Plans. 

1341. Transitional Reinsurance 

Program for Individual Market in Each 

State. 

1342. Establishment of Risk Corridors 

for Plans in Individual and Small Group 

Markets. 

1343. Risk Adjustment. 

(b) Scope. This part establishes 

standards for health insurance issuers to 

contract with the United States Office of 

Personnel Management (OPM) to offer 

Multi-State Plan (MSP) options to 

provide health insurance coverage on 

Exchanges for each State. It also 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69811 

establishes standards for appeal of a 

decision by OPM affecting the issuer’s 

participation in the MSP Program and 

standards for an enrollee in an MSP 

option to appeal denials of payment or 

services by an MSP issuer. 

§ 800.20 Definitions. 

For purposes of this part: 

Actuarial value (AV) has the meaning 

given that term in 45 CFR 156.20. 

Affordable Care Act means the Patient 

Protection and Affordable Care Act 

(Pub. L. 111–148), as amended by the 

Health Care and Education 

Reconciliation Act of 2010 (Pub. L. 111– 

152). 

Applicant means an issuer or group of 

issuers that has submitted an 

application to OPM to be considered for 

participation in the Multi-State Plan 

Program. 

Benefit plan material or information 

means explanations or descriptions, 

whether printed or electronic, that 

describe a health insurance issuer’s 

products. The term does not include a 

policy or contract for health insurance 

coverage. 

Cost sharing has the meaning given 

that term in 45 CFR 155.20. 

Director means the Director of the 

United States Office of Personnel 

Management. 

EHB-benchmark plan has the meaning 

given that term in 45 CFR 156.20. 

Exchange means a governmental 

agency or non-profit entity that meets 

the applicable requirements of 45 CFR 

part 155 and makes qualified health 

plans (QHPs) and MSP options available 

to qualified individuals and qualified 

employers. Unless otherwise identified, 

this term refers to State Exchanges, 

regional Exchanges, subsidiary 

Exchanges, and a Federally-facilitated 

Exchange. 

Federal Employees Health Benefits 

Program or FEHB Program means the 

health benefits program administered by 

the United States Office of Personnel 

Management pursuant to chapter 89 of 

title 5, United States Code. 

Group of issuers means: 

(1) A group of health insurance 

issuers that are affiliated either by 

common ownership and control or by 

common use of a nationally licensed 

service mark (as defined in this section); 

or 

(2) An affiliation of health insurance 

issuers and an entity that is not an 

issuer but that owns a nationally 

licensed service mark (as defined in this 

section). 

Health insurance coverage means 

benefits consisting of medical care 

(provided directly, through insurance or 

reimbursement, or otherwise) under any 

hospital or medical service policy or 

certificate, hospital or medical service 

plan contract, or health maintenance 

organization contract offered by a health 

insurance issuer. Health insurance 

coverage includes group health 

insurance coverage, individual health 

insurance coverage, and short-term, 

limited duration insurance. 

Health insurance issuer or issuer 

means an insurance company, insurance 

service, or insurance organization 

(including a health maintenance 

organization) that is required to be 

licensed to engage in the business of 

insurance in a State and that is subject 

to State law that regulates insurance 

(within the meaning of section 514(b)(2) 

of the Employee Retirement Income 

Security Act (ERISA)). This term does 

not include a group health plan as 

defined in 45 CFR 146.145(a). 

HHS means the United States 

Department of Health and Human 

Services. 

Level of coverage means one of four 

standardized actuarial values of plan 

coverage as defined by section 

1302(d)(1) of the Affordable Care Act. 

Licensure means the authorization 

obtained from the appropriate State 

official or regulatory authority to offer 

health insurance coverage in the State. 

Multi-State Plan Program issuer or 

MSP issuer means a health insurance 

issuer or group of issuers (as defined in 

this section) that has a contract with 

OPM to offer health plans pursuant to 

section 1334 of the Affordable Care Act 

and meets the requirements of this part. 

Multi-State Plan option or MSP option 

means a discrete pairing of a package of 

benefits with particular cost sharing 

(which does not include premium rates 

or premium rate quotes) that is offered 

pursuant to a contract with OPM 

pursuant to section 1334 of the 

Affordable Care Act and meets the 

requirements of 45 CFR part 800. 

Multi-State Plan Program or MSP 

Program means the program 

administered by OPM pursuant to 

section 1334 of the Affordable Care Act. 

Nationally licensed service mark 

means a word, name, symbol, or device, 

or any combination thereof, that an 

issuer or group of issuers uses 

consistently nationwide to identify 

itself. 

Non-profit entity means: 

(1) An organization that is 

incorporated under State law as a nonprofit entity and licensed under State 

law as a health insurance issuer; or 

(2) A group of health insurance 

issuers licensed under State law, a 

substantial portion of which are 

incorporated under State law as nonprofit entities. 

OPM means the United States Office 

of Personnel Management. 

Percentage of total allowed cost of 

benefits has the meaning given that term 

in 45 CFR 156.20. 

Plan year means a consecutive 12- 

month period during which a health 

plan provides coverage for health 

benefits. A plan year may be a calendar 

year or otherwise. 

Prompt payment means a requirement 

imposed on a health insurance issuer to 

pay a provider or enrollee for a claimed 

benefit or service within a defined time 

period, including the penalty or 

consequence imposed on the issuer for 

failure to meet the requirement. 

Qualified Health Plan or QHP means 

a health plan that has in effect a 

certification that it meets the standards 

described in subpart C of 45 CFR part 

156 issued or recognized by each 

Exchange through which such plan is 

offered pursuant to the process 

described in subpart K of 45 CFR part 

155. 

Rating means the process, including 

rating factors, numbers, formulas, 

methodologies, and actuarial 

assumptions, used to set premiums for 

a health plan. 

Secretary means the Secretary of the 

Department of Health and Human 

Services. 

SHOP means a Small Business Health 

Options Program operated by an 

Exchange through which a qualified 

employer can provide its employees and 

their dependents with access to one or 

more qualified health plans (QHPs). 

Silver plan variation has the meaning 

given that term in 45 CFR 156.400. 

Small employer means, in connection 

with a group health plan with respect to 

a calendar year and a plan year, an 

employer who employed an average of 

at least one but not more than 100 

employees on business days during the 

preceding calendar year and who 

employs at least one employee on the 

first day of the plan year. In the case of 

plan years beginning before January 1, 

2016, a State may elect to define small 

employer by substituting ‘‘50 

employees’’ for ‘‘100 employees.’’ 

Standard plan has the meaning given 

that term in 45 CFR 156.400. 

State Insurance Commissioner means 

the commissioner or other chief 

insurance regulatory official of a State. 

State means each of the 50 States or 

the District of Columbia. 

State-level issuer means a health 

insurance issuer designated by the 

Multi-State Plan (MSP) issuer to offer an 

MSP option or MSP options. The Statelevel issuer may offer health insurance 

coverage through an MSP option in all 

or part of one or more States. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69812 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

Subpart B—Multi-State Plan Program 

Issuer Requirements 

§ 800.101 General requirements. 

An MSP issuer must: 

(a) Licensed. Be licensed as a health 

insurance issuer in each State where it 

offers health insurance coverage; 

(b) Contract with OPM. Have a 

contract with OPM pursuant to this part; 

(c) Required levels of coverage. Offer 

levels of coverage as required by 

§ 800.107; 

(d) Eligibility and enrollment. MSP 

options and MSP issuers must meet the 

same requirements for eligibility, 

enrollment, and termination of coverage 

as those that apply to QHPs and QHP 

issuers pursuant to 45 CFR part 155, 

subparts D, E, and H, and 45 CFR 

156.250, 156.260, 156.265, 156.270, and 

156.285; 

(e) Applicable to each MSP issuer. 

Ensure that each of its MSP options 

meets the requirements of this part; 

(f) Compliance. Comply with all 

standards set forth in this part; 

(g) OPM direction and other legal 

requirements. Timely comply with OPM 

instructions and directions and with 

other applicable law; and 

(h) Other requirements. Meet such 

other requirements as determined 

appropriate by OPM, in consultation 

with HHS, pursuant to section 

1334(b)(4) of the Affordable Care Act. 

(i) Non-discrimination. MSP options 

and MSP issuers must comply with 

applicable Federal and State nondiscrimination laws, including the 

standards set forth in 45 CFR 156.125 

and 156.200(e). 

§ 800.102 Compliance with Federal law. 

(a) Public Health Service Act. As a 

condition of participation in the MSP 

Program, an MSP issuer must comply 

with applicable provisions of part A of 

title XXVII of the PHS Act. Compliance 

shall be determined by the Director. 

(b) Affordable Care Act. As a 

condition of participation in the MSP 

Program, an MSP issuer must comply 

with applicable provisions of title I of 

the Affordable Care Act. Compliance 

shall be determined by the Director. 

§ 800.103 Authority to contract with 

issuers. 

(a) General. OPM may enter into 

contracts with health insurance issuers 

to offer at least two MSP options on 

Exchanges and SHOPs in each State, 

without regard to any statutes that 

would otherwise require competitive 

bidding. 

(b) Non-profit entity. In entering into 

contracts with health insurance issuers 

to offer MSP options, OPM will enter 

into a contract with at least one nonprofit entity as defined in § 800.20. 

(c) Group of issuers. Any contract to 

offer MSP options may be with a group 

of issuers as defined in § 800.20. 

(d) Individual and group coverage. 

The contracts will provide for 

individual health insurance coverage 

and for group health insurance coverage 

for small employers. 

§ 800.104 Phased expansion, etc. 

(a) Phase-in. OPM may enter into a 

contract with a health insurance issuer 

to offer MSP options if the health 

insurance issuer agrees that: 

(1) With respect to the first year for 

which the health insurance issuer offers 

MSP options, the health insurance 

issuer will offer MSP options in at least 

60 percent of the States; 

(2) With respect to the second such 

year, the health insurance issuer will 

offer the MSP options in at least 70 

percent of the States; 

(3) With respect to the third such 

year, the health insurance issuer will 

offer the MSP options in at least 85 

percent of the States; and 

(4) With respect to each subsequent 

year, the health insurance issuer will 

offer the MSP options in all States. 

(b) Partial coverage within a State. (1) 

OPM may enter into a contract with an 

MSP issuer even if the MSP issuer’s 

MSP options for a State cover fewer 

than all the service areas specified for 

that State pursuant to § 800.110. 

(2) If an issuer offers both an MSP 

option and QHP on the same Exchange, 

an MSP issuer must offer MSP coverage 

in a service area or areas that is equal 

to the greater of: 

(i) The QHP service area defined by 

the issuer or, 

(ii) The service area specified for that 

State pursuant to § 800.110 covered by 

the issuer’s QHP. 

(c) Participation in SHOPs. (1) An 

MSP issuer’s participation in the 

Federally-facilitated SHOP must be 

consistent with the requirements for 

QHP issuers specified in 45 CFR 

156.200(g). 

(2) An MSP issuer must comply with 

State standards governing participation 

in State-based SHOPs, consistent with 

§ 800.114. For these State-based SHOP 

standards, OPM retains discretion to 

allow an MSP issuer to phase-in SHOP 

participation in States pursuant to 

section 1334(e) of the Affordable Care 

Act. 

(d) Licensed where offered. OPM may 

enter into a contract with an MSP issuer 

who is not licensed in every State, 

provided that the issuer is licensed in 

every State where it offers MSP coverage 

through any Exchanges in that State and 

demonstrates to OPM that it is making 

a good faith effort to become licensed in 

every State consistent with the 

timeframe in paragraph (a) of this 

section. 

§ 800.105 Benefits. 

(a) Package of benefits. (1) An MSP 

issuer must offer a package of benefits 

that includes the essential health 

benefits (EHB) described in section 1302 

of the Affordable Care Act for each MSP 

option within a State. 

(2) The package of benefits referred to 

in paragraph (a)(1) of this section must 

comply with section 1302 of the 

Affordable Care Act, as well as any 

applicable standards set by OPM and 

any applicable standards set by HHS. 

(b) Package of benefits options. (1) An 

MSP issuer must offer at least one 

uniform package of benefits in each 

State that is substantially equal to: 

(i) The EHB-benchmark plan in each 

State in which it operates; or 

(ii) Any EHB-benchmark plan selected 

by OPM under paragraph (c) of this 

section. 

(2) An issuer applying to participate 

in the MSP Program may select either or 

both of the package of benefits options 

described in paragraph (b)(1) of this 

section in its application. In each State, 

the issuer may choose one EHBbenchmark for each product it offers. 

(3) An MSP issuer must comply with 

any State standards relating to 

substitution of benchmark benefits or 

standard benefit designs. 

(c) OPM selection of benchmark 

plans. (1) The OPM-selected EHBbenchmark plans are the three largest 

Federal Employees Health Benefits 

(FEHB) Program plan options, as 

identified by HHS pursuant to section 

1302(b) of the Affordable Care Act, and 

as supplemented pursuant to paragraphs 

(c)(2) through (c)(4) of this section. 

(2) Any EHB-benchmark plan selected 

by OPM under paragraph (c)(1) of this 

section lacking coverage of pediatric 

oral services or pediatric vision services 

must be supplemented by the addition 

of the entire category of benefits from 

the largest Federal Employee Dental and 

Vision Insurance Program (FEDVIP) 

dental or vision plan options, 

respectively, pursuant to 45 CFR 

156.110(b) and section 1302(b) of the 

Affordable Care Act. 

(3) In all States where an MSP issuer 

uses the OPM-selected EHB-benchmark 

plan, the MSP issuer may manage 

formularies around the needs of 

anticipated or actual users, subject to 

approval by OPM. 

(4) An MSP issuer must follow State 

definitions where the State specifically 

defines the habilitative services category 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69813 

pursuant to 45 CFR 156.110(f) or any 

Federal definitions where HHS 

specifically defines habilitative services. 

In the case of any State that does not 

define this category and absent a clearly 

applicable Federal definition, if any 

OPM-selected EHB-benchmark plan 

lacks coverage of habilitative services 

and devices, OPM may determine what 

habilitative services are to be included 

in that EHB-benchmark plan. 

(5) Any EHB-benchmark plan selected 

by OPM under paragraph (c)(1) of this 

section must include, for each State, any 

State-required benefits enacted before 

December 31, 2011, that are included in 

the State’s EHB-benchmark plan as 

described in paragraph (b)(1)(i) of this 

section, or specific to the market in 

which the plan is offered. 

(d) OPM approval. An MSP issuer’s 

package of benefits, including its 

formulary, must be submitted for 

approval by OPM, which will review a 

package of benefits proposed by an MSP 

issuer and determine if it is 

substantially equal to an EHBbenchmark plan described in paragraph 

(b)(1) of this section, pursuant to 

standards set forth by OPM and any 

applicable standards set forth by HHS, 

including 45 CFR 156.115, 156.122, and 

156.125. 

(e) State payments for additional 

State-required benefits. If a State 

requires that benefits in addition to the 

benchmark package be offered to MSP 

enrollees in that State, then pursuant to 

section 1334(c)(2) of the Affordable Care 

Act, the State must defray the cost of 

such additional benefits by making 

payments either to the enrollee or to the 

MSP issuer on behalf of the enrollee. 

§ 800.106 Cost-sharing limits, advance 

payments of premium tax credits, and costsharing reductions. 

(a) Cost-sharing limits. For each MSP 

option it offers, an MSP issuer must 

ensure that the cost-sharing provisions 

of the MSP option complies with 

section 1302(c) of the Affordable Care 

Act, as well as any applicable standards 

set by OPM or HHS. 

(b) Advance payments of premium tax 

credits and cost-sharing reductions. For 

each MSP option it offers, an MSP 

issuer must ensure that an eligible 

individual receives the benefit of 

advance payments of premium tax 

credits under section 36B of the Internal 

Revenue Code and the cost-sharing 

reductions under section 1402 of the 

Affordable Care Act. An MSP issuer 

must also comply with any applicable 

standards set by OPM or HHS. 

§ 800.107 Levels of coverage. 

(a) Silver and gold levels of coverage 

required. An MSP issuer must offer at 

least one MSP option at the silver level 

of coverage and at least one MSP option 

at the gold level of coverage on each 

Exchange in which the issuer is certified 

to offer an MSP option pursuant to a 

contract with OPM. 

(b) Bronze or platinum metal levels of 

coverage permitted. Pursuant to a 

contract with OPM, an MSP issuer may 

offer one or more MSP options at the 

bronze level of coverage or the platinum 

level of coverage, or both, on any 

Exchange or SHOP in any State. 

(c) Child-only plans. For each level of 

coverage, the MSP issuer must offer a 

child-only MSP options at the same 

level of coverage as any health 

insurance coverage offered to 

individuals who, as of the beginning of 

the plan year, have not attained the age 

of 21. 

(d) Plan variations for the reduction 

or elimination of cost-sharing. An MSP 

issuer must comply with section 1402 of 

the Affordable Care Act, as well as any 

applicable standards set by OPM or 

HHS. 

(e) OPM approval. An MSP issuer 

must submit the levels of coverage plans 

and plan variations to OPM for review 

and approval by OPM. 

§ 800.108 Assessments and user fees. 

(a) Discretion to charge assessment 

and user fees. Beginning in plan year 

2015, OPM may require an MSP issuer 

to pay an assessment or user fee as a 

condition of participating in the MSP 

Program. 

(b) Determination of amount. The 

amount of the assessment or user fee 

charged by OPM for a plan year is the 

amount determined necessary by OPM 

to meet the costs of OPM’s functions 

under the Affordable Care Act for a plan 

year, including but not limited to such 

functions as entering into contracts 

with, certifying, recertifying, 

decertifying, and overseeing MSP 

options and MSP issuers for that plan 

year. The amount of the assessment or 

user fee charged by OPM will be offset 

against the assessment or user fee 

amount required by any State-based 

Exchange or Federally-facilitated 

Exchange such that the total of all 

assessments and user fees paid by the 

MSP issuer for the year for the MSP 

option shall be no greater than nor less 

than the amount of the assessment or 

user fee paid by QHP issuers in that 

State-based Exchange or Federallyfacilitated Exchange for that year. 

(c) Process for collecting MSP 

assessment or user fees. OPM may 

require an MSP issuer to make payment 

of the MSP Program assessment or user 

fee amount directly to OPM, or may 

establish other mechanisms for the 

collection process. 

§ 800.109 Network adequacy. 

(a) General requirement. An MSP 

issuer must ensure that the provider 

network of each of its MSP options, as 

available to all enrollees, meets the 

following standards: 

(1) Maintains a network that is 

sufficient in number and types of 

providers to assure that all services will 

be accessible without unreasonable 

delay; 

(2) Is consistent with the network 

adequacy provisions of section 2702(c) 

of the Public Health Service Act; and 

(3) Includes essential community 

providers in compliance with 45 CFR 

156.235. 

(b) Provider directory. An MSP issuer 

must make its provider directory for an 

MSP option available to the Exchange 

for publication online pursuant to 

guidance from the Exchange and to 

potential enrollees in hard copy, upon 

request. In the provider directory, an 

MSP issuer must identify providers that 

are not accepting new patients. An MSP 

issuer must also comply with any 

additional standards related to provider 

directories set by HHS for QHP issuers. 

(c) OPM guidance. OPM will issue 

guidance containing the criteria and 

standards that it will use to determine 

the adequacy of a provider network. 

§ 800.110 Service area. 

An MSP issuer must offer an MSP 

option within one or more service areas 

in a State defined by each Exchange 

pursuant to 45 CFR 155.1055. If an 

Exchange permits issuers to define their 

service areas, an MSP issuer must obtain 

OPM’s approval for its proposed service 

areas. Pursuant to § 800.104, OPM may 

enter into a contract with an MSP issuer 

even if the MSP issuer’s MSP options 

for a State cover fewer than all the 

service areas specified for that State. 

MSP options will follow the same 

standards for service areas for QHPs 

pursuant to 45 CFR 155.1055. 

§ 800.111 Accreditation requirement. 

(a) General requirement. An MSP 

issuer must be or become accredited 

consistently with the requirements for 

QHP issuers specified in section 1311 of 

the Affordable Care Act and 45 CFR 

156.275(a)(1). 

(b) Release of survey. An MSP issuer 

must authorize the accrediting entity 

that accredits the MSP issuer to release 

to OPM and to the Exchange a copy of 

its most recent accreditation survey, 

together with any survey-related 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69814 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

information that OPM or an Exchange 

may require, such as corrective action 

plans and summaries of findings. 

(c) Timeframe for accreditation. An 

MSP issuer that is not accredited as of 

the date that it enters into a contract 

with OPM must become accredited 

within the timeframe established by 

OPM as authorized by 45 CFR 155.1045. 

§ 800.112 Reporting requirements. 

(a) OPM specification of reporting 

requirements. OPM will specify the data 

and information that must be reported 

by an MSP issuer, including data 

permitted or required by the Affordable 

Care Act and such other data as OPM 

may determine necessary for the 

oversight and administration of the MSP 

Program. OPM will also specify the 

form, manner, processes, and frequency 

for the reporting of data and 

information. The Director may require 

that MSP issuers submit claims payment 

and enrollment data to facilitate OPM’s 

oversight and administration of the MSP 

Program in a manner similar to the 

FEHB Program. 

(b) Quality and quality improvement 

standards. An MSP issuer must comply 

with any standards required by OPM for 

reporting quality and quality 

improvement activities, including but 

not limited to implementation of a 

quality improvement strategy, 

disclosure of quality measures to 

enrollees and prospective enrollees, 

reporting of pediatric quality measures, 

and implementation of rating and 

enrollee satisfaction surveys, which will 

be similar to standards under section 

1311(c)(1)(E), (H), and (I), (c)(3), and 

(c)(4) of the Affordable Care Act. 

§ 800.113 Benefit plan material or 

information. 

(a) Compliance with Federal and State 

law. An MSP issuer must comply with 

Federal and State laws relating to 

benefit plan material or information, 

including the provisions of this section 

and guidance issued by OPM specifying 

its standards, process, and timeline for 

approval of benefit plan material or 

information. 

(b) General standards for MSP 

applications and notices. An MSP 

issuer must provide all applications and 

notices to enrollees in accordance with 

the standards described in 45 CFR 

155.205(c). OPM may establish 

additional standards to meet the needs 

of MSP enrollees. 

(c) Accuracy. An MSP issuer is 

responsible for the accuracy of its 

benefit plan material or information. 

(d) Truthful, not misleading, no 

material omissions, and plain language. 

All benefit plan material or information 

must be: 

(1) Truthful, not misleading, and 

without material omissions; and 

(2) Written in plain language, as 

defined in section 1311(e)(3)(B) of the 

Affordable Care Act. 

(e) Uniform explanation of coverage 

documents and standardized 

definitions. An MSP issuer must comply 

with the provisions of section 2715 of 

the PHS Act and regulations issued to 

implement that section. 

(f) OPM review and approval of 

benefit plan material or information. 

OPM may request an MSP issuer to 

submit to OPM benefit plan material or 

information, as defined in § 800.20. 

OPM reserves the right to review and 

approve benefit plan material or 

information to ensure that an MSP 

issuer complies with Federal and State 

laws, and the standards prescribed by 

OPM with respect to benefit plan 

material or information. 

(g) Statement on certification by OPM. 

An MSP issuer may include a statement 

in its benefit plan material or 

information that: 

(1) OPM has certified the MSP option 

as eligible to be offered on the 

Exchange; and 

(2) OPM monitors the MSP option for 

compliance with all applicable law. 

§ 800.114 Compliance with applicable 

State law. 

(a) Compliance with State law. An 

MSP issuer must, with respect to each 

of its MSP options, generally comply 

with State law pursuant to section 

1334(b)(2) of the Affordable Care Act. 

However, the MSP options and MSP 

issuers are not subject to State laws that: 

(1) Are inconsistent with section 1334 

of the Affordable Care Act or this part; 

(2) Prevent the application of a 

requirement of part A of title XXVII of 

the PHS Act; or 

(3) Prevent the application of a 

requirement of title I of the Affordable 

Care Act. 

(b) Determination of inconsistency. 

After consultation with the State and 

HHS, OPM reserves the right to 

determine, in its judgment, as 

effectuated through an MSP Program 

contract, these regulations, or OPM 

guidance, whether the standards set 

forth in paragraph (a) of this section are 

satisfied with respect to particular State 

laws. 

§ 800.115 Level playing field. 

An MSP issuer must, with respect to 

each of its MSP options, meet the 

following requirements in order to 

ensure a level playing field, subject to 

§ 800.114: 

(a) Guaranteed renewal. Guarantee 

that an enrollee can renew enrollment 

in an MSP option in compliance with 

sections 2703 and 2742 of the PHS Act; 

(b) Rating. In proposing premiums for 

OPM approval, use only the rating 

factors permitted under section 2701 of 

the PHS Act and State law; 

(c) Preexisting conditions. Not impose 

any preexisting condition exclusion and 

comply with section 2704 of the PHS 

Act; 

(d) Non-discrimination. Comply with 

section 2705 of the PHS Act; 

(e) Quality improvement and 

reporting. Comply with all Federal and 

State quality improvement and 

reporting requirements. Quality 

improvement and reporting means 

quality improvement as defined in 

section 1311(h) of the Affordable Care 

Act and quality improvement plans or 

strategies required under State law, and 

quality reporting as defined in section 

2717 of the PHS Act and section 1311(g) 

of the Affordable Care Act. Quality 

improvement also includes activities 

such as, but not limited to, 

implementation of a quality 

improvement strategy, disclosure of 

quality measures to enrollees and 

prospective enrollees, and reporting of 

pediatric quality measures, which will 

be similar to standards under section 

1311(c)(1)(E), (H), and (I) of the 

Affordable Care Act; 

(f) Fraud and abuse. Comply with all 

Federal and State fraud and abuse laws; 

(g) Licensure. Be licensed in every 

State in which it offers an MSP option; 

(h) Solvency and financial 

requirements. Comply with the solvency 

standards set by each State in which it 

offers an MSP option; 

(i) Market conduct. Comply with the 

market conduct standards of each State 

in which it offers an MSP option; 

(j) Prompt payment. Comply with 

applicable State law in negotiating the 

terms of payment in contracts with its 

providers and in making payments to 

claimants and providers; 

(k) Appeals and grievances. Comply 

with Federal standards under section 

2719 of the PHS Act for appeals and 

grievances relating to adverse benefit 

determinations, as described in subpart 

F of this part; 

(l) Privacy and confidentiality. 

Comply with all Federal and State 

privacy and security laws and 

requirements, including any standards 

required by OPM in guidance or 

contract, which will be similar to the 

standards contained in 45 CFR part 164 

and applicable State law; and 

(m) Benefit plan material or 

information. Comply with Federal and 

State law, including § 800.113. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69815 

§ 800.116 Process for dispute resolution. 

(a) Determinations about applicability 

of State law under section 1334(b)(2) of 

the Affordable Care Act. In the event of 

a dispute about the applicability to an 

MSP option or MSP issuer of a State 

law, the State may request that OPM 

reconsider a determination that an MSP 

option or MSP issuer is not subject to 

such State law. 

(b) Required demonstration. A State 

making a request under paragraph (a) of 

this section must demonstrate that the 

State law at issue: 

(1) Is not inconsistent with section 

1334 of the Affordable Care Act or this 

part; 

(2) Does not prevent the application of 

a requirement of part A of title XXVII of 

the PHS Act; and 

(3) Does not prevent the application of 

a requirement of title I of the Affordable 

Care Act. 

(c) Request for review. The request 

must be in writing and include contact 

information, including the name, 

telephone number, email address, and 

mailing address of the person or persons 

whom OPM may contact regarding the 

request for review. The request must be 

in such form, contain such information, 

and be submitted in such manner and 

within such timeframe as OPM may 

prescribe. 

(1) The requester may submit to OPM 

any relevant information to support its 

request. 

(2) OPM may obtain additional 

information relevant to the request from 

any source as it may, in its judgment, 

deem necessary. OPM will provide the 

requester with a copy of any additional 

information it obtains and provide an 

opportunity for the requester to respond 

(including by submission of additional 

information or explanation). 

(3) OPM will issue a written decision 

within 60 calendar days after receiving 

the written request, or after the due date 

for a response under paragraph (c)(2) of 

this section, whichever is later, unless a 

different timeframe is agreed upon. 

(4) OPM’s written decision will 

constitute final agency action that is 

subject to review under the 

Administrative Procedure Act in the 

appropriate U.S. district court. Such 

review is limited to the record that was 

before OPM when OPM made its 

decision. 

Subpart C—Premiums, Rating Factors, 

Medical Loss Ratios, and Risk 

Adjustment 

§ 800.201 General requirements. 

(a) Premium negotiation. OPM will 

negotiate annually with an MSP issuer, 

on a State by State basis, the premiums 

for each MSP option offered by that 

issuer in that State. Such negotiations 

may include negotiations about the costsharing provisions of an MSP option. 

(b) Duration. Premiums will remain in 

effect for the plan year. 

(c) Guidance on rate development. 

OPM will issue guidance addressing 

methods for the development of 

premiums for the MSP Program. That 

guidance will follow State rating 

standards generally applicable in a 

State, to the greatest extent practicable. 

(d) Calculation of actuarial value. An 

MSP issuer must calculate actuarial 

value in the same manner as QHP 

issuers under section 1302(d) of the 

Affordable Care Act, as well as any 

applicable standards set by OPM or 

HHS. 

(e) OPM rate review process. An MSP 

issuer must participate in the rate 

review process established by OPM to 

negotiate rates for MSP options. The rate 

review process established by OPM will 

be similar to the process established by 

HHS pursuant to section 2794 of the 

PHS Act and disclosure and review 

standards established under 45 CFR part 

154. 

(f) State effective rate review. With 

respect to its MSP options, an MSP 

issuer is subject to a State’s rate review 

process, including a State’s Effective 

Rate Review Program established by 

HHS pursuant to section 2794 of the 

PHS Act and 45 CFR part 154. In the 

event HHS is reviewing rates for a State 

pursuant to section 2794 of the PHS Act, 

HHS will defer to OPM’s judgment 

regarding the MSP options’ proposed 

rate increase. If a State withholds 

approval of an MSP option and OPM 

determines, in its discretion, that the 

State’s action would prevent OPM from 

administrating the MSP Program, OPM 

retains authority to make the final 

decision to approve rates for 

participation in the MSP Program, 

notwithstanding the absence of State 

approval. 

(g) Single risk pool. An MSP issuer 

must consider all enrollees in an MSP 

option to be in the same risk pool as all 

enrollees in all other health plans in the 

individual market or the small group 

market, respectively, in compliance 

with section 1312(c) of the Affordable 

Care Act, 45 CFR 156.80, and any 

applicable Federal or State laws and 

regulations implementing that section. 

§ 800.202 Rating factors. 

(a) Permissible rating factors. In 

proposing premiums for each MSP 

option, an MSP issuer must use only the 

rating factors permitted under section 

2701 of the PHS Act. 

(b) Application of variations based on 

age or tobacco use. Rating variations 

permitted under section 2701 of the 

PHS Act must be applied by an MSP 

issuer based on the portion of the 

premium attributable to each family 

member covered under the coverage in 

accordance with any applicable Federal 

or State laws and regulations 

implementing section 2701(a) of the 

PHS Act. 

(c) Age rating. For age rating, an MSP 

issuer must use the ratio established by 

the State in which the MSP option is 

offered, if it is less than 3:1. 

(1) Age bands. An MSP issuer must 

use the uniform age bands established 

under HHS regulations implementing 

section 2701(a) of the PHS Act. 

(2) Age curves. An MSP issuer must 

use the age curves established under 

HHS regulations implementing section 

2701(a) of the PHS Act, or age curves 

established by a State pursuant to HHS 

regulations. 

(d) Rating areas. An MSP issuer must 

use the rating areas appropriate to the 

State in which the MSP option is offered 

and established under HHS regulations 

implementing section 2701(a) if the PHS 

Act. 

(e) Tobacco rating. An MSP issuer 

must apply tobacco use as a rating factor 

in accordance with any applicable 

Federal or State laws and regulations 

implementing section 2701(a) of the 

PHS Act. 

(f) Wellness programs. An MSP issuer 

must comply with any applicable 

Federal or State laws and regulations 

implementing section 2705 of the PHS 

Act. 

§ 800.203 Medical loss ratio. 

(a) Required medical loss ratio. An 

MSP issuer must attain: 

(1) The medical loss ratio (MLR) 

required under section 2718 of the PHS 

Act and regulations promulgated by 

HHS; and 

(2) Any MSP-specific MLR that OPM 

may set in the best interests of MSP 

enrollees or that is necessary to be 

consistent with a State’s requirements 

with respect to MLR. 

(b) Consequences of not attaining 

required medical loss ratio. If an MSP 

issuer fails to attain an MLR set forth in 

paragraph (a) of this section, OPM may 

take any appropriate action, including 

but not limited to intermediate 

sanctions, such as suspension of 

marketing, decertifying an MSP option 

in one or more States, or terminating an 

MSP issuer’s contract pursuant to 

§ 800.404. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69816 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

§ 800.204 Reinsurance, risk corridors, and 

risk adjustment. 

(a) Transitional reinsurance program. 

An MSP issuer must comply with 

section 1341 of the Affordable Care Act, 

45 CFR part 153, and any applicable 

Federal or State regulations under 

section 1341 that set forth requirements 

to implement the transitional 

reinsurance program for the individual 

market. 

(b) Temporary risk corridors program. 

An MSP issuer must comply with 

section 1342 of the Affordable Care Act, 

45 CFR part 153, and any applicable 

Federal regulations under section 1342 

that set forth requirements to implement 

the risk corridor program. 

(c) Risk adjustment program. An MSP 

issuer must comply with section 1343 of 

the Affordable Care Act, 45 CFR part 

153, and any applicable Federal or State 

regulations under section 1343 that set 

forth requirements to implement the 

risk adjustment program. 

Subpart D—Application and 

Contracting Procedures 

§ 800.301 Application process. 

(a) Acceptance of applications. 

Without regard to 41 U.S.C. 6101(b)–(d), 

or any other statute requiring 

competitive bidding, OPM may consider 

annual applications from health 

insurance issuers, including groups of 

health insurance issuers as defined in 

§ 800.20, to participate in the MSP 

Program. If OPM determines that it is 

not beneficial for the MSP Program to 

consider new issuer applications for an 

upcoming year, OPM will issue a notice 

to that effect. Each existing MSP issuer 

may complete a renewal application 

annually. 

(b) Form and manner of applications. 

An applicant must submit to OPM, in 

the form and manner and in accordance 

with the timeline specified by OPM, the 

information requested by OPM for 

determining whether an applicant meets 

the requirements of this part. 

§ 800.302 Review of applications. 

(a) Determinations. OPM will 

determine if an applicant meets the 

requirements of this part. If OPM 

determines that an applicant meets the 

requirements of this part, OPM may 

accept the applicant to enter into 

contract negotiations with OPM to 

participate in the MSP Program. 

(b) Requests for additional 

information. OPM may request 

additional information from an 

applicant before making a decision 

about whether to enter into contract 

negotiations with that applicant to 

participate in the MSP Program. 

(c) Declination of application. If, after 

reviewing an application to participate 

in the MSP Program, OPM declines to 

enter into contract negotiations with the 

applicant, OPM will inform the 

applicant in writing of the reasons for 

that decision. 

(d) Discretion. The decision whether 

to enter into contract negotiations with 

a health insurance issuer who has 

applied to participate in the MSP 

Program is committed to OPM’s 

discretion. 

(e) Impact on future applications. 

OPM’s declination of an application to 

participate in the MSP Program will not 

preclude the applicant from submitting 

an application for a subsequent year to 

participate in the MSP Program. 

§ 800.303 MSP Program contracting. 

(a) Participation in MSP Program. To 

become an MSP issuer, the applicant 

and the Director or the Director’s 

designee must sign a contract that meets 

the requirements of this part. 

(b) Standard contract. OPM will 

establish a standard contract for the 

MSP Program. 

(c) Premiums. OPM and the applicant 

will negotiate the premiums for an MSP 

option for each plan year in accordance 

with the provisions of subpart C of this 

part. 

(d) Benefit packages. OPM must 

approve the applicant’s benefit packages 

for an MSP option. 

(e) Additional terms and conditions. 

OPM may elect to negotiate with an 

applicant such additional terms, 

conditions, and requirements that: 

(1) Are in the interests of MSP 

enrollees; or 

(2) OPM determines to be appropriate. 

(f) Certification to offer health 

insurance coverage. 

(1) For each plan year, an MSP 

Program contract will specify MSP 

options that OPM has certified, the 

specific package of benefits authorized 

to be offered on each Exchange, and the 

premiums to be charged for each 

package of benefits on each Exchange. 

(2) An MSP issuer may not offer an 

MSP option on an Exchange unless its 

MSP Program contract with OPM 

includes a certification authorizing the 

MSP issuer to offer the MSP option on 

that Exchange in accordance with 

paragraph (f)(1) of this section. 

§ 800.304 Term of the contract. 

(a) Term of a contract. The term of the 

contract will be specified in the MSP 

Program contract and must be for a 

period of at least the 12 consecutive 

months defined as the plan year. 

(b) Plan year. The plan year is a 

consecutive 12-month period during 

which an MSP option provides coverage 

for health benefits. A plan year may be 

a calendar year or otherwise. 

§ 800.305 Contract renewal process. 

(a) Renewal. To continue participating 

in the MSP Program, an MSP issuer 

must provide to OPM, in the form and 

manner and in accordance with the 

timeline prescribed by OPM, the 

information requested by OPM for 

determining whether the MSP issuer 

continues to meet the requirements of 

this part. 

(b) OPM decision. Subject to 

paragraph (c) of this section, OPM will 

renew the MSP Program contract of an 

MSP issuer who timely submits the 

information described in paragraph (a). 

(c) OPM discretion not to renew. OPM 

may decline to renew the contract of an 

MSP issuer if: 

(1) OPM and the MSP issuer fail to 

agree on premiums and benefits for an 

MSP option for the subsequent plan 

year; 

(2) The MSP issuer has engaged in 

conduct described in § 800.404(a); or 

(3) OPM determines that the MSP 

issuer will be unable to comply with a 

material provision of section 1334 of the 

Affordable Care Act or this part. 

(d) Failure to agree on premiums and 

benefits. Except as otherwise provided 

in this part, if an MSP issuer has 

complied with paragraph (a) of this 

section and OPM and the MSP issuer 

fail to agree on premiums and benefits 

for an MSP option on one or more 

Exchanges for the subsequent plan year 

by the date required by OPM, either 

party may provide notice of nonrenewal 

pursuant to § 800.306, or OPM may in 

its discretion withdraw the certification 

of that MSP option on the Exchange or 

Exchanges for that plan year. In 

addition, if OPM and the MSP issuer fail 

to agree on benefits and premiums for 

an MSP option on one or more 

Exchanges by the date set by OPM and 

in the event of no action (no notice of 

nonrenewal or renewal) by either party, 

the MSP Program contract will be 

renewed and the existing premiums and 

benefits for that MSP option on that 

Exchange or Exchanges will remain in 

effect for the subsequent plan year. 

§ 800.306 Nonrenewal. 

(a) Nonrenewal. Nonrenewal may 

pertain to the MSP issuer or the Statelevel issuer. The circumstances under 

which nonrenewal may occur are: 

(1) Nonrenewal of contract. As used 

in this subpart and subpart E of this 

part, ‘‘nonrenewal of contract’’ means a 

decision by either OPM or an MSP 

issuer not to renew an MSP Program 

contract. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69817 

(2) Nonrenewal of participation. As 

used in this subpart and subpart E of 

this part, ‘‘nonrenewal of participation’’ 

means a decision by OPM, an MSP 

issuer, or a State-level issuer not to 

renew a State-level issuer’s participation 

in a MSP Program contract. 

(b) Notice required. Either OPM or an 

MSP issuer may decline to renew an 

MSP Program contract by providing a 

written notice of nonrenewal to the 

other party. 

(c) MSP issuer responsibilities. The 

MSP issuer’s written notice of 

nonrenewal must be made in 

accordance with its MSP Program 

contract with OPM. The MSP issuer also 

must comply with any requirements 

regarding the termination of a plan that 

are applicable to a QHP offered on an 

Exchange on which the MSP option was 

offered, including a requirement to 

provide advance written notice of 

termination to enrollees. MSP issuers 

shall provide written notice to enrollees 

in accordance with § 800.404(d). 

Subpart E—Compliance 

§ 800.401 Contract performance. 

(a) General. An MSP issuer must 

perform an MSP Program contract with 

OPM in accordance with the 

requirements of section 1334 of the 

Affordable Care Act and this part. The 

MSP issuer must continue to meet such 

requirements while under an MSP 

Program contract with OPM. 

(b) Specific requirements for issuers. 

In addition to the requirements 

described in paragraph (a) of this 

section, each MSP issuer must: 

(1) Have, in the judgment of OPM, the 

financial resources to carry out its 

obligations under the MSP Program; 

(2) Keep such reasonable financial 

and statistical records, and furnish to 

OPM such reasonable financial and 

statistical reports with respect to the 

MSP option or the MSP issuer, as may 

be requested by OPM; 

(3) Permit representatives of OPM 

(including the OPM Office of Inspector 

General), the U.S. Government 

Accountability Office, and any other 

applicable Federal Government auditing 

entities to audit and examine its records 

and accounts that pertain, directly or 

indirectly, to the MSP option at such 

reasonable times and places as may be 

designated by OPM or the U.S. 

Government Accountability Office; 

(4) Timely submit to OPM a properly 

completed and signed novation or 

change-of-name agreement in 

accordance with subpart 42.12 of 48 

CFR part 42; 

(5) Perform the MSP Program contract 

in accordance with prudent business 

practices, as described in paragraph (c) 

of this section; and 

(6) Not perform the MSP Program 

contract in accordance with poor 

business practices, as described in 

paragraph (d) of this section. 

(c) Prudent business practices. OPM 

will consider an MSP issuer’s specific 

circumstances and facts in using its 

discretion to determine compliance 

with paragraph (b)(5) of this section. For 

purposes of paragraph (b)(5) of this 

section, prudent business practices 

include, but are not limited to, the 

following: 

(1) Timely compliance with OPM 

instructions and directives; 

(2) Legal and ethical business and 

health care practices; 

(3) Compliance with the terms of the 

MSP Program contract, regulations, and 

statutes; 

(4) Timely and accurate adjudication 

of claims or rendering of medical 

services; 

(5) Operating a system for accounting 

for costs incurred under the MSP 

Program contract, which includes 

segregating and pricing MSP option 

medical utilization and allocating 

indirect and administrative costs in a 

reasonable and equitable manner; 

(6) Maintaining accurate accounting 

reports of costs incurred in the 

administration of the MSP Program 

contract; 

(7) Applying performance standards 

for assuring contract quality as outlined 

at § 800.402; and 

(8) Establishing and maintaining a 

system of internal controls that provides 

reasonable assurance that: 

(i) The provision and payments of 

benefits and other expenses comply 

with legal, regulatory, and contractual 

guidelines; 

(ii) MSP funds, property, and other 

assets are safeguarded against waste, 

loss, unauthorized use, or 

misappropriation; and 

(iii) Data is accurately and fairly 

disclosed in all reports required by 

OPM. 

(d) Poor business practices. OPM will 

consider an MSP issuer’s specific 

circumstances and facts in using its 

discretion to determine compliance 

with paragraph (b)(6) of this section. For 

purposes of paragraph (b)(6) of this 

section, poor business practices include, 

but are not limited to, the following: 

(1) Using fraudulent or unethical 

business or health care practices or 

otherwise displaying a lack of business 

integrity or honesty; 

(2) Repeatedly or knowingly 

providing false or misleading 

information in the rate setting process; 

(3) Failing to comply with OPM 

instructions and directives; 

(4) Having an accounting system that 

is incapable of separately accounting for 

costs incurred under the contract and/ 

or that lacks the internal controls 

necessary to fulfill the terms of the 

contract; 

(5) Failing to ensure that the MSP 

issuer properly pays or denies claims, 

or, if applicable, provides medical 

services that are inconsistent with 

standards of good medical practice; and 

(6) Entering into contracts or 

employment agreements with providers, 

provider groups, or health care workers 

that include provisions or financial 

incentives that directly or indirectly 

create an inducement to limit or restrict 

communication about medically 

necessary services to any individual 

covered under the MSP Program. 

Financial incentives are defined as 

bonuses, withholds, commissions, profit 

sharing or other similar adjustments to 

basic compensation (e.g., service fee, 

capitation, salary) which have the effect 

of limiting or reducing communication 

about appropriate medically necessary 

services. 

(e) Performance escrow account. OPM 

may require MSP issuers to pay an 

assessment into an escrow account to 

ensure contract compliance and benefit 

MSP enrollees. 

§ 800.402 Contract quality assurance. 

(a) General. This section prescribes 

general policies and procedures to 

ensure that services acquired under 

MSP Program contracts conform to the 

contract’s quality requirements. 

(b) Internal controls. OPM may 

periodically evaluate the contractor’s 

system of internal controls under the 

quality assurance program required by 

the contract and will acknowledge in 

writing if the system is inconsistent 

with the requirements set forth in the 

contract. OPM’s reviews do not 

diminish the contractor’s obligation to 

implement and maintain an effective 

and efficient system to apply the 

internal controls. 

(c) Performance standards. (1) OPM 

will issue specific performance 

standards for MSP Program contracts 

and will inform MSP issuers of the 

applicable performance standards prior 

to negotiations for the contract year. 

OPM may benchmark its standards 

against standards generally accepted in 

the insurance industry. OPM may 

authorize nationally recognized 

standards to be used to fulfill this 

requirement. 

(2) MSP issuers must comply with the 

performance standards issued pursuant 

to this section. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
69818 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 

§ 800.403 Fraud and abuse. 

(a) Program required. An MSP issuer 

must conduct a program to assess its 

vulnerability to fraud and abuse as well 

as to address such vulnerabilities. 

(b) Fraud detection system. An MSP 

issuer must operate a system designed 

to detect and eliminate fraud and abuse 

by employees and subcontractors of the 

MSP issuer, by providers furnishing 

goods or services to MSP enrollees, and 

by MSP enrollees. 

(c) Submission of information. An 

MSP issuer must provide to OPM such 

information or assistance as may be 

necessary for the agency to carry out the 

duties and responsibilities, including 

those of the Office of Inspector General 

as specified in sections 4 and 6 of the 

Inspector General Act of 1978 (5 U.S.C. 

App.). An MSP issuer must provide any 

requested information in the form, 

manner, and timeline prescribed by 

OPM. 

§ 800.404 Compliance actions. 

(a) Causes for OPM compliance 

actions. The following constitute cause 

for OPM to impose a compliance action 

described in paragraph (b) of this 

section against an MSP issuer: 

(1) Failure by the MSP issuer to meet 

the requirements set forth in 

§ 800.401(a) and (b); 

(2) An MSP issuer’s sustained failure 

to perform the MSP Program contract in 

accordance with prudent business 

practices, as described in § 800.401(c); 

(3) A pattern of poor conduct or 

evidence of poor business practices 

such as those described in § 800.401(d); 

or 

(4) Such other violations of law or 

regulation as OPM may determine, 

including pursuant to its authority 

under §§ 800.102 and 800.114. 

(b) Compliance actions. (1) OPM may 

impose a compliance action against an 

MSP issuer at any time during the 

contract term if it determines that the 

MSP issuer is not in compliance with 

applicable law, this part, or the terms of 

its contract with OPM. 

(2) Compliance actions may include, 

but are not limited to: 

(i) Establishment and implementation 

of a corrective action plan; 

(ii) Imposition of intermediate 

sanctions, such as suspensions of 

marketing; 

(iii) Performance incentives; 

(iv) Reduction of service area or areas; 

(v) Withdrawal of the certification of 

the MSP option or options offered on 

one or more Exchanges; 

(vi) Nonrenewal of participation; 

(vii) Nonrenewal of contract; and 

(viii) Withdrawal of approval or 

termination of the MSP Program 

contract. 

(c) Notice of compliance action. (1) 

OPM must notify an MSP issuer in 

writing of a compliance action under 

this section. Such notice must indicate 

the specific compliance action 

undertaken and the reason for the 

compliance action. 

(2) For compliance actions listed in 

§ 800.404(b)(2)(v) through (b)(2)(viii), 

such notice must include a statement 

that the MSP issuer is entitled to request 

a reconsideration of OPM’s 

determination to impose a compliance 

action pursuant to § 800.405. 

(3) Upon imposition of a compliance 

action listed in paragraphs (b)(2)(iv) 

through (b)(2)(vii) of this section, OPM 

must notify the State Insurance 

Commissioner(s) and Exchange officials 

in the State or States in which the 

compliance action is effective. 

(d) Notice to enrollees. If the contract 

is terminated, if OPM withdraws 

certification of an MSP option, or if a 

State-level issuer’s participation in the 

MSP Program contract is not renewed, 

as described in §§ 800.306 and 

800.404(b)(2) or any situation in which 

an MSP option is no longer available to 

enrollees, the MSP issuer must comply 

with any State or Exchange 

requirements regarding discontinuing a 

particular type of coverage that are 

applicable to a QHP offered on the 

Exchange on which the MSP option was 

offered including a requirement to 

provide advance written notice before 

the coverage will be discontinued. If a 

State or Exchange does not have 

requirements about advance notice to 

enrollees, the MSP issuer must inform 

current MSP enrollees in writing of the 

discontinuance of the MSP option no 

later than 90 days prior to discontinuing 

the MSP option, unless OPM determines 

that there is good cause for less than 90 

days’ notice. 

(e) Definition. As used in this subpart, 

‘‘termination’’ means a decision by OPM 

to cancel an MSP Program contract prior 

to the end of its contract term. The term 

includes OPM’s withdrawal of approval 

of an MSP Program contract. 

§ 800.405 Reconsideration of compliance 

actions. 

(a) Right to request reconsideration. 

An MSP issuer may request that OPM 

reconsider a determination to impose 

one of the following compliance actions: 

(1) Withdrawal of the certification of 

the MSP option or options offered on 

one or more Exchanges; 

(2) Nonrenewal of participation; 

(3) Nonrenewal of contract; or 

(4) Termination of the MSP Program 

contract. 

(b) Request for reconsideration and/or 

hearing. (1) An MSP issuer with a right 

to request reconsideration specified in 

paragraph (a) of this section may request 

a hearing in which OPM will reconsider 

its determination to impose a 

compliance action. 

(2) A request under this section must 

be in writing and contain contact 

information, including the name, 

telephone number, email address, and 

mailing address of the person or persons 

whom OPM may contact regarding a 

request for a hearing with respect to the 

reconsideration. The request must be in 

such form, contain such information, 

and be submitted in such manner as 

OPM may prescribe. 

(3) The request must be received by 

OPM within 15 calendar days after the 

date of the MSP issuer’s receipt of the 

notice of compliance action. The MSP 

issuer may request that OPM’s 

reconsideration allow a representative 

of the MSP issuer to appear personally 

before OPM. 

(4) A request under this section must 

include a detailed statement of the 

reasons that the MSP issuer disagrees 

with OPM’s imposition of the 

compliance action, and may include any 

additional information that will assist 

OPM in rendering a final decision under 

this section. 

(5) OPM may obtain additional 

information relevant to the request from 

any source as it may, in its judgment, 

deem necessary. OPM will provide the 

MSP issuer with a copy of any 

additional information it obtains and 

provide an opportunity for the MSP 

issuer to respond (including by 

submitting additional information or 

explanation). 

(6) OPM’s reconsideration and 

hearing, if requested, may be conducted 

by the Director or a representative 

designated by the Director who did not 

participate in the initial decision that is 

the subject of the request for review. 

(c) Notice of final decision. OPM will 

notify the MSP issuer, in writing, of 

OPM’s final decision on the MSP 

issuer’s request for reconsideration and 

the specific reasons for that final 

decision. OPM’s written decision will 

constitute final agency action that is 

subject to review under the 

Administrative Procedure Act in the 

appropriate U.S. district court. Such 

review is limited to the record that was 

before OPM when it made its decision. 

Subpart F—Appeals by Enrollees of 

Denials of Claims for Payment or 

Service 

§ 800.501 General requirements. 

(a) Definitions. For purposes of this 

subpart: 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules 69819 

(1) Adverse benefit determination has 

the meaning given that term in 45 CFR 

147.136(a)(2)(i). 

(2) Claim means a request for: 

(i) Payment of a health-related bill; or 

(ii) Provision of a health-related 

service or supply. 

(b) Applicability. This subpart applies 

to enrollees and to other individuals or 

entities who are acting on behalf of an 

enrollee and who have the enrollee’s 

specific written consent to pursue a 

remedy of an adverse benefit 

determination. 

§ 800.502 MSP issuer internal claims and 

appeals. 

(a) Processes. MSP issuers must 

comply with the internal claims and 

appeals processes applicable to group 

health plans and health insurance 

issuers under 45 CFR 147.136(b). 

(b) Timeframes and notice of 

determination. An MSP issuer must 

provide written notice to an enrollee of 

its determination on a claim brought 

under paragraph (a) of this section 

according to the timeframes and 

notification rules under 45 CFR 

147.136(b) and (e), including the 

timeframes for urgent claims. If the MSP 

issuer denies a claim (or a portion of the 

claim), the enrollee may appeal the 

adverse benefit determination to the 

MSP issuer in accordance with 45 CFR 

147.136(b). 

§ 800.503 External review. 

(a) External review by OPM. OPM will 

conduct external review of adverse 

benefit determinations using a process 

similar to OPM review of disputed 

claims under 5 CFR 890.105(e), subject 

to the standards and timeframes set 

forth in 45 CFR 147.136(d). 

(b) Notice. Notices to MSP enrollees 

regarding external review under 

paragraph (a) of this section must 

comply with 45 CFR 147.136(e), and are 

subject to review and approval by OPM. 

(c) Issuer obligation. An MSP issuer 

must pay a claim or provide a healthrelated service or supply pursuant to 

OPM’s final decision or the final 

decision of an independent review 

organization without delay, regardless 

of whether the plan or issuer intends to 

seek judicial review of the external 

review decision and unless or until 

there is a judicial decision otherwise. 

§ 800.504 Judicial review. 

(a) OPM’s written decision under the 

external review process established 

under § 800.503(a) will constitute final 

agency action that is subject to review 

under the Administrative Procedure Act 

in the appropriate U.S. district court. A 

decision made by an independent 

review organization under the process 

established under § 800.503(a) is not 

within OPM’s discretion and therefore 

is not final agency action. 

(b) Judicial review under paragraph 

(a) of this section is limited to the record 

that was before OPM when OPM made 

its decision. 

Subpart G—Miscellaneous 

§ 800.601 Reservation of authority. 

OPM reserves the right to implement 

and supplement these regulations with 

written operational guidelines. 

§ 800.602 Consumer choice with respect 

to certain services. 

(a) Assured availability of varied 

coverage. Consistent with § 800.104, 

OPM will ensure that at least one of the 

MSP issuers on each Exchange in each 

State offers at least one MSP option that 

does not provide coverage of services 

described in section 1303(b)(1)(B)(i) of 

the Affordable Care Act. 

(b) State opt-out. An MSP issuer may 

not offer abortion coverage in any State 

where such coverage of abortion 

services is prohibited by State law. 

(c) Notice to enrollees—(1) Notice of 

exclusion. The MSP issuer must provide 

notice to consumers prior to enrollment 

when non-excepted abortion services 

are not a covered benefit in a State 

where such coverage of such abortion 

services is permitted by State law, in the 

form, manner, and timeline prescribed 

by OPM. 

(2) Notice of coverage. If an MSP 

issuer chooses to offer an MSP option 

that covers non-excepted abortion 

services, in addition to an MSP option 

that does not provide coverage for these 

services, the MSP issuer must provide 

notice to consumers prior to enrollment 

that non-excepted abortion services are 

a covered benefit, in a manner 

consistent with 45 CFR 147.200(a)(3), to 

meet the requirements of 45 CFR 

156.280(f). OPM may provide guidance 

on the form, manner, and timeline for 

this notice. 

(3) OPM review and approval of 

notices. OPM may require an MSP 

issuer to submit to OPM such notices. 

OPM reserves the right to review and 

approve these consumer notices to 

ensure that an MSP issuer complies 

with Federal and State laws, and the 

standards prescribed by OPM with 

respect to § 800.602. 

§ 800.603 Disclosure of information. 

(a) Disclosure to certain entities. OPM 

may provide information relating to the 

activities of MSP issuers or State-level 

issuers to a State Insurance 

Commissioner or Director of a Statebased Exchange. 

(b) Conditions of when to disclose. 

OPM shall only make a disclosure 

described in this section to the extent 

that such disclosure is: 

(1) Necessary or appropriate to permit 

OPM’s Director, a State Insurance 

Commissioner, or Director of a Statebased Exchange to administer and 

enforce laws applicable to an MSP 

issuer or State-level issuer over which it 

has jurisdiction, or 

(2) Otherwise in the best interests of 

enrollees or potential enrollees in MSP 

options. 

(c) Confidentiality of information. 

OPM will take appropriate steps to 

cause the recipient of this information 

to preserve the information as 

confidential. 

[FR Doc. 2014–27793 Filed 11–21–14; 8:45 am] 

BILLING CODE 6325–63–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 622 

RIN 0648–BE55 

Fisheries of the Caribbean, Gulf of 

Mexico and South Atlantic; SnapperGrouper Fishery Off the Southern 

Atlantic States; Amendment 29 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of availability; request 

for comments. 

SUMMARY: The South Atlantic Fishery 

Management Council (Council) has 

submitted Amendment 29 to the Fishery 

Management Plan for the SnapperGrouper Fishery of the South Atlantic 

Region (FMP) for review, approval, and 

implementation by NMFS. Amendment 

29 proposes actions to update the 

Council’s acceptable biological catch 

(ABC) control rule to incorporate 

methodology for determining the ABC 

of unassessed species; adjust ABCs for 

14 unassessed snapper-grouper species 

through application of the updated ABC 

control rule; adjust annual catch limits 

(ACLs) and recreational annual catch 

targets (ACTs)for four snapper-grouper 

species and three species complexes 

based on revised ABCs; and revise 

management measures for gray 

triggerfish to modify minimum size 

limits, establish a commercial split 

season, and specify a commercial trip 

limit. 

DATES: Written comments must be 

received on or before January 23, 2015. 


asabaliauskas on DSK5VPTVN1PROD with PROPOSALS