On Dec. 16, 2016, HHS released the final rules regarding benefit and payment parameters for 2018. HHS mostly finalized the rules that were proposed in September 2016 (discussed in the Sept. 7, 2016, edition of Compliance Corner). The rules primarily contain technical guidance for insurers, particularly those offering qualified health plans in the Marketplace. However, there are some rules that directly impact employers offering group health plans.
Annual Limits. The annual out-of-pocket maximums that were originally proposed have been finalized. The maximum out-of-pocket limits for 2018 will be $7,350 for single coverage (up from $6,850 in 2016) and $14,300 for family coverage (up from $13,700 in 2016). The annual limitation on cost sharing for stand-alone dental plans, which are certified by the Marketplace and offering pediatric dental essential health benefits, remains $350 for one child and $700 for two or more children.
SHOP Enrollment. For small employers who purchase coverage through the SHOP, the rules regarding enrollment of newly eligible employees will change in 2018. Currently, the enrollment period for a newly eligible employee (whose waiting period is longer than 45 days) must run until at least 15 days prior to the end of the waiting period. Under the new rules, the employer must notify the SHOP within 30 days of an employee becoming eligible. The employee then has 30 days from the notice to enroll. The coverage will be effective the first of the month following the employee’s election. Additionally, waiting periods in the SHOP cannot exceed 60 days and initial measurement periods cannot exceed 10 months.
Special Enrollment Periods (SEPs). The rules finalize and codify several events that allow for a SEP, which are already available to consumers because of prior guidance. The following circumstances will trigger a SEP in both the individual Marketplace and SHOP:
- Victims of spousal abandonment or domestic abuse and their dependents who are enrolled in coverage (but who want to enroll in coverage separately from their abandoner or abuser);
- Dependents of Indians enrolled or enrolling in a qualified health plan (QHP) through an exchange at the same time as the Indian;
- Those who were incorrectly denied payment of the advance premium tax credit due to Medicaid or CHIP eligibility but who are later determined ineligible for Medicaid or CHIP;
- Those misled by significant plan or benefit display errors on the exchange website, including those relating to service areas, premiums or covered services; and
- Those who resolve data matching issues after an inconsistency period has expired or who have income below 100 percent of the FPL and did not enroll in coverage while waiting for HHS verification.
Coordination of Benefits with Medicare. Under the current rules, an individual who is enrolled in Medicare Part A or Part B may not purchase an individual policy through the Marketplace. However, the individual may renew enrollment in such a policy. The final rules will prohibit an insurer from renewing a Medicare enrolled individual in a new policy, but permit an insurer to renew such individual under existing coverage.
Guaranteed Availability of Group Policies. Under the current rules, an insurer must accept any application for coverage from an employer who has employees living, working or residing in the insurer’s service area. The proposed rules requested comments on whether an insurer could deny the application if the employer did not have a place of business or headquarters within the service area. The final rules clarify that the insurer must continue to offer guaranteed availability of coverage for employees living, working or residing within the insurer’s service area regardless of the employer’s location. The expectation of HHS is that coverage would be accomplished by sharing provider networks of affiliated insurers.
Actuarial Value. HHS finalized the 2018 actuarial value calculator. One significant change is how bronze plans are calculated. Under current rules, a plan’s actuarial value must be plus or minus 2 percent from the target tier of coverage. For example, a bronze plan must have an actuarial value of 58 to 62 percent. Under the new rules for 2018, a bronze plan may have an actuarial value of 58 to 65 percent if the plan provides coverage for at least one major service prior to the deductible. Such major services include primary care visits, specialist visits, inpatient hospital services, generic drugs, specialty drugs, preferred branded drugs or emergency room services.
Premium Rating for Children. The premium rate for children under non-grandfathered individual and small group policies is currently based on a single age band for children aged 0 to 20 years. Under the final rules, a single age band will apply for children aged 0 to 14 years and then single-year age bands will apply for children aged 15 to 20 years.
The rules are generally effective for policy years starting on or after Jan. 1, 2018.
Final Rules, HHS Notice of Benefit and Payment Parameters for 2018 »
HHS Fact Sheet »
2018 Actuarial Value Calculator »