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Regulatory Guidance for Filing Qualified Health Plans (QHPs)
Under the Affordable Care Act (ACA), an Exchange will be established in each state, either by the state or the federal government, in time to operate beginning January 1, 2014. Plans offered in the Exchange must be Qualified Health Plans (QHPs) that meet certain federal requirements as stated in the ACA and subsequent regulations, as well as any additional QHP certification requirements that might be imposed by the state. Under a Federally Facilitated Exchange (FFE), all of the QHP certification functions, which are part of Plan Management, would be performed by the department of Health and Human Services (HHS). The Plan Management functions to certify a QHP as part of the QHP application include the following:
In a FFE, the state would retain existing statutory authority related to the review and/or approval of premium rates/forms consistent with the current procedures and provide licensure/solvency information. Certification of a QHP rate filing by the Exchange would be contingent upon the state’s approval of the submitted rate. Indiana would continue to provide the Exchange with information about rate practices and trends both within and outside of the Exchange.
QHP form documents must meet the applicable requirements that the state currently requires on insurance forms. The following include, but are not limited to, additional ACA requirements for issuers providing coverage for non-grandfathered plans in the individual and small group markets both inside and outside of an Exchange:
Each issuer participating on the Exchange must offer at least one gold QHP and one silver QHP. The issuer must also offer a child-only plan at the same level of coverage as any QHP. Since only non-grandfathered plans may be sold in the Exchange, grandfathered plans will not be reviewed for certification requirements, nor will non-grandfathered plans not intended for sale on Exchanges.
Regulatory Guidance for Filing Products to Comply with Essential Health Benefits (EHBs)
The ACA requires that all carriers offering coverage for non-grandfathered, individual and small group plans, both inside and outside the Exchange, provide coverage for EHBs. Carriers must include items and services within the following 10 benefit categories as part of their plan design to comply with the EHB requirement:
For plans on the Exchange, pediatric dental services are not required as an EHB unless there is no stand-alone pediatric dental plan certified to be on the state’s Exchange. For plans off the Exchange, pediatric dental services are required as an EHB, regardless of what other plans may be available off the Exchange.
The state is required to choose a benchmark plan or default to the largest small group plan by enrollment in the state. The plan will constitute the EHBs for the non-grandfathered, individual and small group market for calendar years 2014 and 2015. The benchmark plan selected for Indiana is the Anthem Blue 5.0 – Blue Access PPO – Medical Option #6/Rx Option G. In addition to the benefits provided by the benchmark plan, all state mandated benefits are also included in the EHBs.
The following provides actuarial guidelines related to EHB Substitutions, Actuarial Value (AV), Cost Sharing Reductions and Fair Premiums:
I) EHB Substitutions
Certain provisions may be adopted by the IDOI to allow carriers to make actuarially equivalent substitutions for their plans within each of the 10 EHB categories specified except for prescription drug benefits. At this time, the IDOI has elected not to allow for actuarial substitutions. The state may revisit this decision for future plan years.
If actuarial substitutions are allowed in the future, the following data would need to be submitted to the IDOI as part of filing requirements to review substitution options:
II) Actuarial Value
Carriers must supply AV for plans both inside and outside the health insurance Exchange for consumer plan comparison purposes and to properly evaluate plans as part of the actuarial review.
The ACA requires non-grandfathered individual and small group health insurance plans, except for catastrophic plans, to fall within one of four “metal tiers” as defined by the AV of the benefits offered by the plan, relative to the full cost of the EHBs:
Plans would be allowed a margin of +/- 2% of the required AV for each metal tier. At a minimum, all issuers selling coverage through the Exchange must make available at least one plan in the silver level and one plan in the gold level.
The ACA defines a catastrophic plan as a permissible benefit design offered to certain qualified individuals. Catastrophic plans do not have to meet a specific AV, but must comply with the maximum out-of-pocket limits.
The metallic levels of coverage that plans will be categorized by the ACA are not defined by deductibles, copayments, or coinsurance, instead, AV is used. For example, a plan with an AV of 60% (bronze plan) means that for a standard population, the plan will pay 60% of their essential health benefits, while the enrollees in it will pay 40% of the cost through some combination of deductibles, copays and coinsurance. With a higher AV, the plan will have less patient cost-sharing resulting in more premium amount on average for the insured. The percentage a plan pays for any given enrollee will generally be different from the AV, which is an aggregated average in terms of spending.
III) Cost-Sharing Reductions
The ACA outlines requirements for QHPs to provide reduced cost-sharing for individuals purchasing coverage through the Exchange with a household income below 250% of Federal Poverty Level (FPL). Each silver level plan submitted to the Exchange must be accompanied by three variants providing AVs of 73%, 87% and 94%. These AVs would be provided in the same way that AVs for the metal tiers will be provided.
Cost-sharing must first be reduced by lowering the out-of-pocket limit to levels specified in annual guidance that will be provided by HHS, and then by applying adjustments to other cost-sharing factors. Cost-sharing reductions exclude reductions in premiums, balance billing amounts for non-network providers, and spending for non-covered services. The design of reduced cost-sharing variants cannot violate prohibitions on discriminatory benefit design.
The ACA provides that QHPs covering an American Indian/Alaskan Native whose family income is less than 300% of the FPL shall not be subject to any cost-sharing under the plan.
IV) Fair Premiums
The ACA requires non-grandfathered individual and small group health insurance plans to only vary the rate charged for a particular plan or coverage by the following:
At this time, IDOI is not electing to narrow the bands and ratios required by the ACA.
Regulatory Guidance for Filing Pediatric/Adult Dental Products
It is anticipated that Indiana may have five stand-alone dental plans offered on the Federally Facilitated Exchange (FFE). Since pediatric dental is one of the ten essential health benefit (EHB) categories; the department assumes that the five stand-alone dental plans will be offering pediatric dental coverage. As a result, if a carrier is offering major medical products on the FFE, they are not required to also offer pediatric dental coverage since there are potentially five stand-alone plans available. It is the carrier’s choice if they still want to offer pediatric dental and also adult dental on the exchange. It is not determined if stand-alone adult dental will be offered on the Indiana FFE.
Carriers that are not participating on the FFE must offer pediatric dental coverage with their major medical plan since pediatric dental is an EHB. Carriers that offer major medical, non-grandfathered health insurance products in the individual and/or small group market must meet EHB requirements whether participating or not on the FFE. Stand-alone adult dental plans will continue to be offered off the FFE as a current option in the market and is not considered part of the EHB requirements.
Grandfathered stand-alone pediatric and/or stand-alone adult (family) plans are excepted benefits under HIPAA and are exempt from ACA market insurance reforms. However, the ACA requires for carriers offering dental coverage for the non-grandfathered, individual and small group plans inside the Exchange to meet the same requirements as a qualified health plans, as relevant. Further guidance is anticipated as related to filing for dental plans.
When filing for a pediatric and/or adult dental product whether on or off the FFE, please consider that parts of the new filing instructions, checklists and/or requirements may not be applicable and can be bypassed or noted as N/A.
Regulatory Guidance for Filing Pediatric/Adult Vision Products
Pediatric vision is one of the ten EHB categories. As stated above, carriers that offer major medical, non-grandfathered health insurance products in the individual and/or small group market must meet EHB requirements whether participating or not on the FFE. As a result, carriers must include pediatric vision coverage as part of their major medical plan for both on and off the FFE. Stand-alone pediatric vision plans will not be available on the FFE. Stand-alone adult vision plans may be offered on the Indiana FFE. Stand-alone adult vision plans will continue to be offered off the FFE as a current option in the market and is not considered part of the EHB requirements.
When filing for a pediatric and/or adult vision product whether on or off the FFE, please consider that parts of the new filing instructions, checklists and/or requirements may not be applicable and can be bypassed or noted as N/A. Pediatric dental and/or vision plans provide coverage for individuals under the age of 19.
Summary of 2014 Market Reforms
The following provide state choices related to the market reform provisions effective for plan or policy years beginning on or after January 1, 2014: (These may be subject to change after the release of final regulations.)