Only the commercial health plans sold through the new public exchanges — and some very similar plans — will be able to participate in a new underwriting profit protection program.
The Centers for Medicare & Medicaid Services today ruled that only "qualified health plans" — and plans that are "substantially the same as a QHP" — can either make payments to or get cash from the federal "risk corrridors" program.
The drafters of the Patient Protection and Affordable Care Act created the risk corridors program to protect QHP issuers against the possibility that all of the underwriting rules and benefits mandates PPACA is imposing could flood some insurers with claims.
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Carriers with high operating profits are supposed to reimburse carriers with profit margins of less than 3 percent. If all health insurers do poorly, PPACA calls for the federal government to chip in.
CMS talks about the risk corridors program and many other PPACA provisions in the same 335-page anthology of PPACA final regulations that lets consumers keep non-PPACA-compliant individual policies for two extra years, if insurers and state regulators permit that, and that keeps the current March 31 PPACA individual QHP enrollment deadline.
Commenters on a draft of the regulations asked CMS to let all health plans that comply with PPACA rules, including non-exchange health plans, participate in the risk corridors program.
Limiting the program to QHPs and very similar plans will preserve the intent of the program, which is to stabilize QHP premiums, officials say.
Other sections of the new CMS regulations deal with everything from whether agents and brokers can use their own websites to enroll employers in small-group exchanges' QHPs to whether short-term medical plans have to pay for another PPACA risk-management program, a temporary reinsurance program.
CMS officials say they are comfortable with the idea of a state-based exchange letting brokers enroll businesses in exchange plans, but it's probably not going to make that feature available through the public exchanges it runs for HHS in 2015.
Short-term medical plan issuers might have to pay reinsurance program assessments, if the plans offer a minimum level of coverage value.
Elsewhere in the batch, CMS says.
- Connecticut is the only state taking advantage of a PPACA provision that lets states run their own reinsurance programs.
- The 2014 attachment point, or deductible, for PPACA reinsurance for health plans will be cut to $45,000, from $60,000, and the 2015 PPACA reinsurance premium will be $44 per enrollee per year.
- The HHS exchange user fee for 2015 will be 3.5 percent of premium.
CMS is preparing to publish the new PPACA regulations in the Federal Register March 11.
In related news, the Internal Revenue Service posted preliminary versions of two major new batches of PPACA regulations of its own: final PPACA employer coverage mandate reporting regulations and final minimum essential coverage regulations.
Both batches are supposed to appear in the Federal Register March 10.
In the IRS MEC regulations, for example, the IRS gives details about what address a reporting entity should use when it's sending workers MEC statement.
In the final regulations, the IRS is stating that sending a notice to a recipient's last known permanent address, or, if no permanent address is available, a temporary address, discharges the requirement to furnish a statement, even if the statement is returned.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
