Smart Benefits: CMS Releases HHS Notice of Benefit & Payment Parameters for 2019
Monday, April 23, 2018
Throughout the rule, CMS notes its goals of enhancing the role of states, providing states with additional flexibility, reducing unnecessary regulatory burdens, empowering consumers, and improving affordability. CMS cites the first executive order signed by President Trump in January 2017 that directed federal agencies to waive, defer, grant exemptions from, or delay ACA requirements that impose burdens on states, individuals, families, providers, and insurers.
The 523-page complex rule includes key provisions related to:
- Changes in plan benefits and qualified health provisions, such as allowing states to select a new essential health benefits benchmark plan, eliminating the standardized plan options from the federal marketplace, and deferring to states on essential community provider and network adequacy requirements;
- Eligibility and enrollment changes, such as income verification changes and new standards for direct enrollment;
- Changes to medical loss ratio (MLR) rules and individual and small group rate review standards;
- Changes to the risk adjustment program; and
- Changes to the SHOP program.
Although these provisions primarily affect individual and small group health insurance markets and Exchanges, certain aspects may be of interest to employers. The final rule includes a maximum annual out-of-pocket limit on cost sharing for 2019 of $7,900 for self-only coverage and $15,800 for other than self-only coverage. That is a 7% increase over 2018, the highest increase since 2014.
The change to MLR standards may also impact employers. The ACA requires carriers to report the amount that they spend on claims plus amounts expended on health care quality improvement activities (QIA) as a percentage of total premium revenue. If the percentage of premium revenue expended on claims and quality improvement expenses (the MLR) is less than 80% in the individual and small group market or 85% in the large group market, the carrier must provide an annual rebate to each enrollee.
In addition, the final rule allows insurers to claim a standardized amount (0.8% of earned premium) as QIA expenses rather than tracking and reporting actual QIA expenses. This change effectively makes it easier for insurers to meet the MLR threshold, which will have the effect of decreasing rebate payments from insurers to employers.
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