ACA Now

Implementation Status

CCIIO’s page regarding premium stabilization programs links to relevant regulations and guidance, as well as fact sheets and FAQs.

2012

On March 23, 2012, HHS issued a final rule on standards relating to reinsurance, risk corridors and risk adjustment. Also see the accompanying fact sheet.

2013

On March 11, 2013, HHS published a final rule – the Notice of Benefit and Payment Parameters for 2014 – addressing  the “Three R” premium stabilization programs (risk adjustment, reinsurance and risk corridors), among other topics.

Concurrently, CCIIO released an interim final rule with comment period (comments due on April 30) that supplements the final Notice, such as by proposing adjustments to the risk corridors calculation that will align it with the single risk pool requirement, as well as an alternate simplified methodology for calculating the amounts of cost-sharing reductions provided for reconciliation purposes. CCIIO posted a slide deck with an overview of the Notice and the IRF.

On May 24, CMS posted a Paperwork Reduction Act Notice regarding data collection and reporting for reinsurance, risk corridors and risk adjustment.

On August 30, CCIIO published a wide-ranging final rule (also see a factsheet) on Marketplace program integrity and other provisions, noting that it “generally is finalizing previously proposed policies without change.” The rule addressed oversight of Qualified Health Plan (QHP) issuers in Federally Facilitated Marketplaces; individual and SHOP eligibility appeals, including details on a “federally-managed appeals process [that] will be available for appellants in the individual market”; HHS privacy and security-related Marketplace compliance monitoring; an option for a state to operate a State-based SHOP, while having a Federally Facilitated Individual Marketplace; standards regarding issuers’ acceptance of various payment methods from Marketplace consumers; provisions addressing agents and brokers; QHP issuer direct enrollment; and a clarification regarding certain outside-the-Marketplaces plans’ participation in the risk corridors program.

On August 30, HHS released a Paperwork Reduction Act (PRA) Package including details on information collections associated with the August 30 Marketplace Program Integrity final rule, the provisions of which addressed an aspect of the risk corridors program, agents and brokers in Federally Facilitated Marketplaces and various other issues. The PRA package also contains provisions on additional information collections related to Navigators, certified application counselors and habilitative services, among other topics.

On September 18, CMS sent a proposed rule to OMB for review relating to “Program Integrity: Exchange, SHOP, Premium Stabilization Programs, and Market Standards,” including wide-ranging provisions, including those relating to the risk adjustment, risk corridors and reinsurance, as well as advance payments of the premium tax credit and cost-sharing reductions, among other issues.

On October 24, CMS released a final rule (see a CCIIO fact sheet) codifying certain program integrity-related components of the ACA pertaining to Exchanges, premium stabilization programs and market standards that were delineated in a June 2013 proposed rule. The final rule also amends and adopts as final provisions delineated in the Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 interim final rule with comment issued in March 2013 related to risk corridors and reconciliation of cost-sharing.

On Nov. 1, CMS published a Notice requesting comments by Dec. 31, 2013, on an information collection (see #3 on p. 2) – “Initial Plan Data Collection to Support Qualified Health Plan (QHP) Certification and Other Financial Management and Exchange Operations” – relating to revisions to data elements collected from Qualified Health Plans to support various regulatory requirements. The agency notes that “based on experience with the first year of data collection, we propose revisions to data elements being collected and the burden estimates for years two and three.” Accompanying documents are available in a Paperwork Reduction Act Package.

On Nov. 25, HHS issued a proposed rule establishing the CY 2015 benefit and payment parameters for the cost-sharing reductions (including the annual limitation on cost-sharing for stand-alone dental plans), advance premium tax credit, reinsurance, and risk adjustment programs as required by the ACA.  In addition, the proposed rule establishes the user fees for the Federally-facilitated Exchanges (FFEs), the annual open enrollment period for 2015, the actuarial value (AV) calculator, and other key provisions as required by the law.  Note that the rule allows for adjustments to the risk corridors and other premium stabilization programs in 2014 to account for the “transitional policy” (see the Nov. 14 CCIIO letter to Insurance Commissioners) that addressed plan cancellations, which could equate to broader risk corridors and thus higher stabilization payments to plans. Comments are due by Dec. 26, 2013.

2014

On Feb. 24, HHS sent the final CY 2015 Notice of Benefit and Payment Parameters rule to OMB for review, the final step before issuance of the regulation. It addresses ’15 parameters for ACA premium stabilization programs, as well as advance premium tax credits and cost-sharing reductions.

On Feb. 5, the House Oversight and Government Reform Committee held a hearing, “ObamaCare: Why the Need for an Insurance Company Bailout?” Sen. Marco Rubio testified that while “under normal circumstances, risk corridors are a valid program,” ACA risk corridors do not constitute a “normal circumstance,” the probability of a so-called “bailout” increased with the Administration’s announcement of a transitional policy for canceled policyholders and “now it is time for President Obama, for Secretary Sebelius and for ObamaCare’s supporters to level with taxpayers” about the program. Additional testimony from the hearing is available here. In early February, the House Energy and Commerce Committee released a Congressional Research Service memo it requested that provides background on risk corridors, noting the ACA does not specify a source for payments and that there does not appear to be sufficient statutory language for creating a revolving fund.

On March 5, CCIIO issued the 2015 Notice of Benefits and Payment Parameters final rule (fact sheet). Among other provisions, it includes a “state-level adjustment in the risk corridors formula to account for the transitional policy’s [on canceled plans] effect on the expected 2014 risk pool in a way such that the program is projected to be budget neutral, with payments in equaling payments out, while helping to ensure that prices remain affordable in 2015 and beyond,” according to the agency. The rule also finalizes the 2015 benefit year open enrollment as Nov. 15, 2014, through Feb. 15, 2015 (versus the proposed January 15, 2015 end date).  On March 14, CCIIO posted a proposed rule on Marketplace and broader insurance market standards for “2015 and beyond.” Among other changes, CCIIO proposes “changing the limit on allowable administrative costs to 22 percent [from 20 percent] and the limit on profits to 5 percent [a 2 percentage point increase] in the risk corridors calculation, in recognition of the ongoing uncertainty and changes in the market in 2015,” adding that the agency “expect[s] to implement this change in a budget neutral way” and that the adjustment would be “applied uniformly in all States for 2015 to help additional transition costs and uncertainty.” Comments on the proposed rule are due on April 21.

On April 21, CMS posted an overview of its Registration for Technical Assistance Portal, where FAQs and other information on Marketplace operations and ACA premium stabilization programs are available.

On May 16, 2014 CCIIO released a final rule on Marketplace and insurance market standards for “2015 and beyond,” (fact sheet; blog post) addressing prescription drug exception standards; risk corridor and medical loss ratio adjustments; SHOP Marketplaces’ implementation of employee choice; the use of standardized notices for coverage renewal or product discontinuation; and other issues.

On May 16, 2014, CMS published an information collection notice (see #3 on p. 2) proposing revisions to a currently approved collection. Under it, the agency estimates a total of 15.6 million responses annually from 2,520 respondents. Comments are due by June 16, 2014. Further details on these information collections underlying the premium stabilization programs are provided in a Paperwork Reduction Act package supporting statement here.

In documents posted on June 19, 2014, by Committee Republicans, HHS asserts that ACA risk corridor collections and payments are user fees and are appropriated under the CMS program management (PM) appropriation. Committee Republicans have pressed HHS to clarify its authority to make risk corridors payments to QHP issuers without an explicit congressional appropriation. HHS’s legal analysis, originally prepared as a response to the GAO on May 20, accompanies a June 18 letter from HHS Secretary Sylvia Burwell responding to Committee Republicans.

On June 18, 2014, the House Oversight and Government Reform Subcommittee on Economic Growth, Job Creation and Regulatory Affairs held a hearing with witnesses that included a lead CCIIO official, as well as appropriations lawmakers and legal and actuarial scholars, regarding the ACA premium stabilization programs.

On Jan. 5, 2015, CCIIO posted a Paperwork Reduction Act package containing explanatory information and the reporting forms for states adopting the transitional policy on canceled plans with accompanying risk corridors adjustment to account for their impact. See an accompanying Federal Register notice for additional details, including on the comment period for the associated information collection, the deadline for which is Feb. 4, 2015.

On Feb. 3, CMS posted FAQs reiterating its expectation that ACA risk corridors collections will be adequate to fund payments, noting if there is a shortfall, “payments for that year will be reduced pro rata” and compensated out of future year payments (here). The agency also addressed the calculation of risk corridors in each state at the legal entity level (here). Also see here for details on risk corridor-eligible plans. On Feb. 12, CMS posted FAQs addressing how CMS will calculate the transitional adjustment to ACA risk corridors to account for the impact of non-ACA compliant plans (here); the applicability of reporting requirements (here; here); and the expected spring 2015 publication of the transitional adjustment percentage by state (here).

On Feb. 20, CMS finalized the wide-ranging final 2016 Notice of Benefit and Payment Parameters rule that addresses – among other topics – ACA premium stabilization, Marketplace open enrollment and user fee, rate review, essential health benefits, prescription drug coverage and other issues generally affecting Qualified Health Plans (QHPs) for the 2016 benefit year. Also see a fact sheet. Additionally, on Feb. 20, CCIIO finalized the 2016 letter to health insurance issuers in the Federally Facilitated Marketplace, which addresses QHP certification timelines, benefit design, essential community providers, network adequacy and other issues.

On Apr. 17, CCIIO announced transitional risk corridor adjustment percentages in states adopting the transitional policy on non-compliant plans.

On June 3, CCIIO released slides outlining the risk corridors data reporting process, including data submitted through the medical loss ratio form and specified plan-level risk corridors form.

On June 14, CCIIO posted an FAQ saying that on Aug. 14, it would post preliminary, nationally calculated aggregate data on 2014 risk corridors (including pro-ration for budget neutrality, if applicable) but not yet issuer-specific data.

On June 19, CCIIO provided guidance to plans on incorporating advance cost-sharing reduction (CSR) payments into 2014 risk corridors and medical loss ratio reporting given that CSR reconciliation is largely postponed until April 2016.

On July 7, CMS released a technical correction to its 2016 Notice of Benefit and Payment Parameters final rule.

2016

On Dec. 18, President Obama signed the Consolidated Appropriations Act, 2016, which continues to impose budget neutrality requirements on the ACA risk corridors program through Sept. 30, 2016 (section 225; p. 947).

On March 31, HHS held a public workshop on ACA risk adjustment, as highlighted in an agency blog post.

On  Apr. 13, CMS released FAQs addressing the employee-counting methods that insurers should use for determining whether employers are large or small for purposes of the MLR, risk adjustment, and risk corridors programs.

On Apr. 19, CMS clarified the business rules for QHPs’ submission of supplemental diagnoses via EDGE servers for ACA risk adjustment and reinsurance.

On July 22, CMS transmitted the Calendar Year 2018 Notice of Benefit and Payment Parameters proposed rule to OMB for regulatory review, marking a final step before the proposal is issued for public comment through the Federal Register.

On July 27, CMS circulated an FAQ clarifying that although QHPs’ deadline for medical loss ratio and risk corridors data reporting typically is July 31, the 2015 reporting and benefit year deadline is Monday, Aug. 1 because the July 31 deadline falls on a Sunday.

On Aug. 5, CCIIO explained that QHPs may report reconciled 2015 cost-sharing reduction (CSR) amounts, without adjusting for previously reported 2014 CSRs, as part of the 2015 medical loss ratio and risk corridors reporting process. The guidance also explains the “manner in which issuers that are subject to the adjustment to their 2015 risk corridors amounts should report risk corridors amounts for the purposes of MLR reporting.”

On Sept. 9, CCIIO announced that based on preliminary estimates, no funding will be available at this time for 2015 benefit year ACA risk corridor payments because all 2015 collections will be used for outstanding 2014 risk corridor payments. The agency also recognizes the litigation brought by some QHP issuers based on risk corridor payments that have not been fully received. CCIIO says while the DOJ is defending those claims, “as in all cases where there is litigation risk, we are open to discussing resolution of those claims.” CCIIO says it is “willing to begin discussions at any time.”

On Sept. 20, House E&C Republicans wrote to Secretary Burwell seeking details on risk corridor settlement plans. They ask whether HHS believes it is legal to use the DOJ Judgement Fund for such purposes and request additional information they had asked that Administrator Slavitt provide in follow up during a recent hearing.

On Sept. 27, Sens. Mike Lee (R-UT), John Barrasso (R-WY), Marco Rubio (R-FL), and Ben Sasse (R-NE) wrote to HHS inquiring about risk corridor settlement plans.

On Oct. 4, House Energy & Commerce Committee GOP leaders sent letters to six insurance companies, America’s Health Insurance Plans, and the Blue Cross and Blue Shield Association requesting details on the lawsuits brought against the federal government to recover shortfalls from the ACA’s Risk Corridors program.

On Oct. 26, House Energy & Commerce Committee Republican leaders wrote to the Attorney General asking that she provide, by Nov. 7, details on any discussions with insurers regarding ACA risk corridor settlements.

On Nov. 18, CMS posted the 2015 benefit year ACA risk corridor payment and charge amounts “confirming that all 2015 benefit year risk corridors collections will be used to pay a portion of balances on 2014 benefit year risk corridors payments.”