December 1, 2013

ACA: The 2015 Notice Of Benefit And Payment Parameters Proposed Rule

From: Health Affairs Blog

Implementing Health Reform: The 2015 Notice Of Benefit And Payment Parameters Proposed Rule; ACA Supreme Court Litigation

by Timothy Jost

Note: In another Affordable Care Act development, the Supreme Court on November 26, 2013, agreed to review Sebelius v. Hobby Lobby and Conestoga Wood Specialties v. Sebelius. Both cases raise the issue of whether a regulation that requires health plans to cover certain contraceptives violates the free exercise rights of a for-profit corporate employer. This issue has been raised in lawsuits across the country, with the Courts of Appeals reaching conflicting conclusions. Since four Circuit Courts of Appeals have enjoined the enforcement of the regulation, while two have upheld it, a Supreme Court review was inevitable.

These cases raise fundamental issues of religious liberty, public health regulation, gender equality, employment law, and corporate law. They are not, however, a challenge to the Affordable Care Act, as some news media are reporting them. They challenge the application of one regulation adopted enforcing the ACA’s preventive services mandate. Regardless of how the Supreme Court decides these cases, it will have no effect on the implementation of the ACA beyond the application of that one regulation.

The end of this post was also updated on November 27 to briefly note Internal Revenue Service final rules implementing three of the fees and taxes enacted as part of the ACA.

On November 24, 2013, the Department of Health and Human Services published its 2015 Notice of Benefit and Payment Parameters Proposed Rule.  The benefit and payment parameters rule is a regulation that HHS must publish each fall describing the payment parameters of the premium stabilization (risk adjustment, reinsurance, and risk corridor) and cost-sharing reduction programs, as well as the federal exchange user fees for the following year.  The notice is also an opportunity to tweak other aspects of the ACA health insurance programs, and this Notice proposes changes in rating methods in the small business health options program (SHOP); privacy and security rules for personally identifiable information; the annual open enrollment period for 2015; the actuarial value (AV) calculator; the annual limitation on cost sharing for stand-alone dental plans; the meaningful difference standard for qualified health plans offered through the federal exchange; and patient safety standards for issuers of qualified health plans.

Finally, the Notice makes a few changes in the 2014 premium stabilization program. A fact sheet is available here.

This is in all likelihood the last major proposed rule to come out of HHS before the launch of the qualified health plan and the premium tax credit and cost-sharing reduction programs on January 1, 2014.  We are likely to see more rulemaking activity from the Internal Revenue Service in 2013, but HHS has finished its regulatory work.  Indeed, although the Proposed Notice does make some adjustments in the program for 2014, it is primarily oriented toward the second year of the program, 2015.

The benefit and payment parameters proposed notice is supposed to appear in October each year to provide time for the states and health plans to make adjustments for the next following year.  This Proposed Notice was sent by HHS to the Office of Management and Budget for review on September 24, 2013 and released by OMB on November 8.  It is emblematic of troubled launch of the HHS programs that the Proposed Notice is only now appearing now in late November.  It does, however, propose a host of practical adjustments for 2015, and a few for 2014, that should smooth the way going forward.

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