No. 42038 (Emergency Rule): Rule R590-275. Qualified Health Plan Alternate Enrollment

DAR File No.: 42038
Filed: 08/24/2017 03:02:06 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to: select an alternate enrollment system for PPACA qualified health plans, as provided in 45 CFR 155.335(j)(3) which applies to situations where an issuer will have no individual Federal Exchange enrollment option for the upcoming plan year; take action in order to preserve state control over Utah's health insurance market by direction of the U.S. Department of Health and Human Services to follow Utah's alternate enrollment process; and provide an alternate enrollment system that assists consumers in the most appropriate plan.

Summary of the rule or change:

The rule establishes a state-directed process for the purpose of defining the hierarchy when an issuer leaves the individual Federal Marketplace as provided in 45 CFR 155.335(j)(3). Failure for a state to direct the alternate enrollment process will result in Utah enrollees' plan enrollments being directed by a default federal hierarchy. (EDITOR'S NOTE: The corresponding proposed new Rule R590-275 is under Filing No. 42041 in this issue, September 15, 2017, of the Bulletin.)

Emergency rule reason and justification:

Regular rulemaking procedures would cause an imminent peril to the public health, safety, or welfare.

Justification: On 08/02/2017, Molina Healthcare of Utah (Molina) announced it would no longer offer qualified health plans on the individual Federal Exchange as of 01/01/2018; this action leaves only two insurers on the Federal Exchange for 2018. It is estimated that Molina has about 40% of the enrollees who purchased their coverage on the Federal Exchange. In 2016, the U.S. Department of Health and Human Services (HHS) enacted an alternate enrollment hierarchy for enrollees whose plans will not be made available in the following plan year, but it also provides for a state-directed hierarchy. The Department of Insurance (Department) did not have a need to define such a hierarchy until the announcement was made by Molina in August. Once the Department was able to determine that the federal hierarchy was at odds with Utah's defined terms for network plans, the Department worked quickly to identify what type of hierarchy could be established. During this shortened process, the Department met with various stakeholders and carefully considered the process that would provide the greatest consumer protection, while preserving market competition. Utah must define the state hierarchy no later than 09/01/2017. However, the Department did not receive answers to all of the questions posed to HHS until 08/24/2017. Failure to enact a state hierarchy will further erode Utah's ability to regulate Utah's insurance markets, disrupt the core of private market competition, and cause imminent peril to the public's ability to address their own healthcare needs. The emergency rule must be made in order to meet the 09/01/2017 deadline.

Statutory or constitutional authorization for this rule:

• Subsection 31A-22-212(5)
• Section 31A-2-201

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to the state budget. This rule does not affect the workload or budget of the state.

local governments:

There is no anticipated cost or savings to local governments. This rule does not affect the workloads or budgets of local governments.

small businesses:

While the rule itself does not have direct cost or savings to small businesses, there is a potential cost to small businesses who are health care providers that contract with an issuer who will no longer offer a qualified health plan on the individual Federal Exchange. Such small businesses may see a decrease in patients. The Department is unable to determine the potential decrease due to other underlying factors, including an enrollee's ability to switch to another plan that offers the same provider network; or in cases where the plan assigned by the alternate enrollment process may include the enrollee's current health care providers.

persons other than small businesses, businesses, or local governmental entities:

While the rule does not have direct cost or savings to any individual, partnership, association, government entity, or public organization, it may affect a corporation or private organization that offers health insurance based on the use of a state-defined process rather than defaulting to the federal process. The cost or savings cannot be calculated at this time because it is not known which individuals will enroll in the default plan based on the rule's hierarchy; nor is it possible to know the health status of those individuals.

Compliance costs for affected persons:

There are no compliance costs for any affected persons as a result of this rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

I. WHETHER A FISCAL IMPACT TO BUSINESS IS EXPECTED AS A RESULT OF THE PROPOSED RULE AND, IF SO, A DESCRIPTION OF WHY: While the rule does not have a direct cost or savings to any individual, partnership, association, government entity, or public organization, it may affect a corporation or private organization that offers health insurance based on the use of a state-defined process rather than defaulting to the federal process. The cost or savings cannot be calculated at this time because it is not known which individuals will enroll in the default plan based on the rule's hierarchy; nor is it possible to know the health status of those individuals. Because the rule establishes a process to assign businesses, there is a potential cost to small businesses who are health care providers that contract with an issuer who will no longer offer a qualified health plan on the individual Federal Exchange; such small businesses may see a decrease in patients. The Department is unable to determine the potential decrease due to other underlying factors, including an enrollee's ability to switch to another plan that offers the same provider network; or in cases where the plan assigned by the alternate enrollment process may include the enrollee's current health care providers. II: AN ESTIMATE OF THE TOTAL NUMBER OF BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The Department is unable to determine the number of business establishments in Utah that may be affected by this rule. This rule may have an indirect impact on a portion of Utah's healthcare system, including physicians, clinics, health care facilities, and pharmacies, if an enrollee fails to select a new plan that includes their current health care providers. It is unknown how many enrollees will select which plans. III: AN ESTIMATE OF THE SMALL BUSINESS ESTABLISHMENTS IN UTAH EXPECTED TO BE IMPACTED: The Department is unable to determine the number of business establishments in Utah that may be affected by this rule. This rule may have an indirect impact on a portion of Utah's healthcare system, including physicians, clinics, health care facilities, and pharmacies, if an enrollee fails to select a new plan that includes their current health care providers. It is unknown how many enrollees will select which plans. IV. A DESCRIPTION OF THE SOURCES OF COST OR SAVINGS AS WELL AS THE EXPECTED NET SAVINGS OR COST TO BUSINESS ESTABLISHMENTS AND SMALL BUSINESS ESTABLISHMENTS AS A RESULT OF THE PROPOSED RULE OVER A ONE-YEAR PERIOD, IDENTIFYING ONE-TIME AND ONGOING COSTS: The Department is unable to determine the number of business establishments in Utah that may be affected by this rule. This rule may have an indirect impact on a portion of Utah's healthcare system, including physicians, clinics, health care facilities, and pharmacies, if an enrollee fails to select a new plan that includes their current health care providers. It is unknown how many enrollees will select which plans. V. DEPARTMENT HEAD'S COMMENTS ON THE ANALYSIS: When possible, Utah's leadership has always chosen to invoke the state's right to define processes required by the Affordable Care Act. In the past, the state has chosen its own Essential Health Benefit Plan, selected to run a SHOP Exchange, chosen not to expand Medicaid, and selected to perform plan management review, amongst other things. This rule invokes the state's right to define the alternate enrollment hierarchy based on the Utah marketplace. This rule preserves private competition in the marketplace, rather than federal assignment.

Todd E. Kiser, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

This rule is effective on:

08/24/2017

Authorized by:

Steve Gooch, Information Specialist

RULE TEXT

R590. Insurance, Administration.

R590-275. Qualified Health Plan Alternate Enrollment.

R590-275-1. Authority.

This rule is promulgated pursuant to Section 31A-2-201 and Subsection 31A-2-212(5) wherein the commissioner may make rules to implement the provisions of Title 31A and preserve state control over the health insurance market.

 

R590-275-2. Purpose and Scope.

(1) The purpose of this rule is to select an alternate enrollment system for a PPACA qualified health plan as provided in 45 CFR 155.335(j)(3).

(2) This rule applies:

(a) when a carrier will have no qualified health plans available to individuals on the Federal Exchange for the upcoming plan year;

(b) to a carrier who offers a qualified health plan to an individual on the Federal Exchange; and

(c) to the Federal Exchange.

 

R590-275-3. Definitions.

In addition to the definitions in Sections 31A-1-301 and 31A-30-103, the following definitions shall apply for the purpose of this rule.

(1) "Federal Exchange" means the exchange established and operated by the United States Department of Health and Human Services that makes individual qualified health plans available to qualified enrollees.

(2) "Qualified Health Plan" means a health benefit plan that is certified to meet the standards recognized by the Federal Exchange.

 

R590-275-4. Alternate enrollment process.

(1) Pursuant to 45 CFR 155.335(j)(3), the Federal Exchange requires a defined alternate enrollment for an enrollee in an individual qualified health plan, QHP, where the carrier will have no exchange option available for the upcoming plan year due to a carrier no longer offering an individual QHP in a particular service area in which it previously offered coverage on the Federal Exchange.

(2) At renewal, if an enrollee does not have an individual QHP available from the same carrier through the Federal Exchange in which to enroll, the Federal Exchange shall direct enrollment for an enrollee to a QHP issued by a different carrier based on the hierarchy in Subsection (3), subject to a carrier's ability to absorb new enrollment.

(3)(a) The enrollee's coverage will be matched to a QHP in the same service area:

(i) at the same metal level; or

(ii) if more than one QHP is available the coverage will be matched to a QHP at the same metal level with the lowest premium.

(b) If no QHP is available at the same metal level in the same service area, the enrollee will be matched to a QHP in the same service area:

(i) that is one metal level lower than the enrollee's current QHP; or

(ii) if more than one QHP is available, coverage will be matched to a QHP at one metal level lower with the lowest premium.

(c) If no QHP is available at the same metal level or one metal level lower and in the same service area, the enrollee will be matched to a QHP that is:

(i) one metal level higher than the enrollee's current QHP; or

(ii) if more than one QHP is available at one metal level higher, coverage will be matched to a QHP at one metal level higher with the lowest premium.

(d) If no QHP is available at the same metal level, one metal level lower, or one metal level higher in the same service area, the enrollee will be matched to any QHP at any metal at the lowest premium in the same service area.

(4) The alternate enrollment hierarchy in Subsection (3) does not apply to an enrollee who terminates coverage, including termination of coverage in connection with voluntarily selecting a different QHP in accordance with 45 CFR 155.430.

 

R590-275-5. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R590-275-6. Enforcement Date.

The commissioner will begin enforcing this rule September 1, 2017.

 

R590-275-7. Severability.

If any provision of this rule or its application to any person or circumstances is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances shall not be affected thereby.

 

KEY: insurance, enrollment

Date of Enactment or Last Substantive Amendment: August 24, 2017

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-22-212(5)

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