On April 17,2023, the Department of Health and Human Services (HHS) released the final Notice of Benefit and Payment Parameters for 2024 (NBPP), and additionally on May 1, 2023, the final 2024 Letter to Issuers in the Federally-facilitated Exchanges (Letter). As is the case annually, additional accompanying technical guidance was finalized and released:
- Premium Adjustment Percentage, Maximum Annual Limitation on Cost Sharing, Reduced Maximum Annual Limitation on Cost Sharing, and Required Contribution Percentage for the 2024 Benefit Year
- Key Dates for 2023 QHP Certification & Rate Review
- 2024 Actuarial Value Calculator Methodology
- QHP Data Submission Certification Timeline Bulletin
- Rate Review Timeline Bulletin
As always, the NBPP, Letter, and other guidance address key timelines, certification standards, financial parameters, and operational and technical guidance for Exchanges, Qualified Health Plans (QHPs), and premium stabilization programs. Most of this year’s final changes are adjustments rather than the major overhauls seen in previous years, with more significant policy changes focused on network adequacy and essential community provider standards and categories.
Below, we provide our annual finalized overview of the significant policy changes from previous years’ guidance, with a focus on key payment parameters and changes that impact state insurance markets and regulators. Changes from the proposed standards are flagged in italics.
Timeline
The timelines for annual QHP certification and rate review deadlines were finalized as proposed.
Network Adequacy
HHS finalized the requirement that all QHPs and Standalone Dental Plans (SADPs) across all Exchanges must use a provider network that complies with network adequacy and Essential Community Provider standards with limited exceptions for certain SADPs as outlined in the letter (pages 11-12).
For the 2024 plan year, HHS will evaluate all QHPs for compliance with network adequacy standards based on time and distance standards only and not based on appointment wait time standards. HHS will delay implementation of proposed wait time standards until Plan Year 2025. Those standards will be outlined in forthcoming guidance.
As was the case last year, HHS will be working more closely with states on network adequacy.
Essential Community Providers (ECPs)
In the Letter and NBPP, the following changes to the ECP categories were finalized for Plan Year 2024:
- Addition of a new ECP category entitled “Mental Health Facilities” that includes Community Mental Health Centers and Other Mental Health Providers.
- Addition of a new ECP category entitled “Substance Use Treatment Centers,” moving this provider type from “Other” to their own standalone category.
- Addition of Rural Emergency Hospitals to the “Other ECPs” category.
With these changes, issuers are required to offer a contract to at least one ECP in each of the now eight ECP categories in each country in the service area. The eight categories finalized for 2024 include: Federally Qualified Health Centers (FQHCs), Ryan White Program Providers, Family Planning Providers, Indian Health Care Providers, Inpatient Hospitals, Substance Use Disorder Treatment Centers, Mental Health Facilities, Other ECP Providers.
Issuers have to demonstrate 35 percent provider participation of available ECPs, including write-ins for each plans service area, with an additional new requirement that additionally applies the 35 percent threshold to within two of the categories: FQHCs and Family Planning Providers. The full chart of the proposed ECP categories, and provider types is included in the final Letter starting on pgs. 14-15, as Table 2.1.
Standardized Plans
In the NBPP and Letter, HHS has finalized largely minor updates to Federally-facilitated Exchange (FFE)/State-based Exchange-Federal Platform (SBE-FP) individual market standardized plans for 2024 and future years, with a more significant change to non-standardized plan offerings:
- HHS finalized the elimination of the non-expanded Bronze standardized plan option. The only Bronze standardized plan will be an expanded Bronze plan and the requirement to offer standardized plans will only apply to that plan type in the Bronze level.
- HHS will continue to have standardized plans and require issuers to offer them in the following plan levels: expanded Bronze, Silver, each version of income-based Silver cost-sharing reduction variation, Gold, Platinum. The plan designs for those plans have been updated and are specified in the NBPP.
- HHS maintained a four-tiered drug benefit in standardized plans, declining to expand to five or six tiers and to finalize proposed criteria for placement of generic and brand drugs into tiers.
- Other requirements related to standardized plans – including the requirement to offer, the two sets of standardized plans and differential display have not changed from 2023.
- HHS declined to limit issuers to offering only two non-standardized plans per network type and metal level in each service area for offerings through Exchanges on the Federal platform (FFEs and SBE-FPs) for PY 2024. Instead, HHS adopted a gradual approach, with issuers limited to four non-standard plans per network type and metal level for PY 2024 and two non-standardized plans for PY 2025. HHS is providing additional flexibility for plans with added dental and/or vision coverage that meets enumerated standards (the limit applies separately to plans with and without such coverage, as outlined in the Letter, page 9).
Prescription Drugs
HHS finalized changes to the non-discrimination formulary cost share review tool that will ensure cost sharing is not being used to discourage enrollment of individuals with chronic or high-cost medical conditions. This adverse tiering review tool will focus on the following medical conditions: hepatitis C, HIV, multiple sclerosis, and rheumatoid arthritis.
Plan Variation Marketing Names
CMS finalized as proposed a requirement that QHP plan and plan variation marketing names be reviewed for accuracy during the annual QHP certification cycle. CMS will allow issuers to vary plan marketing names by the plan variant, and a different name for that plan’s equivalent that meets the QHP actuarial value requirements. CMS outlined in the final Letter the following examples of information that should be validated to ensure accuracy and consistency across the plan or plan variation marketing name:
- Plans & Benefits Template
- gov plan selection information, and other applicable QHP certification materials.
- Deductible amounts
- For tiered or network-specific benefits, which tier, or network is referenced.
- Maximum out of pocket (MOOP) amounts
- Benefit copay or coinsurance
- Initial free or discounted visits
- Ability of the plan to be paired with a health savings account (HSA)
Cost Sharing
For 2024, HHS sets the maximum annual limitation on cost sharing at $9,450 for self-only coverage, $18,900 for other coverage, with the cost sharing reduction plan maximum out of pockets (MOOPs) outlined below:
Stand-Alone Dental Plans
As always, HHS has also addressed the cost-sharing limitations for Stand-Alone Dental Plans (SADPs) in the Letter, and increased the MOOP for SADPs to $400 for one child and $800 for two or more children.
In the NBPP as well as the Letter, HHS finalized the following additional changes:
- To require SADP issuer to use the enrollee’s age at the time of issuance or renewal for rating and eligibility purposes.
- To require SADP issuers to submit guaranteed rates through all types of Exchanges rather than allowing estimated rates that enrollees must then confirm.
User Fees
As has been the case in recent years, HHS reduced user fees for 2024 (further reduced from the percentages proposed):
- FFE user fee: 2.2 percent in 2024, down from 2.75 in 2023.
- SBE-FP user fee: 1.8 percent, down from 2.25 in 2023.
Re-Enrollment
In the NBPP, HHS finalized the option for Exchanges to alter the automatic re-enrollment hierarchy that determines what plans individuals who do not pick a plan are enrolled into such that:
- Individuals who are enrolled in a Bronze level QHP eligible for cost-sharing reductions in the Silver level can be re-enrolled into a Silver level QHP in the same issuer, product and provider networks (based on the future year provider network of the current plan) and with equal or lower premiums for the coverage year (after factoring in the Advance Premium Tax Credit) if stated conditions are met.
- Individuals whose plan is no longer available are re-enrolled into plans with the most similar network to their prior plans, again subject to stated conditions.
Special Enrollment Periods
HHS had proposed several changes aimed at ensuring access to coverage and maintaining continuous enrollment for consumers. HHS finalized the proposal to allow assisters to go door-to-door for enrollment purposes. Additional finalized changes include:
- Effective as soon as the final NBPP takes effect (which is June 6, 2023), Exchanges have the option provide that consumers losing coverage via Medicaid or CHIP (likely tied to the known end of continuous enrollment under the Public Health Emergency) have 90 days after the loss of Medicaid or CHIP to enroll in a QHP, to align with the Medicaid reconsideration window. Exchanges in states that provide for a reconsideration period of greater than 90 days could extend the time period to enroll as well. Further, individuals in states that do not elect this new option will still have 60 days after the triggering event for loss of Medicaid or CHIP to select a QHP.
- Additionally, states could allow consumers to attest to a known end of Medicaid, CHIP of MEC to offer an earlier coverage effective date to prevent gaps in coverage.
Terminations of Coverage based on Aging Out of Dependent Coverage
HHS currently prohibits issuers participating in Exchanges on the Federal platform from terminating coverage of a dependent when they age out of dependent coverage if that change happens mid-plan year. The NBPP, finalized the addition of that prohibition explicitly to the regulations to confirm that issuers are required to cover dependent young adults until the end of the plan year in which they turn 26 (or an older maximum age covered by the plan).
Exchange Blueprints
HHS finalized the amendment to the timeline according to which states may transition from either a Federally-facilitated Exchange (FFE) to a State-based Exchange (SBE) or a State-based Exchange on the Federal Platform (SBE-FP) or from a SBE-FP to a SBE. Rather than a specific deadline, states will be required to have approval or conditional approval of its Exchange Blueprints at some point prior beginning open enrollment either as an SBE or SBE-FP. HHS hopes that the additional flexibility will provide more time for federal and state coordination on the transition.
