At NAIC Summer National, CMS Announces Guidance on COVID-19 Premium Credits

On Aug. 4, the Center for Consumer Information and Insurance Oversight (CCIIO) of the Centers for Medicare & Medicaid Services (CMS) issued guidance on premium credits associated with COVID-19 in the individual and small group health insurance markets. A CCIIO representative announced the publication of the guidance in remarks at a meeting of the Regulatory Framework (B) Task Force of the National Association of Insurance Commissioners (NAIC) at the NAIC’s all-virtual Summer National Meeting.

Health insurers active in the individual and small group markets may find it expedient to offer premium credits, in order to alleviate their enrollees’ financial hardship and allow for continuity of coverage. Insurers inclined to offer such credits should consider what they need to do, including filing and informational requirements, in order to comply with CMS’s guidance.

Under the guidance, generally:

• CMS will implement a policy of “relaxed enforcement” of specified regulations that govern health plan pricing, in order to allow insurers to offer premium credits for 2020 coverage.
  
  
• An insurer wishing to provide such credits must first receive permission from
  
  
  • the applicable state insurance regulator (or CMS in states where CMS is the primary enforcer of applicable federal requirements) and
    
    
  • any Exchange through which the insurer offers a qualified health plan (QHP).
    
    
• The requesting insurer must indicate the fixed percentage by which it intends to provide credits against 2020 premium amounts and the months in 2020 to which the credits would apply. This fixed percentage credit must be offered uniformly in a non-discriminatory manner to all members in a market in a state without regard to whether the plan is offered through or outside an Exchange, or whether the member is eligible for advance payments of the premium tax credit (APTC).
  
  
• With respect to Medical Loss Ratio (MLR) reporting:
  
  
  • CMS intends to issue future rulemaking to ensure that insurers may accurately report premium amounts actually billed for months in 2020 for which issuers provided these credits.
    
    
  • QHP issuers offering premium credits in states with a federally facilitated Exchange (FFE) or state-based Exchange using the federal platform (SBE-FP) must, by October 1, 2020, notify CMS of the parameters of these credits using a template to be provided by CMS.
    
    
  • Exchanges are required to accurately report enrollee premiums, as reduced by any credits, to enrollees and the IRS. To ensure proper allocation of APTC to the portion of premium that covers “essential health benefits” under the Patient Protection and Affordable Care Act (ACA), CMS will adjust premium and APTC amounts in its enrollment data.
    
    
• Certain user fees associated with FFEs and SBE-FPs that insurers must pay the Department of Health and Human Services (HHS) will be based on the monthly billed premium amount, as lowered by the premium credit, for insurers that provide these premium credits.
  
  
• QHP issuers offering premium credits in a state with a state-based exchange (SBE) that relies on its own eligibility and enrollment system should follow any requirements established by the SBE for reporting planned temporary premium credits.