patient protection and affordable care act; program integrity: exchange, shop, and eligibility...

7/30/2019 Patient Protection and Affordable Care Act; Program Integrity: Exchange, SHOP, and Eligibility Appeals - Rules & R

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Vol. 78 Friday,No. 169 August 30, 2013

Part VI

Department of Health and Human Services

45 CFR Parts 147, 153, 155, et al.Patient Protection and Affordable Care Act; Program Integrity: Exchange,SHOP, and Eligibility Appeals; Final Rule

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54070 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations

1Patient Protection and Affordable Care Act;Establishment of Exchanges and Qualified HealthPlans; Exchange Standards for Employers, 77 FR18310 (March 27, 2012).

2Patient Protection and Affordable Care Act;Standards Related to Reinsurance, Risk Corridorsand Risk Adjustment, 77 FR 17220 (March 23,2012).

3Patient Protection and Affordable Care Act; HHSNotice of Benefit and Payment Parameters for 2014and Amendments to the HHS Notice of Benefit andPayment Parameters for 2014, 78 FR 15410 and15541 (Mar. 11, 2013).

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

45 CFR Parts 147, 153, 155, and 156

[CMS9957F]

RIN 0938AR82

Patient Protection and Affordable Care

Act; Program Integrity: Exchange,SHOP, and Eligibility Appeals

AGENCY: Centers for Medicare &Medicaid Services (CMS), HHS.ACTION: Final rule.

SUMMARY: This final rule implementsprovisions of the Patient Protection andAffordable Care Act and the Health Careand Education Reconciliation Act of2010 (collectively referred to as theAffordable Care Act). Specifically, thisfinal rule outlines Exchange standardswith respect to eligibility appeals,agents and brokers, privacy and

security, issuer direct enrollment, andthe handling of consumer cases. It alsosets forth standards with respect to aStates operation of the Exchange andSmall Business Health Options Program(SHOP). It generally is finalizingpreviously proposed policies withoutchange.

DATES: These regulations are effectiveon September 30, 2013.FOR FURTHER INFORMATION CONTACT:Leigha Basini at (301) 4924380, orNoah Isserman at (301) 4924401 forgeneral information and matters relatingto parts 155 and 156.

Seth Schneer at (301) 4924405 formatters relating to the SHOP.Jacob Ackerman at (301) 4924179 for

matters relating to part 147.Jaya Ghildiyal at (301) 4925149 for

matters relating to part 153.Christine Hammer at (301) 4924431

for matters relating to part 155 subpartF.

Paul Tibbits at (301) 4924229 formatters relating to part 156, subpart K.SUPPLEMENTARY INFORMATION:

Electronic Access

This Federal Register document isalso available from the Federal Register

online database through Federal DigitalSystem (FDsys), a service of the U.S.Government Printing Office. Thisdatabase can be accessed via theinternet at http://www.gpo.gov/fdsys.

Acronyms and Short Forms

Because of the many organizationsand terms to which we refer by acronymin this proposed rule, we are listingthese acronyms and their correspondingterms in alphabetical order below:Affordable Care Act The Affordable Care

Act (which is the collective term for the

Patient Protection and Affordable Care Act(Pub. L. 111148) and the Health Care andEducation Reconciliation Act of 2010 (Pub.L. 111152))

AV Actuarial ValueCFR Code of Federal RegulationsCHIP Childrens Health Insurance ProgramCMP Civil Money PenaltyCMS Centers for Medicare & Medicaid

Services

DOI State Department of InsuranceDOL U.S. Department of LaborEFT Electronic Funds TransferEHB Essential Health BenefitsFEHB Federal Employees Health BenefitsFFE Federally-facilitated ExchangeFFE API Federally-facilitated Exchange

Application Programming InterfaceFFSHOP Federally-Facilitated Small

Business Health Options ProgramGAO United States Government

Accountability OfficeGLBA Gramm Leach Bliley ActHHS U.S. Department of Health and Human

ServicesHIPAA Health Insurance Portability and

Accountability Act of 1996 (Pub. L. 104

191, as amended) and its implementingregulations

IRS Internal Revenue ServiceLEP Limited English ProficiencyMAGI Modified Adjusted Gross IncomeMLR Medical Loss RatioNAIC National Association of Insurance

CommissionersNPRM Notice of Proposed RulemakingOMB Office of Management and BudgetPCIP Pre-existing Condition Insurance PlanPHI Protected Health InformationPHS Act Public Health Service ActPII Personally Identifiable InformationPRA Paperwork Reduction ActQHP Qualified Health PlanSHOP Small Business Health Options

ProgramThe Code Internal Revenue Code of 1986TIN Taxpayer Identification Number

Executive Summary

Starting on January 1, 2014, qualifiedindividuals and qualified employeeswill be able to be covered by privatehealth insurance coverage throughcompetitive marketplaces calledAffordable Insurance Exchanges, orExchanges (also called HealthInsurance Marketplaces). This rule setsforth standards for eligibility appeals,verification of eligibility for minimum

essential coverage, and treatment ofincomplete applications. It alsoestablishes additional consumerprotections regarding privacy andsecurity; clarifies the role of agents,

brokers, and issuer application assistersin assisting consumers with obtainingExchange coverage; provides for thehandling consumer cases; andestablishes non-discriminationstandards for methods of premiumpayment. Finally, it sets forth provisionsregarding a States operation of theSHOP.

Although many of the provisions inthis rule will become effective byOctober 1, 2013, we do not believe thataffected parties will have difficultycomplying with the provisions by theireffective dates, because the standardsare based on existing standardscurrently in effect in the private healthinsurance market, were previously

addressed in the Exchange Blueprintprocess, discussed in agency-issued sub-regulatory guidance, or discussed in thepreambles to the ExchangeEstablishment Rule,1 PremiumStabilization Rule,2 or the HHS Noticeof Benefit and Payment Parameters for2014.3 In addition to comments on thesubstance of the provisions we are nowfinalizing, we sought input on ways toimplement the proposed policies tominimize burden.

Table of Contents

I. Background

A. Legislative OverviewB. Stakeholder Consultation and InputII. Provisions of the Proposed Regulations

and Analysis of and Responses to PublicComments

A. Part 147Health Insurance ReformRequirements for the Group andIndividual Health Insurance Markets

1. Fair Health Insurance PremiumsB. Part 153Standards Related to

Reinsurance, Risk Corridors, and RiskAdjustment Under the Affordable CareAct

1. Subpart F Health Insurance IssuerStandards Related to the Risk CorridorsProgram

C. Part 155Exchange Establishment

Standards and Other Related StandardsUnder the Affordable Care Act1. Subpart AGeneral Provisions2. Subpart BGeneral Standards Related to

the Establishment of an Exchange3. Subpart CGeneral Functions of an

Exchange4. Subpart DExchange Functions in the

Individual Market: EligibilityDeterminations for ExchangeParticipation and Insurance AffordabilityPrograms

5. Subpart EExchange Functions in theIndividual Market: Enrollment inQualified Health Plans

6. Subpart FAppeals of EligibilityDeterminations for Exchange

Participation and Insurance AffordabilityPrograms

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54071Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Rules and Regulations

4Section 1321(c) of the Affordable Care Acterroneously cites to section 2736(b) of the PHS Actinstead of 2723(b) of the PHS Act. This was clearlya typographical error, and we have interpretedsection 1321(c) of the Affordable Care Act toincorporate section 2723(b) of the PHS Act.

7. Subpart HExchange Functions: SmallBusiness Health Options Program(SHOP)

D. Part 156Health Insurance IssuerStandards Under the Affordable CareAct, Including Standards Related toExchanges

1. Subpart AGeneral Provisions2. Subpart CQualified Health Plan

Minimum Certification Standards

3. Subpart DFederally-facilitatedExchange Qualified Health Plan IssuerStandards

4. Subpart IEnforcement Remedies inFederally-facilitated Exchanges

5. Subpart KCases Forwarded toQualified Health Plans and QualifiedHealth Plan Issuers in Federally-facilitated Exchanges by HHS

6. Subpart MQualified Health Plan IssuerResponsibilities

III. Collection of Information RequirementsIV. Regulatory Impact AnalysisV. Regulations text

I. Background

A. Legislative Overview

The Patient Protection and AffordableCare Act (Pub. L. 111148) was enactedon March 23, 2010. The Health Care andEducation Reconciliation Act of 2010(Pub. L. 111152), which amended andrevised several provisions of the PatientProtection and Affordable Care Act, wasenacted on March 30, 2010. In this finalrule, we refer to the two statutescollectively as the Affordable CareAct.

Subtitles A and C of Title I of theAffordable Care Act reorganized,amended, and added to the provisionsof Title XXVII of the Public Health

Service Act (PHS Act) relating to healthinsurance issuers in the group andindividual markets and to group healthplans that are non-Federal governmentalplans. As relevant here, section 2701 ofthe PHS Act (fair health insurancepremiums) provides that the premiumrate charged by a health insuranceissuer for non-grandfathered healthinsurance coverage in the individual orsmall group market may vary withrespect to a particular plan or coverageonly based on family size, rating area,age (within a ratio of 3:1 for adults), andtobacco use (within a ratio of 1.5:1).

Starting on October 1, 2013 forcoverage starting as soon as January 1,2014, qualified individuals andqualified employers will be able toenroll in qualified health plans(QHPs)private health insurance thathas been certified as meeting certainstandardsthrough competitivemarketplaces called Exchanges orHealth Insurance Marketplaces. TheDepartments of Health and HumanServices, Labor, and the Treasury have

been working in close coordination torelease guidance related to QHPs and

Exchanges in several phases. The wordExchanges refers to both StateExchanges, also called State-basedExchanges, and Federally-facilitatedExchanges (FFEs). In this final rule, weuse the terms State Exchange orFFE when we are referring to aparticular type of Exchange. When werefer to FFEs, we are also referring to

State Partnership Exchanges, which area form of FFE.

In the proposed rule, we encouragedState flexibility. Sections 1311(b) and1321(b) of the Affordable Care Actprovide that each State has theopportunity to establish an Exchange.Section 1311(b)(1) gives each State theopportunity to establish an Exchangethat both facilitates the purchase ofQHPs and provides for theestablishment of a Small BusinessHealth Options Program (SHOP) thatwill help qualified employers enrolltheir qualified employees in QHPs.

Section 1311(b)(2) contemplates theseparate operation of the individualmarket Exchange and the SHOP underdifferent governance and administrativestructures, permitting the individualmarket Exchange and SHOP to bemerged if States have adequateresources to assist both populations(individual and small employers).

Section 1321(a) of the Affordable CareAct provides general authority for theSecretary of Health and Human Services(referred to throughout this rule as theSecretary) to establish standards andregulations to implement the statutory

requirements related to Exchanges,QHPs, and other components of Title Iof the Affordable Care Act.

Section 1321(c)(1) requires theSecretary to establish and operate anFFE within States that either: do notelect to establish an Exchange or, asdetermined by the Secretary, will nothave any required Exchange operational

by January 1, 2014.Section 1321(c)(2) of the Affordable

Care Act authorizes the Secretary toenforce the Exchange standards usingcivil money penalties (CMPs) on thesame basis as detailed in section 2723(b)of the PHS Act.4 Section 2723(b) of thePHS Act authorizes the Secretary toimpose CMPs as a means of enforcingthe individual and group marketreforms contained in Title XXVII, Part Aof the PHS Act when a State fails tosubstantially enforce these provisions,as determined by the Secretary.

Section 1311(d)(4)(A) of theAffordable Care Act directs that eachExchange must implement proceduresfor the certification, recertification, anddecertification of health plans as QHPs,consistent with guidelines developed bythe Secretary.

Section 1312(c) of the Affordable CareAct directs a health insurance issuer to

consider all enrollees in all health plans(other than grandfathered health plans)offered by such issuer to be members ofa single risk pool for each of itsindividual and small group markets.Section 1312(c) of the Affordable CareAct also gives States the option to mergethe individual and small group marketswithin the State into a single risk pool.

Section 1312(e) of the Affordable CareAct directs the Secretary to establishprocedures under which a State maypermit agents and brokers to enrollqualified individuals and qualifiedemployers in QHPs through anExchange, and to assist individuals inapplying for advance payments of thepremium tax credit and cost-sharingreductions.

Section 1313 of the Affordable CareAct, combined with section 1321 of theAffordable Care Act, provides theSecretary with the authority to overseethe financial integrity, compliance withHHS standards, and efficient and non-discriminatory administration of StateExchange activities. Section1313(a)(6)(A) of the Affordable Care Actspecifies that payments made by,through, or in connection with anExchange are subject to the False Claims

Act (31 U.S.C. 3729, et seq.) if thosepayments include any Federal funds.

Under section 1411 of the AffordableCare Act, the Secretary is directed toestablish a program for determiningwhether an individual meets theeligibility standards for Exchangeparticipation, advance payments of thepremium tax credit, cost-sharingreductions, and exemptions from theshared responsibility payment undersection 5000A of the Code.

Section 1411(g) of the Affordable CareAct specifies that information provided

by an applicant or received from a

Federal agency may be used only for thepurpose of, and to the extent necessaryin, ensuring the efficient operation ofthe Exchange, including for the purposeof verifying the eligibility of anindividual to enroll through anExchange, to claim a premium tax creditor cost-sharing reduction, or forverifying the amount of the tax credit orreduction.

Section 1411(h) of the Affordable CareAct sets forth civil penalties that anyperson may be subject to if he or shefails to provide correct information or



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5Questions and Answers Related to HealthInsurance Market Reforms (April 26, 2013).Available at: http://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/qa_hmr.html.

knowingly and willfully provides falseor fraudulent information under section1411(b), or improperly uses or disclosesinformation provided by an applicant oranother Federal agency under section1411(b), (c), (d), or (e).

Sections 1412 and 1413 of theAffordable Care Act and section 1943 ofthe Social Security Act (the Act), as

added by section 2201 of the AffordableCare Act, contain additional provisionsregarding eligibility for advancepayments of the premium tax credit andcost-sharing reductions, as well asprovisions regarding simplification andcoordination of eligibilitydeterminations and enrollment withother health programs.

Unless otherwise specified, theprovisions in this final rule related tothe establishment of minimumfunctions of an Exchange are based onthe general authority of Secretary undersection 1321(a)(1) of the Affordable CareAct.

B. Stakeholder Consultation and Input

HHS has consulted with stakeholderson a number of polices related to theoperation of Exchanges, including theSHOP, and premium stabilizationprograms. HHS has held a number oflistening sessions with consumers,providers, employers, health plans, andState representatives to gather publicinput. HHS consulted with stakeholdersthrough regular meetings with theNational Association of InsuranceCommissioners (NAIC); regular contactwith States through the Exchange

establishment grant process and theExchange Blueprint approval process;and meetings with tribal leaders andrepresentatives, health insuranceissuers, trade groups, consumeradvocates, employers, and otherinterested parties. We considered all ofthe public input as we developed thepolicies in the proposed rule and thisfinal rule.

II. Provisions of the ProposedRegulations and Analysis of andResponses to Public Comments

A proposed rule, titled Patient

Protection and Affordable Care Act;Program Integrity: Exchange, SHOP,Premium Stabilization Programs, andMarket Standards (78 FR 37032), waspublished in the Federal Register on

June 19, 2013 with a comment periodending on July 19, 2013. In total, wereceived 99 public comments on theproposed rule from variousstakeholders, including States, healthinsurance issuers, consumer groups,agents and brokers, provider groups,Members of Congress, Tribalorganizations, and other stakeholders.

Of the comments received, about 22were substantially identical submissionsrelated to non-discrimination standards,Web-brokers, incomplete applications,and payment method non-discrimination standards for theunbanked. We received a few commentsthat were outside the scope of theproposed rule. In this final rule, we

provide a summary of each proposedprovision, a summary of the publiccomments received and our responses tothem, and the policies we are finalizing.We are not finalizing all the provisionsfrom this proposed rule. This final ruleincludes those provisions that need to

be effective for the beginning of openenrollment on October 1, 2013. We willfinalize the other provisions at a laterdate.

Another proposed rule, entitledEssential Health Benefits in AlternativeBenefit Plans, Eligibility Notices, FairHearing, and Appeal Processes for

Medicaid and Exchange EligibilityAppeals and Other Provisions Related toEligibility and Enrollment forExchanges, Medicaid and CHIP, andMedicaid Premiums and Cost Sharing(78 FR 4594), was published in theFederal Register on January 22, 2013with a comment period ending onFebruary 13, 2013. We received a totalof 741 comments from variousstakeholders including individuals,State Medicaid agencies, advocacygroups, and Tribal organizations. In thisfinal rule, we are only addressing fromthat proposed rule the provisionsrelated to appeals in Part 155 Subpart Fand 155.740. Other provisions fromthe January 22, 2013 proposed rule werefinalized in a final rule, titled CMS2234F: Medicaid and Childrens HealthInsurance Programs: Essential HealthBenefits in Alternative Benefit Plans,Eligibility Notices, Fair Hearing andAppeal Processes, and Premiums andCost Sharing; Exchanges: Eligibility andEnrollment (78 FR 42160) published inthe Federal Register on July 15, 2013.

A. Part 147Health Insurance ReformRequirements for the Group andIndividual Health Insurance Markets

1. Fair Health Insurance Premiums( 147.102)

We proposed two clarifications in 147.102, which implements section2701 of PHS Act regarding fair healthinsurance premiums. In paragraph (a),we proposed to add a reference to thesingle risk pool standard codified in 156.80 to clarify the connection

between section 1312(c) of theAffordable Care Act and section 2701 ofthe PHS Act with respect to thedevelopment of rates and premiums for

health insurance coverage in theindividual and small group markets.

In paragraph (a)(1)(ii), we proposed toclarify that for rating purposes undersection 2701 of the PHS Act, thegeographic rating area is determined inthe small group market using theprincipal business address of the grouppolicyholder, and in the individual

market using the address of the primarypolicyholder, regardless of the locationof other individuals covered under theplan or coverage. These proposedstandards would apply both inside andoutside of the Exchanges and areconsistent with previously releasedguidance describing our intendedapproach.5 We solicited comments onthis proposal.

Comment:While some commenterssupported our proposal that issuers inthe small group market apply rates

based on the employers principalbusiness address, other commenters

noted that issuers in some States havealready developed administrativesystems and rates for 2014 based onguidance from State regulators to useeach employees place of residence.These commenters requested that Stateshave flexibility to use either employeror employee address when rating forgeography.

Response:We believe it is importantthat all issuers offering coverage withina State, both through the Exchanges andoutside of the Exchanges, use aconsistent geographic ratingmethodology to promote the accuracy ofthe risk adjustment program establishedunder section 1343 of the AffordableCare Act. Further, we believe that rating

based on the employers principalbusiness address is consistent withcurrent prevailing industry practice andwill simplify administration of thegeographic rating factor. We recognize,however, that issuers in some cases mayhave relied in good faith on guidance orinstructions from States to rate based onemployee address for 2014. Thus, whilewe are finalizing our proposed policythat geographic rating be based on theemployers principal business addressgenerally for plan years beginning on or

after January 1, 2014, we are alsoproviding in this final rule that whereissuers can demonstrate that they haverelied in good faith on differentguidance from a State insuranceregulator prior to the issuance of thisfinal rule, the amendments to 147.102(a)(1)(ii) will not apply untilthe first plan year beginning on or after

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January 1, 2015 with respect to coveragein the small group market. We believethis approach promotes consistency inrating, while affording issuers in certaincircumstances a reasonable period oftime to transition to the geographicrating methodology in this final rule.We note that this flexibility will notapply to plans offered through the

Federally-facilitated Small BusinessHealth Options Program (FFSHOP),which will apply rates based on theemployers principal businessaddressing beginning in 2014.

Summary of Regulatory Changes

We are finalizing the provisionsproposed in 147.102 of the proposedrule with the addition of a transitionperiod for issuers in certaincircumstances.

B. Part 153Standards Related toReinsurance, Risk Corridors, and RiskAdjustment Under the Affordable Care

Act1. Subpart FHealth Insurance IssuerStandards Related to the Risk CorridorsProgram

a. Definitions ( 153.500)

In the proposed rule, we soughtcomment on our proposed amendmentto 155.20 that for a plan offeredoutside the Exchange to be consideredthe same plan as one that is certified asa QHP and offered through theExchange, the benefits package,provider network, service areas, andcost-sharing structure of the two

offerings would have to be identical. Asdiscussed below in Part C(1)(a) of thisfinal rule, we are finalizing this policyas proposed. In the proposed rule, wealso proposed that this standard be usedto determine which off-Exchange planswould be subject to the risk corridorsprogram. As discussed below in PartC(1)(a) of this final rule, manycommenters suggested that, in additionto the plans described in our proposal,plans that differ from a QHP offeredthrough the Exchange only as a result ofFederal or State requirements orprohibitions on the coverage of benefits

that apply differently to plansdepending on whether they are offeredthrough or outside an Exchange, should

be afforded the protection of riskcorridors.

For example, several commenterssuggested that a plan offered outside theExchange that differs from a QHPoffered through an Exchange solely

based on inclusion of the requiredpediatric dental EHB should beincluded in the risk corridors program.Because health insurance issuers maysell a QHP without the pediatric dental

EHB through an Exchange if a stand-alone dental plan that covers thepediatric dental EHB is offered on thatExchange, commenters argued thatplans that differ solely due to coverageof the pediatric dental EHB differ only

because of a Federal requirement, andthat this requirement should not preventthe plans from receiving risk corridors

protections when offered outside theExchange. Another commentersuggested that the network requirementsfor multi-state plan (MSP) issuers set bythe Office of Personnel Management(OPM) could conflict with comparableState requirements, similarly potentiallydisqualifying plans offered outside theExchanges that are comparable to MSPoptions from participating in the riskcorridors program.

We agree with these commenters thatthe risk corridors program should alsocover plans offered outside theExchanges that differ from a QHP only

as a result of Federal or Staterequirements or prohibitions on thecoverage of benefits that applydifferently to plans depending onwhether they are offered through oroutside the Exchange; therefore, we arenot finalizing this risk corridors policyas proposed. Rather, we are reiteratingour policy, previously finalized in thepreamble to the Premium StabilizationRule (77 FR 17237), where we statedthat health plans that are substantiallythe same as a QHP will be subject to therisk corridors program and signaled anintent to clarify this standard in future

rulemaking. Here, we clarify that a planoffered by an issuer outside theExchange that differs from a QHPoffered by the issuer through theExchange only as a result of Federal orState requirements or prohibitions onthe coverage of benefits that applydifferently to plans depending onwhether they are offered through oroutside the Exchange, is substantiallythe same as the QHP and will,therefore, participate in the riskcorridors program. To effectuate thischange, we are amending the definitionof qualified health plan at 153.20and moving it to 153.500 to applysolely for purposes of the risk corridorsprogram. Here, we are also clarifyingthat, when reading the regulations at 45CFR part 153, subpart F regarding riskcorridors, any reference to a qualifiedhealth plan or QHP includes plansthat are the same as a QHP, asspecified below in Part C(1)(a) of thisrule, and plans that are substantiallythe same as a QHP, as specified above.We note that changes in service area,and changes in benefits, cost-sharingstructure, premium, or provider network

that are not tied directly and exclusivelyto the Federal or State requirements orprohibitions on the coverage of benefitsthat apply differentially to a plandepending on whether it is offeredthrough the Exchange, disqualify theplan offered outside the Exchange fromparticipation in the risk corridorsprogram. Additionally, we recognize

that OPM may issue additionalstandards for MSP issuers in the future(for example, standards related toprovider networks) that could createsituations analogous to the ones wediscuss above. We will considerwhether a plan that differs from a QHP(as defined at 155.20) based on thesestandards would be considered to besubstantially the same as a QHP forpurposes of participating in the riskcorridors program, and may address thistopic in future rulemaking.

We intend to issue guidance on theoperational aspects of this standard,

including how HHS and issuers willidentify plan submissions (includingthose submitted for the 2014 benefityear) that are substantially the sameas a QHP offered through an Exchangefor the purposes of determining whetherthe plan will participate in the riskcorridors program. We note that thisamendment is limited to the riskcorridors program, and does not expandthe definition of a QHP for otherpurposes, including for purposes ofparts 155 and 156.


We are adding a definition ofqualified health plan at 153.500 tospecify which plans will be subject tothe risk corridors program. We aredeleting the definition of qualifiedhealth plan at 153.20.

C. Part 155Exchange EstablishmentStandards and Other Related StandardsUnder the Affordable Care Act

1. Subpart AGeneral Provisions

a. Definitions ( 155.20)

We proposed to amend 45 CFR 155.20to reflect new flexibility permitting aState to elect to establish and operate

just a SHOP, and not both a SHOP andan individual market Exchange, bymodifying the definition of Exchange.

Exchange

We proposed to amend the termExchange to mean a governmentalagency or non-profit entity that meetsthe applicable standards of Part 155 andmakes QHPs available to qualifiedindividuals and/or qualified employers.Unless otherwise identified, under theproposed definition this term wouldinclude an Exchange serving the



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individual market for qualifiedindividuals and a SHOP serving thesmall group market for qualifiedemployers, regardless of whether theExchange is established and operated bya State (including a regional Exchangeor subsidiary Exchange) or by HHS.

Although we received no directcomment on this proposed change, we

received several general comments tothe proposed amendments to 155.100in support of permitting a State to electto establish just a SHOP while HHSoperates the individual marketExchange. These comments areaddressed in conjunction with thecomments to 155.100.

Issuer Application Assister

We proposed to define a new term,issuer customer service representativeto mean an employee, contractor, oragent of a QHP issuer that providesassistance to applicants and enrollees,

but is not licensed as an agent, broker,or producer under State law. However,for the same reasons specified in thepreamble to 155.415 below, we willuse the term issuer applicationassisters in place of issuer customerservice representatives to more clearlyarticulate the role of such individuals.Moreover, as also specified in thepreamble to 155.415 below, we arefinalizing a modified definition in thissection to reflect in more detail the roleof issuer application assisters as definedin 155.415.

Qualified Health Plan

In the proposed rule, we proposed tospecify that, for a plan offered outsidean Exchange to be considered the sameplan as one that is certified as a QHPand offered through the Exchange, the

benefits package, provider network,service areas, and cost-sharing structureof the two offerings would have to beidentical. We noted that nothing in thatproposal would relieve an issuer of aplan that has been certified as a QHP byan Exchange from the requirement tocharge the same premium for the QHPsold to consumers outside of anExchange pursuant to sections

1301(a)(C)(iii) of the Affordable Care Actand 45 CFR 156.255(b) and 45 CFR147.104. We also proposed to clarifythat a plan sold to consumers outside ofan Exchange would only be subject tothe risk corridors program if it is thesame plan as a QHP actually offeredbythat issuer on the Exchange. Werequested comment on all aspects of thisapproach.

In this final rule, we are finalizing theproposed policy regarding when a planis the same plan as a QHP for purposesof the same premium requirement.

However, as discussed above in PartB(1)(a) of this final rule, in response tomany of the comments we received onthis policy with regard to the riskcorridors program, we are not finalizingour proposed policy that would haverequired a plan sold to consumersoutside of an Exchange to be the sameplan as a QHP offered through an

Exchange for purposes of participatingin the risk corridors program. Wefurther discuss this policy with respectto the risk corridors program above inPart B(1)(a) of this final rule.

Comment:A number of commentersstated that requiring a plan offeredoutside of an Exchange to be identicalto a QHP offered through an Exchangewith respect to the characteristicsdescribed above in order to beconsidered the same plan was toorestrictive. As discussed above in PartB(1)(a) of this final rule, commenterswere particularly concerned about the

effect of such a standard on plans thatdiffer from Exchange QHPs solely as aresult of Federal and State requirementsor prohibitions on the coverage of

benefits that apply differently to plansdepending on whether they are offeredthrough or outside the Exchange.

Response:Although we understandthe commenters concern that Federal orState requirements or prohibitions onthe coverage of benefits that applydifferently to plans depending onwhether they are offered through oroutside the Exchange could depriveplans offered outside the Exchange ofthe protections of risk corridors, we do

not believe that this policy concernshould result in our considering plansthat are substantially the same as aQHP to be the same plan as the QHP.

In the Premium Stabilization rule (77FR 17220), we stated that a plan offeredoutside of an Exchange that issubstantially the same as a QHPwould qualify for the risk corridorsprogram, and stated that we mightclarify that standard in future guidance.In response to comment, in Part B(1)(a)of this final rule we are clarifying whichplans are substantially the same as aQHP, and will therefore be subject to the

risk corridors program.We believe that, for plans that aresubstantially the same as a QHP, anyvariations in benefits and cost-sharingstructure that are directly tied to Federalor State requirements or prohibitions onthe coverage of benefits that applydifferently to plans depending onwhether they are offered through oroutside the Exchange could affect QHPpremium rating. Therefore, we areclarifying that a plan offered by a QHPissuer outside an Exchange would bethe same as a QHP offered by that same

QHP issuer through the Exchange, onlyif they are identical with respect to

benefits, provider network, service area,and cost-sharing structure, and that, incontrast to our statement in theExchange Establishment rule, only plansthat are the same as a QHP offeredthrough an Exchange must have thesame premium as the QHP offered

through the Exchange, pursuant to 45CFR 156.255(b). We also note that thisdefinition of what constitutes the sameQHP defines identical plan offerings

based only on the criteria set forthabove. Accordingly, plan offerings thatdiffer only in other respects (forexample, plans appeals processes orplan name) would not be considereddifferent plans for purposes of therequirement that the same premiums becharged both through and outside theExchange.

Comment:A few commentersexpressed concern that issuers would

have already submitted their QHPs toExchanges for approval for 2014 withoutthe benefit of knowing how to alignplans offered outside the Exchangeswith QHPs offered through theExchanges. They asserted that issuerswere relying on a substantially thesame standard when they filed theirrates and designed their plan offeringsfor the 2014 benefit year, and thatimplementation of the proposeddefinition in the 2014 benefit year couldhave a destabilizing effect on themarket. Although some commentersrecommended that HHS adopt asubstantially the same standard for

QHPs offered outside the Exchanges forthe duration of the temporary riskcorridors program, others believed thata one-year transition period wouldprovide issuers sufficient time todevelop 2015 benefit year offerings thatwould be eligible for risk corridors.Most commenters did not attempt toclarify how they would decide whichplans were substantially the same asa QHP; however, one commentersuggested that any plan offered outsidethe Exchange that could qualify as aQHP be considered substantially thesame as a QHP.

Response:In Part B(1)(a) of this finalrule, we are revising the risk corridorsregulations at Part 153 to set forthstandards for plans offered outside of anExchange that are substantially thesame as a QHP and that will be subjectto the risk corridors program. We

believe that the regulation text wecodify in this rule reflects the standardset forth in the Premium StabilizationRule, provides flexibility for plans thatwere relying on an undefinedsubstantially the same standard priorto the 2014 rate filing deadline, and also



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helps to ensure the integrity of the riskcorridors program so that it is clear,prior to the end of 2014 when data forthe risk corridors calculation becomeavailable, which off-Exchange plans aresubject to risk corridors, and which off-Exchange plans are not. We note that weintend to issue guidance on theoperational aspects of this standard,

including how HHS and issuers willidentify plans submissions (includingthose submitted for the 2014 benefityear) that are substantially the sameas a QHP offered through an Exchangefor the purposes of determining whetherthe plan will participate in the riskcorridors program.

Comment:In the proposed rule, weindicated our intention to clarify that, inorder to be the same plan as a QHP, theoff-Exchange plan must be offered bythe same issuer that offers a QHP insideof an Exchange. Two commenters statedthat requiring plans offered through the

Exchange and plans offered outside ofthe Exchange to be offered by the sameissuer could present significantoperational challenges for issuers thatorganize their corporate structures sothat Exchange offerings are provided byone entity and offerings outside of anExchange are provided by another. Oneof the commenters was also concernedthat the requirement could restrict therange of products that would beavailable outside of an Exchange, andrecommended that we revise ourproposed policy to clarify that an off-Exchange QHP would be subject to therisk corridors program if it met the

criteria in our proposed policy and wasoffered on an Exchange by the sameissuer group, as defined at 45 CFR156.20, instead of the same issuer.

Response:While we recognize thatthe structure of some organizations mayresult in Exchange offerings andofferings outside of an Exchange that areoffered by different issuers within thesame issuer group, we believe thatexpanding this definition beyond theissuer level is inconsistent with howpricing is developed pursuant to thesingle risk pool provision at 45 CFR156.80, which applies at the issuer level

to all non-grandfathered plans in theindividual and small group marketswithin a State. Expanding the riskcorridors program to plans that are thesame or substantially the same as QHPsoffered outside the Exchange by adifferent issuer within an issuer groupcould result in a risk corridorscalculation that must take into accounttotal claims costs and total premiumsfor the entire risk pool for all therelevant issuers in the issuer group. We

believe the risk corridors programproperly considers claims and

premiums only for the risk poolapplicable to the single issuer.

Comment:One commenter supportedour proposal requiring a plan offeredoutside of an Exchange to have anidentical provider network and servicearea as a QHP offered through anExchange in order to be the same planas the QHP offered through the

Exchange. Another commenter opposedthese requirements, arguing that theproposed standard should only includeEHB, actuarial value (AV), and cost-sharing structure. The commenter

believed that requiring identicalnetworks and service areas was toorestrictive because it would not allowfor differences in network and serviceareas that result from licensurerestrictions.

Response:As stated above, a plan isthe same as a QHP only if it is identicalwith respect to benefits, providernetwork, service area, and cost-sharing

structure to a QHP offered by the sameissuer through the Exchange. We believethat certification of a plans service areais an integral part of the QHPcertification process, and so believe it isintegral to what it means to be the sameQHP. We also believe it important thatExchange enrollees enjoy access to thesame service areas (and networks) asenrollees in the same plans whenoffered outside the Exchanges.


We are finalizing the definition ofExchange as it was proposed. We arenot codifying changes to the definitionof qualified health plan in thissection. For purposes of clarity, infinalizing this policy, we will use theterm issuer application assisters inplace of issuer customer servicerepresentatives to more clearlyarticulate the role of such individualsand we are finalizing a modifieddefinition of issuer applicationassisters to reflect in more detail therole of issuer application assisters asdefined in 155.415.

2. Subpart BGeneral StandardsRelated to the Establishment of an

Exchangea. Establishment of a State Exchange,Approval of a State Exchange,( 155.100, 155.105, and 155.140)

Consistent with our proposedamendment to the definition ofExchange in 155.20, we proposed toamend 155.100 to permit a State toestablish and operate only a State-basedSHOP while the individual marketExchange is established and operated asan FFE. We proposed that pursuant tothe proposed amendment, States would

not be permitted to establish andoperate only the individual marketExchange.

We proposed in 155.100(a)(3) that aState that has timely applied forcertification of an Exchange for 2014,and that has received conditionalapproval for its application, would beable to modify its Exchange Blueprint

pursuant to 45 CFR 155.105(e) toexclude the operation of the individualmarket Exchange functions for 2014. Weexplained in the preamble to theproposed rule that such States have

been preparing to establish and operateboth the individual market and SHOPExchanges for 2014, and would be in aposition to establish and operate just theSHOP in 2014. We sought comment onthis approach.

We proposed to amend 155.105 sothat the Exchange approval criteria setforth therein would be consistent withthe Exchange operational modelsproposed in 155.20, 155.100, and155.200, and to permit HHS to operateonly a FFE that will make QHPsavailable to qualified individuals whena State has elected to operate only anExchange providing for theestablishment of a SHOP pursuant toproposed 155.100(a)(2).

We also proposed an amendment to 155.105(f) to clarify that the regulatoryprovisions that will apply in an FFEinclude the nondiscriminationrequirements of 155.120(c). Section155.120(c), as written, applies to allExchanges, and its previous omissionfrom the list of provisions referenced in

155.105(f) was inadvertent.We also proposed to amend 155.140

to clarify how a subsidiary or regionalExchange may operate in light of theproposed amendments to permit a Stateto establish and operate an Exchangeonly providing for the establishment ofa SHOP.

Comment:We received severalgeneral comments in support ofpermitting a State to elect to establishand operate only a SHOP. Somecommenters supported the additionalflexibility provided for States toestablish and operate only a SHOP in

2014 and recommended expanding theprovision further to allow other States,such as States that timely submitted acomplete Blueprint, to establish andoperate only a SHOP in 2014. Onecommenter supported allowing anyState that believes it would be ready toestablish and operate only a SHOP to doso in 2014. Other commenters opposedallowing a State to establish and operateonly a SHOP, noting potential adverseconsequences to consumers due to aloss of efficiencies and coordination byhaving different entities administering



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the individual market Exchange and theSHOP. One commenter supported theproposed policy of not allowing a Stateto establish and run only an individualmarket Exchange and the while theSHOP is established and operated as anFFSHOP. This commenter noted thatin this scenario, there would be lessleverage for attracting issuer

participation in the SHOP and theSHOP would suffer diminishedoperational efficiencies if it is notaccompanying an individual marketExchange.

Response:We agree with thecommenters who suggested that weshould extend the opportunity toestablish and operate only a SHOP in2014 to more than just those States thathave a conditionally approved ExchangeBlueprint in place for 2014. As weexplained in the preamble to theproposed rule, our intent in limiting theoption in 2014 was to make sure that

only those States that would be in aposition to establish and operate just theSHOP in 2014 do so. We are convinced

by the commenters who suggested thatthese States might include more thanjust those States with a conditionallyapproved Exchange Blueprint.Accordingly, we have modified theproposed language to extend the optionof establishing and operating only aSHOP Exchange for 2014 to any Statethat provides reasonable assurances,through the Exchange Blueprintsubmission and/or amendment process,to CMS that it will be in a position toestablish and operate just a SHOP in

2014.Comment:A number of commenters

expressed support for our clarificationin 155.105(f) that the regulatoryprovisions that apply in FFEs includethe nondiscrimination requirements of 155.120(c). Commenters recommendedincluding in 155.105(f) a reference tosection 1557 of the Affordable Care Act,and one commenter asked CMS toidentify prohibited practices undersection 1557 of the Affordable Care Act.Commenters also requested furtherclarification on the application of theseantidiscrimination protections to

consumer assistance entities receivingfunds associated with implementationand operation of the Federally-facilitated Exchanges.

Response:We are finalizing thisclarification as proposed. We note that 155.120(c)(1) already specifies that theState and the Exchange, which wouldinclude FFEs and State PartnershipExchanges through this amendment to155.105(f), must comply with applicablenondiscrimination statutes. Section1557 of the Affordable Care Act appliesto all Exchanges as entities created

under Title I of the Affordable Care Act.Therefore, we do not think it isnecessary to refer to any specificnondiscrimination statutes in thisregulation text. Further clarification ofprohibited practices under section 1557of the Affordable Care Act is beyond thescope of this rulemaking. For a moredetailed discussion of the application of 155.120(c) to Exchange consumerassistance entities, please see the recentfinal rule, Patient Protection andAffordable Care Act; ExchangeFunctions: Standards for Navigators andNon-Navigator Assistance Personnel;Consumer Assistance Tools andPrograms of an Exchange and CertifiedApplication Counselors, 78 FR 42824,4282942830, 42844 (July 17, 2013).

Comment:One commenter soughtclarification in proposed 155.140 onthe provision relating to the geographicarea covered by subsidiary SHOPs in a

State operating only a SHOP. Thecommenter wanted to ensure that if aState establishes subsidiary SHOPs thatit must provide access to a SHOP in allgeographic areas of the State.

Response:We clarify here that theproposed provision on subsidiarySHOPs in a State operating only a SHOPrequires the combined geographic areaof all subsidiary SHOPs established bythe State to encompass all geographicareas of the State. In suchcircumstances, HHS would establish anindividual market Exchange that covers

all geographic areas of the State. Thus,the combined geographic areas of anysubsidiary SHOPs would also berequired to encompass all geographicareas of the State.


We are finalizing these provisions asfollows. We are finalizing 155.100(a)(3) at 155.100(b) andredesignating 155.100(b) as 155.100(c) to ensure parallel structurein the regulatory text. We are modifying 155.100(b) to expand the opportunityto operate only a SHOP in 2014 to States

that provide reasonable assurances,through the Exchange Blueprintsubmission and/or amendment process,to CMS that they are prepared toestablish and operate only a SHOP in2014. We are also modifying 155.105(b)(1) and (f) to include cross-references to the Exchange minimumfunctions concerning eligibility appealsand exemptions from the sharedresponsibility payment that are beingfinalized at the time of this rule.

3. Subpart CGeneral Functions of theExchange

a. Functions of an Exchange ( 155.200)

Consistent with the amendmentsdescribed above to 155.20, 155.100,155.105, and 155.140, which permit aState to operate only an Exchangeproviding for the establishment of a

SHOP, we proposed amending 155.200so that a State operating an Exchangewhich provides only for theestablishment and operation of a SHOPneed perform only the minimumfunctions described in subpart H and allapplicable provisions of other subpartsreferenced therein. Under suchcircumstances, the Exchange operated

by HHS need not perform the minimumfunctions related to the establishment ofa SHOP.

Although we received no directcomment on this proposal, we receivedseveral general comments and

comments to 155.100 in support ofpermitting a State to elect to establishjust a SHOP.


We are finalizing the provision, witha modification to include cross-references to the Exchange minimumfunctions concerning eligibility appealsand exemptions from the sharedresponsibility payment that are beingfinalized at the time of this rule.

b. Ability of States To Permit Agentsand Brokers To Assist QualifiedIndividuals, Qualified Employers, or

Qualified Employees Enrolling in QHPs( 155.220)

We proposed amending 155.220(c)(3)(i), which currentlyrequires that a Web-broker meet allstandards for disclosure and display ofQHP information contained in 155.205(b)(1) and 155.205(c). Wesought comment on whether we shouldinstead remove 155.220(c)(3)(ii).

We proposed adding a new paragraph(c)(3)(vii) that would require adisclaimer be used by Web-brokers ontheir Web sites.

We proposed to add a new

155.220(c)(4) that would require anyWeb-broker who makes an Internet Website available to other agents and brokersto enroll consumers in QHPs throughthe FFE to require as a condition ofagreement or contract that the agent or

broker accessing and using the InternetWeb site complies with 155.220(c) and(d). We also proposed that a Web-brokerthat makes an Internet Web siteavailable for this purpose would berequired to provide to HHS a list ofagents and brokers who are under sucharrangements, and that the Web-broker



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be required to ensure that the agent orbroker accessing or using the InternetWeb site would be required to complywith the policies that the Web-brokerwould be required to develop underproposed 155.220(d)(4).

We further proposed adding a new 155.220(d)(4) requiring agents and

brokers assisting or enrolling consumers

in the individual market of an FFE toestablish policies and proceduresimplementing the privacy and securitystandards pursuant to 155.220(d)(3).We proposed such standards to includetraining employees, representatives,contractors, and agents with regard tothose policies and procedures on aperiodic basis, and to ensure suchindividuals comply with those policiesand procedures. We sought comment onthe appropriate frequency of retrainingrequirements.

We also proposed adding a new 155.220(f), which would require

agents and brokers who wish toterminate their agreement with an FFEto send to HHS a 30-day advancewritten notice of the intent to terminate,and invited comment on whether weshould additionally require agents and

brokers to also directly notify theirclients of the termination.

We proposed adding a new 155.220(g), which would set forthstandards under which HHS mayterminate an agents or brokersagreement with an FFE for cause. In 155.220(g)(1), we proposed that HHSmay pursue termination with notice of

an agents or brokers agreement with anFFE executed pursuant to 155.220(d)if, in HHSs determination, a specificfinding of noncompliance or pattern ofnoncompliance is sufficiently severe. In 155.220(g)(2), we set forth theviolations that could lead to atermination for cause. We explainedthat we were also consideringimplementing informal procedures toresolve certain compliance issues thatwould take place prior to HHSstermination of an agents or brokersagreement for cause. Notwithstandingthe fact that we were also contemplating

an informal resolution procedure, wealso proposed that upon identificationof a sufficiently severe violation, HHSwould formally notify the agent or

broker of the specific finding ofnoncompliance or pattern ofnoncompliance, as proposed in 155.220(g)(3). The agent or brokerwould then have a period of 30 daysfrom the date of the notice to correct thenoncompliance to HHSs satisfaction,through good faith efforts. If after 30days, the noncompliance is notappropriately addressed, we proposed

HHS may terminate the agreement forcause.

We proposed adding a new 155.220(h) to provide an agent or

broker whose agreement with the FFEwas terminated for cause with a processto request reconsideration of thetermination. We proposed that the agentor broker must submit a request for

reconsideration to the HHSreconsideration entity within 30calendar days of the date of the writtennotice from HHS, after which the HHSreconsideration entity would providethe agent or broker with a written noticeof a final reconsideration decisionwithin 30 calendar days of the date therequest was received.

Comment:Many commenters offeredfeedback on the proposed amendment to 155.220(c)(3)(i). Some commentersexpressed support for the amendmentwhile several other commentersopposed any changes to the requirement

for Web-brokers to display QHPinformation. In expressing theiropposition to the amendment of 155.220(c)(3)(i), some commentersoffered recommendations in the eventwe finalized the amendment. Somecommenters suggested that a Web-

broker prominently display astandardized disclaimer provided byHHS if the Web-broker is not able todisplay the required QHP informationfor a given plan, and that the Web-

broker provide a Web link to theExchange Web site.

Response:We did not accept the

comments which suggested that we notfinalize the proposed amendment to 155.220(c)(3)(i) because there may becircumstances beyond the control ofWeb-brokers that will preclude themfrom displaying all of the informationrequired under 155.205. For instance,Web-brokers currently obtain plan datadirectly from issuers, and generally onlyobtain data from issuers if they havecontractual arrangements and/orappointments to sell the issuers plans.Thus Web-brokers may be restrictedfrom displaying all plan data, includingpremium and rate information, if theydo not have agreements or appointmentswith some issuers. Similarly, theExchange may be precluded by tradesecret and confidentialityconsiderations from providing all Web-

brokers with certain data elementsnecessary to meet the 155.205(b)(1)standards. As a result, we continue to

believe that the amendment to 155.220(c)(3)(i) is necessary. In suchcircumstances, it is important that Web-

brokers ensure applicants are aware thatnot all QHP information may beavailable on their Web sites by

displaying required disclaimers under 155.220(c)(3)(i) and (vii).

Comment:The proposed amendmentto 155.220(c)(3)(i) also added to thestandards for Web-brokers Web sites byrequiring a link to the Exchange Website. In addition, proposed 155.220(c)(3)(vii) required a disclaimerthat included acknowledgement that the

Web-brokers Web site might not displayall QHP data available on the ExchangeWeb site. A number of commentersproposed combining these twoconcepts, recommending that HHSprovide a standardized disclaimer and alink to the Exchange Web site to theextent that not all QHP informationrequired under 155.205(b)(1) isdisplayed on a Web-brokers Web site.Conversely, other commenters suggestedthat this disclaimer should be separatefrom the disclaimer proposed in 155.220(c)(3)(vii) informing theconsumer that the Web-brokers Web

site is not the Exchange Web site.Commenters suggested that astandardized disclaimer would providea uniform and consistent way to notifythe consumer regarding how to obtainthe available QHP information in theevent that such information is notavailable on the Web-brokers Web site.

Response:We found these commentsregarding the need for a standardizeddisclaimer and Web-link to bepersuasive so applicants are aware ofthe incompleteness of the informationavailable on these Web sites. As a result,we have modified the amendment to

155.220(c)(3)(i) by requiring Web-brokers to prominently display astandardized disclaimer and to providea Web link to the Exchange Web site.We will make available a HHS-approvedstandardized disclaimer that Web-

brokers can use to meet thisrequirement, stating that informationrequired under 155.205(b)(1) for theQHP is available on the Exchange Website.

We considered, but did not accept,other recommendations provided bycommenters if the amendment were to

be retained, including consideration ofan inline frame or I-frame approach topresenting QHP information, requiringthat Web-brokers refer consumers toNavigators and certified applicationcounselors if unable to display all QHPinformation, and to have HHS release allplan information for a particular QHP toWeb-brokers if the issuer of the QHPrequests that HHS do so. We recognizethat each of these suggestions may helpprovide additional information toconsumers about their QHP options, butmay be difficult to implement prior tothe start of open enrollment.



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6Role of Agents, Brokers, and Web-brokers inHealth Insurance Marketplaces (May 1, 2013),available at: http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdf.

Comment:Many commenters offeredrecommendations about whether toremove 155.220(c)(3)(ii), whichrequires Web-brokers to provideconsumers with the ability to view allQHPs offered through the Exchange, asan alternative to amending 155.220(c)(3)(i). Several commentersexpressed support for retaining

155.220(c)(3)(ii) as a key consumerprotection, while other commentersrecommended removing therequirement in lieu of amending 155.220(c)(3)(i).

Response:We agree with commentersthat the requirement for Web-brokers toprovide consumers with the ability toview all QHPs offered through theExchange is an important consumerprotection, even if the Web-broker is notable to display all plan details for eachQHP. We are retaining 155.220(c)(3)(ii)without modification.

Comment:A number of commentersexpressed support for proposed 155.220(c)(3)(vii) so consumers would

be informed that the Web-brokers Website is not the Exchange Web site, andthat the Web-broker has agreed tocomply with applicable regulations as acondition of their agreements with HHS.Some commenters recommended thatHHS provide a standardized disclaimerthat could be used by all Web-brokers tomeet this requirement, to ensureuniform and consistent communicationto consumers across all Web-broker Websites. Commenters recommendedspecific elements that should beincluded in the disclaimer. Other

commenters suggested that Web-brokersbe required to display the disclaimer inspecific locations or on every page ofthe Web-brokers Web site. Onecommenter recommended that thedisclaimer not reference the Web-

brokers agreement with HHS, but ratherthe standards to which the Web-brokermust comply. To provide for greaterconsumer protection, severalcommenters also suggested that HHSstandardize the notification byproviding a standardized disclaimer,which would provide for uniform andconsistent communication to consumers

across all Web-broker Web sites.Response:The proposed 155.220(c)(3)(vii) added to thestandards for Web-brokers Web sites inFFEs by requiring prominent display oflanguage notifying consumers that theagents or brokers Web site is not theFFE Web site, that the agent or brokersWeb site might not display all QHP dataavailable on the FFE Web site, that theagent or broker has entered into anagreement with HHS pursuant toparagraph (d) of this section, and thatthe agent or broker agrees to conform to

the standards specified in paragraphs (c)and (d) of this section. While theproposed 155.220(c)(3)(vii) specifiedthe elements to be included in thenotification, it would have permittedWeb-brokers to independently developtheir own notifications.

To provide for greater consumerprotection, we agree with commenters

that a standardized disclaimer should beused for the FFEs, and we havemodified the final 155.220(c)(3)(vii) torequire Web-brokers to use astandardized disclaimer provided byHHS, which would distinguish the Web-

brokers Web site from the FFE Web site.The standardized disclaimer wouldinclude the following notifications: (1)That the Web-brokers Internet Web siteis not an FFE Web site, (2) that the Web-

brokers Web site may not contain allQHP data available on the FFE Web site,(3) that the Web-broker is required toconform to the standards specified in

paragraphs (c) and (d) of 155.220, and(4) the Web-broker is subject to privacyand security standards established byHHS pursuant to 155.260.

We also recognize that commentersprovided other suggestions for topics toinclude in the disclaimer, includinginformation about whether the Web-

brokers Web site contains allinformation for QHPs in a given State,or information about how consumerscan contact HHS if the Web-broker doesnot comply with the requirements fordisplay of QHPs. Although we are notadopting these suggestions at this time,HHS may adjust the disclaimer in the

future to meet the needs of the FFE andits consumers.

We believe that requiring thedisclaimer to be posted on every Webpage of a Web-brokers Web site may berepetitive and burdensome. However,we agree that the disclaimer should beprominently displayed, and that displayon more than a single Web page may bewarranted so that the consumer may befully informed. We plan to address howthe disclaimer should be displayed infuture guidance.

Comment:Several commentersrecommended that we clarify theprocess that Web-brokers must followwhen a consumer (or a member of thatconsumers family) using a Web-brokersWeb site is determined or assessed to beeligible for Medicaid or CHIP.

Response:As indicated in CMSsguidance titled Role of Agents,Brokers, and Web-brokers in HealthInsurance Marketplaces, 6 we expect

agents and brokers, including Web-brokers, to work with all consumers,including individuals who areultimately determined to be eligible forMedicaid or CHIP. In such cases, weexpect that agents, brokers and Web-

brokers will refer the individual to theappropriate State agency for enrollmentin health coverage.

Comment:Some commentersrecommended that we apply 155.220(c)(3)(vii) to State Exchanges.Other commenters requested that weclarify that State Exchanges are notrequired to contract with Web-brokers,and that they may set more stringentstandards than the FFE.

Response:While we did not acceptthe comment to apply 155.220(c)(3)(vii) to State Exchanges,we note that State Exchanges havediscretion to apply a similar or morestringent requirements.

Comment:We received substantialfeedback on proposed 155.220(c)(4).Many commenters expressed supportfor allowing arrangements under whichagents and brokers would be able toenroll qualified individuals in an FFEthrough a Web-brokers Internet Website, even if the agent or broker were notan employee or subcontractor of theWeb-broker. Such commenters notedthat requiring independent agents and

brokers to subcontract with Web-brokersis not standard in the industry. Somecommenters recommended that weclarify the types of arrangements thatwould be permitted between Web-

brokers and other agents and brokers.

Other commenters recommendedprohibiting agents and brokers fromaccessing Web-brokers Web sitesaltogether, unless they were anemployee or subcontractor of the Web-

broker. Such commenters believed thatsuch arrangements bring additionalcomplexity, noting that Web-brokersWeb sites may not display all requiredQHP information, and were concernedthat these agents and brokers might not

be subject to the same level of oversightas other agents and brokers in the FFE,since they are not party to HHSagreement with the Web-broker.

Some commenters responded to ourconcerns regarding oversight of otheragents and brokers that access the Web-

brokers Web sites, objecting to theprovision requiring Web-brokers toensure that agents and brokers accessingtheir Web sites comply with 155.220(c) and (d). These commentersnoted that it could result in a Web-

broker and all agents and brokersaccessing its Web site to have theirconnection to the Federally-facilitatedExchange terminated based uponviolations by a single agent or broker.

http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdfhttp://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/agent-broker-5-1-2013.pdf


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Other commenters provided specificrecommendations for Web-brokerrequirements if agents and brokers arepermitted to use Web-brokers Web sitesto enroll consumers in QHPs throughthe Exchange, including ensuring agentsand brokers provide unique identifierssuch as FFE User ID numbers orNational Producer Numbers (NPNs), and

other documentation to the Web-brokerproving they are trained and registeredto sell products on the Exchange, andhave entered into agreements with CMSto abide by the terms of 155.220.Commenters stated there should be away for CMS to identify and notify Web-

brokers providing access to other agentsand brokers, if the other agent or brokercommits a material breach of theiragreements with HHS, so that the Web-

broker may limit the agents or brokersaccess as needed.

Response:While we recognize thatagents and brokers may be able to reach

and enroll significant number ofconsumers through Web-brokers Websites, we are also concerned aboutensuring that such agents and brokerscomply with the standards in 155.220(c) and (d). We note that agentsor brokers who carry out the functionsauthorized under 155.220(a)(2) and (3)are required to comply with thestandards in 155.220(c) and (d),regardless of whether they use a Web-

brokers Web site, and that theyultimately remain responsible for theirown compliance. Many agents and

brokers currently use Web sites andother systems technology provided by

Web-brokers to help significant numbersof consumers compare and purchaseindividual market coverage acrossmultiple issuers. If Web-brokers are ableto provide a way for other agents and

brokers to leverage their Web sites andconnection to HHS when the Exchanges

begin operating, these agents andbrokers would be able to reachadditional individuals currently withoutcoverage. As a result, we did not acceptcomments that agents and brokers beprohibited from entering intoarrangements that would enable them touse a Web-brokers Web site to assist a

consumer in enrolling in a QHP throughthe Exchange. While we recognize thatsome Web-brokers might be willing to

be responsible for overseeing the actionsof other agents and brokers who accesstheir Web sites, we also did not want tolimit the permissible arrangements tothose in which the agent and broker canonly use the Web-brokers Web site asa subcontractor so as to maximizeopportunity for agent and brokerparticipation.

We also recognize the concerns ofWeb-brokers that they, along with other

agents and brokers who access theirWeb sites, might be held accountable forthe non-compliance of a single agent or

broker. However, we also want to ensurethat HHS can take action against thesingle non-compliant agent or broker ifnecessary, and that the Web-broker andHHS can terminate that agents or

brokers ability to transact eligibility and

enrollment information through theWeb-brokers Web site. We also want toensure that HHS has a way to containprivacy and security incidents and

breaches, should they be caused byagents and brokers accessing the Web-

brokers Web sites. As a result, we havemodified the proposed 155.220(c)(4)so that the Web-broker is no longer theentity that must ensure that agents and

brokers accessing its Web site complywith the standards in 155.220(c) and(d). We accept commentersrecommendations that the Web-brokermust verify that any other agent or

broker accessing its Web site is licensedby the applicable State(s), hascompleted training, has signed allrequired agreements with the FFE, andis registered with the FFE pursuant to 155.220(d). The Web-broker mustcooperate with HHS in takingcompliance actions against a non-compliant agent or broker, includingfacilitating a shut-down of anyconnection to HHS systems whileprivacy and security incidents and

breaches are investigated, ensuringcompliance with applicable standards

by all agents and brokers accessing its

Web site, and performing necessaryactions to assist HHS with overseeingthe actions of agents and brokers usingits Web site. In response to thecomments, we believe that requiring theWeb-broker to display its name andidentifier on the Web site when it ismade available to another agent or

broker, will increase transparencyregarding the relationships between theother agents and brokers and the Web-

broker, and facilitate CMS and/or Stateenforcement actions against an agent or

broker accessing its Web site, in theevent of a breach or violation.

In response to all of these comments,we are modifying the final 155.220(c)(4) to clarify therequirements that apply to a Web-brokerthat permits other agents or brokers toaccess its Web site pursuant to acontractual arrangement. In response tocomments recommending clarificationof the types of permissible arrangements

between Web-brokers and other agentsand brokers under this provision, weclarify that the provision applies tocontractual or other arrangements inwhich an agent or broker accesses the

Web-brokers Web site to enrollconsumers through the FFE. We havealso added language to the final ruleclarifying that in such arrangements, theagent or broker is the agent of record onthe enrollment. As finalized, 155.220(c)(4) would allow HHS toidentify Web-brokers Web sites andtake appropriate action if the agent or

broker who uses the Web-brokers Website violates the terms of the agents or

brokers agreement with HHS. Section155.220(c)(4)(i) applies the followingrequirements on Web-brokers that allowother agents and brokers to access theirWeb sites: (1) The Web-broker mustprovide the FFE with a list of agents or

brokers who enter into such anarrangement if requested by HHS; (2)the Web-broker must verify that theagent or broker using the Web site islicensed in the FFEs State, hascompleted training and registration, andhas signed all applicable agreements

with the Federally-facilitated Exchange;(3) the Web-broker must ensure that itsname and any identifier required byHHS, such as the Web-brokers NationalProducer Number (NPN), appears on theInternet Web site and written materialscontaining QHP information that can beprinted from the Web site, even if theagent or broker that is accessing theInternet Web site is able to customizethe appearance of the Web site; (4)terminate the other agent or brokersaccess to its Web site if HHS determinesthat the agent or broker is in violationof the provisions of 155.220 and anyrequired agreement between HHS and

the agent or broker is terminated; and(5) report to HHS and applicable StateDepartment of Insurance any potentialmaterial breach of the standards in 155.220(c) and (d) by the agent or

broker accessing the Internet Web site,should the Web-broker become aware ofany such potential breach.

This approach would ensure thatagents and brokers that access Web-

brokers Web sites must meet the sameregistration and training requirementsand be subject to the same oversightrequirements as other agents and

brokers in the FFE. This approach

would also ensure that agents andbrokers whose agreements with HHS areterminated are no longer able to accessHHS systems through a Web-brokersconnection. In addition, thisrequirement would also help providetransparency and traceability back to theWeb-broker making the Web siteavailable, if HHS or a State departmentof insurance needed to take action withrespect to an agent or broker using aWeb-brokers Web site.

Section 155.220(c)(4)(ii) clarifies thatHHS retains the right to temporarily



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suspend the Web-brokers connection toHHS systems in the event of a privacyand security incident or breachinvolving a Web-broker that makes itsWeb site available to third party agentsand brokers under previously describedarrangements. In the case of an incidentor breach, HHS must follow its incidentresponse plan to address privacy and

security incidents and breaches. Inadhering to its incident response plan,HHS may need to temporarily suspenda Web-brokers connection to HHSsystems to contain further damage fromthe incident or breach if the incident or

breach is related to the Web-broker andits connection to HHS systems. Thetemporary suspension would provideHHS with the ability to conduct aninvestigation and work with the Web-

broker to remedy the breach or incident.Comment:Several commenters

recommended that Web-brokers not bepermitted to use data collected for

Exchange enrollment purposes for anyother purpose.

Response:Data collected for Exchangeapplication purposes may be used onlyin accordance with section 1411(g) ofthe Affordable Care Act. Consistent withsection 1411(g), in the agreements thatHHS will enter into with Web-brokers,HHS will permit Web-brokers to usepersonally identifiable information (PII)collected through the Exchangeapplication and enrollment process onlyfor certain functions related to theefficient operation of the Exchange,such as assisting with applications for

QHP eligibility, supporting QHPselection and enrollment by assistingwith plan selection and plancomparisons, and assisting withapplications for the receipt of APTCs orCSRs, and selecting an APTC amount.

Comment:Several commentersexpressed support for proposed 155.220(d)(4), which proposedrequiring agents and brokersparticipating in the FFE individualmarket to implement policies to traintheir workforce in privacy and securitystandards pursuant to 155.220(d)(3).Some commenters further

recommended that such training occuron an annual basis, at a minimum. Onecommenter also recommended that HHSclarify that agents and brokers couldonly use PII accessed from individualsduring the QHP eligibility andenrollment process for FFE-relatedfunctions that agent or broker isauthorized to carry out under the termsof its agreement with HHS, and severalothers stressed that agents and brokersshould be required to destroy any PIIobtained during the eligibility andenrollment process after the termination

of an agent or brokers relationship withan FFE.

Response:We believe it is critical toensure that agents and brokersimplement appropriate safeguards andprocedures, including privacy andsecurity training to protect the PII ofindividuals whom they assist withapplications for Exchange coverage,

advance payments of the premium taxcredit, and cost sharing reductions, andwith QHP enrollment through the FFE.We note that 155.260(b) requires non-Exchange entities, including agents and

brokers, to abide by the privacy andsecurity policies adopted by the FFE asa condition of contract or agreementwith the FFE. Because obligationsregarding compliance with privacy andsecurity standards will be imposed onagents and brokers through agreementsexecuted pursuant to 155.260(b), weare not finalizing 155.220(d)(4), oradditional privacy and security

requirements for agents and brokers inthis rule. Instead we clarify here that inthe FFEs, agents and brokers will agreeto comply with the Exchanges privacyand security standards as required by 155.220(d)(3) through separateagreements that the FFE will executewith agents and brokers under 155.260. Such agreements will specifythe authorized functions for whichagents and brokers may use PII, and willset forth the agents or brokers duties toprotect and maintain the privacy andsecurity of PII for such functions,including developing privacy andsecurity training programs for members

of their workforces who access PII whilecarrying out such authorized functions.The agreements will also prohibit agentsand brokers from using PII accessedthrough the Exchange application andenrollment process for any purposeother than the specific functionsauthorized by the agreements.

HHS seeks to minimize burdensomeduplication of existing laws and anyExchange-specific requirements andstandards for protecting PII pursuant tosection 1411(g) and 155.260. Werecognize that agents and brokers arealso required to adhere to other Federal

laws safeguarding certain kinds ofinformation, such as HIPAA and theGramm-Leach-Bliley Act (GLBA), inaddition to any applicable State laws,and may leverage existing complianceinfrastructures as appropriate toimplement Exchange privacy andsecurity requirements to protect PII.

Comment:We received broad supportfrom commenters for proposed 155.220(f), which provided for a 30-day advance written notice oftermination from agents and brokers toHHS. A few commenters stressed it

would be appropriate for all agents orbrokers that receive a 30-day advancednotice of termination to be immediatelysuspended from assisting individuals toenroll in a QHP offered through the FFEand/or the ability to securely exchangeinformation with HHS, at leasttemporarily. In response to our requestfor comments, commenters expressed

support for a requirement that agentsand brokers notify clients of suchtermination. Commenters recommendedthat agents and brokers should continueto assist existing clients withcompletion of QHP applications and/orenrollment until the agents or brokersintended date of termination, and toinform clients that additional assistanceis available through the FFE.

Response:We agree with commentersrecommendations to also require agentsand brokers to notify consumers if theagent or broker plans to terminate itsagreement with an FFE under

155.220(f). Further, we agree thatagents and brokers should continueassisting consumers throughout the pre-termination period, and should informconsumers that they can continue toobtain additional assistance through anFFE. We have modified the final rule toinclude provisions reflecting thesecomments.

Comment:Several commenterssupported proposed 155.220(g) andsuggested that we specify that HHS mayterminate an agents or brokersagreement for violations of specific Statelaws, including patterns of steering orunfair and deceptive trade practices.

Other commenters that expressedsupport for 155.260(g) alsorecommended HHS immediatelysuspend an agents or brokersagreement, if findings of noncompliancewere sufficiently egregious, until thecure period is completed to HHSsatisfaction.

Response:We will look to Stateauthorities to enforce their own Statelaws regulating agents and brokers. Inresponse to the comments regardingimmediate and temporary suspensionsor terminations from the FFE, we

believe the implementation of an

informal resolution procedure prior toterminating an agents or brokersagreement that was discussed in thepreamble and contemplated under thecure period in 155.220(g), addressesthe range of potential responses andrecognizes that nothing would precludeHHS from retaining the right to bypassthese informal procedures. We also notethat HHS retains the ability to terminatean agents or brokers relationship withan FFE for cause, including based ontermination of the separate agreementexecuted pursuant to 155.260(b).



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7The Accredited Standards Committee ischartered by the American National StandardsInstitute. See, http://www.x12.org/.

Comment:Several commenters alsorecommended HHS should be requiredto inform State departments ofinsurance (DOIs) of any administrativeor disciplinary actions taken againstlicensed agents and brokers forviolations of FFE rules under 155.220.One commenter also suggested HHSshould not take any action based on an

FFE violation until the State takesaction.

Response:As we emphasized in thepreamble to the proposed rule, weexpect that States will continue tooversee and regulate agents and brokerswithin their States, both inside andoutside of the Exchange. This applieswhether the Exchange is an FFE,including a State Partnership Exchange,or a State Exchange. To avoidduplication of oversight activitiesrelated to agents and brokers enrollingor assisting consumers through an FFE,HHS will focus its oversight activities

primarily on ensuring that agents andbrokers in an FFE meet the standardsoutlined in 155.220, including therequirements set forth in the agreementsentered into under 155.260(b). Thus,we intend to defer to States in all areaswhere the State DOIs are the primaryregulators of agent and broker conduct,which will entail open communicationand collaboration with State DOIs.


We are finalizing the provisionsproposed in 155.220(c)(3) of theproposed rule as follows: in paragraph(c)(3)(i), we amend the provision to

require the prominent display of astandardized disclaimer provided byHHS stating that QHP informationrequired under 155.205(b)(1) isavailable on the Exchange Web site andproviding Web link to the ExchangeWeb site, for use when not all QHPinformation required under 155.205(b)(1) is displayed on the Web-

brokers Web site. In paragraph(c)(3)(vii), we modify the provision torequire the display of a standardizeddisclaimer provided by HHS, andprovision of a Web link to the ExchangeWeb site. In paragraph (c)(4), we clarify

that the provisions in this paragraph areapplicable to a Web-broker when itpermits other agents and brokers to useits Internet Web site to enrollindividuals in an FFE through a contractor other arrangement, and the agent or

broker accessing the Web site pursuantto the arrangement is listed as the agentof record on the enrollment. We alsorequire that such a Web-broker must: (1)Provide HHS a listing of agents and

brokers entering into such arrangementsif requested by HHS; (2) ensure that theagent or broker is licensed in the State

in which the consumer is selecting theQHP; (3) verify that the agent or brokerhas completed training, registration andhas signed all required agreements withthe FFE; (4) ensure that its name andany identifier required by HHSprominently appears on the InternetWeb site and on written materialscontaining QHP information that can be

printed from the Web site, (5) terminatethe agents or brokers access to its Website if HHS determines that the agent or

broker is in violation of the provisionsof this section and/or HHS terminatesany required agreement with the agentor broker, and (6) report to HHS and theapplicable State DOI any potentialmaterial breach of the standards in 155.220(c) and (d), or the agreemententered into pursuant to 155.260(b), bythe agent or broker accessing theInternet Web site. Furthermore,paragraph (c)(4)(ii) also permits HHS totemporarily suspend the Web-brokers

ability to transact information with HHSin the event of a severe privacy andsecurity incident or breach, for theperiod in which HHS conducts aninvestigation and the incident or breachis remedied.

patient protection and affordable care act; program integrity: exchange, shop, and eligibility...

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