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HHS Finalizes Re-Enrollment and Annual Eligibility Redeterminations Rule for Exchange Participation and Insurance Affordability Programs, Finalizing Most Provisions as Proposed

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On Sept. 2, HHS released a final rule on re-enrollment and annual eligibility redeterminations for health insurance exchanges, simultaneously releasing guidance for issuers on discontinuation and renewal notices.
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The rule and guidance were finalized largely as proposed, with a few modifications. The rule finalizes the proposal to give issuers broad flexibility to re-enroll consumers in their plans, including qualified health plans (QHPs), for 2015, without requiring them to re-select a plan or re-determine their eligibility. While issuers will be required to inform consumers about annual premium changes, if consumers take no action, they will generally remain in the same QHP and receive the same 2014 subsidy, as long as the consumer grants the exchange access to their tax return information. The final rule did make one notable change, stating that if a QHP is no longer offered on the exchange, an issuer can no longer automatically re-enroll a consumer in a plan outside the exchange.

HHS estimates that 95 percent of enrollees, approximately 5.1 million individuals, will be auto-reenrolled, helping ensure that consumers have continuous care. In addition, the redetermination process helps health plans retain their current books of business. However, an Avalere analysis suggests that many of the plans with high enrollment in 2014 will increase their premiums in 2015. As such, consumers who do not proactively re-select a plan could experience avoidable premium increase if their premiums are significantly higher than they were in 2014. Moreover, consumers who were previously enrolled in a second-lowest-cost silver plan in 2014, the “benchmark” plan, could be automatically re-enrolled in that plan for 2015, even if it is no longer the benchmark. Subsidized exchange enrollees who are re-enrolled in a more expensive plan must pay the difference-dollar for dollar-between the benchmark plan premium and their selection.

With open enrollment about two months away, the exchanges and QHP issuers are preparing to notify enrollees about the open enrollment period, whether their plans are being renewed or discontinued, and any expected coverage changes in 2015. For coverage on the individual exchange, issuers must send written notice of renewal before the first day of the next annual open enrollment period (Nov. 15, 2014). For grandfathered coverage in the individual market, and grandfathered and non-grandfathered coverage in the small group market, issuers must provide each plan sponsor or individual, as applicable, written notice of renewal at least 60 calendar days before the date of the renewal of the coverage.

View HHS’ final rule.

View HHS’ guidance.

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