DraftMedicarePolicy CMS-9944-P

HHS Notice of Benefit and Payment Parameters for 2016 (proposed rule)

Proposed CMS/HHS rule setting payment parameters and program provisions for risk adjustment, reinsurance, risk corridors, cost-sharing parameters, FFE user fees, enrollment periods, essential health benefits, QHP standards, and related Exchange requirements affecting issuers, Exchanges, and stakeholders in the individual and small group markets.

Policy Summary

PayerMedicare

PolicyHHS Notice of Benefit and Payment Parameters for 2016 (proposed rule)

Policy CodePolicy CMS-9944-P

Change TypeProposed rule with multiple program and payment parameter revisions

Effective Date

Next Review Date

Key ActionRecalibrate the HHS risk adjustment model using recent MarketScan data and consider applying recalculated factors to prior benefit years.

SourceLink

POLICY UPDATE CHANGES

Proposes that if cumulative risk corridors collections exceed payment requests for 2016, HHS would increase the administrative cost ceiling and profit margin floor by a percentage to distribute excess collections to eligible QHP issuers for 2016.

Proposes an allocation methodology for default per-member-per-month risk adjustment charges: distribute collected funds among compliant plans proportionally to each plan's relative revenue requirement (PLRS*IDF*GCF).

Proposes to set the annual open enrollment period for benefit years beginning on or after 2016 from October 1 through December 15, with coverage effective January 1 following the open enrollment period.

Proposes multiple amendments to special enrollment period effective dates, availability, and qualifying events, including allowing advance reporting of permanent moves and modifying effective dates for birth/adoption/foster placements.

Proposes aligning Exchange termination language with market-wide guaranteed availability and renewability by distinguishing termination of enrollment through the Exchange from termination of coverage altogether.

Proposes changes to hardship exemption processing: allow certain low-income non-dependent individuals and those eligible for IHS/ITU services to claim exemptions on tax returns without Exchange certificate numbers.

Provides the methodology and numerical result for the required contribution percentage for 2016, yielding 8.13 percent.

Clarifies that the transitional adjustment to the risk corridors formula applies only to plans that are transitional plans renewing after January 1, 2014 and excludes early renewal member-months unless the plan becomes transitional upon renewal in 2014.

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

3.5%FFE user fee rate

$27reinsurance contribution

$90,000reinsurance attachment

$250,000reinsurance cap

Oct 1–Dec 15annual open enrollment

8.13%required contribution %

Coverage, Risk Adjustment, Reinsurance, and Enrollment Criteria

inv-07: Model factor table continuation

inv-07: Model factor table continuation — Not applicable — this section provides numeric model factors rather than coverage decisions.

This criteria group contains continuations of the HHS risk adjustment model numeric factor tables (adult, child, and infant models) as presented in the proposed rule preamble. These tables list demographic factors, diagnosis group factors (HCCs), severity levels, and plan metal-tier-specific factor multipliers used to calculate individual enrollee risk scores in the HHS risk adjustment methodology.

The material represented here is informational and numeric in nature and does not impose coverage criteria. It includes: (1) Continuation rows for TABLE 1 — Adult Risk Adjustment Model Factors showing diagnosis groups and corresponding factor multipliers for Platinum, Gold, Silver, Bronze, and Catastrophic metal-levels; (2) Continuation rows for TABLE 3 — Child Risk Adjustment Model Factors with demographic and diagnosis group factor multipliers by metal tier; and (3) Continuation rows for TABLE 4 — Infant Risk Adjustment Model Factors with severity level multipliers by metal tier.

Examples of entries included in the continuation (excerpted) are: Respiratory Arrest; Cardio-Respiratory Failure and Shock; Necrotizing Fasciitis; Bone/Joint/Muscle Infections/Necrosis; Rheumatoid Arthritis and Specified Autoimmune Disorders; Stem Cell/ Bone Marrow Transplant Status; Pathological Fractures; Cystic Fibrosis; Chronic Obstructive Pulmonary Disease; Fibrosis of Lung; Aspiration and Specified Bacterial Pneumonias; and infant severity categories such as Extremely Immature with Severity Levels 1–5 and their numeric factor values.

These numeric tables and continuations are intended to be used by issuers and HHS when implementing the HHS-developed risk adjustment model for the applicable benefit year; the full numeric tables (complete factor listings) are published in the preamble tables and in accompanying agency materials. Where applicable, these factors are blended from separately estimated calibrations over multiple years of MarketScan data and are applied as additive components (with demographic and interaction terms) to compute individual predicted plan liabilities.

Note: No policy coverage decisions or utilization criteria are contained in these table continuations — they are strictly numeric model factor continuations for risk score computation.

Model Factors, Codes, and Financial Parameters

Relevant acronyms and codesmixed

AV	Actuarial value (acronym defined)
MLR	Medical loss ratio (acronym defined)
QHP	Qualified health plan (acronym defined)

Risk adjustment model factorsmixed

HCC	Hierarchical Condition Categories used as diagnosis factors in the HHS risk adjustment model

Adult HCC factor groupsmixed

HCC groups (multiple)

Diagnosis-based HHS HCC factor groups (e.g., septicemia, metastatic cancer, diabetes, malnutrition, transplant status, liver disease, intestinal conditions, infections, autoimmune disorders)

Grouped diagnosis categoriesmixed

Grouped condition names (e.g., Hemophilia; Aplastic Anemia; Respiratory Arrest; Cardio-Respiratory Failure; Heart Transplant; Congestive Heart Failure) with associated numeric factors shown for metal tiers.

HCC factor numeric valuesmixed

No codes listed

Demographic factor values (child)mixed

Age and sex demographic factor multipliers for child model (e.g., Age 2-4 Male Platinum = 0.264)

Diagnosis factor values (child)mixed

Diagnosis factor multipliers for child model (e.g., HIV/AIDS Platinum = 3.508; Metastatic Cancer Platinum = 38.610)

Adult HCC and interaction valuesmixed

Adult model HCC and interaction factor values (multiple entries across benefit levels), including interaction terms such as Severe illness x Opportunistic Infections with specified multipliers.

Diagnosis groups (no codes)mixed

No explicit CPT/HCPCS/ICD-10 codes listed in this excerpt; only diagnosis group names and numeric weights are provided.

Risk Adjustment Factor Valuesmixed

Numeric factor values presented for many clinical condition categories across metal/severity levels (examples shown in Tables 3 and 4).

Infant model HCC factorsmixed

HHS HCCs (infant model)

HHS HCC categories mapped to infant model maturity and severity categories with numeric factor weights (e.g., Extremely Immature Severity Level 5 Platinum = 410.348).

Reinsurance contribution amountsmixed

Uniform reinsurance contribution rates per covered life by year (2014 = $63, 2015 = $44, proposed 2016 = $27) and bifurcated payment splits (examples provided).

Financial parameters (not clinical codes)mixed

Per-capita contribution and payment parameter amounts described for 2016 (annual per capita contribution $27; attachment point $90,000; reinsurance cap $250,000; coinsurance 50%; estimated total collection ~$5.032 billion).

mixed

No codes listed

Coding impactmixed

Not applicable — operational/regulatory changes described; no procedure or billing codes provided in this excerpt.

inv-43: FFE user fee rate — 3.5% of premium

FFE user fee rate (2016)3.5% of premium

ContextProposed Federally-facilitated Exchange (FFE) user fee rate included in the 2016 notice of benefit and payment parameters

ApplicabilityAssessed on premium for QHPs when HHS operates the FFE

inv-44: Risk adjustment user fee calculation inputs — Per-enrollee-per-month fee equals total projected administrative costs divided by expected enrollees in HHS-operated risk adjustment prog...

Operational Requirements and Actions for Issuers and Exchanges

Note

Exchange fees and enforcement

When operating a Federally-facilitated Exchange (FFE), HHS may collect and spend user fees under sections 1321(c)(1) and 1311(d)(5)(A) of the Affordable Care Act and may assess user charges under 31 U.S.C. 9701. OMB Circular A-25 Revised provides Federal policy for such user fees. In addition, HHS may enforce Exchange standards using civil money penalties (CMPs) on the same basis as section 2723(b) of the PHS Act authorizes CMPs. Exchanges may not establish rules that conflict with or prevent application of Secretary-issued regulations.

HHS authority to collect/spend user fees when operating an FFE
User charges permitted under 31 U.S.C. 9701
Exchange enforcement via CMPs per PHS Act §2723(b)
Exchanges barred from creating conflicting rules under §1311(k)

Documentation Required

Use of factors to compute predicted expenditures

The HHS risk adjustment models predict annualized plan liability expenditures using demographic categories and the HHS HCCs. For a given enrollee, the sum of the factors for the enrollee's HCCs equals the total relative predicted expenditures. Factors are regression dollar values for each HCC divided by a weighted average plan liability for the modeling sample and represent predicted relative incremental expenditures. Interaction terms and demographic factors are included. The factors are applied by summing applicable HCC factors and multiplying by any applicable adjustments (for example, cost-sharing reduction adjustments).

Key Term Definitions and Mapping

inv-77: EHB — Essential health benefits (EHB)

EHBEssential health benefits (EHB)

QHPQualified health plan (QHP)

AVActuarial value (AV)

inv-78: QHP — Qualified health plan

QHPQualified health plan

ContextA health plan certified by an Exchange to offer essential health benefits and meet applicable issuer standards

ReferenceAcronyms list in the proposed rule preamble provides definition and usage

Policy Summary

PayerMedicare

PolicyHHS Notice of Benefit and Payment Parameters for 2016 (proposed rule)

Policy CodePolicy CMS-9944-P

Change TypeProposed rule with multiple program and payment parameter revisions

Effective Date

Next Review Date

Key ActionRecalibrate the HHS risk adjustment model using recent MarketScan data and consider applying recalculated factors to prior benefit years.

SourceLink

On This Page

Per-enrollee-per-month fee inputsPer-enrollee-per-month fee = HHS projected total administrative costs ÷ expected enrollees in HHS-operated risk adjustment programs

PurposeFunds HHS operation of State risk adjustment programs when HHS operates on a State's behalf

Cost componentsModel and methodology development, collections, payments, account management, data validation, program integrity, audits, analytics, training, operational support

inv-45: example high-risk threshold value — 46.995 (Hemophilia, Platinum)

Example high-risk factor (adult/child models)46.995 — Hemophilia (Platinum) shown in risk factor table

Source tableTABLE 1 / TABLE 3 risk adjustment model factor listings provide per-metal-tier numeric weights

UsageUsed as a numeric weight in enrollee's summed risk score for payment transfer calculations

inv-46: Observed factor value range — approximately 0.759 to 40.465

Observed adult model factor range (example) Approximately 0.759 to 40.465 (examples shown in adult factor tables)

ImplicationNumeric factors vary substantially by condition and metal tier and feed into risk score sums

ReferenceSee TABLE 1 adult risk adjustment model factors for low and high examples

inv-47: example numeric range — values vary widely (approx. 0.000 to >38.0 depending on condition and level)

Illustrative numeric variabilityValues vary widely across tables (approx. 0.000 to >38.0 and higher depending on condition, age group, severity, and metal level)

ExamplesChild/infant and adult factor tables show many entries from near-zero demographic cells up to >50 for severe diagnoses

Operational noteApply the specific factor entries from the relevant model/table when computing enrollee risk scores

inv-48: Example high-risk threshold (illustrative) — Some diagnosis groups have weights >50 (e.g., Hemophilia ~53.37), indicating substantially higher risk adjustment values in the table exc...

Illustrative very-high weightsSome diagnosis groups have weights >50 (example: Hemophilia ~53.37 in child model table excerpt), indicating substantially higher risk adjustment values

ImplicationHigh-weight diagnoses drive large contributions to enrollee risk scores and affect transfers/payments

SourceTABLE 3 child risk adjustment model factors (Hemophilia entries) and related table continuation

inv-49: Infant model factor ranges — Extremely Immature severity factors range up to 410.348 (Platinum Level 5)

Infant model maximum factorExtremely Immature * Severity Level 5 (Platinum) = 410.348

Range noteInfant model factors span from low double-digits up to several hundreds depending on maturity and severity level

ApplicationInfant risk scores are assigned by mutually exclusive maturity/severity groups and multiplied by CSR adjustment if applicable

inv-50: Induced utilization factor — Values published per plan AV and FPL band (examples: 1.00, 1.07, 1.12, 1.15)

Published induced utilization factorsExamples include 1.00, 1.07, 1.12, 1.15 (varies by plan AV and FPL band)

PurposeAdjusts predicted utilization for recipients of cost-sharing reductions and plan AV variants when calculating risk scores/payments

Table referenceSee TABLE 7 - COST-SHARING REDUCTION ADJUSTMENT for per-AV and FPL band multipliers

inv-51: Contribution deadlines — Form submission by Nov 15; payments by Jan 15 (combined or first) and Nov 15 (second) as applicable

Contribution submission deadline (form)Annual enrollment/count form submission by Nov 15 of the benefit year

Payment deadlinesOption 1: combined payment by Jan 15 of the following year; Option 2: bifurcated payments — first by Jan 15 and second by Nov 15 of the following year

Operational detailHHS will auto-calculate contribution amounts on Pay.gov; entities may pay full contribution or use bifurcated schedule

inv-52: Reinsurance payment parameter thresholds — Attachment point $90,000; Reinsurance cap $250,000; Coinsurance rate 50%

Reinsurance attachment point (2016)$90,000

Reinsurance cap (2016)$250,000

Coinsurance rate (2016)50%

inv-53: allowable-costs threshold for 2016 adjustment — Plans with allowable costs >= 80% of after-tax premium eligible for administrative cost ceiling and profit floor adjustment

Allowable-costs threshold for 2016 adjustmentPlans with allowable costs ≥ 80% of after‑tax premium eligible for administrative cost ceiling and profit floor adjustment

EffectIf cumulative risk corridors collections exceed payment requests for 2016, HHS may increase administrative cost ceiling and profit floor percentage for eligible plans

MLR treatmentMLR calculations will ignore these adjustments to avoid affecting rebate determinations

inv-54: default reenrollment premium growth trigger (examples solicited) — 5% or 10% (examples under consideration)

Default reenrollment premium growth trigger examplesThreshold examples under consideration: 5% or 10% premium increase

PurposeTriggers alternative default re-enrollment into a lower-cost plan if current plan premium increases beyond threshold

Consumer protectionConsumers would retain ability to choose different plans during open enrollment; safeguards under consideration for network/benefit differences

inv-55: Required contribution percentage for 2016 — 8.13%

Required contribution percentage (2016)8.13%

MethodologyCalculated from excess of premium growth (2013–2015) over income growth using NHEA per-capita GDP projections and applying established formula

UseDetermines income-based affordability threshold for hardship exemptions and related exemptions under §155.605

Factors = regression dollar value for each HCC / weighted average plan liability
Sum of enrollee HCC factors = total relative predicted expenditures
Interactions and demographic factors included
Adjustments (e.g., cost-sharing reductions) are multiplied against the sum

Note

Adult risk adjustment model factors (table fragment)

Table 1 lists adult risk adjustment model factors (statistical regression-derived relative expenditure factors) by condition group and metal level. Table 1 includes high-severity conditions with large factor values (examples shown below). These factors are the proposed blended values from 2010–2012 MarketScan calibrations (and may be recalculated when 2013 data are available).

Adult model factors provided by HCC / condition group and metal tier (Platinum/Gold/Silver/Bronze/Catastrophic)
Factors reflect blended 2010–2012 MarketScan model estimates
May be recalculated if 2013 MarketScan data are incorporated

Note

High-severity diagnosis examples

Examples of high-severity diagnosis groups included in the adult and child tables (used to illustrate condition categories with large factor values): Septicemia/sepsis/Systemic Inflammatory Response Syndrome or shock; Peritonitis/Gastrointestinal perforation/Necrotizing enterocolitis; Non-traumatic coma/brain compression/anoxic damage; Respirator dependence/tracheostomy status; Respiratory arrest; Cardio-respiratory failure and shock (including respiratory distress syndromes); Pulmonary embolism and deep vein thrombosis.

Septicemia, Sepsis, Systemic Inflammatory Response Syndrome/Shock
Peritonitis/Gastrointestinal Perforation/Necrotizing Enterocolitis
Non-Traumatic Coma, Brain Compression/Anoxic Damage
Respirator Dependence/Tracheostomy Status
Respiratory Arrest
Cardio-Respiratory Failure and Shock, Including Respiratory Distress Syndromes
Pulmonary Embolism and Deep Vein Thrombosis

Note

Child risk factor table entries

Table 3 provides child risk adjustment model factors by condition group, severity level, and metal tier. Table rows include conditions such as acute liver failure/disease (including neonatal hepatitis), intestine transplant status/complications, spina bifida and other congenital nervous system anomalies, myasthenia gravis and related neuropathies, respiratory arrest, cardio-respiratory failure, heart assistive device/heart transplant, and congestive heart failure, with distinct factor values by metal level and severity.

Child model factors reported by HCC/condition and metal tier
Severity levels indicated where applicable (e.g., neonatal/immature levels)
Examples include transplant status, congenital anomalies, severe respiratory and cardiac conditions

Note

Child and Infant Risk Adjustment Factors

Table 3 and Table 4 present child and infant risk adjustment factors respectively. Table 4 contains infant model factors across severity levels (e.g., Extremely Immature severity levels 1–5) with large factor values for the highest severity infant categories. These infant factors are reported by metal tier and severity level and are applied in the infant risk adjustment model.

Infant factors reported by severity level (e.g., Extremely Immature levels 1–5) and metal tier
Highest severity infant categories have substantially higher factor values
Tables 3 and 4 together cover child and infant model inputs

Documentation Required

Cost-sharing reduction adjustment policy

HHS proposes to continue including an adjustment in the risk adjustment models for receipt of cost-sharing reductions (CSRs) and to continue not adjusting for reinsurance payments. CSR adjustments have been updated to align with the CSR advance payment formula finalized in the 2015 Payment Notice. The CSR adjustment factors (Table 7) are multiplied against the sum of demographic, diagnosis, and interaction factors. HHS will continue to evaluate the CSR adjustment and seeks comment.

CSR receipt is adjusted for in risk adjustment models
Reinsurance payments are not adjusted for in the model
CSR adjustment factors multiply the sum of demographic, diagnosis, and interaction factors
Silver plan variant and zero cost-sharing factors unchanged from 2014 Payment Notice

Billing Rule

Reinsurance submission and payment scheduling

Contributing entities (or a TPA/ASO contractor acting on their behalf) must complete the ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form on Pay.gov. A contributing entity must submit its annual enrollment count by November 15 of the applicable benefit year (or next business day if not a business day). Contribution payments are due no later than January 15 (or next business day) for combined or first bifurcated payment and no later than November 15 (or next business day) for the second bifurcated payment. HHS will permit an option to remit the entire benefit year contribution in one payment by January 15 or to bifurcate payments (with specified amounts). Forms must be completed and payments scheduled by November 15 to comply with submission process deadlines.

Submit ACA Transitional Reinsurance Program Form on Pay.gov
Annual enrollment count due by November 15 (or next business day)
Contribution payment due dates: January 15 (combined or first payment) and November 15 (second payment) or next business day if not a business day
Option to make a single payment by January 15 or two bifurcated payments

Note

Common ownership determination for TPAs

HHS proposes to clarify the definition of ‘contributing entity’ regarding TPAs by applying principles similar to the controlled group rules of Code section 414(b) and (c) to determine whether a TPA is under common ownership or control with a self-insured group health plan or plan sponsor. A TPA that is unrelated and performs limited services (e.g., provider network or up to 5% of claims processing) is not deemed to be used for purposes of the contributing entity definition. HHS seeks comment on this approach and alternative familiar standards.

Use controlled group-type principles to assess common ownership/control
TPA not deemed to be used if unrelated and limited to certain services
Seek comment on alternative definitions familiar to stakeholders

Documentation Required

Reporting requirements for multi-plan sponsors

Plan sponsors maintaining multiple group health plans must determine and report the average number of covered lives using a counting method and related data elements through the Pay.gov reinsurance submission process. The sponsor must retain supporting information (e.g., counting method and plan names) and make it available to HHS if requested to assess compliance. HHS proposes to require only the average number of covered lives and required data elements be reported via the Pay.gov form while retaining additional documentation for audit.

Report average covered lives and specified data elements via Pay.gov
Retain counting method and plan names for potential HHS review
Consistent annual enrollment count must be reported if bifurcated payments require two forms

Prior Authorization

Good Faith Safe Harbor Extension

HHS proposes to extend the good faith safe harbor for non-compliance with HHS-operated risk adjustment and reinsurance data requirements through the 2015 calendar year. Under the safe harbor, CMPs will not be imposed if an issuer has made good faith efforts to comply. Good faith efforts may include timely notification, communication, and cooperation with HHS regarding establishment and provisioning of dedicated distributed data environments.

Safe harbor extended for non-compliance during 2015 if issuer demonstrates good faith
Good faith may include notifying and cooperating with HHS on distributed data environments
Parallels QHP issuer safe harbor under §156.800

Billing Rule

Default Risk Adjustment Charge Allocation

HHS proposes to assess a default risk adjustment charge for issuers that fail to establish required distributed data environments or otherwise fail to provide required data. Collected default charge funds would be allocated proportionally to each compliant plan's relative revenue requirement (PLRS * IDF * GCF) relative to the market average across compliant plans in the State. Allocation excludes noncompliant plans and is intended to distribute default charges according to expected revenue requirements rather than simple enrollment or premium shares. HHS seeks comment on this allocation approach and formula.

Default charge funds allocated among compliant plans only
Allocation proportional to PLRS*IDF*GCF relative to market average
Excludes data from noncompliant plans when calculating transfers
Seeks comment on allocation approach

Documentation Required

HHS-approved vendor functions and obligations

HHS proposes an approval process for HHS-approved vendors to perform FFE agent/broker training and identity verification (information verification). Vendor obligations would include submitting a complete application, demonstrating prior experience with online training and identity proofing, complying with content/format/delivery specifications, collecting and securely sharing training and verification data with HHS, executing an agreement with HHS, adhering to privacy and security laws, and adopting a fee structure generally consistent with comparable trainings. Vendors would be approved for one-year terms, listed publicly if approved, subject to monitoring and audit, and permitted an appeals process for denials or revocations.

Application demonstrating experience with online training and identity proofing
No recent regulatory/enforcement actions in prior 3 years to qualify
Adhere to HHS specifications for content, format, delivery, and CEU approval
Collect/store/share data with HHS in specified secure formats
Execute agreement with HHS; comply with applicable State and Federal laws
One-year approval terms with re-approval requirement; publish approved vendor list
HHS monitoring, audit, and appeals process for vendors

Billing Rule

First-month premium payment deadlines

We propose that Exchanges establish a standard policy for deadlines for payment of the first month's premium to effectuate enrollments. In the FFE, HHS is considering deadlines tied to the coverage effective date for regular effective dates (coverage effective the first of the following month or the first of the second month depending on selection timing). Options include requiring payment by the coverage effective date, the day before, or within a short period after the coverage effective date (for example, 5, 10, or 30 days). For special effective dates (retroactive or accelerated), HHS is considering a premium payment deadline of 10–15 business days from receipt of the enrollment transaction. HHS seeks comment on which deadlines balance issuer operational needs and consumers' ability to obtain coverage.

Exchanges may set uniform first-month premium payment deadlines
FFE options tied to coverage effective date for regular effective dates
Consideration of 5, 10, or 30 days after effective date as options
10–15 business day deadline under consideration for special effective dates

Note

Terminology/conforming changes

HHS proposes terminology and conforming changes to align Exchange regulations with market-wide guaranteed availability and guaranteed renewability. Specifically, references to 'termination of coverage' will be amended to refer to termination of enrollment 'through the Exchange' where applicable (e.g., §§155.430, 155.735, 156.270, 156.285, and 156.290). Other conforming amendments across Exchange and SHOP regulations may be made in the final rule to ensure consistency with interpretations of guaranteed availability and renewability. These amendments would become effective with the final rule effective date.

Revise references so 'termination of coverage' means termination of enrollment through the Exchange when appropriate
Modify listed provisions to align with guaranteed availability/renewability
Additional conforming amendments may be made in the final rule

inv-79: plan — Plan — proposed amendment: with respect to an issuer and a product, the pairing of the coverage benefits under the product with a particu...

Proposed 'plan' definition'Plan' means for an issuer and product the pairing of coverage benefits with a particular cost-sharing structure, provider network, and service area

ImplicationPlans differing by cost sharing, network, or service area are distinct even within same metal tier

Cross-referenceProposal aligns §144.103 plan definition with rate review and risk corridors program definitions

inv-80: State — proposed modification to codify that for purposes of part 147, 'State' does not include U.S. territories

Proposed 'State' modification (part 147)For purposes of part 147, 'State' would not include U.S. territories (Puerto Rico, Virgin Islands, Guam, American Samoa, Northern Mariana Islands)

ScopeOther parts (146, 148, 150) would continue to include territories where applicable; codifies prior letters to territories

RationaleReflects HHS determination to align PHS Act applicability to territories for specified provisions

inv-81: State — State

State (general)'State' means each of the 50 States, the District of Columbia, and, for certain provisions, U.S. territories as specified; see proposed codification

NoteTreatment of territories varies by part of the regulations (part 147 exclusion noted)

SourcePreamble discussion and proposed regulatory text in §144.103

inv-82: HHS risk adjustment model risk score — Risk score

Risk scoreHHS risk adjustment model risk score predicts plan liability based on enrollee's age, sex, and diagnoses; enrollee factors summed to a risk score

ModelsSeparate models for adults, children, and infants; infant scores assigned by maturity/severity groups

UsePlan average risk score (enrollment-weighted) is input to payment transfer formula determining transfers/payments

inv-83: Model factor — factor

Model factor (definition)Factors = regression dollar values for each HCC divided by weighted average plan liability; represent predicted relative incremental expenditures

ApplicationSum of an enrollee's HCC factors equals enrollee's total relative predicted expenditures used in risk scoring

TablesFactors displayed by metal tier and demographic cells in model tables (TABLE 1, 3, 4)

inv-84: Platinum/Gold/Silver/Bronze/Catastrophic — Metal tiers

Metal tiersPlatinum / Gold / Silver / Bronze / Catastrophic (five metal levels)

UsageRisk adjustment factors and demographics provided separately for each metal tier in model tables

ReferenceTABLE 1 and continuations present per-metal factor values

inv-85: Numeric weight applied to grouped condition for actuarial risk adjustment — Risk adjustment factor

Risk adjustment factor (definition)Numeric weight applied to a grouped condition (HCC group) for actuarial risk adjustment

ApplicationMultiply and sum factors for enrollee's conditions to compute predicted relative expenditures

PresentationFactors listed per condition group and metal level in TABLE 1 (adult) and TABLE 3 (child) fragments

inv-86: HCC factor values — HCC factor values: numeric weights assigned to condition categories for risk adjustment scoring, presented per metal level (Platinum, Gol...

HCC factor valuesNumeric weights assigned to condition categories for risk adjustment scoring (examples shown across metal levels)

RangeValues in excerpt range from under 1.0 for some conditions to over 40 for severe conditions; child/infant tables include even larger values

Tables referencedTABLE 1 (adult), TABLE 3 (child), TABLE 4 (infant) contain detailed HCC factor values

inv-87: HCC group references (example: G06 includes HCCs 67, 68; G08 includes HCCs 73, 74) — G06/G08

HCC group references (example)G06 includes HCCs 67, 68; G08 includes HCCs 73, 74 — used in interaction terms in adult model tables

UsageInteraction factors apply severe-illness multipliers to specific HCC groups as shown in TABLE 1 continuations

SourceTABLE 1 adult model factor continuation (interaction entries)

inv-88: Platinum/Gold/Silver/Bronze/Catastrophic — Metal Level

Metal levels reportedFactors provided for five metal levels: Platinum, Gold, Silver, Bronze, Catastrophic

ImplicationModel differentiates predicted costs by plan AV/metal level reflecting benefit generosity

TablesChild and adult factor tables list per-metal values for each diagnosis group

inv-89: Numeric weight applied in the child risk adjustment model for a diagnosis group — Risk adjustment factor

Child model risk adjustment factor (definition)Numeric weight applied in the child risk adjustment model for a diagnosis group (per-metal values shown)

ExamplesHemophilia and other high-severity child diagnosis groups shown with large numeric weights in TABLE 3

ApplicationSum child diagnosis and demographic factors to compute child enrollee risk score

inv-90: Severity Level (1-5)

Severity Levels (infant model)Severity Level 1 (Lowest) through Severity Level 5 (Highest)

UseSeverity levels map to lists of HHS HCCs for infant model group assignments (see TABLE 6)

ReferenceTABLE 4 (infant factors) and TABLE 6 map severity levels to HCC categories

inv-91: Platinum/Gold/Silver/Bronze/Catastrophic — Metal Level

Metal Level usage in child/infant tablesFactors reported per metal level (Platinum/Gold/Silver/Bronze/Catastrophic) across child and infant models

ImplicationPlan AV differences reflected across demographic and diagnosis factors in tables

TablesSee TABLE 3 and TABLE 4 for per-metal factor entries

inv-92: Maturity categories — Extremely Immature; Immature; Premature/Multiples; Term; Age 1 (as defined by HCC/birthweight groupings in the table)

Maturity categories (infant model)Extremely Immature; Immature; Premature/Multiples; Term; Age 1 — defined by birthweight/groupings in tables

ApplicationInfant grouped categories determine assignment to severity-level factor entries

ReferenceTABLE 4 and TABLE 6 list maturity categories and associated HCCs

inv-93: Severity levels mapping to lists of HHS HCCs used in the infant model

Severity levels mapped to HCC lists (infant model)Severity Level mappings to lists of HHS HCCs used in infant model are provided (see TABLE 6 continuations)

ContentTABLE 6 enumerates HCCs included in each infant severity category (Levels 1–5)

UseAssign infants to severity category by HCCs to select corresponding numeric factor from TABLE 4

inv-94: plan average risk score — the member month-weighted average of individual enrollee risk scores used in risk adjustment transfers.

Plan average risk score (definition)The member month–weighted average of individual enrollee risk scores used in risk adjustment transfers

RolePLRS is an input to payment transfer formula determining plan transfers/charges

Computation noteCalculated per plan within geographic rating area using enrollee-level summed factors

inv-95: subscriber months / billable member months — Subscriber months (MS) — months of family subscription counted at the subscriber (family) level; Billable member months (MB) — months cou...

Subscriber months (MS)Months of family subscription counted at the subscriber (family) level; each family contract is a single subscriber

Billable member months (MB)Months counted for placing subscribers into family tiers; sums individual billable member months within family coverage

Formula usageMS in numerator and MB in denominator used in ARF calculations for family-tiering States (payment transfer formula)

inv-96: self-insured expatriate plan — proposed to exempt self-insured group health plans whose enrollment is limited to participants residing ou...

Self-insured expatriate plan (proposed exemption)Proposed exemption beginning 2015 for self-insured group health plans whose enrollment is limited to participants residing outside home country ≥6 months

EffectSuch self-insured expatriate plans would be exempt from reinsurance contributions under §153.400(a)(1)(iii)

RationaleAligns treatment with insured expatriate FAQ definition and aims to avoid double coverage of expatriate-specific plans

inv-97: snapshot count — Snapshot count method

Snapshot count (definition)Add totals on chosen dates in corresponding months of first 3 quarters, divide by number of dates used; same months used across quarters; date constraints apply

Use casePermitted counting method for determining covered lives for reinsurance contributions

Consistency requirementSame months must be used for each quarter and date used for Q2/Q3 must fall in same week as Q1 date

inv-98: snapshot factor — Snapshot factor method: similar to snapshot count but counts self-only participants plus 2.35 times non-self-only participants for each c...

Snapshot factor (definition)Same as snapshot count but counts self-only participants plus 2.35 × non-self-only participants for each date

ApplicationUsed by self-insured group health plans as permitted counting method for reinsurance contributions

ConstraintsDates selection and quarter consistency rules mirror snapshot count method

inv-99: attachment point — claims amount above which reinsurance coinsurance applies.

Attachment point (definition)Claims amount above which reinsurance coinsurance applies

2016 exampleAttachment point proposed at $90,000 for 2016 benefit year

RoleUsed with coinsurance rate and cap to determine reinsurance payment amounts

inv-100: reinsurance cap — upper limit on claims subject to reinsurance payments.

Reinsurance cap (definition)Upper limit on claims subject to reinsurance payments

2016 exampleReinsurance cap proposed at $250,000 for 2016 benefit year

InteractionCap and attachment point together bound reinsurance payments per enrollee

inv-101: coinsurance rate — percentage of claims above the attachment point reimbursed by reinsurance.

Coinsurance rate (definition)Percentage of claims above the attachment point reimbursed by reinsurance

2016 exampleCoinsurance rate proposed at 50% for 2016 benefit year

PurposeBalances issuer cost-sharing incentive with program support for high-cost claims

inv-102: plan / rate increase (proposed) — 'Plan' — proposed to have the meaning in §144.103; 'rate increase' — proposed to mean increase for a specific product or plan; proposed t...

'Plan' and 'rate increase' (proposed for rate review)'Plan' as defined in §144.103; 'rate increase' proposed to mean increase for a specific product or plan; proposes plan-level consideration for review triggers

Effect on reviewIf any plan within a product meets/exceeds threshold, the product would be subject to review

HarmonizationAligns rate review aggregation with single risk pool and plan definitions

inv-103: relative revenue requirement — product of Plan Liability Risk Score (PLRS), Induced Demand Factor (IDF), and Geographic Cost Factor (GCF)...

Relative revenue requirement (definition)Product of Plan Liability Risk Score (PLRS), Induced Demand Factor (IDF), and Geographic Cost Factor (GCF) used to allocate default charges among compliant plans

UseAllocation basis for distributing default per-member-per-month risk adjustment charges when noncompliant plans exist

SourceProposed allocation methodology in good faith safe harbor/default charge provisions

inv-104: qualified employee — definition for SHOP enrollment

Qualified employee (SHOP)Any employee or former employee of a qualified employer offered SHOP coverage; business owners not considered qualified employees but may enroll if ≥1 employee enrolls

ScopeIncludes eligibility for dependents where employer offers dependent coverage; definitions revised for SHOP applicability

ReferenceProposed amendments to §154.301 and related SHOP definitions

inv-105: enrollee — Includes qualified individuals, qualified employees, and dependents of qualified employees; business owners and their dependents may enroll where allowed and receive same rights/privileges where permitted.

Enrollee (definition)Includes qualified individuals, qualified employees, and dependents of qualified employees; business owners and dependents may enroll where allowed and receive same rights/privileges

ImplicationWhen permitted to enroll, these individuals must receive the same notices and protections as other enrollees

SourceProposed amendments to definitions in rate review / SHOP provisions

inv-106: non-Navigator entity physical presence — Entities funded through an Exchange Establishment Grant must maintain a physical presence in the Exchange service area to provide face-to-face assistance...

Non-Navigator entity physical presenceEntities funded through an Exchange Establishment Grant must maintain a physical presence in the Exchange service area to provide face-to-face assistance; if no larger entity exists, the individual may be considered the entity

ClarificationProposed amendment to §155.215(h) to limit requirement to entities rather than individual assistants

PurposeEnsures organizational capacity for consumer protection and community-level assistance

inv-107: Annual open enrollment period — Annual open enrollment period

Annual open enrollment period (proposed for 2016+)October 1 through December 15 of the calendar year preceding the benefit year; coverage effective January 1 following the open enrollment period

ApplicabilityFor benefit years beginning on or after January 1, 2016 (proposed amendment to §155.410)

Operational noteProposed redesignation of effective date paragraphs to standardize coverage effective dates for enrollments during open enrollment

inv-108: Special enrollment period — SEP — qualifying life events etc.

Special enrollment period (SEP) — definition and triggersTemporary enrollment window triggered by qualifying life events (birth, adoption, move, court order, death, loss of dependent status, errors/misconduct); effective date rules proposed to be modified

Advance reportingProposed to allow advance reporting of permanent moves up to 60 days (effective 2016) to prevent coverage gaps

Effective date optionsExchanges may allow immediate effective dates for some events or regular effective dates to avoid duplicate coverage; specific amendments proposed to §155.420

inv-109: Required contribution percentage — the income-based affordability threshold; calculated value for 2016

Required contribution percentage (definition)Income‑based affordability threshold used to determine hardship exemption eligibility; methodology yields 8.13% for 2016

Calculation basisBased on excess of premium growth (2013–2015) over income growth (NHEA per-capita GDP projections) applied to baseline 8.00%

Regulatory reference§155.605 and related preamble discussion in proposed rule