Proposed rule sets guidelines on insurance exchange payments, refunds

The Obama administration is working to fill in the blanks on financial elements of the coming health insurance exchanges, including options for enrollees without bank accounts.

In a proposed rule (PDF) issued Friday, the CMS and HHS built on previously issued guidance to states and other stakeholders, according to the CMS. The rule aimed to clarify oversight of various premium assistance programs, build on state options regarding the Small Business Health Options Program, and provide technical clarifications.

“In just a few months, consumers across the country will have access to a new marketplace in their state where they can easily shop for health insurance that meets their needs and the needs of their families,” Marilyn Tavenner, administrator of CMS, said in a news release. “The release of these guidelines signals that we're ready to build on our ongoing efforts and ensure that the new systems are fiscally sound.”

Included in the proposed rule is a provision to allow people without bank accounts pay for coverage in the exchanges. It would require issuers of qualified health plans in all states to accept various payment types—such as prepaid debit cards—for insurance premiums beyond the default bank account deduction.

Up to 8.5 million expected enrollees in the exchanges were in danger of disqualification due to a lack of a required bank account, according to a May report by Jackson Hewitt.

“We at Jackson Hewitt applaud the federal government for taking this important step to ensure that unbanked Americans have full access to the new coverage programs under the Affordable Care Act,” Brian Haile, senior vice president for health care policy, said in a news release.

The draft regulations also propose oversight standards for states that operate either risk adjustment or reinsurance programs. The CMS would require those states to issue reports to HHS and the public on operations and to take other steps “to ensure the soundness and transparency of the programs.”

Also included are requirements for refunds that insurers owe to enrollees and providers when the issuer incorrectly applies the advance payment of the premium tax credit or cost-sharing reductions, or incorrectly assigns enrollees to a standard plan without cost-sharing reductions.

Officials also laid out oversight requirements for state-run exchanges regarding enrollees’ choices of available coverage, whether enrollees receive advance payments of the premium tax credit or cost-sharing reductions, and whether the marketplaces are meeting federal transparency standards.

In addition to the states’ roles in overseeing the health insurance markets, HHS would have a role in enforcing compliance with the exchanges’ standards.

Among the tweaks to existing exchange rules, HHS proposed allowing states to operate a State-based Small Business Health Options Program even if HHS is running their exchange for the individual market. The rule would formalize such arrangements in both Utah and New Mexico. Both states defaulted to the arrangement after scuttling plans to fully operate their marketplaces after running out of time before enrollment begins Oct. 1.

Follow Rich Daly on Twitter: @MHrdaly